Why in News?
The European Court of Justice struck down Malta’s 2020 ‘golden passports’ scheme, ruling it violated EU principles by commercialising citizenship in exchange for investment, undermining mutual trust among member states.
Description:
- What Was Malta’s Scheme: Malta’s Citizenship by Investment (CBI) scheme, also known as the “golden passports” scheme, was introduced in 2020. It allowed foreign nationals to acquire Maltese—and thus EU—citizenship in return for hefty financial investments.
- Why Was It Scrapped: The European Court of Justice (ECJ) struck down the scheme in April 2024, stating it commercialised EU citizenship, which undermined the trust among EU member states and violated EU treaties like the Maastricht Treaty (1992) and the 2009 Treaty on the Functioning of the EU.
- Concerns Raised: The European Commission and other EU institutions objected due to risks like money laundering, tax evasion, and organised crime. Between 2013 and 2019, 1.32 lakh persons used CBI and RBI schemes to enter the EU, generating €20 billion in financial inflows.
- Violation of EU Principles: The ECJ emphasized that EU citizenship is tied to national citizenship, and granting nationality purely for investment undermines principles like solidarity, reciprocity, and good faith, core to EU membership.
- Implications and Future: While Malta could theoretically continue granting nationality outside the EU framework, it would risk losing its status as a destination state and diminish the value of Maltese citizenship, as such citizenship would no longer confer EU-level rights.
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