Malta could face legal action from Brussels over its controversial cash-for-passports scheme if it is deemed not to comply with EU law, a European Commission spokesman has said.

German newspaper Bild on Thursday claimed that Malta and Cyprus would be placed under an infringement procedure by the end of the year over their respective golden passport schemes.

The report followed remarks made on Wednesday by European Commission president Ursula von der Leyen in her state of the union address. 

Citing an array of breaches to the rule of law she referred to the sale of golden passports – European values were not for sale, she said.

Malta’s Individual Investor Programme was introduced in 2014 and is to be replaced by a second scheme under which the minimum investment requirement has been increased and the residency clause tightened.

Brussels has frequently raised concerns on the risks which such schemes pose to the entire union.

The Commission spokesman said that on June 29, Justice Commissioner Didier Reynders had raised “well-known concerns” in a phone call with Home Affairs Minister Byron Camilleri, and asked for the draft proposals of the new scheme.

Brussels would analyse the Maltese programme and monitor all investor citizenship schemes across the EU, he added.

He said the commission had frequently raised concerns on the risks which such schemes pose in particular with regard to security, money laundering, tax evasion and corruption.

“The Commission is looking at compliance with EU law and will introduce infringement proceedings, if judged necessary,” the spokesman said.

Malta holds that the EU has no jurisdiction over matters related to nationality and citizenship but Brussels argues that passports are a matter of concern for all member states due to free movement.

The government had not answered questions by the time of writing.