Montenegro has dropped its cash-for-citizenship scheme after “numerous analyses and consultations, including consultations with the EU.
The country had amended its Citizenship Act in 2010 in order to bestow nationality on individuals who invested at least €500,000 in the Adriatic country. The government had described the scheme as a means to attract wealthy foreign investors. However, it agreed to suspend the programme that same year under pressure from the EU, which it had applied to join.
“The concept never entered the implementation phase. In this moment we do not think about reconsidering the concept of economic citizenship,” said Srd–an Kusovac, head of the Montenegrin government’s Public Relations Bureau. Mr Kusovac did not reply when asked to specify what the EU’s concerns were.
Montenegro’s experience is relevant to Malta because the European Com-mission has asked the Maltese government for further explanations about its cash-for-citizenship scheme, formally known as the Individual Investor Programme (IIP).
IIP beneficiaries will be granted Maltese – and consequently EU – citizenship in exchange for €1.15 million in fees and investments. The European Commission is considering filing potential infringement proceedings against Malta on the basis of article 4.3 of the EU treaty, which says that member states must act “pursuant to the principle of sincere cooperation”.
Jelena Dzankic, an expert in investor citizenship programmes at the European University Institute in Florence, said EU concerns about Montenegro’s citizen-ship scheme were related to security and corruption.
Montenegro is widely expected to be the next nation to join the EU. Its citizens have been able to visit Schengen countries without a visa since December 2009.
The 2010 analytical report of the European Commission, published alongside the opinion on Montenegro’s EU candidacy, expressed “concerns about possible misuse” of the provision to grant citizenship in exchange for investment. It noted the scheme was on hold. Montenegro entered negotiations on chapters 23 and 24 of the EU acquis (justice, fundamental rights, freedom and security) in December 2013. “I doubt that the country would risk a negative assessment in the context of accession negotiations [by restarting its cash-for-citizenship scheme],” DrDzankic said.
“Even though citizenship issues are still the prerogative of the states themselves, questions of corruption and security can be used as leverage by the EU to exert pressure on accession countries to put such schemes on hold,” she continued, adding that Article 4.3. did not apply as Montenegro was not yet a member state.
When Montenegro introduced its scheme, Germany’s Christian Democrat Party called it an “open provocation of the EU and the EU’s integration policy for Western Balkan countries”.