The Vanuatu Government says a statement released this week by the Parliament’s Public Accounts Committee, claiming two Australian banks have stopped doing business with the National Bank of Vanuatu because of concerns about money laundering, is false.
The Minister of Finance and Economic Management, Johnny Koanapo, says the information should not have been made public by the committee and was “misinformation”.
“This misleading information should not be out in the public domain until a final report from the Public Accounts Committee on it is submitted to the Parliament and is reviewed by the Parliament,” Minister Koanapo said.
This week, the Chairman of the Public Accounts Committee, Matai Seremiah, said that two Australian banks – Westpac and the National Bank of Australia – have ceased doing business with the National Bank of Vanuatu because they regard Vanuatu’s sale of citizenship programs, as having the potential to breach Australian and international anti-money laundering laws.
However, Minister Koanapo said that the two banks mentioned have not raised concerns about the Vanuatu’s sale of citizenship programs.
The Minister said the statement from the Chairman of the Public Accounts Committee could affect the income and revenue of the National Bank of Vanuatu; and that information of this type had the potential to spread panic about the banks, especially amongst clients of the National Bank of Vanuatu.
Minister Koanapo said Vanuatu’s political leaders should not circulate information of this type “to gain political support”.
The Chairman of the Public Accounts Committee, said earlier this week that an inquiry carried out into Vanuatu’s sale of citizenship programs, revealed that the two Australian banks named had notified the National Bank of Vanuatu they had withdrawn as corresponding banks.
Mr Seremiah, a Leaders Party of Vanuatu member of Parliament for Luganville, said Westpac and the National Bank of Australia have withdrawn because they have concerns that there is a high risk that the sale of citizenship programs will breach Australian and international anti-money laundering laws.
MP Seremiah says the Public Accounts Committee had held an inquiry into the issue because the Government was including VT9 billion of expected sale of citizenship program revenue into next year’s National Budget.
Mr Seremiah says the notice of withdrawal from Westpac Australia and the National Bank of Australia could have a negative impact on Vanuatu’s National Budget and has put a question mark over what revenue can be collected from the sale of citizenship programs in 2021.
“This is because the citizenship programs make such large contributions to our National Budget,” he said.
“If the corresponding banks withdraw from doing business with our national bank, revenue from the citizenship programs will not be able to enter Vanuatu.”
Mr Seremiah says the two Australian banks involved were being very vigilant about potential money laundering risks and that Westpac, had just been fined AUD1.3 billion by Australian banking regulators for breaching strict Australian anti-money laundering laws.
The Governor of the Reserve Bank of Vanuatu, Simeon Athy, appeared to confirm the information provided by the Public Affairs Committee.
Mr Athy says the National Bank of Vanuatu is currently working hard to find other corresponding banks to handle citizenship revenue money before it enters Vanuatu.
He says the Reserve Bank of Vanuatu will provide all the assistance required to establish partnerships with any international bank that is willing to do business with the National Bank of Vanuatu.
Since January this year, Vanuatu’s Citizenship Office has collected VT8.9 billion from the sale of citizenship programs and had expected to raise a total of VT9 billion from the programs in 2020.
VBTC asked the Chairman of Vanuatu’s Citizenship Commission for a response on the accuracy of the Public Accounts Committee statement, but he was unavailable for comment.
Vanuatu has two sale of citizenship programs – the Vanuatu Contribution Program and the Vanuatu Development Support Program – where overseas applicants pay varying sums of money, such as a single couple without children paying USD 100,000, to gain certain citizenship rights.
In 2018 and 2019, the revenue from these sales of citizenship programs outstripped total revenue from VAT taxes and other levies and the programs have become the Vanuatu Government’s biggest single source of revenue.