Commission Initiates Legal Action Against Cyprus and Malta for ‘Selling’ EU Citizenship

The European Union Commission has finally launched legal action against two of its Member States – Cyprus and Malta – for ‘selling’ European citizenship through their so-called ‘golden visa’ schemes, after warning them for months to reviews the schemes or abolish them at all.

The ‘golden visa schemes’ are officially known as investor citizenship schemes and are run by several EU members, including the two island countries which will now face legal action due to the way they have operated the schemes.  The schemes permit non-EU citizens to obtain the nationality of the country in which they decide to make an investment of a set amount of money, or pay that money to the government.

On October 20, the Commission launched infringement procedures against both Malta and Cyprus, by sending to the government of each a letter of formal notice, pointing out that granting citizenship in exchange for a payment or investment, is against the EU laws.

“Due to the nature of EU citizenship, such schemes have implications for the Union as a whole. When a Member State awards nationality, the person concerned automatically becomes an EU citizen and enjoys all rights linked to this status, such as the right to move, reside and work freely within the EU, or the right to vote in municipal elections as well as elections to the European Parliament,” the Commission notes in a press release issued on the same day the proceedings were launched.

The press release further explains that the investor citizenship schemes, as a consequence of the above, affect not only the Member State that grants the ‘golden visa’ but the whole EU block.

For over a year now, the EU Commission has continuously raised the issue of investor citizenship schemes, pointing out the risks that arise from them. A report published in January 2019, highlighted that the main risks related to the schemes include money laundering, tax evasion and corruption.

Whereas in April, the Commission criticized Bulgaria, Cyprus, and Malta for their investor citizenship scheme, during a video-hearing of the LIBE Committee, calling on these countries to end the schemes and to stop exploiting the pandemic to run them.

SchengenVisaInfo.com has previously reported that the EU could launch legal action against Cyprus’ government regarding the claims that it sold citizenship to 1,400 internationals together with their 1,100 family members, who were involved in corruption affairs, money laundering and criminal activities.

Later on, in October, Cyprus’ announced it would put to an end the scheme on November 1.

Upon receiving the letters of formal notice, the governments of Cyprus and Malta will now have a total of two months to reply to the Commission. In case they do not, or that their replies are not satisfactory, then the Commission may issue a Reasoned Opinion in this matter.