When the Cypriot government abruptly terminated its citizenship by investment program in November last year, 1,413 applications (roughly half from main applicants and half from their dependents) remained unprocessed. While conceding that the due diligence of the program had been flawed, as evidenced by their suspension of the same, Nicosia nonetheless signaled its intention to – in good faith – complete processing for those who had submitted their applications prior to the program’s cancellation, despite protestations from the European Commission.
The processing of pending applications is now complete and, according to Interior Minister Nicos Nouris’ statements in Parliament on the occasion of his presenting the ministry’s 2022 budget, has resulted in 390 approved citizenship applications, according to Cyprus Mail. That equates to an approval rating of just 27.6%.
The Ministry’s decision to complete the processing of pending applications also after the program’s termination elicited an acrimonious reaction from the Commission, which in October last year opened infringement procedures against Cyprus and Malta over their operating of CIPs. In June, the Commission issued a statement indicating Cyprus’ decision to continue processing had motivated an escalation of the infringement procedure:
“While Cyprus has repealed its scheme and stopped receiving new applications on November 1, 2020, it continues processing pending applications. Hence, today, the Commission decided to take the next step in the procedure against Cyprus by issuing a reasoned opinion. The Commission considers that the concerns set out in the letter of Formal Notice were not addressed by Cyprus,” it added.
Both Cyprus and Malta awaiting responses from Commission
The Commission gave Cyprus two months to respond to its Reasoned Opinion, to which Cyprus dutifully responded on August 5th, a few days before the deadline. The Commission’s response, which has yet to surface, can take one of two forms; the Commission may accept Cyprus’ response to the Reasoned Opinion, or reject it and bring the matter to the European Court of Justice.
“We have given all the explanation that needed to be given and we expect to hear back in the coming weeks,” Interior Minister Nouris reportedly told members of the finance committee recently.
Where Cyprus has reached the Commission’s “Reasoned Opinion” stage, Malta has instead received a second Formal Notice, in which the Commission raised concerns about Malta’s new CIP, the MEIN policy. Malta responded to its second Formal Notice in October and is also still waiting to hear back from the Commission. During an official visit to Malta in September, President of the European Commission, Ursula von der Leyen, said the MEIN policy “must end”.
Should the Commission also reject Malta’s second response to a Formal Notice, its next step would be to issue a Reasoned Opinion, the stage at which Cyprus currently finds itself. In the event that the Commission is not satisfied with the two countries’ responses to the Reasoned Opinions, it may decide to escalate the matter to the courts.
Prof. Dimitry Kochenov, a prominent scholar on EU constitutional law, has argued that, should the Commission decide to bring the matter before the court, it will “likely be humiliated” because its claim that EU citizens must have “genuine links” to their country of nationality is plainly ultra vires.
Christian Henrik Nesheim is the founder and editor of Investment Migration Insider, the #1 magazine – online or offline – for residency and citizenship by investment. He is an internationally recognized expert, speaker, documentary producer, and writer on the subject of investment migration, whose work is cited in the Economist, Bloomberg, Fortune, Forbes, Newsweek, and Business Insider. Norwegian by birth, Christian has spent the last 14 years in the United States, China, and Spain.