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EC threatens to suspend Vanuatu Passport’s Visa Waiver. This would severely impact demand for Vanuatu passports from CBI investors. The European Commission has voiced its concerns over corruption, security risks and tax evasion under its citizenship programme. Vanuatu will need to meet its compliance requirements to avoid this suspension.
The European Commission (“EC”) has expressed their grave concern over the ‘security risk’ that investment migration programmes pose to the EU. The EU and Vanuatu have had a Visa Waiver in place since 2015. It allows citizens of Vanuatu to enter any EU Member state and stay there for up to 90 days visa free in any 180 day period.
As mentioned in their press release of 12th January 2022, this visa waiver is at risk of being suspended as the European Commission wants to exert pressure on the Vanuatu government to address certain risks that include:
- Infiltration of Organised Crime
- Money Laundering
- Tax Evation
- Corruption
In recent years the EC have been targetting both Member States and Non-EU States who offer residency and citizenship by investment (“RCBI”) programmes asking for their cessation. This has given rise to a contentious debate between EU policy makers and EU Member States.
The latter counter that they do infact use advanced due diligence screening for all (though numbers are not that sizeable) RCBI applicants and have the sovereign right to decide who is granted a passport/residency permit.
Nonetheless, the EU has reiterated that by having EU Member States offer non EU citizens visa-free access to Europe it is in fact jeopardizing the bloc, its security and allowing personae non gratae to enter.
In a similar vein, the EC has been sending non-EU countires who have visa-free agreements with Europe, warnings and recommendations on their citizenship by investment (“CBI”) programmes’s due diligence procedures. Judgin by their statement below, the EC has found the Vanuatu CBI programme lacking.
Based on careful monitoring of the schemes and information received from Vanuatu, the Commission has concluded that Vanuatu’s investor citizenship schemes present serious deficiencies and security failures, with:
- The granting of citizenship to applicants listed in Interpol’s databases, which raises concerns about the reliability of the security screening;
- An average application processing time too short to allow for thorough screening; as well as no systematic exchange of information with the applicants’ country of origin or main past residence before citizenship is granted;
- A very low rejection rate: up until 2020, only one application was rejected;
- The countries of origin of successful applicants including countries that are visa-required for the EU, with some that are typically excluded from other citizenship schemes.
- As a result, Vanuatu’s investor citizenship schemes allow individuals who would otherwise need a visa to travel to the EU to bypass the regular Schengen visa procedure and the in-depth assessment of individual migratory and security risks it entails.
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How will the EC’s suspension of the Vanuatu Visa Waiver impact the CBI?
If the EC adopt this partial suspension against Vanuatu passport holders it will instantly remove 27 countries from the list of countries that Vanuatu citizens can access visa-free.
This will certainly wipe out the value that the Vanuatu passport has for its holders.
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To provide a ‘proportionate’ response that doesn’t detrimentally impact the majority of Vanuatu citizens, this EC suspension would only apply for recipients of a Vanuatu passport who obtained their passport since the 25th May 2015.
Regretably any other Vanuatu citizens who have obtained their passports in this time (through birth, or other naturalisation routes) will also be impacted by this suspension.
Many entrepreneurs and international business people have in fact invested in obtaining a Vanuatu passport for the mere fact that it provides global mobility and access to the EU so this partial suspension will prove to be much more than a pat on the hand, rather more a kick in the teeth.
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What compliance message is the EC sending to all RCBI countries?
Vanuatu will be pressured to act.
The EC will have two months to notify Vanuatu that the suspension is in force and it will only be lifted if the deemed security risks and compliance risks in the CBI programme are eradicated, to the satisfaction of the EC.
Investor citizenship programmes in other non EU states will be scrutinizing their due diligence standards and procedures to ensure they too don’t suffer the same fate as Vanuatu. Similarly, prospective CBI investors will also have increased hesitation to progress with their applications should the EC persist and progress with this policy throughout 2022 and beyond.
Is the Commission planning to take action in relation to other non-EU countries with visa-free travel to the EU operating investor citizenship schemes?
All EU visa waiver agreements can be suspended on grounds of security or public policy concerns. Investor citizenship schemes in countries with visa-free access to the EU may have an impact on the visa-free regime, as they raise security risks. The Commission continues to follow the issue closely in order to assess any possible security risks related to such schemes.
Source: European Commission Q&A – Vanuatu Suspension Visa Waiver Proposal
The message to all Non EU Member States who have EU Visa Waiver agreements, specifically those who offer RCBI programmes- is clear.
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References
EC Press Release 12th January 2022
EC Q&A Vanuatu Partial Visa Waiver Agreement Suspension Proposal
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