There’s a landmark at the corner of Whitehead and South Streets. It says in big letters: “Southernmost Point Continental USA.” Smaller letters above read: “90 miles to Cuba.”
Mark Nestmann wealth preservation and privacy expert.
A recent trip to “Mile 0” inspired me to take a few moments to reflect on a major life decision I’d made a few years earlier: the choice to give up my U.S. citizenship.
A Secret Business Trip
Just 90 miles from U.S. shores stood a business hotspot frequented by Canadians, Mexicans, Europeans, pretty much everyone … except Americans.
I wanted to visit Cuba. I wanted to do business in Cuba. But U.S. citizens have been forbidden for nearly 50 years, by their own government.
The more I thought about this, the more outraged I became. Then in 1994, I read a story that pushed me to take action.
The story was about the “Freedom to Travel Campaign” that sought to end travel restrictions. The group challenged regulations, and guess what the Clinton Justice Department did? Nothing.
The Justice Department (likely fearing juries would side with tourists) did not prosecute the cases. Instead, the Treasury Department changed regulations so they could fine violators without going to court.
This sneaky workaround was all it took.
Despite the risks, I got on a plane and flew to Nassau, the Bahamas. From there I hopped on the daily direct flight to Havana on Cubana de Aviacion, Cuba’s national air carrier.
It was easier than I thought it would be.
A Wealth of Opportunity
In Cuba I discovered a wealth of business opportunities. This was the height of the “Special Period in Peace” when the Cuban economy was in a tailspin due to the collapse of the Soviet Union and the end of Soviet aid.
Cuba was ripe for investment. Need for serious outside capital injection abounded. And the terms were quite favorable. I knew right away I wanted to participate in those investments.
A few days later I returned to Nassau. I passed right through U.S. Customs’ pre-flight inspection, never revealing that I had visited Cuba.
In those days, the customs forms didn’t ask “counties visited on this trip prior to U.S. arrival” as they do now. And the customs inspector didn’t ask, either.
Penalties Galore!
When I returned home, I sat down and read the U.S. Treasury regulations regarding Cuba. I learned they barred basically all contact with Cuba by “all U.S. citizens and permanent residents wherever they are located, all people and organizations physically in the United States or its territories, and all branches and subsidiaries of U.S. organizations throughout the world, corporations, wherever they are located throughout the world.”
Criminal penalties for violating include up to 10 years in prison, $1 million in corporate fines, and $250,000 in individual fines. Civil penalties up to $65,000 per violation may also be imposed.
The only way to legally travel to or do business with Cuba, or any other sanctioned country, was (and still is) to obtain a license issued by OFAC. Only journalists and a few other classifications of individuals may obtain a license to travel to sanctioned countries. For businesses, it is almost impossible.
The only other option was to not to be a U.S. citizen. In those moments after my return home, considering my options, I knew I was not prepared to take that step. Instead, I decided to explore the possibility of living outside the United States.
Researching this option, I learned living abroad would not exempt me from OFAC regulations. I also learned that there was no escape from the obligation of U.S. citizens to pay tax on their worldwide income, even if they physically resided outside the United States.
I began to seriously wonder whether my “little blue book” (my U.S. passport) was really worth keeping.
How I ‘Escaped America’ – Step-by-Step
Mulling over the idea of truly “escaping America” and all of its restrictions, I first began looking into ways to obtain an alternative citizenship and passport. I did some Internet research. I found then, as now, many of the companies offering passports were thinly disguised scams offering unofficial or even stolen documents.
So I consulted an attorney. I found a few Caribbean countries that offered legitimate “economic citizenship” programs. With my attorney’s help, I researched to find out which program would best suit me.
I looked at cost, availability of visa-free travel, credibility, and the desirability of that country as a residence (weather conditions, political climate, natural beauty, etc.).
After considerable research, I chose the Commonwealth of Dominica. Dominica does lack some of the amenities of the United States, but I liked the country. I knew I could possibly settle there, or at least maintain a residence or business presence.
I paid the fees to obtain economic citizenship and met with some government officials. Weeks later, after an extensive background check, I swore an oath of allegiance to this country. I was granted citizenship and obtained a passport.
After obtaining this second passport, at the advice of my attorney, I decided to take the biggest step of all. I gave up my U.S. citizenship.
My heart pounded as I approached the U.S. embassy. I thought I would be called a traitor when I entered.
I had also been advised that individuals who gave up their U.S. citizenship for tax reasons could be permanently excluded from ever returning to the United States. (This provision is part of the 1996 immigration bill, but has never been enforced due to questions about its constitutionality).
My mind was whirling as I walked through the door. Was I doing the right thing? Would this decision come back to haunt me in some way later in my life?
Despite misgivings, I was determined to see this process through to the end.
For all my fears, I was surprised just how smoothly the process actually went. The U.S. consular officer I met with was completely non-judgmental. He gave me some official government forms to complete and asked me if I understood the consequences of giving up U.S. citizenship.
The forms required me to state that I wasn’t expatriating under compulsion, that I was of sound mind, and I understood that expatriation was, in fact, irrevocable.
I completed the forms and handed them over, along with my U.S. passport. The officer made a copy of my new passport to demonstrate to the State Department that I would not be a “stateless person” upon giving up U.S. citizenship. He informed me that in a few weeks, I would receive an official document called a “Certificate of Loss of Nationality” or CLN.
The entire process took less than 30 minutes, most of which were waiting for copies to be made.
Two months later, I received my CLN. I was no longer a U.S. citizen. Attached was a letter explaining that I could appeal my loss of nationality, if I chose to do so, directly to the Attorney General.
Occasionally, I’m asked to show a copy of the CLN to prove my ex-citizen status when doing business or banking internationally. This is due to the many restrictions offshore institutions place on doing business with U.S. citizens (which I no longer worry about).
Since I still have family and some business interests in the United States, my next step was to take my Dominica passport and CLN back to the U.S. consulate and apply for a multiple-entry visa to visit the United States.
I had a short meeting with a consular officer who asked whether I intended to permanently settle in the United States. Of course, I had no intention of once again becoming subject to the jurisdiction of OFAC and the IRS! I assured the officer I had no such intention, and the visa was issued within a few hours.
This visa gives me the right to visit the United States for up to 90 days at a time but not reside permanently.
Life as an Expat
Although I completed these steps only a few years ago, I have already experienced enormous benefits both personally and in business. I can travel anywhere in the world with my new passport. And I now have extensive business interests in Cuba and other countries subject to U.S. sanctions.
One of my main concerns within my new home country was discrimination. I wondered if residents or border-crossing guards would give me any trouble. I found no problems in either case. My passport was identical to any native-born Dominican.
I did ultimately decide to settle elsewhere after living in Dominica for several months, but I still invest there.
I wrote this article at the marker in Key West, looking over the Straits of Florida. I watched a group of tourists disembark from a trolley tour, snapping pictures of the marker.
None of those tourists who are U.S. citizens or residents can visit Cuba – 90 miles away.
I can.
Those picture-snapping U.S. tourists also have to file an annual tax return with the IRS.
I don’t.
This is what I call true liberation—or, if you prefer, being a “sovereign individual.”
