A government in need of cash will turn to destructive “solutions” such as money printing, higher taxes, and more regulations.
Unfortunately, these are just hors d'oeuvres before a 10-course meal.
As they become increasingly desperate, governments around the world and throughout history always turn to more destructive policies, such as capital controls, price controls, people controls, official currency devaluations, wealth confiscations, retirement account nationalizations, and more.
The more a government's fiscal health declines, the more destructive its policies become. This is what political risk is all about. And it's no secret political risk is increasing in many parts of the world, particularly in the US, where welfare and warfare spending continues unabated.
This trend is triggering more interest in second passports as people look for ways to become less dependent on their home government. Naturally, this is also causing a surge in second passport scams and traps, which are not always easy to spot.
If and when you pursue a second passport, you absolutely want to make sure you’re taking a legitimate route.
Unfortunately, obtaining a legitimate second passport is never simultaneously fast, easy, and inexpensive. But this does not make it any less necessary.
Some passport scams, such as the selling of alleged “diplomatic passports,” are obvious. Others, involving grey market passports, are less obvious but similarly dangerous.
If you end up falling for a second passport scam or trap, it will likely cause significant problems and limit your options down the line. You want the opposite: minimal problems and more options.
My advice is to treat grey and black market passports (and the hucksters who peddle them) the same way you’d treat a random solicitation to wire money to some Nigerian you don't know: run—don't walk.
What Are Grey and Black Market Passports?
Black market passports are unofficial, illegitimate documents. They include stolen, cloned, and counterfeit passports.
Black market passports mainly show up in the world of organized crime and spy agencies. It’s not impossible you’ll run across a black market passport, but it isn’t very likely.
Grey market passports, on the other hand, are far more common. They appear legitimate, which makes them even more dangerous to someone like you.
Grey market passports are official passports obtained in some way that skirts the normal legal requirements (usually bribing a local official). Usually, this involves someone’s “special friend” in a foreign government who can help you get a passport faster and easier than you could otherwise.
Grey market passports often come from Bulgaria, Mexico, Paraguay, and Cambodia. There are legitimate ways to obtain second passports from these countries. But, if you do business with someone promoting these passports, be absolutely certain you meet the legal naturalization requirements.
No matter the country, you or those advising you should be able to point to specific naturalization laws with explicitly defined requirements that clearly spell out everything. This information is usually located on the local government's website or one of their consulate’s or embassy's websites.
It’s a major red flag if you can’t verify this information with the local government. If someone makes claims that don’t correspond with the explicit legal requirements, they’re probably trying to sell you an illegitimate passport.
This is especially true when someone hypes a little-known economic citizenship program. While there are legitimate economic citizenship programs, they all have easily identifiable laws with specific costs that you can point to. It's the ones without clear laws, where you can’t find official information outlining the program and its costs, that you want to avoid.
Decades ago, you might have gotten by with a grey market passport. But now, with terrorism hysteria at a sustained fever pitch and governments linking up their passport databases, using a grey market passport is both foolish and dangerous.
The Costs Far Outweigh the Benefits
The potential troubles of a grey market passport far outweigh any potential benefits. In the electronic age, when governments around the world have linked databases, it's extremely foolish to imagine you could get away with using an illegitimate passport indefinitely. And the consequences for trying are severe almost everywhere in the world.
Sure, a grey market passport might work for a while. But what happens when the issuing government discovers what happened, or when the “special friend” is busted?
Americans have another reason to avoid grey market passports: the Foreign Corrupt Practices Act (FCPA), which makes bribing foreign government officials a criminal offense. This includes giving or offering “anything of value” to gain an “improper advantage.”
Obtaining a passport by bribing a corrupt foreign official to help you skirt the normal naturalization requirements most likely violates the FCPA. That’s not something I would want hanging over my head.
How to Detect Illegitimate Passport Offers
As with most things, when something about a second passport sounds too good to be true, it usually is. Here are a few tips for fine-tuning your second passport BS detector:
The best way to detect a grey market passport offer is to independently verify the offer against the local government’s specific and explicit naturalization requirements. If you can’t do that, then it’s almost always a grey market offer.
Today, the cheapest legitimate economic citizenship program costs about $100,000 per person plus tens of thousands of dollars in fees. Even under the best circumstances, it takes at least a couple of months to process. Be wary of any economic citizenship program that’s cheaper or faster. If it’s significantly cheaper or faster, dismiss it out of hand.
Make sure you have up-to-date information. Naturalization requirements and options change frequently.
Besides the economic citizenship options, marrying a local, having ancestry in a country, or other shortcuts, it generally takes at least five years to become naturalized in most countries. There are countries that will naturalize you in less time, but not many.
In order to become naturalized, practically every country in the world requires a thorough application process, which usually involves a background check and spending some time in the country. If the application process seems too easy, it should raise a red flag.
Giving Yourself More Options
The goal of international diversification is to increase your options in an uncertain world. Falling for a grey or black market passport scheme is a sure path to fewer options… or worse. You should avoid them and the people who promote them like the plague.
Although there are schemes and a lot of bad advice out there, your need for a legitimate second passport and the political diversification that comes with it is only growing.
Most people have health, life, fire, and car insurance. You hope you never have to use these insurance policies, but you have them anyway. They give you peace of mind and protect you if and when the worst does happen.
A second passport is the ultimate insurance policy against an out-of-control government. Think of it as your “freedom insurance.”
The rules on second passports can change quickly. This is why it’s so important to have the most up-to-date, accurate, and actionable information out there.
Be sure to get the guide we just released on the easiest countries to get a second passport from. Click here to download the PDF.
Unfortunately most people have no idea what really happens when a government goes out of control, let alone how to prepare…
We think everyone should own some physical gold. Gold is the ultimate form of wealth insurance. It’s preserved wealth through every kind of crisis imaginable. It will preserve wealth during the next crisis, too.
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