Dismissing the Genuine Link by Disregarding Constitutional Principles

The struggle over the Maltese investment citizenship scheme is probably one of the fiercest debates of EU constitutional law. The conflict revolves around the question of whether EU law contains requirements for the conferral of a Member States’ nationality – and thus the acquisition of Union citizenship – and whether these requirements consist in a “genuine link” between the respective state and individual. After years of dialogue at the political level, the Commission has finally referred the Maltese scheme to the Court of Justice. The case touches upon the very essence of Union citizenship. No doubt, it has the potential to become a landmark judgment.

The recent Opinion by Advocate General Collins, however, misses this mark. Collins provides us with an extremely narrow and astonishingly one-sided view that hardly does justice to the magnitude of the case. In particular, he seeks to make us believe that there are no sound ways to anchor a genuine link requirement in EU law. Martijn van den Brink finds it “hard to disagree with the Advocate General”. Respectfully, I disagree. Collins’ reasoning raises not only procedural and substantive doubts, but disregards several constitutional principles of EU law. There is a compelling argument for establishing a genuine link requirement under Union law, rooted in the prohibition of the abuse of rights, the Union’s openness to international law, and the principles of solidarity, trust, democracy, and equality. These principles justify the genuine link requirement and should inform the Court’s interpretation of Article 20 TFEU.

Procedural doubts: iura novit curia?

From the very outset, the Opinion reveals a misunderstanding of the Court’s role in infringement proceedings. This becomes especially apparent in the Advocate General’s closing remarks: “the Commission has failed to prove that … Article 20 TFEU requires the existence of a ‘genuine link’” (para 58). Collins requires the Commission to prove the existence of a legal obligation under the Treaties. According to the Court, however, the Commission must only “prove … that an obligation has not been fulfilled, by placing before the Court all the information required to enable the Court to establish that the obligation has not been fulfilled”. With other words, the Commission must not prove the existence of the obligation, but the Member State’s failure to fulfil it. Whether such an obligation exists is for the Court to determine. Iura novit curia! This misconception explains why Collins does not provide any further assessment of the Commission’s application.

Substantive doubts: falling for the competence objection

The Advocate General’s substantive reasoning appears questionable as well. Importantly, he seems to fall for what may be described as “competence error”. The Opinion stresses several times the Member States’ exclusive competence in matters of nationality: “the Member States could have decided to pool their competences and to confer on the European Union the power to determine who may become an EU citizen. They have chosen not to do so” (para 44). Hence, EU requirements for the acquisition of nationality would lead to “a wholly unlawful erosion of Member States’ competence in a highly sensitive field” (para 57). It often occurs that Member States try to defend their conduct before the Court of Justice by pointing to their exclusive competences in a certain domain. Yet, constant repetition does not render this argument any more correct – even if voiced by an Advocate General.

The Court has held in almost all its nationality-related decision that the Member States retain the competence to regulate the loss and acquisition of nationality. Nonetheless, they must respect Union law “when exercising their powers in the sphere of nationality” (see only Tjebbes). This approach is not unique to nationality law but can be found in practically all areas of exclusive Member State competences, ranging from criminal law, over extradition, direct taxation, surnames, civil status to the organisation of the national judiciary. Thus, the Member States’ obligations under EU law are generally indifferent to the Union’s competences to adopt legal acts.

Certainly, one may question whether this case law can apply to the acquisition of nationality. During the controversial hearing of the case, Collins asserted that the obligations by the Member States were primarily negative. In the area of criminal law, for instance, the Court emphasised that EU law “sets certain limits” to the competences of the Member States. Prescribing requirements for the acquisition of nationality, such as the genuine link, would not be a negative limitation to Member State action, but rather a positive obligation. Yet, the distinction between negative and positive obligations is difficult to maintain. Any positive obligation can ultimately be turned into a negative one. A positive obligation to introduce a genuine link requirement can easily be formulated as a negative prohibition to confer nationality in its absence.

The Advocate General’s reference to Declaration No 2 (paras 45, 57), in which the Member States stressed that “the question whether an individual possesses the nationality of a Member State shall be settled solely by reference to the national law”, does not change this configuration. That Declaration, which is no primary law, did not prevent the Court from applying EU law to national rules governing nationality. In Rottmann, the Court expressly noted that

“[i]t is true that Declaration No 2 on nationality of a Member State, … have to be taken into consideration as being instruments for the interpretation of the EC Treaty … 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”.

While the Advocate General is right to assume that the Court’s case law has focused on EU requirements constraining the loss of a Member State’s nationality and Union citizenship (paras 52-54), the Court does not seem to categorically distinguish between acquisition and loss. Since Micheletti the Court referred to both “the conditions for the acquisition and loss of nationality” when emphasising the Member States’ obligation to have due regard to EU law. And even though the Advocate General is “unaware of any case to date where the Court examined a Member State’s rules on the acquisition of nationality” (para 50), the case law started to increasingly bring not only the loss but also the acquisition of nationality within the scope of Union law.

Already in Airola, the Court instructed the Community institutions to reject the recognition of an individual’s nationality if the conferral took place in a discriminatory manner. And while the Court refused to assess a Member States’ rules on the acquisition of nationality in Kaur, the judgment in Wiener Landesregierung seems to break new ground in this respect. This case concerned an individual that challenged the revocation of a naturalisation assurance by Austrian authorities that had led her to relinquish her Estonian nationality. The Court assessed the compliance of the Austrian act with Article 20 TFEU. To many, this constitutes an important step towards subjecting the acquisition of nationality to EU law. The pending infringement procedure is a stepping stone to further develop this case law. The Advocate General, however, misses this opportunity.

Alternative avenues: anchoring the genuine link in EU law

The Opinion has an extremely narrow focus, which leaves no space for systematic or teleological considerations, let alone for an interpretation of Article 20 TFEU in light of the Union’s constitutional principles. The Court should not adhere to such a narrow approach but explore alternative avenues to anchor a genuine link requirement in Article 20 TFEU. In my view, such a requirement can emerge from interpreting Article 20 TFEU in light of several principles: the prohibition of abuses of Union law, the openness towards international law as well as the constitutional principles of solidarity, trust, democracy, and equality.

Protecting against abuses of Union law

The Advocate General’s Opinion mentions the general principle of the prohibition of the abuse of Union law only in passing as the Commission arguably did not raise such an abuse (para 51). According to my understanding, however, the Commission has gone through lengths to argue that the Maltese investor citizenship scheme is abusive. That should suffice to allow for the determination that the Maltese commodification of nationality constitutes an abuse of Union citizenship under Article 20 TFEU.

The Court has held that an abuse requires, first, that despite the formal observance of rules of EU law their purpose has not been achieved (objective element), and second, the intention to obtain an advantage from these EU rules by creating artificially their conditions (subjective element). Applied to the present case, the often-mentioned free-rider argument comes to mind: Maltese nationality is not “purchased” for its own sake but to acquire access to the combined territory of the Member States. While conferring nationality without a genuine link is carried out in a lawful manner as such, Malta confers a common status – Union citizenship – to gain monetary advantages with consequences for all Member States. Malta is thus selling an access which is provided almost exclusively by other Member States (generating revenues of over 900 million EUR amounting to almost 2% of the Maltese GDP, see here, Table 11).

Protecting the Union’s openness to international law

The second anchoring, which Collins rejects without any further elaboration, can be found in the Union’s openness to international law: “EU law must be interpreted in the light of the relevant rules of international law” (Hungary v Slovak Republic). In the sphere of nationality, however, there seems to be a conflict between the Member States’ powers under international law and their constraints under Union law.

The ICJ’s judgment in Nottebohm allowed states to refuse to recognise nationality conferred by another State in the absence of a genuine link. The CJEU’s judgment in Micheletti has deactivated this “Nottebohm power”. Since Micheletti “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”. How to square these two opposing strands in a manner that assures the “strict observance and the development of international law” stipulated in Article 3(5) TEU?

Abstractly, there are two ways of reconciling these cases. On the one hand, Micheletti could be restricted in case of abusive conferral practices. Yet, this might harm the system of mutual recognition in the sphere of nationality established by that decision. The smooth functioning of this system is essential for the preservation of a common area of mobility within the Union. Introducing the possibility to review the conditions of Union citizenship could severely disrupt this system or even cause its collapse. In order to avoid a departure from Micheletti and still preserve the Member States’ “Nottebohm powers”, the requirement of a genuine link would then have to be projected to the level of nationality’s acquisition. Again, the Advocate General simply dismisses this reasoning as providing “no logical basis” for the existence of common minimum standards for the acquisition of nationality (para 57).

Protecting solidarity and trust among the Member States

Venturing to more constitutional grounds, awarding nationality without a genuine link may seriously jeopardise the principle of solidarity and mutual trust.

On the one hand, Union citizenship is, as Advocate General Cruz Villalón noted, “founded on the existence of a community of states and individuals who share a … commitment to solidarity”. Union citizenship contains a bundle of rights vis-à-vis the Member States including free movement and equality rights (Articles 18 and 21 TFEU) as well as rights of political participation (Article 22(1) TFEU). These rights require mutual solidarity between the Member States. Such solidarity, however, needs a stable basis. As Advocate General Capeta observed, “solidarity is usually based on belonging to a community”. Along these lines, the belonging to European society is a central precondition for solidarity between the Member States and Union citizens. The genuine link can be understood as an expression of this belonging.

On the other hand, it was already noted that Micheletti established a principle of mutual recognition of nationalities. The Member States cannot review, let alone refuse to recognise any abusive conferral of nationalities by other Member States. Such mutual recognition goes hand in hand with mutual trust. According to Advocate General Collins, this trust is “unconditional” (para 47). Yet, this seems to be a fundamental misunderstanding: trust is never “unconditional” but requires compliance with a baseline of common standards and their effective monitoring. Put differently, trust is never “blind”. In this respect, a parallel can be drawn with other mutual recognition regimes such as the European Arrest Warrant, which is also based on mutual trust and the monitoring of certain minimum standards. Applied to the present case, excluding the possibility to review the acquisition of a Member State’s nationality should thus be accompanied by a common minimum standard: the genuine link.

Protecting democracy and equality within the Union

Finally, the genuine link serves to protect democracy and equality at the Union level. The acquisition of a Member State’s nationality directly results in the acquisition of Union citizenship, which includes rights to political participation at the EU level. The nationals of the Member States and Union citizens form the constituency that conveys democratic legitimacy to the European level, both by electing national governments represented in the Council as well as through elections to the European Parliament (see Article 10(2) TEU). On that basis, EU law should be able to protect the composition of the Union’s “electorate” by imposing certain safeguards in the form of minimum requirements for the Member States’ nationality laws.

First, the genuine link requirement protects the character of Union citizenship as political status. The Commission claimed that the Maltese practice undermines the “essence and integrity of Union citizenship”. This essence comprises also rights of political participation. As Advocate General Maduro stressed in Rottman, Union citizenship aims at a “new form of civic and political allegiance on a European level”. Commercialising nationality – and thus Union citizenship – could fundamentally alter the meaning of this institution. The character of Union citizenship would deteriorate from a status which reflects political participation to an economic good. The genuine link presents a stronger bond which corresponds to citizenship as a political status.

Second, the genuine link protects democratic equality. With regard to the Maltese practice, the European Parliament warned against a “commodification of rights” which violates the value of equality in Article 2 TEU. A principle of democratic equality can also be derived from Article 9 TEU, pursuant to which the participation of Union citizens in the Union’s activities must be equal. Further, Article 21 of the Charter prohibits any unequal treatment on the basis of social origin or property. One may certainly argue that the determination of who belongs to the electorate is a question preceding democratic equality. Article 9 TEU, however, seems to indicate a different understanding by mentioning democratic equality in its first sentence, the acquisition of Union citizenship in its second. In consequence, the derivative acquisition of Union citizenship seems to be subject to the caveat of democratic equality. As an objective criterion, the genuine link guarantees this equality.

Conclusion

One can read the Advocate General’s Opinion as concise and convincing. I, for my part, see an overly narrow and extremely one-sided reasoning that disregards central constitutional principles of EU law. That, not the Commission’s infringement procedure, is the “constitutional outrage”. Contrary to Collins’ Opinion, there is a strong case for a genuine link requirement under Union law. It emerges from an interplay of several principles with an increasingly constitutional pedigree, starting from the prohibition of abuse of rights and the Union’s openness towards international law, to thicker ones, like the principles of solidarity, trust, democracy, and equality. For that reason, the Luxembourg judges should not follow the Opinion of their Advocate General.

Note: the thoughts in this text have been developed based on a common project with Ferdinand Weber from Göttingen University.