passport business

The Marshall Islands passport business

By Giff Johnson

The sale of citizenship in the Marshall Islands has gone through a series of metamorphoses since the government first began offering pass ports to Asians in the mid-1980s.

And, in doing so, it has engendered complaints from the United States govern ment, financial audits critical of the han dling of passport revenues by government officials and unwanted international media coverage centring primarily on the false advertising claims made by sales agents of the benefits of passport ownership - and upwards of SUSIS million in revenue to the Marshall Islands government.

Officially, the government suspended sales of passports to foreigners last August, in large part because of objections raised by the US State Department and the impact these passport sales were having on Marshall Islanders entering the US. Non- Marshall Islanders continue to obtain pass ports in Majuro, however, leading to spec ulation that the programme was suspended to allow the government to get it under control. They add that it could be restarted at a later time once new regulations are produced and enforced.

“Passport sales were suspended in August 1996,” said Foreign Minister Phillip Muller in late May. “We haven’t done anything since then. The cabinet authorised [the Foreign Ministry] to come up with new regulations, but we haven’t done it yet.”

Passport sales were put on hold “because of concerns shared by both the Marshalls and the US governments”, Muller said. “There was so much false information being given out about the pass ports. It was too loose. We needed to stop it.” But, the foreign minister added, “It’s a good programme if we do it right; if we come up with a way that is more transpar ent and will attract investors and bring jobs, not just the sale of passports.”

Since day one, the Marshall Islands has had trouble with the agents it has hired to sell passports. In the mid-80s, Taiwan based promoters issued colour brochures extolling the benefits of owning a Marshall Islands passport, including, they said, unre stricted entry into the US, a claim that had people lining up to buy the passports.

Unfortunately, the claim was far from the truth - but it has continued to be made by subsequent agents as a way to attract buy ers. Under the terms of the Compact of Free Association with the US, Marshall Islanders - like citizens from Palau and the Federated States of Micronesia - have privileges to travel, live, work and study in the US without needing a visa. But these same privileges do not extended to pass port buyers. Indeed, the compact specifi cally states that anyone buying a passport for the purpose of emigrating to the US is prohibited from doing so. And for legiti mately naturalised citizens, there is a five year residency requirement before requests to emigrate will be considered.

While Marshall Islands passports are a ticket to America for Marshall Islanders, they most certainly aren’t for naturalised citizens. But that ‘technicality’ hasn’t lim ited the hype used to sell passports. Since the Marshalls has engaged numerous agents, it’s a battle for customers. And a passport that claims to get you direct entry to the US sells better than one that doesn’t.

The misleading claims of agents haven’t been the only trouble surrounding the passport sales. Since the mid-80s, pass port prices have ranged from a high of $U5250,000 to a low of about SUS3O,OOO, involving a variety of schemes to attract

long-term investors.

In the early 90s, an Australian promot

er, Gregory Symons, began selling pass

ports for the government. He was later charged in Marshall Islands courts and found guilty of embezzling more than SUSI million. In early 1995, the govern ment’s auditor-general criticised the pro gramme, saying ‘"the passport sales pro

gramme is inadequate with respect to its results and performance because manage ment failed to establish a system to record transactions and safeguard government assets”. The auditor-general indicated pos sible embezzlement and otherwise undocu mented use of passport revenues in 1993 and 1994.

In the past couple of years, the US gov ernment has expressed increasing concern about the programme. By last year, pass port sales had reached close to 1000, according to Marshall Islands officials, who said the vast majority had been sold to citizens of the People’s Republic of China.

Some passport buyers have attempted to enter the US using Marshall Islands pass ports, resulting in US immigration confis

cating passports and initiating deportation

proceedings against the Chinese. This resulted in a consequent backlash that has at times caused Marshall Islanders more difficulty when they enter the US - their passports are sometimes subjected to greater scrutiny to ensure that they are ‘real’ Marshall Islanders - as well as addi tional checks when Marshall Islanders apply for US social security or seek employment in the US, activities that did n’t raise an eyebrow from US officials dur ing the first years of the compact, begin ning in 1986. Muller acknowledges that attempts by Chinese to enter the US using Marshall Islands passports has caused “more hassle to our people”.

To be sure, US State Department offi cials in Majuro said recently that the pass port sales would not cause the US to remove the visa-free entry privilege accorded to Marshall Islanders because it is guaranteed by treaty through 2001. What happens after 2001 is open to speculation.

In fact, in response to concerns from the US, the Marshall Islands, in 1996, began stamping the passports being sold to Chinese with a “US visa required” announcement to distinguish them from passports used by Marshall Islanders. And then, in August, the Marshalls announced it was definitely halting passport sales.

Still, Muller believes, the programme can be implemented properly. “We need the money,” he said, adding that US offi cials had shared information on model passport sales programmes in progress in other nations. “Many other countries, like the US and Canada, sell passports for investments,” he said. “We can do it, too.

But we need to sit with professionals and get the programme reorganised. ■