Vanuatu: A Haven for Criminals

The Pacific island nation of Vanuatu has been blacklisted by the European Union as an uncooperative tax jurisdiction, attracting international fraudsters and criminal networks. Despite its small economy, Vanuatu’s lax financial regulations and extensive waters make it a prime location for drug trafficking and illegal fishing.

Challenges in Monitoring Borders

A privately-own island in Vanuatu is being used as a hideout for drug traffickers en route to Australia, making monitoring of the country’s borders a significant challenge. The country’s police force has limited resources and infrastructure, leading to case delays and overcrowding in prisons.

Vulnerabilities in Financial Sector

Vanuatu’s financial sector is also at risk due to its lack of anti-money laundering measures and strict secrecy provisions that prevent law enforcement agencies from obtaining beneficial owner information. The country’s golden passport scheme, which offers citizenship in exchange for investment, makes it vulnerable to financial crime.

Economic Environment Challenges

The country’s economic environment is facing challenges due to complex bureaucratic procedures, outdated labor laws, and poorly managed state-own enterprises. The Central Provident Fund has fallen victim to fraud and scams, leaving low-income Vanuatu nationals at risk.

Limited Support for Victims

Victim support provided by government agencies and civil society is limited, and there is a lack of systematic anti-trafficking awareness campaigns. The country’s labor department licenses and monitors agencies that recruit workers from Vanuatu for overseas work, but does not prohibit recruitment fees for seasonal work out of the country.

Press Freedom and Civil Society

The government generally respects press freedom, but recent legislation has raised concerns about restrictions on media. Non-governmental organizations (NGOs) are free to operate in the country, but civil society appears inactive in combating organized crime.

Key Findings

• Vanuatu’s financial sector is vulnerable to money laundering and terrorist financing
• The country’s lax regulations and extensive waters make it a prime location for drug trafficking and illegal fishing
• The privately-own island being used as a hideout for drug traffickers en route to Australia presents significant challenges in monitoring the country’s borders
• The police force has limited resources and infrastructure, leading to case delays and overcrowding in prisons
• The country’s economic environment is facing challenges due to complex bureaucratic procedures, outdated labor laws, and poorly managed state-own enterprises

Recommendations

• Strengthen anti-money laundering measures and regulations
• Improve border monitoring and security
• Enhance police resources and infrastructure
• Implement systematic anti-trafficking awareness campaigns
• Reform the country’s economic environment by simplifying bureaucratic procedures and updating labor laws
• Increase transparency in the golden passport scheme and implement stricter controls on citizenship sales