EU, VANUATU VISA WAIVER AGREEMENT UNDER THREAT

[Up&running Siaraga]

Vanuatu’s citizenship by investment schemes have proven lucrative over the last few years. (ABC News: GFX/Jarrod Fankhauser)

The European Commission has proposed a partial suspension of the application of the agreement with the Republic of Vanuatu, allowing citizens of Vanuatu to travel to the EU without a visa for stays of up to 90 days in any 180-period. 

The proposal made on Wednesday, January 12 2022, was deemed necessary to mitigate the risks posed by Vanuatu's investor citizenship (or “golden passports”) schemes on the security of the EU and its Member States. It follows extensive exchanges with the authorities of Vanuatu, including prior warnings of the possibility of suspension. The schemes allow citizens of third countries to obtain Vanuatu citizenship - and thus also visa-free access to the EU - in exchange for a minimum investment of 130,000 USD.

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.

Additionally, investor citizenship schemes operated by Vanuatu since 2015 are commercially promoted with the expressed purpose of granting visa-free access to the EU, while the visa waiver agreement is not aimed at allowing visa-required travellers to circumvent the visa requirement by acquiring Vanuatu citizenship.

The Commission has concluded on this basis that Vanuatu's investor citizenship schemes present heightened risks for the security of the EU and its Member States and is therefore proposing a partial and proportionate suspension of the visa waiver agreement. The suspension would be applicable to all holders of ordinary passports issued as of 25 May 2015, when Vanuatu started issuing a substantial number of passports in exchange for investment. These holders would therefore no longer be allowed to travel to the EU without a visa (but would retain the possibility to apply for a visa to visit the EU).  

If the Council decides to partially suspend the agreement, Vanuatu should be notified at least two months before the suspension is applied. During the period of partial suspension, the Commission must establish an enhanced dialogue with Vanuatu, with a view to eliminating or substantially mitigating the security risks for the EU and its Member States. Should Vanuatu introduce sufficient measures to this effect, the partial suspension should be lifted.

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's report on investor citizenship schemes of January 2019 highlighted concerns about such schemes, in particular as regards security, infiltration of organised crime, money laundering, the financing of terrorism, tax evasion and corruption. In the report, the Commission also warned that the schemes could be used to circumvent the regular Schengen visa procedure and the in-depth risk assessment this procedure entails.

Since 2015, almost at the same time as the visa waiver agreement between the EU and Vanuatu was signed and started to apply provisionally, Vanuatu started operating investor citizenship schemes on an increasingly large scale, granting citizenship to a high number of applicants. The Commission has carefully monitored the schemes and collected information regarding their management, in particular as regards application requirements, security screening of applicants, exchange of information and statistics the on number of applications, the nationality of applicants and the rejection rate.

At meetings between the EU and Vanuatu held in April 2019 and April 2021, the EU referred again to the potential impact of Vanuatu's investor citizenship schemes on the visa waiver agreement. On both occasions, the EU urged Vanuatu to immediately address possible risks of infiltration of organised crime, money laundering, tax evasion and corruption associated with such schemes. However, no substantial amendments were made to the schemes and in April 2021 the Government of Vanuatu even took additional steps to set up a new citizenship program.

All EU visa waiver agreements can be suspended on grounds of security or public policy concerns.

In response to the suspension recommendation, Ronald Warsal, Chairman of Vanuatu's National Citizenship Commission told Daily Post that discussions surrounding this matter were held yesterday with officials from the Ministries of Foreign Affairs, Internal Affairs, Finance and Prime Minister's Office.

The government will appoint a Taskforce to look into the issues identified by the European Commission and address them.