Category: Fact-Check

  • FATTI: Is Malta Using Bill 55 to Shield Gambling Firms From EU Courts?

    FATTI: Is Malta Using Bill 55 to Shield Gambling Firms From EU Courts?

    The European Commission is challenging Malta’s Bill 55 after two years of tensions between gambling companies and courts in EU states, such as Austria — a move that Malta’s government and Malta Gaming Authority are resisting.

    A 2023 amendment to Malta’s Gaming Act through Bill 55 mandates Maltese courts reject court judgements from other countries that undermine “the legality of the provision of gaming services in or from Malta”.

    On 18th June, the European Commission announced that it was opening infringement proceedings against Malta “for failing to comply with its obligations under the Regulation on jurisdiction and the recognition and enforcement of judgements (Regulation (EU) 1215/2012) in the area of gambling” – referred to locally as ‘gaming’.

    Malta’s government and its regulator, the Malta Gaming Authority (MGA), dispute the Commission’s stance. Government argues that Bill 55  “does not establish new or separate grounds for refusing recognition or enforcement”, with the MGA elaborating that the refusal to recognise court judgements is not a blanket ban.

    Is Malta protecting its industry, or applying a creative interpretation of EU law? Let’s look at the facts.

    According to the MGA, the legal amendment “does not impose a blanket ban on enforcing European judgements against Maltese-licensed gaming companies, nor does it shield them from legal action in other EU courts”

    This is a position that MGA expressed in 2023, when the bill was adopted, saying that the amendment “enshrining into law the country’s existing public policy that protects the status of the Maltese gaming licence from unfounded challenges” and that  “the law does not preclude any action whatsoever from being taken against a licensee”.

    Bill 55 was tabled by Economy Minister Silvio Schembri “to codify in law the longstanding public policy of Malta encouraging the establishment of gaming operators in Malta”.

    The bill amended the Gaming Act to state that “the Court shall refuse recognition and/or enforcement in Malta of any foreign judgement and/or decision given upon an action” that “conflicts with or undermines the legality of the provision of gaming services in or from Malta”.

    Gambling laws are not harmonised in the EU, and there is no obligation for authorities to recognise gambling licences from another EU country. There is case law that repeatedly recognises the rights of EU countries to restrict the cross-border market of gaming services, but restrictions (such as more stringent criteria for a national licence) must be proven to be proportionate.

    According to the government of Austria, “cross-border supply of gambling activities is not allowed”.

    “Gambling activities, e.g. via electronic media (Internet) offered internationally, are also subject to the national gambling monopoly and may not be advertised or executed within Austria. Interventions into the monopoly are punishable by civil law or administrative penalty regulations of the gambling law”.

    The EU Regulation 1215/2012 stipulates that court judgements are to be enforced, except when refused on specified grounds, one of which is public order.

    The public order is understood as “rules that Member States deem of special importance” – something not clearly defined and subject to debate. Abroad, such debates have occurred, for example, on the recognition of marriage between cousins, surrogacy, or expropriation.

    Malta itself has different regulations for land-based casinos, for example. They must have a government concession to apply for an MGA licence and are inspected daily. Only four companies had a licence to run land-based casinos, according to a 2024 report by MGA 2024.

    According to Investigate Europe, authorities in Austria, Germany, Sweden and the Netherlands are dealing with “a deluge of consumer complaints about illegal gambling”. The crux of the matter: Malta-based firms operate websites without licenses in some countries they target.

    This is how it works:

    • Another country’s law requires that gambling companies obtain a national licence to operate.
    • If a company targets such a country’s gamblers without a required licence, its contracts with gamblers are null and void under the law.
    • Gamblers who lost money sue and win in national courts.
    • To reclaim money from gambling companies headquartered in Malta, they need Maltese courts to recognise the foreign court judgement.
    • That should be automatic in the EU, with limited exceptions. Bill 55 enshrines such an exception.

    “Maltese courts apply Bill 55, and they reject enforcement of judgements based on it. There’s no reason why I should invest money, pay a Maltese lawyer, pay Maltese court fees, to bring a judgement to Malta where I 100% know that it will not work,” says Benedikt Quarch, co-founder and managing director of a company called RightNow. He represents German and Austrian claimants. 

    Amphora Media analysed Maltese court cases since the adoption of Bill 55. We found 81 first-instance judgements involving gambling companies and 32 appeals that cited the relevant legislation.

    Not all of these were court judgements about refunding gambling losses. The court issued interim judgements on many procedural requests, responding to challenges brought by either side – the gambler or the company – including garnishee orders and requests for recusal.

    This is how the cases ended:

    • Interim judgements:
      • Gamblers won only 3,
      • Companies won 62.
    • Cases where a final judgement was issued:
      • Gamblers won 7,
      • Companies won 9.
    • Appeals:
      • Gamblers won 5,
      • Companies won 27. 

    Claimants have seen some success in Maltese courts despite Bill 55. In one case, a gambler won because the losses occurred before the law came into effect. Courts have also ordered refunds of losses with interest and, in another instance, upheld an Austrian enforcement order while refusing to release a company’s frozen funds. However, it temporarily suspended the actual transfer of money.

    On the other hand, the court decided in favour of gambling companies in even more cases. In some cases, courts found that a gambler had “abused the process” by repeatedly filing identical applications and refused to recognise and enforce an Austrian judgement because it conflicted with Malta’s public policy and gaming laws.

    Quarch argues that currently, there are relatively few cases in Maltese courts because gamblers and their lawyers do not expect a favourable outcome. “Everybody understands that the only reason why you can’t get the money at the moment is Malta and Maltese legislation,” he says.

    “As soon as the European Court of Justice declares Bill 55 void, we can bring thousands of cases to Malta. So, Maltese courts can look forward to the day on which Bill 55 will be struck down, because on this day, there will be thousands of cases in the Maltese court system,” — lawyer Benedikt Quarch

    Nearly half of the cases were about suspending a garnishee order and many stopped at that. “It’s not up to the Maltese to define when their courts may not implement a decision from another member state,” Miguel Poiares Maduro, a former advocate-general at the European Court of Justice (ECJ) and now an academic, told Investigate Europe earlier this year.

    The Malta Gaming Authority’s statement that the amendment “does not impose a blanket ban” is somewhat true. There have been instances where gamblers have managed to enforce foreign judgements against Maltese-licensed gambling companies.

    However, companies won the majority of cases, despite the fact that there is no single market for gambling services in the EU (countries are free to regulate it as they wish) and it is not clear how some gamblers’ claims went against Malta’s public order more than others. Malta is also opposing another country’s stricter approach to online gambling when its own framework for land-based gambling is dependent on government policy and concessions.

    In the absence of legal certainty, one of the lawyers representing gambling company clients says that many cases have not even reached Maltese courts because they are waiting for the European Court of Justice’s decision. 

    Where countries like Austria protect their public order by introducing more stringent regulations, Malta claims to protect its public order by allowing gambling operators to avoid responsibility for failing to comply with the laws in Austria.

    Where one country limits online gambling from abroad and another country legislates that such limits are not enforceable, there is a clash between two legal systems that is best tackled at the EU level.

    Analysis of the judgements shows that a fifth of the wins were because the losses were experienced before Bill 55.

    The rejection rate of other EU countries’ judgements in this area is high. Given that gamblers occasionally win cases despite Bill 55, it is not a blanket ban. But legal certainty over enforcement of foreign judgements is lacking.

    The answer whether Bill 55 “systematically”, in the Commission’s words, shields gambling companies is somewhat true.  

    This project is supported by the European Media and Information Fund. The sole responsibility for any content supported by the European Media and Information Fund lies with the authors and it may not necessarily reflect the positions of the EMIF and the Fund Partners, the Calouste Gulbenkian Foundation and the European University Institute.

  • FATTI: Is Malta Really ‘Proactive’ on Human Rights Rulings?

    FATTI: Is Malta Really ‘Proactive’ on Human Rights Rulings?

    As key justice reforms remain stalled, government ministers have lauded Malta’s “proactive” stance on implementing European Court of Human Rights judgements.

    During a meeting with ECtHR officials, Foreign Minister Ian Borg claimed the rulings are “crucial” in shaping ongoing reforms. Justice Minister Jonathan Attard echoed this in a press release, praising Malta’s progress and compliance.

    But is the country truly taking the Court’s guidance to heart? This edition of FATTI investigates whether Malta is walking the talk on human rights.

    In the meeting with ECtHR officials, Foreign Minister Ian Borg said that the “judgements have been crucial in guiding our ongoing reforms as we remain committed to continuously updating our legislation to ensure their full implementation”.

    “We see the implementation of ECtHR judgments not as a burden, but as a partnership—a shared responsibility to uphold the rule of law and promote dignity for all,” Minister Attard emphasised in his press release.

    “Malta’s steadfast commitment to judicial independence and improving access to justice – areas in which Malta continues to benefit from constructive engagement with the Venice Commission [the Council of Europe’s advisory body] and GRECO [Council of Europe’s anti-corruption platform],” he added.

    What is the European Court of Human Rights (ECtHR)?

    The ECtHR is responsible for applying the European Convention on Human Rights (ECHR), and its judgements are binding on the case parties. The Committee of Ministers, another Council of Europe institution, supervises how countries execute the judgments, but is not empowered to overrule national decisions or annul national laws.”

    The Council of Europe is separate from the EU, but the ECHR (the European Convention of Human Rights) has significantly influenced EU law.

    Individuals can initiate a case in ECtHR if they feel their rights under the ECHR have been violated by a signatory state – and only after they have exhausted avenues for  justice in domestic institutions, which in Malta’s case includes the Constitutional Court.

    In a 2021 case regarding ongoing detention, the ECtHR ruled that constitutional redress proceedings are not an effective remedy for such complaints.

    Ian Borg. Source: DOI

    “What the Strasbourg Court has said repeatedly is that the whole system Malta has in place, intended to safeguard our rights, doesn’t work,” says Neil Falzon, director of aditus foundation, whose lawyers represent some claimants at the Strasbourg-based ECtHR.

    “Speaking about people who are illegally deprived of their liberty, locally, there is no remedy that they can access – no remedy at all,” he added.

    An analysis of judgments reveals that filed cases peaked in the period from 2010 to 2013, with visible patterns.

    Cases decided per year, involving Malta. Analysis based on hudoc.echr.coe.int
    Cases decided, per year. Data downloaded from hudoc.echr.coe.int

    Cases involving rent laws – protected long-term rents that historically imposed low fees on owners – have been present since Malta’s EU accession, and the last one was filed as late as 2021.

    Numerous cases were filed about the degrading treatment of detainees. Some of them involved, but were not exclusive to, asylum seeker detention. Every year, numerous cases involving the judicial process, rent laws, and other areas are being decided, suggesting a persistent need to address issues in these areas.

    Distribution of cases since 2004. Analysis based on data downloaded from Cases decided, per year. Analysis based on data from hudoc.echr.coe.int
    Distribution of cases since 2004. Data from hudoc.echr.coe.int

    There was also a substantial number of cases related to the judicial process, including court bias and the length of proceedings. Many complaints that have been repeated over the years are similar, suggesting that substantial reforms have not been implemented.

    Since joining the EU, Malta has lost 90 cases. Rent laws accounted for a quarter of them. Detention came second, with almost a fifth of lost cases. The justice process came third, followed by the expropriation of land.

    Below is a deeper dive into the most prevalent issues that led to lost ECtHR cases.

    Jonathan Attard. Source: DOI

    Cases in property laws

    Before 2009, many Maltese rental agreements were governed by rules from the post-war period, heavily favouring tenants. These rules allowed tenants to stay in properties for life at unchanged or heavily restricted rents, often far below market value.

    Evictions were nearly impossible, and rent increases did not come close to market rates, leading to significant financial losses for property owners.

    In 2009 and 2010, the first reforms were introduced to start addressing the imbalance. However, these were not enough to resolve widespread disputes. Other cases followed until further amendments in 2021 introduced mechanisms for landlords to request market-aligned rent and, in some cases, reclaim the property.

    Expropriation of private land was another frequent theme in property-related cases before the ECtHR . Compensation was often delayed and did not reflect market values, leaving landowners with little recourse. In many cases, people were informed of the expropriation through the government gazette.

    Following pressure from national and international courts, Malta reformed its expropriation laws in 2017, mandating transparent procedures, timely and fair market-based compensation, and the right to challenge claims, ensuring expropriation is a last resort and reinforcing respect for private property rights.

    European Court of Human Rights

    Cases in detention and asylum

    Malta lost five cases relating to the treatment of asylum claims and many more because of their treatment in detention.

    According to an aditus foundation report, when asylum seekers began arriving in greater numbers in 2002, Malta imposed immediate, indefinite, and mandatory detention—often lasting for years with no legal time limit.

    Detention conditions improved when Malta joined the EU, but remained automatic. In 2015, Malta adopted a new reception policy, which introduced legal limits to detention,  after losing three cases in the ECtHR.

    Jonathan Attard spoke of “a shared responsibility to uphold the rule of law and promote dignity for all”. Source: DOI

    When the number of arrivals increased in 2018, automatic detention was instituted on public health grounds. In practice, this has been applied beyond legal limits and without clear communication.

    In October 2021, former Council of Europe Commissioner for Human Rights, Dunja Mijatović visited a detention centre in Malta and “was struck by the deplorable situation”. NGOs have criticised unreasonable obstacles to monitoring detention conditions.

    Detention service van
    Detention service van. Photo credit: aditus foundation

    One case, A.D v Malta, focused on this issue.

    “At the time of A.D. and even before, everybody was detained under the public health legislation – adults, children, men, women, everybody was automatically detained for a couple of months. The ECtHR very clearly said that’s wrong,” lawyer Neil Falzon of the aditus foundation told Amphora Media. He represented A.D.

    “The public health regime is now down to a couple of days, and people are given a detention order right away. At least now, the legal basis is one established in law.”

    However, he notes that there was a negative development as well, because instead of detaining asylum applicants under public health rules on an ad hoc basis, Malta reverted to detaining all asylum applicants.

    “We have to go again to the ECtHR and use the arguments we had used in [2010 and 2013]”, he said.

    Separately, a reform of the accelerated asylum procedure remains unimplemented, despite Malta losing a related case in 2022.

    Meanwhile, in 2013, an ECtHR application also stalled and blocked Joseph Muscat’s plans to push back to a group of asylum seekers to Libya.

    Judicial reforms

    Several cases end unfavourably for Malta because of deficiencies in its judicial system.

    Ian Borg says that “we remain committed to continuously updating our legislation”. Source: DOI

    At the end of 2024, Malta was among the 15 countries considered not in sufficient compliance with GRECO’s 5th Round recommendations. Meanwhile, the  Venice Commission’s recommendation to create consistency in the application of constitutional rulings has yet to be implemented.

    This has been flagged by the European Commission in its latest rule of law report:

    “Uncertainty persists as to the erga omnes effect of judgements of the Constitutional Court, as it is up to Parliament to repeal or amend laws found unconstitutional”, which means that “judgments of the Constitutional Court lack universal applicability, allowing unconstitutional laws to remain valid until Parliament repeals them”.

    The report noted “Parliament’s inconsistency in adhering to Constitutional Court rulings” and that “authorities confirmed that no steps have been taken to address this issue”.

    As of mid-2024, Malta had 14 leading judgments of the European Court of Human Rights pending implementation—a decrease from 15 at the start of the year, but the same number as mid-2023.

    More than half (57%) of the leading judgments from the past 10 years remained pending in 2024, up from 45% in 2023.  

    The length of implementation has also increased. “The oldest leading judgment, pending implementation for 16 years, concerns disproportionate restrictions to property rights,” the report found, and there were “6 cases in total awaiting confirmation of payments”.

    Lost human rights cases could be avoided at several stages, firstly by updating laws and establishing domestic redress mechanisms. But these essential reforms have been slow and materialised only after numerous cases.

    Furthermore, opportunities to reach a friendly settlement with claimants and avoid losing a case are also not exhausted.

    Expropriation and rental laws, which together have generated the largest number of lost cases, have been reformed – but only in 2017 and 2021, respectively.

    Evidence of degrading detention conditions year after year shows that substantial reform has been lacking, despite detention conditions leading to a large number of lost cases for Malta.

    The European Commission’s rule of law report notes that progress in judicial reforms is insufficient, which is likely to continue generating lost cases in the justice domain. 

    Given the sluggishness of reforms in key areas generating lost cases at the ECtHR, the minister’s statement is misleading.

    Reforms have taken place somewhat reluctantly, given the number of cases, while Malta’s parliament continues to hold power over whether rulings can be translated to actual legislation.

    This project is supported by the European Media and Information Fund. The sole responsibility for any content supported by the European Media and Information Fund lies with the authors and it may not necessarily reflect the positions of the EMIF and the Fund Partners, the Calouste Gulbenkian Foundation and the European University Institute.

  • FATTI: Are Manoel Island delays beyond MIDI’s control?

    FATTI: Are Manoel Island delays beyond MIDI’s control?

    The concession granted to MIDI plc to develop Manoel Island is currently under the spotlight after activists collected over 29,000 signatures calling on the government to reclaim the island for the public.

    Activists argue that MIDI, the developer, is bound by contractual obligations to ‘substantially’ complete the project by 2023, which it has failed to fulfil. MIDI has pushed back, insisting that the project is taking so long due to ‘unforeseen’ architectural finds on site, appeal processes, and “slow motion” planning.

    Malta’s Prime Minister Robert Abela says the government’s hands are tied, and the developer would be eligible for hefty compensation if the concession was cancelled.

    Opposition leader Bernard Grech believes the government must honour its obligations – but the interview did not cover developers’ obligations”. In recent days, several Nationalist Party MPs have come out in favour of scrapping the deal. Even the Labour Party’s president admitted to having signed the petition.

    So did MIDI do everything it could to fulfil its contractual obligations?

    In 2024, the Times of Malta fact-checked claims about whether the concession contract allows the government to reclaim Manoel Island if the developer fails to substantially complete the works.

    In response, MIDI wrote that “The delays encountered are clearly documented and include the delays associated with the archaeological finds which necessitated the complete redesign of the masterplan, delays associated the approval of development permits and most recently the delay associated with the requirement to prepare a Heritage Impact Assessment, which is still ongoing.”

    Manoel Island Malta

    Speaking to MaltaToday, MIDI CEO Mark Portelli admitted that the 2023 deadline stipulated in the concession contract was breached. Still, he argued that the deed includes automatic provisions for extending that deadline, and those provisions cover building permits, archaeological finds, “any delays beyond the control of MIDI”.

    He also specified that negotiations with the government are ongoing regarding the deadline extension based on the archaeological findings.

    Neither MIDI nor the government replied to our questions about the content and timeline of these negotiations.

    Portelli considers that the company lost 10 years due to archaeological excavations on the two sites included in the concession. He expects 10 years to be added to the completion deadline.

    “The Group has encountered several unforeseen delays related to the issuance of development permits and archaeological finds at both Manoel Island and Tigné Point. These issues, which were not foreseen at the time the emphyteutical deed was granted in 2000, entitles the Group to an extension of the completion date for the development works as per the provisions of the Deed,” MIDI’s chairman wrote in the company’s annual report.

    Signed in 2000, the concession agreement contains clauses that establish a 2023 deadline to ‘substantially’ complete the development, and fines in the event this is not done. 

    Fines also apply if the developer fails to complete the restoration of heritage buildings, such as the Lazzaretto, by specified deadlines and commence works to prevent further deterioration of the heritage sites within six months, with completion expected within two years. The Lazzaretto restoration is still a work in progress: MIDI’s website still refers to it in the future tense.

    The contract also requires the developer to apply for all necessary permits and authorisations within 12 months. Data on the Planning Authority’s website shows that the first application on Manoel Island since the concession agreement was for the restoration of Fort Manoel in 2001.

    Manoel Island Malta

    Failures to observe obligations are subject to fines. Meanwhile, if completion delays persist for three years, the government can rescind the concession.

    There is a clause stating that “neither party shall be liable for delay in performing or failure to perform obligations if the delay or failure results from any event or circumstance outside its control.”

    However, it points to a schedule that lists such events and circumstances specifically, and the list includes wars, floods, riots, and trade disputes, but not permitting processes, legal action or red tape.

    MIDI’s argument has been that the deadlines do not apply since the company qualifies for an extension. “The clock is on hold,” Portelli said in 2025. In an earlier interview, he said archaeological digs began in 2019 and will last nearly five years.

    A letter from Mamo TCV, a law firm representing MIDI, submitted to the Planning Authority states that “even a (hypothetical) breach of the condition [completion deadline] […] would not lead to ipso jure [by law] termination, but one which is at the discretion of the grantor [government]”.

    It can be argued that archaeological finds are not as unforeseen as MIDI claims them to be. Attachments to the concession agreement include a report which mentions “many cemeteries on the island”.

    Manoel Island Malta

    Schedules attached to the contract allow the developer to address the discovery of archaeological remains by choosing to either rescind the concession over the affected areas, integrate the remains into the development if feasible, or—if the rest of the site becomes unsuitable—relinquish the entire concession. In such cases, the developer is entitled to a proportional refund and compensation for unusable improvements. A report by the Planning Authority shows that MIDI chose to integrate the cemeteries and convert them into a garden.

    The fact that Manoel Island contains cemeteries has long been known. A 1987 publication by Paul Cassar stated that “There were six cemeteries, at different periods of time, associated with the lazzaretto”.

    Planning Authority documents associated with MIDI’s 2017 development application clearly show that Superintendence for Cultural Heritage already flagged the likelihood of archaeological finds, as well as impact on Valletta’s UNESCO status.

    Article 13 of the concession contract says that “the time limits” can be extended by any “such period” or “periods starting three months” from the date a required application is submitted, until the date that application is granted. This provision applies on condition that the developer duly filed all required applications and provided all the information required for them.

    Manoel Island Malta

    Some of the procedural delays were caused by the court questioning supporting documentation. An environmental impact assessment was challenged in court due to an alleged conflict of interest; however, in 2023, the court ruled that the assessment was acceptable. Nevertheless, the Superintendence for Cultural Heritage was not satisfied with the photomontages and archaeological evaluations. 

    The Environment & Resources Authority also noted that a nature permit would be required. This shows that competent authorities repeatedly had to remind the developer of the standards required for this type of application.

    The question whether the delays are justifiable is ambiguous: if the government considered that delays up to 2023 were unjustified, it could have imposed fines, but in response to questions by the Times of Malta in 2024, MIDI did not admit to paying any fines and the government’s spokesperson did not answer the question. Neither MIDI nor the government replied to our questions directly.

    Neither the government nor MIDI clarified the stage the discussion on the delays is in. MIDI’s 2024 annual report mentions discussions with the government – something its CEO Mark Portelli also confirmed in his 2025 interview.

    The concession agreement contains several clauses that allow the government to ‘rescind’ (in full or in part) or ‘dissolve’ the concession contract. Regarding missed deadlines, there is currently no clarity from the government on its interpretation of whether project implementation delays are justified. Had the government imposed fines in 2023, it would be a clear signal. From MIDI’s responses to the media and the lack of mention of penalties in its annual report, it appears that no fines were imposed.

    Since 2017, it was flagged to MIDI that cemeteries on site will require archaeological examinations, as cemeteries on the site have been mentioned in multiple sources. The impact of views and vistas of Valletta has also been flagged in late December in the planning application process. MIDI had the option to exclude sensitive areas from the concession, but did not use it.

    As pointed out by MIDI’s lawyers, the interpretation of how the deadlines should be honoured is up to the government. From the limited communication on the issue from the government, it appears that, as a contracting side, it has accepted the delays and did not challenge or fine MIDI.
    Pending the government’s communication on its interpretation of the acceptability of the delays, the matter remains ambiguous.

    This project is supported by the European Media and Information Fund. The sole responsibility for any content supported by the European Media and Information Fund lies with the authors and it may not necessarily reflect the positions of the EMIF and the Fund Partners, the Calouste Gulbenkian Foundation and the European University Institute.

  • FATTI: EU Is Singling Out Malta For Its Golden Passport Scheme

    FATTI: EU Is Singling Out Malta For Its Golden Passport Scheme

    One overarching narrative has emerged in Malta’s battle to preserve its citizenship-by-investment programme: the EU and its institutions are unfairly singling the country out over its golden-passport scheme.

    This narrative is two-pronged: 

    • Other countries are running similar golden passport schemes,
    • The EU Commission had initially approved the scheme before u-turning under the influence of the Nationalist Party.

    Is this accurate?

    The idea that other EU countries run similar golden passport schemes, yet only Malta faces criticism, is longstanding.

    It is a narrative used by Malta’s Prime Minister Robert Abela and his predecessor, Prime Minister Joseph Muscat.

    The Nationalist Party’s stance is less clear, with the party’s manifesto calling for the scheme to be amended, and not scrapped. 

    The idea that Malta has been unfairly singled out has been regularly repeated following the court ruling, namely by MEP Alex Agius Saliba in an address to the European Parliament, and MP Alex Muscat in a recording of ‘Il-Kazin’.

    “I’m also astonished that Austria—a Member State with a scheme identical to Malta’s—has been left entirely out of the discussion. I am amazed at how Cyprus, Greece, Italy, Latvia, Luxembourg, Portugal and Spain, which all have residence-by-investment schemes, can continue operating similar schemes, yet when it comes to Malta, it’s as if, because there is someone who to fans, all the windows get shut,” Agius Saliba said.

    Alex Agius Saliba in the EP
    Alex Agius Saliba. Photo credit: Alexis HAULOT/ European Parliament

    “We will abide by the Court’s decision so that we can keep a scheme that continues to generate wealth, because Malta is in no way inferior to any other Member State,” he added.

    Read the original quote in Maltese

    “Niskanta wkoll kif l-Awstrija, Stat Membru li għandu skema identika għal dik Maltija, tħalla kompletament barra mid-diskussjoni. Niskanta kif Ċipru, il-Greċja, l-Italja, il-Latvja, il-Lussemburgu, il-Portugall u Spanja li lkoll għandhom skemi ta’ residenza b’investiment jistgħu jmexxu skemi simili, iżda fil-konfront ta’ Malta għax hemm min irewwaħ, jinqalgħu l-irwiefen kollha.

    Se nimxu mad-deċiżjoni tal-Qorti sabiex ikollna skema li tkompli tħalli l-ġid, għaliex Malta m’għandha xejn inqas minn Stati Membri oħra.”

    It has even extended to operators. Henley & Partners, a leading service provider for passport buyers, claimed that the “ruling, targeting the smallest EU Member State, sets a worrying precedent for the undemocratic extension of EU competences beyond its treaty-based limits.”

    “It would be interesting to see what the outcome would have been if the case were against France or Germany,” it added. 

    Another key claim in the current narrative is that the EU Commission approved the citizenship-by-investment programme after Malta implemented the necessary amendments, only to u-turn later following pressure by the Nationalist Party.

    Both Abela and Joseph Muscat have fanned the flames of these claims. Abela has said that the PN staged a “systematic attack” and “then Simon Busuttil, David Casa, Roberta Metsola, who went out to celebrate that same day of the sentence”.

    Meanwhile, Muscat told his social audience to “give a round of applause to Roberta Metsola and the PN who have worked against our country since the first minute”.

    In the European Parliament, MEP Thomas Bajada described the golden passports scheme as a “programme that the EU Commission had approved, and we amended it where it was needed.”

    Thomas Bajada. Photo credit: Alain ROLLAND/ European Parliament
    Read the original quote in Maltese.

    “Programm illi ġie approvat mill-Kummissjoni u emendajna fejn kien meħtieġ. U llum qed niddiskutu allegazzjoni dwar nies li jużaw dan il-programm biex jiżgiċċaw sanzjonijiet fuq ir-Russja, li azzjoni dwarhom bdiet tittieħed.”

    Neither MEP replied to our request for comment to clarify the claims.

    Did the Commission approve the golden passports scheme?

    On 29th January 2014, two weeks after a damning resolution by the European Parliament, the EU Commission and the Maltese government reached an agreement over the golden passports scheme, which required that no citizenship or “certificate of naturalisation” would be issued unless:

    “The applicant provides proof that he/she has resided in Malta for at least 12 months immediately preceding the day of issuing the certificate of naturalisation.”

    The reached agreement was taken as an endorsement.

    In 2021, the Passport Papers investigation exposed that officials often waived the requirement for a physical presence. 

    Applicants submitted receipts for consumables or newspaper subscriptions, and the average time spent in Malta, according to calculations by the Daphne Caruana Galizia Foundation, was 16 days.

    The Commission’s use of “effective residence status” in its press release about the agreement suggests that the Commission was not aware of this creative interpretation of residency. 

    It referenced the investigation in the ECJ case, noting:

    “The actual physical presence in Malta is required on two occasions only: to provide biometric data in order to obtain a residence permit and to swear the oath of allegiance”, and that the “legal residence” (rental or property purchase) does not constitute a “genuine link”.

    The Commission’s spokesperson did not reply to a request for comment.

    Malta Passport Citizenship

    Was Malta singled out? Do other EU member states have similar programmes?

    In 2019, the EU Commission published a comprehensive report on the risks of investor citizenship, focusing on Bulgaria, Cyprus and Malta, which were running such schemes at the time. 

    The Commission’s report also noted that some countries run discretionary citizenship pathways, which are “used on a limited basis”. 

    In 2020, formal notices and comments were sent to Malta, Cyprus and Bulgaria. Cyprus repealed the scheme that year, while Bulgaria halted its programme in 2022.

    The Commission referred Malta to the European Court of Justice in 2022, stating that passports are granted “in the absence of a genuine link with the naturalising country, such as long-term residence.”

    As of 2024, most countries in the EU had residency visas for investors, known as golden visas, which differ from citizenship by investment, or golden passports, which offer a passport, citizenship and nationality.

    Austria says it does not have a citizenship-by-investment scheme. 

    Austria does offer exemptions for investors, but these are discretionary. While there is no minimum investment amount, applicants must make a substantial, active contribution to the Austrian economy, creating jobs and implementing projects.

    Industry sources estimate that it could cost up to €10 million. A Commission fact-finding study found that all applicants for citizenship were required to pass a language and civic knowledge test and prove “uninterrupted registered residence”.

    Among residency schemes, only six on the EU’s list focus on passive investment in real estate. Portugal has removed the real estate pathway, and its golden visa concentrates now on job creation or cultural contributions. 

    In the case of Portugal, a country often cited in defence of the scheme, an applicant for the residency-by-investment can only become a citizen if they’ve been a resident for at least five years (with sufficient proof of residency), and must also provide certification proving fluency in Portuguese. This is the standard process for naturalisation. 

    Malta, like Portugal, has a residency by investment programme. This was not subject to the court decision. 

    The Commission has been pressured to do more against citizenship by investment by the majority of the European Parliament, which has repeatedly called on the Commission to ban citizenship by investment and impose stricter regulations on residency by investment.

    Thomas Bajada in the EP

    The claim that the European Commission’s criticism regarding the absence of a genuine link focuses on Malta while ignoring comparable schemes elsewhere is false. 

    Since 2019, the European Commission has criticised citizenship by investment schemes in Bulgaria, Cyprus and Malta.

    By 2022, at the point of the EU court referral, no other EU country was running a similar scheme.

    Austria’s investor citizenship pathway is different from a structured scheme, requiring significant investment in the country that extends to job creation.

    Residency by investment (so-called golden visas) should not be confused with citizenship by investment (so-called golden passports).They are entirely different schemes that provide entirely different privileges.

    The court ruling does not impact Malta’s current residency-by-investment scheme. 

    The EU Commission and European Parliament have made that distinction, with the latter calling for a ban on golden passports and stricter regulation of golden visas.

    The claim that the European Commission had approved the scheme in Malta before u-turning is misleading. 

    When the European Commission reached an agreement on the scheme in 2014, Malta failed to live up to the agreement. Simply buying or renting property, offering scant evidence of spending, and scarcely setting foot on the island did not amount to a genuine link or proof of residency. Once those facts came to light, the Commission began its legal challenge against Malta.

    This project is supported by the European Media and Information Fund. The sole responsibility for any content supported by the European Media and Information Fund lies with the authors and it may not necessarily reflect the positions of the EMIF and the Fund Partners, the Calouste Gulbenkian Foundation and the European University Institute.

  • FATTI: €1.4 Billion From Malta’s Golden Passport Sales Was “Invested In The People”

    FATTI: €1.4 Billion From Malta’s Golden Passport Sales Was “Invested In The People”

    By Daiva Repečkaitė and Julian Bonnici

    The European Court of Justice has condemned Malta’s citizenship-by-investment scheme. Still, Malta’s government and Prime Minister Robert Abela have staunchly defended the scheme, citing a €1.4 billion revenue supposedly created to benefit Maltese people. 

    But is that correct? An analysis of published data shows that the actual investment in people is far smaller.

    The claim

    In a Facebook post, the Prime Minister claimed the scheme generated “almost a billion and a half euros that we have invested in people”, helping them “in their hour of need” during moments like the pandemic.

    A government press release cited the €1.4 billion figure, listing several projects:

    • More than €60 million to social housing projects, “providing hundreds of social housing apartments”.
    • An €8.5 million investment in St Michael Hospice, a state-of-the-art palliative care project.
    • €5 million invested in the Puttinu Cares apartments in London.
    • A €10 million investment in health centres, 
    • “Millions” in equipment at St Vincent De Paul and the cardiology department at Mater Dei Hospital.
    • €5 million invested in athletes participating in the Games of the Small States of Europe
    • Over €13 million allocated to the construction of a car racing track.
    • A €9 million agreement with the Malta Football Association for a new technical centre

    The facts

    The revenues generated from the programme are channelled into two key streams:

    1. The National Development and Social Fund (NDSF) – 70%

    The NDSF runs a direct investment portfolio for local economic, cultural or social strategic investments.

    Such investments ranged from purchasing Lombard Bank shares to buying art at international auctions to the social projects mentioned above.

    It also includes a discretionary portfolio, a BOV-managed fund targeting global investments, like bonds and securities.

    2. The Consolidated Fund – 30%

    The main government bank account, where all public revenues are deposited and expenditures are made, receives around 30% of the money generated.

    It should be noted that the statement says that the percentage sent to the Consolidated Fund increased during the COVID-19 pandemic. However, no official figure could be found for the amount spent from the citizenship scheme revenues during the COVID-19 pandemic.

    A breakdown of the distribution of revenues from golden passports – Source: NSDF Report 2022

    According to the latest financial statements, the NDSF received €619 million in revenues between its inception and 2022.

    €130 million, or about one-fifth, was allocated to projects of social importance.

    Prime Minister Robert Abela provided a breakdown of the distribution of the NDSF’s social projects in July 2024, following a parliamentary question from MP Mark Anthony Sammut.

    The government did not respond to requests to provide the latest official figures.

    Figures provided by Prime Minister Robert Abela to Parliament in July 2024

    The data confirms that as of July 2024, less than 10% of the reported €1.4 billion generated from the scheme went into social projects, and that just €41,847,629, or one-third of the amount promised, had been paid out. 

    Notably, just under €7.7 million of the total €60 million promised to social housing had been used by July 2024 – some 13% of the amount pledged. 

    In 2019, the NDSF and the Housing Authority pledged to develop 550 housing units. The latest financial statements suggest that works were at the permitting stage, awaiting tenders.

    Since then, we have found seven tenders for the construction of housing blocks issued by the Housing Authority and published on the government’s public procurement website. The Ministry for Social and Affordable Housing did not reply to our request for an update.

    The data provided by Prime Minister Abela in July 2024 shows some schemes for which no disbursements have been provided. These include:

    • The New Hope scheme, which offers a loan for individuals who face difficulties in taking up life insurance.
    • Richmond Foundation: KIDS for Development Programme
    • CT Scan/MRI St Vincent De Paul Hospital
    • SportMalta ‐ Malta Olympic Committee High Performance Strategy

    The funds committed to Puttinu Cares were fully disbursed. However, this figure over the years pales before regular donations from the general public at a single charity event, reportedly over €3 million in 2024 and 2025 each.

    Successful applicants of the golden passport scheme also donate to charitable causes, which extend to football clubs, band clubs, university departments, the Malta Film Commission, and many others, one of which is managed by citizenship scheme agents themselves.

    According to a 2023 report by the regulator, since the beginning of the programme €6,112,648 were received across 1,061 donations.

    The claim also included €339 million from property purchases and €158 million from property rentals, which is also not direct investment in people.

    Participation in the property market is not direct investment in people, as a 2023 KPMG report showed that growth in the construction and real estate sector did not trickle down to workers’ income.

    The government’s spokesperson did not respond to our questions and requests for a breakdown of more updated figures.

    The verdict: Misleading – but not entirely false

    The claim about the citizenship-by-investment scheme’s contribution to society’s needs is overestimated, and the claim that €1.4 billion was invested “in the people” is misleading.

    From the €1.4 billion figure, over 90% of the funds generated do not go directly to social projects – instead, they are either placed in financial instruments, which generate interest, debt securities and other assets – or not utilised at all 

    Only €131 million – less than a tenth of the €1.4 billion figure – has been committed to social projects, and only a third has been disbursed.

    So while the scheme certainly generated €1.4 billion in revenue, it is inaccurate to say that the billion figure is ‘directly’ invested in the people.

    This project is supported by the European Media and Information Fund. The sole responsibility for any content supported by the European Media and Information Fund lies with the authors and it may not necessarily reflect the positions of the EMIF and the Fund Partners, the Calouste Gulbenkian Foundation and the European University Institute.