Ticket to Paradise: Vanuatu’s citizenship-for-sale

Vanuatu’s honorary citizenship program needs serious improvements to become beneficial to all Ni-Vanuatu, writes Emily Lyon.

Vanuatu’s ‘citizenship-for-sale’ program devalues the meaning of being Ni-Vanuatu, attracts questionable characters, and yet, is an incredibly important revenue stream for the nation.

To warrant this, such a controversial program should at least be effective.

Vanuatu has offered citizenship in exchange for financial investment in some form or another since 2014. The current Development Support Program (DSP), established in 2017, was intended to attract business elites to prompt economic development in exchange for honorary citizenship.

These programs have been controversial since inception. People applying for citizenship never have to even step foot in Vanuatu. Through government-approved third-party agents, internationals apply for citizenship and a passport in a few months. Reports vary on the exact price, but for between US$130,000 to US$250,000 you could expect a new lifetime, hereditary citizenship.

For many Ni-Vanuatu, it is seen as demeaning to those who fought for independence. “We achieved our name and now put it on sale,” said founding president Ati George Sokomanu, “it is lowering our dignity as Ni-Vanuatu and Melanesian people”.

So, what makes people interested in purchasing a second citizenship?

Agents’ websites boast benefits of visa-free travel to over a hundred countries, minimal tax obligations, low residency requirements, and life in a tropical paradise. Yet, programs such as these are easily exploited by bad-faith actors and bring to light Vanuatu’s inadequate bureaucratic infrastructure for conducting due diligence.

This was seen most recently in June, when six Chinese nationals, four with Vanuatu citizenship, were arrested in Port Vila by Chinese law enforcement. Vanuatu faced harsh criticism granting these applications as they were known to international law enforcement.

China’s growing Pacific influence is, of course, a major theme and complicates this issue further.

On top of these criticisms, the dealings of the Citizenship Commission are also opaque and shrouded in secrecy. Only in June this year did the Passport Office reveal, through Parliamentary Committee, the number of passports sold to date — around 4,000 as of June 2019, with 1,800 sold in 2018 alone. Secrecy also abounds in the process of becoming a citizen-selling agent, with agents making billions but without any idea how they are selected and various instances of people with a history of misconduct being approved by the Citizenship Commission.

If this program is so deeply criticised, why does it still exist?

The sale of honorary citizenship is incredibly lucrative for Vanuatu. Revenue from the DSP is Vanuatu’s largest single source of revenue, overtaking VAT in 2018-19. The gains from citizenship sales are increasing, with revenue up 16.4 per cent in the first half of 2019, earning VT5.3 billion for Vanuatu.

For a Pacific small island state, traditional economic avenues are not always accessible, making honorary citizenship programs popular for many small countries. Antigua and Barbuda, Saint Kitts and Nevis and Saint Lucia all use them to supplement national income where it is difficult to do so traditionally.

Outside of taxation and citizenship, Vanuatu’s economy is reliant upon tourism and agricultural exports. However, both industries, tourism especially, are constantly fluctuating and high-risk for the country. Vanuatu has attempted to diversify through labour mobility, but money has to come from somewhere.

And selling citizenships seems to be working.

What can be done to make this citizenship program more palatable, while ensuring Vanuatu’s continued growth?

To start, the programs need an overhaul of oversight and accountability mechanisms. There have been calls to strengthen the Office of the Ombudsman and to improve the Citizenship Commission to better manage sales and investigate potential exploitations.

Transparency is also key, beginning with a revelation and reformation of the agent selection process. Knowledge of who is selling citizenship will help deter bad-faith actors prevent conflicts of interest in who becomes Ni-Vanuatu.

Much of the suspicion around the program grows out of uncertainty, which could be quelled with the annual release of DSP statistics — the amount earned, nationality breakdown, number of passports sold, etc.

While incredibly lucrative, the DSP fails at its main goal of attracting elite investors. “Currently we are selling passports to some foreigners who have no interest to invest in Vanuatu,” says MP Kalo Seule. A simple solution to this is to require a certain level of investment in economic sectors — be that infrastructure, education or tourism — to deter bad-faith actors and increase the financial burden of exploiting the system.

The value of being Ni-Vanuatu is not for me nor other non-citizens to assign. It is up to the people of Vanuatu to decide what citizenship means for them and to act accordingly. However, these three areas of change would be a significant step towards bettering the lives of all Ni-Vanuatu.