Vanuatu becomes first country to ever lose EU visa-free access after golden passport scheme poses security threat.
Earlier this month Vanuatu received a stinging rebuke from the European Parliament, becoming the first country ever to lose its visa-free access to the bloc’s Schengen area.
In the explanatory note accompanying the European Parliament vote, rapporteur Paulo Cunha said that this is not a step the EU took lightly.
“It is both proportionate and justified by the inadequate cooperation of the Republic of Vanuatu and the need to protect European borders from a threat of this scale,” he said.
This fall from grace is due to Vanuatu’s ‘citizenship by investment’ program and the EU rapporteur’s explanatory note is blunt about why it is problematic. Particular concern focused on that all applications had been approved, indicating a lack of rigor in vetting and background checks, posing a “serious (security) threat.”
Cunha summarises the position in trenchant terms: “Vanuatu has been selling its citizenship and abusing the European Union’s trust”.
The Melanesian country is still listed online by “golden passport” agents as “the fastest and most simple citizenship program available”, “very few documents are required” and that it can all be done digitally. One of Vanuatu’s green-colored passports costs about US$150,000 to acquire.
Meanwhile, elsewhere in the region, other countries are dipping their toes into the murky waters of CBI schemes, particularly Solomon Islands and Nauru.
Earlier this year, the Solomon Islands government announced a CBI bill had been drafted and would be reviewed before submission to the national cabinet.
Holders of Solomon Islands’ green passports can travel to Europe without a visa. This will no doubt be one of the selling points of the scheme if it goes ahead, just as it was for Vanuatu.
Even though the legislation has yet to be passed by parliament, the scheme is being spruiked online by websites that promote these offerings.
When the scheme was announced, Solomon Islands authorities said there would be “a thorough analysis” to ensure the associated risks are managed and mitigated.
Earlier this month at the UN’s COP 29 climate summit in Baku, Azerbaijan, Nauru revealed it is also embarking on the CBI journey.
Minister for Climate Change and National Resilience Asterio Appi said Nauru was launching the “innovative” scheme in direct response to the need for climate finance in his country.
It is not surprising that countries with constrained resources and few opportunities to expand their economies are looking for options to increase public revenue.
About 11,000 people live in the Micronesian island state of Nauru that is only 21 square kilometers (8.1 sq miles) in size. The impacts of the climate emergency in the region carry significant costs in terms of mitigation, adaptation, and responding to natural disasters.
Seen as the “next big thing” in the CBI industry, Nauru is already described by agents as offering fast processing, minimal residency requirements and visa-free access to 89 countries for about U.S.$140,000.
Vanuatu’s experience included a period in which the revenue from their scheme was the biggest contributor to the public purse. This provided the government with policy space and a financial buffer to service debt and provide financial support to businesses and households during COVID-19.
In 2022 the EU imposed a partial suspension of Vanuatu’s visa-free status and then a full suspension in 2023. When the European Parliament passed this latest regulation – 62 in favour, one against, with 2 abstentions – it made my Vanuatu passport much less powerful than it once was. The final expulsion of Vanuatu is expected to receive approval by the EU Council when it considers the matter.
Losing access to the Schengen area has economic and diplomatic consequences, as the visa-free status is also an indicator of political stability and cooperation.
The totality of Vanuatu’s experience offers important lessons for Solomon Islands and Nauru. When the CBI schemes were introduced, chiefs and elders in Vanuatu were dismayed to see their citizenship commodified. Many remember that prior to independence, the Indigenous people of the then British and French colony of New Hebrides were stateless and not eligible to hold passports. To see those symbols of nationhood and sovereignty marketed as goods for sale was not welcome.
It has been clear for some time that the intricacies of successfully operating schemes of this type requires specialised resources, beyond what the Vanuatu authorities were able or willing to allocate.
For some countries, the answer is to engage a private sector partner to bring in appropriate skills and expertise. There are plenty available and no doubt their services are already being offered to Solomon Islands and Nauru.
There were many weaknesses in Vanuatu’s processes – checking the backgrounds of applicants, verifying documentation, liaising with Interpol and other authorities – to weed out undesirable applicants. Managing critical relationships, including the one with the EU, was also neglected.
All of this requires technical skills, internet and communications infrastructure and a regulatory regime, to nip any mistakes and malpractice in the bud. Sufficiently robust schemes are costly, both to establish and maintain. Vanuatu’s experience with CBI and the reputational damage caused is still to fully play out. The lessons learned so far don’t seem to have resonated strongly enough yet with the governments of Nauru or Solomon Islands….PACNEWS
Tess Newton Cain is a Principal Consultant at Sustineo P/L and adjunct Associate Professor at the Griffith Asia Institute. She is a former lecturer at the University of the South Pacific and has over 25 years of experience working in the Pacific island’s region.