Issue link: https://maltatoday.uberflip.com/i/1318996
13 maltatoday | SUNDAY • 13 DECEMBER 2020 OPINION Pillorying two small Mediterranean states over citizenship ON 20 October 2020, the Euro- pean Commission announced that it had opened infringement proceedings against Malta and Cyprus for their programmes for the granting of "golden pass- ports" (citizenship against in- vestment). In a "formal letter of formal notice", the Commission argued that the granting of citi- zenship by these Member States, against a predetermined invest- ment and "without a genuine link" with the State concerned, violated the principle of sincere cooperation and undermined the integrity of the status of EU citizenship under the Treaty on the way the European Union functions. OECD gives flank protection This has now reached its pre- liminary climax a campaign that has been prepared for years with a broad PR strategy in which the Commission, the European Parliament, and the European Economic and Social Commit- tee act hand in hand. One gets the impression that the cor- responding pronouncements actually come from one pen. The OECD also provides flank protection. The most important catchphrase is President von der Leyen's sentence: "Europe- an values, including passports, are not for sale." The Commission's campaign has been welcomed by many in the media. It is seen as an important contribution to the fight against terrorism, tax eva- sion, money laundering and corruption. Some of them bla- tantly exploit the widespread Russian and Chinese phobia, and they build on one of the most European of all European "values": envy. On closer inspection, howev- er, it turns out that the proce- dures brought by the Commis- sion are legally built on sand. The accusation that the two states have violated EU law by granting their citizenship to foreigners within their com- petence is merely an assertion. What is particularly question- able is the fact that the Com- mission considers that there must be a 'genuine link' with the State which confers its cit- izenship. This ignores the fact that there are millions of people in the EU who are citizens of a state without ever having lived there. There is also a precedent of the ECJ of 1992 which rejects such a condition. In that par- ticular case, a Spanish author- ity had refused to grant a dual citizen, an Argentinian-Italian, a permanent residence permit to Spain on the ground that his Argentinean nationality was, in fact, his actual nationality. The man, who had never lived in Italy, invoked his freedom of establishment as a citizen of the Union. The ECJ agreed with him. It was not for the national law of a Member State (Spain) to restrict the effects of a nation- ality effectively conferred to an individual by another Member State (Italy) by establishing, besides the recognition of that nationality, another condition is imposed for the exercise of the fundamental freedoms. The judgment is incorrectly cited in the Commission's letter. The idea that civil rights presuppos- es a special connection with a state dates to the ruling of the International Court of Justice (ICJ) during the Cold War pe- riod. German-born Friedrich Nottebohm moved to Guate- mala in 1905. At the outbreak of The Second World War, he tried to protect his property by acquiring the citizenship of neutral Liechtenstein in Octo- ber 1939 against a naturaliza- tion fee and in compliance with the legal formalities, with the exception of the three-year res- idence requirement. In 1940 he returned to Guatemala as a citi- zen of the Liechtenstein munic- ipality of Mauren. When Gua- temala entered the war against Germany in 1941, it confiscated its assets as enemy property. In its judgment of 6 April 1955, the ICJ, by eleven votes to three, rejected Liechtenstein's right to diplomatic protection for Not- tebohm on the ground that the right to citizenship had been conferred 'without genuine ties' with Liechtenstein. The Nottebohm ruling has al- ways been controversial, and it is meaningless as far as EU law is concerned. The Commission, in fact, does not quote it. There is hardly anyone among the leading EU citizenship lawyers who agrees with the Commis- sion's approach. The right to grant citizenship is a core com- petence of the Member States. The fact that citizens of the Member States can move freely within the EU is a simple con- sequence of freedom of move- ment. If the EU wants to regu- late the granting of citizenship by the Member States at Euro- pean level, it must try to do so through legislation. But then it must address the problems across the board. According to EU statistics, the 27 EU Member States together have granted around 2 million citizenships between 2017 and 2019. Most were issued because of ancestry (e.g. because of a grandfather of Romanian origin in Ukraine). Cases of Cypriot citizenship against investment affect about 0.0125% of the to- tal. And these cases are all well documented. Two small states being pilloried According to a BBC report of 29 October 2018, one of the main problems in the EU is the mass allocation of ancestry by Poland, Hungary, Romania, Bulgaria and Italy. But other Member States, such as Spain, Portugal and Germany, are al- so citizens on the basis of "an- cestry". According to Eurostat, hundreds of thousands of peo- ple are naturalised each year, largely unaudited. This regu- larly leads to police actions in the states concerned, but they do not attract as much atten- tion as the naturalization of billionaire former Google boss Eric Schmidt and his family in Cyprus. The second major problem is that many of the remaining naturalised persons come from so-called high-risk countries such as Afghanistan, Albania, Algeria, Syria, Somalia, Iran, Morocco or Tunisia. Malta, for example, does not allow persons from most of these countries to become a citizen against investment un- der its citizenship programme. Of the 27 EU countries, 20 have programmes for granting citizenship or a residence per- mit against investment. Some of them were launched in re- sponse to the 2007 financial crisis. Picking out and pillory- ing two small Mediterranean states is incompatible with the requirement of consistency and the repeatedly cited "European values". However, an amend- ment to the Treaties requires unanimity. This requirement cannot be undermined by ju- dicial activism. It is true that the ECJ has adopted a dynamic interpretation of the Treaties on key issues to promote inte- gration. However, it is doubtful that, in the cases relating to the Malta and Cyprus investment programmes, it would interfere, without a clear legal basis, with the primary competence of the Member States. Bjorn Azzopardi Bjorn Azzopardi is policy director (PDPID) in the ministry for agriculture, fisheries and animal rights