On the 17th of June 2024 the European Court of Justice heard a case which the European Commission has launched against the Republic of Malta regarding Malta's citizenship by investment (CBI) program.
The Commission’s main arguments are that the program violates European Union (EU) law, by turning the nature of citizenship into a transactional one, therefore, lacking a genuine link between the applicant to the program and Malta, which in turn is argued to be undermining the integrity of EU citizenship. This is based on the principle that since Malta is a Member State of the EU, the new successful applicants who become citizens of Malta in turn, become citizens of the EU thus benefitting from the rights and guarantees which come with it, without having a connection of substantive value to Malta.
The European Commission also argues that such a program is also in violation of the principle of sincere cooperation which is found in the Treaty of the European Union through the purchase of citizenship without a connection of a genuine nature to the Member State.
The defences which Malta raised are sound in nature, grounded in national sovereignty, historical precedence and security and diligence. Regarding national sovereignty Malta defended itself by stating that the granting of citizenship is hence a matter of national competence whereby each Member State, determines its own criteria for nationality, according to the Treaty of the European Union. The defence of Historical Precedence makes reference to events in the past where other countries have adopted similar schemes and programs.
One of Malta’s main arguments against the European Commission’s claims is that the CBI scheme includes security measures and due diligence exercises which are of a robust and thorough nature. This is to ensure that the new applicants do not pose any risks and therefore, countering the argument of the European Commission that such scheme compromises the integrity of the European Union framework on citizenship.
In its defence Malta argued that the Commission's opposition to its citizenship by investment initiative has shifted over time. Initially, the Commission deferred to national sovereignty in 2013, then raised security concerns in 2019, which Malta addressed with stricter vetting. Currently, the Commission's opposition focuses on EU citizenship integrity and cooperation principles. The Commission maintains that a genuine link between applicants and the state is a consistent EU law principle.
The Advocate General is expected to deliver his opinion on October 3, 2024
As KSi Malta we will continue to monitor the situation closely and shall give updates on the case as they happen.
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