Granting naturalisation based on a monetary payment alone, without any further condition attesting to the existence of a genuine link with the awarding Member State and/or its citizens departs from the traditional ways of granting nationality in the Member States and affects citizenship of the Union. Since under Article 20 TFEU, citizenship of the Union is an automatic consequence of holding nationality of a Member State and a host Member State cannot limit the rights of naturalised Union citizens on grounds that they acquired the nationality of another Member State without any link with that awarding Member State30, each Member State needs to ensure that nationality is not awarded absent any genuine link to the country or its citizens31. The Commission has discussed with the Maltese and Cypriot authorities the inclusion of an effective residence criterion in their investor citizenship scheme legislation32. As a result, Malta in 2014 introduced a requirement for “proof of residence” for twelve months into its legislation33. In practice, this requirement is considered fulfilled if the applicant obtains a residence permit to reside in Malta, even without physical residence, provides boarding passes, and possibly evidence of, for example, donations to charitable organisations in Malta, membership of local sports clubs or payment of income tax to Malta. Cyprus also changed its legislation in 2016 to require applicants under its investor citizenship scheme and their family members to hold residence permits34. The Commission will continue monitoring compliance with Union law. 3. Investor Residence Schemes in the EU 3.1. Context While some investor residence schemes were initiated in the early 2000s, the financial crisis starting in 2007 led more Member States to adopt these schemes, or revive previous ones. 30 31 32 33 34 See, in relation to freedom of establishment, the clear statement of the Court in Case C-369/90, Micheletti, paragraph 10: “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.”; see also Case C-165/16, Lounes, paragraph 55: “A Member State cannot restrict the effects that follow from holding the nationality of another Member State, in particular the rights which are attendant thereon under EU law and which are triggered by a citizen exercising his freedom of movement.”. The principle of sincere cooperation with other Member States and the Union laid down by Article 4(3) TEU, obliges Member States to refrain from measures that could jeopardise the attainment of the Union’s objectives. See the Joint Press Statement of 29 January 2014 issued by the European Commission and the Maltese Authorities, http://europa.eu/rapid/press-release_MEMO-14-70_en.htm. Several exchanges took place between the Maltese and Cypriot authorities, respectively. Regulation 7(12) of LN 47/2014 (the Individual Investor Programme of the Republic of Malta Regulations) requires proof that the main applicant has been a resident of Malta for at least 12 months preceding the day of the issuing of the certificate of naturalisation. The term “proof of residence” has not however been further defined. See the Study, ibid, note 4. Council of Ministers Decision No 834 of 13.9.2016 6