Vanuatu Prime Minister has instructed the Citizenship Commission to identify where funds generated under the Capital Investment Immigration Plan (CIIP) are held or have been invested.
The Citizenship-by-Investment (CBI) programme allows foreign investors to gain Vanuatu citizenship by making a significant investment in the local economy, through approved capital investment projects.
According to the Citizenship Commission, the CIIP programmes have attracted over 2,000 applicants, generating more than VT10 billion (US$81,531,407) in investments, which are held or managed by the designed “Master Agents”.
The CIIP programmes have an investment component of 70 percent of the citizenship cost, which is managed by the master agents and is intended to be reimbursed to the government after a period of time.
The suspension only applies to the CIIP programmes, excluding the Development Support Programme (DSP) where funds are paid directly into the government’s designated DSP Account.
PM Jotham Napat instructed the in-depth review of the CIIP programmes following recent media reports.
The Citizenship Commission said political instability and poor due diligence led to the uncontrolled appointment of agents, damaging the integrity of the citizenship programs. As a result, Vanuatu’s visa-free agreement with the European Union (EU) Schengen area was suspended, and the USA has recently suggested considering travel restrictions.
The EU Reported cited that ” the programme’s flaws in due diligence, lack of physical presence requirements, and insufficient information exchange create vulnerabilities that can be exploited by individuals with malicious intent.”
In a statement issued to the Daily Post, the Citizenship Commission said it acknowledge the negativity surrounding the citizenship programmes due to past mismanagement, particularly concerns about inadequate due diligence.
The Commission pointed out that the practice of accepting migrants and granting citizenship is not unique to Vanuatu but has existed for generations.
“One only has to look at the advanced countries such as USA and even Australia and New Zealand who have developed to where they are today as a result of the influx of migrants starting from the days when they were discovered by foreign explorers,” it stated.
“The same can be said for Fiji whereby Indian indentured laborers were brought in by colonial planters initially to support the sugar industry whose generations today can be said to be directly responsible for the considerable economic development and progress in Fiji as compared to its other Pacific neighbours.”
Vanuatu’s citizenship programmes originally began with the first CIIP, which was later shut down due to questions regarding the whereabouts of the remaining funds invested on behalf of the government.
The Vanuatu Economic Recovery Programme (VERP) was established to raise essential funds for the Government to support recovery efforts after Cyclone Pam caused widespread damage to the country in March 2015.
This was followed by the DSP, which continues to operate today.
The VERP, which raised significant revenue for the government, was also shut down and merged into the DSP.
In its statement, the Citizenship Commission said the citizenship programmes were designed not only to raise essential revenue but also to build connections with credible individuals who could invest in the country, contributing to its growth through tourism and other ventures.
“Strict controls implemented during the early years of the citizenship programmes ensured the quality and integrity of Vanuatu’s citizenship programmes whilst raising a substantial amount of revenue and contributing significantly to Government revenue,” said the Commission.
“However, changes resulting from political instabilities led to amendments in the Citizenship Commission’s legal frameworks which introduced changes making it very hard for the Commission’s administration to control the integrity of the programmes.
“Major flaws in due diligence practices and irrational and uncontrolled appointment of agents as a result of political pressures and the interest generated paved the way for practices which severely affected the integrity of Vanuatu’s citizenship programmes.”
The recent CIIP programmes started in January 2023 after the regulations were signed by the then PM Ishmael Kalsakau. The regulations were then amended by the former PM Charlot Salwai.
All CIIP agents have been informed of the suspension of the CIIP programmes.
