Malta defends citizenship by investment programme before Court of Justice

Malta delivered a robust defence of its position regarding its controversial citizenship by investment programme during a Court of Justice hearing taking place on 17th June, calling out the European Commission’s “shifting goalposts” and insisting that citizenship remains a national prerogative.

The sitting saw the European Commission and Malta butt heads on the country’s Malta Exceptional Investor Naturalisation (MEIN) policy, which the Commission referred to the Court of Justice in late 2022.

The MEIN is itself a reworked version of Malta’s Individual Investor Programme (IIP), which had come in for strong criticism. In 2020, the IIP was terminated and replaced by the MEIN, which focuses on residency and provides two routes to citizenship.

Despite the changes, the Commission argues that the new programme flouts an EU requirement that a genuine link needs to exist between the applicant and member state granting citizenship.

It also told the Court that the MEIN policy undermines mutual trust and solidarity between member states, since beneficiaries become EU citizens without having a substantive connection to Malta.

The Commission added that the scheme violates the principle of sincere cooperation between EU member states.

On its part, Malta said that citizenship remains a national competence over which the EU has little to no power. It also pointed out that states have been granting citizenship against investment for hundreds of years.

Malta also argued that its scheme boasts some of the most stringent due diligence and security measures found anywhere in the world, and therefore does not pose any threat to the integrity of the EU.

Finally, Malta lambasted what it portrayed as shifting goalposts by the European Commission. It pointed out that in 2013, the Commission had refrained from commenting on the then-fledgling programme, saying that it was a national competence.

This position became more hostile, and by the close of the decade the Commission was warning about potential security risks – risks that were more than adequately addressed.

Now, the Commission is once again citing different reasons for its opposition to the scheme, said Malta.

In response, the European Commission argued that the need for a genuine link between the state and individual being granted citizenship underpinned all of its objections throughout the years, and while earlier concerns were largely related to security, the current case is entirely based on the legal limits established by EU law.

Writing about the proceedings for IMI Daily, citizenship-by-investment specialist Christian Henrik Nesheim outlined the questions that the panel of judges posed to the Commission, relating to the legal basis for the requirement of a genuine, the comparison with historical schemes, whether the legal basis cited by the Commission (Article 20 of the TFEU) could indeed be interpreted from the text, and the transactional nature of the policy.

The next step is for the EU’s Advocate General to deliver an opinion on 3rd October, followed by the Court’s deliberation and final decision.