Malta rebuffed EU calls to stop selling citizenship on Wednesday, telling the European Commission that the granting of citizenship falls within the national competence of a member state "and it should remain as such".
The Mediterranean island's reaction came after the European Commission said it had issued a "reasoned opinion" spelling out why Malta needs to stop selling citizenship, and warning of court action if the practice continues.
"The Commission considers that the granting of EU citizenship in return for pre-determined payments or investments, without any genuine link to the member state concerned, is in breach of EU law," the Commission said.
"Investor citizenship schemes undermine the essence of EU citizenship and have implications for the Union as a whole. Every person that holds the nationality of an EU member state is at the same time an EU citizen," it added.
"EU citizenship automatically gives the right to free movement, access to the EU internal market, and the right to vote and be elected in European and local elections. The inherent risks of such schemes have once again been highlighted in the context of the Russian aggression against Ukraine."
The commission launched similar action against Cyprus and Bulgaria last year. Both countries have since stopped processing new applications for citizenship, and in October Nicosia revoked the citizenship of 39 investors.
Malta on March 2 suspended applications from Russia and Belarus but continues to receive applications from other wealthy foreigners, notably from China and other Asian and Arab countries.
Prime Minister Robert Abela has repeatedly defended the programme, saying it is based on strong due diligence and is an important revenue earner. "It was partly thanks to those funds that we could help our businesses and families during the pandemic," he told media in March.
(Reporting by Christopher Scicluna; Editing by Alex Richardson)
