End of Golden Passports

European Court rules golden passport schemes illegal

The European Court of Justice (ECJ) has ruled that Malta’s “golden passport” programme, which allowed wealthy non-EU nationals to buy citizenship, violates European Union law.

In a major legal decision that marks the end of EU-wide citizenship-by-investment schemes, the ECJ today declared Malta’s programme illegal. The scheme had allowed foreign investors to acquire Maltese nationality, and by extension, full EU citizenship rights, in exchange for an investment of around €1 million.

EU citizenship not for sale

The European Commission filed a case against Malta in 2022, arguing that granting nationality without any genuine connection to the country such as residency, cultural integration, or language undermined the fundamental principles of EU law. Malta’s programme enabled investors to live, work, and travel freely within the EU by effectively purchasing a passport.

The court said that although member states can determine how they grant or withdraw nationality, Malta’s scheme eroded the principle of mutual trust between member states upon which the common area is based.

“A member state cannot grant its nationality – and indeed European citizenship – in exchange for predetermined payments or investments, as this essentially amounts to rendering the acquisition of nationality a mere commercial transaction,” the court said.

“Such a practice does not make it possible to establish the necessary bond of solidarity and good faith between a member state and its citizens, or to ensure mutual trust between the member states.”

EU’s last golden passport scheme shut down

This verdict marks the legal end of the EU’s last operating investor citizenship scheme. Experts had warned that a ruling in Malta’s favour could have revived similar golden passport schemes across Europe, including Cyprus’ programme, which was shut down in 2020 after a scandal involving high-profile abuses and international backlash.

Security and ethics concerns highlighted

According to the Financial Times, some individuals who gained Maltese passports through the scheme later appeared on EU, US, or Ukrainian sanctions lists. At least 16 of those granted citizenship were either politically exposed persons (PEPs) or under criminal investigation at the time.

Among the beneficiaries were members of the Saudi royal family, though no allegations of corruption have been made in their cases.

Cyprus still under legal scrutiny

Cases related to Cyprus’ golden passport scheme are still being heard in the island’s courts, and there have been suggestions that the current “golden visa” programme is a mere rebranding rather than a substantial reform.

Source

Cyprus Property News