Partner Nations to Close Borders for Vanuatu Citizens?

The citizenship by investment landscape in Vanuatu has long been a source of concern in the international community and has been criticised by international entities, investor immigration industry stakeholders, and even local Ni-Vanuatu agents.

As such, Vanuatu has introduced – and terminated – a myriad of economic citizenship programmes over the years. At present however, Vanuatu operates two citizenship by investment programmes, the Vanuatu Development Support Programme (VDSP) and the Vanuatu Contribution Programme (VCP).

The criticism levied at Vanuatu is often centred upon the significant deficiencies that exist with respect to the country's due diligence procedures. In 2019, for example, Vanuatu attracted criticism from members of the European Parliament. Their concerns focused on the fact that applicants naturalised under Vanuatu's programmes could use their new citizenship "to bypass the regular Schengen visa procedure and the in-depth assessment of individual migratory and security risks it entails." This is so as holders of ordinary passports issued by Vanuatu may enter the Schengen Area without a visa for up to 90 days within any 180-day period. Citizens of Vanuatu can also travel to the United Kingdom and its Crown dependencies, as well as the Republic of Ireland, for up to six months on a visa-free basis.

In the citizenship by investment industry, a robust system of due diligence is essential to ensure the survival of a citizenship by investment programme. Reputable citizenship by investment countries, for example those in the Caribbean, implement extensive, multi-layered vetting procedures on applicants. In the Caribbean, the due diligence process is bolstered by support from international third-party due diligence firms, who are tasked with performing on-the-ground checks to verify the information contained in an application, ranging from an applicant's criminal history, to reputational data and political exposure. External due diligence is a vital component that is notably missing from Vanuatu's vetting process, despite calls for Vanuatu to implement third-party due diligence.

In a 2019 interview with the Financial Times, Vanuatu acknowledged that concerns surrounding its due diligence were affecting its bilateral relations with other countries and Ralph Regenvanu, Vanuatu's Foreign Minister at the time, promised to undertake a review of the programmes. The position of Foreign Minister has since been assumed by the Honourable Mark Ati. Only in June 2020, however, did it seem that Vanuatu might finally move to tighten its due diligence procedures when newly-appointed Prime Minister, the Honourable Bob Loughman, instructed Chairman Warsal of the Vanuatu Citizenship Commission to conduct an internal review of the programmes.

Yet as we enter the final quarter of 2020, Vanuatu has made no progress in implementing stricter due diligence and has issued no tender for the selection of third-party due diligence providers. Vanuatu's lack of action is particularly troubling in light of recent industry developments. Just last week, the Cypriot Government announced that it will be suspending the Cyprus Investment Programme from 1 November 2020, after an investigative video report revealed how the country's lack of external due diligence had allowed Government officials to undermine the rules governing the programme. This, in turn, appeared to prompt the European Commission to initiate infringement proceedings against Cyprus and Malta regarding their citizenship by investment programmes on Tuesday.

As it stands, the European Union is afraid that its border security will be undermined by citizenship by investment countries with lax due diligence. In light of increasing pressure from Europe, it is critical that Vanuatu implements a more stringent due diligence process akin to those in the Caribbean, utilising independent, internationally renowned firms based in partner nations. Strong due diligence is the only way to mitigate the threat Vanuatu's programmes face.