A “Robust Departure From the Rule of Law”: Industry Reactions to ECJ Ruling on Malta’s MEIN

“Encroachment on national sovereignty” and a return to “Blut und Boden” nationalism: industry experts react to ECJ’s citizenship ruling.

Investment migration experts have expressed concern over the European Court of Justice (ECJ) ruling against Malta’s citizenship by investment program. Many question the court’s departure from its Advocate General’s recommendation.

James Muscat Azzopardi, Partner at Credence Corporate and Advisory Services Limited, called the ruling “very unusual” as “the AG’s opinion was crystal clear and based on the same Articles of law quoted in the ECJ’s final decision.”

When asked about the possibility of an appeal, Muscat Azzopardi confirmed that “there is no appeal from the ECJ’s decision.” This finality means Malta must now adapt to the new legal reality.

The ruling requires Malta to stop its current program. “Malta’s Prime Minister has indicated that Malta will amend the program to respect the ECJ decision, but we do not have any more information at this stage,” Muscat Azzopardi explained while emphasizing that “this does not affect current passport holders.”

For other potential EU citizenship programs, Muscat Azzopardi advises them to “study the decision in detail and avoid a transactional program and one that does not create enough genuine links with the country.”

Henley & Partners, which designed Malta’s previous Individual Investor Programme, expressed disappointment with what it termed a “highly politicized judgment.” The firm issued an official statement claiming the decision “undermines two of the most important values of the EU itself, democratic legitimization and rule of law.”

The company highlighted the “stark contrast to the thoughtful and legally grounded opinion of the Advocate General” and suggested the decision “appears politically motivated,” while its reasoning remains “tenuous at best.”

Dr. Juerg Steffen, CEO of Henley & Partners, believes the ruling represents an “encroachment on national sovereignty” in citizenship matters. “At the heart of this case lies the principle of sovereignty and national competence in citizenship matters. Member States have the exclusive right to determine the criteria for the acquisition of their citizenship, which is clearly laid out in the EU treaties.”

The firm rejected the court’s characterization of citizenship by investment as “commercialization,” arguing that such programs constitute “structured and transparent legal pathways that demand lawful conduct, economic contribution, and commitment from applicants.”

Henley & Partners pointed out that “in 2023 alone, EU Member States collectively granted over 1.1 million citizenships—and often based on tenuous links to the granting country, such as a remote ancestry connection.”

The company noted that while “the United States, Canada, UAE, Singapore, and other successful countries are leading the way in attracting investors and talent with investment migration programs, the European Union prefers to go backward.”

Professor Dimitry Kochenov told EU Law Live that the ruling represents a “departure from the liberal conception of EU citizenship” and signals a “robust departure from the Rule of Law.” Kochenov compared the ruling to a return to “Blut und Boden” nationalism and criticized the enforcement of “thick citizenship” versus the liberal citizenship model the EU previously embraced.

Kochenov believes the court “invented the law” as “there is nothing in international, EU, or Maltese law which would prohibit this approach to naturalizations.”

He criticized the court’s repeated focus on “commercialization” of EU citizenship, noting the term appears seven times in the ruling despite no legal basis for this concept.

He described the decision as an “unprovoked attack against the Micheletti ideal of liberalism,” where EU citizenship has been “hijacked by solidarity enthusiasts afraid of money.”

The ruling may embolden the EU to increase pressure on citizenship programs in third countries, particularly regarding Schengen access, according to Muscat Azzopardi. He explains that “this is the widespread expectation amongst industry leaders.”

Dr. Christian H. Kälin, Chairman of Henley & Partners, emphasized that “the idea that investment migration undermines solidarity within the EU is not only unfounded but reflects a troubling misunderstanding of the socio-economic role these programs play.”

Henley & Partners noted that despite the ruling, the firm expects a “significant advantage” as “the termination of Malta’s citizenship program will only increase the demand for specialized advisors.” Clients increasingly seek “alternative citizenship and residency solutions and diversification options.”

The unanimous criticism from these industry figures centers on perceived legal inconsistencies in the ruling and concerns about EU institutional overreach while acknowledging the definitive nature of the ECJ’s decision.