European Court Orders Malta to End "Golden Passport" Program

The European Court of Justice (ECJ) ruled on Tuesday that Malta must cease its controversial “golden passport” program, stating that the sale of citizenship violates European Union law. The court's decision marks a significant blow to Malta’s practice of granting citizenship in exchange for substantial financial investments, a program that has faced widespread criticism.

EU Law Violations and Commercialization of Citizenship

The ECJ declared that “a Member State cannot grant its nationality—and indeed European citizenship—in exchange for predetermined payments or investments.” The court further described Malta's scheme as the “commercialization” of nationality, emphasizing that EU citizenship should not be treated as a commodity in a commercial transaction.

Malta’s citizenship-by-investment program, which has been in place since 2014, allows foreign nationals to obtain Maltese citizenship by meeting specific financial criteria. These include purchasing property worth at least €700,000, renting a property for €16,000 annually, contributing to the Maltese government, and making donations to local NGOs. The scheme has generated over €1.4 billion for the country since its inception but has also been criticized for facilitating money laundering, white-collar crime, and the potential evasion of international sanctions.

Malta's Response and Legal Implications

In response to the ruling, the Maltese government stated it would comply with the court’s decision while reviewing its legal implications. The government defended the program, claiming it had brought significant financial benefits to the nation. However, former Prime Minister Joseph Muscat, who introduced the program, argued that the ruling was “politically motivated” and suggested that the program should be reformed, not scrapped entirely.

While Malta has suspended the golden passport scheme for Russian and Belarusian nationals following the invasion of Ukraine, previous participants, including some sanctioned Russian oligarchs, have raised concerns about the potential for abuse. Transparency International, which has long opposed such schemes, welcomed the ECJ ruling, calling it a vital step in preventing the commodification of EU citizenship.

EU Crackdown on Citizenship-by-Investment Schemes

Malta’s golden passport program is not the only one to come under scrutiny. Cyprus and Bulgaria have already halted their own citizenship-by-investment schemes, with Cyprus even revoking some passports issued to foreign nationals, including Russian businessmen linked to sanctions. The European Commission has been vocal in its opposition to such schemes, arguing that they undermine trust between EU member states and threaten the integrity of the Union’s core values.

The court’s ruling is part of broader efforts to clamp down on these programs, which some fear enable criminal elements to gain access to the European Union. With Malta now required to end its program, the EU hopes to set a precedent that will prevent other member states from adopting similar schemes in the future.

The ruling also comes amid growing concerns over the role of “golden visa” programs, which offer residency (but not citizenship) in exchange for investments. While Malta’s program was the last in the EU to offer full citizenship, other countries have also faced pressure to curtail their golden visa schemes.