ECJ Ruling “Didn’t Say [EU] Countries Can’t Have CBI”

Moustafa Daly
Cairo

---

At IMI Connect Athens, industry veterans James Muscat Azzopardi and Eric G. Major weighed in on the ECJ’s Malta ruling.

Last week’s European Court of Justice (ECJ) ruling against Malta’s Exceptional Investor Naturalisation (MEIN) Policy sent shockwaves through the investment migration industry.

The news broke as IMI Connect Athens was about to launch, where James Muscat Azzopardi, founder of Muscat Azzopardi & Associates, and Eric G. Major, a seasoned expert and CEO of Latitude Residency & Citizenship, shared their insights on the ruling and its potential implications.

Unexpected and politically motivated

Azzopardi did not mince words when describing his reaction to the ruling. “The ruling was unexpected,” he said, pointing out that the ECJ went against the Advocate General’s earlier recommendation to dismiss the case. He argued that the European Court of Justice had very “widely” stretched the interpretations of Article 4 and Article 20 “to accommodate a political opposition” to citizenship by investment programs, labeling the ruling as “politically motivated.”

Azzopardi emphasized that “there is no European law that prohibits the giving of citizenship by investment,” nor is there a law that prohibits a program from being transactional.

The ruling doesn’t outright ban citizenship programs, says Azzopardi, adding that this leaves room for Malta to adapt. “One would expect that the EU will accept a program that is much less transactional and where there are more genuine links required,” he said, hinting at potential amendments to Malta’s framework.

The ECJ’s insistance on genuine links remain open to interperitation as the court did not specifically explain what constitutes as a genuine link, and Malta has announced its studying the legal implications in order to align with the court order, as the ECJ leaves Malta to its own devices to guess what “genuine links” really mean.

Azzopardi also underscored the lack of clarity regarding genuine links or a non-transactional program under EU law. Explaining that “there’s no directive, no regulation, no official guidance as to what is acceptable and what is not.”

Residency with a citizenship path is the future

Eric G. Major also weighed in, describing the ruling as “a surprise” and “very unfortunate.” Like Azzopardi, he reiterated the industry’s expectation that the court would follow the Advocate General’s opinion, which was in Malta’s favor.

Major also expects the industry to evolve in response to the decision, predicting a shift toward offering residency by investment options with “a clear pathway to citizenship.” He explained that future programs must address the “genuine link” requirement outlined in the ruling to prevent potential disruptions.

He says it is “clear it [any future program] can’t be transactional” and has to have a physical presence and a genuine link to the nation.

Despite the setback, Major struck an optimistic tone. “We’ll find a way,” he said confidently, predicting that such challenges will drive innovation within the industry, seeing the ruling as an opportunity for the industry to adapt.

“Future programs will need to comply with EU standards while creating pathways that address concerns about physical presence and integration,” he said, adding that such models are likely to gain broader acceptance over time.