New Delhi: What is the thread that binds a controversial Turkish banking mogul, a suspected North Korean politician, two brothers of Indian-origin charged with state capture in South Africa, an Italian businessman accused of extorting the Vatican, and former IPL chairman Lalit Modi? They were all at some point fugitives avoiding extradition, and citizens of Vanuatu.
Lalit Modi’s citizenship, though, was short-lived since the Vanuatu government publicly revoked his passport Monday and rebuked him for using the country of islands in the Pacific Ocean “to avoid extradition”. But Vanuatu has a history of harbouring fugitives.
In exchange for an investment of a little over Rs 1 crore, it offers citizenship, including to those facing sanctions or arrest warrants, under its ‘golden passport’ or citizenship by investment scheme. In 2021, The Guardian reported that more than 2,000 individuals bought Vanuatuan citizenship the previous year.
The Vanuatuan passport ranks 53rd out of 199 on the Henley Passport Index (updated monthly) with a mobility score of 91. Mobility score is an indicator of how many countries a passport holder can visit without a visa. Among countries a Vanuatuan citizen could enter visa-free were 27 member states of the EU, until the European Commission revoked the visa exemption in December 2024 citing “security and migration risks”.
Vanuatu is not the only country offering the ‘golden passport’ scheme. About 30 other countries including Canada, Spain, Turkey, Egypt, Malta, Dominica, Montenegro and Antigua and Barbuda, among others, offer similar programmes for potential investors.
An analysis by the Investment Migration Insider in March 2021 revealed that revenue from its ‘golden passport’ scheme was the Vanuatuan government’s single-largest source of income (42 percent) for the year 2020, earning it an estimated USD 132.6 million. This allowed the government of Vanuatu to, among other things, reduce its fiscal debt.
Former cricket administrator Lalit Modi, who Indian investigative agencies have termed a fugitive, had applied for citizenship of Vanuatu in 2024. He had fled India in May 2010, weeks after he was questioned in Mumbai by a joint team of the Income Tax department and ED in connection with alleged financial irregularities by IPL and its franchises.
Stating that India continues to pursue the case against Modi, MEA spokesperson Randhir Jaiswal said during a press briefing last week that Modi “made an application for surrender of his passport at the High Commission of India in London” and it was being examined.
Lalit Modi, however, is not the only high-profile figure from India to have sought protection in Vanuatu, which has a population of a little over 3 lakh. Having fled India in 2020 after his name came up in the West Bengal cattle- and coal-smuggling case, former Trinamool Congress (TMC) youth wing leader Vinay Mishra is believed to be living in Vanuatu.
Also Read: In last bid to halt extradition, Tahawwur Rana cites UK ruling in arms dealer Sanjay Bhandari case
Vanuatu as a tax haven
Situated between Australia and Fiji, Vanuatu is considered one of the poorest countries in the world. According to the Asian Development Bank, 15.9 percent of Vanuatuans lived below the national poverty line in 2020. Vanuatu’s economy is heavily reliant on fishing, tourism and agriculture, especially copra, coconut oil, and beef.
The islands also face challenges like poor infrastructure, vulnerability to natural disasters, and a small domestic market, though Vanuatu’s GDP has grown modestly in recent years.
The Vanuatuan government has for some time now explored tax reforms to broaden the revenue base, especially with increasing aid dependency, according to a 2010 report by Directorate-General for International Partnerships of the European Commission.
But what sets Vanuatu apart is its growing reputation as a tax haven. The country levies no income, capital gains, or inheritance taxes on its citizens, relying solely on VAT and trade taxes for revenue. In 2008, however, the government removed its secretive company law provisions, which allowed for hidden company owners and undisclosed deposits. This measure was a response to the arrest of Australian businessman Robert Agius, who was accused of spearheading a $100 million offshore tax scam involving over 400 people.
No extradition treaty
The Vanuatu Citizenship Commission website mentions eight types of citizenships on offer: Naturalization; Non-Citizen married to a Vanuatu Citizen; Entitlement; Regain; Granting of Citizenship to an investor under the Capital Investment Immigration Plan; Honorary Citizenship under Vanuatu Development Support Program; Granting of Citizenship to an individual under Vanuatu Contribution Programme; and Granting of Citizenship under Real Estate Option Programme.
Post the 2021 investigation by The Guardian, the government of Vanuatu also tightened its citizenship policies. This is reflected in Lalit Modi’s citizenship retraction.
Stringent rules also resulted in a marked increase in applications failing the enhanced scrutiny undertaken by the Vanuatu Financial Intelligence Unit, according to the statement issued Monday by Vanatuan Prime Minister Jotham Napat.
“The improved process implemented several years ago includes triple-agency checks, including Interpol verification. We acknowledge that the individual at the centre of this matter faces allegations that have yet to be proven in court, and we wish him well in addressing these matters. However, he will not be facing them as a Vanuatu citizen,” it said.
Napat said holding a Vanuatuan passport is a “privilege” and that applicants must seek citizenship for legitimate reasons. “Avoiding extradition is not a legitimate reason,” he said, referencing Modi’s case.
He further added that while background checks and Interpol screenings during an assessment of Lalit Modi’s passport application revealed no criminal convictions, in the last 24 hours, Interpol had twice denied India’s requests to issue an alert for Modi, citing insufficient judicial evidence. Had such an alert been issued, it would have automatically led to the rejection of Lalit Modi’s citizenship application, the statement read.
Since Vanuatu lacks an extradition treaty with India, this can help Indian authorities further call for Lalit Modi’s extradition.
Meanwhile, in a post on X, Lalit Modi claimed there were no pending cases against him in India and accused the media of spreading “fake news”.
(Edited by Amrtansh Arora)
Also Read: Lalit Maken to Tahawwur Rana—India’s first extradition battle still poses tough questions