The Malta Independent 17 August 2022, Wednesday

European Commission steps up infringement procedures against Malta, Cyprus' ‘golden visa’ schemes

Wednesday, 9 June 2021, 13:30 Last update: about 2 years ago

The European Commission has taken further steps in its infringement procedure against Malta’s ‘golden passports’ scheme, warning the country that Malta is failing to fulfil its obligations towards the EU treaties with its citizenship programme.

Last year, Malta phased out the controversial IIP scheme and replaced it with a new scheme which the government says focuses more on residency and can lead to citizenship.


But the European Commission had launched infringement proceedings and asked Malta to provide a detailed explanation.

The government had replied to the EC last year, telling it that Malta would not cede on rights that fall under national competence.

The Parliamentary Secretary responsible for citizenship, Alex Muscat, said last week that the Commission was still analysing Malta’s reply.

The EC, however, has now decided to take further steps against Malta and Cyprus, which also operates a similar scheme.

The Commission said it considers that by establishing and operating investor citizenship schemes that offer citizenship in exchange for pre-determined payments and investments, these two Member States fail to fulfil their obligations under the principle of sincere cooperation and the definition of citizenship of the Union as laid down in the Treaties.

“While Cyprus and Malta remain responsible to decide who may become Cypriot and Maltese, the Court of Justice has made it clear on multiple occasions that rules on the acquisition of the nationality of a Member State must do so having ‘due regard to EU law’”.

The Commission launched these infringement procedures against Cyprus and Malta by sending letters of formal notice in October 2020. While Cyprus has repealed its scheme and stopped receiving new applications on 1 November 2020, it continues processing pending applications. Hence, the Commission decided to take the next step in the procedure against Cyprus by issuing a reasoned opinion.

The Commission considers that the concerns set out in the letter of formal notice were not addressed by Cyprus.

The Commission also decided to take further steps against Malta.

“While the previous investor citizenship scheme is no longer in force, Malta established a new scheme at the end of 2020. The Commission has decided today to issue an additional letter of formal notice to expand the concerns set out in the letter of formal notice to a new scheme operated by Malta.”

Both Member States have now 2 months to take the necessary measures to address the Commission's concerns. In case of Cyprus, if the reply is not satisfactory, the Commission may bring the matter before the Court of Justice. In case of Malta, if the reply is not satisfactory, the Commission may take next step and issue a reasoned opinion in this matter.

Commissioner for Justice, Didier Reynders noted that “By offering citizenship in exchange for pre-determined payments and investments, Malta fails to fulfil its obligations in the Treaties. Becoming the national of a Member State means becoming an EU citizen too. This link must not be forgotten. The new Maltese scheme, currently in place since late 2020, raises concerns in this respect. We expect the Maltese authorities to provide concrete explanations before we decide on the next step.”


Government reaction

In a statement, the Maltese government said it has noted the Additional Letter of Formal Notice but reiterated that “citizenship is a member state national competence and it should remain as such.”

It said that, nonetheless, it will analyse the contents of the correspondence received “and is willing to carry on partaking in constructive dialogue with the European Commission.” Observations will be communicated to the European Commission in due course, it said.


Residency programmes

Meanwhile, the Commission has also sent letters of formal notice to Malta, Lithuania and Slovenia for failing to correctly transpose EU rules on long-term residents.

The Directive defines the conditions under which non-EU nationals can obtain long-term resident status and defines their right to equal treatment to support their integration. Under the Directive, Member States grant long-term resident status to non-EU nationals legally and continuously residing within its territory for 5 years immediately prior to their application.

Under Maltese legislation, applicants for long-term residency must prove a certain knowledge of the Maltese language, while applicants for Maltese citizenship by naturalisation have the choice between providing evidence of their Maltese or English language skills. The additional language requirement for long-term residents does not comply with the principle of proportionality, the Commission said.

This additional letter of formal notice extends the scope of the initial infringement procedure opened on 2 July 2020.

Lithuania, Malta and Slovenia now have two months to respond to the arguments put forward by the Commission. In the absence of a satisfactory response, the Commission may decide to send a reasoned opinion in each case.

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