Vanuatu has become the first country to lose its European Union visa-free access over a controversial golden passport scheme that it handed out to adopted residents.

The Melanesian archipelago was handed a full suspension of its visa-free status since Vanuatu was "accused of selling its citizenship and abusing the European Union's trust" more than two and a half years ago.

The European parliament delivered a stinging rebuke to Vanuatu after member-states voted to deliver the ban for good over the security threat the scheme posed.

The Schengen bloc of 29 European member states that share borders agreed to abolish the visas to Vanuatu.

In an explanatory note accompanying the European Parliament vote which sent a warning to other Pacific islands states that are considering following Vanuatu in earning US currency, rapporteur Paulo Cunha said the decision is not a step the EU took lightly.

"It is both proportionate and justified by the inadequate cooperation of the Republic of Vanuatu," Mr Cunha said, "and the need to protect European borders from a threat of this scale."

The fall from grace is over Vanuatu's Citizenship by Investment program after concern from the EU about why it is problematic.

Particular reasons for concern focused on that all applications had been approved, indicating a lack of rigour in vetting and background checks, posing a "serious (security) threat".

There were fears cashed-up criminals would pay out around $US150,000 for the passport to ensure they had a direct entry into Europe.

Cunha summarises the position in blunt terms:

"Vanuatu has been selling its citizenship and abusing the European Union's trust," he said.

The EU is upset Vanuatu is listed online by agents as "the fastest and most simple citizenship program available" digitally, promoting that "very few documents are required" that stinks up the legitimacy of applicants of good character.

Neighbouring countries considering similar schemes include the Solomon Islands and Nauru, both seen as soft targets for their recent dealings with the Chinese Community Party.

The Solomon Islands government has announced its intention to draft a Citizenship by Investment bill which would be reviewed before submission to the national cabinet.

Holders of its green passports can travel to Europe without a visa now that Vanuatu's visas have been given the ban.

When the scheme was announced, Solomon authorities ensured sceptics there would be "a thorough analysis" to ensure the associated risks are managed and mitigated.

The microstate of Nauru, an island of 12,000 citizens in the Pacific Ocean, also revealed at the recent UN's COP 29 climate summit it is embarking on a CBI journey .

Minister for Climate Change and National Resilience, Asterio Appi, said Nauru was launching an "innovative" scheme in direct response to the need for climate finance in his country.

There are few opportunities to expand their economy, with Nauru is looking for options to increase its limited public revenue.

The impacts of the climate emergency on the tiny island of just 21 square kilometres carry significant costs in terms of mitigation, adaptation, and responding to natural disasters.

Agents now describe Nauru as offering "fast processing" and "minimal residency requirements", and are selling the ex-phosphate mining haven as having visa-free access to 89 nations for about $US140,000.

Both the Solomon Islands and Nauru have witnessed Vanuatu's experience whereby the revenue from its passport scheme was the biggest contributor to the public purse for its 335,000 citizens.

This provided the government with a financial buffer to service its debt and provide financial support to businesses and households during the pandemic period.

It wasn't until 2022 until the EU first imposed a partial suspension of Vanuatu's visa-free status.

When the European parliament passed this latest regulation – 62 votes in favour, one against, with two abstentions – it made Vanuatu's passport much less powerful to travel on than it once was, let alone the economic consequences.

It is said chiefs and Elders in Vanuatu were dismayed to hear their citizenship commodified as the Indigenous Ni-Van people of the dual British/French colony that was New Hebrides were stateless and did not hold passports.

To see the symbols of nationhood and sovereignty marketed as goods for sale was not welcome.