Malta Ruling: Malta citizenship ruling by the Court of Justice of the EU (CJEU) plays a crucial role in how citizenship laws are interpreted across the Union.
The Court of Justice of the EU in the case C-181/23, Commission v. Malta ruled that Malta’s program for granting citizenship to investors is contrary to Union law, finding that the acquisition of Union citizenship cannot be the result of a commercial transaction.
It is a fundamental principle that the determination of the requirements for the acquisition and loss of citizenship of a Member State falls within the competence of the Member States. This competence of the Member States must be exercised in compliance with Union law. The link of citizenship with a Member State is based on a special relationship of solidarity, loyalty and reciprocity of rights and obligations between the State and its citizens.
The commercialization of citizenship is incompatible with the fundamental concept of citizenship of the Union as defined in the Treaties. It violates the principle of sincere cooperation and undermines the mutual trust between Member States in the granting of their nationality, which was the basis for the establishment of citizenship of the Union in the Treaties.
Malta adopted a regulatory act, an amendment to the Maltese Nationality Act in July 2020, laying down the requirements for acquiring Maltese nationality by naturalization for the provision of exceptional services through direct investment.
Under this scheme, foreign investors could apply for naturalization provided they met certain conditions, mainly of an economic nature. The Commission considers that this scheme, which grants citizenship in return for pre-determined payments or investments to persons with no real links to Malta, constitutes an infringement of the rules on citizenship of the Union and infringes the principle of sincere cooperation.
After an action was brought by the Commission against Malta, the Court ruled that Malta, by adopting and implementing the 2020 investor citizenship scheme, lead to the commercialization of the citizenship of Malta and, by extension, of the status of citizen of the Union, had infringed Union law.
The Court recalled that each Member State is free to determine the requirements under which it grants or withdraws its citizenship. However, that freedom must be exercised in compliance with European Union law. The text and the interpretation of the Treaties do not allow to be concluded that the intention of their drafters was to provide, an exception to the obligation to comply with Union law, as regards the granting of nationality of a Member State.
Citizenship of the Union guarantees freedom of movement within a common area of freedom, security and justice. That common area is based on two fundamental principles: mutual trust between the Member States and mutual recognition of national decisions.
Citizenship of the Union reflects the fundamental solidarity between the Member States, which is based on a set of mutual commitments. Each Member State must therefore, in accordance with the principle of sincere cooperation, refrain from taking any measure which could jeopardize the common objectives of the Union.
Consequently, a Member State cannot grant its nationality – and, de facto, citizenship of the Union – in return for predetermined payments or investments, because that would mean, in essence, that the acquisition of nationality constitutes a simple commercial transaction.
Such a practice does not allow the necessary bond of solidarity and loyalty between a Member State and its citizens to be established or mutual trust to be guaranteed between Member States and therefore constitutes a breach of the principle of sincere cooperation.
In conclusion, this discussion can be proven important for our country, taking into account the previous and current citizenship schemes.
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