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Advocate General delivers opinion in Commission vs Malta (Case-181/23)

In this post, we summarise the significant, though non-binding, opinion delivered by the Advocate General of the Court of Justice of the European Union, which disagrees with the European Commission's argument that granting Maltese citizenship by investment, in exchange for a set investment and without a requirement for a genuine link to the country, violates EU law.



On the 4th of October 2024, Advocate General Michael Collins issued an opinion on case 181/23 in relation to the European Commission case against Malta with regards to Malta’s granting of citizenship by investment. The Granting of Citizenship for Exceptional Services Regulations, grants citizenship to individuals who make a substantial contribution to Malta’s economic development. The programme is capped at 400 main applicants annually, with a total quota of 1,500 overall.


The European Commission in this case is seeking a ruling that Malta, by implementing its citizenship scheme, which grants naturalisation in exchange for specified payments or investments without requiring a genuine connection between applicants and the country, has breached its obligations under Article 20 of the TFEU and Article 4(3) of the TEU. The Commission is arguing that such a programme goes against the principle of sincere cooperation and the whole integrity of the European Union.


During the proceedings, Malta has consistently upheld that the right to grant citizenship is a matter of national sovereignty, asserting that neither public international law nor EU law specifies conditions for acquiring citizenship or mandates the existence of a "prior genuine link." According to Malta, the power to attribute nationality lies at the very core of national sovereignty, and it is the prerogative of each country to define what constitutes a "genuine link." While acknowledging that considering such links is a valid way to assess an individual's ties to a Member State, Malta maintains that it is ultimately up to each state to determine what qualifies as sufficient grounds for granting citizenship. In fact, under its own rules for citizenship by investment, Malta expects the applicant to satisfy a number of genuine links requirements which include personal, commercial, financial and investment ties. The Residence Criteria Proposal Letter is a crucial component of the application process. It is submitted alongside a thorough and detailed disclosure of the applicant's assets, explanations of their source of wealth, and background checks carried out by the applicant's representatives. Malta also argues that the European Commission has oversimplified its citizenship by investment framework, which involves a comprehensive and rigorous four tier due diligence process for the main applicant and their family members, among other factors.


Advocate General Collins has delivered his opinion, advising the Court that the European Commission has not proven that EU citizenship law requires a "genuine link" or "prior genuine link" for granting citizenship. He observes that the European Commission must prove that a Member State has not fulfilled an obligation binding upon it at EU law and it may not rely upon any presumption in order to do so. He stressed that decisions on citizenship remain a matter of national sovereignty, not governed by EU law. He further confirmed that it is well-established in case law that Member States, under their exclusive competence and in line with international law, determine the conditions for acquiring or losing nationality. While the EU may intervene in cases where a Member State acts in violation of EU law, this authority is limited. Collins warned that imposing such a rule would disrupt the balance between national and EU citizenship established by the Treaties and unjustly encroach on Member States' sovereignty in this sensitive area.


As a result, the Advocate General has recommended that the Court dismiss the Commission's action and order it to also pay the legal costs. While his opinion strongly supports Malta's position, it is not binding, and the final decision rests with the Court of Justice of the European Union. Deliberations have begun, with a ruling expected by late 2024 or early 2025.


About the authors Dr Jean-Philippe Chetcuti. Managing Partner at Chetcuti Cauchi Advocates. JP has advised some of the world's most accomplished ultra HNW individuals and their family offices, lawyers, bankers, wealth managers on global citizenship and residency, family office structuring, international tax. Dr Antoine Saliba-Haig. Senior Lawyer at Chetcuti Cauchi Advocates. Antoine wrote his doctoral thesis on the Maltese Citizenship Act. He has assisted a number of the firm's clients qualify for Maltese citizenship under various routes.


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