EU top court rules against Malta's golden passport scheme

By Charlotte Van Campenhout and Bart H. Meijer

BRUSSELS (Reuters) -The European Court of Justice on Tuesday said Malta needs to end its golden passport programme that allows wealthy foreigners to buy citizenship, as it infringes EU law.

The European Commission took Malta to court in 2022 over the scheme, which grants foreigners a passport and thereby the right to live and work in any EU country in return for an investment of around 1 million euros ($1.14 million).

The court said member states can determine how they grant or withdraw nationality, but that Malta's scheme eroded the principle of mutual trust between EU member states.

"A member state cannot grant its nationality – and indeed European citizenship – in exchange for predetermined payments or investments, as this essentially amounts to rendering the acquisition of nationality a mere commercial transaction," the court said.

"Such a practice does not make it possible to establish the necessary bond of solidarity and good faith between a member state and its citizens, or to ensure mutual trust between member states."

Malta - which had repeatedly insisted its interpretation of EU treaties was correct - said it respected the courts and was studying how to bring its citizenship rules in line with the judgment.

It added that the scheme since 2015 had generated over 1.4 billion euros ($1.6 billion) and funded investments in social housing, healthcare, sports and culture.

Malta suspended the programme for Russian and Belarusian nationals after the start of the war in Ukraine.

The Commission - whose 2020 infringement procedure against Malta and Cyprus led to no tangible changes in Malta - welcomed the ruling.

"European citizenship is not for sale," a spokesperson said.

Malta was the last EU member country with an investor citizenship scheme, as Cyprus stopped accepting new applications at the end of 2020 and is now investigating citizenships previously granted, the spokesperson said.

Bulgaria abolished its scheme in April 2022, he added.

Current EU legislation does not, however, regulate conditions for granting residence permits, which several member states offer in return for investments.

($1 = 0.8778 euros)

(Reporting by Charlotte Van Campenhout, Bart Meijer, Geert De Clercq and Philip Blenkinsop; Editing by Sharon Singleton and Aidan Lewis)