EU Council suspends visa waiver with Vanuatu

By Salman Siddiqui

The Council of the European Union has decided to suspend its visa waiver deal with Vanuatu, citing serious deficiencies and inherent risks in the country's CBI program as the main reasons for the drastic step. While some Vanuatu CBI agents remain hopeful that the government of Vanuatu will find a way to meet all of EU’s reform demands before the cancellation is finalized in the next two months, others are concerned.

Vanuatu CBI agent Martin St-Hilaire, who is the managing director and co-founder of the consultancy firm AJC, said that while the suspension will enter into force around two months later, he did not think there would be a change.

“I think this is final,” St-Hilaire told Uglobal.

Other Vanuatu CBI agents like James Elcocke-Harris, chief executive of the Vanuatu Investment & Migration Bureau, sounded more hopeful, though even he acknowledged that the time window left to meet the demands was narrow.

“Disturbing and worrying as the EU announcement is, the EU has left a narrow window for Vanuatu to implement the systems, checks and balances that would address the EU concerns sufficiently for the visa-suspension activation to be pushed-back,” Elcocke-Harris said.

He also pointed out this was not yet a cancellation of the visa waiver agreement.

“It should be noted that this is a ‘suspension’ notice, not a cancellation. We will have to see what the Vanuatu government can do in the next eight weeks before the suspension is enacted. Even if it is, not all is lost as, with the right remedies applied, Vanuatu should hopefully be able to restore the visa-privileges it currently enjoys,” he added.

Laszlo Kiss, who is the managing director of Discus Holdings Ltd., said he was hopeful that negotiations between the government and the EU would bear fruit soon.

“I am very sure that the ongoing negotiations between the government of Vanuatu and the European Commissions will be finished with positive results before the end of the deadline,” Kiss said.

“I expect a positive result of the negotiations with the suspension not coming into force and a strengthened due diligence process for checking applicants,” he added.

Suspension does not come as a surprise

The suspension move doesn't come as a total surprise to the migration industry since it was made after the European Commission had proposed the same action against Vanuatu on January 12, warning that the EU would implement its proposal if the South Pacific Ocean nation did not take meet the Union's demands to reform the program soon.

In a statement released on March 2, the Council, which is the main decision-making body of the EU, cited several flaws in Vanuatu's program, among which was the low rejection rate of CBI applications, which in EU's view was seen as a serious lack of due diligence and security screening of applicants.

It also objected to the fact the data of the CBI applicants was not being shared with their countries of origins; nonexistent physical stay conditions; awarding of citizenship to even those named in Interpol’s wanted lists; and the fact that applicants who ended up availing the CBI program in Vanuatu were originally from countries that required strict vetting and screening procedures before they could get an EU visa.

The suspension of the visa waiver deal is expected to be applied to all Vanuatu citizens who received their ordinary passports from 2015 onwards; the suspension itself will be implemented as soon as the decision is published in the Council's Official Journal, which should be around two months from now.

Elcocke-Harris said Vanuatu had taken some steps recently to meet the reform requirements.

“At least one UK-based due diligence firm, and one internationally-based advisor have been appointed by the Vanuatu government in 2022, so there are external resources it can call upon to assist implement the immediate actions required,” Elcocke-Harris said.

Impact of suspension on CBI program

Kiss said that he was more concerned about existing clients rather than new ones since they might not see the value in Vanuatu’s citizenship following the suspension of the visa waiver deal.

“My concern is not really about new clients, but the ones who have already obtained the citizenship – when they realize that they lost an important advantage they counted on when they applied for citizenship and received it, we can be sure that they will not recommend Vanuatu to do business with,” he said.

St-Hilaire, however, downplayed the impact of the suspension on the CBI program, claiming that none of his clients ever even mentioned the 90-day Schengen zone visa as the reason for them to apply for the Vanuatu citizenship.

“I think the 90-day Schengen tourist visa was a really small part of the value of Vanuatu citizenship and I do not think the Vanuatu citizenship program will be affected by this,” he said.

He said the Vanuatu passport would remain powerful even if the suspension became permanent.

“Well, the world is much bigger than just the European Union, and Vanuatu citizenship also provides visa-free access to more than 100 countries and territories, including the UK, Hong Kong, Israel, Russia, and Singapore, to name only a few. So,there’s still tremendous value there,” St-Hilaire said.

“Also worth mentioning is that CBI programs are not all about visa exemptions. Even the citizens of the Schengen Area, or the non-EU nationals who have residency status there, can find value in securing Vanuatu citizenship, to complement their life planning for instance,” he added.

Elcocke-Harris said the CBI program remains critical to Vanuatu’s economy, especially during the pandemic, and any step that goes against the program, would eventually also hurt the economy.

“I believe that the EU recognizes the critical importance of the CBI income to Vanuatu – particularly during this COVID-19 pandemic period. Having held COVD-19 at bay for two years, this week it has finally reached the shores of Vanuatu, with the first community transmissions recorded.

“It remains to be seen what level of impact this will have on the country, but it would be a cruel coincidence if Vanuatu’s economy was to be negatively impacted on two fronts simultaneously,” Elcocke-Harris added.

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