Statement by the Investment Migration Council – 29 April 2025

Today, on 29 April 2025, the Court of Justice of the European Union found that the Maltese Citizenship by Investment pathways violates EU law.

In a rare turn, the Court disagreed 100% with the Opinion of its Advocate General Collins, released on the 10th October 2024. Unlike the Advocate General, who recommended dismissing the case and order the Commission to pay the costs, effectively hinting at the abuse of the procedure, given the absence of EU competence in this field. The divergence of views between the AG and the Court hints at the poor state of EU law on the matter, where legality and legal certainty are not guaranteed and a high degree of politicisation prevails. In any event, the judgment outlaws ‘commercialisation’ of EU citizenship and hints at a U-turn away from the liberal conception of EU citizenship, celebrated in earlier case-law as a legal link between the individual and authority capable of protecting the individual against any ‘absence of genuine links’ claims: the core added value of liberal citizenship. This vision, at least at the EU level, is now gone.

For the first time, instead of attempting to defend the rights of Europeans, the Court does the opposite without convincingly demonstrating any harm caused by the national policy in question and hinting at the growing politicisation of the EU legal order. There is no appeal against this judgment of the Grand Chamber, with far reaching implications for the future of the EU citizenship, Internal Market and the Investment Migration sector.

The European Commission alleged the infringement of Article 20 TEU (stating that every Member State national is a citizen of the Union), arguing that it flows from the article and the principle of mutual trust that a ‘genuine link’ between a Member State and the national is required (50), which does not equal per se the link of nationality enjoyed by the person and Article 4(3) TFEU (sincere cooperation), adding that the EU is not merely an economic but also a political Union, bringing together the peoples of the Member States and that CBI without ‘genuine links’ would undermine mutual trust and that legal residence is insufficient to establish such a link (56, 62). The Commission further referred to Opinion 2/13 (Accession to the ECHR) to emphasize that EU citizenship is one of the raisons d’être of the Union, which ‘should be considered an expression of solidarity and mutual trust between the Member States’ (49). The case of Micheletti and others involving the obligation imposed by EU law on Spain to automatically recognise the Italian nationality of an Argentinian man, who obtained it through ancestry in Argentina, was offered by the Commission, contra legem, as an example that ‘genuine links’ between the Member State and the national going beyond nationality itself are presumed to be part of the mutual recognition package (51).

Malta responded that the Court is being invited, effectively, to act as ‘indirect legislator’ in reviewing legislation of a Member State lying outside the ambit of powers conferred on the Union and within ‘the exclusive competence of the Member States’ (68), that ‘genuine links’ requirements are not part of EU law and are in any case to the Member States to appraise and that the Union has not been established as a ‘single polity’ (70). Malta further offered an argument that any review of national legislation is such cases as this should only happen in cases of ‘significant breaches of the values or objectives of the Union’.

The Court dismissed the latter argument outright, pointing to a rich case-law. It further cited Article 3(2) on the area of freedom, security and justice, which is offered by the Union to its citizens (84) and listed the rights of EU citizens, including freedom of movement in the EU (86, 87), consular protection outside of the EU (90) and rudimentary political rights (88), to conclude from the existence of such rights that grants of Member State nationality affect the ‘functioning of the EU as a common legal order’ (89), as they underpin the raison d’être nature of EU citizenship in the context of the EU (91) as a ‘fundamental status of the nationals of the Member States’ (92) and a ‘primary expression of solidarity’ among the Member States, requiring the Member States not to exercise their competences ‘in a way that is manifestly incompatible with the very nature of EU citizenship’ (95). The Court underlined the ‘special relationship of solidarity and good faith’ that marks any nationality in the eyes of EU law (96, 97).

While it is up to the Member States to establish the materialization of such a relationship (97), this should happen in conformity with EU law (98). This is where the logical jump occurs, as the Court informs the readers that it presumes that offering citizenship for ‘predetermined payments or investments’ amounts to a manifest disregard of such relationship (99): ‘A programme of that sort amounts to the commercialisation of the granting of the status of national of a Member State and, by extension, Union citizenship, which is incompatible with the conception of that fundamental status that stems from the Treaties’(100), with further implications for solidarity (101). The Court further proceeds to try to find ‘genuine links’ in the Maltese CBI, only to dismiss payments and transactional nature of the scheme and to underline that it has insufficient physical presence requirements before naturalization, especially in the context of the ‘ordinary’ naturalizations on Malta. Quite surprisingly, the Court follows the Commission in frowning upon the fact that Malta advertised its CBI with references to EU citizenship (119) using this as an obiter dictum in its reasoning against Malta. Yet, not informing newly-naturalised Maltese citizens of their EU citizenship rights would be a violation of EU law, which the Court is there to protect. The main problem, in the eyes of the Court, seems to be ‘commercialisation’ of EU citizenship, the terminology repeated in the case 7 times, including in paras 100, 103, 113, 120, 121, yet, there is nothing in international (Nottebohm), EU, or Maltese law, which would prohibit this approach to naturalisations, which hints at the ECJ inventing the law.

Key takes:

1. The Court has started dismantling a long-standing liberal tradition of EU citizenship, which viewed
   citizenship as a legal connection between the person and a Member State irrespective of any ‘thick’
   identitarian considerations: the approach celebrated in Micheletti case-law, where EU law rights of an Italian national having no ‘genuine links’ to Italy were protected against Spanish claims that something more than a status of nationality was required to enjoy EU citizenship rights in the EU.
2. Overruling Micheletti has significant implications for the very essence of the Union the Court has in
   mind: from a liberal and empowering space, where identities cannot state in the way of the reliance on EU citizenship rights in the Treaties, we learn that EU citizenship is not such a purely legal liberal status, opening up the door to questioning legal identities of Europeans suspected of having little or no ‘genuine link’ to their country of citizenship. This is a blow not only to EU citizenship as a fundamental legal status, but also to the success of the EU’s internal market as such, as EU citizenship is now conditional on extra-legal considerations.
3. Although stating otherwise, the Court does help the Commission to a significant power-grab: Maltese legislation is de facto rewritten not on the basis of EU competences and principles, but on the basis of enumerating the rights of EU citizens. Given that creating EU citizens in full compliance with EU law is the job of the Member States, enumerating the rights associated with this legal status cannot offer any sound argument to move the boundary of EU competences in favour of the Commission, especially in the absence of any rule of Maltese, EU, or International law, which would allow legal questioning of the Maltese CBI.
4. For the first time in EU citizenship case-law the Court is not guided by the logic of protecting the individual but rather appears to punish a group of Europeans through a presumption that their links with a particular Member State are not ‘genuine’ enough, on a mission to undo all their rights and legal status in the Union. In doing so, ironically, it refers to the case law which is informed by the opposite logic: to try to protect the rights of Europeans no matter what, even when such Europeans are delinquent, like Dr. Rottmann, or have never at all visited their Member State of nationality, like Catherine Zhu.
5. Following the European Commission, the Court takes the law wrong on the requirements of physical presence for naturalisation. Detailed scholarly overviews demonstrate that physical presence is often an https://www.compas.ox.ac.uk/publication/legal-residence-and-physical-presence-the-law-and-practice-of-naturalization-in-eu-jurisdictions

Initial Implications for the sector:

1. The Court offered a hint at a vision of ‘genuine links’ it purports to be required, which should be used by the designers of CBI pathways in the future.
2. Outright sale of EU citizenship is illegal under EU law.
3. It will be the Republic of Malta’s political decision, whether it complies with this judgment or pronounces it ultra vires to buy time and to generate further litigation.

The Investment Migration Council
To read the full JUDGMENT OF THE COURT (Grand Chamber) published on the 29 April, please click here.
Case C-181/23