This guide delves into the key aspects of Advocate General (AG) Anthony Collins’ recent opinion dated 04 October 2024 in the case of Recent Developments in Revocation of Cyprus Citizenship for Foreign Investors)

Case Background

The European Commission v Malta case arose from the Commission’s challenge to Malta’s CBI program, which allows foreign investors to acquire Maltese citizenship by making pre-determined financial contributions.

The Commission argued that this scheme undermines the integrity of EU citizenship, as these investors often have no meaningful ties to Malta. Specifically, the Commission claimed that the scheme violated:

• Article 20 TFEU: Establishes the framework for EU citizenship and the associated rights.
• Article 4(3) TEU: Requires sincere cooperation between EU Member States to uphold the Union’s objectives.

The Commission's position was that granting citizenship in exchange for financial investments without ensuring a "genuine link" between the investor and the country undermines the mutual trust and cohesion that EU citizenship is based on.​

AG Collins’ Key Legal Findings

Absence of a "Genuine Link" Requirement in EU Law

• One of AG Collins’ core conclusions was that EU law does not impose a requirement for a “genuine link” between a foreign investor and the Member State granting citizenship. In his opinion, the European Commission did not provide adequate legal grounds to support its argument that such a link was required under Article 20 TFEU or any other EU law.
• AG Collins emphasized that while international law (particularly the Nottebohm case) introduces the concept of a "genuine link," this principle is not binding within the context of EU nationality decisions. Therefore, Member States retain the authority to define their own rules for granting citizenship, as long as they do not conflict with specific EU obligations.

National Sovereignty in Granting Citizenship

• AG Collins stressed that nationality laws remain within the sovereign domain of EU Member States. According to Declaration No. 2 of the Treaty of Maastricht, the decision to grant nationality is one that Member States exclusively control, and the criteria for citizenship are determined by national law. Therefore, the CBI schemes of Member States like Malta (or Cyprus) do not inherently conflict with EU law unless they contravene specific provisions.

Commission’s Failure to Prove Breach of EU Law

• AG Collins found that the Commission had not adequately demonstrated that Malta’s scheme violated the principles of sincere cooperation outlined in Article 4(3) TEU. The Advocate General reiterated that while EU law may impose constraints on nationality in specific cases (e.g., preventing statelessness), EU citizenship itself does not dictate how Member States should determine the conditions under which they grant nationality.

Implications for Citizenship by Investment Programs

Reinforcement of National Autonomy

• If the CJEU follows AG Collins’ opinion, it would reinforce the autonomy of Member States to continue operating CBI schemes without the need to prove a "genuine link" between investors and the state.

Legal Precedents for Other Member States

• AG Collins’ opinion could serve as a legal precedent for other Member States with active CBI programs. While the European Commission may still scrutinize these schemes for potential violations, the absence of a "genuine link" requirement in EU law means that Member States may continue offering citizenship through investment, so long as they adhere to broader EU principles​.

Potential for Future Reforms

• While the Advocate General's opinion leans in favour of national discretion, the growing scrutiny of CBI programs across the EU may lead to future reforms or additional regulations. In particular, concerns about the security risks, money laundering, and the commodification of EU citizenship could drive changes at both the national and EU levels. Member States operating CBI schemes should remain vigilant and prepared for potential policy shifts​.

Conclusion

The Advocate General’s opinion in the Malta case offers a strong defense of national sovereignty in the context of Citizenship by Investment schemes. For Member States, this represents a legal affirmation of their right to continue offering such programs, provided they respect key EU principles.

However, with increased scrutiny on CBI programs, future reforms at both the national and EU levels may still be on the horizon.