European Commission urges Malta to stop golden passports scheme

Updated at 1:50pm with government statement

The European Commission will be taking further steps in the infringement procedures against Malta with regards to the citizenship-by-investment schemes.

In an additional letter of formal notice, the EC expanded on the concerns initially raised in a separate formal notice issued in October 2020, specifically that both Malta and Cyprus are failing to fulfill their obligations under the principle of sincere cooperation and the definition of citizenship of the Union as laid down in the Treaties.

Consequently, Malta has been given two months to take all measures necessary to address the Commission's concerns. If government's reply is unsatisfactory, the Commission could take a further step and issue a reasoned opinion on the matter.

"While Cyprus and Malta remain responsible to decide who may become Cypriot and Maltese, the Court of Justice has made it clear on multiple occasions that rules on the acquisition of the nationality of a Member State must do so having 'due regard to EU law'," the Commission's statement reads. 

The Commission acknowledged that a new Maltese citizenship-by-investment scheme was launched towards the end of 2020, and that the previous scheme is no longer in force. However, the Commission still expressed concerns on the new scheme being operated in Malta.

Didier Reynders, EU Commissioner for Justice, noted that  “by offering citizenship in exchange for pre-determined payments and investments, Malta fails to fulfil its obligations in the Treaties. Becoming the national of a Member State means becoming an EU citizen too. This link must not be forgotten."

"The new Maltese scheme, currently in place since late 2020, raises concerns in this respect. We expect the Maltese authorities to provide concrete explanations before we decide on the next step,” Reynders continued.

Infringement procedures against Malta were launched last October. The Prime Minister initially claimed that this legal action was being taken due to attacks by the Nationalist Party MEPs over the sale of passports, and that one could thank the MEPs for failing to defend Malta at EU level. 

However, a joint investigation dubbed The Passport Papers found that several IIP applicants under the previous scheme were spending only an average number of 16 days in Malta prior to receiving their passport, while the absolute majority applicants opted for a lease agreement that was on, or just above, the legally required amount to qualify for citizenship.

Similar practices remain under the new citizenship-by-investment scheme. An undercover investigation by The Guardian revealed how Maltese government still accepts a three-week stay in the country as sufficient evidence of a genuine link to Malta.

Citizenship a national competence - Malta

In its initial reaction to the European Commission's decision to pursue its case against Malta, the Maltese government reiterated its long-held stand that citizenship is a member state national competence and it should remain as such.

"Nonetheless, the government will analyse the contents of the correspondence received and is willing to carry on partaking in constructive dialogue with the European Commission. Observations will be communicated to the European Commission in due course," a statement by the Citizenship Parliamentary Secretariat said.

Malta 'failed to correctly transport Long-Term Residents Directive'

The Commissiion has also sent an additional letter of formal notice to Malta for failing to correctly transpose the Long-Term Residents Directive.

The Directive defines the conditions under which non-EU nationals can obtain long-term resident status, and further defines their right to equal treatment to support their integration.

Under Maltese legislation, applicants for long-term residency must prove knowledge of the Maltese language. However, applicants seeking Maltese citizenship through naturalisation can choose between proving knowledge of Maltese or English language skills.

According to the Commission, the additional language requirement for long-term residents does not comply with the principle of proportionality.