Malta wins first round against EC court challenge to citizenship by investment scheme

The European Commission (EC) has no right to impose restrictions on EU Member States' citizenship-by-investment (CBI) policies, according to an Advocate General of the Court of Justice of the European Union set out in a statement on 4 October. 

The CJEU will now examine the advocate's recommendation that each Member State has unfettered rights to determine who is entitled to be one of their nationals.

An extract of the Advocate General’s Opinion in Case C-181/23 | Commission v Malta (Citizenship by investment) is set out below:

AG COLLINS: "The Commission has failed to prove that EU rules on citizenship (Article 20 TFEU) require that a ‘genuine link’ or ‘prior genuine link’ between a Member State and an individual must exist in order for it to grant citizenship.

"Following an amendment to the Maltese Citizenship Act in July 2020, the Republic of Malta adopted subsidiary legislation 1 which included the ‘Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment scheme’ 2 (the ‘2020 citizenship scheme’). Under the 2020 scheme, foreign investors could apply to be naturalised upon fulfilling a number of conditions, principally of a financial nature.

"In this infringement action, the Commission seeks a declaration that, by establishing and operating the 2020 citizenship scheme that offers naturalisation, in exchange for pre-determined payments or investments, to persons, notwithstanding the absence of a genuine link between them and the Republic of Malta,

"Malta failed to fulfil its obligations under Article 20 TFEU concerning EU citizenship 3 and the principle of sincere cooperation. In today’s opinion, Advocate General Anthony Collins advises the Court that the Commission has failed to prove that, in order to lawfully grant citizenship, EU law requires the existence of any ‘genuine’ or ‘prior genuine’ link between a Member State and an individual other than that required under a Member State’s domestic law.

"Advocate General Collins observes that, in these proceedings, the Commission must prove that a Member State has not fulfilled an obligation binding upon it at EU law and it may not rely upon any presumption in order to do so."

To read the full EC statement, click here.