The author of an EU-funded research project on the cost of citizenship and residency in the EU has criticised member states offering the schemes, saying they were “free riders”.
Sergio Carrera, a senior research fellow and head of the Justice and Home Affairs Section at the Centre for European Policy Studies in Brussels, drew up the paper on behalf of a project called Involuntary Loss of European Citizenship, which aims to establish a framework for debate on international norms on involuntary loss of nationality.
Mr Carrera looked at the scheme from the point of view of the EU, since the intention of the applicants was to live elsewhere in the EU than in the state that has pocketed the money.
“If this is the case, then the member states offering the schemes may be classified as free riders, which unjustly benefit from the attractiveness of life in other member states that they have not paid for or participated in creating,” he wrote. “By instrumentalising the granting of their citizenship, they are selling something they do not own (or pay for) – life in other member states.”
“There are at least three EU member states where EU citizenship has now a price tag: Malta: +/-€1.15 million; Cyprus: +/-€2 and €5 million; and Bulgaria: +/-€500,000.
“One of the key features of these schemes is the financial donation, going beyond actual investment in the country, which creates an even higher degree of dissonance. There is certainly a question of comparative price and value. Some member states are taking advantage of the margin of manoeuvre on questions of acquisition and loss of nationality, to design strategic nationality and attractive migration schemes for their own economic advantages and national interests,” he said.
He also delved into whether there was more harmonisation across member states, thanks to a 2003 directive, on the acquisition of long-term residency status.
One of the common set of rules for granting long-term residency status to third-country nationals is that they must have resided legally and continuously for a period of five years in the territory of a member state. Once acquired, long-term residency status gives the holder the right to move and reside anywhere in the EU (except Denmark, Ireland or the UK) provided that they can pay for themselves.
“Most of the academic attention on the long-term residence directive has focused on how it allows member states to apply restrictions and further conditions on permanent residency, not on ways in which they can apply it more favourably to certain categories of third-country nationals, for instance super-rich foreigners,” he said.
He said a key question was whether wealthy third-country nationals really had to live in the host member state for five years. Certain member states issue permits with a permanent or unlimited validity on conditions that are more favourable than those provided for by the directive – but these do not confer the right to reside in other member states.
“Yet, because the five-year residence requirement is now contained in EU secondary legislation, it cannot be applied as flexibly as member states’ national provisions. The Luxembourg Court is ultimately responsible for the correct application and interpretation of the 2003/109 Directive94 and a member state’s application of the directive which would defeat its objective, that is to say to ensure that third-country nationals obtain long-term residency status after five years residence in a member state, would surely be anathema to the Court.
“By attaching a higher value to the applicants’ wallet, investor residency schemes may even undermine one of the main goals of the EU long-term residence directive, which frames the five years of residence in the territory of a member state as the most relevant criterion for acquiring the status of long-term resident,” he said.
“While some member states sell residency status and may even call it ‘permanent’ under their respective national laws, if the conditions of the directive are not fulfilled then the status cannot be EU permanent residency status in light of directive 2003/109. Thus it cannot give the holder the right to move to and live in any other member state. The consequence is that the purchase of residency status in one member state does not have any impact on other member states until the purchaser has lived for five years in the first member state and fulfilled the conditions of the directive that apply to the acquisition of EU permanent residence status.”