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Malta's golden passport scheme breaks EU law, top court rules Malta's golden passport scheme breaks EU law, top court rules
(about 20 hours later)
Malta's so-called golden passport scheme that lets people become citizens through financial investment is contrary to European law, the EU's top court has ruled.Malta's so-called golden passport scheme that lets people become citizens through financial investment is contrary to European law, the EU's top court has ruled.
The EU commission took Malta to court in 2022 over the scheme, which grants foreigners a Maltese passport and thereby the right to live and work in any EU country in return for paying at least €600,000 (£509,619), buying or renting property of a certain value, and donating €10,000 to charity. The EU commission took Malta to court in 2022 over the scheme, which grants foreigners a Maltese passport and thereby the right to live and work in any EU country in return for paying at least €600,000 (£509,619), buying or renting property of a certain value, and donating to charity.
The EU's Court of Justice said the scheme "amounts to rendering the acquisition of nationality a mere commercial transaction".The EU's Court of Justice said the scheme "amounts to rendering the acquisition of nationality a mere commercial transaction".
Malta's government has not yet responded to the ruling, which former Prime Minister Joseph Muscat called "political". Malta's government said it respected the ruling and was studying its legal implications.
He said he believed the scheme could continue with "some changes". The government said the ruling was being studied "in detail" so that the citizenship-by-investment framework could be brought in line with the judgement's principles.
The country risks hefty fines if it does not comply with the judgment. In the statement, the government said it "has consistently expressed its firm intention to defend this framework", a position it adopted because it said "issues related to citizenship fall entirely within the national sphere of competence".
The EU's Court of Justice said "the acquisition of Union citizenship cannot result from a commercial transaction." The government said the scheme had generated more than €1.4bn (£1.1bn) for Malta since 2015.
Malta has repeatedly insisted that it was correct in its interpretation of EU treaties, Reuters news agency reported. "The Government of Malta takes pride in the wealth generated through this framework over recent years, which enabled the establishment of a national fund for investment and savings to address the needs of both present and future generations," the statement read.
In 2022, it suspended the scheme for Russian and Belarusian nationals in the wake of Russia's invasion and Europe's crackdown on Kremlin-linked individuals. In the ruling, the EU's Court of Justice said a member state cannot grant its nationality - and by extension European citizenship - in exchange for predetermined payments or investments, "as this essentially amounts to rendering the acquisition of nationality a mere commercial transaction."
Although each EU member state determines how they grant nationality, the court said Malta's scheme "jeopardises the mutual trust" between member states.
The country risks fines if it does not comply with the judgement.
Tuesday's ruling goes against a report last October from the court's Advocate General at the time, Anthony Collins.Tuesday's ruling goes against a report last October from the court's Advocate General at the time, Anthony Collins.
He said the commission had failed to prove that EU law requires a "genuine link" between the person and the country to grant lawful citizenship, adding it is for each member state to decide who is "to be one of their nationals and, as a consequence, who is an EU citizen".He said the commission had failed to prove that EU law requires a "genuine link" between the person and the country to grant lawful citizenship, adding it is for each member state to decide who is "to be one of their nationals and, as a consequence, who is an EU citizen".
Although each EU member state determines how they grant nationality, the court said Malta's scheme "jeopardises the mutual trust" between member states. Malta's government said the court's decision "ignored" the previous advocate general's recommendation.
Malta noted it was "not the only Member State operating similar frameworks".
In 2022, Malta suspended the scheme for Russian and Belarusian nationals in the wake of Russia's invasion and Europe's crackdown on Kremlin-linked individuals.
The EU has previously called on countries to end the practice, noting that investor citizenship schemes carried "inherent" security issues, as well as risks of money laundering, tax evasion and corruption.The EU has previously called on countries to end the practice, noting that investor citizenship schemes carried "inherent" security issues, as well as risks of money laundering, tax evasion and corruption.