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Kochenov: “Zero Chance” Commission Will Propose Legislation Against CBI Based on Parliament Vote

As expected, the European Parliament today voted to adopt the report of MEP Sophie in ‘t Veld and the LIBE Committee that seeks to put pressure on the European Commission to propose legislation to end citizenship by investment and strictly regulate residence by investment in the EU and beyond.

MEPs adopted the legislative initiative report, the text passing with 595 votes in favor, to 12 against and with 74 abstentions.

The European Commission will now decide whether to pursue the preparation of legislation along the model proposed in the report.

While the discussions in the European Parliament has had many industry observers worry about the potential consequences of today’s vote, Professor Dimitry Kochenov, an internationally recognized scholar on EU Constitutional Law (nicknamed “The Passport Professor” by IMI), is convinced the matter will remain in the Parliament and not become the subject of any legislative initiative on the part of the Commission.

Watch the full 45-minute interview with Professor Kochenov in the IMI Club Members’ Lounge under “exclusive interviews”.

“Commission has no intention whatsoever of proposing new legislation”

“Since the European Parliament does not initiate new legislation in EU law, there is no proposal.”, says Kochenov. […] the Commission has not spoken and the Commission is the initiator of legislation.”

Whenever a Parliamentary proposal might directly contravene “the core ideals of the internal market and the core premises of EU law,” adds Kochenov, “since the adoption would harm the internal market and individual rights while boasting only indirect connection with the risks the Parliament outlines and seeks to mitigate” there is a very low chance that the Commission will propose legislation on the matter.

In this present case, not only is in ‘t Veld’s proposal legislatively unfeasible – because the Commission would need to work together with the Council, where several of the represented member states have such programs, to prepare legislation – but also not desirable for the Commission because it is already pursuing the same end through infringement procedures.

“It would actually be quite strange for the Commission to make another push in the same direction, one which is less likely to succeed [than its infringement case with the Court of Justice], without waiting for the decision of the Court.”

Because of those factors, Kochenov points out, “there’s zero chance that Commissioner Reynders would actually start any kind of legislative procedure […] and, in this sense, the debate was actually real because, as far as I understand, the Commission has no intention whatsoever of proposing new legislation along the lines proposed by in ‘t Veld.”

Saving face

He believes in ‘t Veld, who is a veteran and well-known MEP, understands perfectly well that the Commission does not intend to attempt legislation on the matter. The professor, in effect, implies that in ‘t Veld’s motion has been frivolous from the beginning.

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“It’s obviously a political move that has nothing to do with any kind of serious intentions in terms of changing the law of the European Union because it was quite obvious from the start that there was zero chance the Commission would initiate this kind of legislation.”

Kochenov says he thinks both the MEP and the Commissioner should be worried “if they really believe in what they are doing and really seek success” because a (to them) favorable outcome of the ECJ infringement procedures is not likely. Indeed, the Professor has previously stated that, should the matter make it to Court, the Commission would likely be “humiliated”.

Kochenov, who has already analyzed the Commission’s arguments in detail in a London School of Economics paper, indicates the Commission is aware of the weakness of its argument in front of the Court, but even less confident in its chances of success through the legislative route, which is why it prefers infringement procedures over attempted changes to the law.

“The easiest way for the Commission to save face, and to appear to fully cooperate with the European Parliament […], is to say ‘we will see how it plays out in front of the Court of Justice’.”

If the Commission wins, Kochenov explains, both the Commission and the Parliament will be pleased. If the ECJ does not side with the Commission in its infringement procedures against Malta and Cyprus, both sides will be pleased as well because the Commission can say it did its best and will not have to waste time on a legislative proposal that would be rejected by the Council.

Regulations on residence by investment is a possibility

Questioned as to the possibility that the Commission would initiate legislation based on the parts of the report that dealt with residence by investment, however, Kochenov concedes that this could happen.

On matters related to residency programs and migration regulation more generally, the professor emphasizes, “the European Union has powers and can legislate […] and this is precisely what allows the Union to remain in charge of Schengen visas, long-term residence permits, what enables the blue card directive, documents on seasonal workers, students, and plenty of others.”

But also here, he says, in ‘t Veld’s proposal is highly atypical.

Beyond the simple fact that it aims to make the issuing of visas more difficult, thus obstructing the legitimate interests of countless individuals and making the EU more closed, another crucial point is that “she pretends, or she expects, that the European Commission would introduce legislation that would be the only regulation of a particular field. So, golden visas would be regulated in such a way on the supra-national level that the member states would absolutely lose any kind of ability to deviate from that regulation.”

But, according to the Long Term Residence Directive, which sets a European standard (with exceptions) for how long member states can wait to grant permanent residency to a third-country national, the member states that prefer to be more lenient on residency that what is stipulated by the directive, are allowed to have more lenient regulations in place.

“This means that, if Portugal wants to give someone a permanent residence permit on the basis of zero days of sta, […] this is absolutely allowed by the Directive.”

Christian Henrik Nesheim AdministratorKeymaster

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 16 years in the United States, China, Spain, and Portugal.

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