The EU Commissioner for Justice Didier Reynders briefed the plenary of the European Parliament on Thursday on the Commission’s decision to initiate infringement proceedings against Cyprus and Malta in view of their ‘golden passports’ schemes which appear to be in violation of EU law.
Reynders made clear that although Malta and Cyprus intend to maintain such programs in one way or another, the ultimate aim is to persuade them to abolish them altogether.
The Commissioner referred to the Commission's most recent report on citizenship-by-investment programs operating in member states, that was published almost a year ago, noting based on the findings at the time he had sought explanations from governments, sending letters last April and meeting with relevant ministers before the outbreak of the pandemic.
The recent surge in negative publicity and developing scandals in which such schemes have become embroiled in have finally “confirmed our suspicions,” Reynders said.
Clarifying that though EU citizenship is also citizenship specific for member states, the EU Court of Justice has given a binding opinion that although member states are free to determine the criteria for granting citizenship, they must be directly in line with Community law.
Reynders noted that the Commission is aware that the schemes operating in Malta and Cyprus grant citizenship in exchange for an investment of one to two million euros, stressing that the schemes’ current situation undermines the trust of other member states for the common European citizenship.
"Indeed, becoming a citizen of a member state automatically implies the acquisition of Union citizenship, as well as all related rights. A foreign investor who ‘buys’ the citizenship of a member state of the Union can, on this basis, immediately go to any other member state, engage in economic activity there and benefit from the principle of non-discrimination between European citizens in a number of sectors,” Reynders said.
That person can even, he continued, “participate in democratic processes, in particular by exercising the right to vote and to stand for election in European (or municipal) elections. For several years now, these programs have been a source of great concern, especially for the College and the Commission."
Reynders added that "the Commission has worked hard on this issue, as it is also a European issue, with European values at stake. In January 2019, it published its first report on citizenship-by-investment schemes and residency-by-investment schemes operating in the EU. The report clearly stated the inherent risks of such schemes, in particular as regards security, money laundering, tax evasion and corruption. And from the beginning of this Commission's mandate, we have consistently expressed these concerns with the member states concerned, urging them to reconsider their decision to implement such systems.”
Reynders stressed that “a number of recent scandals in Cyprus and Malta only confirm the serious concerns we have already expressed in our 2019 report.”
The Commission, Reynders added, is now fulfilling its commitment to take the necessary measures in cases where such schemes fail to comply with EU, by initiating infringement procedures against Malta and Cyprus.
Reynders stated that over a period of just two years, Cyprus and Malta have granted citizenship to several thousands of people through their schemes, undermining trust, threatening the integrity of EU citizenship and its proper functioning, and violating the principle of sincere cooperation.
He added that despite the shambles and the Commission’s warnings and impending potential measures, Malta has clarified that it plans to replace its program with a very similar one, and Cyprus, while it has announced its abolishment in the near future, is already discussing the implementation of a new program. But, Reynders said, the Commission will stand firm in its aim to completely abolish such programs altogether.