COMMISSION - TWO MONTH DEADLINE FOR 'PASSPORTS' FOR CYPRUS & MALTA

 Filenews 20 October 2020

The European Commission gives Cyprus and Malta two months to explain naturalised programmes through investments, otherwise it will take legal action.

According to the Commission communication, the two countries' 'golden passport' programmes are not in line with the principle of bona fide cooperation. The Commission also considers that the granting of Union citizenship in exchange for predetermined payments or investments without any real link with the Member States concerned undermines the essence of Union citizenship. 

The Communication

Today the European Commission is initiating infringement proceedings against Cyprus and Malta by issuing letters of formal notice concerning the systems for granting citizenship to investors in these countries, also known as 'golden passport' schemes.

The Commission considers that the granting by those Member States of their nationality — and therefore of Union citizenship — in exchange for a predetermined payment or investment and without any real link with the Member States concerned is incompatible with the principle of bona fide cooperation enshrined in Article 4(3) of the Treaty on European Union. At the same time, it undermines the integrity of the status of Union citizenship provided for in Article 20 of the Treaty on the Functioning of the European Union.

Due to the nature of Union citizenship, these systems have an impact on the Union as a whole. Where a Member State grants citizenship, the person concerned automatically becomes an EU citizen and enjoys all the rights associated with this status, such as the right to freedom of movement, residence and work within the EU or the right to vote in municipal elections, as well as in elections to the European Parliament. Consequently, the effects of citizenship schemes on investors are not limited to the Member States applying them, nor are they neutral in relation to the other Member States and the EU as a whole.

The Commission considers that the granting of Union citizenship in exchange for predetermined payments or investments without any real link with the Member States concerned undermines the essence of Union citizenship.

Next steps

The Governments of Cyprus and Malta have two months to reply to the letters of formal notice. If the replies are not satisfactory, the Commission may issue a reasoned opinion on this matter.

"Let's start today"

Asked about this, the Commission's responsible representative, Christian Vigant, said that "today, as you have seen, the Commission is issuing infringement proceedings against Cyprus and Malta, issuing letters of formal notice concerning the citizenship systems of their investors, also referred to as gold passports".

More specifically in the question about the announcement of a possible end of the programme in Cyprus, Christian Vigant said that "we are aware of these announcements. However, the schemes remain in place for the time being in both Member States and could be replaced by similar investment programmes. In fact, Malta has informed the Commission that it intends to extend citizenship for investments, while Cyprus recently announced that it will terminate its current system from 1 November and continue to process pending applications."

"We understand that there are also already calls for the introduction of a new format," he noted. "Such systems violate EU law and that is why we are launching the infringements today," the spokesman clarified.

As for the retroactive effect of the infringements, the spokesperson said that "we understand that both Cyprus and Malta are currently carrying out a process of checking already successful applications. This is something that the Commission encourages. We started the infringement process today, so we will not speculate on possible outcomes or consequences and possible next steps that we may see."

What is important, he continued, is that in the future no Member State will operate systems that effectively result in the sale of citizenship to the EU. As Commission President Von der Leyen said, European values are not for sale. "In individual cases, if a person can be deprived of the nationality already granted to him after an inspection, it is always for the competent authorities to assess in relation to the relevant national and Community law and under the control of independent courts," it concluded.