Insights

In Commission v Malta (filed on the 22 March 2023), the European Commission challenged Malta’s Citizenship by Investment framework. The Malta citizenship by Naturalisation for Exceptional Services by Direct Investment framework grants citizenship to an exclusive number of applicants (with an annual cap of 400 main applicants and limited to a maximum of 1500) who contribute in a significant way to Malta’s economic development.  Essentially through Malta’s CBI framework a further pillar was added to the grounds on which citizenship by naturalisation may be obtained at law (i.e., descent, registration in certain scenarios or after marriage, birth and naturalisation on the basis of residence), namely, through the new concept of “exceptional services”, which consist of:

1. exceptional contribution to the Republic of Malta;
2. exceptional contribution to humanity;
3. exceptional interest to the Republic of Malta; or
4. exceptional direct investment (in the form of a contribution of €750,000 when combined with a 12-month residence option or €600,000 when combined with a 36-month residence option).

The European Commission has argued that “the Republic of Malta has failed to fulfil its obligations under Article 20 TFEU and Article 4(3) TFEU” dealing with the principle of sincere  co-operation and the integrity of the status of EU citizenship (seeing that the conferral of Maltese nationality automatically results in the acquisition of EU citizenship). The European Commission’s main argument is that Malta is actively granting citizenship to individuals with no “genuine link” or “prior genuine link” to the country and thus allegedly threatening the core principles of EU citizenship.

On the other hand, Malta has continued to maintain that the right to grant citizenship is a matter of national sovereignty and that neither public international law nor EU law lay down the conditions for acquiring citizenship (or require a ‘prior genuine link’ for that matter): “The power to attribute nationality lies at the very core of national sovereignty”.  Malta has argued that it is within the right of each country to determine what can be considered as a “genuine link” or a “prior genuine link”.  Malta argues that while considering genuine links is a legitimate basis on which the extent of an individual’s ties to that Member State can be determined, it is ultimately up to that particular Member State to decide what links are sufficient to justify granting citizenship.  According to Malta, the Commission has also over-simplified Malta’s CBI framework which involves a thorough and in-depth due diligence process with respect to the main applicant and his or her family members (besides other elements).

Today, 4 October 2024, Advocate General Collins’ delivered his opinion in the proceedings and has advised the Court that the European Commission has failed to prove that EU citizenship law requires the existence of any “genuine link” or “prior genuine link”.  He also emphasised that such decisions on granting citizenship are a matter of national sovereignty and do not fall under EU law:

“It follows that the Member States have decided that it is for each of them alone to determine who is entitled to be one of their nationals and, as a consequence, who is an EU citizen”. (para.46)

Collins’ confirmed that it is “settled case-law that it is for each Member State, acting within its exclusive competence and having regard to international law, to lay down the conditions under which its nationality may be acquired and lost” (para.44). Therefore, the EU can technically intervene in matters relating to acquisition and the loss of nationality, but this limitation only applies when a particular Member State “acts in a manner contrary to EU law”.

As Advocate General Collins indicated in his Opinion in Prefet du Gers (C673/20; 129 point 22) “the Member States could have decided to pool their competences and to confer on the European Union the power to determine who may become an EU citizen.  They have chosen not to do so.” (para.44; emphasis added)

Advocate General Collins went so far as to opine that: “There is also no logical basis for the contention that because Member States are obliged to recognise nationality granted by other Member States, their nationality laws must contain a particular rule, let alone one that requires a ‘genuine link’ as a condition for possessing that nationality.” (para.56; emphasis added)

According to Advocate General Collins: “To find otherwise would upset the carefully crafted balance between national and EU citizenship in the Treaties and constitute a wholly unlawful erosion of Member States’ competence in a highly sensitive field which they have clearly decided to retain under their exclusive control.” (para.56; emphasis added)

As a result, the Advocate General has proposed that the Court:

• “Dismiss the Commission’s action;
• order the Commission to pay its costs and those of the Republic of Malta.” (para.62)

While the Advocate General’s opinion strongly supports Malta’s arguments, his opinion is not binding on the Court and the final decision ultimately lies in the hands of the Court of Justice of the European Union.  It is the role of the Advocates General to, in complete independence, propose to the Court a legal solution to the cases that they are responsible for, and today’s Opinion is Advocate General Collins’ proposed legal solution to the infringement proceedings brought by the Commission against Malta in respect of the latter’s Citizenship by Investment framework.

The judges have now commenced deliberations, and the final judgement is to be expected at a later date.  Various sources are speculating that a decision is expected as early as end of 2024 or early 2025.