THE GREAT ESCAPE
Guptas secured Vanuatu citizenship despite red flags raised by compliance checks – report
The fugitive Gupta brothers acquired Vanuatu citizenship even though the country’s financial intelligence unit had warned immigration authorities against them, says a report.
Fugitive brothers Atul and Rajesh Gupta and their families applied for Vanuatu citizenship under the country’s Development Support Programme in February 2018, the Vanuatu Daily Post reported, citing a statement by the Vanuatu Financial Intelligence Unit (FIU).
The FIU – which does compliance checks on applicants in the citizenship-by-investment scheme – had advised the Vanuatu Citizenship Office of “adverse information” against the brothers on two separate occasions in 2018, said the republic’s only daily newspaper on Thursday.
After identifying this adverse information the FIU had informed the citizenship office of its findings on 4 and 27 February 2018, the FIU said, reported the Vanuatu Daily Post.
In a statement to the newspaper, the FIU wrote: “On around 5th of July 2018, a fresh application for the same clients was received, and this Office issued the same response to the Citizenship Office.
“After numerous meetings and correspondences on this matter, on around 2nd April 2019, this Office issued another letter to the Citizenship Office maintaining its position of adverse information identified against the Gupta brothers.
“This stated clearly that the brothers were subject to criminal investigations in South Africa. The onus was placed on the discretionary authority of the Citizenship Office and the Citizenship Screening Committee. Thereafter, FIU was unaware of the Gupta brothers’ citizenship application nor received a request for a fresh review of their applications.”
Dubai court papers recently revealed that the Guptas were citizens of the tiny South Pacific island nation. South African officials only discovered they had acquired citizenship of Vanuatu after receiving the note verbale (diplomatic communication) from the UAE embassy on 6 April.
The Gupta brothers’ extradition hearing was concluded in Dubai on 13 February 2023, with the court denying South Africa’s request.
Read more in Daily Maverick: The Guptas are gone. No one is to blame, everyone did their best. The end
“In the communication we received, the judgment makes reference to the Guptas being citizens of a country called Vanuatu in the Pacific Islands. This was a new development for us because previously their status was that they were carrying South African citizenship,” said Department of Justice director-general Doctor Mashabane last Friday.
Read more in Daily Maverick: South Africa set to démarche UAE ambassador on Guptas’ extradition judgment failure
An archipelago of 83 tiny islands make up the nation of Vanuatu, which has a population of more than 300,000, according to World Bank data. In December 2020, Vanuatu shed its official United Nations classification as one of the world’s least-developed countries, graduating to developing country status. Port Vila is the capital and largest town.
In 2019, Daily Maverick’s Jessica Bezuidenhout quipped that the Guptas could probably acquire new passports for life in Vanuatu tomorrow, should they need to.
The Guptas hurriedly packed up and fled South Africa for Dubai after several South African banks terminated their accounts in 2016. A year later there was really no turning back as the #GuptaLeaks emerged to expose the vast extent of their alleged criminal enterprise. The stakes were high; they had to prepare themselves for life on the run.
Haven for fugitives
In 2017, Vanuatu launched its Development Support Programme – or Economic Citizenship Programme (ECP) – a citizenship-by-investment scheme which is marketed by some agencies as one of the fastest, cheapest and most lax citizenship programmes in the world. The passport scheme allows foreigners to buy citizenship from $130,000 (about R2,435,719.55 ), and with it visa-free access to 95 countries – including the EU and UK.
Vanuatu also operates as a tax haven, with no income, corporate or wealth tax, which makes it attractive for money laundering.
The country is also an attractive haven for fugitives, politicians and disgraced business tycoons, The Guardian reported. In 2021, the UK publication revealed that dodgy businesspeople and individuals sought by police in various countries – including another pair of South African brothers accused in a R51-billion cryptocurrency heist – were among more than 2,000 people to whom Vanuatu sold citizenship in 2020. The Guardian has published several articles on this highly controversial citizenship scheme.
In November 2022, the EU announced a full suspension of visa-free access for citizens of Vanuatu because of the nation’s controversial citizenship-by-investment programme. The EU believed the scheme presented “serious deficiencies and security failures”, including:
- The granting of citizenship to applicants listed on Interpol’s databases;
- The low rejection rate and speed of approvals which does not allow for thorough screening; and
- The lack of information exchange with applicants’ country of origin.
(The issues with the ECP are also highlighted in the International Monetary Fund’s 2023 Vanuatu report, here).
The suspension was due to take effect from February 2023, but the EU later agreed to a delay, converting the partial suspension to a full suspension (for all Vanuatu passport holders) until August 2024, giving the country’s authorities more time to implement reforms.
While many countries around the world offer citizenship-by-investment programmes, and Vanuatu’s is not illegal, many reputable investment migration consultancy firms, including Henley & Partners, do not promote or offer Vanuatu as an option to their clients, because of concerns over vetting which risk the integrity of the programme.
Interestingly, Vanuatu law allows you to change your name on your passport. On one investment migration agent’s website, the agency answers a question about whether passport recipients can change their name: “Yes. Once you have obtained citizenship, you can change your name and the process is fast and simple. Your passport will be issued with your new name and your Vanuatu passport, issued under your previous name, will be surrendered to the Passport office.”
Read more in Daily Maverick: Dubye to justice – alleged drug kingpin wanted by the Dutch also freed in Gupta-style UAE extradition saga
The South African government does not appear to know where the Gupta brothers are. The news of the failed extradition also came on the back of unattributed media reports of sightings of the Guptas in Switzerland and of asylum applications by them to Cameroon and the Central African Republic.
Daily Maverick contacted the Vanuatu Citizenship Office and Commission for comment on Thursday but a response had not been received by the time of publication. Queries were also to Vanuatu’s Financial Intelligence Unit. DM