The European Commission has said it will take Malta to court over the member state’s “golden passport” scheme.
Foreign citizens can buy Maltese and EU citizenship in exchange for around €1 million of investment under the controversial programme.
The Commission said in a statement on Thursday that it decided to refer Malta to the EU’s Court of Justice.
Cyprus and Bulgaria had also issued “golden passports” but both have since ended, leaving Malta as the only EU country with such a scheme.
Brussels has long criticised the initiative, arguing it encourages corruption and money laundering while complaining the investors do not have any obligation to live in the EU.
“EU values are not for sale,” EU Justice Commissioner Didier Reynders wrote on Twitter.
“By offering citizenship in exchange for pre-determined payments or investments, without any real link to the Member State concerned, Malta is in breach of EU law,” he added.
The EU Commission first launched an infringement procedure against Malta in October 2020 to stop the controversial practice.
The Maltese government has maintained that its system “does not contravene” the EU treaties and reiterates that its citizenship policies fall within its national competence.
The sale of passports generated more than €800 million for Malta between 2014 and 2020, the government said.
The “golden passport” scheme was however suspended for Russian and Belarusian citizens in March following Moscow’s invasion of Ukraine.
“Although this is a positive step, Malta continues to implement the scheme for nationals of all other nationalities and has not expressed any intention to end it,” the Commission’s statement read.
“EU citizenship automatically gives the right to free movement, access to the EU internal market, and the right to vote and to be elected in European and local elections.”
“For these reasons, the conditions for obtaining and losing nationality, regulated by the national law of each Member State, are subject to due respect for EU law.”
Some EU countries still operate programmes to sell so-called “golden visas” that allow foreign investors to obtain residency.