The Background: The European Commission vs. The Republic of Malta
It should be no surprise that the European Union and its institutions are not fond of Residency & Citizenship by Investment programs, also known as Golden Visas. In 2014, the European Parliament issued a resolution, in which they claimed concerns over the “sale” of EU Citizenship, citing risks such as criminal activity, money laundering, tax evasion and corruption.
In 2019, the European Commission released a formal report on the matter of “Investor Citizenship and Residence Schemes in the European Union”, citing the same risks. In 2022, the European Commission adopted a recommendation calling for the “immediate repeal of investor citizenship schemes”, and strict safeguard measures for “investor residence schemes.”
With its position on the matter perfectly clear and well-established, the European Commission, in 2023, launched an action against Malta. In its case, the European Commission argues that Malta’s Citizenship by Naturalisation for Exceptional Services by Direct Investment violates Article 20 of the Treaty of the Functioning of the European Union. By constituting an “unlawful citizenship investor scheme”, it breaches the country’s duty to sincerely cooperate with other EU member states, as it can serve as a pathway for third-country citizens to bypass traditional “genuine” links to each country.
Ever since then, much discussion has been had over Residency & Citizenship by Investment programs. However, the opinion issued by Mr. Collins could influence the final deliberation on the matter. But what exactly does his opinion mean or why should it be considered?
The Decision: What Does the Advocate General’s Opinion Mean?
On October 4th 2024, Mr. Anthony Collins, an Advocate General for Ireland on the European Court of Justice (ECJ), published his Opinion on Case C-181/23, in regards to the ongoing legal battle between the European Commission and Malta.
In the ECJ’s Press Release 164/24, the Advocate General states the following: “(...) the Commission has 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.”
Essentially, it is the opinion of Mr. Anthony Collins that each of the EU Member States has the right to establish their own nationality law and the requirements for obtaining citizenship however they see fit. This is further highlighted in the Advocate General’s opinion that a “(...) Member State, under its nationality laws, may require proof of a genuine link, [but] EU law does not define, much less require, the existence of such a link in order to acquire or to retain that nationality.”
The only caveat that Mr. Collins interjects is that the existence or operation of either Residency or Citizenship by Investment programs must not be in breach of EU law. Specifically, the Advocate General’s opinion on the matter is as follows: “(... ) Thus 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 where that Member State acts in a manner contrary to EU law.”
In short:
- The European Commission has failed to prove that the Article 20 of the Treaty of the Functioning of the European Union (TFEU) requires a “genuine” link and that it is being breached by Malta’s Granting of Citizenship through Exceptional Services by Direct Investment.
- Advocate General Anthony Collins states that EU law does not impose such a requirement, and that nationality laws are under member states' sovereignty.
- EU law may constrain citizenship rules only when they breach EU law.
It is also important to take notice that, despite the ongoing legal issues between the European Commission and Malta, the program is still operational. Residency initiatives, like the Portugal D2 Visa or the Greece Golden Visa, also offer a pathway toward EU Citizenship, albeit a longer one.
The Future: New Citizenship by Investment Programs Coming Soon?
It is important to clarify that Mr. Collins’ opinion on the matter at hand is not binding. The issuing of opinions is part of the Advocates General’s duties as members of the European Court of Justice, by proposing solutions to ongoing cases.
However, it is also fair to put forward that the Advocate General’s opinion does hold weight and may ultimately influence the ECJ’s final deliberation on Case C181/23. While the Case has yet to reach its conclusion, and it will likely be many months before a final ruling is issued, a decision in favor of Malta could dramatically change the European investment immigration landscape.
A favorable decision would be a victory for each of the EU Member State’ sovereignty. It could also set up a precedent for each country being able to freely set up their own Residency or Citizenship by Investment program, reinforcing their national autonomy in determining the required conditions for becoming a Citizen.
Your Brighter Future: EU Citizenship with Investment Visa
Residency and Citizenship by Investment programs (RBI/CBI) are a powerful tool that, when used and applied correctly, can be an overall win-win situation for everyone involved. National governments obtain a great economic boon, boosting their own coffers and accounts. Prospective investors & expats get access to Residency or Citizenship status, depending on the program of choice.
The final ruling from the ECJ is expected in the near future, and regardless of the deliberation, the final decision will potentially reshape the future of the European RBI & CBI industry. As the Global Leader in Residency & Citizenship, Investment Visa remains committed to keeping you updated on this, and all topics related to the broader scope of the investment immigration industry.
Our commitment to you extends beyond keeping you informed. With a team of professionals working around the clock, Investment Visa also specializes in providing tailored advice fitting to your own personal needs and preferences. Even if your fate lies elsewhere other than a European Union country, you can rest assured – where there is a Residency or Citizenship initiative, Investment Visa is there. Your brighter future starts with simply filling out a contact form, and we will do the rest.
-
Is Montenegro's Citizenship by Investment Program Returning?
Amid an uptick in press headlines across Europe, there is growing speculation that Montenegro’s Citizenship by Investment (CBI) program may...
