Vanuatu’s Citizenship Programme and Rejection of Lalit Modi & Nirav Modi’s Applications

Sub: Polity

Sec: Citizenship

Context:

Vanuatu, a Pacific island nation, has a Citizenship by Investment (CBI) programme, which allows foreign nationals to acquire citizenship through financial contributions.
Recently, Vanuatu rejected the citizenship application of Lalit Modi and previously denied the same to Nirav Modi due to concerns over financial irregularities and money laundering.

Vanuatu’s Citizenship by Investment (CBI) Programme

Vanuatu offers citizenship to foreign applicants in exchange for a non-refundable donation or investment.
The Capital Investment Immigration Plan (CIIP) requires:
- $1,55,000 (₹1.3 crore) for single applicants, making it one of the most affordable citizenship programmes.
The programme has been used by individuals seeking alternative nationality, sometimes to evade legal proceedings in their home countries.

Why Was Lalit Modi’s Citizenship Revoked?

Lalit Modi, former Indian Premier League (IPL) chairman, was granted Vanuatu citizenship, but it was later cancelled.
Vanuatu PM Jotham Napat stated that:
- Interpol screenings during his application process showed no criminal convictions.
- However, new information revealed that Interpol twice rejected India’s request for an alert notice due to lack of substantive judicial evidence.
- If an alert had been issued, Modi’s application would have been automatically rejected.
Reason for revocation: Modi sought citizenship to avoid extradition, which is against Vanuatu’s rules.

Why Was Nirav Modi’s Citizenship Request Rejected?

Nirav Modi, accused in the ₹13,600-crore Punjab National Bank (PNB) scam, attempted to acquire Vanuatu citizenship before the scam became public.
He transferred $195,000 in November 2017 to an authorised agent of Vanuatu’s CBI programme.
Vanuatu’s Financial Intelligence Unit (FIU) found adverse findings against him, leading to the rejection of his application.

Why Has Vanuatu Tightened Its Citizenship Programme?

Due to global concerns over money laundering, Vanuatu has strengthened background checks in the last four years.
New rules include:
- Triple-agency checks, including Interpol verification.
- Vanuatu Financial Intelligence Unit (FIU) scrutiny.
International response:
- European Union revoked Vanuatu’s visa-free travel agreement in December 2024.
- Financial Action Task Force (FATF) highlighted risks of criminals misusing citizenship programmes to hide assets and evade extradition.

Case of Mehul Choksi

Mehul Choksi, co-accused in the PNB scam, acquired Antigua & Barbuda’s citizenship through an investment programme.
He has been fighting extradition to India since then.

Lalit Modi: Allegations and Legal Issues

Modi is accused of:
- Forex violations related to the ₹425-crore IPL 2009 TV rights deal with World Sports Group.
- Misconduct and financial irregularities in IPL franchise bids.
Legal developments:
- He fled to the UK in May 2010 after one interrogation by ED and Income Tax authorities.
- BCCI banned him for life in 2013 after finding him guilty of financial misconduct.

Conclusion

Vanuatu’s CBI programme has faced scrutiny for being misused by financial offenders.
To prevent criminals from evading justice, Vanuatu has tightened background checks.
The international community, including the EU and FATF, has raised concerns over such pay-for-citizenship schemes.
Cases of Lalit Modi, Nirav Modi, and Mehul Choksi highlight the misuse of citizenship-by-investment programmes as a means to escape legal accountability.