Here’s a breakdown of the judgment in Case C-181/23, designed for clarity and understanding:
This judgment addresses whether Malta’s investor citizenship program (specifically, the 2020 scheme) violates EU law. The European Commission argued that by offering citizenship in exchange for predetermined payments or investments, without requiring a genuine link to the country, Malta undermines the essence of EU citizenship and breaches the principle of sincere cooperation among Member States. The Court ultimately agreed with the Commission, finding Malta in violation of its obligations under the Treaty on the Functioning of the European Union (TFEU) and the Treaty on European Union (TEU).
**Structure and Key Provisions:**
The judgment is structured as follows:
* **Background:** It outlines the Commission’s action against Malta, the specific Maltese laws and regulations in question (the 2020 investor citizenship scheme), and the pre-litigation procedure (the exchange of letters and opinions between the Commission and Malta).
* **Legal Context:** It summarizes relevant articles from the EU and FEU Treaties, Declaration No. 2 on nationality, and the Edinburgh Decision, as well as relevant Maltese law.
* **Arguments of the Parties:** It details the arguments presented by both the Commission and Malta. The Commission argued that Malta’s scheme undermines the integrity of EU citizenship. Malta countered that it has the sovereign right to determine its nationality laws and that its scheme is legitimate and well-regulated.
* **Findings of the Court:** This is the core of the judgment. The Court reviews relevant case law, emphasizes the importance of Union citizenship, and explains why Malta’s scheme is incompatible with EU law.
* **Operative part:** The Court declares that Malta has failed to fulfill its obligations under EU law and orders Malta to pay the costs of the proceedings.
**Main Provisions and Changes:**
The judgment focuses on the 2020 investor citizenship scheme, which allowed foreign investors to obtain Maltese nationality (and thus EU citizenship) by meeting certain financial requirements (investments, donations) and a minimal residence requirement.
The Court found that this scheme, because of its transactional nature, amounts to a “commercialization” of EU citizenship. This is because the Court considered that the payments and investments were the primary consideration for granting citizenship, with the residence requirement being insufficient to establish a genuine link between the applicant and Malta.
**Most Important Provisions for Use:**
* **Paragraphs 81-83:** Clarify that while Member States have the power to define conditions for granting nationality, this power must be exercised in compliance with EU law. There is no exception for cases involving the granting of nationality (as opposed to the loss of nationality).
* **Paragraphs 95-101:** Explain the core reasoning behind the Court’s decision. The Court emphasizes that Union citizenship is based on common values and mutual trust. A scheme that essentially sells citizenship undermines this trust and the very nature of Union citizenship.
* **Paragraphs 102-121:** Analyze the specific features of the Maltese scheme and explain why the Court considers it a “transactional” scheme that commercializes citizenship. The Court focuses on the importance of payments and investments, the minimal residence requirement, and the limited scope of the eligibility checks.
**** This judgment has significant implications for any EU Member State operating similar investor citizenship schemes. It confirms that the EU has the power to scrutinize these schemes and that they can be found to violate EU law if they undermine the essence of Union citizenship. This could affect Ukrainians seeking alternative citizenship within the EU.
