Malta's Golden Passport Scheme Violates EU Law, Court Rules

In a landmark ruling, the EU's top court has deemed Malta’s citizenship initiative, which allows wealthy foreigners to acquire Maltese passports through investment, illegal under European law.

Malta's controversial golden passport scheme has been struck down by the EU’s Court of Justice, which found it in violation of EU law. The initiative grants individuals from outside the EU the opportunity to obtain Maltese citizenship by investing a minimum of €600,000, purchasing or leasing property at a specified price, and donating €10,000 to charity.

The European Commission had brought Malta to court in 2022 over concerns that this scheme effectively commercializes citizenship, thereby undermining EU regulations. The court emphasized that citizenship acquisition should not be treated as a commercial transaction, a stance that Malta's government has yet to publicly contest. Former Prime Minister Joseph Muscat labeled the ruling as "political" and suggested that revisions might keep the scheme operational.

Fines loom for Malta if it fails to align with the court's ruling. Despite previously asserting that its interpretation of EU treaties was correct, Malta suspended the scheme for individuals from Russia and Belarus in response to geopolitical tensions following Russia's invasion of Ukraine.

Notably, this ruling counters an earlier opinion from the court's Advocate General, Anthony Collins, who argued that EU law does not necessitate a "genuine link" between individuals and the nation while assigning citizenship. However, the court's latest decision highlights that Malta's program endangers mutual trust among EU member states.

The EU has expressed its concerns regarding investor citizenship schemes, citing associated risks, including security vulnerabilities, money laundering, and corruption issues.