Court decision undermines national sovereignty - Henley & Partners

A citizenship consultancy company at the heart of Malta’s golden passports scheme has attacked a European court ruling against the scheme, accusing it of undermining national sovereignty and EU principles.

Earlier on Tuesday, the Court of Justice of the European Union (ECJ) said Malta’s citizenship-by-investment programme violates EU law, effectively sealing the fate of the controversial scheme.

Responding to the decision, London-based company Henley & Partners, which held the concession for the controversial scheme from its introduction in 2014 until 2020, said it was “disappointed” by the ruling, which it described as “highly politicised”.

Describing the judgment as “lacking a solid foundation in EU law,” the company pointed to an October decision by EU’s Advocate General siding with Malta as evidence to support its claim.

“There is a stark contrast to the thoughtful and legally grounded opinion of... the ECJ’s lead judge, who concluded that the Maltese programme did not infringe EU law and that the EU Commission has no case”, the company said.

“The court has now reversed course by a staggering 180 degrees and issued a decision that appears politically motivated, as the reasoning provided by the court is tenuous at best.”

Former Prime Minister Joseph Muscat (L) with Henley & Partners chairman Christian Kaelin in 2014. File photo: Matthew Mirabelli.

The London firm said the ruling "undermines judicial consistency and confirms serious concerns about the increasing politicisation of the EU’s legal institutions” while accusing it of undermining EU principles of democracy and rule of law.

Henley & Partners CEO Juerg Steffen stressed EU member states had the “exclusive right” to set their own criteria for citizenship as laid out in EU treaties, calling the court’s decision an “encroachment on national competence”.

Government data shows Henley & Partners has netted almost €56 million from Malta’s golden passport scheme. Its contract entitled the company to earn four per cent of every contribution fee paid by successful citizenship applicants, which equated to around €26,000 for every applicant.

'Fundamentally flawed’

Defending citizenship-by-investment schemes, the company said characterising such programmes as commericalisation – as in the case of the ECJ ruling – was “fundamentally flawed,” instead describing them as “a legitimate, internationally recognised policy instrument”.

Other countries running such schemes including UAE, Singapore and the US – the latter of which recently saw its president Donald Trump unveil a $5 million 'gold card' visa – were “leading the way in attracting investors and talent,” it said, accusing the EU, meanwhile, of going “backwards”.

Calling for “rational dialogue,” the company said Malta’s programme should be seen “in the greater context”, noting that in 2023, EU states granted over 1.1 million citizenships “often based on tenuous links... such as a remote ancestry”.

“Against this backdrop, the few hundred citizenships granted annually by Malta... hardly justify the non-factual, alarmist narrative promoted by the Commission".

The company said that while it acknowledged and respected the ECJ decision, it was "nevertheless a blow to foundational European principles”.

While Malta's government has already said it will respect the court’s decision and plans to update its citizenship rules to match the court’s guidelines, the London company said it "remains to be seen how citizenship acquisition could be structured in the future so it is in compliance with the ECJ’s ruling.”

Henley & Partners claims to have “created” the concept of residence and citizenship by investment in the 1990s, according to documents provided by the company which also claim its activities have raised more than $15 billion in direct investment for countries worldwide.