The European commission has announced today, a proposal to permanently re-introduce visa requirement for citizens of Vanuatu. The deadline of the temporary suspension now extended from 3 August 2024 to 3 February 2025 for Vanuatu nationals.
“This proposal builds on the Commission’s efforts to address irregular migration and security challenges linked to visa-free travel, in particular those deriving from investor schemes operated by visa-free countries. These risks include the infiltration of organised crime, money-laundering, tax evasion and corruption”, said the Commission in a press release.
The move follows extensive engagement with the authorities of Vanuatu since May 2022, when the Commission assessed that Vanuatu’s investor citizenship schemes represented a risk to the security of the EU and its Member States.
Commission considers that these have not been sufficient to mitigate the security risks of its investor citizenship schemes that remain in operation
– European Commission
The Commission has clearly stated, Vanuatu has adopted a number of legislative changes to address the EU’s concerns. However, the Commission considers that these have not been sufficient to mitigate the security risks of its investor citizenship schemes that remain in operation.
“Visa free travel provides huge benefits to the EU and our partner countries around the world. But it is a privilege that if abused, can be taken away. As we are showcasing today in the case of Vanuatu, the EU has the means to quickly counter any abuses of visa-free travel, particularly when these lead to irregular migration or security risks for the EU, and we will not hesitate to use them.”
Margaritis Schinas, Vice-President for Promoting our European Way of Life – 31/05/2024
Security Risks and Deficiencies
Based on the assessment of the relevant data and information collected, the Commission
concluded that Vanuatu’s investor schemes presented serious deficiencies and security failures that had the potential to create a risk to the internal security of the EU and its Member States, and activated the suspension mechanism set out in Article 8 of the Visa Regulation.
These concerns were related in particular to:
- high number of passports issued to nationals that would otherwise have to apply for a
visa to travel to the EU (more than 10 000 between 2015 and 2021), with a very low
rejection rate; - absence of any requirement for the applicants to have previously resided or even
visited Vanuatu, as the application process is managed by specialised agencies located
outside Vanuatu (e.g., in Dubai, Thailand, Malaysia, etc.) whereby the applicant does not
need to have any direct contact with Vanuatu’s authorities; - absence of a requirement for a physical interview, reducing the opportunities for the
authorities of Vanuatu to properly assess the applicant or to corroborate the information
provided in the application, including its veracity and credibility; - the fact that the schemes were commonly advertised as a way to by-pass the Schengen
visa procedure and easily obtain visa-free access to the EU; - fact that the applications were processed within very short deadlines, not allowing for
a proper security screening and exchange of information with the applicants’ country of
origin or main past residence before the granting of the citizenship. Due to this, Vanuatu
had granted citizenship to persons subject to a criminal investigation, including persons
listed on Interpol’s databases; - lax legislation on name changes, as successful citizenship-by-investment applicants
can also apply for an identity change.
Furthermore, Vanuatu is also classified as potentially posing a high risk to the integrity of the Common Reporting Standard by OECD, raising suspicion of possible tax evasion and money laundering activities.
The EU said, data received from Vanuatu authorities show a high number of successful applicants, with the vast majority from nationalities that would otherwise require a visa to enter the EU. Plus there are numerous inconsistencies in the data submitted by Vanuatu to the Commission over the years.
There are numerous inconsistencies in the data submitted by Vanuatu to the Commission over the years
Key Issues
- No adequate means for the authorities of Vanuatu to verify the veracity of the documents issued by the applicant’s country of origin or residence, including identity documents and criminal records, since these authorities do not exchange information with the applicants’ country of origin or residence.
- Vanuatu does not seem to rely on international due diligence firms for identity, reputational and security screening.
- Vanuatu not provided information on actual cases of revocation of citizenship acquired through the investor schemes.
- Vanuatu could not provide any information on the number of persons who acquired the citizenship through investment and subsequently changed their name, or on any follow-up checks on those persons
In the report, The EU has expressed concerns that, Vanuatu has continued accepting Russian and Belarusian applicants, also after the Russian aggression against Ukraine.
Visa Suspension Impact
Before the suspension, Vanuatu’s economy heavily relied on the revenues generated from
the investor citizenship schemes (i.e., 33% of total revenues in 2020 and 2021,14 or 12.3% of the GDP in 2020 and 10.2% in 2021).
The introduction of the visa waiver suspension in 2022, triggered a decline in revenue collected under the schemes of 27%
According to IMF, the introduction of the visa waiver suspension, in 2022, triggered a decline in revenue collected under the schemes of 27%, leading the schemes to account for about half of what they amounted to in 2021 in terms of GDP, i.e., 5.3% in 2022 and 5.5% in 2023.
EU Negotiations with Vanuatu Authorities
The European commission has engaged series of dialogues with Vanuatu government to restore the visa free regime. Four meetings held between February 2023 and April 2024, and numerous information exchanges in writing.
The first of these meetings took place on 15 February 2023, where Vanuatu’s designated
contact point for the enhanced dialogue, the National Security Advisor to the Prime Minister’s Office, informed the Commission of the policy and legislative measures put in place by Vanuatu to address the concerns of the Commission: new standards of procedures to manage the schemes, including the appointment of a new Head of the Citizenship Office; the reduction and better scrutiny of private agents handling citizenship applications that would lead to the direct termination of their professional license in case of malpractice.
First meeting – On 4 April 2023, Vanuatu submitted to the Commission the Citizenship Amendment Act, adopted on 21 March 2023. The main novelty introduced by this new legislation is the replacement of the institutions and procedures for the screening and due diligence checks of the applications.
Second meeting – On 13 July 2023, the second meeting of this phase took place, during which the Commission expressed to Vanuatu’s representatives the need to receive a detailed explanation of the above mentioned Citizenship Amendment Act. In that context, the Commission expressed its concerns about the legislative changes, especially in relation to the methodology used for processing the applications that did not sufficiently address the issues identified as risks for the internal security of Member States, such as the lack of exchange of information with the applicants’ countries of origin about criminal records and the origin of the funds
Third meeting – On 5 December 2023, the third meeting took place. Vanuatu was represented by a newly designated Contact point, the Secretary-General of Vanuatu Citizenship Commission. In that context, the Commission regretted that the long reaction time of the Vanuatu authorities to the Commission’s requests for information was slowing down the dialogue, and recalled the approaching legal deadline set out by the suspension procedure of 3 August 2024.
Fourth Meeting – The fourth and last meeting of this phase took place on 5 April 2024 between the Commission and the Secretary General of the Vanuatu Citizenship Commission. The Commission invited Vanuatu to clarify and elaborate on the replies submitted on 22 March 2024 regarding the screening and vetting procedure, the independence of the institutions involved in the schemes, and the impact of the suspension on citizenship applications in 2022 and 2023. The existing concerns were not addressed adequately and several factual and statistical inconsistencies in the data previously provided to the Commission remained unanswered (see point ii under ‘Phase 3’ below). At that point, the Commission was informed by Vanuatu’s representatives that possibilities for exchanges at technical level had been exhausted and that Vanuatu would consider outreach to the Commission at the political level.
According to the report, during the dialogue, Vanuatu merely indicated the references to the legislative changes, without providing sufficient accompanying explanation and information on the reliability and robustness of this screening process.
“While Vanuatu has adopted a number of legislative changes in 2023 aimed to address those concerns, it has failed to provide satisfactory proof that these changes are being duly implemented and are sufficient to mitigate the security risks deriving from the operation of its investor citizenship schemes.”
– European Commission Report
Conclusion
In light of the above updated assessment, the Commission considers that Vanuatu has not
provided satisfactory remedies to the circumstances that led to the suspension of the visa
exemption. In particular, the quality of the responses to the Commission’s requests and the
numerous inconsistencies in the data provided, as well as the lack of sufficient explanations
regarding the new legislation and its implementation, led the Commission to the conclusion that the operation by Vanuatu of investor citizenship schemes would continue to pose substantial risks to the public policy and internal security of the Member States if holders of Vanuatu’s passports would be able to resume visa-free travel to the EU.
To allow the necessary time for the European Parliament and the Council to examine the Commission proposal, the Commission has also extended the period of suspension of the visa exemption by six month, until 3 February 2025.
Next Steps
In the coming days, The European Parliament and the Council to examine this proposal and decide whether to permanently reintroduce the visa requirement for Vanuatu nationals. The Commission has to submit a report to the European Parliament and to the Council with its final assessment, which may be accompanied by a legislative proposal to amend the Regulation in order to transfer the reference to the third country concerned from the list of visa-free countries to the list of visa-required countries.
