EU vs Malta Citizenship by Investment Programme: Court Hearing Set for June 17th 

13 June 2024

The highly anticipated first public hearing in the European Commission’s case against Malta’s Citizenship by Investment (CBI) Programme is scheduled for the 17 June 2024 at 14:30 in the Grand Chamber of the European Court of Justice in Luxembourg. 

The European Commission’s Case 

In September 2022, the European Commission announced its intention to take Malta to the Court of Justice of the European Union for its CBI initiative, which offers EU citizenship to investors in exchange for financial contributions. The Commission claims that Malta’s 2020 ‘Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment’ project allegedly violates EU legislation. This program allows foreign investors who invest approximately €1 million in Malta to acquire Maltese, and consequently EU, citizenship. The European Commission argues that the lack of a genuine connection between the investors and Malta undermines the fundamental principles of Union citizenship. The Commission has asserted that “European values are not for sale.”1 The Commission continues to assert that this stance is supported by Union law, which deems citizenship programmes that provide nationality in exchange for pre-arranged monetary donations without a significant connection to the state are illegal. According to the Commission, by establishing and maintaining such a scheme, Malta compromises and undermines the essence and integrity of Union citizenship, violating the principle of sincere cooperation enshrined in the Treaty on European Union. 

Malta’s Stance 

Malta continues to defend its CBI project, maintaining that it complies with European laws despite the European Commission’s objections. While acknowledging the Commission’s concerns, the Maltese government asserts that the program does not violate any EU regulations. However, Malta has implemented some changes in recent years. For instance, following the invasion of Ukraine, the program has been suspended for nationals of the Russian Federation and Belarus, although it remains available to citizens of other countries. 

Sovereignty vs. Supranational Authority 

Critics argue that the EU’s legal challenge undermines member states’ sovereignty in citizenship matters. They stress that nations should have the freedom to shape their citizenship laws according to their unique circumstances. Additionally, opponents believe the EU’s standardized citizenship policy overlooks member states’ distinct economic needs. They assert that investment migration schemes are vital for some countries to avoid reliance on unsustainable international financial aid. Despite past contention, investment plans for residents now enjoy widespread support among EU member states. Numerous EU member states actively pursue policies aimed at attracting foreign direct investment. 

The forthcoming decision by the ECJ regarding the CBI project represents a pivotal moment at the intersection of national sovereignty and EU law. At its core lies the question of whether Malta’s CBI scheme aligns with the principles and objectives of EU law, particularly regarding EU citizenship rights, the principle of sincere cooperation, the genuine connection requirement, and the safeguarding of fundamental rights. The ECJ’s ruling will necessitate a delicate balance between respecting Malta’s autonomy in determining nationality criteria and addressing the potential broader implications of the scheme on EU interests and values. 

Looking Ahead: The June Hearing 

The hearing in June will provide both parties an opportunity to present their oral arguments. After the hearing, the Advocate General of the European Court of Justice will have the chance to issue an opinion. This opinion will be considered before the judges deliberate and reach a final judgment. The decision, which will be final and binding, is anticipated towards the end of 2024 or the beginning of 2025. This ruling could significantly impact the future of CBI programs within the European Union, as well as the sovereign rights of member states concerning citizenship policies.

 

1 State of the Union Address by President von der Leyen at the European Parliament Plenary, 16 September 2020 

Key Contacts

Kris

Kris Scicluna

kscicluna@ae.com.mt

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