The European Court of Justice (ECJ) has ruled that Malta must shut down its $1.1 million “golden passport” program, delivering a major blow to citizenship-for-sale schemes across the European Union.
The ruling states that granting nationality in exchange for investment violates the “genuine link” principle of EU citizenship and undermines the bloc’s foundational values.
“A member state cannot grant its nationality and indeed European citizenship—in exchange for predetermined payments or investments, as this essentially amounts to rendering the acquisition of nationality a mere commercial transaction,” the court ruled.
The scheme, formally known as the Individual Investor Programme, allowed foreign nationals to obtain Maltese and, by extension, European Union citizenship in exchange for financial contributions totaling around €1 million($1.1million). These typically included a one-time investment of at least €600,000, a charitable donation, and a property transaction, alongside a nominal three-year residency requirement.
The ruling represents the most forceful repudiation yet of so-called citizenship-by-investment programs, which have long attracted criticism for enabling wealthy individuals, often from politically unstable or sanctioned regions, to acquire EU passports without establishing any meaningful ties to the issuing country.
In recent years, the Commission has intensified its scrutiny of such schemes, citing threats to mutual trust among member states, the integrity of the EU’s common visa policy, and broader security concerns.
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Malta has been one of the final holdouts in the bloc, continuing to defend the programme even as neighboring countries like Cyprus and Bulgaria dismantled their own versions under EU pressure. In 2022, the European Commission formally brought legal proceedings against Malta, leading to the ECJ’s binding decision this week.
- The court’s judgment comes amid mounting criticism of the programme’s misuse. The case of Russian businessman Albert Avdolyan, who acquired Maltese citizenship through the scheme and was later sanctioned by the EU over links to the war in Ukraine, has reignited concerns about the system’s vulnerability to abuse. Despite travel bans, Avdolyan reportedly retained mobility within the EU thanks to his Maltese passport.
- While Malta’s government has insisted its scheme complies with EU treaties and serves as a tool to attract high-value foreign investment, the ECJ emphasized that citizenship requires a genuine connection between the individual and the state, a principle the court found to be absent in Malta’s programme.
The ruling may also cast uncertainty over existing golden passport holders, who could now face heightened scrutiny or even potential revocation challenges, though no retroactive measures have been mandated by the court.
