Pirates of the Mediterranean meet judges of the Kirchberg: the CJEU rules on Malta’s investor citizenship law

 

Steve Peers, Professor of Law, Royal Holloway University of London*

Photo credit: Aldo Ardetti, via Wikimedia Commons

*Thanks to Justin Borg-Barthet for corsair quote

**This blog post builds on research for the upcoming third edition of The EU Citizenship Directive: A Commentary, by Elspeth Guild, Steve Peers and Jonathan Tomkin (OUP, 2026)

 

Defending his country’s investor citizenship policy, a former Prime Minister of Malta once defined his homeland as a nation of ‘corsairs’, offering an explanation based on the legality (or not) of buccaneering behaviour:

“The difference between pirates and corsairs is that pirates do things illegally while corsairs have a license to do things that are on the brink of what is acceptable by the mainstream.”

Nevertheless, the Court of Justice of the EU has now ruled that the Maltese investor citizenship policy is a breach of EU law. So the Maltese government are pirates after all. Or are they? Is the real swashbuckling lawlessness here in fact the foray of the Luxembourg judges deep into the waters of Member States’ powers, to seize as treasure national competence which is plainly not theirs?

Background

According to the Declaration on nationality of a Member State, attached to the original TEU (the Maastricht Treaty):

The Conference declares that, wherever in the Treaty establishing the European Community reference is made to nationals of the Member States, the question whether an individual possesses the nationality of a Member State shall be settled solely by reference to the national law of the Member State concerned. Member States may declare, for information, who are to be considered their nationals for Community purposes by way of a declaration lodged with the Presidency and may amend any such declaration when necessary.

The point was reiterated in the ‘Edinburgh Decision’ of Member States a few months later:

The question whether an individual possesses the nationality of a Member State will be settled solely by reference to the national law of the Member State concerned.

Earlier in 1992, the CJEU gave its first ruling that fully addressed the issue: Micheletti. In this case, a national court asked the CJEU whether a dual citizen of a non-EU country and an EU Member State could rely upon EU free movement law, even though another Member State had doubts that his Member State nationality (acquired via his parents’ nationality) sufficed to entail a genuine link with that Member State, given that his previous residence was outside the EU.

The Court of Justice responded by referring to Member States’ power to define their nationality, with an ensuing obligation of mutual recognition by other Member States:

Under international law, it is for each Member State, having due regard to Community law, to lay down the conditions for the acquisition and loss of nationality. However, it is not permissible for the legislation of a Member State to restrict the effects of the grant of the nationality of another Member State by imposing an additional condition for recognition of that nationality with a view to the exercise of the fundamental freedoms provided for in the Treaty. [emphases added]

It followed that:

…it is not permissible to interpret Article 52 of the Treaty [now Article 49 TFEU] to the effect that, where a national of a Member State is also a national of a non-member country, the other Member States may make recognition of the status of Community national subject to a condition such as the habitual residence of the person concerned in the territory of the first Member State.

In the Court’s view, ‘this conclusion is reinforced by the fact that the consequence of allowing such a possibility would be that the class of persons to whom the Community rules on freedom of establishment were applied might vary from one Member State to another’.

Despite the reference to ‘international law’ in the context of a Member State granting or removing its own nationality, the Court implicitly rejected the approach of international law as regards judging whether another Member State’s nationality had to be recognised. In particular, the ICJ’s Nottebohm judgment had previously stated that countries could disregard another country’s nationality if there was no ‘genuine connection’ with that country. (The Advocate General’s opinion in Micheletti expressly argued that Nottebohm was not relevant).

Moreover, the throwaway reference to Member States’ power to define their nationality being subject to the proviso of ‘having due regard to Community law’ was eventually clarified. Starting with the 2010 judgment in Rottmann, the CJEU ruled that a Member State’s decision to deprive its citizens of its nationality was not unlimited, despite the declaration and decision of 1992, because that resulted in the loss of citizenship of the EU:

It is clear that the situation of a citizen of the Union who, like the applicant in the main proceedings, is faced with a decision withdrawing his naturalisation, adopted by the authorities of one Member State, and placing him, after he has lost the nationality of another Member State that he originally possessed, in a position capable of causing him to lose the status conferred by Article [20 TFEU] and the rights attaching thereto falls, by reason of its nature and its consequences, within the ambit of European Union law.

The Court qualified its prior judgment in Micheletti:

The proviso that due regard must be had to European Union law does not compromise the principle of international law previously recognised by the Court, and mentioned in paragraph 39 above, that the Member States have the power to lay down the conditions for the acquisition and loss of nationality, but rather enshrines the principle that, in respect of citizens of the Union, the exercise of that power, in so far as it affects the rights conferred and protected by the legal order of the Union, as is in particular the case of a decision withdrawing naturalisation such as that at issue in the main proceedings, is amenable to judicial review carried out in the light of European Union law.

Having established that deprivation of nationality was within the scope of EU law, the Court went on to say that there was no breach of EU law in doing so in this case, given the international measures that refer to the prospect of deprivation of citizenship in case of fraud (referring to the Council of Europe Convention on Nationality and the UN Convention on the Reduction of Statelessness, and also to the Universal Declaration of Human Rights as regards arbitrary deprivation of nationality).

The Rottmann judgment led inevitably to further case law, given the importance of deprivation of nationality to any individuals facing it: Tjebbes (discussed here); C-118/20; C-689/21; and C-684/22. Broadly speaking, this case law is generally deferential to Member States’ decisions to deprive citizens of their nationality, but subject to some limits, particularly a need for a legitimate interest (criminal offences, absence from the territory, dual citizenship) as well as the principle of proportionality and the guarantee of procedural rights. (Note that British citizens’ loss of EU citizenship due to Brexit was not subject to this case law, because that loss followed from the UK choosing no longer to be a Member State – as confirmed by the CJEU in 2022 (see discussion here))

On the other hand, the Court did not have the opportunity to clarify whether there were also limits imposed by EU law on Member States’ rules on acquisition of their nationality – until the Commission challenged the Maltese rules on investor citizenship, on the grounds that they amounted to selling the nationality of a Member State (and therefore EU citizenship) to people who lacked a sufficient link to that Member State.

The Commission v Malta judgment

The Court’s ruling starts by addressing the Maltese government’s argument that the constraints set by EU law on acquisition of Member States’ nationality are much less than the constraints on deprivation of nationality: they should ‘be limited to a finding of significant breaches of the values or objectives of the European Union, which are general and systematic in nature’. In the Court’s view ‘[t]here is nothing in the wording or the scheme of the Treaties to support the inference that their authors intended to lay down, as regards the grant of the nationality of a Member State, an exception to the obligation to comply with EU law’ only in such cases. Moreover, ‘such an exception cannot be accepted since it would amount to a limitation of the effects attaching to the primacy of EU law, which falls within the essential characteristics of EU law and, therefore, within the constitutional framework of the European Union’.

The Court then moves to the Commission’s argument that Malta had infringed Article 20 TFEU (the definition of EU citizenship, based on holding the nationality of a Member State) and Article 4(3) TEU (the EU law principle of sincere cooperation). The judgment points out that the Treaties aim to ensure free movement of people, in conjunction with the principle of mutual recognition. Next, the Court refers to the political participation elements of EU citizenship, by which ‘Union citizens participate directly in the democratic life of the European Union’; the EU’s ‘functioning is founded on representative democracy, which gives concrete expression to democracy as a value, which is, under Article 2 TEU, one of the values on which the European Union is founded’ (citing its recent judgment on EU citizenship and membership of political parties, which I discussed here). According to the Court:

It follows that the exercise by the Member States of their power to lay down the conditions for granting their nationality has consequences for the functioning of the European Union as a common legal order.

The Court also refers to the Treaty provisions on consular protection of EU citizens. Then:

It is in the light of those various rights that the Court has held that the provisions relating to citizenship of the Union are among the fundamental provisions of the Treaties which are part of the framework of a system that is specific to the European Union and which are structured in such a way as to contribute to the implementation of the process of integration that is the raison d’être of the European Union itself and thus form an integral part of its constitutional framework…

Next, the Court repeats its long-standing catchphrase that ‘Union citizenship constitutes the fundamental status of nationals of the Member States’, providing reasoning for that conclusion: ‘in the light both of the scope of the rights attaching to Union citizenship…and of the fact that that status derives automatically from the fact of being a national of a Member State’.

Therefore:

Union citizenship is thus one of the principal concrete expressions of the solidarity which forms the very basis of the process of integration…and which is an integral part of the identity of the European Union as a specific legal system, accepted by the Member States on a basis of reciprocity

And it follows that:

The exercise of the Member States’ power to lay down the conditions for granting the nationality of a Member State is not, therefore, in the same way as their power to lay down the conditions for loss of nationality, unlimited. Union citizenship is based on the common values contained in Article 2 TEU and on the mutual trust between the Member States as regards the fact that none of them is to exercise that power in a way that is manifestly incompatible with the very nature of Union citizenship.

The Court then reiterated (based on prior case law) that ‘the bedrock of the bond of nationality of a Member State is formed by the special relationship of solidarity and good faith between that State and its nationals and the reciprocity of rights and duties’, extending that to entail a principle underlying EU citizenship:

In the same vein, it is clear from the very wording of the first sentence of Article 20(2) TFEU that citizens of the Union are to enjoy the rights and be subject to the obligations laid down in the Treaties. In accordance with Article 20(1) TFEU, the special relationship of solidarity and good faith between each Member State and its nationals also forms the basis of the rights and obligations reserved to Union citizens by the Treaties.

When defining that ‘particular relationship of solidarity and good faith…the definition of the conditions for granting the nationality of a Member State does not fall within the competence of the European Union, but within that of each Member State, which has a broad discretion in the choice of the criteria to be applied, provided that those criteria are applied in compliance with EU law’.

But as the Court had already noted, that national discretion was not unlimited, but was subject to EU law. Crucially, then, the Court asserts that:

…a Member State manifestly disregards the requirement for such a special relationship of solidarity and good faith, characterised by the reciprocity of rights and duties between the Member State and its nationals, and thus breaks the mutual trust on which Union citizenship is based, in breach of Article 20 TFEU and the principle of sincere cooperation enshrined in Article 4(3) TEU, when it establishes and implements a naturalisation scheme based on a transactional procedure between that Member State and persons submitting an application under that programme, at the end of which the nationality of that Member State and, therefore, the status of Union citizen, is essentially granted in exchange for predetermined payments or investments.

A programme of that sort amounts to the commercialisation of the granting of the status of national of a Member State and, by extension, Union citizenship, which is incompatible with the conception of that fundamental status that stems from the Treaties.

The Court then recalls the mutual recognition principle from Micheletti, expressing its concern in that context:

Transactional naturalisation, which is granted in exchange for predetermined payments or investments, is not only contrary to the principle of sincere cooperation, but is also liable, by its nature, to call into question the mutual trust which underlies that requirement of recognition, since that trust relates to the premiss that the grant of the nationality of a Member State must be based on a special relationship of solidarity and good faith justifying the grant of rights resulting, in particular, from Union citizenship.

Diving into the specific rules of the Maltese investor citizenship scheme, the Court states that three of the five rules are essentially based on forms of cash payment. Although the fourth condition requires ‘legal residence in Malta for a period of 36 months’, the Court dismisses this as being, in effect, a Potemkin village: in practice, ‘that condition does not amount to a requirement of actual residence in the territory, since the physical presence of the applicant on that territory is required only when biometric data are collected in order to obtain the residence permit and to take the oath of allegiance’. This conclusion was reinforced by the opportunity to reduce the residence requirement to 12 months in return for further cash payments, and by comparison to the more stringent rules – entailing longer and genuine residence – which apply to the ‘ordinary’ naturalisation procedure of Malta. As for the final condition – a series of suitability checks in the public interest – the Court takes the view that they do not alter the essentially commercial nature of the sale of citizenship.

Finally, the Court dismisses Malta’s argument that its investor citizenship scheme ‘takes into account certain connecting factors on the part of the applicants’, in particular links via investments and possible future links after obtaining nationality. In the Court’s view: there was no evidence that the scheme ‘provides for a specific and concrete examination of the relevance of certain investments in order to establish the existence and extent of an applicant’s ties with the Republic of Malta, or to enable the development of such links with that Member State, distinct from’ examining whether an applicant meets the criteria; the prospect of deprivation of nationality after granting it was limited in scope; and the scheme was sold as conferring free movement rights in any Member State. Although Malta denied responsibility for how private parties sold the scheme, the Court points out that it had authorised them to act on its behalf – so (implicitly) had the power to prevent them from adopting these sales techniques, but failed to use that power. So, as a sales pitch, Malta was not really selling its nationality – it was selling citizenship of the European Union. And (implicitly again) Malta was not linking its nationality to its territory – it was linking it to being somewhere else in the EU instead.

Comments

I’ll start with the specific issues arising from the judgment (the impact on investor citizenship schemes) and move to the general (the impact on EU citizenship and the nature of the EU legal order more broadly).

Investor citizenship schemes

Several questions arise here. First of all, what happens to those who have already obtained citizenship under the Maltese scheme? Is Malta now obliged to yeet the rich?

Secondly, can Member States now refuse to recognise another Member State’s citizenship, if it has been obtained via means of an investor citizenship scheme that breaches EU law? Thirdly, would any system of investment citizenship by a Member State necessarily breach EU law?

Fortunately, immigration lawyer Simon Cox has already mused over these issues. On the first point, he points out that Malta did not ask the Court to limit the temporal effect of its ruling, so arguably it applies to citizenship already granted on the basis of the illegal scheme. Although, as he notes, Member States may not be keen to rescind citizenship already granted, other Member States have done so in similar circumstances (I would add that the CJEU case law on deprivation of nationality, mentioned above, would likely accept this on public interest grounds). But for those Member States reluctant to deprive investors of citizenship, it is possible that the CJEU may be asked to rule on this point – either if the Commission seizes the Court again, or if a Maltese court (perhaps seized by an NGO opposing the national scheme) asks the Court questions about the consequences of its judgment in that Member State.

But can another Member State now refuse to recognise the investor citizenship granted by Malta? The judgment touches on that point but very ambiguously, noting that a transactional citizenship rule is ‘liable, by its nature, to call into question the mutual trust’ underpinning EU citizenship, without answering the implied question of whether it is legal to do so. There’s a practical question of how to identify the Maltese citizens in question: presumably their passports are not literally golden. Perhaps immigration officials could profile those Maltese citizens who are flashing the biggest Rolexes and surrounded by the youngest women.

Assuming Member States do this, it should not be assumed, in light of the Court’s ambiguity, that it has overruled its long-standing judgment in Micheletti. Where the Court wishes to reverse its prior judgments, it does so explicitly (see, for instance, Metock: ‘It is true that the Court held [an absurd interpretation of free movement law in a previous judgment]….However, that conclusion must be reconsidered.’) In any event, in my view, the Micheletti judgment was and remains rightly decided on the mutual recognition point: the ICJ’s Nottebohm judgment was, with respect, poorly reasoned (paying insufficient account to the basic international law principle of state sovereignty), and it is hard to see how EU free movement law could function if Member States are second-guessing who is validly a national of another Member State. Above all, Member States had already made it clear (in the 1992 declaration and decision) that in the context of EU law, it was up to each of them – not other Member States – to determine who their nationals are.  

What about alternative versions of investor citizenship? Certainly the general tone of the judgment is one of disgust for commercialisation of EU citizenship in general. But as Simon Cox points out, the judgment also seems to suggest that a genuine residence requirement would overcome the Court’s revulsion. A less blatant sales pitch might help too. We can only speculate how long the super-rich would have to endure the inconvenience of mooring their yachts in Valetta for, to satisfy the Court – because it only told us that the current Maltese law was insufficient, without detailing which alternative would be legal.

EU citizenship and the EU legal order

This train already left the station with the Rottmann judgment 15 years ago, but it bears saying again, as the Court confirms that this case law applies to also the acquisition of Member State nationality: this whole line of judgments, with respect, has no basis in the wording of the Treaties or EU legislation. Not only is there no reference to any EU law constraints on Member States’ nationality law in the Treaties, the 1992 declaration and decision make absolutely clear that Member States interpret the Treaty to mean that nationality of a Member State is defined solely by national law.  

The Court’s specific rationales for rejecting Malta’s proposed high threshold for EU law constraints on acquisition of Member State nationality throw more flimsy fuel on this unconvincing fire. Yeah, of course the authors of the Treaties said nothing about an exception from EU law as regards acquisition of Member State nationality – because they said nothing about EU law applying to Member States’ nationality law in the first place. In fact, the 1992 declaration and decision clearly state that the authors of the Treaties believe EU law doesn’t apply to Member States’ nationality law at all. “We are very concerned about what the authors of the Treaties wrote” says the Court – while ignoring what the authors of the Treaties actually wrote on this very issue. This is simply judicial gaslighting.

As for the primacy of EU law, this is just confused. Even assuming one agrees with the Court’s conception of the primacy of EU law, it is a means of enforcement of EU law in the event of a conflict with national law. That primacy tells us nothing about what the scope or substance of EU law is – whether it applies at all to the acquisition of national citizenship, and if so what constraints it places upon those rules.

I have to say that if I read this reasoning on an EU law exam, the student would get nowhere near a 2:1.

Having said that, the judgment is what it is. We cannot avoid having to grapple with the Court’s explication of how it conceives of EU citizenship, and what that might mean more generally. And here, despite the weak foundations of its demand to set constraints upon national citizenship, the Court develops many interesting principles.  

The prior case law on the deprivation of Member States’ nationality was focussed on what the consequent loss of EU citizenship might mean for the individual concerned, particularly as regards free movement. But as regards acquisition of nationality, in this judgment at least the Court is not concerned about the impact on the individual. It is not even wholly focussed – as you might reasonably expect of the sale of nationality as a means to free movement – on the impact on other Member States. Rather it focusses in many respects on the impact for the European Union.

And what a European Union that is. As in the earlier case law, the Court mentions free movement aspects of citizenship, but it now adds references to consular protection and especially political rights. Coupled with the Court’s disdain for the sale of nationality, it seems that in this judgment, EU law is no longer founded on the internal market; it is now based on the internal marketplace of ideas. 

The Court does not mention the rather inconvenient fact that EU citizens face financial thresholds to exercise free movement rights: benefit recipients can move from Hamburg to Hanover, but not from Bucharest to Bremen. While EU free movement law is more generous than the usual immigration law for those of modest means, it is still more stringent than the rules applying to citizens of a Member State moving within it – on financial grounds. The Court is Captain Renaut in Casablanca: shocked, shocked to find that citizenship rights are dependent on money in here.

The judgment also links EU citizenship to democracy and the values of the EU, asserting an impact of Member States’ rules on acquisition of nationality upon ‘the functioning of the [EU] as a common legal order’, and ‘the identity of the [EU] as a specific legal system’. This stress on the legal nature of the EU reads like an attempt at fashioning constitutional patriotism by bloodless legal technocrats; and it is inevitably undermined by the profound weaknesses of the Court’s legal reasoning as regards the existence of EU constraints upon Member States’ nationality law.

But there’s a broader stress on non-legal values here too. The overall vibe is of a court preparing itself with arguments to defend the rule of law and other EU values – despite contrary developments in one country across the Atlantic and, more cogently, certain Member States. We shall soon see how this might play out in the pending case about EU values and Hungarian LGBT restrictions. And, circling back to Member State nationality, it is hard to see how the Hungarian government’s plan to suspend the Hungarian nationality of dual citizens who are insufficiently orgasmic about Orban could possibly be compatible with EU law in light of this new judgment.

One issue is notable by its absence from the Court’s reasoning: the argument that the rules on acquisition of nationality of a Member State are an aspect of national identity, which the Treaties explicitly require the EU to respect – even though Malta argued the point. It’s a strong argument in general terms, but its strength may differ in separate cases. There’s obviously a better case for (say) the grant of Irish nationality to (most of) those born in Northern Ireland as being intrinsically linked to the history and identity of Ireland, than there is for the souvenir shop citizenship of the Maltese law in this case. But the Court should nonetheless have answered the objection.

Conversely, the Court explicitly uses this judgment as a vehicle to express itself on the ‘identity’ of the European Union: as we have seen already, as a ‘specific legal system’. Presumably the specificity of this legal system explains – although again the Court avoids saying this directly – why the judgment implicitly rejects the Commission’s argument that Member States must base their nationality law upon a ‘genuine link’ with the country (echoing international law), and instead develops an EU-specific set of principles. (The break with international law is another point of divergence with the case law on deprivation of citizenship; perhaps it didn’t help that the Advocate-General’s opinion inaccurately claimed that the Council of Europe Convention has no rules on acquisition of nationality).   

Rather, the basis for the EU law rules on the acquisition of Member State nationality is the ‘special relationship of solidarity and good faith between each Member State and its nationals’; and the test is apparently whether a particular national rule is ‘manifestly incompatible with the very nature of Union citizenship’. Applying that test, ‘a Member State manifestly disregards’ this requirement when it sells its nationality on a commercial basis. Note that the Court does not say that this would be the only type of rule on acquiring nationality which is, in its view, incompatible with EU law.

What might this mean in other cases? Simon Cox’s blog post usefully points out some examples of other rules which might be challenged as a barrier to acquiring nationality (rather than, as in this case, making it too easy to obtain in some cases). He refers to high fees and education requirements; I would add that, by analogy with the case law on loss of citizenship, EU law may give applicants for nationality procedural rights too. And the link the Court makes with the values of the EU should, for example, preclude any practice (as in Trump’s USA) of refusing citizenship based on criticism of the actions of a foreign government – still less arresting the applicant at a citizenship interview with a view to deporting him.

Conclusion

This is the Alien v Predator of constitutional moments. I’m equally unimpressed by both the arrogant Eurofederalism of the Court and the fridge-magnet nationalism of the Maltese government. But what, in an ideal world, would be the best way forward?

There’s certainly a case, given the impact of the grant of nationality upon other Member States, of some form of coordination of nationality law within the EU. This would also be consistent with the logic of declaring the existence of citizenship of the European Union: why should the notion of citizenship be subject to no common rules at all?

But the development of such principles needs to be consistent with the rule of law, not the Court’s untenable interpretation of the 1992 decision and declaration. I doubt that there is much prospect of a Treaty amendment to confer competence upon the EU in this field: Orban may be many things, but he is not a turkey who would vote for Christmas. As things currently stand, principles could be agreed on the basis of soft law, or even treaties between Member States, on the basis of a ‘coalition of the willing’ if need be.

As I doubt that such a coalition will be easily forthcoming, I think we will be stuck with the development of legal principles in this field based on further elaboration of the Court’s judicial activism for the foreseeable future.  Time will tell whether the Court’s judgment is an anomaly – a reaction to a particularly egregious national policy in the context of broader allegations of corruption – or a key part of further case law on nationality law in particular and the EU legal order in general. 

To adapt the words of a famous on-screen pirate, look at the Court: they are the captain now.

“Daphne’s Law”: The European Commission introduces an anti-SLAPP initiative

 

Professor Justin Borg-Barthet, University of Aberdeen*

*Advisor to a coalition of press freedom NGOs on the introduction of SLAPPs, co-author of the CASE Model Law, lead author of a study commissioned by the European Parliament, and member of the Commission's Expert Group on SLAPPs and its legislative sub-group

 

Background

 

When Daphne Caruana Galizia was assassinated in Malta on 16th October 2017, 48 defamation cases were pending against her in Maltese and other courts. Daphne was at the peak of her journalistic powers when she was killed, producing a seemingly endless exposé of criminality involving government and private sector actors. Naturally, those she was exposing did not take kindly to the intrusion on the enjoyment of the fruits of their labour. Courts which offered few meaningful safeguards against vexatious litigation presented a nominally legitimate forum in which they would seek to exhaust and punish Daphne and to ensure that others did not engage in similar investigations. Most of these cases were inherited by her sons, whose grief was interrupted constantly by a need to appear in court in defence of their mother’s work.

 

The scale of abusive litigation which Daphne endured prompted several NGOs to look more closely at the phenomenon of SLAPPs. Strategic Lawsuits Against Public Participation, a term coined in American academic circles, are lawsuits intended not to serve the legitimate purpose of pursuing a claim against a respondent, but instead to use court procedure to suppress scrutiny of matters of public interest. The direct costs, psychological strain, and opportunity costs of defending oneself in court are intended to coerce retraction of legitimate public interest activity, and to have a chilling effect on others who might show an interest. While most SLAPPs are framed as defamation claims, there is also a growing body of abusive litigation which suppresses public participation using the pretext of other rights such as privacy and intellectual property.

 

In response to the growing SLAPP phenomenon, several US States, Canadian provinces and Australian states and territories have introduced anti-SLAPP statutes. Typically, these statutes provide for the early dismissal of cases, and include cost-shifting measures to compensate SLAPP victims and to dissuade claimants. No EU Member State has yet adopted similar laws. Prompted by Daphne’s experience, European NGOs and MEPs became increasingly aware of the alarming incidence of SLAPPs throughout Europe. They then set out to identify and advocate for legal solutions in the European Union.

 

Initially, the European Commission resisted calls for the introduction of anti-SLAPP legislation, citing a lack of specific legal basis. As the legal and statistical research bases for NGO advocacy evolved further, and following a change in the Commission’s political leadership, the Commission’s assessment changed. This culminated in the introduction of a package of anti-SLAPP measures on 27th April 2022, including a proposed anti-SLAPP Directive which Vice-President Jourova dubbed “Daphne’s Law”.

 

The legislative proposal is based, in part, on a Model Law which was commissioned by the Coalition Against SLAPPs in Europe (CASE), a grouping of NGOs established to further the research basis and advocacy for anti-SLAPP laws in Europe. That Model Law is itself inspired by anti-SLAPP statutes adopted in the United States, Canada and Australia, but accounts for divergent continental legal traditions, and benefits from extensive consultation with experts and practitioners in Europe and elsewhere.

 

Legal Basis and Scope

As noted above, the key barrier for NGOs and MEPs to persuade the Commission to initiate anti-SLAPP legislation was disagreement about whether the EU had competence to act in this area. Subsequently, however, the Commission recognised the internal market relevance of SLAPPs, as well as adopting a more strident approach to the rule of law and human rights implications of SLAPPs. Arguments concerning a legal basis included an approach based on numerous treaty articles (as in the Whistleblowers’ Directive), reliance on the internal market effects of SLAPPs (Article 114 TFEU) as in the Model Law, and the potential use of treaty provisions on cross-border judicial cooperation. Ultimately, in view of Member States’ expected resistance to intervention in domestic procedural law, the Commission’s draft proceeds on the basis that Article 81 TFEU confers competence in respect of judicial cooperation in civil matters.

 

The orthodox view of Article 81 TFEU presupposes an international element to matters falling within its scope. It was therefore incumbent on the drafters to constrain the scope of the proposed directive to cases having a cross-border dimension. The Commission’s proposal begins with a classic private international law formulation which refers to the domicile of the parties. A case lacks cross-border implications if the parties are both domiciled in the Member State of the court seised. This, however, is subject to a far-reaching caveat in Article 4(2):

 

Where both parties to the proceedings are domiciled in the same Member State as the court seised, the matter shall also be considered to have cross-border implications if:

a)      the act of public participation concerning a matter of public interest against which court proceedings are initiated is relevant to more than one Member State, or

b)      the claimant or associated entities have initiated concurrent or previous court proceedings against the same or associated defendants in another Member State.

 

The Commission’s proposal adopts an innovative formulation, the breadth of which is commensurate to the internal market and EU governance implications of SLAPPs. Given the EU’s interconnectedness, it is paramount that the law account for the fact that cross-border implications do not flow only from the circumstances of the parties but also from transnational public interest in the underlying dispute.

 

The broad scope could be extended further if and when Member States come to transpose the proposed directive in national law. It is hoped, and indeed recommended as good practice, that Member States will take the view that national transposition measures will not be restricted to matters falling within the scope of the Directive but would apply also to purely domestic cases. This would avoid the prospect of reverse discrimination against SLAPP victims in domestic disputes. It would also minimise opportunistic litigation concerning the precise meaning of ‘[relevance] to more than one Member State’ in Article 4(2)(a).

 

Defining SLAPPs

Other than in the title and preamble, the proposed directive does not deploy the term ‘SLAPPs’. Discussions preceding the drafting process noted a number of difficulties associated with the term, not least (i) its unfamiliarity to a European legal audience, and (ii) the potential confusion resulting from the word ‘strategic’, which could be understood to require evidence of said strategy. In keeping with the Model Law, the Commission’s draft Directive deploys familiar language and focuses on the abusive nature of the proceedings. Rather than referring to SLAPPs, therefore, the text of the draft directive uses the term ‘abusive court proceedings against public participation’.

 

In identifying matters falling within the scope of the draft directive, it is first necessary to establish that a matter concerns ‘public participation’ on a matter of ‘public interest’. The Commission’s draft accounts for the fact that SLAPPs do not only target journalistic activity, but also seek to constrain legitimate action of civil society, NGOs, academics, and others. Public participation and public interest are therefore defined broadly as follows in Article 3:

 

‘public participation’ means any statement or activity by a natural or legal person expressed or carried out in the exercise of the right to freedom of expression and information on a matter of public interest, and preparatory, supporting or assisting action directly linked thereto. This includes complaints, petitions, administrative or judicial claims and participation in public hearings;

‘matter of public interest’ means any matter which affects the public to such an extent that the public may legitimately take an interest in it, in areas such as:

a)      public health, safety, the environment, climate or enjoyment of fundamental rights;

b)      activities of a person or entity in the public eye or of public interest;

c)       matters under public consideration or review by a legislative, executive, or judicial body, or any other public official proceedings;

d)      allegations of corruption, fraud or criminality;

e)      activities aimed to fight disinformation;

 

If a case concerns public participation in matters of public interest, it is then necessary to establish that the proceedings are abusive in accordance with the definition in Article 3:

‘abusive court proceedings against public participation’ mean court proceedings brought in relation to public participation that are fully or partially unfounded and have as their main purpose to prevent, restrict or penalize public participation. Indications of such a purpose can be:

a)      the disproportionate, excessive or unreasonable nature of the claim or part thereof;

b)      the existence of multiple proceedings initiated by the claimant or associated parties in relation to similar matters;

c)       intimidation, harassment or threats on the part of the claimant or his or her representatives.

 

There are therefore two key elements to the notion of abuse: (i) claims may be abusive because they are fully or partly unfounded, or (ii) they may be abusive because of vexatious tactics deployed by claimants. The implications of a finding of abusiveness will vary depending on the type of abuse identified in the proceedings, with more robust remedies available where the claim is manifestly unfounded in whole or in part.

 

Main legal mechanisms to combat SLAPPs

Once a court has established that proceedings constitute SLAPPs falling within the directive’s scope, three key remedies will be available to the respondent in the main proceedings: (i) the provision of security for costs and damages while proceedings are ongoing, (ii) the early dismissal of proceedings, and (iii) payment of costs and damages.

 

Speedy dismissal of claims is considered the cornerstone of anti-SLAPP legislation. Accelerated dismissal deprives the SLAPP claimant of the ability to extend the financial and psychological costs of proceedings to the detriment of the respondent. Early dismissal of cases must, of course, be granted only with great caution given it is arguable that this restricts the claimant’s fundamental right to access to courts. The solution provided in the draft directive is to restrict the availability of this remedy to claims which are manifestly unfounded in whole or in part. It is for the claimant in the main proceedings to show that their claim is not manifestly unfounded (Art 12).

 

Early dismissal is not available where the claim is not found to be manifestly unfounded, even if the its main purpose is ‘to prevent, restrict or penalize public participation’ (as evidenced by ‘(i) the disproportionate, excessive or unreasonable nature of the claim…the existence of multiple proceedings [or] intimidation, harassment or threats on the part of the claimant’). This differs from the Model Law which envisages early dismissal in cases which are not manifestly unfounded but which bear the hallmarks of abuse. The Model Law’s authors reasoned that a court should be empowered to dismiss a claim which is designed to abuse rather than vindicate rights. This would not, in our view, constitute a denial of the right to legitimate access to courts but would dissuade behaviour which is characterised as abusive in the Commission’s own draft instrument. While the Commission’s reasoning and caution are understandable, the high bar set by the requirement of manifest unfoundedness allows for significant continued abuse of process.

 

This shortcoming is mitigated somewhat by the other remedies, namely the provision of security pendente lite (Article 8) and liability for costs, penalties, and compensatory damages (Articles 14-16), which are available regardless of whether the SLAPP is manifestly unfounded or merely characterised by abuse of rights. These financial remedies are especially useful insofar as they give the respondent some comfort that they will be compensated for the loss endured through litigation. They are also expected to have a dissuasive effect on SLAPP claimants who would be especially loathe to the notion of rewarding the respondent whose legitimate exercise of freedom of expression they had sought to dissuade or punish. Nevertheless, it bears repeating that in all cases these remedies, designed to compensate harm, should supplement the principal remedy of early dismissal which is intended to prevent harm.

 

In addition to these main devices to dissuade the initiation of abusive proceedings against public participation, the draft directive includes a number of further procedural safeguards. These include restrictions on the ability to alter claims with a view to avoiding the award of costs (see Recital 24 and Article 6), as well as the right to third party intervention (Article 7) which will enable NGOs to submit amicus briefs in proceedings concerning public participation. While this may appear to be a minor innovation at first blush, it could have substantial positive implications insofar as it would equip more vulnerable respondents (and less expert courts) with valuable expertise and oversight.

 

London Calling: Private International Law Innovation

While the provisions discussed above would limit the attractiveness of SLAPPs in EU courts, there would remain a significant gap if EU law did not provide protection against the institution of SLAPPs in third countries. London, with its high litigation costs and somewhat claimant friendly defamation laws, is an especially attractive forum for claimants who wish to suppress public scrutiny. Equally, other States could be attractive to claimants who wish to circumvent EU anti-SLAPP law, whether simply as a function of the burden of transnational litigation, or because of the specific content of their substantive and/or procedural laws. The draft directive therefore proposes to introduce harmonised rules on the treatment of SLAPP litigation in third countries.

 

Article 17 provides that the recognition and enforcement of judgments from the courts of third countries should be refused on grounds of public policy if the proceedings bear the hallmarks of SLAPPs. While Member States were already empowered to refuse recognition and enforcement in such cases, the inclusion of this article ensures that protection against enforcement of judgments derived from vexatious proceedings is available in all Member States.

 

Article 18 provides a further innovation by establishing a new harmonised jurisdictional rule and substantive rights to damages in respect of SLAPPs in third countries. The provision confers jurisdiction on the courts of the Member State in which a SLAPP victim is domiciled regardless of the domicile of the claimant in the SLAPP proceedings. This would provide an especially robust defence against the misuse of third country courts and reduce the attractiveness of London and the United States as venues from which to spook journalists into silence.

 

While the limitation of forum shopping in respect of third countries is, of course, welcome, there does remain a significant flaw insofar as EU law and the Lugano Convention facilitate forum shopping within the European judicial area. The cumulative effect of EU private international law of defamation is to provide mischievous litigants with ample opportunity to deploy transnational litigation as a weapon to suppress freedom of expression. NGOs have therefore requested amendment of two EU private international law instruments:

 

In the first instance, and as a matter of urgency, the Brussels I Regulation (recast) requires amendment with a view to grounding jurisdiction in the domicile of the defendant in matters relating to defamation. This would remove the facility for pursuers to abuse their ability to choose a court or courts which have little connection to the dispute;

The omission of defamation from the scope of the Rome II Regulation requires journalists to apply the lowest standard of press freedom available in the laws which might be applied to a potential dispute. We recommend the inclusion of a new rule which would require the application of the law of the place to which a publication is directed;

 

These changes have not yet been forthcoming. It is hoped that ongoing reviews of these instruments will yield further good news for public participation in the EU.

 

Concluding remarks

Daphne’s Law will now have to be approved by the Council of Ministers and the European Parliament. The legislative process may see a Parliament seeking more robust measures pitted against Member States who may be inclined to protect their procedural autonomy. The Commission has considered these competing demands in its draft and sought to propose legislation which strikes a balance between divergent institutional stances. Nevertheless, it must be expected that the draft will be refined as it makes its way through the approval process. As noted above, the draft would be improved if those refinements were to include the extension of early dismissal to cases beyond the narrow confines of manifest unfoundedness. Equally, the draft directive should be viewed as a first welcome step in the pushback against SLAPPs in Europe and that reviews of private international law instruments will follow soon after.

 

Photo credit: ContinentalEurope, on Wikicommons

Judicial Independence and Maltese courts: Is a microstate about to provide EU rule of law with its Van Gend moment?

Justin Borg-Barthet, Senior Lecturer in EU Law at the University of Aberdeen*

In fifteen years of EU membership, Maltese courts have been remarkably reluctant to refer questions of interpretation to the CJEU.  This could be about to change in litigation which could have far-reaching consequences for the direct effect of member states’ rule of law and human rights obligations.  The dispute raises important, novel questions concerning the extent to which EU law of a classical constitutional nature could be democratised in much the same manner as the law of the internal market was democratised through Van Gend.

In the case of Pace Axiaq et al vs Prim Ministru, an NGO has asked the Civil Court to seek a preliminary ruling concerning the compatibility with EU law of Malta’s system of judicial appointments.  The NGO contends that a system which grants the executive absolute power over appointment and promotion breaches the right to a fair trial and the right to an effective remedy (Art 19 TEU and Art 47 Charter of Fundamental Rights).  The applicants also seek to enjoin the government to refrain from making further appointments to the bench until constitutional reforms have been implemented.

In a decree issued on 22 May 2019, the Civil Court rejected the Maltese government’s request to summarily dismiss the case.  The Court found that, while the applicants could not rely on the Maltese Constitution or the ECHR, they did have a juridical interest insofar as they rely on EU law. 

The case, should it be referred to the CJEU, would enable the further development of jurisprudence through which the Luxembourg court has operationalised the rule of law in the EU.  In particular, it could render individuals enforcers of the principles in the Juizes Portugueses judgment (discussed here) in which it was held that “every Member State must ensure that the bodies which, as ‘courts or tribunals’ within the meaning of EU law, come within its judicial system in the fields covered by that law, meet the requirements of effective judicial protection” (para 37).

Systematic backsliding in the absence of systemic change

The applicants in Pace Axiaq rely in great measure on the ongoing proceedings in Commission v Poland (discussed further here).  Their submissions refer also to the damning indictment of Malta’s rule of law failings in a report by the Council of Europe’s Venice Commission.  The report, which was prompted by the assassination of journalist Daphne Caruana Galizia, noted that the independence of the judiciary is severely compromised by the present system of appointments.

The Maltese government has, in fact, committed to introducing legislation which will make the judiciary self-perpetuating, thereby severing the executive’s control over the judicial branch.  The catch, however, is that appointments to the bench have continued; indeed, six appointments were made quite hurriedly following the filing of Pace Axiaq.  The net effect is that partisan capture could be perpetuated if a secure partisan majority of judges is installed by the executive prior to any legislative innovation.  As former ECHR judge Giovanni Bonello observes, permanent capture is quite likely given that the vast majority of judicial appointees since the 2013 change of government have either occupied a prominent role in the governing party or have close family or business relations with persons who do. 

Equally importantly, the threat to the independence of the judiciary is to be considered in a broader context of institutional capture.  The Maltese constitution relies on trust insofar as the separation of powers is concerned.  The executive has extensive powers of appointment and removal of officials responsible for the enforcement of criminal law, including financial regulation required by EU law. This has always been problematic in conceptual terms, and internal criticism is not a new phenomenon.  Recent events, however, demonstrate that there has been significant movement towards a deliberate culture of impunity in the highest political offices.  Erosion of the independence of the judiciary therefore takes on an altogether more worrisome flavour given many considered the judiciary to be a significant bar to the further (or complete, by some accounts) erosion of the rule of law, and the principle of sincere cooperation.

Malta is not Poland, but…

The Maltese rule of law crisis is distinguishable from its better-known Polish counterpart, however.  Poland has adopted regressive laws following EU membership, and thereby compromised the standard of judicial independence which had been scrutinised prior to accession.  The European Commission has been clear that this type of formal backsliding engages EU law, specifically Article 7 TEU, and requires redress as a matter of Union law.

In Malta, in contrast, the laws which the applicants in Pace Axiaq contend are contrary to EU law have been in place for as long as Malta has been an independent state.  Of course, nowhere in the treaties is the enforcement of fundamental rights and rule of law obligations contingent on regression, but the absence of formal regression means that a clear demarcation between compliance and its absence is lacking.  Indeed, the Maltese government, cognisant of the Commission’s formulaic systemic backsliding criteria, has been eager to emphasise the Commission’s role in the enforcement of rule of law obligations, arguing that there is no private route to enforcement. 

The potential innovation in Pace Axiaq, and the reason why a preliminary ruling is in fact necessary, is that the petitioners rely instead on the direct effect of certain human rights obligations: Article 19(1) TEU, which requires national courts to “provide remedies sufficient to ensure effective legal protection in the fields covered by Union law”, and Article 47 of the Charter of Fundamental Rights, which guarantees the right to an effective remedy and the right to a fair trial.  The matter is then brought within the scope of the Wachauf formula by way of the duty of sincere cooperation in Article 4(3) TEU; it is argued that the entire substance of the effectiveness of EU law may be at stake, and that all future judgments could be called into question should judicial independence be further compromised.

Paradoxically, Pace Axiaq could provide the Maltese courts with an opportunity to make their greatest contribution to the rule of law at a time when their own independence is most under threat.  Much like the establishment of the internal market required the development of direct effect and citizen-led enforcement of the law, supranational judicial oversight would go a long way towards fulfilling EU law’s promise of a system founded on the rule of law and fundamental rights.

*Reblogged from Verfassungsblog

Barnard & Peers: chapter 9

Photo credit: The Judiciary of Malta

Is the new Council of Europe treaty on match-fixing compatible with EU internal market law?

Tom Serby, Senior Lecturer in Law, Anglia Law School, Anglia Ruskin University

There is a growing epidemic of betting related match fixing in sport. To address it, the Council of Europe recently opened for signature a Convention on the Manipulation of Sports Competitions. However, Malta has asked the CJEU to rule on whether this treaty offends against the rules of the internal market, specifically freedom to provide services. This legal challenge highlights the difficulty in obtaining international agreement on how best to fight the match fixing.

The first 15 countries, including Russia and Germany, as well as six other EU Member States (Bulgaria, Denmark, Finland, Greece, Lithuania and Netherlands) signed up to the Convention as soon as it was open for signature, on September 18^th 2014; Malta’s is a lone voice in opposition. UEFA and the IOC (the Olympic movement) back the Convention but the associations of regulated European bookmakers are more guarded, sharing some of Malta’s concerns.

Match fixing, which the Convention addresses, has moved up the agenda for sports governing bodies, national governments and the the European Commission (which has funded various studies into it), in the wake of the scandals over the last decade which have affected in particular, but not only, the sports of football and cricket.

The growth in betting related match fixing, (or “spot fixing” where an event within a match is fixed rather than the overall result), is well known to anyone with only a passing interest in sport. The rise in this corrupt “manipulation” of sport, where athletes take bribes to underperform in order to facilitate winning on betting, has been fuelled by the huge rise in both licensed and unlicensed online gambling. INTERPOL investigations have proved that much of the fixing is at the behest of international (particularly from Asia where betting is often illegal) criminal gangs and is used for Money laundering purposes.  The infamous Calcioscommesse football scandal for instance, was financed out of Singapore, the corruptors acted in Italy, bets were placed all over Asia, and money proceeds were laundered through Panama.

Manipulation or fixing is very difficult to detect, and thus to prevent, as it crosses jurisdictions and is largely the result of online activity. Sports governing bodies have acknowledged that, while they have a role to play by tightening up their Codes of Ethics and Disciplinary procedures and introducing Integrity Units to investigate any suspected malpractice by athletes, they cannot on their own eradicate the problem without governmental support.

Under the Lisbon Treaty and TFEU Art 165 the EU has a role in promoting sport which specifically falls short of law harmonization. Under what has become known as the doctrine of the “specificity” of sport the CJEU will only interfere in the internal rules and regulations laid down by sporting federations in so much as they have an economic impact. So famously, in the Bosman ruling, the Court ruled as unlawful (under the internal market freedom of movement provisions) UEFA’s then transfer rules which restricted, on the basis of a player’s nationality, football clubs signing players from other EU Member States.

Malta’s complaint in regard of the Convention is brought under Article 218 TFEU, which is a special jurisdiction allowing the CJEU to rule if an envisaged treaty (ie not in force for the EU yet) is compatible with EU law or not. The object of the Convention is to establish international cooperation in terms of defining unlawful manipulation of sports competitions (ie corrupt betting related fixing) and in the investigation and prevention of fixing.

A key provision of the Convention is at Article 3 (5)(a) which defines "illegal sports betting" as "all sports betting activity whose type or operator is not allowed under the applicable law of the jurisdiction where the consumer is located".  The Convention prescribes at Article 11 website blocking and a ban on advertising to enforce the restriction on illegal betting. In other words, a betting operator licensed in say Malta, could be prohibited from going about its business in another EU state, say Poland, if Polish law proscribes some of the betting methods which in Malta are perfectly legal; thereby constituting a classic impediment to an internal market.

In Poland gambling is legal, and indeed is a source of important public revenue being relatively highly taxed; however, unusually for the EU, online gambling is illegal.  In practice blocking of foreign websites is not enforced and many Poles therefore work round this restriction on online gambling.

In Malta, on the other hand, betting operators are highly prized as economic entities and both regulation and tax are very light on betting companies in order to stimulate an important part of the economy for this, the smallest EU member state. Not unreasonably the Maltese argue that the Convention exceeds the ambit of EU competence by introducing regulations on gambling which is not a settled matter in the EU. Moreover, Malta will argue that any unduly restrictive provisions which drive gamblers into the unregulated market are counter-productive, since it is widely acknowledged that it is the unregulated betting market that is the source of much of the match fixing problem.

Malta’s case is that the definition of “illegal betting” is discriminatory under TFEU Art 18, and unlawful under articles 49 (freedom of establishment) and article 56 (freedom to provide services); and it is expected that Malta will argue before the Court that while they accept that the regulation on illegal gambling is in pursuit of a justifiable public policy aim (the eradication of match fixing), attacking gambling which is licensed in one EU State but not another, is not a proportionate means of achieving the aim given the evidence that unlicensed as opposed to licensed gambling is primarily the source of match fixing.

The complex and voluminous case law on the Court of Justice on this issue (most recently reiterated in Pfleger) makes clear that Member States have a great deal of discretion to regulate gambling. However, that discretion is not unlimited, and there are circumstances in which gambling regulation can constitute a disproportionate restriction of internal market rights.

There are two possible outcomes of this litigation. First of all, if the CJEU rules that the relevant rules in the Convention are incompatible with EU internal market law, neither the EU nor the Member States will be able to ratify it. Secondly, if the Court rules that there is no breach of internal market law, it will probably indicate in detail how to interpret the relevant provisions of the Convention in order to ensure compatibility with EU law. In that case, the opinion of the CJEU will of course inform the manner in which the Convention is implemented in Member States. 

As the Convention is the first multinational treaty aimed at harmonizing different states’ fight against betting related sports corruption, the Court’s ruling is eagerly anticipated.  Watch this space……

Barnard & Peers: chapter 14, chapter 16, chapter 24

Want to be an EU citizen? Show me the money!

Steve Peers

Give me your rich, your bored,
Your pampered mistresses shopping duty-free,
The randy playboys through our open doors.
Send these, the chinless, party-goers to me,
Come flash your cash inside our finest stores!

We can only imagine whether Emma Lazarus, the author of the famous poem inscribed on the Statute of Liberty, would indeed have adapted her poem thus, in light of the sale of Maltese nationality (and hence, citizenship of the European Union) circa 2014. However, putting parody aside, are there any constraints deriving from EU law on Member States’ rules on the acquisition of EU citizenship, and if so, what are they?

The starting point is the judgment in Micheletti, in which the Court of Justice of the European Union (CJEU) stated that ‘'[u]nder international law, it is for each Member State, having due regard to Community law, to lay down the conditions for the acquisition and loss of nationality’ (emphasis added).

What limits are set by the phrase ‘having due regard to Community law’? In Kaur, the CJEU ruled that the United Kingdom was free to refuse to grant full British nationality to one of its quasi-citizens holding a special form of ex-colonial legal status, mainly because these rules were among the ‘conditions of accession’ of the UK to the Communities in 1973. ‘Furthermore’, the UK’s declaration to this effect did not deprive anyone ‘of rights to which that person might be entitled under Community law. The consequence was rather that such rights never arose in the first place for such a person’.

However, in Rottmann, the Court ruled that there were some constraints upon Member States’ rules upon the loss of their nationality, deriving from the existence of EU citizenship. The Court began by quoting the Council of Europe’s Convention on Nationality, Article 3:

‘1. Each State shall determine under its own law who are its nationals. 2. This law shall be accepted by other States in so far as it is consistent with applicable international conventions, customary international law and the principles of law generally recognised with regard to nationality.’

So international law (although Malta has signed, but not ratified, this Convention) gives States the power to determine who their citizens are, and requires other States to accept that decision in principle, with caveats (as regards the latter rule) about international law. If we could end our analysis here, the answer to the question posed above would be simple: Malta could sell its nationality.

But the answer is not simple, because, as a matter of EU law, the rules of public international law on nationality are not fully applicable. First of all, in Micheletti and subsequently (see Chen and Zhu), the CJEU stated that EU law establishes a rule of pure mutual recognition of Member States’ nationalities. In other words, the international law exceptions set out in Article 3(2) of the Council of Europe Convention do not apply. It must follow that, since Member States are obliged to recognise each other’s nationalities, they have at least some interest in what other Member States’ rules on nationality are – limiting the application of Article 3(1) of that Convention.

Let’s return to Rottmann. In its judgment, the CJEU then mentioned declarations and decisions of Member States to the effect that the acquisition and loss of nationality was purely a matter for national law. But the Court then stated baldly that: ‘Nevertheless, the fact that a matter falls within the competence of the Member States does not alter the fact that, in situations covered by European Union law, the national rules concerned must have due regard to the latter’. EU law applied to a national decision on the loss of Member State nationality, because it caused the person concerned to lose his status as an EU citizen.

The Court then explained the application of EU law to Member States’ nationality law as follows: 'The proviso that due regard must be had to European Union law does not compromise the principle of international law previously recognised by the Court…that the Member States have the power to lay down the conditions for the acquisition and loss of nationality, but rather enshrines the principle that, in respect of citizens of the Union, the exercise of that power, in so far as it affects the rights conferred and protected by the legal order of the Union, as is in particular the case of a decision withdrawing naturalisation such as that at issue in the main proceedings, is amenable to judicial review carried out in the light of European Union law (emphasis added).'

The Court then distinguished Kaur, as it concerned a person who had never had EU citizenship, rather than someone (like Mr. Rottmann) who had it and lost it. It then indicated that EU law could accept the idea that nationality of a Member State could be lost due to deception, subject to the principle of proportionality. Finally, it hurled this hot potato back to the national courts, which were left to apply these principles to the facts of this case. 

What can we derive from Rottmann? While the case concerned the loss of EU citizenship, we cannot conclude necessarily that EU law has nothing to do with its acquisition. The crucial words ‘in particular’ indicate that EU law might impact upon that topic too. While Kaur did concern the acquisition of nationality, it can be distinguished from the Maltese case because it concerned the refusal of nationality, not the grant of it. While refusal of nationality does not impact directly upon other Member States, the grant of that nationality (and therefore EU citizenship) does.

Having said that, Rottmann does indicate that prima facie EU law does not set very tight constraints on Member States’ nationality laws. But the outright sale of citizenship arguably bursts through even this loose corset. While the Court of Justice might be willing to accept extensive variants of the jus soli and jus sanguinis principles fro acquiring the nationality of a Member State, would it be willing to accept the principle of jus argentum? We cannot be certain until the Court of Justice is seized of the question; but we can hardly be sure that it would.

 *For an alternative view, see Dimitry Kochenov, ‘Citizenship for Real: Its Hypocrisy, Its Randomness, Its Price’, at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2385340

Barnard & Peers: chapter 13