By Moustafa Daly
The process to revamp Vanuatu’s citizenship by investment program is in progress. The EU is directly involved in the reform process, announcing that regular virtual meetings will be held between EU and Vanuatu officials to ensure the reforms clearly address EU’s border security concerns.
“The requirements of the EU commission so far are strengthening the due diligence process and screening process of prospective applicants, abolishing the easy name change possibility, and strengthening the security of the passport booklet… no surprises there,” previously explained Laszlo Kiss, managing director at Discus Holdings, to Uglobal.
The background on Vanuatu’s relationship with the EU
In 2015, the EU granted Vanuatu citizens visa-free access to the Schengen Area. Two years later, the small Oceania island-nation introduced a golden passport scheme which the EU eventually deemed as a gateway for illicit activities and individuals – voicing particular concerns over the low rejection rate and granting the passport to individuals listed in Interpol databases, among other concerns.
The situation led to escalating tensions between both sides, leading the EU to issue several warnings to the Vanuatu government to scale down its program and apply tighter due-diligence – particularly following the Russian invasion of Ukraine. A partial suspension of the visa-waiver agreement was ordered by the EU in May of 2022, and failure to take prompt action on part of Vanuatu led the union to go ahead with a full suspension of the visa-waiver agreement in November 2022.
The impacts of this decision have been drastic. “Vanuatu passport holders are no longer exempt from obtaining a visa to enter the Schengen zone. This affects Vanuatu citizens traveling to neighboring New Caledonia, which requires a visa for entry since it is a French territory,” explains Martin St-Hilaire, director at EC Holdings. “Prior to this change, entry was automatically granted due to the Schengen zone access.”
“However, it's important to note that this change in visa policy has not been mirrored by the UK, Singapore, Hong Kong, or Israel. These nations, known for their stringent border control and security policies, still welcome Vanuatu passport holders without requiring a visa in advance for crossing their borders,” he adds.
After months-long negotiations, the EU finally agreed to allow Vanuatu to reform its CBI program, giving the island’s officials 18 months to enact reforms to the program from which it makes 30% of its annual revenue. The decision was made after Vanuatu’s president led a delegation to Brussels to assert EU officials over his nation’s commitment to address the union’s concerns and revamp the program.
“The Vanuatu government is actively engaging in negotiations with European Union authorities to restore this visa exemption benefit that Vanuatu passport holders previously enjoyed,” says St-Hilaire.
Vanuatu and its investors
Vanuatu is yet to explicitly ban Russian investors so it remains as one of the options along with Montenegro, which also enjoys visa-free travel to the EU. This is expected to be part of the reforms overseen by the EU, but it’s yet to be announced in an official capacity.
One of the perks of having a Vanuatu passport is also visa-free travel to the UK – a popular destination for Russian oligarchs. Following the war, the UK halted Russians’ access to its Tier 1 Investment Visa before scrapping it altogether shortly thereafter.
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