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Malta’s ‘golden passport’ breaches EU law

The EU’s highest court has ruled that a Maltese scheme that offers citizenship in return for certain investments is contrary to EU law. 

The judges concluded that a member state could not grant its nationality – and European citizenship – in exchange for pre-determined payments or investments ”as this essentially amounts to rendering the acquisition of nationality a mere commercial transaction”. 

The case was taken by the European Commission, which argued that the so-called ‘golden passport’ scheme, introduced in 2020, infringed the rules relating to EU citizenship.

Security concerns

The commission had previously raised its concerns about investor-citizenship schemes, flagging in particular worries about security, money laundering, tax evasion and corruption. 

Malta’s was the last such programme operaing in the EU. Ireland closed an Immigrant Investor Programme in 2023.

In its judgment, the Court of Justice (CJEU) found that Malta had breached EU law, as its investor-citizenship programme amounted to “the commercialisation of the grant of the nationality of a member state and, by extension, of union citizenship”. 

‘Mutual trust’ 

The judges stressed that each EU member state was free to lay down the conditions under which it granted or withdrew its nationality. 

“That freedom must, however, be exercised in compliance with EU law,” they stated.

Pointing to the fact that European citizenship guaranteed free movement within a common area of freedom, security, and justice, the court said that this common area was based on two essential principles: mutual trust between member states and mutual recognition of national decisions. 

The court held that the ‘commercialisation’ of citizenship “infringes the principle of sincere co-operation and jeopardises the mutual trust between member states concerning the grant of their nationality, which governed the establishment of union citizenship in the treaties”.