Vanuatu slammed by Henley & Partners despite steps towards improving CBI Programmes

Henley & Partners, one of the economic citizenship industry’s major players, has said it refuses to associate with Vanuatu’s Programmes due to the country’s ‘reputation for corruption.’

Wednesday, 8th January 2020

In an increasingly globally-minded world, more and more businesspersons and high net worth individuals are looking to economic citizenship as a valuable tool to break free of the restrictions imposed by their own citizenship of birth. As a result, the citizenship by investment industry is experiencing an upward growth trajectory. In such a climate, it is more important than ever that citizenship by investment jurisdictions appeal to investors by showcasing clear and robust programmes that operate with the highest level of integrity. In the last few years, stakeholders have seen industry standards raised across the globe, particularly with respect to the Caribbean, where countries are heralded for their straightforward routes to citizenship and rigorous, multi-layered due diligence systems. One nation that is showing signs of improvement in this regard is the Pacific nation of Vanuatu, boasting two concurrent citizenship programmes: the Vanuatu Contribution Programme (VCP) and the Development Support Programme (DSP). The VCP, which remains the sole prerogative of a Hong Kong-based marketing agent, was originally the only programme leading to full citizenship rights, while the DSP was more limited in scope; offering only ‘honorary’ citizenship and no right to participate in local politics. Prior to 2019, disparity also existed between the investment thresholds of the two programmes, with the VCP being significantly cheaper than the DSP, much to the chagrin of local Ni-Vanuatu agents who are restricted to marketing the latter Programme. In January 2019, however, Vanuatu’s Citizenship (Amendment) Act (No. 34 of 2018) removed the honorary designation and established the DSP as a citizenship programme in its own right. Positive changes were also made in the Citizenship (Development Support Programme) Regulation Orders 32 and 33 of 2019, which unified the investment thresholds of the two programmes. Local agents hailed these changes for improving the competitiveness of the DSP, as well as by potential investors, for whom clarity is an essential factor when it comes to choosing their second citizenship. Attempts have also been made by the Government of Vanuatu to clamp down on undercutting by agents. Secretary-General of the Citizenship Commission, Samuel Garae, for example, recently conveyed instructions to all agents to ensure their adherence to mandated minimum pricing requirements. Reports also indicate that the Government plans to introduce further control measures to combat underselling. In another welcomed step towards improving its Programmes, Vanuatu’s Minister of Foreign Affairs, Ralph Regenvanu, in a recent interview with the Financial Times, announced that the Vanuatuan Government has embarked on a review of its due diligence procedures. The review, which is expected to be concluded before March 2020, demonstrates Vanuatu’s commitment to bringing its Programmes in line with best industry standards; a feat that should be celebrated by industry stakeholders. Despite Vanuatu’s attempts at harmonising and improving its two Programmes, Henley & Partners, one of the economic citizenship industry’s major players, has said it refuses to associate with Vanuatu’s Programmes due to the country’s ‘reputation for corruption.’ First reported in an October 2019 article by the BBC, this condemnation was picked up in a number of other media outlets. 2020 is set to be a vital year for the investor migration industry. While there is still room for improvement for nations like Vanuatu, which remain accountable to investors and international agents, it is essential that even small steps in the right direction are recognised and celebrated by industry stakeholders.