The Court of Justice of the European Union (CJEU) ruled on Tuesday that Malta’s citizenship-by-investment program violates EU law, stating that EU citizenship cannot be treated as a commercial transaction.

The Court emphasized that while Member States control how they grant citizenship, they must respect EU law. Granting citizenship solely in exchange for investments undermines mutual trust among Member States and the principle of sincere cooperation.

The ruling concerns Malta’s 2020 program allowing foreign investors to acquire citizenship after making significant financial contributions. The European Commission had previously argued that this program breached EU rules, as it granted citizenship to individuals without genuine ties to Malta.

The CJEU concluded that treating citizenship as a transaction damages the solidarity and trust that underpin the European Union. Malta must now comply with the ruling or risk financial penalties if it fails to do so.