European Court Advocate General backs Malta in Citizenship Case
A high court official of the Court of Justice of the EU tasked with providing legal advice to Judges on the legal outcome of the European Commission case against Malta';s citizenship rules, asked for the dismissal of the Commission arguments, agreeing with Malta in all material points. The Advocate General stated that the EU had not competence to impose a genuine link requirement but without it, new Citizens may have their citizenship disregarded by other countries.
The European Commission is requesting a declaration that Malta's 2020 citizenship by investment scheme, which grants naturalisation in exchange for specified payments or investments without requiring a genuine connection to the country, violates Article 20 TFEU and Article 4(3) TEU. Additionally, the Commission is asking that Malta be ordered to cover the costs.
EU has No Competence in Domestic Citizenship Acquisition Rules
According to the Advocate General, EU law does not regulate the conditions for acquiring citizenship, which is under the sovereignty and national competence of Member States. For this reason, a Member State is under no obligation to implement any particular conditions for acquiring citizenship as may be dictated by any European Union institution. However, a bond between the citizen and the country of citizenship is an important component for the integrity and cohesiveness of citizenship as understood in international relations.
The Advocate General endorsed Malta's position that Malta does apply a requirement of genuine links for granting citizenship by direct investment, even if Malta does not consider a 'prior genuine link' as a prerequisite under Public International Law or EU law.
Malta's investor citizenship rules actually apply Genuine Links Requirement
The European Commission has oversimplified Malta's 2020 citizenship scheme to mislead the Court. Maltese rules require applicants to show evidence of personal, commercial, and financial ties with the country, in addition to meeting the minimum investment criteria.
"A duty under EU law to recognise nationality granted by other Member States is a mutual recognition of, and respect for, the sovereignty of each Member State– not a means to undermine the exclusive competences that the Member States enjoy in this domain. To find otherwise would upset the carefully crafted balance between national and EU citizenship in the Treaties and constitute a wholly unlawful erosion of Member States’ competence in a highly sensitive field which they have clearly decided to retain under their exclusive control.
Opinion, para. 57, emphasis added.
States may disregard Citizenship obtained without Genuine Links
The Advocate General agrees with the European Commission on the lessons learnt from the International Court of Justice (in the Nottebohm judgement) that held that a State may refuse to recognise nationality granted by another State, in the absence of a genuine link or a connection between that individual and the State. (AG Opinion, para. 56)
The ICJ ruling is limited to allowing States to withhold recognition of nationality granted in the absence of such genuine link... It does not oblige States to require that such a link exists either between them and their own nationals or between other States and their nationals.
Advocate General, Opinion para. 56. (emphasis added)
Implications of this Opinion for Malta Citizenship by Investment
The Advocate General’s opinion in favour of Malta is not binding on the Court and the final decision lies in the hands of the Court of Justice of the European Union that is expected in the coming months.
Many immigration lawyers working with citizenship by investment in Malta and abroad, were elated by this development given its pivotal role in stopping the incursions in citizenship law and policy of countries running citizenship by investor programmes.
Not so Dr Jean-Philippe Chetcuti, senior immigration and tax partner at Chetcuti Cauchi Advocates and who works with the worlds' wealthiest families. Dr Chetcuti was cautiously optimistic:
"This opinion backing Malta is a positive development. But it may be easily misunderstood. The Advocates General's Opinion highlights the robustness of the Maltese rules on Citizenship by Direct Investment, namely world-class multi-tiered due-diligance process, the focus on reputation, security, impeccable source of wealth and clean records of applicants. However, the AG sounds a resounding alarm that EU member states are obliged to recognise citizenship granted by another EU member state without inquiring on the rules of naturalisation applyed by that state - but other countries have the blessing of the Nottebohm judgement in disregarding citizenship obtained without genuine links.
Dr Jean-Philippe Chetcuti
Dr Chetcuti continues: "Given applicants applying for citizenship in Europe often hail from outside the EU, the automatic recognition of European citizenship by other EU states is no comfort. One seeks to have recognition for his/her citizenship from countries that the family is leaving or those that the family wants to travel to most, or possibly relocate to, hence the importance of integrating and estlblishing ties with the new country of citizenship by investment".
Read Expert Analysis of the Attorney General's Recommendations to the European Court
Below find links to two analytical publications by Dr Chetcuti and his partners of the key outcomes of the Attorney General's advice to the Court of Justice of the EU: