The European Commission argues that Malta's scheme, which allows wealthy foreigners to obtain a Maltese passport in exchange for payment, violates European law. It maintains that EU citizenship must not be for sale and that EU countries cannot use their national powers to undermine the rights of the Union.
The Maltese government insists that the granting of citizenship is an exclusive national competence and remains so. According to Malta, the policy is entirely legal, and the country has been careful in screening candidates. Prime Minister Robert Abela has repeatedly stressed that Malta determines who becomes its citizen.
The case already came fully into the public eye in 2017 through publications by Maltese journalist Daphne Caruana Galizia about the ties between Maltese politicians and wealthy businessmen with the international underworld. She was assassinated in a bomb attack commissioned by wealthy criminals, but the perpetrators could be tracked down.
The case of the 'golden passports' gained additional weight after it was recently revealed that some wealthy Russians who already had Maltese passports were under EU sanctions due to their involvement in the war in Ukraine. The Financial Times reported that sanctioned Russian citizens acquired EU citizenship through the Maltese program, which led to increased concerns about security risks.
According to Transparency International, the sale of passports through investment programs undermines the core values of the European Union. The organization calls for stricter rules and more control mechanisms to prevent such practices from being abused for money laundering or to circumvent sanctions.
The European Commission has formally warned Malta in earlier stages as well. The commission stated that the scheme affects not only national but also European interests since EU citizenship grants rights across all member states. To date, however, Malta has maintained its program, albeit with some adjustments.
The program, introduced in 2014, has generated significant revenues for Malta. According to Outbound Investment, the sale of passports yielded hundreds of millions of euros. Opponents point out, however, that financial gain does not outweigh the potential damage to the EU's reputation.
The ruling of the European Court of Justice is expected to have major consequences for Malta and potentially also for other countries with similar programs, such as Cyprus. The lawsuit is seen as a test of the limits of national sovereignty within the European integration process.