BASSETERRE, St. Kitts –  The U.S. Treasury has alerted financial institutions that some people are abusing a citizenship-by-investment program in St. Kitts & Nevis, which has become increasingly reliant on revenue from selling citizenship to foreigners.

The tiny Caribbean nation, less than twice the size of Washington D.C., offers foreigners a very fast path to citizenship in exchange for a minimum real estate investment of $400,000 or a $250,000 donation. It has long insisted its background checks are thorough and the program is well managed, although there has been little public accounting.

But the U.S. Financial Crimes Enforcement Network said in an advisory issued Tuesday that St. Kitts’ program “maintains lax controls as to who may be granted citizenship,” and as a result, “illicit actors, including individuals intending to use the secondary citizenship to evade sanctions, can obtain a SKN passport with relative ease.”

It also believes Iranian nationals are continuing to obtain passports through the islands even though St. Kitts announced last year that all Iranians were barred from getting local citizenship.

In a Thursday statement, Prime Minister Denzil Douglas said officials are determining “what changes, if any, should be made to the program.” He said he was “very pleased” that the U.S. had uncovered evidence that certain economic citizens were using their St. Kitts passports to facilitate unlawful financial transactions.

By midday, the islands’ Cabinet announced that all applications for St. Kitts’ economic citizenship program will be sent to “some of our closest allies in crime-fighting, including the FBI, Scotland Yard, the Royal Canadian Mounted Police and Interpol.”

The Cabinet also said an oversight commission will soon be created to monitor the program. It noted that the citizenship-by-investment program adopted a policy in July 2013 to bar all Iranian applicants, but it did not address the U.S. network’s belief that Iranians were still getting St. Kitts passports.

While ruling party officials tried to put a positive spin on the U.S. advisory, opposition officials portrayed it as a fiasco.

“What has now happened is indeed a sad blow for St. Kitts & Nevis because it means that our own citizens born right here will be under scrutiny,” said Shawn Richards, leader of opposition Peoples Action Movement.

“Investor visa” or citizenship programs are offered by many nations, including the U.S. and Britain. But St. Kitts and nearby Dominica have long offered a speedy path to citizenship at a very low cost. The whole process can take as little as 90 days in St. Kitts. And there’s no need to ever live here, or even visit.

Selling citizenship is a booming business in St. Kitts, which created is program in 1984. A Dubai-based company is currently building a 4-square mile (10-square-kilomter) community in St. Kitts where investors can buy property and citizenship at the same time.

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David McFadden reported from Kingston, Jamaica.