No ‘genuine link’ to Malta required for golden passport holders, EU told

The Maltese government has secured a favourable opinion from the European Court of Justice’s Advocate General over a challenge from the European Commission to shut down its citizenship-by-investment scheme.

Malta introduced its golden passports for the world’s ultra-wealthy in 2014, selling Maltese citizenship at well over €1 million apart from an obligation to acquire property and securities.

Since then, the Individual Investor Programme has been refashioned as ‘Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment’.

The European Commission challenged the Maltese scheme, hardly the only one in the EU, saying there was “no genuine link” between the golden passport holders and Malta.

By accusing Malta of not fulfilling its obligations under the Treaty of the EU concerning EU citizenship and the principle of sincere cooperation, the Commission commenced infringement actions and finally a court action in the ECJ.

But the advice of the ECJ’s Advocate General to the Court, which has yet to pass judgement, is that the Commission has failed to prove that EU rules on citizenship 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.

Advocate General Anthony Collins advised the Court that the Commission had 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.

“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… member state’s respective conceptions of nationality touch on the very essence of their sovereignty and national identity, which they do not intend to pool.

“It follows that the member states have decided that it is for each of them alone to determine who is entitled to be one of their nationals and, as a consequence, who is an EU citizen,” Collins said.

The AG therefore found that EU law does not define, much less require, the existence of such a link in order to acquire or to retain that nationality.

Although EU law does not lay down conditions for the exercise of powers the member states  have chosen to retain, that exercise must not breach EU law in situations that come within the latter’s scope. Whilst EU law may constrain, in principle, the exercise of a member state’s sovereign prerogative to grant or withdraw citizenship, that limitation applies only when it acts contrary to EU law.

“The conditions for the grant of nationality are a matter of national law, although deference may be paid to rules of international law against statelessness and EU law requires that the human and procedural rights of the persons concerned are respected, at  least as regards the loss of nationality,” the AG said.

Collins said the duty under EU law to recognise the nationality granted by another member state is a mutual recognition of, and respect for, the sovereignty of each State and is not a means to undermine the exclusive competences that the member states enjoy in this domain.

“There is no logical basis for the contention that because member states are obliged to recognise nationality granted by other member states, their nationality laws must contain any particular rule.

“To find otherwise would upset the carefully crafted balance between national and EU citizenship in the Treaties and constitute a wholly unlawful erosion of Member States’ competence in a highly sensitive field which they have clearly decided to retain under their exclusive control.”