In this second installment of a three-part series on citizenship by investment in Vanuatu, Chairman Warsal of the country’s Citizenship Commission answers some of the most pressing questions the industry has regarding his country’s two citizenship programs:
- Why are there two citizenship programs selling the same thing at the same price?
- What is the latest on Jimmy Ng’s VCP?
- What is the Commission doing to address ongoing problems with illegal discounting?
On a number of occasions in the last year, Vanuatu officials have floated the idea of expanding the number of avenues by which investors can obtain citizenship, notably a real-estate option. Specific plans, however, have yet to materialize, a delay the Chairman chalks up to the legal and economic complexities involved in bringing online further options.
“When the new government came in, they wanted to diversify the program but […] it’s got to work in with the law, with the economics, it’s got to work in with everything that’s already here. The advice they got from the Attorney General’s office has made the government more cautious,” he explains, pointing out that this is why the introduction of new program elements – such as the long-awaited real estate option – is taking time.
Since the beginning of his tenure in April, 2020, the Chairman has taken a markedly more proactive stance on agent conduct, most recently very publicly cracking down on what he termed “distasteful” marketing practices. One category of misconduct that he has made it a particular priority to prevent is illegal discounting, which he recognizes has become a problem. Lamenting that he had observed many examples of brazenly illegal discounting, Vanuatu DSP agent James Harris said such behavior posed risks not only to program agents but also to the investors who apply through them, as these might see their citizenships rescinded later.
“If I’m an applicant, and I find out that my friend or my neighbor was able to manipulate or get some under-the-table kind of pricing,” asked Harris, “then how am I going to feel? I’m going to feel very aggrieved about it. It undermines the credibility of the whole program.”
Chairman Warsal categorically insisted that any such behavior would be “dealt with accordingly”, presuming the Commission is presented with evidence of the wrongdoing.
“The Commission has sent out a notice to all the agents, advising them that these are the prices set by law and that everyone has to play by the rules. And certainly, if the Commission has evidence of any such [price manipulation] conduct, the Commission will take action because it’s against the law. It has to be stopped.”
Kieron Sharp, CEO of UK-based FACT, a due diligence and risk management company, echoed the Chairman’s view that preventing price manipulation was an indispensable element of preserving the program’s integrity. But keeping tabs on the behavior of agents and applicants, he emphasized, was not something that should end once approvals had been granted.
“It would be wise to look at applicants after they’ve been granted citizenship, for a period of time, to have their backgrounds reviewed, say, on a six-monthly basis, to see whether something that might have been in the background, or wasn’t picked up previously, comes to light,” said Sharp.
For several years now, observers have been asking why Vanuatu has two separate citizenship by investment programs, a state of affairs made all the more perplexing by the removal of differences in pricing and geographical delineations between the two programs last year.
Warsal has previously hinted the VCP’s days might be numbered and, in the video, he explains how the dual-program conundrum arose in the first place. He further admitted that the reason the impasse remains unresolved has to do with certain binding agreements entered into by his predecessors.
“Let me put it this way; because of the contract signed by the previous government, the VCP is still here.”
Watch the full video below: