Why Nations Like Vanuatu Give Citizenships To Economic Offenders Like Alleged Hawala Operator Hari Shankar Tibrewal?

1. How Vanuatu’s “golden passport” system actually works

1.1 Citizenship by investment, not by migration

Vanuatu runs one of the world’s most prominent citizenship-by-investment (CBI) programmes. Instead of emigrating, living there for years and integrating, a foreigner can:

• Make a qualifying financial contribution (typically a non-refundable “donation” in the range of ~US$130,000+ for a single applicant), and

• Undergo basic background checks,

• Then receive full Vanuatu citizenship and a passport, often within a few months. 

The main channels are:

• Development Support Program (DSP)

• Vanuatu Contribution Program (VCP)

A 2020 review for Vanuatu’s government notes that over 5,200 passports had been issued via these schemes by early 2020, generating more than 26.7 billion vatu in revenue (tens of millions of US dollars). 

1.2 Why a Vanuatu passport is attractive

A Vanuatu passport offers, among other things: 

• Visa-free or visa-on-arrival access to around 90–100 countries (numbers have shifted as the EU tightened rules).

• Historically, visa-free access to the Schengen Area and UK — a huge draw, and a key reason the EU became alarmed about Vanuatu’s CBI scheme.

• No income tax on worldwide income, no capital gains tax, and a generally tax-friendly, offshore-style regime.

• No residence requirement: you can live in Dubai, London or Singapore and still hold Vanuatu citizenship.

• A relatively fast, remote, document-driven process, usually handled via agents.

For anyone facing regulatory heat at home, those features are extremely appealing.

2. Why Vanuatu sells citizenship at all

2.1 CBI is a revenue lifeline

Vanuatu is a small Pacific island state with:

• A tiny domestic market

• High exposure to cyclones, climate change and natural disasters

• Heavy dependence on tourism and external aid

Citizenship sales became a major source of government money, especially during COVID when tourism collapsed.

Different analyses (IMF-linked and CBI-industry sources) indicate that:

• CBI revenues contributed about 18% of government revenue in early 2024;

• In some peak years around 2019–2020, up to 37–42% of all government revenue came from selling citizenship.

One pro-CBI policy paper from a Vanuatu-aligned organisation frankly states that CBI proceeds have been “the government’s primary source of revenue” in recent years, funding infrastructure and basic services.

In short: without the passport programme, Vanuatu’s fiscal position would be far more fragile.

2.2 Political economy: powerful domestic lobbies

Once CBI money becomes such a large slice of the budget:

• Agents, lawyers, and politically connected intermediaries develop a strong interest in keeping the tap open.

• Politicians enjoy having a direct, discretionary revenue stream less constrained than traditional taxes or donor funds.

• Attempts to tighten vetting risk angering influential brokers and cutting revenue in the short term.

That creates structural pressure to keep standards “flexible” and approval rates high.

3. How people under investigation exploit these schemes

Vanuatu is not unique here; many CBI and “golden visa” schemes attract controversial figures. But Vanuatu has become something of a case study.

3.1 Documented pattern: fugitives, sanctions-hit and disgraced businesspeople

A 2021 Guardian investigation found that Vanuatu had sold passports to more than 2,000 people in 2020, including: 

• Individuals wanted by police,

• People facing serious allegations or warrants,

• Politicians and businesspeople with sanctions or corruption baggage.

The European Commission later documented “serious deficiencies and security failures” in the Vanuatu investor scheme:

• Very low rejection rates,

• No meaningful residence or interview requirement,

• Short processing times that made deep background checks difficult,

• Instances where people with Interpol notices or suspicious documents obtained citizenship. 

Because of these concerns, the EU first suspended, then completely revoked visa-free Schengen travel for Vanuatu passport holders in 2022–2024 — the first time ever the bloc killed a visa-waiver over a golden passport scheme. 

3.2 Recent high-profile examples

Two widely reported cases show how people with serious legal issues at home leveraged Vanuatu’s CBI:

• Andrew Tate

  • Investigative reporting by OCCRP and others found that Tate obtained a Vanuatu golden passport in December 2022, the same month he was arrested in Romania on charges including human trafficking and forming an organised crime group.

  • Vanuatu later confirmed his citizenship would not be revoked, admitting vetting weaknesses but saying he had cleared Interpol and UK checks at the time. 

• Mahadev betting app promoters Saurabh Chandrakar and Ravi Uppal

  • ED’s prosecution complaint states that the Mahadev creators obtained Vanuatu citizenship and passports, which they then used to evade arrest and travel freely despite Indian look-out circulars. 

ED investigations into the Mahadev network also note that several bookies from Gujarat secured Vanuatu citizenship, suggesting a conscious pattern of using this jurisdiction as a safe haven. 

Against this backdrop, it’s not surprising that commentary pieces now argue that alleged hawala operators like Hari Shankar Tibrewal might follow the same path, even if official confirmation is still limited.

4. Why would Vanuatu (or similar states) accept someone like Tibrewal?

Again, we must be careful:

• It is well documented that ED calls Tibrewal a “huge hawala operator” and has frozen hundreds of crores of shares linked to him in the Mahadev and stock-manipulation probes. 

• It is reported, but not officially documented in easily verifiable public records, that he has already obtained Vanuatu citizenship.

So let’s treat Tibrewal as a hypothetical but realistic example of the kind of applicant these programmes can attract, and look at why Vanuatu’s system might let such a person through.

4.1 Structural incentives: money first, due diligence later

From Vanuatu’s side:

1. Revenue dependence

   • When CBI brings in tens of millions of dollars a year, sometimes over a third of government income, there is a built-in incentive to err on the side of approving borderline applications — especially if an applicant promises to bring in a full “family pack” of donations. 

2. Distributed responsibility

   • Applications flow through licensed agents and marketing firms scattered across Dubai, Hong Kong, Turkey, etc. These intermediaries earn large commissions per approval, which creates pressure to package the client in the best possible light and push applications forward quickly.

3. Formal but limited checks

   • Officially, Vanuatu says it performs Financial Intelligence Unit (FIU) clearance and police certificate checks, and consults Interpol. 

   • In practice, as both the EU and The Guardian’s investigation showed, these checks have at times been perfunctory or based solely on whether someone is in an easily searchable database, rather than deep, proactive investigation.

If a figure like Tibrewal:

• Has not yet been formally charged or red-corner-noticed at the time of application,

• Uses front companies, alternate spellings, or passport variants, and

• Presents clean police certificates from the jurisdictions where he is formally resident,

then the CBI machinery may simply not flag him.

4.2 Information asymmetry: ED vs small island bureaucracy

Indian agencies like the ED, SEBI or CBI might have:

• Internal dossiers,

• Suspicious transaction reports,

• Intelligence about informal hawala networks,

which are not automatically shared with a small Pacific island’s citizenship office.

Unless:

• India files Interpol notices,

• Or directly alerts Vanuatu through diplomatic or FIU channels,

Vanuatu’s vetting teams might never see the detailed allegations, especially if the person hasn’t yet been convicted in court.

This creates a gap where “alleged” or “under investigation” economic offenders can truthfully write:

“No criminal convictions.”

and sail through basic checks.

4.3 Jurisdictional arbitrage: why such applicants choose Vanuatu

From the applicant’s perspective (using Tibrewal as an illustrative profile based on media reports): 

• A second citizenship unlinked to India is a powerful shield if ED or CBI move to cancel Indian passports, issue LOCs or seek extradition.

• Vanuatu historically had no extradition treaty with India, a point that even appears in Indian court orders related to Mahadev promoters. 

• A Vanuatu passport, especially when it still had Schengen/UK visa-free access, offered global mobility and banking access without the “Indian national under ED scanner” tag popping up immediately.

• It allows one to rebrand as an “international investor”, even while facing probes at home.

In other words, Vanuatu’s programme offers exactly what someone in Tibrewal’s reported situation might want: a new legal identity with better travel, looser ties to India, and a friendly tax regime.

5. Systemic problems exposed by the Mahadev + Vanuatu nexus

The Mahadev investigations have already shown that several categories of actors — from the main promoters (Chandrakar, Uppal) to Gujarat bookies — have used Vanuatu citizenship to dodge Indian law-enforcement.

When you set that alongside:

• EU’s drastic move to terminate visa-free travel for all Vanuatu citizens purely because of the CBI scheme; 

• The Andrew Tate case, where an individual already under investigation still passed Vanuatu CBI checks; 

• Academic and investigative work documenting “fugitives, politicians and disgraced businesspeople” among passport buyers;

a pattern emerges:

Countries like Vanuatu are structurally prone to approving at least some applicants who are, or later become, alleged economic offenders.

Tibrewal — as described in ED-linked and investigative reporting — fits the profile of someone who would have strong incentives to exploit such a system, even if his status as a Vanuatu citizen still rests largely on commentary reporting rather than official acknowledgements. 

6. Are countries like Vanuatu just “selling passports to criminals”?

The reality is more nuanced:

• From Vanuatu’s official standpoint, they insist that:

  • Every applicant is screened by the Financial Intelligence Unit,

  • Interpol and other databases are checked,

  • And they have tightened rules since EU sanctions and media criticism. 

• Critics — from the EU Commission to investigative journalists — counter that:

  • The business model depends on high volumes and fast approvals,

  • The programme has previously approved people with serious criminal or sanctions issues,

  • And the risk to other states’ security and financial systems is unacceptable. 

The truth likely lies in the tension between:

• A small state struggling for economic survival, and

• A global system trying (and often failing) to police cross-border financial crime.

In such a context, alleged economic offenders and hawala operators will naturally gravitate to jurisdictions where:

• Citizenship is a commodity,

• Due diligence is constrained by capacity and incentives, and

• Extradition or information-sharing frameworks are weaker.

Vanuatu is one prominent example, but not the only one.

7. What would have to change?

If the goal is to prevent situations where people like the Mahadev promoters, Gujarati bookies, or alleged hawala operators secure such citizenships, several reforms are routinely suggested by experts and even some in Vanuatu itself: 

1. Deeper, not just faster, due diligence

   • Mandatory cross-checks with all relevant law-enforcement and FIUs in the applicant’s home countries.

   • Independent, third-party investigations into politically exposed persons (PEPs) and anyone in sensitive sectors (casinos, crypto, defence, etc.).

2. Lower tolerance for “borderline” cases

   • Automatic deferral or rejection where there are significant ongoing investigations, not just convictions.

   • A public or at least inter-governmental register of revoked or refused CBI passports.

3. Binding international standards

   • FATF-style guidelines specifically for citizenship-by-investment and residency-by-investment, with peer reviews and potential blacklisting for non-compliance.

4. Domestic diversification

   • For Vanuatu, moving away from a model where up to one-third or more of state revenue depends on selling passports would reduce the temptation to lower standards. 

Until such changes are fully implemented — and enforced — any CBI jurisdiction will remain attractive to people seeking to outrun regulators.

Bottom line

Countries like Vanuatu grant citizenship through investment programmes designed to raise revenue quickly, with limited residence requirements and historically light vetting. That model, combined with information gaps and powerful economic incentives, makes it structurally likely that some applicants under serious financial-crime suspicion — including alleged hawala operators like Hari Shankar Tibrewal, according to recent commentary — will succeed in obtaining citizenship. 

That doesn’t mean Vanuatu wants to harbour economic offenders. It means that a system built to sell passports at speed, in a world of uneven law-enforcement and opaque financial flows, will inevitably become a magnet for exactly those people who have the strongest reasons to buy a new identity.