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This court case could decide the fate of controversial 'golden passport' programs in Europe

The article from Fortune, published on March 19, 2025, titled "Malta's Golden Passport Scheme Faces Legal Challenge in European Court," delves into the ongoing legal battle surrounding Malta's controversial citizenship-by-investment program, commonly known as the "Golden Passport" scheme. The article provides a comprehensive overview of the case, its implications, and the broader context of citizenship-by-investment programs in Europe.

The legal challenge against Malta's Golden Passport scheme was brought before the European Court of Justice (ECJ) by the European Commission, which argues that the program violates EU law. The Commission contends that the scheme undermines the integrity of EU citizenship and poses risks to security and the rule of law within the Union. The case has garnered significant attention, not only because of its potential impact on Malta but also due to its broader implications for similar programs across Europe.

Malta's Golden Passport scheme, introduced in 2013, allows wealthy individuals to obtain Maltese—and by extension, EU—citizenship in exchange for a significant financial investment. The program requires applicants to make a minimum investment of €600,000, which can be in the form of a government contribution, real estate purchase, or a combination of both. Additionally, applicants must pass a due diligence process and meet certain residency requirements.

The European Commission's case against Malta centers on several key arguments. First, the Commission asserts that the Golden Passport scheme breaches the principle of sincere cooperation enshrined in Article 4(3) of the Treaty on European Union (TEU). This principle requires member states to assist each other in carrying out tasks that flow from the Treaties and to refrain from any measures that could jeopardize the attainment of the Union's objectives. The Commission argues that by selling citizenship, Malta is undermining the integrity of EU citizenship and the rights associated with it.

Second, the Commission contends that the scheme violates the principle of non-discrimination, as enshrined in Article 18 of the Treaty on the Functioning of the European Union (TFEU). The argument here is that the Golden Passport program creates a two-tier system of citizenship, where wealthy individuals can buy their way into the EU, while others must go through the traditional naturalization process. This, the Commission argues, is discriminatory and contrary to the fundamental values of the Union.

Third, the Commission raises concerns about the potential security risks posed by the Golden Passport scheme. By granting citizenship to individuals who may not have a genuine connection to Malta or the EU, the program could facilitate the entry of individuals who might pose a threat to public security. The Commission points to several high-profile cases where individuals who obtained citizenship through the program were later found to be involved in criminal activities.

The article also discusses the broader context of citizenship-by-investment programs in Europe. Malta is not the only EU country to offer such a scheme; Bulgaria, Cyprus, and Hungary have similar programs in place. However, Malta's program has been particularly controversial due to its relatively low investment threshold and the speed with which citizenship can be obtained.

The legal challenge against Malta's Golden Passport scheme has sparked a wider debate about the ethics and legality of citizenship-by-investment programs. Critics argue that these programs commodify citizenship and undermine the principles of equality and solidarity that underpin the EU. They also raise concerns about the potential for corruption and money laundering, as well as the impact on the social fabric of the countries offering these programs.

Supporters of the Golden Passport scheme, on the other hand, argue that it brings significant economic benefits to Malta. The program has generated millions of euros in revenue for the government, which has been used to fund public services and infrastructure projects. Proponents also point out that the due diligence process is rigorous and that the program is subject to strict regulations to prevent abuse.

The article also explores the potential implications of the ECJ's ruling on Malta's Golden Passport scheme. If the Court finds in favor of the European Commission, Malta may be forced to abolish or significantly reform its program. This could set a precedent for other EU countries with similar schemes, potentially leading to a broader crackdown on citizenship-by-investment programs across the Union.

However, if the ECJ rules in favor of Malta, it could embolden other member states to expand or introduce their own Golden Passport schemes. This could lead to a race to the bottom, with countries competing to offer the most attractive terms to wealthy investors, further undermining the integrity of EU citizenship.

The article concludes by discussing the political ramifications of the case. The Golden Passport scheme has been a contentious issue in Maltese politics, with opposition parties calling for its abolition. The outcome of the ECJ case could have significant implications for the government's political fortunes, as well as for the broader debate about immigration and citizenship in Malta and across the EU.

In summary, the article provides a detailed analysis of the legal challenge against Malta's Golden Passport scheme, exploring the arguments put forward by the European Commission, the broader context of citizenship-by-investment programs in Europe, and the potential implications of the ECJ's ruling. The case highlights the tensions between national sovereignty and EU law, as well as the ongoing debate about the ethics and legality of selling citizenship. As the case progresses, it will continue to be closely watched by policymakers, legal experts, and the public, both in Malta and across the European Union.

Read the Full Fortune Article at:
[ https://fortune.com/2025/03/19/malta-europe-court-case-could-golden-passport/ ]