The European Court of Justice, has ordered Malta to end its citizenship by investment program, alleging citizenship for pre-determined payments is illegal and breaches the EU laws. The Top court ruled, Malta had failed to fulfil its obligations” under the bloc’s treaties that enshrine EU citizenship
Malta has the last remaining citizenship by investment in the EU running for 11 years since 2014, after making several amendments to the program to comply with EU law. Cyprus, Bulgaria have already outlawed their investor citizenship schemes after pressure from Commission to phase out such schemes by 2025, for money-laundering, corruption and tax evasion. Malta has come under international criticism for giving out citizenship to many Russians (sanctioned under Ukraine war) under the scheme.
Industry experts in the investment migration industry expressed surprise and disappointment, has criticized the ruling of portrayal of citizenship by investment as commercialization is fundamentally flawed, despite the few hundred citizenships granted annually by Malta.
The Court verdict alleges the “commercialization” of the citizenship program, which granted naturalisation in return for predetermined payments or investments to persons without a genuine link with Malta, constitutes an infringement of the rules relating to Union citizenship and of the principle of sincere cooperation.
The Government of Malta announced “it respects” the decisions of the courts, while at this moment the legal implications of this judgment are being studied in detail, so that the regulatory framework on citizenship can then be brought in line with the principles outlined in the judgment.
The Malta’s Investor Citizenship (CBI) program has directly generated over €1.4 billion in revenue for Malta. These funds have always been divided between the National Development and Social Fund (NDSF), and the Covid Consolidated Fund. The CBI framework generated €339 million from property purchases, €158 million from property rentals, and €236 million were invested in bond acquisitions. Applicants also contributed over €10 million in direct philanthropic donations to voluntary organisations across the country.
- €60 million were allocated to social housing projects
- €10 million investment programme was launched to strengthen health centres across the country,
- Over €13 million were allocated to the construction of a car racing track
- €9 million agreement was reached with the Malta Football Association for a new technical centre
- €8.5 million were allocated to St Michael Hospice; and an additional €5 million invested in the Puttinu Cares apartments in London.
Malta must comply immediately with the Court’s judgment without delay, otherwise the commission may bring a further action seeking financial penalties. The Government remains committed to continuing to attract the best investment, from which the Maltese and Gozitan people benefit.
