Malta's Golden Passport Scheme Deemed Illegal by EU Court

The European Court of Justice has declared Malta’s golden passport scheme, which allows citizenship through financial investment, illegal under EU law, leading to potential sanctions for the nation.

Malta's controversial "golden passport" scheme, permitting foreigners to acquire citizenship through substantial financial investments, has been ruled illegal by the Court of Justice of the European Union (CJEU) in a decision that could have significant ramifications for the island nation. This program, which requires a minimum payment of €600,000, property investments, and a charitable donation, was challenged by the European Commission back in 2022.

The court emphasized that the scheme effectively turns the acquisition of nationality into a commercial exchange, which is contradictory to EU principles. Former Prime Minister Joseph Muscat criticized the ruling as politically motivated, suggesting that Malta could modify the scheme to bring it into compliance with EU laws.

Failure to adhere to the court's judgment could result in substantial financial penalties for Malta. While the country maintains that its interpretation of EU treaties is correct, the court explicitly stated that nationality must not derive from a transactional context.

In light of heightened geopolitical tensions, Malta had previously halted the scheme for Russian and Belarusian applicants due to the ongoing conflict in Ukraine. This ruling contradicts an earlier opinion from the court’s Advocate General, who argued that the EU law does not demand a tangible connection between applicants and the member state granting citizenship.

Despite the rights of individual member nations to regulate citizenship, the EU cautioned that such investor citizenship programs could undermine trust among member states and carry serious risks related to security, money laundering, and corruption.