By Anayat Durrani
The European Commission plans to take Malta to court to file a legal challenge against the country for its popular golden visa scheme. The EU Commission claims Malta’s CBI program breaches EU law since it grants citizenship without requiring a person to actually live in the country.
The program has been criticized, claiming it encourages corruption and money laundering. Malta most recently suspended the program for Russian and Belarusian nationals due to the war in Ukraine.
“By offering citizenship in exchange for pre-determined payments/investments without a genuine link with the member state concerned, breaches EU law. Values are not for sale,” tweeted EU Justice Commissioner Didier Reynders.
The Commission stated that the scheme “is not compatible with the principle of sincere cooperation enshrined in Article 4(3) of the Treaty on European Union, and with the concept of Union citizenship, as provided for in Article 20 of the Treaty on the Functioning of the European Union.”
Malta’s government rejects the claims from the EU Commission
In response, the government of Malta’s Ministry for Home Affairs, Security, Reforms and Equality released a statement saying they believe they are not in breach of the principle of sincere cooperation in Article 4(3) of the Treaty of the European Union (TEU) and that the country’s legislative framework of citizenship by investment “fully respects the provisions as laid down in the Treaty of the Functioning of the European Union (TFEU) by the operation of the said avenue of naturalization.”
The government of Malta said they strongly rejected the interpretation by the EU Commission and that the country operates with robust due diligence processes that address potential risks with money laundering and the financing of terrorism. The government of Malta stated they “ensure that only worthy individuals would acquire Maltese citizenship and consequently European citizenship.”
The EU Commission has addressed the issue before. The EU Commission sent a letter of formal notice to Malta on October 20, 2020, urging the country to end its investor citizenship program. This was followed with a reasoned opinion sent by the Commission on April 6, 2022. However, the commission stated that Malta's reply “did not satisfactorily address the concerns raised” and said the country is the only Member State still operating a scheme.
The golden visa program has gained more than $780 million for Malta between 2014 and 2020.
The status of the Maltese Citizenship by Naturalization for Exceptional Services by Direct Investment scheme
The EU Commission stated that since the launch of the first program in 2014, the individual investor program, the country naturalized several thousand investors and their family members. By the end of 2020, the country began a new program, the ‘Maltese Citizenship by Naturalization for Exceptional Services by Direct Investment' scheme, after the first scheme came close to reaching a limit of 1,800 successful main applicants. The 2020 program allows nationality in return “for pre-determined payments, without having to establish any genuine link between the applicant and Malta,” the commission statement said.
Malta is a popular choice for a second passport. The country has earned a top spot in the annual indexes published by Henley and Partners ranking the world’s most attractive Investment Migration Programs. This is the seventh consecutive year that Malta has been at the top of the Global Citizenship Program Index.
Meanwhile, the government of Malta stated, the action by the EU Commission will give Malta “the opportunity to continue rebutting the said allegations and let the Court of Justice of the European Union settle the matter by ruling on the interpretation of the treaties.”
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