Government and business leaders say a move by the European Union to suspend visa-free travel for Vanuatu passport holders could damage Vanuatu’s economically-valuable Citizenship by Investment Program.
The program now accounts for over 40 percent of Vanuatu’s annual revenue collection, supporting essential government services such as in education and health
Vanuatu Business Resilience Council chair, Glen Craig, who developed the citizenship program in 2012, said Vanuatu depends on it to keep its economy afloat.
“The negative effects on the economy will be big from this decision, because 60 to 70 percent of people who purchase a [Vanuatu] passport [do so for the] travel mobility,” Mr Craig said.
“The Vanuatu passport gives them greater ability to travel visa-free through other countries.
“Without that ability to travel through Europe visa-free it becomes a less attractive option when compared to other country’s citizenship investment programs.
‘’That’s the biggest implication.”
A media release from Prime Minister, Bob Loughman, said, “The EU visa waiver arrangements were vital elements in the success of the citizenship program.”
The Prime Mister has written to the President of the European Commission to assure him that the Vanuatu Government will work in close collaboration with the EU to mitigate its concerns.
He said a special taskforce has been established to manage the issue, with steps to include: “changes to improve the credibility of security and due diligence verification systems.”
The Citizenship by Investment Program allows foreigners to purchase Vanuatu citizenship and a passport in exchange for a minimum investment of $US130,000.
The EU is concerned about security and money-laundering risks from people using Vanuatu passports as a back-door to visa-free travel in Europe. It has repeatedly warned Vanuatu that its Citizenship by Investment Program does not offer sufficient scrutiny and security screening of applicants.
Mr Craig says the EU wants to see no further expansion of Vanuatu’s citizenship programs and tighter controls over them.
The EU wants an official tender process to be conducted to engage an independent third party to support the Vanuatu Financial Intelligence Unit’s security checks on citizenship applicants.
And he says, it also wants to see Vanuatu reduce the number of its authorised citizenship agents down from the current figure of over 140 agents; and more independent people appointed to the Vanuatu Citizenship Commission.
The European Union Commission proposed the suspension of its Vanuatu passport visa-free travel arrangements in mid-January, but EU states are yet to vote on the proposal.
A Vanuatu passport provides access to travel and visa-free access to 129 countries and territories including the EU and the UK.
Since the start of 2020, the Citizenship by Investment Program has approved 4000 applicants, generating 49 per cent of the overall government revenue in 2020.