We may need to ask …
-should we be worried where this is going?
-is this about new ways to avoid scrutiny by Australian authorities?
-specifically is this about avoiding greater scrutiny by the FIRB?
-is it about proxy buying?
-is it about money laundering?
Indeed, is it about all the risks associated with those who are crossing borders with convenient identities?
Are Border Force up to getting ahead of this new dimension in knowing who is who? (Or should we say woo … just being cynical)
Why Vanuatu’s lucrative ‘passports for sale’ scheme is popular among Chinese nationals
7 AUGUST 2019
Are you in the market for a second passport? One that can get you into scores of countries — including Europe, the UK, Hong Kong, Singapore and Russia — without needing a visa?
- Applicants can become a Vanuatu citizen without needing to set foot in the country
- It costs about $220,000 for a single application and more for couples and families
- More than 4,000 passports have been sold under the scheme, with most to Chinese citizens
Or perhaps you’d like to park your money in a tax haven where there are no personal or corporate income taxes.
Maybe you’d just like to get away from the rat race and live on a picturesque tropical island in the South Pacific.
Vanuatu, then, could be the place for you.
These are some of the selling points of Vanuatu’s citizenship by investment scheme, or cash-for-passports as it’s also known locally.
Sales have been booming in recent years, providing the Government with an unexpected but lucrative source of revenue.
But not everyone is happy about the scheme, with several prominent locals — including former presidents and high-ranking chiefs — saying it undermines the value of Vanuatu citizenship and the country’s fight to gain independence from its former colonial masters, the French and British.
The recent deportation of a group of Chinese nationals, some of whom had obtained Vanuatu citizenship, focused even more adverse attention on the scheme.
So how does it work?
Many countries have citizenship by investment schemes but often applicants are required to become permanent residents first and then only after a number of years do they become eligible to become a citizen.
Under Vanuatu’s scheme, successful applicants can become citizens within a matter of months, and there’s no requirement to reside in the country or even set foot on Vanuatu soil at all.
It costs around $US150,000 ($220,900) for a single application and more for couples and families.
Interested parties submit their applications through agents who’ve been approved by the Citizenship’s Office and Commission, which oversees the entire process.
The job of screening an applicant’s criminal and financial backgrounds is performed by the Government’s Financial Intelligence Unit.
If their client’s application is successful, the agent pockets around a third of the application fee.
Once approved, freshly minted citizens can then apply for the real prize, a Vanuatu passport.
Why does the Vanuatu Government sell passports?
Pure and simple: to raise revenue. There have been several iterations of Vanuatu’s citizenship by investment scheme since it was first introduced in 2014.
The aim of one of them was to raise money to rebuild the country after Cyclone Pam caused widespread devastation in 2015.
Despite the rising tide of domestic criticism, the Government has largely remained tight-lipped about how many passports have been sold and how much money has been raised.
But in June, a parliamentary committee told local media that more than 4,000 passports had been sold under the scheme.
The Vanuatu Daily Post newspaper examined government financial statements and found that sales sky-rocketed last year, with 1,800 passports sold in 2018 alone.
Most have been sold to people from mainland China even though it’s technically illegal to hold dual citizenship under Chinese law.
What does the deportation of six Chinese nationals have to do with the scheme?
Six Chinese nationals were arrested in the capital Port Vila in late June and later deported back to China at the request of Beijing law enforcement officials.
The group was allegedly running an online financial scam targeting people back in China.
Before their deportation it emerged that four of them had successfully applied for Vanuatu citizenship and obtained passports.
Critics of the citizenship by investment scheme said the incident validated their concerns that undesirable people were buying passports for nefarious purposes.
Vanuatu’s founding president Ati George Sokomanu said the sale of Vanuatu citizenship was demeaning to those who had struggled to achieve the country’s independence.
“The Government needs to state clearly how many passports have been sold, who they’ve been sold to, and how much revenue the sales have generated,” Mr Sokomanu said.
“We achieved our name and now put it on sale and people are coming in and we don’t know [who] we’re inviting,” he said.
The Financial Intelligence Unit later said none of the deported Chinese nationals had a criminal record and Chinese officials informed local authorities of their investigation after they had been granted citizenship.