Ius Doni in International Law and EU Law [1 ed.] 9789004357525, 9789004357518

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Ius Doni in International Law and EU Law

Theory and Practice of Public International Law Series Editor Vincent Chetail

volume 2

The titles published in this series are listed at brill.com/tppi

Ius Doni in International Law and EU Law By

Christian H. Kälin

leiden | boston

The Library of Congress Cataloging-in-Publication Data Names: Kalin, Christian, author. Title: Ius doni in international law and EU law / by Christian H. Kalin. Description: Leiden ; Boston : Brill/Nijhoff, 2019. | Series: Theory and practice of public international law ; volume 2 | Includes bibliographical references and index. Identifiers: LCCN 2018048917 (print) | LCCN 2018049524 (ebook) | ISBN 9789004357525 (Ebook) | ISBN 9789004357518 (hardback : alk. paper) Subjects: LCSH: Citizenship. | Investments--Law and legislation. | Emigration and immigration law. | Citizenship--European Union countries. | Investments--Law and legislation--European Union countries. Classification: LCC K3225 (ebook) | LCC K3225 .K35 2019 (print) | DDC 342.08/3--dc23 LC record available at https://lccn.loc.gov/2018048917

Typeface for the Latin, Greek, and Cyrillic scripts: “Brill”. See and download: brill.com/brill-typeface. issn 2405-6847 isbn 978-90-04-35751-8 (hardback) isbn 978-90-04-35752-5 (e-book) Copyright 2019 by Koninklijke Brill NV, Leiden, The Netherlands. Koninklijke Brill NV incorporates the imprints Brill, Brill Hes & De Graaf, Brill Nijhoff, Brill Rodopi, Brill Sense, Hotei Publishing, mentis Verlag, Verlag Ferdinand Schöningh and Wilhelm Fink Verlag. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill NV provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, MA 01923, USA. Fees are subject to change. This book is printed on acid-free paper and produced in a sustainable manner.

Contents List of Abbreviations  vii List of Tables  x Table of Cases  xi Introduction  1 1 Key Contours of Citizenship and Ius Doni  17 1.1 Citizenship Framework and Development  17 1.1.1 Citizenship and State Sovereignty  18 1.1.2 Citizenship in Ancient Greece and Rome  22 1.1.3 Citizenship from the Middle Ages to Modern History  27 1.1.4 Citizenship in the XXth and XXIst Centuries  35 1.2 Ius Doni and Citizenship Realities  39 1.2.1 Citizenship Requirements  42 1.2.2 Facilitated Naturalisation  44 1.2.3 Ius Doni and Other Forms of Naturalisation  47 1.2.4 Ius Doni and Inequalities  50 1.3 Conclusions to Chapter 1  57 2 Ius Doni in International Law  59 2.1 Rules and Limitations of International Law  59 2.1.1 Citizenship and Non-discrimination  62 2.1.2 Right to Citizenship  67 2.1.3 Statelessness in Practice  69 2.1.4 Mass Conferral of Citizenship  73 2.2 Dual Nationality and Residence  77 2.2.1 Dual Citizenship: from Resistance to Acceptance  79 2.2.2 Diplomatic and Consular Protection  83 2.2.3 Genuine Link and Acquisition of Citizenship  88 2.2.4 Residence and Ius Doni  96 2.3 Conclusions to Chapter 2  103 3 Ius Doni in EU Law  105 3.1 Supranational Cooperation and Citizenship beyond the Nation-State  105 3.1.1 The New Legal Order  108 3.1.2 EU Citizenship  113

vi

Contents

3.1.3 Discretion of Member States in Citizenship Matters  118 3.1.4 Rights of EU Citizens  121 3.2 Solidarity and Loyal Cooperation  131 3.2.1 Article 4(3) TEU  132 3.2.2 The Maltese Matter: Article 4(3) in Practice?  136 3.2.3 Genuine Link and Sincere Cooperation  141 3.2.4 Ius Doni and Mass Conferral of Citizenship  143 3.3 Conclusions to Chapter 3  146 4 Ius Doni: Procedures and Practices  148 4.1 Justification and Procedures  148 4.1.1 The Economic Imperative  149 4.1.2 Requirements of Citizenship and Residence Programs  152 4.1.3 The Due Diligence Process  159 4.1.4 Associated Risks  164 4.2 Ius Doni Practices and National Legislation  169 4.2.1 Austria  174 4.2.2 Montenegro  182 4.2.3 St. Kitts and Nevis  186 4.2.4 Malta  190 4.3 Conclusions to Chapter 4  194 5 Conclusion: The Reality of Citizenship in the XXIst Century  196 Bibliography  207 Index  239

Abbreviations aap aic ars caricom cleer ceps cfreu CbIP(s) citsee

Accelerated Application Process American Immigration Council Annual Review of Sociology Caribbean Community Centre for the Law of EU External Relations Centre for European Policy Studies Charter of Fundamental Rights of the European Union Citizenship by Investment Program Europeanisation of Citizenship in the Successor States of the Former Yugoslavia ciu Citizenship by Investment Unit cjel Columbia Journal of European Law cjeu Court of Justice of the European Union cml Rev Common Market Law Review CC Code Civil CoE Council of Europe Contemp. Contemporary crs Common Reporting Standard cis Commonwealth of Independent States gcc Gulf Cooperation Council oecs Organisation of Eastern Caribbean States Conn. Connecticut crispp Critical Review of International Social and Political Philosophy daca Deferred Action for Childhood Arrivals DW Deutsche Welle ecn European Convention on Nationality ejml European Journal of Migration and Law ets European Treaty Series Euratom European Atomic Energy Community Eur. European ecsc European Coal and Steel Community EC European Community eec European Economic Community EFARev European Foreign Affairs Review ejsw European Journal of Social Work Ethn. Ethnic EU European Union

viii

Abbreviations

EZ Elder of Ziyon FT Financial Times ftc Financial Transparency Coalition gyil German Yearbook of International Law hcnm High Commissioner on National Minorities H&P Henley & Partners hnwi High Net Worth Individual hjil Houston Journal of International Law hrw Human Rights Watch hrf Hurricane Relief Fund iachr Inter-American Court of Human Rights iccpr International Covenant on Civil and Political Rights icescr International Covenant on Economic, Social and Cultural Rights iclq International & Comparative Law Quarterly icsid International Centre for Settlement of Investment Disputes ijb International Journal of Bilingualism ijbs International Journal of Bahamian Studies ijcl International Journal of Constitutional Law ilc International Law Commission imc Investment Migration Council imi Investment Migration Insider isi Institute on Statelessness and Inclusion J. Journal jer Journal of Eurasian Research L. Law/Legal Migr. Migration mrg Minority Rights Group mlj Macquarie Law Journal mna Montenegrin Nationality Act (öasvg) Austrian General Social Insurance Act oau Organization of African Unity OECD Organisation for Economic Co-operation and Development oriip Office of the Regulator Individual Investor Programme osf Open Society Foundations pcij Permanent Court of International Justice qicms Quebec Investment Consultation & Management Services qni Quality of Nationality Index rcj Revista Culturas Jurídicas RbIP(s) Residence by Investment Program(s) rgdip Reveu Générale de droit international public

Abbreviations S. South Stud. Studies sgf Sustainable Growth Fund sidf Sugar Industry Diversification Foundation TI Transparency International UNDP United Nations Development Programme unhcr United Nations High Commissioner for Refugees usafa United States Air Force Academy udhr Universal Declaration on Human Rights vic Vanuatu Information Centre wto World Trade Organisation WW World War YB Year Book ZaöRV Zeitschrift für ausländisches öffentliches Recht und Völkerrecht

ix

Tables 1 2 3 4 5 6

Acquisitions of citizenship by group of previous citizenship in the EU-28 and EFTA, 2016  51 Selected countries which allow or recognize dual citizenship  84 Acquisitions of citizenship per 1000 persons, EU-28 and EFTA, 2016  145 Residence programs  156 Citizenship programs  158 Reasons for choosing RbIPs and CbIPs  167

Table of Cases Arbitrations IIA, Enron Corporation and Ponderosa Assets, L.P. v Argentine Republic, [2007] ICSID ARB/0113. IIA, Sempra Energy International v The Argentine Republic, [2007] ICSID ARB/02/16. IIA, Siemens A.G. v The Argentine Republic, [2007] ICSID ARB/02/8. IIA, Azurix Corp. v The Argentine Republic, [2006] ICSID ARB/01/12. CLR, Soufraki v United Arab Emirates, [2004] ICSID Case No. ARB/02/7, Award on Jurisdiction of July 7th 2004. Flegenheimer Case – Decision No. 182, Rep of Int’l Arbitral Awards (20 September 1958) 327.

(European) Court of Justice and the Court of First Instance/the General Court C-430/10, Hristo Gaydarov v Direktor na Glavna direktsia ‘Ohranitelna politsia’ pri Ministerstvo na vatreshnite raboti, [2011] ECLI:EU:C:2011:749. C-34/09, Gerardo Ruiz Zambrano v Office national de l’emploi (ONEm), [2011] ECLI:EU:C:2011:124. C-256/11, Murat Dereci and Others v Bundesministerium für Inneres, [2011] ECLI:EU: C:2011:734. C-434/09, Shirley McCarthy v Secretary of State for the Home Department, [2011] ECLI:EU:C:2011:277. C-135/08, Janko Rottman v Freistaat Bayern, [2010] ECLI:EU:C:2010:104. C-135/08, Janko Rottman v Freistaat Bayern, [2009] ECLI:EU:C:2009:588. C-33/07, Ministerul Administraţiei şi Internelor – Direcţia Generală de Paşapoarte Bucureşti v Gheorghe Jipa, [2008] ECLI:EU:C:2008:396. C˗441/02, Commission v Germany (Italian migrants), [2006] ECLI:EU:C:2006:253. C-503/03, Commission of the European Communities v Kingdom of Spain, [2006] ECLI:EU:C:2006:74. C-459/03, Commission of the European Communities v Ireland, [2006] ECLI:EU:C: 2006:345. C-217/97, Communities v Federal Republic of Germany, [2006] ECLI:EU:C:1999:34. C-300/04, M.G. Eman and O.B. Sevinger v College van burgemeester en wethouders van Den Haag, [2006] ECLI:EU:C:2006:545.

xii

Table of Cases

C-482/01 and C-493/01, Orfanopoulos and Oliveri v Land Baden-Württemberg, [2004] ECLI:EU:C:2004:262. C-266/03, Commission v Luxembourg, [2005] ECLI:EU:C:2005:341. C-200/02, Kunqian Catherine Zhu and Man Lavette Chen v Secretary of State for the Home Department, [2004] ECLI:EU:C:2004:639. C-47/02, Albert Anker, Klaas Ras and Albertus Snoek v Bundesrepublik Deutschland, [2003] ECLI:EU:C:2003:516. C-405/01, Colegio de Oficiales de la Marina Mercante Española v Administración del Estado, [2003] ECLI:EU:C:2003: 515. C-413/99, Baumbast and R v Secretary of State for the Home Department Case, [2002] ECLI:EU:C:2002:493. C-100/01, Ministre de l’Interieur v Aitor Oteiza Olazabal, [2002] ECLI:EU:C:2002:712. C-283/99, Commission of the European Communities v Italian Republic, [2001] ECLI:EU:C:307. C-184/99, Rudy Grzelczyk v Centre public d’aide sociale d’Ottignies-Louvain-la-Neuve, [2001] ECLI:EU:C:2001:458. C-192/99, The Queen v Secretary of State for the Home Department, ex parte: Manjit Kaur, intervener: Justice Case, [2001] ECLI:EU:C:2001:106. C-388/95, Kingdom of Belgium v Kingdom of Spain, [2000] ECLI:EU:C:2000:244, Case C-388/95. C-179/98, Belgian State v Fatna Mesbah, [1999] ECLI:EU:C:1999:549. C-348/96, Calfa, [1999] ECLI:EU:C:1999:6. C-473/93, Commission of the European Communities v Grand Duchy of Luxemburg, [1996] ECLI:EU:C:1996:263. C-11/95, Commission of the European Communities v Kingdom of Belgium, [1996] ECLI:EU:C:1996:316. C-5/94, The Queen v Ministry of Agriculture, Fisheries and Food, ex parte: Hedley Lomas (Ireland) Ltd., [1996] ECLI:EU:C:1996:205. C-58/93, Yousfi v Belgian State, [1994] ECLI:EU:C:1998:13. C-369/90, Mario Vicente Micheletti and others v Delegación del Gobierno en Cantabria, [1992] ECLI:EU:C:1992:295. C-2/88, J. J. Zwartveld and others [1990] ECLI:EU:C:1990:315. C-235/87, Annunziata Matteucci v Communauté Française de Belgique, [1988] ECLI:EU:C:1988:460. C-433/03, Commission v Germany, [1987] ECLI:EU:C:2005:462. C-66/85, Deborah Lawrie-Blum v Land Baden-Württemberg, [1986] ECLI:EU:C: 1986:284. C-294/83, Parti écologiste ‘Les Verts’ v European Parliament, [1986] ECLI:EU:C:1986:166. C-271/82, Vincent Rodolphe Auer v Ministère public, [1983] ECLI:EU:C:1983:243.

Table of Cases

xiii

C-149/79, Commission of the European Communities v Kingdom of Belgium, [1980] ECLI:EU:C:1980:297. C-141/78, French Republic v United Kingdom of Great Britain and Northern Ireland, [1979] ECLI:EU:C:1979:225. C-30-77, Régina v Pierre Bouchereau, [1977] ECLI:EU:C:1977:172. C-36-75, Roland Rutili v Ministre de l’intérieur, [1975] ECLI:EU:C:1975:137. C-152-73, Giovanni Maria Sotgiu v Deutsche Bundespost, [1974] ECLI:EU:C:1974:13. C-2/74, Jean Reyners v Belgium, [1974] ECLI:EU:C:1974:68. C-22/70, Commission of the European Communities v Council of the European Communities, [1971] ECLI:EU:C:1971:32. Joined cases 90 and 91/63, Commission of the European Economic Communities v Grand Duchy of Luxemburg and the Kingdom of Belgium, [1964] ECLI:EU:C:1964:80. C-232/78, Commission of the European Communities v French Republic, [1964] ECLI:EU:C:1979:215. C-6/64 Flaminio Costa v enel, [1964] ECLI:EU:C:1964:66. C-26/62, nv Algemene Transporten Expeditie Onderneming van Gend en Loos v Nederlandse Administratie van Belastingen, [1963] ECLI:EU:C:1963:1.

European Court of Human Rights ECtHR, Geillustreerde Pers nv. v The Netherlands, (1976) App No. 5178/71.

International Court of Justice and the Permanent Court of International Justice ICJ, La Grand (Germany v United States of America) [2001] Rep 494. ICJ, Liechtenstein v Guatemala [1955] ICJ Rep 18. ICJ, Elettronica Sicula SpA (elsi) United States of America v Italy [1989] ICJ Rep 15. ICJ, Interpretation of the Agreement of 25 March 1951 between the who and Egypt (Advisory Opinion) [1980] ICJ Rep 73. PCIJ, S.S. ‘Lotus’ (France v Turkey) [1927] PCIJ Rep Series A, No 10. PICJ, Tunis v Morocco Nationality Decrees [1923], Advisory Opinion, Series B, No. 4, 24.

National Courts James Louis Drummond case 2 Knapp, [1834] P.C. Rep 295, 12 Eng., 492.

xiv

Table of Cases

ÖVwGH judgment of 27 August 1998, Case 93/13/0023. ÖVwGH judgment of 15 December 1976, Case 2004/76. U.S. Supreme Court, Afroyim v Rusk, [1967] 387 U.S. 253. U.S. Supreme Court, Kennedy v Mendoza-Martinez, [1963] 372 U.S. 144. U.S. Supreme Court, Perez v Brownell, [1958] 356 U.S. 44. U.S. Supreme Court, Savorgnan v United States et al., [1950] 338 U.S. 49. U.S. Supreme Court, Schneider v Rusk, [1964] 377 U.S. 163. U.S. Supreme Court, Trop v Dulles, [1958] 356 U.S. 86. U.S. Supreme Court, Towne v Eisner case, (1918) 245 U.S. 418.

Introduction Citizenship1 has been vaguely defined as a ‘legal bond between a person and a [s]tate’.2 It has long been an important concept, not only in law but also in sociology3 and the political sciences.4 Indeed, the idea of citizenship figures ‘centrally in constitutional theory, in political philosophy, in social theory, in cultural studies, and in legal studies’.5 Citizenship is, without doubt, a complex institution with various dimensions,6 ‘a legal term of art’7 which ‘may vary greatly in colour and content according to the circumstances and time in which it is used’,8 and which is central to the intellectual projects across disciplines nowadays.9 Much of the current major sociopolitical debate in modern Western societies is, in essence, concerned with citizenship.10 Nevertheless, citizenship is an ‘essentially contested concept’,11 a concept ‘the proper use of

1

The term ‘citizenship’ is often interchangeably used with ‘nationality’, Article 2(a) European Convention on Nationality (adopted 6 November 1937, entered into force 1 March 2000) ets166 (ecn) stipulates: ‘For the purpose of this Convention: a “nationality” means the legal bond between a person and a State and does not indicate the person’s ethnic origin’. This work uses these two terms interchangeably understood simply as a classification of a natural person belonging to a particular State. 2 E.g. Article 2(a) ecn. 3 Christian Joppke, Citizenship and Immigration (Polity, Cambridge/Malden, MA 2010) 6; see also Jürgen Mackert and Hans-Peter Müller (eds), Moderne (Staats) Bürgerschaft: Nationale Staatsbürgerschaft und die Debatten der Citizenship Studies (VS Verlag für Sozialwissenschaften, Wiesbaden 2007) 9. 4 Paul Magnette, Citizenship: The History of an Idea (European Consortium for Political Research, Colchester 2005); see also David Miller, Citizenship and National Identity (Polity/ Blackwell, Cambridge, Malden, MA 2000). 5 Linda Bosniak, The Citizen and the Alien: Dilemmas of Contemporary Membership (Princeton UP, Princeton NJ) 17. 6 Joppke, Citizenship and Immigration 7. 7 James B Jacobs, Socio-Legal Foundations of Civil-Military Relations (Routledge, NY/Oxford 1986) 42. 8 Oliver W Holmes, Jr., Former US Supreme Court Judge in Towne v Eisner (1918) 245 U.S. 416, 425 with regard to ‘words’. 9 Bosniak, The Citizen and the Alien. 10 Mackert and Müller, Moderne (Staats) Bürgerschaft 9. 11 William E Connolly, The Terms of Political Discourse (3rd edn, Princeton UP, Princeton/NJ 1993) 10. Citizenship is an example of what Connolly describes as an ‘essentially contested concept’. He writes: ‘When the concept involved is appraisive in that the state of affairs it describes is a valued achievement, when the practice described is internally complex in that its characterization involves reference to several dimensions, and when the agreed

© koninklijke brill nv, leiden, ���9 | doi:10.1163/9789004357525_002

2

Introduction

which inevitably involves endless disputes about their proper uses on the part of their users’.12 As rightly noted by Shklar, ‘[t]here is no notion more central in politics than citizenship, and none more variable in history, or contested in theory’.13 That notwithstanding, and despite many attempts to arrive at a definition of the concept14 – most of which focus on the formal link between the state and its citizens and on rights enjoyed by citizens15 – citizenship has been accurately described as ‘an object and an instrument of closure’,16 or ‘the chalk of the line between the “outs” and the “ins”’17 separating citizens and noncitizens. Various languages and religions,18 cultures and societal conventions require a decentralised world order and its organisation into distinct components. There is a fundamental human need for units of solidarity smaller than the species itself,19 hence the existence of individual states which represent the main political subdivision.20 The realisation of a global state, which would e­ nsure law and order around the world, or a global citizenship that would parallel

12 13 14

15 16 17 18 19 20

and contested rules of application are relatively open, enabling parties to interpret even those shared rules differently as new and unforeseen situations arise, then the concept in question is an “essentially contested concept”’. William B Gallie, ‘Essentially Contested Concepts’ (1955) 56 Proceedings of the Aristotelian Society 167, 169. Judith N Shklar, American Citizenship: The Quest for Inclusion (The Tanner Lectures on Human Values) (4th edn, Harvard UP, MA 1998) 1. For a good overview see Brigitte Knocke, Das Europäische Übereinkommen über die Staatsangehörigkeit als Schranke für die Regelung des nationalen Staatsangehörigkeitsrechts. Stand der Vereinbarkeit des Staatsangehörigkeitsrechts der Schweiz, der Bundesrepublik Deutschland, des Vereinigten Königreichs und Frankreichs mit den Vorgaben des Übereinkommens (gca Auflage, Herdecke 2005). Dimitry Kochenov, ‘Ius Tractum of Many Faces: European Citizenship and the Difficult Relationship Between Status and Rights’ (2009) 15(2) cjel 169, 175, 176. Rogers Brubaker, Citizenship and Nationhood in France and Germany (Harvard UP, Cambridge, MA 1992) 34. Dimitry Kochenov, ‘The Citizenship of Personal Circumstances in Europe’ in Daniel Thym (ed), Questioning EU Citizenship: Judges and the Limits of Free Movement and Solidarity in the EU (Bloomsbury/Hart, Oxford/Portland, OR 2017) 37, 38. See, notably, Immanuel Kant, Zum ewigen Frieden: Ein philosophischer Entwurf (first published 1795, CreateSpace, Pittsburgh, PA 2013). David A Hollinger, ‘Nationalism, Cosmopolitanism, and the United States’ in Noah MJ Pickus (ed), Immigration and Citizenship in the Twenty-First Century (Rowman & Littlefield, Lanham, MD 1998). Christian H Kälin, ‘The Future of Citizenship’ (Times of Malta, 30 January 2015) accessed 10 August 2018.

Introduction

3

state citizenship, if not the idea of such,21 is deemed practically impossible.22 That notwithstanding, the concept of citizenship has evolved considerably through the ages. Indeed, it was firstly related to family membership, later on to the tribe, then came the city and currently it’s the state.23 It should therefore come as no surprise that some authors see ‘the world as the unit and citizenship in the world-state’24 as the next logical step. While the ideas of world without borders and universal citizenship25 go beyond the scope of this work, growth and the changing nature of citizenship are nevertheless its focus. A new class of ‘global citizens’ has emerged and it is comprised of individuals who have multiple homes and bases and for whom multiple citizenship is the norm.26 Indeed, with increased mobility and the transnational lives of ‘global citizens’, having multiple ties in different countries and even on different continents has become much more commonplace. Having multiple social identities and feeling a sense of belonging to more than one state is no longer controversial.27 One of the latest trends of allocation of citizenship is through investment or ius doni.28 While certain forms of granting citizenship in return for economic contribution have certainly taken place even in antiquity,29 the first Citizenship by Investment Program (CbIP) of St. Kitts and Nevis emerged in 1984 and the industry spread through tailor made CbIPs in the more recent years.30 21 22

23 24 25 26 27 28 29 30

E.g. Derek Heater, World Citizenship: Cosmopolitan Thinking and Its Opponents (Continuum, London 2002). E.g. Kant, Zum Ewigen Frieden; Peter Koller, ‘Frieden und Gerechtigkeit in einer geteilten Welt’ in Merkel Reinhard and Ronald Reinhard (eds), Zum ewigen Frieden: Grundlagen, Aktualität und Aussichten einer Idee von Immanuel Kant (Suhrkamp, Frankfurt am Main 1996). Donnave Baker, ‘The Development of Citizenship’ (1998) 3(2) Social Science 122. Baker, ‘The Development of Citizenship’ 124. Dorothee Schneider, ‘Symbolic Citizenship, Nationalism and the Distant State: The United States Congress in the 1996 Debate on Immigration Reform’ (2000) 4(3) Citizenship Stud. 255. H&P, The Global Residence and Citizenship Programs 2017–2018: The Definitive Comparison of the Leading Investment Migration Programs (Ideos, New York/London/Zurich/Hong Kong 2017). Thomas Risse, A Community of Europeans?: Transnational Identities and Public Spheres (Cornell UP, Ithaca, NY 2010) 39. The term ius doni coined by the author, derives from the Latin expression used for a gift or a contribution (dōnum/gen. dōnī) and signifies the right to citizenship by making donation and by investing in the host state. See Chapter 1 of this book with regard to the early forms of citizenship in Athens and Rome. See Chapter 4 of this book in greater detail.

4

Introduction

The emergence of ius doni and fast spread of cips, but also of Residence by Investment Programs (RbIPs) aimed at attracting foreign investors, can be seen as a result of the discretionary powers of states in the field of immigration and citizenship law on the one hand, and a counterbalance to the conservative and exclusionary character of citizenship and opposition to global inequality of citizenship on the other. Indeed, states have a large amount of discretion in determining who their residents and citizens are, and thereby control transnational migration, promote labour market policy requirements or encourage direct investments and increase direct capital inflows to the country. While international law provides for some guidance for national jurisdictions in citizenship matters – most notably with regard to the principle of non-discrimination, ‘genuine link’, and due consideration for neighbouring ­countries – wide discretion of states remains largely intact. Furthermore, the sad truth is that citizenship of different states are not equal in terms of their practical value.31 It would have been difficult, if not impossible, to imagine the flourishing of CbIPs in absence of global disparities and unequal practical value of citizenship across states.32 Citizenship across states differ and ‘[i]t is no secret that our nationalities have a direct impact on our lifestyles and on our freedom to think independently, do business, and live longer, healthier, and more rewarding lives’.33 Naturally, a person’s right to live and work in a given country is a critical determinant of that person’s lifetime opportunities.34 From that perspective, passports and visas are among the most important instruments of global social inequality as they determine the opportunities of international mobility.35 The borders within which individuals happen to be born and the documents they are entitled to are no less arbitrary than other characteristics, such as skin colour, gender or the genetic makeup with which one is endowed.36 A child 31 32 33 34 35

36

Dimitry Kochenov (ed), Henley and Partners˗Kochenov, Nationalities of the World in 2016, Quality of Nationality Index (ideos, NY/London/Zurich/Hong Kong 2017) (qni 2016). Peter J Spiro, ‘Cash-for-Passports and the End of Citizenship’ in Ayelet Shachar and Rainer Bauböck (eds), Should Citizenship be for Sale? eui Working Papers rscas 2014/1. qni 2016, 10. qni 2016. Ayelet Shachar, ‘Children of a Lesser State: Sustaining Global Inequality through Citizenship Laws’ in Stephen Macedo and Iris Marion Young (eds), Child, Family, State (NY UP, NY 2003); see also Kamal Sadiq, Paper Citizens: How Illegal Immigrants Acquire Citizenship in Developing Countries (oup, NY/Oxford 2009). Seyla Benhabib, The Claims of Culture: Equality and Diversity in the Global Era (Princeton UP, Princeton, NJ/Oxford 2002) 94–95; see also Joseph H Carens, Culture, Citizenship, and Community: A Contextual Exploration of Justice as Evenhandedness (oup, NY/Oxford 2000); Dimitry Kochenov, ‘The Present and the Future of EU Citizenship: A Bird’s Eye

Introduction

5

born in Laredo, Texas, is able to avail itself of all of the social and economic benefits of the American welfare state as an American citizen and as such can seek employment opportunities throughout the usa as well as enjoy wide visafree travel around the world.37 A child born in the adjacent town of Juarez, Mexico, would have a significantly reduced choice.38 Through no act of their own, the two children will have very different life prospects simply because of their places of birth.39 Allocation of citizenship thus amounts to a ‘birthright lottery’, to use Shachar’s memorable phrase and the ‘[b]irthright citizenship does more than define the formal boundaries of membership (…) closely correspond[ing] to strikingly different prospects for the well-being, security, and freedom of individuals’.40 Various determinant factors comprising the ranking of citizenship can be taken into account to assess the quality thereof.41 Thus, the most comprehensive and inclusive citizenship ranking,42 The Henley and Partners˗Kochenov View of the Legal Debate’ Jean Monnet Working Papers 2/12 accessed 10 August 2018; Vesco Paskalev, ‘If You Do Not Like Selling Passports, Give Them for Free to Those who Deserve Them’ in Shachar and Bauböck (eds), Should Citizenship be for Sale?; and in particular regarding citizenship as a ‘birthright lottery’; Ayelet Shachar, The Birthright Lottery: Citizenship and Global Inequality (Harvard UP, Cambridge, MA 2009). 37 The US nationality scored weaker than most EU nationalities (all but the nationality of Croatia) but better than most other nationalites around the world, being ranked 27th in the General qni Ranking in 2017, with a value of 69.4%. US nationality allows visa free or visa on arrival access to 186 destinations, and is ranked 4th on the H&P Passport Index available at: accessed 10 August 2018 (H&P Passport Index). 38 The Mexican nationality was ranked 52nd in the General qni Ranking in 2017, with a value of 43.7%. The Mexican nationality allows visa free or visa on arrival access to 158 destinations, and is ranked 21st on the H&P Passport Index. 39 See, for instance, Michael J Sandel, Justice: What’s the Right Thing to Do? (Penguin Books, London 2010) 230 et seq. 40 Shachar, The Birthright Lottery 8. 41 Citizens of Member States of strong regional groups, such as the EU, or those connected to such groups, are ranked on the top of the list having extensive benefits in other Member States. Such benefits come close to rights enjoyed by citizens of the Member States, diminishing the exclusionary character of citizenship to a significant extent. Relations between states in such regional alliances are typically stronger than relations with or between other states – in some instances coming even closer to intrastate regional relations than to interstate relations. 42 Dubbed ‘a masterpiece’ by the Investment Migration Insider, the qni has been lauded for having ‘by far the soundest methodology’, among a range of similar indexes in the investment migration industry (Investment Migration Insider, 12 July 2017) accessed 10 August 2018).

6

Introduction

Quality of Nationality Index (qni), includes a number of internal and external factors to determine the objective value and rank of citizenship.43 This include data on the human development, economic strength and peace and stability of the country of citizenship as well as diversity and quality of unrestricted travel and settlement destinations allowed for by the citizenship in question. For instance, It is better to have a nationality of a country whose citizens have long life expectancy, a good schooling system and a high level of prosperity – like Norway – than of a country which offers lower levels of security, schooling and health to its nationals – like Honduras. (…) some nationalities give their passport holders the ability to travel around nearly all the world unobstructed by visa requirements, such as the German nationality; while others make tourist and business travel dependent on acquiring endless visas, or at times, de facto impossible, such as Yemen.44 It is undeniable that more often than not, citizenship ‘plays an important role in establishing a highly irrational ceiling for our opportunities and aspirations, reflecting the core aspect of being a national of some place, which is a random consequence of birth boasting no correlation with a person’s achievements, ideas, feelings, and desires’.45 Having a weak citizenship comes usually with ‘long-lasting implications for the whole life-project of the holder’.46 Indeed, the distinction between citizens and aliens is now relevant more than ever before as an important instrument, in particular for affluent nations, for excluding people from other countries – except for temporary access for tourists, students or business travellers, or where the labour or capital investments of aliens are in demand – and the issue of the regulation of access to state territories, labour markets and social benefits is crucial both for individuals and states.47 It is revealing of the qualities a society values in others and seeks to incorporate, to observe who’s access to residence and citizenship is fasttracked and who is pushed to the back of the line or denied access altogether.48 43

See, for instance, Dimitry Kochenov (ed), Henley and Partners˗Kochenov, Nationalities of the World in 2017, Quality of Nationality Index (ideos, NY/London/Zurich/Hong Kong 2018) (qni 2017) 4, 6. 44 qni 2016, 4, 6. 45 qni 2017, 3. 46 qni 2017, 3. 47 Brubaker, Citizenship and Nationhood in France and Germany. 48 Ayelet Shachar and Ran Hirschl, ‘On Citizenship, States, and Markets’ (2014) 22(2) J. ­Political Philosophy 231.

Introduction

7

The control of this access is the preserve of immigration and citizenship laws.49 The freedom of citizens,50 as well as a community’s welfare policies and culture are protected through the restriction of access by individuals who do not belong to that community.51 Yet, the legal debate in this respect largely focuses on sovereignty of states and their discretion in the field of citizenship matters. To agree with Kingsbury, there is a certain relationship (‘of mutual containment’)52 between sovereignty and inequality: ‘[t]he system of sovereignty at least notionally precludes some forms of inequality, while helping to exclude other forms of inequality from real consideration’.53 The concept of state sovereignty allows questions in citizenship matters to be treated as the responsibility of states. Thus, ‘the question of which state would guarantee membership to a particular individual has been seen as largely irrelevant’54 from a point of view of international law. The issue of inequality has been left to international law,55 which has been how­ ever, primarily concerned with the problem of statelessness. Being citizen of any state is viewed as more desirable than not enjoying state protection at all.56 However, even if the issue of statelessness was successfully resolved, disparities between states and practical value of citizenship would have remained. Put differently, attempts to resolve the issue of statelessness focus ‘only on formal equality of status’57 and not on ‘rectifying inequalities that correlate with the birthright assignment of membership in “this or that” particular country’.58 Citizenship laws reinforce the trend of birth-based membership: ‘advantaging those who have access to the inherited privilege of membership, while disadvantaging those who do not’.59 In particular, citizenship is most often 49 Joppke, Citizenship and Immigration. 50 Bosniak, The Citizen and the Alien; see also Chandran Kukathas, ‘Expatriatism: The Theory and Practice of Open Borders’ in Rogers M Smith (ed), Citizenship, Borders, and Human Needs (University of Pennsylvania Press, Philadelphia 2011); Marc Morjé Howard, The Politics of Citizenship in Europe (cup, NY 2009); and Joseph H Carens, ‘Aliens and Citizens: The Case for Open Borders’ in Ronald Beiner (ed), Theorizing Citizenship (State University of NY Press, Albany 1995). 51 Michael Walzer, Spheres of Justice: A Defense of Pluralism and Equality (Basic Books, NY 1983) 34 et seq. 52 Benedict Kingsbury, ‘Sovereignty and Inequality’ (1998) 9 ejil 599, 602. 53 Kingsbury, ‘Sovereignty and Inequality’ 599, 602. 54 Shachar, The Birthright Lottery 8. 55 Kingsbury, ‘Sovereignty and Inequality’. 56 Shachar, The Birthright Lottery 9. 57 Shachar, The Birthright Lottery 9. 58 Shachar, The Birthright Lottery 9. 59 Engin F Isin, Peter Nyers and Bryan S Turner (eds), Citizenship Between Past and Future (Routledge, NY/Oxford 2013) 145.

8

Introduction

c­ onnected with a person’s birth60 – either based on the citizenship of the parents (ius sanguinis or citizenship by descent) or birthplace (ius soli, citizenship by birth or birthright citizenship)61 – and in smaller number of cases, it derives through naturalisation which represents ‘acquisition after birth of a citizenship not previously held by the person concerned that requires an application to public authorities and a decision by these’.62 Most states base their citizenship laws on a combination of both ius soli and ius sanguinis while naturalised citizens are normally in the minority among citizens of the state. As formulated by Joppke, the concept of birthright citizenship is comparatively the simplest way to localise the world’s population.63 Both modes of birth-based membership – ius soli and ius sanguinis – are the expression of a membership entitlement resulting merely from one’s place of birth or generational transfer rather than from any special achievements or allegiances of the individual. The ius soli acquisition of citizenship is accepted under public international law even if the birth merely happens to occur on a territory of an ius soli state. Citizenship resulting from such circumstances is sometimes also referred to as ‘accidental citizenship’ and its holder as an ‘accidental citizen’.64 As accurately put by Kunz, ‘[i]t is clear that the acquisition of nationality jure soli may be wholly fortuitous, and a child may have no specific link at all with the country in which it has been born’.65 The pure ius soli is becoming increasingly tenuous with its demand for the ‘sufficient connection to the [s]tate’ in view of globalisation and ever-increasing mobility of the world population. Think, for instance, of a lady who went for a study visit and who, for some reason, stayed longer than planned in the US and gave birth to her child there. Both, the mother and the child, might have left the US shortly afterwards and never travelled or intended to go back to the US, but the child has already become an American citizen by virtue of the 14th Amendment of the American Constitution, on the basis of which all persons born in the United States are US 60 61

Otto Palandt, Bürgerliches Gesetzbuch (71st edn, Beck, Munich 2012) 140 et seq. For greater detail on birthright citizenship see Douglas B Klusmeyer and Alexander T Aleinikoff, Citizenship Policies for an Age of Migration (Carnegie Endowment for International Peace, Washington D.C. 2002). 62 Definition borrowed from Sara Wallace Goodman and Rainer Bauböck, Naturalisation, European Union Direct Observatory (eudo), Citizenship Policy Briefs (Robert Schuman Centre for Advanced Studies and European Union Institute, Florence 2010). 63 Joppke, Citizenship and Immigration 153. 64 Peter Nyers, ‘The Accidental Citizen’ in Peter Nyers (ed), Securitisations of Citizenship (Routledge, Abingdon/NY 2009). 65 Josef L Kunz, The Changing Law of Nations: Essays on International Law (Ohio State UP, Columbus 1968) 430.

Introduction

9

citizens.66 The law equally applies to new-borns of illegal immigrants in the US67 or to children of ‘birth tourists’ who travel to the US for the sole purpose of securing US citizenship for their child.68 Accidental citizens are moreover not unique to the ius soli citizenship, but different techniques of acquiring citizenship for children produce their own unique accidents.69 The ius sanguinis citizenship is frequently attributed to an ethnic conception of the nation-state,70 which derives from the most natural and closest relationship between persons – that between parents and the child.71 However, governments often treat citizens of certain states in a preferential way in accessing citizenship for various reasons including ideology, history, closeness or common language. That trend of preferential treatment of certain groups is widely spread and viewed as ‘appropriate’.72 For instance, numerous states extended the right to citizenship to distant descendants of citizens living in other countries.73 In other words, a person may be a citizen of a state without

66

67 68

69 70 71 72

73

See, for instance, the U.S. Department of State – Bureau of Consular Affairs website on ‘Renunciation of U.S. Nationality Abroad’ (Section F), noting the following: ‘Citizenship is a status that is personal to the U.S. citizen. Therefore, parents may not renounce the citizenship of their minor children. Similarly, parents/legal guardians may not renounce the citizenship of individuals who are mentally incompetent. Minors seeking to renounce their U.S. citizenship must demonstrate to a consular officer that they are acting voluntarily and that they fully understand the implications/consequences attendant to the renunciation of U.S. citizenship’, available at: accessed 10 August 2018. Birthright Citizenship Act of 2009, H.R.1868, 111th Cong. Edward J Erler, ‘Birthright Citizenship and Dual Citizenship: Harbingers of Administrative Tyranny’ (2008) 37(7) Imprimis accessed 10 August 2018. See also John Eastman, From Feudalism to Consent: Rethinking Birthright Citizenship (Heritage Foundation, Washington D.C. 2006). Nyers, ‘The Accidental Citizen’ 133. Patrick Weil, ‘Zugang zur Staatsangehörigkeit – Ein Vergleich von 25 Staatsangehörigkeitsgesetzen’ in Christoph Conrad and Jürgen Kocka (eds), Staatsbürgerschaft in Europa: historische Erfahrungen und aktuelle Debatten (Körber-Stiftung, Hamburg 2001). See in greater detail Ingo von Münch, Die deutsche Staatsangehörigkeit. Vergangenheit – Gegenwart – Zukunft (De Gruyter Recht, Berlin 2007). Open Society Foundation (osf), ‘Citizenship and Equality in Practice: Guaranteeing NonDiscriminatory Access to Nationality, Protecting the Right to be Free from Arbitrary Depriva­ tion of Nationality, and Combating Statelessness’ accessed 10 August 2018. Costica Dumbrava, ‘The Ethno-demographic Impact of Co-ethnic Citizenship in Central and Eastern Europe’ (2018) J. Ethn. Migr. Stud., available at: accessed 10 August 2018. 74 Kunz, The Changing Law of Nations 430. 75 Italy Heritage, ‘Italian Citizenship for Descentants of Italians’ (IT Heritage, 2017) accessed 10 August 2018. 76 Guido Tintori, ‘More than One Million Individuals Got Italian Citizenship Abroad in Twelve Years (1998–2010)’ (eudo Citizenship News, 2012) accessed 10 August 2018. 77 See, for instance, ‘Spain Passes Law Awarding Citizenship to Descendants of Expelled Jews’ TheGuardian (London, 11 June 2015) accessed 10 August 2018. 78 Costica Dumbrava, ‘Rolling Back History: The Romanian Policy of Restoration of Citizenship to Former Citizens’ (citsee, 15 April 2013) accessed 12 February 2018. 79 Dumbrava, ‘Rolling Back History’. 80 Dumbrava, ‘The Ethno-demographic Impact of Co-ethnic Citizenship’.

Introduction

11

s­ entiments and feeling of the citizenry’.81 Identifying yourself as an A ­ merican does not make you one.82 Being (even accidently) born on American soil, notwithstanding your feelings, does. The birth-based mode of acquisition of citizenship enables states to ‘[hand] down from generation to generation the ­invaluable security and opportunity that attach to membership in a stable, ­affluent, and rule-of law society (and) [i]t also allows members of well-off polities an enclave in which to preserve their accumulated wealth and power through time’.83 Such birthright transfer of entitlement has not only survived through the historical development of citizenship but has been also widely embraced by international law and national jurisdiction all over the world. Social citizenship for the global poor is rather an idealistic vision of a more just world. However, the fact that citizenship goes along with exclusions and social inequality is neither new nor entirely exclusive to aliens. Exclusion is the key function of citizenship84 – from exclusion of women, slaves and foreign-born since its earliest inception in the ancient city and through the constant struggle to widen membership of the citizen class.85 Furthermore, citizenship has never been about substantive equality, yet as noted by Kochenov, ‘equality among and the empowerment of its bearers is citizenship’s and by extension, a citizens’ only reason to exist: this is why an abstract legal status of equals emerged, to replace the heterogeneity of human beings with an abstraction mandated by the authority in charge’.86 The basic human equality associated with citizenship is not inconsistent with social inequalities in society.87 As convincingly argued by Marshall, social inequalities may be acceptable as long as equality of citizenship is recognised.88 Citizenship has in fact become ‘the architect of legitimate social inequality’.89 The uniform status of citizenship replaced differential statuses associated with class, function and family, providing a basis of equality on which social inequality could be built.90 Indeed, ‘this status was clearly an aid, and not a menace, to capitalism and the free-market economy, 81 Kochenov, ‘The Citizenship of Personal Circumstances in Europe’ 39. 82 Kochenov, ‘The Citizenship of Personal Circumstances in Europe’ 39. 83 Shachar, The Birthright Lottery 2. 84 Dimitry Kochenov, ‘On Tiles and Pillars: EU Citizenship as a Federal Denominator’ in Dimitry Kochenov (ed), EU Citizenship and Federalism: The Role of Rights (cup, Cambridge 2017) 3–82, 21. 85 Larry Siedentop, Inventing the Individual: The Origins of Western Liberalism (Penguin Books, Milton Keynes 2015). 86 Kochenov, ‘On Tiles and Pillars’ 43. 87 Thomas Humphrey Marshall, Citizenship and Social Class and Other Essays (cup, Cambridge 1950). 88 Marshall, Citizenship and Social Class 8 89 Marshall, Citizenship and Social Class 9. 90 Marshall, Citizenship and Social Class 34.

12

Introduction

because it was dominated by civil rights, which confer the legal capacity to strive for the things one would like to possess but do not guarantee the possession of any of them’.91 As illustrated by Marshall, A property right is not a right to possess property, but a right to acquire it, if you can, and to protect it, if you can get it. But, if you use these arguments to explain to a pauper that his property rights are the same as those of a millionaire, he will probably accuse you of quibbling. Similarly, the right to freedom of speech has little real substance if, from lack of education, you have nothing to say that is worth saying, and no means of making yourself heard if you say it. But these blatant inequalities are not due to defects in civil rights, but to lack of social rights, and social rights in the mid-nineteenth century were in the doldrums.92 Socio-economic inequalities within states indisputably weaken any ‘direct sense of community membership based on loyalty to a civilization which is a common possession’93 of poor citizens who rather ‘create unprecedented claims (…) expand[ing] citizenship to new social basis’.94 Furthermore, growth of citizenship in terms of extension of the status to groups of the population which were previous excluded (as, for instance, women) and extension of their citizenship rights (as, for instance, granting women the right to vote) has not improved global inequality. Agreeing with Kochenov, The main purpose of citizenship has been upgraded: from a neo-­feudal mechanism of sexist and racist governance, it is turning into one of the core instruments of preservation and justification of global inequality, hiding its functionality behind the old façade of political self-­determination, which had been effective to brush away women and ­minorities before.95

91 Marshall, Citizenship and Social Class 34. 92 Marshall, Citizenship and Social Class 35. 93 Marshall, Citizenship and Social Class, 40. 94 James Holston and Arjun Appadurai, Cities and Citizenship (University of Chicago Press, Chicago 1996). 95 Dimitry Kochenov, ‘Escapist Technology in the Service of Neo-Feudalism’ in Liav Orgad and Rainer Bauböck (eds), Cloud Communities: The Dawn of Global Citizenship? eui Working Papers rscas 2018/28, 47, 48 accessed 10 August 2018.

Introduction

13

Notwithstanding its form and stage of development, citizenship has been continuously used to exclude, discriminate and segregate different population groups. The European Union has achieved the most significant break with this tradition, hence coming closest to ‘renationalisation’ if not ‘denationalisation’ of the concept of citizenship. In particular, the EU dismantled citizenship as ‘an instrument and an object of closure’ through inclusion of other EU citizens into the national community led by the principle of non-discrimination on the basis of nationality.96 It has thus diminished legal relevance of Member State nationalities in many areas where EU law applies,97 or as put by Joppke, EU citizenship ‘liberat[ed] the individual from the suffocating grip of nationstates and tam[ed] the latter’s demonic potentials that, after all, had forced the idea of “Europe” back to life after 1945’.98 The EU’s huge step forward towards inclusion of other than domestic ­citizens of Member States aside – and to a lesser extent the Caribbean Community (caricom), Commonwealth of Independent States (cis), Gulf Cooperation Council (gcc), Organisation of Eastern Caribbean States (oecs) and the regional cooperation in South America, – exclusion and arbitrariness remain dominant features of politics of citizenship of virtually all sovereign states across the world. Nationalism is the main source of such exclusivity99 and traditional methods of acquisition of citizenship are vehicles through which arbitrariness is legitimately cherished. New methods of inclusion are necessary in the contemporary climate of citizenship and ius doni, while certainly not solving global inequalities created by birthright assignment of membership, is an important step forward towards inclusion and further growth of citizenship. It is further an important ‘step in the demystification of states and empowerment of individuals’.100 To agree with Joppke, states ‘have always been strategists in matters of citizenship’,101 however, ‘[t]he novelty is to see individuals as citizenship strategists’.102 The attempts to advance peoples’ choices of how and where to live their lives, as opposed to be bound by the citizenship allocated at birth, should be further enhanced rather than supressed. 96 97 98

Kochenov, ‘The Citizenship of Personal Circumstances in Europe’. Kochenov, ‘The Citizenship of Personal Circumstances in Europe’. Christian Joppke, ‘The Instrumental Turn of Citizenship’ (2018) J. Ethnic and Migration Stud. 1˗21. 99 Joppke, ‘The Instrumental Turn of Citizenship’ 1. 100 Joppke, ‘The Instrumental Turn of Citizenship’ 18. 101 Joppke, ‘The Instrumental Turn of Citizenship’ 18. 102 Joppke, ‘The Instrumental Turn of Citizenship’ 18.

14 1

Introduction

Key Questions

This monograph focuses on ius doni or the mode of acquisition of citizenship by investment as one of the latest trends in allocation of citizenship. It offers answers to many important questions including: should CbIP be considered a sell-out of sovereignty103 which cannot be reconciled with the purported anchoring role of citizenship law in the sphere of democracy and human rights?104 Is there a distinction between financial and human investments with regard to the acquisition of citizenship?105 Does ius doni lead to welfare gains through additional external investments and economic contributions that benefit the general population? Is it essential for a person to settle for a longer period of time in a national community and develop a ‘personal bond’ with it, by living and working there in order to acquire citizenship? Perhaps additional requirements should be fulfilled, ones that would prove a certain degree of loyalty to the state such as having a good command of the national language, basic knowledge of the national culture and history or the presence of an economic livelihood, existence of which could be used as a definite indication of the achievement of a certain level of integration, as with ordinary naturalisation? Alternatively to these traditional requirements, could it be sufficient to display extraordinary economic abilities, in particular by way of investments or gifts for charitable or public interest purposes? What is the impact of international law on citizenship matters? How and to what extent does EU law shape the development of citizenship rules in EU Member States? Obviously, a large number of other important questions could still be asked. However, the intention of this book is to begin to bridge the gap in the ­academic literature by explaining the concept of acquisition of citizenship by investment in the light of international law and EU law, as well as the implementation of CbIP and relevant national legislation. 103 Michael J Sandel, What Money Can’t Buy: The Moral Limits of Markets (Penguin Books, London 2013) 10–11; see also Robert Kuttner, Everything for Sale: the Virtues and Limits of Markets (University of Chicago Press, Chicago 1999). 104 Elmar Broak, a cdu European representative, even spoke of a ‘modern day human trafficking’ at the time of the introduction of the citizenship programme in Malta in autumn 2013, see Thomas Gutschker, ‘Malta betreibt Menschenhandel’ Frankfurter Allgemeine (Frankfurt am Main, 16 November 2013) accessed 10 August 2018. 105 See Raul M Berton, ‘Citizenship for Those who Invest into the Future of the State is Not Wrong, the Price is the Problem’ in Shachar and Bauböck (eds), Should Citizenship be for Sale? 11.

Introduction

2

15

Structure of the Monograph

The monograph is divided into five chapters. The first chapter focuses on key contours of citizenship and ius doni. In the first part it analyses the basic framework discussing citizenship and state sovereignty and historic lines of development of citizenship from antiquity to contemporary times. The second part of the chapter discusses citizenship requirements and analyses ius doni against other forms of naturalisation. The second chapter discusses ius doni in International law. It first analyses rules and limitations of International law looking also at their potential impact on the mode of acquisition of citizenship by investment. In particular, it discusses the principle of non-discrimination, the right to citizenship which International law has tried to promote, as well as statelessness and implications of mass conferral of citizenship. The second part discusses the right to dual nationality and associated restrictions. It then goes into the theory of genuine link dismissing claims that the icj’s decision in Nottebohm imposes an obligation on states with regard to acquisition of citizenship. The third chapter introduces the concept of EU citizenship and its scope of application. The first part of the chapter explains EU citizenship and focuses particularly on the rights of EU citizens beyond their native states and the obligations of Member States to comply with the limitations set by EU law in the field of citizenship. The emphasis in the second part are on the principle of loyal cooperation. The relevant law, Article 4(3) of the Treaty on European Union (teu) and its (semi)application through the problematization of the launching of the Maltese Individual Investor Program, are primarily discussed. The fourth chapter focuses largely on procedures and practices of ius doni. It starts in the first part with the economic justification and requirements of various citizenship and residence programs and continues with discussing the due diligence process and risks of circumventing Common Reporting Standard (crs). In the second part, the text discusses different programs and national legislation of four states: Austria, Montenegro, St. Kitts and Nevis and Malta. Austria has been chosen as a well-established, wealthy EU country which has included citizenship by investment provisions in its citizenship law since 1986 and has developed, if not a structured CbIP, a rather well-established practice in this regard. Malta features in this chapter because it has the newest and most advanced CbIP designed to attract the applicants of the highest caliber. Montenegro is included in the selection as it represents a European non-EU state which has ius doni provisions in its laws. St. Kitts and Nevis is a part of the analysis as a representative of the oldest and most studied CbIP in the modern

16

Introduction

times, given that it was established already in 1984, one year after the country became independent from Great Britain. The fifth and final chapter presents the general conclusions of this study, discussing inter alia the conceptual and practical implications of citizenship. The acquisition of citizenship by investment does not necessarily undermine the purpose and functional significance of the citizenship in its traditional sense. However, all applicable citizenship norms and principles must be observed in the process of acquisition of citizenship by investment to prevent the concept from turning into a manipulative scheme instead of a state incentive. The CbIP operating today, together with more general practice of states in this respect, provide a solid platform both for assessing the adherence to the applicable standards and for their further scope for improvement in compliance with national, international and EU law standards. In summary, this monograph initially discusses the main framework and gradual development of citizenship throughout history. Requirements for acquisition of citizenship under different modes are clarified and different forms of naturalisation compared. The question of equality is brought into connection with citizenship and discussed accordingly. So is the principle of non-discrimination but also the reality of statelessness and struggle of international law to make states cooperate. The theory of a ‘genuine link’ and due consideration for neighbouring countries by preventing mass naturalisations are discussed in the light of ius doni. Considerations of the book additionally incorporate the concept of EU citizenship and its impact on Member States’ discretion to decide on the matters concerned with citizenship law, focusing on the principle of loyal cooperation. Necessarily, ius doni is analysed in view of this principle. Further, the book examines national contexts and circumstances in which ius doni is applied. Finally, the book concludes by drawing together the findings and arguing that ius doni is neither a novel nor inappropriate mode of citizenship acquisition which may, however, have certain conceptual and practical implications for the future development of citizenship. Should the process be implemented within a framework created to advance the host state’s development in accordance with national law and relevant international principles and EU law, where applicable, ius doni could be a beneficial option not only for investors but also for the country to which they wish to contribute and become part of.

Chapter 1

Key Contours of Citizenship and Ius Doni 1.1

Citizenship Framework and Development

For most people today, citizenship above all means having a passport which has thus become a direct expression of the corresponding benefits, rights and obligations of citizenship.1 The decentralised organisation of the world is made particularly manifest in citizenship law, which links individuals with particular states.2 When states are discussed as the point of reference for citizenship today,3 such discussion is focused on nation-states, and citizenship from an historical perspective is an institution of the nation-state.4 While the idea that humanity is naturally divided into ‘nations’ is an old concept,5 the nation-states as known today is a relatively young phenomenon. 1 Martin Stiller, ‘Statelessness in International Law: A Historic Overview’ (2012) 37(3) dajv Newsletter 94. There are, however, some exceptions such as British statuses some of which, although true citizenships, would not meet the basic requirements of providing rights. For instance, British protected persons have no automatic right to live or work in the UK and the same rule applies to holders of British Subject Status. Furthermore, in Panama, where passports, under certain conditions, are issued to a particular category of residents settled in Panama but not employed there or in Malaysia, where specially marked national identity cards are issued also to non-citizens. From 1982 until 1984, Tonga issued ‘Tongan Protected Person Passports’, which confer neither citizenship nor residence rights in the country, nor visa-free entry. Many countries refuse entry to Tongan Protected Passport holders. See also Anthony van Fossen, ‘Citizenship for Sale: Passports of Convenience from Pacific Island Tax Havens’ (2007) 45(2) Commonwealth and Comparative Politics 138. Another example are non-citizens of Latvia, i.e. individuals who are citizens of the former ussr and who possess neither Latvian nor any other citizenship. With respect to Latvian non-citizens, see Dimitry Kochenov and Aleksejs Dimitrovs, ‘EU Citizenship for Latvian “Non-citizens”: A Concrete Proposal’ (2016) hjil 55. 2 E.g. Georg Jellinek, Allgemeine Staatslehre (first published 1914, Athenäum, Kronberg/Taunus 1976); Patrick Weil, Qu’est-ce qu’un français? Histoire de la nationalité française depuis la Révolution (Grasset, Paris 2002). 3 von Münch, Die deutsche Staatsangehörigkeit. 4 Dieter Gosewinkel, ‘Die Staatsangehörigkeit als Institution des Nationalstaates, Zur Entstehung des Reichs und Staatsangehörigkeitsgesetzes von 1913’ in Rolf Grawert et al. (eds), ­Offene Staatlichkeit: Festschrift für Ernst-Wolfgang Böckenförde zum 65. Geburtstag (Duncker & Humblot, Berlin 1995). 5 Magnette, Citizenship: The History of an Idea 7; See also Patrick Weil, ‘From Conditional to Secured and Sovereign: The New Strategic Link between the Citizen and the Nation State in a Globalised World’ (2011) 9(3/4) ijcl 615 and Douglas B Klusmeyer, Between Consent

© koninklijke brill nv, leiden, ���9 | doi:10.1163/9789004357525_003

18

Chapter 1

The Peace of Westphalia of 1648 has been largely regarded in the literature as the beginning in the development of the international system of sovereign states.6 The ‘Westphalian model’ replaced the power of the church and the Holy Roman Empire. It was established that the monarchs would retain the right to form their own autonomous sovereign states and furthermore, that every sovereign state could regulate its internal affairs without external interference, given that common characteristics of the citizen of each state would be sufficient in order to justify a nation.7 The further development of nation-states can be traced back to the Reformation, when prominent personalities such as Martin Luther propagated a new perspective on the position of the individuals with respect to state authority and to the first codifications of constitutions and constitution-like declarations, such as the Bill of Rights (an Act declaring the Rights and Liberties of the Subject)8 in Great Britain dating back to 1689, the Constitution of the United States of America of 1787 and the French Constitution of 1791, right through to their heyday in the nineteenth and twentieth centuries. 1.1.1 Citizenship and State Sovereignty State sovereignty is at the core of citizenship law or the question of who qualifies as a citizen of an individual nation-state, how this citizenship is acquired or conferred, and how this is regulated by domestic law.9 The Montevideo Convention ratified that permanent population is a prerequisite for statehood, along with a defined territory, government and the capacity to enter into relations with other states.10 These constitutive elements of states are, at the same time, the ‘objects of state power’.11 States are, in turn, entitled to exercise their sovereign powers within area under their jurisdiction and to exclude actions of other states on their territories.12 Citizenship is closely related to the

6 7 8 9 10 11 12

and Descent: Conceptions of Democratic Citizenship (Carnegie Endowment for International Peace, Washington, DC 1996). See, for instance, Leo Gross, ‘The Peace of Westphalia: 1648–1948’ (1948) 42 ajil 20. Stiller, ‘Statelessness in International Law’. E.g. Reinhard Pohanka, Dokumente der Freiheit (Marix, Wiesbaden 2009). Ruth Donner, The Regulation of Nationality in International Law (2nd edn, Transnational Publishers, Irvington-on-Hudson 1994) 2. Article 1 Montevideo Convention on Rights and Duties of States (adopted 26 December 1933, entered into force 26 December 1934). Gregor Noll, Negotiating Asylum: The EU Acquis, Extraterritorial Protection and the Common Market of Deflection (Kluwer Law Int’l, The Hague 2000) 354. Elena Basheska, ‘The Position of Good Neighbourliness Principle in International and EU Law’ in Dimitry Kochenov and Elena Basheska (eds), Good Neighbourliness in the European Legal Context (Brill, Leiden/Boston 2015).

Key Contours of Citizenship and Ius Doni

19

­territorial sovereignty13 of states. Citizens are linked with the state through their citizenship, which is a political and legal point of reference.14 State and citizens complement each other: citizens form constituent people, one of the constitutive components of the state ˗ the existence of which allows for the formal status of citizen.15 National citizenship law is comprised of the legal norms which regulate the acquisition and loss of citizenship or are otherwise involved with citizenship.16 States use various legal instruments in doing so but almost ­everywhere the basics are regulated on the constitutional level and the details on the legislative one as well as in the governmental decisions, in case of implementing regulations or ordinances.17 Whereas in some states, such as the Bahamas, constitutional changes are required to alter the citizenship norms,18 in others extensive regulation by government order is possible as it is supported by corresponding primary legislation. Citizenship legislation has been shaped by particular circumstances and histories of states and is primarily a matter of domestic jurisdiction.19 The Hague Convention on Certain Questions Relating to the Conflict of Nationality Laws of 1930 made this point clear in the Article 1: ‘It is for each State to

13

In general, state sovereignty can be described as the highest authority which is not d­ erived from any other territorial entity, which for its part is not subject to any obligations. This corresponds formally with the authority of the state, by virtue of which it has the exclusive ability of legal self-determination and self-binding. See Marija Dietrich, Staatliches Souveränitätsverständnis im Wandel der gesellschaftspolitischen Strukturen (Schriften zum internationalen und zum öffentlichen Recht, Frankfurt am Main 2011) 95. 14 von Münch, Die deutsche Staatsangehörigkeit; see also Jellinek, Allgemeine Staatslehre; Utku Topal, Staatsangehörigkeitsverlust und Mehrstaatigkeit – Eine verfassungsrechtliche Untersuchung zum Verlustgrund des Erwerbers einer ausländischen Staatsangehörigkeit (Herbert Utz, Munich 2010). 15 Numerous rights, however, can be enjoyed by certain individuals, for instance by legally resident non-citizens without formal citizenship status. See, for instance, Bosniak, The Citizen and the Alien 100; See also Rainer Bauböck, ‘Temporary Migrants, Partial Citizenship and Hypermigration’ (2011) 14(5) crispp 665; Dimitry Kochenov, ‘Citizenship for Real: Its Hypocrisy, Its Randomness, Its Price’ in Shachar and Bauböck (eds), Should Citizenship be for Sale?. 16 Knocke, Das Europäische Übereinkommen über die Staatsangehörigkeit als Schranke für die Regelung des nationalen Staatsangehörigkeitsrechts. 17 Bergmann Wilfried et al., Internationales Ehe- und Kindschaftsrecht mit Staatsangehörigkeitsrecht (Verlag für Standesamtswesen, Frankfurt am Main 2005). 18 See in more detail Stephen B Aranha, ‘Bahamianness as an Exclusive Good: Attempting to Change the Constitution’ (2002) 22 ijbs 16. 19 Rainer Bauböck et al., ‘Introduction’ in Rainer Bauböck et al. (eds), Acquisition and Loss of Nationality: Policies and Trends in 15 European States Volume 1: Comparative Analyses (Amsterdam UP, Amsterdam 2006) 15–16.

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determine under its own law who are its nationals’.20 Article 2 clarifies that ‘Any question as to whether a person possesses the nationality of a particular [s]tate shall be determined in accordance with the law of the [s]tate’.21 The quest for more uniform citizenship rules before the Hague Convention was mostly dismissed due to lack of a universal jurisdiction and jurisprudence to ensure uniformity of national laws.22 While the premise of states’ freedom in citizenship matters has generally remained intact by international law since the Hague C ­ onvention, both the nature of state sovereignty and the concept of citizenship have certainly evolved in line with the changing global society. Indeed, state and sovereignty are ‘mutually constitutive and constantly undergoing change and transformation (…) neither state nor sovereignty should be assumed or taken as given, fixed, or immutable’.23 As noted by Boutros BoutrosGhali, the former UN Secretary-General: Respect for (the) fundamental sovereignty and integrity (of the state) are crucial to any common international progress. The time of absolute and exclusive sovereignty, however, has passed; its theory was never matched by reality. It is the task of leaders of [s]tates today to understand this and to find a balance between the needs of good internal governance and the requirements of an ever more interdependent world.24 One aspect of such change of sovereignty is clearly reflected in citizenship matters to which growing tolerance of dual citizenship around the globe testifies.25 The historical development of citizenship has been intrinsically related to the concepts of equality, nationality and, above all, nationalism.26 While all these aspects directly affect the theory and practice of citizenship law worldwide 20 21 22 23 24

25 26

Convention on Certain Questions Relating to the Conflict of Nationality Law (adopted 12 April 1930, entered into force 1 July 1937) 179 lnts 89 (Hague Convention). Article 2 Hague Convention. Bauböck et al., ‘Introduction’ 21–22. Thomas J Biersteker and Cynthia Weber, ‘The Social Construction of State Sovereignty’ in Thomas J Biersteker and Cynthia Weber (eds), State Sovereignty as Social Construct (cup, Cambridge 1996) 11. Secretary-General, Preventive diplomacy, peacemaking and peace-keeping: Report of the Secretary-General pursuant to the statement adopted by the Summit Meeting of the ­Security Council on 31 January 1992 ‘An Agenda for Peace’ UN Doc A/47/277 (1992) 11 (­Report of the Secretary-General). See Chapter 2 of this book with regard to state acceptance of dual citizenship. See Dieter Gosewinkel, Einbürgern und Ausschließen: Die Nationalisierung der Staatsangehörigkeit vom Deutschen Bund bis zur Bundesrepublik Deutschland (Vandenhoeck & Ruprecht, Göttingen 2003).

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nowadays,27 global interdependence has certainly played a role in the gradual extension of the freedom of the individual with respect to the public authorities. Finally, human dignity, the importance of which has been universally acknowledged, even if not equally codified in all democratically constituted nation-states,28 is yet another aspect which has been often brought into correlation with citizenship. Rules for the guarantee of human dignity are found in the constitutions of various states and in numerous supranational legal sources, such as in Article 1 of the Charter of Fundamental Rights of the E ­ uropean Union (cfreu),29 Article 26 of the Revised European Social Charter30 or Article 1 of the Universal Declaration of Human Rights (udhr).31 However, the idea that ‘all human beings are born free and equal in dignity and rights’32 might, at least, be approached from various angles if not discarded in the context of allocation of citizenship and enjoyment of citizenship rights.33 The development of citizenship has not followed a ‘single trajectory’.34 ­National forms that citizenship took varied due to the different structure and circumstances of the state.35 That said, there are a number of common elements characterising citizenship over time which go back to its earliest forms. 27

28

29 30 31 32 33

34

35

Rogers Brubaker, Ethnicity without Groups (Harvard UP, Cambridge, MA 2004); Ruud Koopmans et al., Contested citizenship: Immigration and cultural diversity in Europe (University of Minnesota Press, Minneapolis, MN 2005); Irene Bloemraad et al., ‘Citizenship and Immigration: Assimilation, Multiculturalism and the Nation State’ (2009) 34 ars 153. For the universal significance of human dignity, see David P Forsythe, Human Rights in International Relations (3rd edn, cup, NY 2012); Yasemin N Soysal, Limits of Citizenship: Migrants and Postnational Membership in Europe (University of Chicago Press, Chicago 1994) and Christopher McCrudden, Understanding Human Dignity (oup, Oxford 2014). Article 1 of the cfreu [2000] C 364/01, stipulates that: ‘Human dignity is inviolable. It must be respected and protected’. Article 26 of the European Social Charter (3 May 1996, Strasbourg) ets No 163, speaks of dignity of workers at work. According to Article 1 udhr (adopted 10 December 1948) unga Res 217 A(III), ‘All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood’. Article 1 udhr. Bas de Gaay Fortman, ‘The Crowbar to Universality: Implications of “Equal in Rights”’ in Marjolein van den Brink, Susanne Burri and Jenny Goldschmidt (eds), Equality and ­Human Rights: Nothing But Trouble? (The Netherlands Institute of Human Rights, Utrecht University, Utrecht 2015). Richard Bellamy, ‘Introduction: The Making of Modern Citizenship’ in Richard Bellamy, Dario Castiglione and Emilio Santoro (eds), Lineages of European Citizenship: Rights, ­Belonging and Participation in Eleven Nation-States (Palgrave Macmillan, Basingstoke/NY 2004) 14. Gerard Delanty, The Cosmopolitan Imagination: The Renewal of Critical Social Theory (cup, Cambridge 2009) 115.

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These include bonds beyond basic family ties as well as relation between a person and political entity. It is an indication of a membership characterised by certain forms of participation in such entity and a privileged status over those excluded from membership. Rights and exclusion have always formed important elements of citizenship. Non-citizens have been traditionally excluded from rights and privileges unique to citizenship. Historical origins of citizenship – at least from the perspective of the Western countries dealt with here36 – ­extend from ancient Greece37 and through Roman law, medieval feudalism with the European free states, the Renaissance and the Peace of Westphalia, to the French Revolution and the resulting nationalism.38 Such development of citizenship has seen the use of various modes of citizenship throughout history. 1.1.2 Citizenship in Ancient Greece and Rome Both ius soli and ius sanguinis have ancient roots but they do not always compete. The same goes with naturalisation and ius doni, the early forms of which go also back to ancient times. Thus, none of the modes of acquisition of citizenship is entirely novel but all of these have been rather modified to different extents in the light of changing circumstances of political entities and growth of citizenship. For the Greeks and Romans, the most important distinction was not ­between the public and the private sphere but the one between public and domestic.39 Family was central to religious beliefs and deceased males related by blood were the only family gods who could be worshipped.40 The domestic sphere was traditionally a sphere of inequality which was central to the worship of the ancient family.41 Larger associations came into being with the patriarchal families uniting through a common worship.42 When such associations increased they established tribes. Lastly, when several tribes became associated, the ancient city came into being. While such large associations might not have been always based on family ties, the ancient city was ‘a confederation of 36

A study of other historical lines, e.g. from African, Chinese or Indian point of view, has been omitted here, especially because the modern design of citizenship laws in virtually all States follow Western models. 37 Magnette, Citizenship: The History of an Idea 10–19. 38 Jürgen Mackert, Staatsangehörigkeitsrechtliche Fragen der Terrorismusbekämpfung (Marix, Wiesbaden 2006); Klusmeyer, Between Consent and Descent; Magnette, Citizenship: The History of an Idea, for the very interesting development of German citizenship cf. Gosewinkel, Einbürgern und Ausschließen 11 and 278 et seq. 39 Siedentop, Inventing the Individual 18. 40 Siedentop, Inventing the Individual 10˗11. 41 Siedentop, Inventing the Individual 18. 42 Siedentop, Inventing the Individual 20.

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cults, an association superimposed on other associations, all modelled on the family and its worship’.43 Inequalities in family were reflected in citizenship matters when the a­ ncient city was created. Citizenship was reserved for the paterfamilias, and, later, his sons, while women, slaves and foreign-born (with ‘no hearth or worship of their own, no recognized ancestors’)44 were excluded, being ruled out by ‘family piety’.45 Young Athenians or Romans got their full citizenship following the same path as the city. At the age of sixteen or eighteen, he is presented for admission to the city. On that day in the presence of an altar, and before the smoking flesh of a victim, he pronounces an oath, by which he binds himself, among other things, always to respect the religion of the city. From that day he is initiated into public worship, and becomes a citizen. If we observe this young Athenian rising, step by step, from worship to worship, we have a symbol of the degrees through which human association has passed. The course which this young man is constrained to follow is that which society first followed.46 Citizenship was proto-racialized.47 Thus, the classical Athenian notions of citizenship were based on differences between the groups and superiority of  Greeks over barbarians.48 Citizenship required birth to an Athenian father, and after the passage of the Citizenship Law of Pericles of 451 b.c. citizenship could be conferred only if both mother and father were Athenians.49 Pericles’ new law made Athenian citizenship even more exclusive and had an effect of reducing the number of Athenian citizens. Marriage with foreigners was not allowed.50 Only a small percentage of the Athenian population actually had full citizenship rights ˗ even in the fourth century (from whence a reasonable demographic picture is available) only about 31 percent were citizens.51 Fitzgerald 43 Siedentop, Inventing the Individual 21. 44 Siedentop, Inventing the Individual 18. 45 Siedentop, Inventing the Individual 18. 46 Fustel de Coulanges, The Ancient City: A Study on the Religion, Laws and Institution of Greece and Rome (The Johns Hopkins UP, Baltimore, MD 1874) 170. 47 David Scott Fitzgerald, ‘The History of Racialized Citizenship’ in Shachar et al., The Oxford Handbook of Citizenship (oup, London/NY 2017) 132. 48 Fitzgerald, ‘The History of Racialized Citizenship’ 132. 49 Klusmeyer, Between Consent and Descent 11. 50 Fitzgerald, ‘The History of Racialized Citizenship’ 133. 51 Marilyn A Katz, ‘Women and Democracy in Ancient Greece’ in Thomas M Falkner, Nancy Felson and David Konstan, Contextualizing Classics: Ideology, Performance, Dialogue: ­Essays in Honor of John J Peradotto (Rowman & Littlefield, Oxford 1999) 41, 58.

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is therefore right to conclude that ‘Athenian citizenship was based on a strong version of jus sanguinis ˗ the principle of descent’.52 This was far from Aristotle’s theoretical conception of participatory citizen, i.e. ‘a man who shares in the administration of justice and in the holding of office’,53 or ‘those who share in indeterminate office’54 (i.e. offices of judge and member of the assembly),55 or ‘he who enjoys the right of sharing in deliberative and judicial office’.56 It was even further from the concept of cosmopolitanism or global citizenship, where Diogenes rejected the status of a politēs, a citizen, advocating in favour of that of a kosmopolitēs, a citizen of the universe. Unlike Aristotle,57 Diogenes has not seen man as a political animal, but as a ‘multicultural animal’,58 and all wise men formed a single moral community, a city of the world.59 The stoics, starting with Zeno, provided a long line of philosophical support for the cosmopolitan idea, including one of the most crucial concepts of Natural Law,60 which can be found in the modern human rights and human dignity discussions and codifications. The exclusive character of citizenship notwithstanding, the process of naturalisation was not unknown to ancient Athens although being conferred on a rather exceptional and ad-hoc basis. Early forms of naturalizations have been noticed in the time of Solon, who, as noted, have naturalised refugees and foreigners who were practicing trade in Athens.61 Cleisthenes introduced the deme (village or ‘neighbourhood’) as the smallest unit of political organisation, 52 Fitzgerald, ‘The History of Racialized Citizenship’ 133. 53 Aristotle, Politics (III. i. 1275a 23–24). 54 Aristotle, Politics (III. i 1275a 33). 55 Curtis Johnson, ‘Who Is Aristotle’s Citizen?’ (1984) 29 Phronesis 73, 74. 56 Aristotle, Politics (III. i. 1275b 19–20). 57 Aristotle’s set forth his definition of a citizen in Politics iii: ‘Who (or what) is a citizen (politēs) is therefore clear from these arguments: we can now state that he who possesses the right to share in political (archē) and judicial office (krisis) is a citizen of that polis, and a polis is a group of such people that is sufficient to maintain independence of life, speaking generally’ Aristotle, Politics (III. i 1275b 17–24) accessed 10 August 2018. 58 Heater, World Citizenship 27. 59 Robin Cohen and Steven Vertovec, ‘Introduction’ in Robin Cohen and Steven Vertovec (eds), Conceiving Cosmopolitanism: Theory, Context and Practice (oup, Oxford 2000) 6; cf. also Heater, World Citizenship. 60 Heater, World Citizenship. 61 Plutarch, Solon 24.4: ‘His law concerning naturalized citizens is a surprising one, because it granted naturalization only to those who had emigrated with their families to practice a trade. Solon’s obect here, we are told, was not so much to discourage other types of immigrant as to invite these particular categories to Athens with the assurance that they could become citizens there’ (tr I Scott-Kilvert).

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and assigned each ethnic citizen to a deme on the basis of his place of residence.62 He has been known for extending citizenship to many foreigners and slaves.63 By the middle of the fifth century b.c., however, conferral of citizenship to individuals and groups who have not demonstrated andragathia have become illegal. Andragathia, as explained by Kamen, refers here ‘not to military courage (as it often does) but to state benefaction’,64 it is ‘a “gift” granted to benefactors’.65 Thus, in return for their benefaction to the state, noncitizens were given the gift of citizenship. Those opposing to naturalisation considered it ‘less a gift exchange than the sale of a comodity’,66 criticising the practice for making citizens out of inferiors: On an earlier occasion, when Perdiccas, who was king of Macedonia at the time of the Persian invasions, destroyed the barbarians who were ­retreating after their defeat at Plataea and so completed the discomfiture of the Great King, they did not vote him the citizenship, but only gave him immunity from taxes; because, I presume, they regarded their own country as great, glorious, and venerable, and as something greater than any service rendered. But now, Athenians, you make citizens of the scum of mankind, menial sons of menial fathers, charging a price for it as for any other commodity. You have got into the habit of acting thus, not because in ability you are inferior to your ancestors, but because it was second nature with them to have a high opinion of themselves, while you, Athenians, have lost that virtue.67 The Athenian citizenship was rarely conferred upon groups. There are some examples, however, which testify to this practice including citizenship conferral to non-citizens who fought in battles or grant of citizenship to groups for ‘their loyalty to Athens’.68 The situation in expansionist Rome differed in that citizenship was less exclusive. 62 Klusmeyer, Between Consent and Descent 10. 63 See also Josine Blok, Citizenship in Classical Athens (cup, Cambridge 2017) 249 et seq. 64 Deborah Kamen, Status in Classical Athens (Princeton UO, Princeton, NJ 2013) 79. See also M J Osborne, Naturalization in Athens: The Testimonia for Grants of Citizenship (awlsk, Brussels 1983) 147˗150. 65 Kamen, Status in Classical Athens 79 (footnote omitted). 66 Kamen, Status in Classical Athens 79˗80. 67 Demosthenes, On Organization 13.24 accessed 19 June 2018. 68 Michael M Austin and Pierre Vidal-Naquet, Economic and Social History of Ancient Greece: An Introduction (University of California Press, Berkeley/Los Angeles, CA 1972) 95.

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Unlike Athens, Rome did not have a proto-racial citizenship.69 This, as noted by Fitzgerald, was despite prejudices against foreigners and due to the diversity of people on which the empire was based, Rome was ‘unified by ­allegiance to Caesar rather than a democracy like Athens obsessed with self-rule by a single community’.70 Granting citizenship to outsiders was a way to assimilate diverse people and expand the empire. Citizenship was effectively used to recruit soldiers either from the Roman plebeians or from the conquered outsiders. As noted by Balot, Unlike the Greeks, who jealously guarded their citizenship even from other Greeks, the Romans recognised early on the incorporating outsiders through grants of citizenship provided manpower and proved to be diplomatically useful. (…) The Romans’ most important tool of hegemonic power was the incorporation of defeated enemies through the strategic use of privileges of citizenship. The United States has used capitalism and popular culture for these purposes; the Romans used citizenship and ‘Romanization’.71 In ancient Roman political theory the state was understood as a community of citizens whose identities were not necessarily linked to their place of residence.72 The need to include diverse people in the expanding Roman Empire led to the development of citizenship as a legal concept of the state, in which the citizen is considered its subject,73 and citizens and non-citizens were distinguished accordingly, during the process of granting of the so-called citizenship rights (civitas Romana).74 The Roman Republic also began to develop a relatively flexible naturalisation process, so that the new subjects could very quickly be integrated into the Roman Federation and remain colonially loyal, to the great benefit of the Republic. During the Imperial Era this cosmopolitan character of the Roman civil right was further extended, with Roman Emperors 69 70 71

Fitzgerald, ‘The History of Racialized Citizenship’ 133. Fitzgerald, ‘The History of Racialized Citizenship’ 133. Ryan K Balot, ‘Revisiting the Classical Ideal of Citizenship’ in Ayelet Shachar et al., The Oxford Handbook of Citizenship (oup, London/NY 2017) 24. 72 Jellinek, Allgemeine Staatslehre; Magnette, Citizenship: The History of an Idea. 73 Thomas L Dynneson, Civism: Cultivating Citizenship in European History (Peter Lang, NY 2001). See also Bloemraad et al. ‘Citizenship and Immigration’ 155. 74 Kaser Max, Das römische Privatrecht – Erster Abschnitt: Das altrömische, das vorklassische und klassische Recht (Beck, Munich 1971); Kaser Max and Knütel Rolf, Römisches Privatrecht (Beck, Munich 2008); Peter J Spiro, Beyond Citizenship: American Identity after Globalisation (oup, NY/Oxford 2008).

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granting citizenship ‘for great acts in the service to the community’,75 among other things. A famous account of the first can be found in the Bible where, during the arrest of Saint Paul the Apostle, the Roman commander referred to his acquisition of Roman citizenship for money: The commander came and said to him, ‘Tell me, are you a Roman?’ And he said, ‘Yes.’ The commander answered, ‘I acquired this citizenship with a large sum of money.’ And Paul said, ‘But I was actually born a citizen.’ Therefore those who were about to examine him immediately let go of him; and the commander also was afraid when he found out that he was a Roman.76 Finally, the Constitutio Antoniniana of 212 ad, a pioneering act of the modern citizenship concept and the culmination of the extension of the Roman civil rights,77 granted all free residents of the Roman Empire citizenship78 regardless of their origin or culture and without being bound by conditions or ­obligations to Rome.79 With this declaration, a preliminary cosmopolitan peak was reached in citizenship law, marking the invention of extensive territorial citizenship. 1.1.3 Citizenship from the Middle Ages to Modern History In view of its historical development from the Middle Ages to the eighteenth century, the ius soli was the dominant criterion for citizenship in Europe80 and in England:81 as one of the formative features of Feudal society and the absolutist sovereignty state of the Ancien Régime in Europe, people were relegated to the role of subjects and were subjected to their respective feudal lord, who owned the soil of the country in which they were born.82 This ownership on 75 Spiro, Beyond Citizenship 34. See also Klusmeyer, Between Consent and Descent 18. 76 The Holy Bible, Acts 22, 27–29, accessed 10 August 2018; see also Richard Bellamy, Citizenship: A Very Short Introduction (oup, Oxford/ NY 2008) 39. 77 Magnette, Citizenship: The History of an Idea. 78 Max, Das römische Privatrecht; Max and Rolf, Römisches Privatrecht. 79 Magnette, Citizenship: The History of an Idea. 80 On 23 February 1515, the ius soli was introduced by the parlement de Paris into the French law, cf. Weil, Qu’est-ce qu’un français?. 81 The precursor to ius sanguinis in Great Britain was the law of 1351 ‘De natis ultra mare’, which however only concerned the foreign-born children of kings and the nobility. cf. Ann Dummett and Andrew Nicol, Subjects, Citizens, Aliens and Others: Nationality and Immigration Law (George Weidenfeld & Nicholson, London 1990). 82 cf. Weil, Qu’est-ce qu’un français?.

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the Continent (for example France) and in England, was connected to the feudal idea of subjection, and generally excluded foreigners from the acquisition of property.83 Until the Naturalisation Act of 1870, foreigners in Great Britain, for example, could neither acquire nor inherit property.84 According to the earlier law, the assets of a foreigner were at the discretion of the Crown, which generally led affluent foreigners to naturalise. ­Indeed, ­medieval towns took on new arrivals as citizens, if this was of benefit to the city or if enough money flowed into its treasury. In England, for example, there were a large number of German and German-Russian merchants, who acquired citizenship for merely economic reasons, – and not to settle in England.85 Indeed, citizenship through investment was not an unknown phenomenon. Naturalisation was, in fact, an important instrument of the mercantilist policy of Great Britain. It was an important asset in its competition with other states, its progress towards dominance, its rise as a global trading power and the one that has transformed Great Britain from a backward country into an economically thriving one.86 The country’s ascent was organised and promoted in no small measure through its newly naturalised citizens – especially rich merchants from continental Europe, particularly from Italy and Germany – who became ‘British’ through acquiring citizenship through investment.87 This lent a homogeneous social profile to the naturalised people, the majority of whom were merchant traders – since the naturalisation costs were high, only a wealthy minority could afford them. The British state and the foreign merchants formed a community of interest, through mutual promotion of the individual as well as the common good. From the perspective of the British state, ‘immigration and naturalisation of foreign economic elites serves the immediate promotion of innovation, economic progress and expansion’.88 From 1695 until the passage of a new law in 1818, there was also a provision in the founding charter of the Bank of Scotland stating that each person who bought shares worth at least £83 would be granted Scottish citizenship. Since the Union with England in 1707, Scots were also simultaneously British 83 Brubaker, Citizenship and Nationhood in France and Germany; Ann and Andrew, Subjects, Citizens, Aliens and Others. 84 Margrit S Beerbühl, Deutsche Kaufleute in London. Welthandel und Einbürgerung (1600– 1818) (De Gruyter Oldenbourg, Munich 2007) 42. 85 Beerbühl, Deutsche Kaufleute in London 21 and 45. 86 Margrit S Beerbühl, ‘War England ein Sonderfall der Industrialisierung? Der ökonomische Einfluss der protestantischen Immigranten auf die Entwicklung der englischen Wirtschaft vor der Industrialisierung’ (1995) 21 Geschichte und Gesellschaft 479. 87 Beerbühl, Deutsche Kaufleute in London 2. 88 Beerbühl, Deutsche Kaufleute in London (translated from German by the author) 2.

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­ ationals and therefore this citizenship by investment provision led directly to n obtaining citizenship of the United Kingdom. Naturalisation through acquisition of shares in the Bank of Scotland was not only cheaper and economically more advantageous, but was also not subject to the political and economic restrictions of naturalisation,89 such as the usual restrictions of private naturalisation acts like residential or religious requirements, and while it conveyed full political rights, it did not require any oath of allegiance. The charter of the Bank of Scotland was confirmed several times by the British Parliament.90 During the Middle Ages the predominant perspective lacked the idea of ­national unity and by extension the strict differentiation between private and public law. The customary law of the place of residence (domicile) was to be the decisive factor on which rights would be applied. Kingdoms were ‘based on personal loyalties and not on loyalty to abstract concepts such as the “nation” or to ideologies or impersonal institutions’,91 such as the (modern) state. ­Medieval society in general was basically ‘made up of civically inactive persons, of nonparticipants’.92 Citizen status in the medieval free cities, however, was somewhat different and underwent an extension, at least in contrast to the ancient polis, insofar as that even craftsmen and later also tenant farmers were included.93 There continued to be no relationship between the city and the citizen beyond a medieval city’s borders. With the Latin translation of Aristotle and the renewed interest in Roman authors in the late Middle Ages and the Renaissance in Italy, the classical ideals of participatory citizenship were revived, for example through Niccolò ­Machiavelli (1469–1527).94 It is then that Jean Bodin introduced the concept 89 90

See Beerbühl, Deutsche Kaufleute in London 50. Margrit S Beerbühl, ‘British Nationality Policy as a Counter-Revolutionary Strategy During the Napoleonic Wars: The Emergence of Modern Naturalization Regulations’ in Andreas Fahrmeir et al. (eds), Migration Control in the North Atlantic World: The Evolution of State Practices in Europe and the United States from the French Revolution to the Inter-War Period (Berghahn Books, NY/Oxford 2003). 91 David Jacobson, Rights across Borders: Immigration and the Decline of Citizenship (Johns Hopkins UP, Baltimore 1996) 18. 92 Jacobson, Rights across Borders 18. 93 Stiller, ‘Statelessness in International Law’. 94 The citizenship practice theory was largely influenced by a civic republicanism tradition which has its roots in Greek democracies described by Aristotle and Thucydides. According to these philosophers the participations of citizens in politics was essential compmonet of creating a community neccessary for political life. Citizenship therefore was not to be seen simply as a legal status but consisted of a number of practices between states and citizens. The duty of political participation was then promoted by Cicero, and later, by Machiavelli. See the historical background in Christopher Berry Gray, The Philosophy of

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of state sovereignty,95 forming the basis of the modern state system. The time of absolutism – a synonym for the epoch spanning the French invasion of Italy in 1494, the religious wars of the sixteenth century and the revolutions of the late eighteenth century, characterised by autocratic centralist leadership and extensive claims to sovereignty96 in the style of kings such as Louis xiv (‘L´êtat c´est moi’) – turned, in contrast, again to completely dispose of individual agency and authority.97 Roughly three centuries of absolutism also witnessed the consolidation of several large states, including France, the United Kingdom, Spain and Russia. Religious and cultural affiliations provided the basis for proto-nationalism, instilling an identification with French, English and other nationalities.98 The concept of state sovereignty was reiterated with the Peace of Westphalia of 1648 which has been seen as a watershed in interstate relations if not ‘marking the end of an epoch and the opening of another’.99 As noted by Gross, [t]he idea of an authority or organization above the sovereign states is no longer. What takes its place is the notion that all states form a world-wide political or that, at any rate, the states of Western Europe form a single political system. This new system rests on international law and the balance of power operating between rather than above states100 Together with the impacts of the Westphalian order, the principle of sovereignty laid the basis of the principle of non-intervention and equality of states. As put by Phillips, Westphalia marked ‘passing out of a world in which “All things that are, are set in order by God”, and into a world in which “Anarchy” is what [sovereigns] make of it’.101 The Enlightenment saw the propagation of the model of the night-­watchman state, in which the latter was restricted to maintenance of law and order, ­securing of property rights and national defence. Due to this m ­ inimalistic Law: An Encyclopedia (Routledge, NY/Oxford 2013) 118 et seq; See also Klusmeyer, Between Consent and Descent 21˗27. 95 Donner, The Regulation of Nationality in International Law 2. 96 Jellinek, Allgemeine Staatslehre. 97 Wesel Uwe, Geschichte des Rechts – Von den Anfängen bis zur Gegenwart (3rd edn, CH Beck, Munich 2006). 98 David, Rights across Borders 20. 99 Gross, ‘The Peace of Westphalia’ 28. 100 Gross, ‘The Peace of Westphalia’ (footnotes omitted). 101 Andrew Phillips, War, Religion and Empire: The Transformation of International Orders (cup, Cambridge 2011) 145 (footnotes omitted).

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­ odel, no general theory of citizenship developed.102 There were two apm proaches to affiliation to a political system: the ‘contractual’ one put ­forward by John Locke (1632–1704),103 which emanates from the idea of the ‘social contract’ under which the state is based on a contract among the citizens, and an instrumental approach emanating from the self-interest theory proposed by Adam Smith (1723–1790).104 Individuals are motivated by self-interest to be part of a state, since they see the benefits of being subjected to a common sovereign authority,105 or in line with John Rawls’ theory – the nation-state as founded upon the idea of a social contract is based on the self-interest of its participants.106 Jean-Jacques Rousseau (1712–1778) therewith defined participatory citizenship anew, as a joint exercise of sovereignty. Whereas Locke and Smith propagated limited models of state machinery, Rousseau believed that Republican governance in the interest of the common good could demand a great deal from the citizens. In the years preceding the French Revolution, the idea of citizenship was increasingly discussed, and Rousseau’s ideal of a democratically governed community of active citizens, forming a state with a common will and equally united before the law, offered the revolutionaries a rich source of inspiration.107 Emanating from the American Revolutionary war108 and following the Declaration of Independence in 1776, US citizenship – grounded in the natural rights of mankind and guarded by a written constitution – marked a ‘new beginning in the world’s long experience with civic membership’.109 Citizenship was firstly codified as ‘subject property’ by the Josephinian Code of 1786 in Austria, in which a distinction was made between ‘foreigners’ and ‘subjects’, whereas the latter was defined as all people who live united in the hereditary lands under the authority of the provincial nobility. The French Revolution starting in 1789 then laid the actual foundation for the concept of citizenship in a modern sense, even though more extensive efforts towards the legal 102 Klusmeyer, Between Consent and Descent 29˗37. 103 John Locke, Two Treatises of Government (Book Jungle, Open Library 2009). 104 Adam Smith, The Theory of Moral Sentiments (Dover Publications, Mineola, NY 2012). 105 Klusmeyer, Between Consent and Descent 30. 106 John Rawls, The Law of Peoples: With ‘The Idea of Public Reason Revisited’ (Harvard UP, Cambridge, MA 1999); John Rawls, Justice as Fairness: A Restatement (Harvard UP, Cambridge, MA 2001). 107 Klusmeyer, Between Consent and Descent. 108 Perhaps even as early as the Dutch Revolt (1568–1648) and the establishment of the Dutch Republic in the seventeenth century, the idea evolved that sovereignty resides with the people rather than with the monarch. See Jacobson, Rights across Borders. 109 Charles R Kesler, ‘The Promise of American Citizenship’ in Pickus (ed), Immigration and Citizenship 3.

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c­ odification of citizenship law were made after the French Revolution, which ultimately resulted in the publication of the Code Civil (CC)110 in 1804.111 Nonetheless, the French Constitution of 1791 had already regulated who was French within this new nation-state:112 ‘Those born in France of a French father; Those who, born in France of a foreign father, have established their residence in the kingdom; those who, born in a foreign country of a French father, have established themselves in France and have taken the civic oath’.113 Article 4 of the French Constitution of 1793 gave the status of a citizen to every adult, including foreign persons, who had lived for one year in France from his labour, or has acquired property, married a French woman, adopted a child, or supported an aged man.114 Lastly, foreigners who were ‘well deserving of the human race’ as declared by the legislative body were admitted to citizenship.115 The abdication of the Ancien Régime was accompanied by a socio-political paradigm shift, which led to fundamental changes, in particular to local citizenship law, the basis of which had been until then close ties with the union of Kingdom, Crown and State, and which was primarily based on birth in the national territory.116 With the Code Civil of 1804 – and against the will of Napoleon – France opened the era of modern citizenship law.117 From then on citizenship law was clearly regulated and was based on the person: a person was a citizen because she descended from a citizen, a status which was conferred in a similar manner to the family name and which could not be lost if the person moved abroad118 – as in the case of the Huguenot emigrants in 110 Code Civil Francais as amended, ‘Code civil – Version consolidée au 1 novembre 2017 (CC)’ (LegiFrance, 1 November 2017) accessed 10 August 2018. 111 Articles 17˗21. Walter Schätzel, ‘De-facto Staatsangehörigkeit und De-facto-Staatenlosigkeit’ in Karl Zemanek et al., Völkerrecht und rechtliches Weltbild: Festschrift for Alfred Verdross (Springer, Vienna 1960); Weil, Qu’est-ce qu’un français?; Fahrmeir et al., Migration Control in the North Atlantic World. 112 cf. Weil, Qu’est-ce qu’un français?. 113 Title ii, Section 2 of the French Revolutionary Constitution of 3 September 1791. 114 Article 4 of the French Republic Constitution of 24 June 1793 (French Constitution 1793). 115 French Constitution 1793. 116 Patrick Weil, ‘The History of French Nationality: A Lesson for Europe’ in Randall Hansen and Patrick Weil (eds), Towards a European Nationality: Citizenship, Immigration and ­Nationality Law in the EU (Palgrave Macmillan, NY 2001); Weil, Qu’est-ce qu’un français?. 117 Weil, Qu’est-ce qu’un français?. 118 Weil, Qu’est-ce qu’un français?. For the development of the French Citizenship Act since the abdication of the Ancien Régime on 14 July 1789, see Gérard Noiriel, Le Creuset français: Histoire de l’immigration, XIXe–XXe siècles (Seuil, Paris 1988); see also Brubaker, Citizenship and Nationhood in France and Germany; Hans Schattle, The Practices of Global Citizenship (Rowman & Littlefield, Lanham, MD 2008); Patrick Weil, Qu’est-ce qu’un français?; for

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the seventeenth century, for instance, who lost their citizenship when they left France ‘sans esprit de retour’.119 Guided by the ideas of some of the pioneers of the European Enlightenment, such as Jean Jacques Rousseau120 and Francois Marie Arouet (Voltaire),121 the transition from ius soli to ius sanguinis was enshrined in the CC: descent from individual members of the same national community came to be regarded as a higher priority. French was henceforth he whose parents were also French.122 The ground-breaking developments in France in the eighteenth century extended beyond the country’s state borders and diffused to almost all states with the mindset of the Revolution made ‘le tour du monde’.123 The Kingdom of Prussia was also affected by this development. The Prussian law of 31 ­December 1842 was a first step towards a common understanding of citizenship, determined by to whom obedience was owed and therefore a continuation of the idea of ‘subject’. This law is considered the first modern law regulating citizenship, applying an idea of codification which not only regulated citizenship but also its associated laws which was ultimately propagated worldwide.124 Despite the specific differences in the legislation adopted in individual states, the national laws in these early days primarily introduced the ius sanguinis, in contrast to the prevailing ius soli principle of the Ancien Régime. Other ethnic populations in Germany no longer received citizenship automatically at birth.125 The French Revolution resulted in a closer tie between citizenship and the territorial unity of the states, creating a clear demarcation between citizen and non-citizens. This demarcation from the outside world created by modern relevant discussion on the principle of collective and individual self-determination as an expression of the natural law of the sovereignty of the people see Heinhard Steiger, ‘Das natürliche Recht der Souveränität der Völker: Die debatten der Französischen Revolution 1789–1793’ in Jörg Fisch (ed), Die Verteilung der Welt: Selbstbestimmung und das Selbstbestimmungsrecht der Völker (R Oldenbourg, Munich 2011). 119 Heinrich Triepel, ‘Internationale Regelung der Staatsangehörigkeit’ (1929) ZaöRV 185. 120 On Rousseau’s advocacy of a distinctive civic identity, see Jean-Jacques Rousseau, The Government of Poland (Hackett, Indianapolis, IN 1985). 121 For meticulous analysis on Voltaire’s views, see Constance Rowe, Voltaire and the State (Colombia UP, NY 1995). 122 E.g. Patrick Weil, ‘From Conditional to Secured and Sovereign’. 123 JG Lipovano L’Apatridie (Les Éditions Internationales, Paris 1935); cf. also Weil, Qu’estce qu’un français?; Stiller, ‘Statelessness in International Law’; Brubaker, Citizenship and ­Nationhood in France and Germany. 124 Aleksandr N Makarov, Allgemeine Lehren des Staatsangehörigkeitsrechts (Kohlhammer, Stuttgart 1962); Stiller, ‘Statelessness in International Law’. 125 Topal, Staatsangehörigkeitsverlust und Mehrstaatigkeit.

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citizenship resulted in the promotion of domestic homogenisation,126 modern nationalism and the nation-state,127 which continue to affect the theory and practice of citizenship today.128 The nineteenth century was above all the century of nationalism. During this time, an increasingly ethnicised understanding of the nation had been developing. National symbols, traditions and theories of origin were adapted from the respective dominant cultures or simply invented.129 Mill was of the view that the concept of nationality creates an affiliation which deviates from previous membership concepts.130 Membership limitations could be clearly defined with the concept of nationality. In doing so, Mill effectively merged demos and ethnos,131 two different terms for people: sovereignty lies in demos, whose members are constituted from the common political association, while ethnos refers to the members who are defined through a common culture, history and a shared sense of identity. Klusmeyer thought that through the unification of these two concepts of the nation, the basis for an exclusive understanding of the membership in the national community was created and meant that individuals with varying ethnos could not enjoy a full and equal membership of a nation.132 However, as argued by Habermas, the democratic nation-state forged the close link between ethnos and demos only for a short period and the concept of citizenship was not conceptually tied to national identity.133

126 Mackert, Staatsangehörigkeitsrechtliche Fragen der Terrorismusbekämpfung; John Stuart Mill and Williams Geriant, Utilitarianism, On Liberty, Considerations on Representative Government (Dent, London 1993). 127 cf. Gosewinkel, ‘Die Staatsangehörigkeit als Institution des Nationalstaates’; Mackert, Staatsangehörigkeitsrechtliche Fragen der Terrorismusbekämpfung; Stiller, ‘Statelessness in International Law’. 128 Brubaker, Ethnicity without Groups. 129 Eric Hobsbawm and Terence Ranger, The Invention of Tradition (cup, Cambridge 1983). 130 John Stuart Mill, Considerations on Representative Government (Harper and Brothers, NY 1862). 131 M Rainer Lepsius, ‘“Ethnos” oder “Demos”: Zur Anwendung zweier Kategorien von ­Emerich Francis auf das nationale Selbstverständnis der Bundesrepublik und auf die Europäische Einigung’ (1986) 38 Kölner Zeitschrift für Soziologie und Sozialpsychologie 751; Klusmeyer, Between Consent and Descent; and Jürgen Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy (John Wiley & Sons, New Jersey 2015). 132 Klusmeyer, Between Consent and Descent. 133 Habermas, ‘Citizenship and National Identity: Some Reflections on the Future of Europe’ in Dahbour and Ishay (eds), The Nationalism Reader 155, 158.

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1.1.4 Citizenship in the XXth and XXIst Centuries The further development of nationalism had eventually led to the First World War, by the time of which states became much more centralised, also as a ­result of industrial growth. ‘Wars make states’ is a famous phrase to describe the emergence of European nation-states.134 Before the First World War, ‘a sensible, lawabiding Englishman could pass through life and hardly notice the existence of the state, beyond the post office and the policeman’.135 With the First World War states had to expand their role to ensure a regular supply of soldiers fit enough to fight.136 Nationalism became increasingly expressive in international conflict, and ‘as laws on citizenship were tabled and strict i­ mmigration control followed, the nation-state reached full fruition’.137 New passport requirements were strictly enforced (and not even waived for personages as prominent as Vanderbilt), and even President Wilson needed a passport to travel to Versailles at the end of the First World War – apparently the first US president to be issued a passport.138 The Second World War and totalitarian forms of government that followed – especially Stalinist-Leninist Russia and the Soviet Union and National Socialist Germany – which brought ad absurdum the concepts and norms developed until that point in parts of Europe and elsewhere in the world, from a societal, political and legal perspective (and of interest here, also and not least relating to citizenship).139 Citizenship law and immigration law became instruments of power of totalitarian states, whereby the sovereignty of these states was eventually also expressed and strongly asserted. Many immigrants from Germany and the Soviet Union, Greeks and Armenians during the formation of the Turkish Republic, or many ethnic Chinese in Malaysia during that state’s independence from Great Britain found themselves stateless, and to use Walzer’s words in ‘a condition of infinite danger’.140 The post-WW2 period, ‘marks the beginning of the contemporary era of human rights, which establishes the individual and his or her integrity as the 134 Charles Tilly, The Formation of National States in Western Europe (Princeton UP, Princeton 1975). 135 Charles Tilly and Gabriel Ardant, English History 1914–1945 (oup, Oxford 1965) 1. 136 Brian M Downing, The Military Revolution and Political Change: Origins of Democracy and Autocracy in Early Modern Europe (Princeton UP, Princeton 1993). 137 Jacobson, Rights across Borders 21. 138 cf. Craig Robertson, The Passport in America: The History of a Document (oup, NY/Oxford 2010); with further references. 139 cf. Yfaat Weiss, Deutsche und polnische Juden vor dem Holocaust. Jüdische Identität zwischen Staatsangehörigkeit und Ethnizität 1933–1940 (De Gruyter Oldenbourg, Munich 2000); and Gosewinkel, Einbürgern und Ausschließen. 140 Walzer, Spheres of Justice 32.

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benchmark and ulterior constraint of state policy [and as] a result, citizenship became infused with human rights logic’.141 Also, the idea of EU ­citizenship,  or citizenship beyond the state, has its roots in the aftermath of the WW2, when Churchill spoke of ‘common citizenship’142 and of ‘sharing (European) common inheritance’.143 The EU citizenship, which was introduced by the 1992 Maastricht Treaty, has marked ‘postnational membership’144 by extending rights of citizens beyond borders of nation-states. Other regional organizations such as the caricom, cis, gcc, oecs and the regional cooperation in South America have followed suit albeit to a lesser extent. Such cooperation in citizenship matters has somewhat altered the concept of the sovereignty of states. Nation-states have lost at least some of their political autonomy as a ­result of globalisation, and supranational entities have become increasingly important. Economic globalisation,145 the resulting higher international migration flows146 and the multi-layered, cross-border affiliation of an ever-­growing cosmopolitan elite147 – as well as the digitalisation which has caused the world to be perceived as a ‘global village’ due to the increased data transmission sped and other technological advancements – have all led to an ­increasing incongruence between the benefactor of state authority148 – i.e. in democratic states, the possessors of active voting rights (or subset of the ones who are actually actively interested in the political rights and exercise these rights) – and

141 Joppke, Citizenship and Immigration 26–27. 142 Winston Churchill, speech delivered at the University of Zurich, 19 September 1946 accessed 10 August 2018 (Churchill’s speech). 143 Churchill’s speech. 144 Yasemin Soysal, Limits of Citizenship 148. 145 Concerning the concept of globalisation in this context, see Werner G Faix et al., Praxishandbuch Aussenwirtschaft (Gabler, Wiesbaden 2006) 47˗48; John Micklethwait and Adrian Wooldridge, A Future Perfect: The essentials of Globalisation (Crown Business, NY 2000). 146 In detail, oecd, International Migration Outlook 2013 (oecd, Paris 2013) accessed 10 August 2018; and Seyla Benhabib, The Rights of Others: Aliens, Residents, and Citizens (cup, NY 2004) 10 et seq. 147 Cohen and Vertovec, ‘Introduction’ 6. 148 Unlike in the Unites States, the Swiss Confederation or France, the authority of the state in the constitutional monarchy of Great Britain is not based on the people, but on the British Lower House, the House of Commons (the principle of absolute parliamentary government), see Peter Leyland, The Constitution of the United Kingdom: A Contextual Analysis (2nd edn, Hart, Oxford 2012). Moreover, a considerable number of current States are not democratically legitimate, see Bellamy, Citizenship 3˗4.

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the governed – i.e. all the people who reside, work and go about their business under the national territorial sovereignty.149 Traditional notions of citizenship within national borders are increasingly being brought into question given the ever-growing number and the different places of origin of international migrants.150 Owing to the cultural, social and ethnic plurality of society, the concept of the constituent people can no longer be equated to a political community. In other words, some of the premises on which the definition of citizenship is founded are outdated and should be revised with respect to affiliation.151 In view of the forgoing considerations treated as asocial phenomena and the fact that through the opening of the international markets various economic regions have become much more connected with each other, the question arises as to whether or not nation-states will survive under the conditions of economic globalisation and transnationality.152 Other inevitable question in this context is whether affiliations with states should be linked exclusively to individual states and if such concepts should also be promoted across state borders.153 The issue of social cohesion and integration, for instance, has been slowly moving from the national to the supranational level. According to Bauböck, for instance, with the ever-growing mobility and the increasing ‘permeability’ of the state borders, in particular in Europe, citizenship should be claimed wherever one is located.154

149 For greater detail for Europe, see Soysal, Limits of Citizenship; as well as generally, Benhabib, The Rights of Others. 150 In countries such as Australia (24%), Switzerland (24%) and Canada (18%), every fourth or fifth resident was born overseas, see, Bloemraad et al., ‘Citizenship and Immigration’; see also, Peter J Spiro, Beyond Citizenship; Soysal, Limits of Citizenship; and oecd, International Migration Outlook 2013. 151 See Rita Hering, Ausarbeitung Des Referates Zu Seyla Benhabibs ‘Zu Begriff Und Institution Der Staatsbürgerschaft’ (grin Verlag GmbH, Munich 2011) 89. 152 See Josef Isensee, ‘Rückmeldung eines Totgesagten: der Staat’ in Eckhard Jesse (ed), ­Renaissance Des Staates? (Nomos, Baden-Baden 2011) 53–73; Bloemraad et al., ‘Citizenship and Immigration’; Soysal, Limits of Citizenship; Aihwa Ong, Flexible Citizenship: The Cultural Logics of Transnationality (Duke UP, London 1999); See also Benhabib, The Rights of Others; Leslie Sklair, The Transnational Capitalist Class (Blackwell, Malden, Mass. 2001); Saskia Sassen, Globalization and its Discontents (New Press, NY 1999); and with reference to transnational citizenship, see Rainer Bauböck, Transnational Citizenship (Edward Elgar, Aldershot 1994). 153 Bloemraad et al., ‘Citizenship and Immigration’. 154 Bauböck, Transnational Citizenship.

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The numerous societal problems such as global warming,155 nuclear waste and disaster management, intellectual property or personal data protection156 and many other areas which can no longer be managed at the national level, prompted the former UN Secretary General Boutros-Ghali to claim, already in 1992, that ‘the time of absolute and exclusive sovereignty (…) has passed,’157 while Zakaria proclaimed the end of the Westphalian sovereignty back in 2000.158 That said, cosmopolitanism is in reality a privilege of those who can rely on a secure nation-state. As Ignatieff has rightly determined, cosmopolitans ‘are not beyond the nation’,159 and a cosmopolitan spirit depends on the capacity of individual nation-states to provide security and civility for their citizens.160 National borders are protected by national border guards and those guards have guns.161 Indeed, despite globalisation and transnationalism, the fact is that the nation-states preserve a monopoly on the legitimate use of force and remain the most important actors on the world stage, and that ‘the issues that concern them most will be the same as they have always been: protecting their interests and preserving a balance of power’.162 This applies particularly 155 At the United Nation Climate Change Conference in Durban, South Africa, in December 2011, the extension of the Kyoto Protocol and further measures for the containment of the impact of CO 2 were named as the main concerns, see Filiz Katman, ‘Introduction’ in Filiz Katman (ed), Global Climate Change, Environment and Energy: Global Challenges and ­Opportunities to Global Stability (Cambridge Scholars, Newcastle upon Tyne 2014) xv. Regarding climate change as the driving force of transnational migratory movements cf. Jane Mcadam, Climate Change Displacement and International Law (unhcr, Geneva 2011). 156 Just think of the cloud computing, through which the personal data of users can be propagated throughout the world through the ‘server farms’, and through which the control over personal data, i.e. the so-called information dominion, is at risk of slipping away. 157 Report of the Secretary-General; see also Kay Hailbronner and Marcel Kau, ‘Der Staat und der Einzelne als Völkerrechtssubjekte’ in Wolfgang G Vitzthum (ed), Völkerrecht (5th edn, De Gruyter Recht, Berlin 2010) 179; concerning the question of whether, and to what ­extent, the nation-state is still viable as a form of collective organisation under conditions of globalisation, see Jan D Kuhnen, Die Zukunft der Nationen in Europa: Ist das Zeitalter der Nationen und Nationalstaaten in Europa vorüber? (Duncker & Humblot, Berlin 2009). 158 Rainer Bauböck, ‘Political Community Beyond the Sovereign State, Supranational Federalism, and Transnational Minorities’ in Cohen and Vertovec (eds), Conceiving Cosmopolitanism; see also Fareed Zakaria, ‘The Empire Strikes Out: the Unholy Emergence of the Nation-State’ (NY Times Magazine, 18 April 1999) accessed 10 August 2018; and Benhabib, The Rights of Others. 159 Michael Ignatieff, Blood and Belonging: Journeys into the New Nationalism (New Vintage, London 1994) 9. 160 Ignatieff, Blood and Belonging 9. 161 Carens, ‘Aliens and Citizens’. 162 Micklethwait and Wooldridge, A Future Perfect 161.

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to citizenship. Arendt aptly put it: ‘[a] citizen is by definition a citizen among citizens of a country among countries’163 and ‘[n]obody can be a citizen of the world while he is the citizen of a country’.164 1.2

Ius Doni and Citizenship Realities

Different forms of regional cooperation among states aside, the power of a state to regulate its citizenship legislation and population movement is, as an expression of its territorial sovereignty, autonomous within certain broad ­international limits. It is fundamental to the existence of a modern nationstate system as well as national sovereignty.165 In principle, citizenship’s ­national character and location are treated as axiomatic.166 Territorial sovereignty describes the status of a national community, which is not a subject to direction from other authorities except for those international legal obligations voluntarily ratified, and includes – as an integral part of its territorial sovereignty – sense of authority, which is an effective and legal exercise of the state power.167 While the latter can be described as the prerogative to exercise sovereign power in a given spatial region, territorial sovereignty of a state denotes assignment of a given area to a state and its power to possess it, determining its territory and borders.168 Citizenship is still traditionally granted around the world in line with ius soli and ius sanguinis. It is to be recalled that with regard to the territoriality

163 Hannah Arendt, Men in Dark Times (Harcourt Brace Jovanovich, NY 1968) 81. 164 Arendt, Men in Dark Times 81. The question of whether national sovereignty and thus national citizenship have survived cannot be discussed reasonably, since it is not apparent what they could be replaced by. For an interesting and recent perspective on this debate: see, for instance, Dina J Kiwan, Naturalization Policies, Education and Citizenship (Palgrave Macmillan, Basingstoke 2013). 165 Soysal, Limits of Citizenship 120. See also Aristide R Zolberg, ‘International Migrations in Political Perspective’ in Mary M Kritz, Charles B Keely and Silvano M Tomasi (eds), Global Trends in Migration: Theory and Research on International Population Movements (Center for Migration Studies, NY 1981); Donner, The Regulation of Nationality in International Law; and in terms of the European Convention on Citizenship as a barrier to the provisions of national citizenship law, see Knocke, Das Europäische Übereinkommen über die Staatsangehörigkeit als Schranke für die Regelung des nationalen Staatsangehörigkeitsrechts. 166 Bosniak, The Citizen and the Alien. 167 See Wolfgang G Vitzthum et al., Handbuch des Seerechts (CH Beck, Munich 2006) 540. 168 See Wilfried Erbguth and Stefan Mahlburg, ‘Steuerung von Offshore: Windenergieanlagen in der Ausschließlichen Wirtschaftszone – Raumordnerische Handlungsmöglichkeiten des Bundes und der Länder’ (2003) döv 665; and Jellinek, Allgemeine Staatslehre.

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principle, or ius soli,169 which is the fundamental principle in the United States, Canada and most Latin American countries, a natural person acquires his or her citizenship by birth in the corresponding territory. The overriding concern of ius soli is to promote a high degree of congruence within a nation, that is between the people who are actively and passively fully eligible to vote and domestic population as the totality of individuals with domestic residence or permanent place of habitual abode, and beyond that – to support integration in the sense of internal social cohesion in order to mobilise the forces of civil society to allow the state to focus on its core tasks. The principle of descent, or ius sanguinis,170 directs that citizenship is transferred through direct blood relationship, i.e. through the natural parents of a child, understood as a product of a long-term cohabitation between a man and a woman in the context of marriage or other consensual union. The principle of descent, given its meaning of subsidiarity, aims primarily to achieve the cohesion of decentralised small social units, in particular the families within a state polity. It was e­ nforced in all European countries after the successful culmination of the French Revolution in 1789 and in the subsequent years.171 Today, there is a wide convergence in both directions: most countries use a mix between ius soli and ius sanguinis.172 Neither of the two rules has established 169 For ius soli, see Matthias Herdegen, Völkerrecht (9th edn, CH Beck, Munich 2010); Weil, ‘From Conditional to Secured and Sovereign’; Thomas Janoski and Brian Gran, ‘Political Citizenship: Foundations of Rights’ in Engin F Isin and Bryan S Turner (eds), Handbook of Citizenship Studies (sage, London 2002); Costanza Margiotta and Olivier Vonk, ‘Nationality Law And European Citizenship: The Role Of Dual Nationality’ in Leila Simona Talani (ed), Globalisation, Migration, and the Future of Europe: Insiders and Outsiders (Routledge, NY/Oxford 2012); with respect to the United States, see Spiro, Beyond Citizenship. 170 For ius sanguinis, see Herdegen, Völkerrecht; see also Weil, ‘From Conditional to Secured and Sovereign’; Rogers M Smith, ‘Modern Citizenship’ in Isin and Turner (eds), Handbook of Citizenship Studies; Robert Zarnetske, ‘Counting Dual U.S.˗E.U. Citizens’ in Talani, Globalisation, Migration, and the Future of Europe. 171 Patrick Weil, How to Be French: Nationality in the Making since 1789 (Duke UP, Durham/ London 2008) 182. 172 For greater detail, Patrick Weil, ‘Access to Citizenship: A Comparison of Twenty-Five ­Nationality Laws’ in Alexander Aleinikoff and Douglas B Klusmeyer (eds), Citizenship Today: Global perspectives and practices (Brookings Institution Press, Washington D.C. 2010). Only Austria and Switzerland are considered pure ius sanguinis countries among European States, after Germany, with its reform of its citizenship law as of 1 January 2000, introduced ius soli as a separate and independent additional acquisition principle and made further amendments with the Second Act Amending the Nationality Act, which entered into force on 20 December 2014, to significantly increase the number of those allowed to keep their second citizenship. For greater detail, see von Münch, Die Deutsche Staatsangehörigkeit 151–158; and Johannes Masing, Wandel Im Staatsangehörigkeitsrecht Vor Den Herausforderungen Moderner Migration (Mohr Siebeck, Tübingen 2001) 5˗8.

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itself as a primary one; instead, there persists an unharmonised coexistence of different principles bridged only partly by a number of international conventions.173 The objective of the principle of descent is primarily to guarantee the preservation of domestic and, in particular, cross-border family ties and to promote identification with the established traditions and conventions of a state community set against other forms of assimilation. Given its historical development, the principle of descent, however, is also directed at strengthening the family in the sense of creating the necessary permanent coexistence, or connectedness, required as an essential component of the private authority of a social polity against state authorities. From this ­perspective, ius sanguinis reinforces defensive effect of the universally ­acknowledged and nationally concretised human dignity, the essential purpose of which is to ensure that an individual, as a free person, is not degraded to a mere object of the state force – at least within state borders. However, considering the increasing fragmentation of social structures in many European and non-European states, which results partly from the increasing transnational mobility of workers and progressive relativisation of the value of the family in the classical sense, the basis for validity of the descent principle is also weakened. For those who were denied access to citizenship by birth or adoption, only the route through naturalisation is open. As already discussed earlier, ­non-citizens were, since antiquity, naturalised either by decisions of a­ uthorities or relevant councils of the city states, principalities etc., or, as practised in the Roman Empire, entire peoples were awarded citizenship after a victorious conquest. However, it is naturalisation by lettres de naturalité introduced by the French king François i, where non-French persons were systematically declared French by decree that can be regarded as the beginning of ‘modern’ naturalisation practice.174 Citizenship acquired by naturalisation forms a complement to the acquisition of citizenship by virtue of ius soli or ius sanguinis and is not linked to birth but requires a foreign citizen to actively apply.175 It can also be, unilaterally, a direct result of legal actions, such as marriage, legal stay in the country for a certain period of time, special achievements, or in some cases simply the acquisition of immovable property, to mention only a few grounds for naturalisation.176 173 von Münch, Die Deutsche Staatsangehörigkeit 154; Weil, ‘From Conditional to Secured and Sovereign’. 174 See Weil, How to Be French 12. 175 von Münch, Die Deutsche Staatsangehörigkeit. 176 See, for instance, Donner, The Regulation of Nationality in International Law.

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1.2.1 Citizenship Requirements Citizenship requirements differ between various naturalisation forms. Residence of the applicant in the country of application is the first requirement practiced usually by most states in the cases of naturalisation. The minimum length of stay required for the purposes of ordinary naturalisation varies greatly across states (e.g. two years in Singapore,177 all the way up to ten years in Switzerland,178 20 years in Brunei,179 and 30 years in Liechtenstein180 and the uae181). If the naturalisation law of a state requires a closer actual relationship, in the sense of a certain attachment of a natural person to domestic legal order, which in general, in addition to a spatial-physical element (such as taking up residence or permanently lawfully staying within the territory of a state) ­requires also a certain connection to the national polity manifested inwardly and outwardly, its content should be determined not only by the central functions of citizenship law but also by considering the general socio-demographic and socio-structural situation of the nation.182 Thus, other common requirement in naturalisation processes across states is knowledge of the language spoken in the host country.183 Considering the relationship between state’s population and state power a common language 177 See ‘Becoming a Singapore Citizen’ (2017) accessed 10 August 2018. 178 See ‘Swiss Citizenship: Getting a Swiss passport or Swiss permanent residency’ (Expatica, 2017)  accessed 10 August 2018. 179 Laws of Brunei, Chapter 15 Brunei Nationality 10 accessed 10 August 2018. 180 See ‘Dual Citizenship: Lichtenstein’ (2016) accessed 10 August 2018. 181 Benoît Bréville, ‘L’acquisition de la nationalité à travers le monde: Pourquoi vous ne deviendrez jamais chinois’ (Le Monde Diplomatique, January 2014) accessed 10 August 2018. 182 The German Federal Constitutional Court (Bundesverfassungsgericht) held in 1952 that citizenship is to be conferred by a state only to persons having actual connection to it, see Decisions of the Bundesverfassungsgericht – Federal Constitutional Court – Federal Republic of Germany, Vol. 1: International law and law of the European Communities, 1952–1989 (Nomos, Baden-Baden 1992) 322, 329; other German federal courts have considered arbitrary granting of citizenship without regard to generally accepted connecting factors in public international law – see Kay Hailbronner, ‘Nationality in Public International Law and ­European Law’ in Bauböck et al., Acquisition and Loss of Nationality 59; See also Volker Epping and Christian Gloria, ‘Das Staatsgebiet’ in Knut Ipsen (ed), Völkerrecht (6th edn, CH Beck, Munich 2004). 183 See Ingrid Piller, ‘Naturalization Language Testing and its Basis in Ideologies of National Identity and Citizenship’ (2001) 5(3) ijb 259, 260.

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can significantly contribute in ensuring that laws and related administrative decisions – which are themselves an expression of shared values and common culture – are understood and respected both in terms of language and content. Both current and potential conflicts, which naturally arise from people’s coexistence in the same place and whose settlement appears necessary to achieve internal peace within the social unit, should be settled in as decentralised a manner as possible at the respectively lowest level of society, since a decentralised resolution of a conflict is usually not only more effective but also considers the responsibility of the individual, which accords with the guarantee of human dignity. For a conflict resolution understood in this way to be practically possible a common national language or languages are usually required. Indeed, in states such as France or Germany, which are not characterised by language pluralism and recognise a universal official language, requirement of the command of the common national language appears to be a decisive criterion in the concretisation of citizenship. In countries that lack language pluralism domination of a national language is regarded not only as a fundamental prerequisite for achieving intra-community order but can also be identified as an essential requirement of intra-community peace. Citizenship tests are amongst other common requirements. Indeed, while the traditional immigration countries – the usa, Canada, Australia and New Zealand – have all had naturalisation tests in one form or another for some time, citizenship tests in Europe are a rather recent phenomenon.184 An important exception is Switzerland, which has long been familiar with such tests and where persons seeking naturalisation, depending on the canton and municipality, have had to endure some very far-reaching and detailed naturalisation tests.185 Nevertheless, other states including Germany, France, the Netherlands and Denmark, now have introduced such naturalisation tests.186 Residence, language and tests requirements are usually waived in cases of facilitated naturalisation. Facilitated naturalisation allows for obtaining 184 James Hampshire, ‘Becoming Citizens: Naturalization in the Liberal State’ in Gideon Calder, Phillip Cole and Jonathan Seglow (eds), Citizenship Acquisition and National Belonging: Migration, Membership and the Liberal Democratic State (Palgrave Macmillan, Basingstoke 2010) 77. 185 Brigitte Studer et al., Das Schweizer Bürgerrecht (Verl. Neue Zürcher Zeitung, Zurich 2008); see also Christin Achermann and Stefanie Gass, Staatsbürgerschaft und Soziale Schliessung (Seismo, Zurich 2003); and historically, see Regula Argast, Staatsbürgerschaft und Nation: Ausschließung und Integration in der Schweiz 1848–1933 (Vandenhoeck & R ­ uprecht, Gottingen 2007). 186 oecd, Naturalisation: A Passport for the Better Integration of Immigrants? (oecd, Paris 2011) 16.

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citizenship under lessened requirements, for certain categories of applicants, and in some instances almost all naturalisation requirements are completely waved. The acquisition of citizenship by investment, or ius doni, is one of the examples of the facilitated naturalisation based on the applicant’s exceptional contribution to the country’s economy. Other examples include, for instance, naturalisations of famous artists and sportspeople, or preferential naturalisation of foreigners who are considered to have special ties with the state. Unlike everyday immigrants who had to reside and learn the language of their new country to some extent, talented footballers and investors can jump the queue and get their citizenship fast and often without residing in the country and learning its language. Such privileged access to citizenship has been practiced since antiquity at least, and results from the state particular interest in naturalising certain categories of citizens rather than from latter’s keenness to live or socially integrate in their new country of citizenship. Such preferential treatment of certain categories of citizenship applicants has been possible thanks to wide discretion of states in citizenship matters. 1.2.2 Facilitated Naturalisation Since ancient times, states have used the fact that their citizenship is a ‘good’ that is in demand from rewarding soldiers to attracting talent and investors. Ethnic considerations, close history and languages, special status or special merit and achievements frequently drive policies in immigration and citizenship law and make some of the grounds on which facilitated naturalisation is often allowed. Think of Germany’s policy to grant immediate citizenship to repatriates;187 the Spanish law requiring to remember the victims of the civil war and dictatorship under the Franco regime, which grants citizenship to descendants of people who fled during that period;188 Israeli ‘Law of Return’ which encourages the immigration of Jews to Israel granting citizenship upon ‘return’ to Israel, no matter how destitute, aged or unskilled those new citizens are,189 the preferential treatment of Macedonians in Bulgaria for the purposes of citizenship;190 and the provision of Hungarian passports to hundreds of

187 On Repatriation policies of Germany and other EU Member States, see Mareike Beusse, Repatriation Policies and Practices: A Comparative Overview of the Repatriation Policies and Practices of Other EU Member States (Eesti Migratsioonifond, Tallinn 2009). 188 See Michael Humphrey, ‘Law, Memory and Amnesty in Spain’ (2014) 13 mlj 25. 189 For detailed analysis see Suzi Navot, Constitutional Law of Israel (Kluwer Law Int’l, Alphen aan den Rijn 2007) 187˗197. 190 Ridvan Peshkopia, Conditioning Democratization: Institutional Reforms and EU Membership Conditionality in Albania and Macedonia (Anthem Press, London 2015) 186–187.

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thousands of Serbians and Romanians,191 to mention only some of the many examples testifying to the ethnic ideology of states providing for facilitated naturalisation. In Croatia, for example, a country with a large diaspora both in Europe and overseas (America, but also Australia and New Zealand) it is possible to regain the citizenship immediately if the Croatian descent can be shown.192 Ireland, which relatively to its size has experienced one of the largest mass emigrations in history, also has a very generous principle of descent, one of the most liberal in the world, which allows anyone who has at least one grandparent born in Ireland to regain Irish citizenship.193 Furthermore, military service frequently gives access to privileged naturalisation. This is, for example, the case with the recruitment of foreign military personnel for use in wars (as practiced throughout history, and to the present day in France with the French Foreign Legion194 or as the United States generally provides195 for the US Army) where citizenship is provided in return for soldiers’ commitment. Qualified members of the US armed forces, for instance, may be exempt from certain naturalisation requirements, including residence and physical presence in the country under Sections 328 and 329 of the Immigration and Nationality Act.196 This extraordinary naturalisation option serves as an incentive and reward to perform military service and risk one’s life. Another example is the recruitment of elite foreign athletes for national teams in the Olympic Games or other world sporting championships, who gain not only the privilege to compete for a given state in such games but also its citizenship in return for their efforts.197 As famously named by Shachar, such ‘Olympic citizenship’ is focused on the ‘spread of the talent-for-citizenship exchange’,198 be it in sports, culture, science or other fields. As an illustration 191 Sabrina P Ramet and Marko Valenta, ‘Situating Ethnic Minorities in Post-Socialist Southeastern Europe: An Introduction’ in Sabrina P Ramet and Marko Valenta (eds), Ethnic Minorities and Politics in Post-Socialist Southeastern Europe (cup, Cambridge 2016) 3–23. 192 Article 11 in connection with Article 8 of the Croatian Citizenship Act 2001 (Official Journal issues 53/1991, 70/1991, 28/1992, 113/1993, 4/1994, 130/2011). 193 See Clive R Symmons, ‘Irish Nationality Law’ in Hansen and Weil (eds), Towards a European Nationality. 194 Douglas Porch, The French Foreign Legion (Skyhorse, NY 2010). 195 8 U.S. Code, para.1440; see Spiro, Beyond Citizenship. 196 Most recent figures on naturalisation in the US through military service is available on the official Website of the Department of Homeland Security accessed 10 August 2018. 197 Ayelet Shachar, ‘Picking Winners: Olympic Citizenship and the Global Race for Talent’ (2011) 120 Yale L.J. 2088. 198 Shachar, ‘Picking Winners’ 2088; with regard to the ‘race for talent’, see also Shachar and Hirschl, ‘On Citizenship, States, and Markets’.

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of this widespread practice, the French sports paper, L’Equipe, reported on the quarter-final of the European Table Tennis Championships in October 2013 what follows: ‘In the women’s singles, two-time European champion Li Jiao of the Netherlands (2007 and 2011), lost to Portugal’s Fu Yu. In the semi-finals, Fu Yu will meet Sweden’s Li Fen’.199 Foreign top athletes, who are of special interest for Germany, are preferred for naturalisation based on an administrative directive; yet, only a maximum of ten top athletes per year have been admitted in the more recent past.200 Other countries are more lenient about that: at the World Athletics Championships in 2005, Qatar was represented by almost a dozen elite athletes born in Kenya and naturalised in Qatar.201 Shortly before the 2006 Winter Olympics, President Bush signed a bill which granted citizenship to aliens of extraordinary ability,202 allowing, among others, the Russian ice dancer Maxim Zavozin to represent the usa.203 Zavozin thereafter became a Hungarian citizen just in time to represent Hungary at the Winter Olympics in 2010.204 The former world chess champion Bobby Fischer was naturalised in Iceland to escape custody prior to extradition in Japan, after an alien’s passport issued by Iceland was not recognised to secure his passage to Iceland.205 The usa, more than any other country in the world, has gone out of its way to perfect the technique of attracting accomplished athletes by offering them citizenship in return for their pursuit of Olympic medals.206 Other talents, statuses, or fame may also form a basis for facilitated ­naturalisation. In Denmark, a country which has one of the most restrictive  naturalisation regimes today and which, since 2000, naturalises only people who speak Danish and know the history and values of Denmark, the Australian bride of Crown Prince Frederik, Mary Donaldson, received Danish citizenship as an engagement gift.207 Most recently, a young Malian migrant who rescued a child dangling from a balcony was promised French citizenship,208 Ralph 199 200 201 202 203 204 205 206 207 208

Bréville, ‘L’acquisition de la nationalité à travers le monde’. von Münch, Die Deutsche Staatsangehörigkeit 189–197. von Münch, Die Deutsche Staatsangehörigkeit 338. See Res. 2044 109th Congress (2005) (enacted). Shachar, ‘Picking Winners’ 2092. Shachar, ‘Picking Winners’ 2092, with further references. von Münch, Die Deutsche Staatsangehörigkeit 189. Shachar, ‘Picking Winners’ 2092. von Münch, Die Deutsche Staatsangehörigkeit 31. Saskya Vandoorne, Samantha Beech and Ben Westcott, ‘“Spiderman” Granted French Citizenship after Rescuing Child from Paris Balcony’ (cnn, 28 May 2018), available at: accessed 10 August 2018.

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Fiennes received a Serbian passport for filming in the country209 and Afghan refugee, Farhad Nouri, was offered Serbian citizenship because of his skilful drawings210 – as opposed to other refugees in the country who lack exceptional talent.211 The list of grounds and examples is non-exhaustive as discretion of states in the field of citizenship law is virtually plenary – an extreme example being the conferral of citizenship of Saudi Arabia to a robot.212 Similarly, citizenship can perform the function of recruiting foreign investors who are granted citizenship for their significant direct investment or other economic contribution to the country.213 The mode of acquisition of citizenship by investment is an expression of facilitated naturalisation. Investors are often allowed an easier access to citizenship.214 Applicants who pay, although they must also be suitably qualified and undergo strict due diligence procedures, do not have to wait for many years to be admitted to citizenship. ‘First come first served’ is displaced by the ethics of the market: ‘you get what you pay for’.215 The acquisition of citizenship by investment is then, essentially, nothing more than a fast track procedure to citizenship access, based on the ability and willingness to pay, comparable to toll roads or fast-track lanes for the First Class and Business Class passengers at airports. 1.2.3 Ius Doni and Other Forms of Naturalisation The mode of acquisition of citizenship by investment should not be seen or treated differently than other forms of facilitated naturalisation. Indeed, there can be no qualitative difference in whether citizenship is allocated on the basis

209 See, for instance, Vladimir Kozlov and Nick Holdsworth ‘Actor Ralph Fiennes Receives Serbian Citizenship’ (Balkan Insight, 11 September 2017) accessed 10 August 2018. 210 See ‘Afghan “Little Picasso” Offered Serbian Citizenship’ (DW News, 17 August 2017) accessed 10 August 2018. 211 See Gordana Knezevic, ‘Feting Of “Little Picasso” A Sharp Contrast to Serbia’s Treatment of Migrants’ (Radio Free Europe, 11 September 2017) accessed 10 August 2018. 212 Paul Ratner, ‘For the First Time Ever, a Country Gave a Robot Citizenship’ (Big Think, 31 October 2017) accessed 10 August 2018. 213 See Xin, El-Ashram and Gold, ‘Too Much of a Good Thing? Prudent Management of ­Inflows under Economic Citizenship Programs’ imf Working Papers 15/93. 214 Shachar, ‘Dangerous Liaisons’. 215 Sandel, What Money Can’t Buy 28, and generally, 17˗41.

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of some natural talent assets or on the basis of financial assets.216 Both are in the national interest. As put by Okun, ‘when people differ in capabilities, interests, and preferences, identical treatment is not equitable treatment’.217 Yet, it is not a secret that some people tend to be sensitive when it comes to money, feeling strongly about trade with (what seems to be) non-tradable goods.218 To them, such goods acquire a somewhat sacrosanct status, which must not be questioned. Such critiques do not view investors as talented entrepreneurs who contribute to the state prosperity in a similar way to talented athletes but only as privileged individuals who jump the queue and are spared from all ­requirements of regular naturalisation.219 Shachar, for instance, emphasises that: Rapid processes of market expansionism have now reached what for many is the most sacrosanct non-market good: membership in a political community. More puzzling is the willingness of governments – our public trustees and legal guardians of citizenship – to engage in processes that come very close to, and in some cases cannot be described as anything but, the sale and barter of membership goods in exchange for a hefty bank wire transfer or large stack of cash.220 Thus, some authors are of an opinion that citizenship by investment should be distinguished clearly from the Olympic citizenship to discern the r­ ecipients of citizenship who are given specialized treatment on the basis of their human capital from those who gain citizenship on the basis of commitment of their financial capital.221 It has been argued that CbIPs link citizenship with social standing and wealth and selecting future citizens on the basis of investment or economic contribution has been seen as a departure from the ‘egalitarian thrust that underlines rules of birthright citizenship as well as residence-based naturalisation’.222 Those authors, however, routinely fail to show why selection on the basis of financial capacity – which very often, and not least, reflects the 216 Berton, ‘Citizenship for Those who Invest into the Future of the State is not Wrong’. 217 Arthur M Okun, Equality and Efficiency: The Big Tradeoff (Brookings Institution, Washington, D.C. 1975) 8. 218 Ayelet Shachar, ‘Dangerous Liaisons: Money and Citizenship’ in Shachar and Bauböck (eds), Should Citizenship be for Sale? 3. 219 See, in particular, Shachar, ‘Dangerous Liaisons’. 220 Shachar, ‘Dangerous Liaisons’. 221 For example, Shachar and Hirschl, ‘On Citizenship, States, and Markets’; or Rainer Bauböck, ‘What is Wrong with Selling Citizenship? It Corrupts Democracy!’ in Shachar and Bauböck (eds), Should Citizenship be for Sale? 19. 222 Bauböck, ‘What is Wrong with Selling Citizenship?’ 21.

Key Contours of Citizenship and Ius Doni

49

person’s overall abilities as an entrepreneur and investor, talents and abilities which are and should be much sought-after by states – is any less arbitrary than selection on the basis of exceptional talents such as being able to play table tennis really well and thus helping a national table tennis team to excel. Ius Doni has been particularly criticized on grounds of non-discrimination in terms of producing general inequality in citizenship matters. This is notwithstanding the fact that citizenship as such has exclusionary nature and states have wide discretion in determining who are their citizens. Džankić, for instance, despite recognising that ‘[t]here is no obligation for states to treat those who want to naturalise equally as those who are already citizens’,223 notes that: Naturalising investors by waiving all other criteria, however, equalises financial contribution with cultural, sports, and educational achievements. The latter are considered reputational gains ‘which are not available for purchase’, and thus investment violates the sphere boundary of money. The fast-track admission of investors into a polity breaks the equality principle inherent in the citizenship legislation in that only wealthy individuals are able to offer a significant contribution to the state’s economy. Thus, naturalisation of this kind gives precedence to one social class over others, breaching the sphere boundary of ‘money’ by ‘unlocking’ blocked exchanges that limit the dominance of wealth. It reduces citizenship to a commodity that is traded for money and not for genuine ties with the state, as is the case in ordinary naturalisation.224 The question that arises is which ‘equality principle inherent in the citizenship legislation’ has been broken if states have no legal obligation to treat those who want to naturalise equally on other basis but race and ethnicity? Džankić does not elaborate on the legal principle of equality she mentions in her text. Granting citizenship on a basis of investment is not substantially different to other existent citizenship requirements, such as the requirement for a minimum income or independence of the applicant from government welfare payments as a condition for naturalisation. Such conditions could equally raise issues of discrimination. They are mainly concerned with promoting the sustainable integration of an applicant into the host country, which corresponds

223 Jelena Džankić, ‘The Pros and Cons of Ius Pecuniae: Investor Citizenship in Comparative Perspective’ eui Working Papers rscas 2012/14, 3. 224 Džankić, ‘The Pros and Cons of Ius Pecuniae’ 3 (footnotes omitted).

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with the idea of the state community as a member-based collective, in which each individual – to a certain extent as a corrective to the principle of solidarity in the sense of a contractually based obligation of mutual care and protection – owes a certain contribution to the success of the whole. Citizenship by investment, by ensuring upfront that the individual applicant has sufficient means and in addition, makes a substantial contribution to the state, can be interpreted equally in the spirit of the principle of solidarity. 1.2.4 Ius Doni and Inequalities The problem of inequality between different categories of citizenship – which always existed and shall exist with or without the citizenship by investment mode of acquisition – might be less problematic than global inequality of states which results in huge disparities in the life quality in home states and also of quality of passports in terms of mobility and life opportunities outside the home state.225 It would have been difficult to discuss CbIPs in a world of equal opportunities226 to which the relatively small number of naturalisations of EU citizens residing in other Member States than their own compared to the number of naturalisations of non-EU citizens (Table 1)227 or the largely increased number of applications for Irish citizenship after the Brexit vote, for instance, testify.228 A fundamental issue relates to the theoretical discussion about the conferral of citizenship based on investments or economic contributions to a state and whether it falls, or should fall, under the area of blocked exchanges229 or whether, in the light of modern citizenship laws and in view of the increasing transnational financial and immigration flows and globalisation, the primary aim of having well-off citizens of the world, linked to a state via naturalisation based on a significant economic contribution to that state is, or should be, considered as a legitimate function of modern citizenship law. An allegation that such l­ iberalism undermines itself by favouring the wealthy or the privileged is 225 Roxana Barbulescu, ‘Global Mobility Corridors for the Ultra Rich: The Neoliberal Transformation of Citizenship’ in Shachar and Bauböck (eds), Should Citizenship be for Sale? 15. See also the qni 2017. 226 Spiro, ‘Cash-for-Passports’. 227 Eurostat, ‘Acquisition of citizenship statistics’ (ES, 2017) accessed 10 August 2018. 228 Lisa O’Carroll, ‘Record Number of Irish Passports Issued as Brexit Vote Spurs Demand’ The Guardian (London, 29 December 2017) accessed 10 August 2018. 229 Džankić, ‘The Pros and Cons of Ius Pecuniae’; Shachar, ‘Dangerous Liaisons’ 3–8.

EU-28 Belgium Bulgaria Czech Republic Denmark Germany Estoniaa Ireland Greece Spain France Croatia Italy

Table 1

120 200 8 400 0 1 000

1 200 31 800 0 3 300 900 3 600 8 600 300 17 000

15 000 112 800 1 800 10 000 33 200 150 900 119 200 4 000 201 600

7.9 28.2 0.6 33.1 2.6 2.4 7.2 6.6 8.4

12.1 26.2 0.9 21.4

(%)

Citizens of another EU Member State

994 800 31 900 1 600 4 600

Total number of recipients [2016]

13 400 79 600 1 800 6 700 32 300 147 300 108 200 3 700 184 600

863 300 23 100 1 600 3 600 89.3 70.6 99.4 66.9 97.3 97.6 90.8 93.2 91.6

86.8 72.2 97.5 78.0

(%)

Citizens of a non-EU country

of which,

400 900 0 0 0 0 0 0 0

2.8 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.6 0.2 0.0 0.0

(%)

Stateless

6.300 100 0 0

Acquisitions of citizenship by group of previous citizenship in the EU-28 and efta, 2016

0 500 0 0 0 0 2.300 0 0

4 900 500 0 0

0.0 0.5 0.0 0.0 0.0 0.0 1.9 0.2 0.0

0.5 1.4 1.6 0.6

(%)

Unknown

Key Contours of Citizenship and Ius Doni

51

Cyprus Latvia Lithuania Luxembourg Hungary Malta Netherlands Austria Poland Portugal Romaniab Slovenia Slovakia Finland Sweden

4 700 2 000 200 3 300 4 300 1 500 28 500 8 500 3 700 25 100 4 500 1 300 0 500 9 400 61 300

Total number of recipients [2016]

1 300 300 0 2 700 3 300 300 2 600 1 300 200 900 0 100 2 1 200 12 800

26.9 13.4 1.7 80.2 75.8 17.1 9.2 15.5 5.5 3.7 0.2 5.2 41.9 12.7 21.0

(%)

Citizens of another EU Member State

3 400 1 700 100 700 1 000 1 200 25 800 7 200 3 500 24 200 4 500 1 200 300 7 900 42 900

72.9 84.9 77.3 19.7 24.2 82.9 90.4 84.1 93.9 96.3 99.7 94.8 57.4 84.7 70.0

(%)

Citizens of a non-EU country

of which,

0 0 0 0 0 0 100 0 0 0 0 0 0 100 4 400

0.0 0.2 21.0 0.1 0.0 0.0 0.4 0.4 0.4 0.0 0.1 0.0 0.6 1.1 7.2

(%)

Stateless

Table 1 Acquisitions of citizenship by group of previous citizenship in the EU-28 and EFTA, 2016—cont'd

0 0 0 0 0 0 0 0 0 0 0 0 0 100 1 100

0.1 1.5 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.0 0.0 0.0 1.5 1.8

(%)

Unknown

52 Chapter 1

17 200

400 100

1 300 23 100

149 400

700 200

13 700 42 900

9.3 53.9

50.5 34.7

11.5

12 200 19 700

300 100

131 800

88.6 46.0

45.8 64.1

88.2

300 0

0 0

200

2.0 0.0

3.7 1.2

0.1

0 0

0 0

200

0.1 0.1

0.0 0.0

0.2

Note: The individual values do not add up to the total due to rounding. source: Eurostatc a break in series b estimated c The table with data and notes has been taken down from Eurostat (online data codes: migr_acq) (Eurostat statistics).

United Kingdom Iceland Liechtenstein Norway Switzerland

Key Contours of Citizenship and Ius Doni

53

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not correct – while citizenship by investment does necessarily imply an economic transfer of some kind to be made in return for status, there is nothing to preclude this transaction from being supported by a loan or future garnishing of an income.230 Indeed, in the US this practice has even become relatively common, with private financial institutions offering citizenship loans to cover the costs of the naturalisation process. Moreover, the utilitarian argument and the argument of the effective allocation of goods, i.e. that market exchanges, benefit buyers and sellers alike improving everyone’s collective wellbeing,231 also support the case for a market-based allocation of citizenship: markets are not good or bad, they are simply the most effective means to allocate resources and goods.232 Additional means or economic contributions improve common well-being in the given country.233 Everyone benefits from such practice in ­addition, of course, to the applicants themselves who value the citizenship they obtain enough to incur economic costs by applying under such a program. The state receives additional funding at virtually no costs. It gets additional investments in private or public sectors or ­direct monetary contributions (depending on how the CbIP of a particular ­country in question is structured). In return, the state adds wealthy entrepreneurs and investors to its stock of citizens.234 Whether such practice is desirable or whether it should be avoided as an inappropriate commingling of the spheres of money and state,235 or expanding markets and market values ‘into spheres of life where they don’t belong’,236 is often discussed among scholars.237 For instance, Okun,238 Walzer,239 Kuttner240 and, more recently, Sandel241 discussed areas or spheres in human society and its legal systems in which money can and areas – domains of rights – in which money should not play a role. The latter are also referred to as ‘blocked exchanges’.242 The question that arises is whether access to citizenship belongs in the sphere where 230 Borna Shaheen and James M Stearns, ‘The Ethics and Efficacy of Selling National Citizenship’ (2002) 37(2) J. Business Ethics 193, 194. 231 Gregory Mankiw, Principles of Microeconomics (5th edn, South-Western Cengage Learning, Mason, OH 2009) 147˗151. 232 See Friedrich A von Hayek, Law, Legislation and Liberty (5th edn, Routledge, NY/Oxford 2012) 227–228. 233 Xin, El-Ashram and Gold, ‘Too Much of a Good Thing?’ 9. 234 Kochenov, ‘Citizenship for Real’ 28. 235 Walzer, Spheres of Justice; see also Arthur M Okun, Equality and Efficiency. 236 Sandel, What Money Can’t Buy 7. 237 See Shachar and Bauböck (eds), Should Citizenship Be For Sale?. 238 Okun, Equality and Efficiency. 239 Walzer, Spheres of Justice. 240 Kuttner, Everything for Sale. 241 Sandel, Justice: What’s the Right Thing to Do?; and Sandel, What Money Can’t Buy. 242 Walzer, Spheres of Justice 100.

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money or other material aspects may play a role. Yet, the fact is that it always, or at least since antiquity, has been the case.243 The question is therefore strictly ethical: same as if one asked whether blood, descent, nationalism, fighting in wars or success rate in scoring goals should play a role in access to citizenship. Money has generally become an anonymous medium of societal integration.244 Undoubtedly, money is able to buy things which previously have not been considered appropriate to be bought and sold. The right to pollute the air – which can now be bought and sold openly,245 for-profit schools and prisons; naming rights for schools, public parks and civic spaces or the system of political campaign finance that ‘comes close to permitting the buying and selling of elections’246 are only a few examples. Sandel points out that some of the good things in life are corrupted and degraded if turned into commodities and that society has drifted from having a market economy to being a market society: a way of life in which market values seep into every aspect of human endeavour.247 To believe that a good is corrupted though, one must value that good as more ­appropriate than others. Reasons, as noted by Sandel, are rather judgmental: [i]t hardly makes sense to speak of corrupting an activity ˗ parenthood, say, or citizenship ˗ unless you think that some ways of being a parent, or a citizen, are better than others. Moral judgments such as these lie behind the few limitations on markets we still observe. We don’t allow parents to sell their children or citizens to sell their votes. And one of the reasons we don’t is, frankly, judgmental: we believe that selling these things values them in the wrong way and cultivates bad attitudes.248 In the light of the above, ‘[h]iring foreign mercenaries to fight our wars might spare the lives of our citizens but corrupt the meaning of citizenship’.249 ­Indeed, fighting in wars corrupts the meaning of citizenship in the same way as acquiring one through investment or marrying a generous prince.

243 See the previous section of Chapter 1 of this book with regard to acquisition of citizenship in Athens and Rome on economic grounds. 244 Habermas, ‘Citizenship and National Identity’ 336. 245 EU operates the EU Emissions Trading System, which enables companies to buy and sell the right to pollute, see ‘The EU Emissions Trading System’ (European Commission, 2018) accessed 10 August 2018. 246 Sandel, What Money Can’t Buy 8. 247 Sandel, What Money Can’t Buy 8–10; see also Fred Hirsch, Social Limits to Growth (Routledge & Kegan Paul, London 1976); and Kuttner, Everything for Sale. 248 Sandel, What Money Can’t Buy 14. 249 Sandel, What Money Can’t Buy 9.

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While critics have a point in claiming that the very fact that an immaterial value like citizenship has a price tag may undermine and devalue it,250 the opposite can also be true: granting of citizenship and passports to highly esteemed persons can make that same citizenship and passport highly ­esteemed too.251 Moreover, the migration of investors, which may be assessed as negative from the perspective of the country of their origin,252 might be assessed as positive in the economic sense as it ultimately contributes to international economic, technological and cultural experience and, moreover, to consistent market discipline. Agreeing with Kochenov, there is no real negative brain drain in the world if properly put in perspective.253 That said, ‘“brains” will move no matter which public policy is in place’.254 The same is true of capital. To attempt to correct the lack of coordination between supply and demand in the labour market through targeted control of the migration movements255 is not a specific phenomenon of the internet age. Better coordination between the opposing sides of the market, supported by citizenship law to reflect these need of the society, could lead to an improvement in welfare for all sides concerned; under the premise of achieving controlled immigration, it can create employment.256 It is clear in the case of immigration on the basis of

250 Paskalev, ‘If You Do Not Like Selling Passports, Give Them for Free’. 251 Paskalev, ‘If You Do Not Like Selling Passports, Give Them for Free’ 26. 252 Less developed countries may argue against that as they are being drained of their much needed investment funds and their human capital, see Shaheen and Stearns, ‘The Ethics and Efficacy of Selling National Citizenship’. 253 Dimitry Kochenov, ‘The Right to Leave Any Country Including Your Own in International Law’ (2012) 28 Conn. J. Int’l L. 43, 63: ‘treating the world of knowledge as divided into states is simply wrong’, of a different view, John Barnhill, ‘Brain Drain’ in Patrick J Hayes (ed), The Making of Modern Immigration: An Encyclopedia of People and Ideas (abc-clio, Santa Barbara 2012) 143 et seq. 254 Shaheen and Stearns, ‘The Ethics and Efficacy of Selling National Citizenship’ 195. 255 On the targeted control of transnational migration flows through citizenship law, see Holger Kolb and Oliviero Angeli, ‘Nicht Nur Effizienter, Sondern Auch Gerechter? Ein ­Modell Preisbasierter Zuwanderungssteuerung’ (2011) 2 zar 254; Sabine Altmeyer, ‘Vereinheitlichung des Erbrechts in Europa – Der Entwurf einer “EU – Erbrechts – Verordnung” durch die EU-Kommission’ (2010) ZeuS 475; Rainer Bauböck and Bernhard Perchinig, ‘Evaluation and recommendations’ in Bauböck et al., Acquisition and Loss of Nationality; ­Johannes Eichenhofer, Carsten Hörich and Maximilian Pichl, ‘Ist Deutschland Noch Ein Einwanderungsland?’ (2011) 5 zar 183; Masing, Wandel Im Staatsangehörigkeitsrecht; Jan Schneider and Bernd Parusel, Zirkuläre Und Temporäre Migration (Bundesamt für Migration und Flüchtlinge, Nürnberg 2011); regarding skilled workers (‘high-skilled immigration’), see Barry R Chiswick (ed), High-Skilled Immigration in a Global Market (aei Press, Washington D.C. 2011). 256 The ‘Green Card’ initiated by the German Government in 2000 is an example of a successful recruitment of overseas skilled workers – a principle comparable to the ‘Blue Card’

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i­nvestments (investor immigration)257 and even more so in the case of the direct granting of citizenship based on investment.258 Last but not least, there can certainly be no ethical justification for the allocation of citizenship exclusively on the basis of the circumstance of one’s birth and not through natural talent or private contribution, any more than can be justified the allocation of wealth and property by the same means. Ius doni is only a visible instance of wider unfairness in allocating citizenship.259 It is no less arbitrary than the granting of citizenship according to circumstances of birth, which is nevertheless the norm worldwide: the overwhelming majority of people are allocated their citizenship at birth based on nothing more than where they were born and to whom. Much like inherited wealth or an innate talent for playing table tennis, this is a most arbitrary and unjust allocation system and is reminiscent of the feudal system of the past. Ius doni, then, with its very limited scope of application, even if it appears somehow repugnant to some, pales in comparison to many of these other inequities attendant on the ordinary transmission of citizenship.260 1.3

Conclusions to Chapter 1

Citizenship is a legal tie between an individual and the state. It has been traditionally used for excluding foreigners from territories of states. State sovereignty has served the exclusionary nature of citizenship perfectly well, giving legitimacy to divisions between ‘us’ and ‘them’ or between those who belong and others. In general, it is for states to determine who their citizens are. Freedom to decide in citizenship matters is sovereign right of states and is only limited by duties of states under international treaties they have concluded and general principles of international law and customary international law.

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recruitment programme – directed especially at IT specialists, within the framework of which 17,931 specialists from non-EU States were allowed to move temporarily to Germany. Each of recruited specialists has contributed to the creation of an average of 2.5 jobs in other segments of the labour market, see Martin Strunden and Michaela Pasenow, ‘Fachkräfte gesucht! – Ausländerrecht fit? Die sächsische Initative für gesteuerte Zuwanderung’ (2011) 4 zar 121. Roger Ware et al., The Economic Impact of the Immigrant Investor Program in Canada (Analysis Group, Montreal 2010); regarding the United States of America, see Lincoln Stone et al. (eds), Immigration Options for Investors & Entrepreneurs (American Immigration Lawyers Association, Washington D.C. 2014). For detailed analysis, see H&P, The Global Residence and Citizenship Programs. Chris Armstrong, ‘The Price of Selling Citizenship’ in Shachar and Bauböck (eds), Should Citizenship be for Sale? 16. Armstrong, ‘The Price of Selling Citizenship’ 17.

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History of citizenship, at least since antiquity, testifies to the early forms of today’s modes of acquisition of citizenship. Both ius soli and ius sanguinis are ancient rules but do not always compete. While Ancient Athens was ideologically a ius soli state, one needed to have an Athenian father to become a citizen, and after the passage of Pericles’ new law, both of his parents had to be Athenian. Thus, Athenian citizenship was dominantly ius sanguinis. Naturalisation was granted in rather exceptional circumstances for military courage or loyalty while early forms of ius doni were formalised through gifting a citizenship to an individual in return for his benefaction to the state. Ancient Rome was different. Citizenship was neither excessively exclusive nor jealously kept by ­Ancient Romans but became an important tool of hegemonic power. The ius soli rule was then dominant during the Middle Ages until the xviii century while its transition to ius sanguinis enshrined in the CC spread fast beyond French borders. The nationalism in the xix and early xx century culminated with the two world wars, the end of which, however, marked a new era in interstate relations. A citizenship beyond borders was born out of the unique supranational cooperation between the European states – an example which has been also followed by other regions.261 The end of the xx and particularly the xxi century saw flourishing of the CbIPs. States started to introduce economic citizenship in an attempt at attracting foreign investments shaping thus their citizenry via specific citizenship criteria. Such criteria often wave residence requirements or language and other tests otherwise required as a part of the naturalisation process. Instead, applicants are asked to contribute to the ­development of their new home country by investing a large amount of money in specific and defined projects, or make a contribution to a sovereign wealth fund, or similar. They go through a vigilant due diligence process which aims at diminishing potential risks of manipulating the programs for nefarious activities. In short, ius doni provides for a much faster procedure of gaining citizenship under certain conditions. Such procedure is similar to the facilitated naturalisation of football players, for instance, who get their citizenship quickly because it is in the national interest of the state to have a successful football team. National interests are defined by the states themselves and economic prosperity is certainly a legitimate one. The interest of wealthy foreigners in economic citizenship has been widely inspired by differences in quality of nationalities. Such differences are large and more often than not an impediment to international businesses or simply to private life goals and ambitions. 261 To which the caricom, oecs or ecowas, for instance, testify.

Chapter 2

Ius Doni in International Law 2.1

Rules and Limitations of International law

States are generally free to regulate citizenship matters as they please.1 This principle goes at least as far back as the advisory opinion of the Permanent Court of International Justice (pcij) of 7 February 1923, concerning citizenship decrees in Tunisia and in the zone formerly controlled by Morocco, which states: The question whether a certain matter is or is not solely within the jurisdiction of a State is an essentially relative question; it depends upon the development of international relations. Thus, in the present state of ­international law, questions of nationality are, in the opinion of the Court, in principle within this reserved domain.2 International law principally recognises that each state may determine who should be counted among its nationals, and that the regulation of citizenship belongs to the domaine réservé of individual states. In Lotus, the pcij clarified its view on the matter: International law governs relations between independent [s]tates. The rules of law binding upon [s]tates therefore emanate from their own free will as expressed in conventions or by usages generally accepted as expressing principles of law and established in order to regulate the relations between these co-existing independent communities or with a view to the achievement of common aims. Restrictions upon the independence of [s]tates cannot therefore be presumed.3 The first multilateral treaty concerning citizenship law was the Hague Convention of 1930, which was initiated by the League of Nations and came into

1 Donner, The Regulation of Nationality in International Law. 2 pcij, Tunis v Morocco Nationality Decrees [1923] Advisory Opinion, Series B, No. 4, 24. 3 pcij, S.S. ‘Lotus’ (France v Turkey) [1927] pcij Rep Series A, No 10, 18.

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force on 1 July 1937.4 The Hague Convention underpinned the autonomy of states in the citizenship law, stipulating in the basic principles, however, that other states shall recognise the law under which each state determines its own nationals, as long as ‘it is consistent with international conventions, international custom, and the principles of law generally recognised with regard to nationality’.5 Similarly, although on a regional level, the Inter-American Court of Human Rights (iachr) has more recently confirmed, in a rather explicit way, that ‘states’ discretion must be limited by international human rights that exist to protect individuals against arbitrary state actions’.6 The iachr went further, explaining that ‘[s]tates are particularly limited in their discretion to grant nationality by their obligations to guarantee equal protection before the law and to prevent, avoid, and reduce statelessness’.7 Limitations on the right of states to design their citizenship laws emanate from the bilateral or multilateral treaties to which each state submits voluntarily8 and also of customary law and general principles of law recognised by states. Other instruments, such as the udhr,9 are non-binding although including a number of rights that are based on human rights standards enshrined in legaly binding international instruments. Already in the closing days of the eighteenth century, Kant convincingly argued, that morals which apply to the relationships among individuals ought also to be applicable to the relationships between states or nations. Accordingly, the individual states are not guided in their actions solely by their goals in the pursuit of their own interests.10 Rawls recently expanded the idea of the partnership agreement to the ‘society of nations’ to find that ‘­well-regulated 4

So far, 20 states are party to the Hague Convention. The list of states is available at: accessed 10 August 2018. 5 Article 1 Hague Convention. 6 iachr, ‘Inter-American Court of Human Rights Affirms the Human Right to Nationality and Upholds the International Prohibition on Racial Discrimination in Access to Nationality’ (Open Society Foundation, October 17, 2005) accessed 10 August 2018 (osf Press release). 7 osf Press release. 8 Donner, The Regulation of Nationality in International Law 11 et seq. N Makarov, Allgemeine Lehren des Staatsangehörigkeitsrechts; Salaheldin Kanaan, Abkommen zur Mehrstaatigkeit: Europaratsabkommen und ihr Einfluss auf die Staatsangehörigkeitsgesetzgebung Deutschlands (Kovač, Hamburg 2012). 9 On the meaning of the udhr for the enforcement of universal rights under the impact of economic globalisation and transnationalism, see Olusoji Elias, ‘The Impact of Globalisation on Human Rights’ (2000) 28 Amicus Curiae 19. 10 Kant, Zum Ewigen Frieden. See also Koller, ‘Frieden und Gerechtigkeit in einer geteilten Welt’.

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societies’ must accept the principle of the ‘law of nations’.11 There is, however, a far-reaching disagreement regarding the content and scope of the limitations.12 Some of them, such as prohibitions against discrimination, statelessness and arbitrariness, have been clearly rooted in international law: ­prohibition of discrimination on the basis of ethnicity or race; prohibition of the abuse of rights; prohibition of arbitrariness; and prohibition of mass passportization. The supervision of human rights in the nation-states is largely in the hands of the international community, because of its universality, which bearing in mind the proportionality principle and the principle of international subsidiarity, can permit intervention in the internal affairs of states, if a nation-state is failing in its fiduciary duty towards its own citizens.13 Under public international law, one of the basic requirements of state sovereignty is that violations of state law are sanctioned consistently. The fundamental requirement made on an organised community to be recognised as a state internationally, is an unambiguous definition of its territory and its ability to effectively exercise control over that area.14 A state is sovereign only if it has a functioning monopoly on authority and the use of violence (to echo the social scientist, Max Weber),15 determines violations of public law consistently and is respected by its citizens. The state’s duty of care remains irrespective of the location of the person in question, following from the spatially unlimited effect of citizenship corresponding to the extent of the state’s duty of action and intervention when its citizens violate norms of public international law. However, state’s duty of care also implies the individual right to protection of citizens by the state community, which, outside of the territory of a state, is particularly visible in the right to diplomatic and consular protection.16 States 11 12 13

14 15 16

See John Rawls, The Law of Peoples; and Leavitt Neal, The Foreign Policy of John Rawls and Amartya Sen (Lexington Books, Lanham, MD 2013). N Makarov, Allgemeine Lehren des Staatsangehörigkeitsrechts; Georg Dahm et al. (eds), Band I/2: Der Staat und andere Völkerrechtssubjekte. Räume unter internationaler Verwaltung (De Gruyter Recht, Berlin 2002); Kanaan, Abkommen zur Mehrstaatigkeit. Recent examples of such violations include the Apartheid regime in South Africa, the North Korean state, the genocide in Rwanda, the conflict in Kosovo and the recent events in Syria, where the State regime allowed gunning down its own citizens. For the conditions of one such case and similar cases of humanitarian intervention cf. Peter Hilpold, ‘Humanitäre Intervention: Neue Perspektiven für ein geächtetes Instrument der Völkerrechtsgeschichte?’ in Fisch, Die Verteilung der Welt. cf. Kay Hailbronner, ‘Rights and Duties of Dual Nationals: Changing Concepts and Attitudes’ in Kay Hailbronner and David A Martin (eds), Rights and Duties of Dual Nationals: Evolution and Prospects. cf. Max Weber, Wirtschaft und Gesellschaft (5th edn, Mohr, Tübingen 1972). cf. Chittharanjan F Amerasinghe, Diplomatic Protection (oup, Oxford 2008).

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are also asked to participate in the protection of citizens of other states as a matter of shared responsibilities of states.17 Other aspects of citizenship law, such as the ‘genuine link’ theory, have not developed into obligatory rules or principles of international law. Thus, the ‘genuine link’ theory serves today as a guiding principle rather than as a citizenship requirement. Other aspects, like general prohibition of discrimination in the process of acquisition of citizenship, are hardly attainable. Citizenship requires a clear demarcation of the domestic legal system at the national level, based on mapping of the individual rights in relation to other subjects of public international law in order to help ensuring clear and unambiguous assignment of rights. The separation between the nation and state beyond the citizenship matters corresponds to that between the internal and external sovereignty of a state. The latter describes a subject’s independence from other states and defines its position with respect to the outside world in the sense of public international law.18 While not seriously disturbing the comfortable position of states as primary regulators in the sphere of citizenship matters, international instruments and other sources of international law have created a framework which has restricted discretions of states in the field of citizenship law to a limited extent. This is primarily because not all relevant international legal sources have binding character and also not all binding legal instruments have been widely ratified. Last but not least is the problem with enforcement in international law which has undermined the effectiveness of its system and its credibility. As noted by Khaliq, ‘policy statements and legal obligations are one thing, implementation quite another’.19 Citizenship law is also part of such reality of international law. 2.1.1 Citizenship and Non-discrimination International law is clear as to when legitimate difference in treatment exists: ‘persons who are equal should be treated equally and those who are different should be treated differently’.20 Thus, differences in treatment are not impermissible. As noted by the Human Rights Committee in General Comment No.18, differentiation of treatment is permissible if the goal is to achieve a legitimate purpose and the criteria for such differentiation are reasonable and

17 18 19 20

Claudia Tazreiter et al., Fluid Security in the Asia Pacific: Transnational Lives, Human Rights and State Control (Palgrave Macmillan, London 2016) 9˗10. cf. Dietrich, Staatliches Souveränitätsverständnis. Urfan Khaliq, Ethical Dimensions of the Foreign Policy of the European Union: A Legal Appraisal (cup, Cambridge 2008) 2. Stephanie Farrior, Equality and Non-Discrimination under International Law Vol. 2 (Routledge, Abingdon 2017).

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objective.21 Furthermore, and as established in the international human rights law, the means employed must be proportionate with the aim sought. Thus, in the Belgian Linguistic case, the echr explained that prohibited discrimination exists where: the facts disclose a differential treatment; (…) the distinction does not have a legitimate aim, i.e., it has no objective and reasonable justification having regard to the aim and effects of the measure under consideration; and (…) there is no reasonable proportionality between the means employed and the aim sought to be realized.22 Numerous international instruments, binding or non-binding, include provisions on prohibition of the racial and ethnic discrimination. Thus, Article 2 udhr stipulates that: [e]veryone is entitled to all the rights and freedoms set forth in (the) Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Furthermore, no distinction shall be made on the basis of the political, jurisdictional or international status of the country or territory to which a person belongs, whether it be independent, trust, non-self-governing or under any other limitation of sovereignty.23 Article 2 udhr, in conjunction with Article 15(1) udhr, prohibits any discrimination with regard to obtaining and keeping or changing one’s citizenship. However, discrimination is not only prohibited in relation to acquisition and loss of citizenship24 but also with regard to distinction between the citizens and non-citizens. In particular, such distinction must be construed so as to avoid undermining the basic prohibition of discrimination; hence, it should not be interpreted to detract in any way from the rights and freedoms recognized and enunciated in particular in the Universal Declaration of Human Rights, the International Covenant 21

unhcr, General Comment No. 18: Non-discrimination, HRI/GEN/1/Rev.9 (Vol. 1), (adopted 10 November 1989) unhcr. 22 ECtHR, Geillustreerde Pers NV. v The Netherlands, (1976) App No. 5178/71, echr Dec. & Rep. 8, 5, 14–15. 23 Article 2 udhr. 24 unhcr Committee on the Elimination of Racial Discrimination, General Recommendation XXX, Discrimination against Non-Citizens (2002) para. 14 (unhcr General Recommendation XXX).

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on Economic, Social and Cultural Rights and the International Covenant on Civil and Political Rights.25 Furthermore, Article 7 udhr puts emphasis on the equality before law and equal protection of law without any discrimination. Both provisions have significant meaning for the functioning and development of national legislation in the field of citizenship law. While the udhr is legally a non-binding document embodied in a declaratory resolution of the UN General Assembly, its importance has been widely recognised in state practices26 and nonsdiscrimination has been incorporated in all of the major international legal instruments, attaining a status of a ius cogens principle.27 For instance, one of the declared purposes of the United Nations is to ‘achieve international cooperation (…) in promoting and encouraging respect for human rights and for fundamental freedoms for all without distinction as to race, sex, language, or religion’.28 Also, ‘with a view to the creation of conditions of stability’29 the UN shall promote ‘universal respect for, and observance of, human rights and fundamental freedoms for all without distinction as to race, sex, language, or religion’.30 Thus, Article 15(1) udhr has a profound human rights dimension which is in particular emphasised by the word ‘any’, which underscores that any discrimination based on home, origin, creed, religion, gender, sexual identity etc., is permitted. It is also emphasised by the fact that Article 15(1) udhr provides a special statutory specification of Article 1(1) udhr, claiming that all people are free and equal in dignity and rights. Similar assurances against discrimination can be found in binding instruments including the International Covenant on Civil and Political Rights,31 the International Covenant on Economic, Social and Cultural Rights,32 as well as in a number of regional treaties including the European Charter of F­ undamental

25

26 27 28 29 30 31 32

unhcr General Recommendation XXX; International Covenant on Economic, Social and Cultural Rights (adopted 16 December 1966, entered into force 3 January 1976) 999 unts 171 (icescr); International Covenant on Civil and Political Rights (adopted 16 December 1966, entry into force 23 March 1976), unga, Treaty Series 999 (iccpr). Alina Kaczorowska, Public International Law (5th edn, Routledge, NY/Oxford 2015) 527. Corcuera Cabezut Santiago, Derecho constitucional y derecho internacional de los derechos humanos (oup, Oxford 2002) 31. Article 1(3) of the Charter of the United Nations (adopted 26 June 1945, entered into force 24 October 1945) 59 Stat. 1031 (UN Charter). Article 55 UN Charter. Article 55(c) UN Charter. Articles 2 and 26 iccpr. Article 2(2) icescr.

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Freedoms,33 the African Charter on Human and Peoples’ Rights;34 and the American Convention on Human Rights.35 Article 14 echr prohibits discrimination against the rights and freedoms set in the Convention on any ground. Nation-states are obliged to honour general prohibition of discrimination on the grounds of sex, race, skin colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or any other status by guaranteeing the rights and freedoms recognised in the echr (Article 14 echr). As a binding treaty of public international law among the contracting states, the echr directly substantiates obligations that the jurisdictions of the contracting states have to secure for the person’s subject to the Convention rights, which are directly created by the Treaty. That said, Article 14 echr prohibits discriminatory measures which have no objective and reasonable justification, not any difference in treatment. Furthermore, general prohibition of discrimination, such as that of Article 14 echr hardly implies any restrictions on states in itself. While Article 14 echr may appear to prohibit contracting states from granting their citizenship solely in return for the applicant bringing in a large sum of money, it is not a self-standing provision and as such must be linked to another echr right. Given the scope of rights guaranteed by the echr, it would be difficult to invoke Article 14 echr. Other forms of discrimination, such as ethnic or racial, are hardly applicable to citizenship by investment given that Citizenship Programs are not designed for a specific ethnicity or race but for potential investors of all over the world. The common citizenship criteria across various programs, excluding the investment criteria which are tailor made and specific to each country, are usually straightforward: the investor must be age 18 and over;36 he must have a clean criminal record from his country of origin and country of residence if the latter differs,37 he must not be included on the list of persons whose property is ordered to be frozen, etc.38 However, as an exception to the openness of these programs to the potential investors from all around the world, some states 33 34 35 36 37 38

Article 21 cfreu. Article 2 of the African Charter on Human and Peoples’ Rights (Banjul Charter), (adopted 27 June 1981, entered into force 21 October 1986) oau Doc. CAB/LEG/67/3 rev. 5, 21 i.l.m. 58. Articles 1(1) and 24 of the American Convention on Human Rights (adopted at the InterAmerican Specialized Conference on Human Rights, San José, Costa Rica, 22 November 1969). See, for instance, ‘Cyprus Citizenship by Investment’ (GoldenVisa.CH, 2017) accessed 10 August 2018. ‘Cyprus Citizenship by Investment’. ‘Cyprus Citizenship by Investment’.

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with the CbIPs have inserted stricter criteria for citizens of c­ ertain ­countries due to the difficulties of carrying out the due diligence procedures. For instance, citizens of Afghanistan, Iran,39 Iraq, North Korea, Somalia and ­Yemen who reside in their respective country of birth are denied the opportunity to attain citizenship by investment in Antigua and Barbuda and St. Kitts and Nevis. Citizens of these countries who reside lawfully in Western Europe, Canada, or the United States as established residents, on the other hand, can apply for the programs if they meet the high due diligence standards.40 It has been stated that ‘[t]he Cabinet of Antigua and Barbuda   has taken this position to safeguard the integrity of the Antigua and Barbuda passport and ensure that only persons whose past behaviour will not threaten the very well-being of the Citizenship Programme, can be accepted’.41 In 2013, St. Kitts and Nevis decided to suspend participation of Afghanistan and Iranian citizens – irrespective of their domicile – in its CbIP.42 The exclusion of the citizens of the above countries from the CbIPs of Antigua and Barbuda and St. Kitts and Nevis on the basis of ethnicity or race has not been challenged in front of national or international courts. If restrictions introduced by Antigua and Barbuda and St. Kitts and Nevis are challenged as discriminating against the citizens against whom the introduced restrictions apply, both the aim and proportionality of means employed must be assessed to confirm whether illegitimate differentiation in treatment exists. Contrary to the situation in Antigua and Barbuda and St. Kitts and Nevis, security concerns due to which the American President Trump imposed a travel ban on citizens of six Muslim countries (Iran, Libya, Somalia, Sudan, Syria and Yemen) as well as on citizens of Chad, North Korea and Venezuela, do not affect potential bona fide investors of those countries. A bona fide relationship exists where there is ‘formal, documented, and formed in the ordinary course,

39

40

41 42

On more recent modification of restrictions for citizens of Iran see ‘Antigua and Barbuda Citizenship Open to Iranian Nationals’ (qicms, 2017) ­accessed 10 August 2018. Vicky Katsarova, ‘Antigua and Barbuda Citizenship by Investment Program Changes’ (hnw Immigration, 23 December 2014) accessed 17 February 2018. See ‘Citizenship Granted to Iraqi Nationals’ (ciu, 12 April 2016) accessed 15 February 2018. St Kitts and Nevis Citizenship by investment, ‘St Kitts and Nevis Citizenship’ (stkitts, 2018) accessed 17 February 2018.

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rather than for the purpose of evading the [travel ban]’.43 EB-5 investors who invest in US business sign numerous legal documents and because of that they are counted as establishing the bona fide relationship.44 2.1.2 Right to Citizenship International cooperation between states has largely focused on combatting statelessness and multiple citizenship. Relevant international instruments include the Convention relating to the Status of Refugees of 1951,45 Convention relating to the Status of Stateless Persons of 1954,46 Convention on the Reduction of Statelessness of 196147 and the Convention of Reduction of Cases of Multiple Nationality and on Military Obligations in Cases of Multiple Nationality of 1963.48 Yet, unhcr estimates that there are at least 10 million stateless people in the world49 while more than half of all states allow, if not embrace, dual citizenship.50 State practices that violate the right to citizenship occur where there are discriminatory laws and policies.51 Article 15(1) udhr stipulates that every natural person has a subjective individual right to citizenship. In terms of subjective individual human rights, this provision should ensure that no one is totally deprived of access to state benefits, such as the guarantee of diplomatic and consular protection, or issuing of a national passport. The right to a nationality was recognized in response

43 44 45 46 47 48 49 50 51

See ‘Supreme Court Partially Lifts Trump Travel Ban Preliminary Injunctions’ Issue 106 (C&C, 2017) accessed 12 February 2018. See ‘EB-5 Investors Will Not Be Affected by Trump’s Travel Ban’ (MS, 2017) accessed 10 August 2018. Convention Relating to the Status of Refugees (adopted 28 July 1951, entered into force 22 April 1954) 189 unts 137. Convention Relating to the Status of Stateless Persons of 1954 (adopted 28 September 1954, entered into force 6 June 1960) 360 unts 117 (Convention Relating to the Status of Stateless Persons). Convention on the Reduction of Statelessness (adopted 30 August 1961 entered into force 13 December 1975) 989 unts 175 (Convention on the Reduction of Statelessness). CoE, Convention on Reduction of Cases of Multiple Nationality and Military Obligations in Cases of Multiple Nationality (adopted 6 May 1963, entered into force 28 March 1968) ets 43 (crcmn). Information available at: accessed 10 August 2018. Thomas Faist, ‘Dual Citizenship as Overlapping Membership’ (2001) Willy Brandt Series of Working Papers in Int’l Migration and Ethnic Relations 3/1; and Danièle Joly (ed) International Migration in the New Millenium (Aldershot 2004). osf, ‘Citizenship and Equality in Practice’ 9.

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to the crisis of statelessness in the wake of the World War ii, which caused the largest population movements and forceful expulsions in European history.52 The wording of Article 15(1) udhr – ‘right to a nationality’53 – underlines the hybrid nature of citizenship law being a subjective human right on one hand, and treated as an (objective) function of the state organisation on the other. In addition to providing for the right for citizenship, the udhr also declares that no one shall arbitrarily have his citizenship revoked or shall be denied the right to change his citizenship.54 The udhr does not clarify the notion of ‘arbitrariness’ within the meaning of Article 15(2). In the elsi case, the icj explained arbitrariness as ‘not so much something opposed to a rule of law, as something opposed to the rule of law (…) It is wilful disregard of due process of law, an act which shocks, or at least surprises, a sense of judiciary property’.55 In the words of the UN Human Rights Committee, ‘the notion of “arbitrariness” must not be equated with “against the law” but interpreted more broadly, to include such elements as inappropriateness and injustice’.56 Moreover, ‘the concept of arbitrariness is intended to guarantee that even interference provided for by law should be in accordance with the provisions, aims and objectives of International Covenant on Civil and Political Rights (iccpr) and should be, in any event, reasonable in the particular circumstances’.57 Article 15(2) udhr together with Article 2 udhr prohibits deprivation of citizenship on a discriminatory basis. Indeed, the UN Commission on Human Rights recognised that ‘arbitrary deprivation of nationality on racial, national, ethnic, religious, political or gender grounds is a violation of human rights and fundamental freedoms’.58 Article 15(2) udhr aims largely at preventing statelessness, which can remove all diplomatic and consular protection from the affected person in its 52 53 54 55

56 57 58

osf, ‘Citizenship and Equality in Practice’ 6 accessed 10 August 2018. Article 15(1) udhr (emphasis added). Article 15(2) udhr. icj, Elettronica Sicula SpA (elsi) United States of America v Italy [1989] icj Judgment, Rep 15, 128. See also iia, Azurix Corp. v The Argentine Republic [2006], Award 14 July 2006, icsid ARB/01/12; iia, Siemens A.G. v The Argentine Republic [2006], Award 6 February 2007, icsid ARB/02/8. In iia, Enron Corporation and Ponderosa Assets, L.P. v Argentine Republic, Award 22 May 2007, icsid ARB/01l3, para. 281 and in Sempra Energy International v The Argentine Republic, Award 28 September 2007, icsid ARB/02/16, the tribunals concluded that ‘irrespective of the question of intent, a finding of arbitrariness requires that some important measure of impropriety be manifest’. unhcr, A. v Australia, Communication No. 560/1993, CCPR/C/59/d/560/1993, 30 April 1997, para. 9.2. unhcr, General Comment No. 16, CCPR/C/21/Rev/1, 19–20. unhcr, Human Rights Resolution No. 2005/45 on ‘Human Rights and Arbitrary Deprivation of Nationality’.

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final analysis. It implies in its control structure that although a loss of citizenship due to a state sovereign act is conditionally permissible under public international law, the occurrence of statelessness is not. Two major international instruments have been dedicated to statelessness with the aim of protecting the rights of stateless persons in the following years: in 1954 the Convention relating to the Status of Stateless Persons was adopted by the Conference  of Plenipotentiaries59 and in 1961, when the Convention on the Reduction of  Statelessness was adopted.60 The Convention of 1954 affirmed that stateless persons shall enjoy their fundamental human rights without d­ iscrimination, whereas the 1961 Convention imposed a positive duty on each contracting state to ‘grant its nationality to a person born on its territory who would otherwise be stateless’.61 It further prohibits states from depriving ‘any person or a group of persons of their nationality on racial, ethnic, religious or political grounds’.62 Deprivation of citizenship that results in statelessness and thus strips the affected individual from one of his fundamental human rights ‘can only be deemed arbitrary’.63 Both conventions had significant meaning in denoting limitations of states’ discretion in the regulation of citizenship law.64 Furthermore, while falling short of providing for a general affirmation of the right to citizenship, Article 24(3) of 1966 International Covenant on Civil and Political Rights (iccpr) made the right to citizenship declared in Article 15(2) udhr binding with regard to children.65 The same right was later guaranteed by Article 7 of the Convention on the Rights of the Child. 2.1.3 Statelessness in Practice Statelessness has been regarded as ‘the worst possible result of the violation of the right to a nationality’66 in international law. As noted in Perez, 59 60 61 62 63 64 65 66

Convention Relating to the Status of Stateless Persons; UN Conference of Plenipotentiaries on the Status of Refugees and Stateless Persons, Summary Record of the Twenty-third Meeting (26 November 1951) A/CONF.2/SR.23. Convention on the Reduction of Statelessness. Article 1 Convention on the Reduction of Statelessness. Furthermore, Articles 7(3) and 8(1) ecn reiterate limitation of states’ discretion stipulating that loss of citizenship should not result in statelessness. Article 9 Convention on the Reduction of Statelessness. osf, ‘Human Rights and Legal Identity: Approaches to Combating Statelessness and Arbitrary Deprivation of Nationality’ 8 accessed 10 August 2018. unhcr, The State of the Worlds Refugees (unhcr, A Humanitarian Agenda, 1997) accessed 10 August 2018. Article 24(3) iccpr. Institute on Statelessness and Inclusion, ‘About Statelessness’ (isi, 2014) accessed 10 August 2018.

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Citizenship is man’s basic right, for it is nothing less than the right to have rights. Remove this priceless possession and there remains a stateless person, disgraced and degraded in the eyes of his countrymen. He has no lawful claim to protection from any nation, and no nation may assert rights on his behalf. His very existence is at the sufferance of the state within whose borders he happens to be.67 There are many possible answers to the question of what are the root causes of statelessness: gaps in and conflicts between citizenship laws; gender inequality in citizenship laws; emergence of new states and changes in borders; loss or deprivation of citizenship; discriminatory criteria against a specific minority in citizenship law, to mention only some of the possible causes of statelessness due to which millions of people around the world have been left stateless.68 To agree with Swider, ‘[t]he ultimate root cause of statelessness is, however, the existence of states’.69 That is in addition to powerlessness of international law to provide for effective protection of stateless persons. Numerous practices applied in different times by a number of states testify to exclusionary grounds in citizenship laws leading to statelessness. Think of the past anti-Asian immigration policy in the United States,70 the ‘all white’ policies of Australia and New Zealand,71 or the Liberian law which up to the present date permits naturalisation for black Africans (‘Negroes’) only.72 67 68 69

Chief Justice Earl Warren in Perez v Brownell [1957] 356 US 44, 64 (Perez v Brownell). See Stiller, ‘Statelessness in International Law’. Katja Swider, ‘States as a Root Cause of Statelessness’ (ens, 28 May 2015) accessed 10 August 2018. 70 The US anti-Asian Policy started with the Chinese Exclusion Act passed by the Congress in 1882 and continued with many other restrictions on non-European immigration. In 1965 the US created temporary worker programs for skilled workers and finally normalised its relations with China in 1979. The exclusionary nature in the field of citizenship is evident from the first US Naturalization Act of 1790 enabling naturalisation of ‘free white persons’. In 1870 naturalization was extended to ‘aliens of African nativity and to persons of African descent’ and in 1898 the Supreme Court ruled in United States v Wong Kim that a citizenship should be granted to an American-born child of Chinese parents living in the US. For more details on the development of US immigration policies and citizenship law see Gabriel J Chin and Rose Cuison Villazor (eds), The Immigration and Nationality Act of 1965: Legislating a New America (cup, NY 2015); See, also, John Soennichsen, The Chinese Exclusion Act of 1882 (Greenwood, Westport 2011); Erika Lee, The Making of Asian America: A History (Simon and Schuster, NY 2015) etc. 71 See, for instance, Allen Bartley, ‘(Un)problematic Multiculturalism: Challenges and Opportunities for Social Cohesion in New Zealand’ in Norman Vasu et al., Nations, National Narratives and Communities in the Asia-Pacific (Routledge, Oxon 2014). 72 Chapter 21(1) of the Liberian Aliens and Nationality Law stipulates the eligibility criteria for naturalization. The first criterion is the race of the applicant: ‘No person shall be naturalized unless he is a Negro or of Negro descent’.

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F­urther exclusionary practices include discrimination against indigenous people in Thailand (Karen, Mon, Hmong and other hill tribes);73 Biduns in Kuwait;74 the Rohingya Muslim minority in Myanmar;75 Palestinians in Arab states;76 Dominicans of Haitian descent in the Dominican Republic;77 Meskhetian Turks in Russia etc.78 Effects of arbitrary deprivation of citizenship are similar.79 Taking away person’s citizenship involves a ‘total destruction of the individual’s status in organized society’80 and ‘the (…) concept of man’s dignity does not comport with making even those we would punish completely stateless – fair game for the despoiler at home and the oppressor abroad, if indeed there is any place which will tolerate them at all’.81 For, as pointed out by Arendt, rights of man were supposed to be ‘inalienable’ but ‘the moment human beings lacked their own government and had to fall back upon their minimum rights, no authority was left to protect them and no institution was willing to guarantee them’.82 73 74 75 76 77

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80 81 82

Micah F Morton, ‘The Indigenous Peoples’ Movement in Thailand Expands’ (2016) 68 iseas accessed 10 August 2018. Human Rights Watch, Prisoners of the Past – Kuwaiti Bidun and the Burden of Statelessness (hrw, 2011) accessed 10 August 2018. mrg, ‘Myanmar/Burma – Muslims and Rohingya’ (mrg, 2018) accessed 10 August 2018. Elder of Ziyon – Israel News, ‘Arab Discrimination and Abuse against Palestinians since 1948’ (EZ, 2018) accessed 10 August 2018. Alan Yuhas, ‘Dominicans of Haitian Descent Turned into “Ghost Citizens”, Says Amnesty’ The Guardian (London, 19 November 2015) accessed 10 August 2018. Emil Payin, ‘Population Transfer: The Tragedy of the Meskhetian Turks’ (Cultural Survival Quarterly Magazine, 1992) accessed 10 August 2018. The prohibition against the abuse of rights of states in this respect is rooted in the era of the European Reformation and the Enlightenment. Until the Thirty Years War (1618– 1648), refusal to accept a particular religion often resulted in loss of certain rights in many European regions. In extreme cases it could mean that the person was declared an ‘outlaw’, i.e. excluded from the state community. The paradigm shift from ius soli to ius sanguinis started by the French Revolution of 1789, and its development in the following years, gradually led to the rejection of the rule of ‘cuius regio, eius religio’ and changed the meaning of citizenship from an instrument of an objective state organisation to a subjective and individually enforceable right. U.S. Supreme Court, Trop v Dulles [1958] 356 U.S. 86 (Trop v Dulles). Chief Justice Earl Warren in Trop v Dulles; McCrudden, Understanding Human Dignity 337. Hannah Arendt, The Origins of Totaliarianism (Harcourt Brace Jovanovich, NY 1973) 268.

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Yet, many states around the world have arbitrarily stripped racial and ethnic minorities of their citizenship, rendering them stateless contrary to Article 15 udhr.83 Examples from the past include: Bhutanese arbitrary deprivation of citizenship of over 100,000 southern Bhutanese of Nepali origin and their expulsion to Nepal in the early 1990s; discriminatory citizenship law of Democratic Republic of Congo of 1981 stripping Banyamulenge of citizenship; deprivation of citizenship and expulsion of thousands of black Mauritanians in 1989; discriminatory Zimbabwean law stripping those presumed to have double citizenship but applied to those with non-Zimbabwean surnames, etc. Moreover, there is nothing in the law suggesting that those who acquired their citizenship through investment should be treated differently from other citizens. The equal treatment of these citizens is particularly important in terms of securing certainty for the applicants that their status would not change if, for instance, the government which has introduced the CbIP in the country changes or once the program is closed. While these programs are selective in that one has to have sufficient financial means to acquire citizenship through this route, they at least offer a route for persons rendered stateless to re-acquire citizenship. That said, most of the holders of citizenship gained through investment have more than one citizenship rather than facing the problem of statelessness. Finally, gaps in, and conflicts between, citizenship laws have been very often enumerated among the main causes of statelessness.84 Some examples resulting from such causes include children born to stateless parents in a country which does not automatically grant citizenship to stateless children born on its territory. The more recent story of Maria Jakab85 testifies to this reality. Born to a Romanian mother who left her baby walking out of a hospital in ­Poland, Maria was not considered citizen of either Romania, for which an entry on a birth certificate is not a sufficient proof to grant citizenship, or Poland, where children receive their citizenship automatically if either or both of their ­parents are Polish or ‘unknown’.86 She only received her citizenship after a long legal battle and the media coverage of the case at the age of 17.87 Other more worrisome examples which affect large group of ethnic and racial minorities 83 84 85 86 87

According to Article 15 udhr: (1) Everyone has the right to a nationality; (2) No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality. unhcr, ‘Ending Statelessness’ (unhcr, 2001–2018) accessed 21 February 2018. See ‘Born Stateless – Maria Jakab’ (StatlessVoices, 2018) accessed 10 August 2018. Stateless Voices, ‘Born Stateless – Maria Jakab’. ‘Born Stateless – Maria Jakab’.

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result from state secession. This is, for instance, the case with the citizenship laws of Estonia and Latvia after secession from the Soviet Union resulting in the loss of citizenship of large Russian minorities in these countries,88 erasure of thousands of non-ethnic Slovenians after the secession of Slovenia from Yugoslavia,89 the loss of citizenship by many Roma living on the Czech territory and being regarded as of Slovak origin after the split of Czechoslovakia,90 the loss of Croatian citizenship by thousand ethnic Serbs following the independence of the country,91 the loss of citizenship by Eritreans living in Ethiopia and Ethiopians living in Eritrea after the secession of Eritrea from Ethiopia,92 the deprivation of citizenship of Biharis living in Bangladesh by both Bangladesh and Pakistan, etc.93 2.1.4 Mass Conferral of Citizenship Mass conferral of citizenship is most commonly discussed as an example of possible infringement of the principle of good neighbourliness in the field of  citizenship law.94 The principle of good neighbourliness is an international principle of law designating ‘a model of interstate relations or certain type of ties among neighbouring states, providing for peaceful coexistence, dialogue and cooperation’.95 It is founded on legally binding rules limiting actions of independent states.96 It is based on the principles embodied in Article 2 of the 88 89 90 91

92 93 94 95 96

With regard to the status of a ‘Non-citizen’ of Latvia, for instance, see Kochenov and Dimitrovs, ‘EU Citizenship for Latvian “Non-citizens”’. Jasminka Dedić et al., Izbrisani: organizirana nedolžnost in politike izključevanja (Mirovni inštitut, Ljubljana 2003). Jiřina Šklová and Marta Miklušáková, ‘Citizenship of Roma after the Split of Czechoslovakia: A Social Problem to be Faced by Other Multinational States’ (1998) 1(2) ejsw 177. Viktor Koska, ‘The Evolution of the Croatian Citizenship Regime: From Independence to EU Integration’ citsee Working Papers 2011/15, available at: accessed 10 August 2018. Katherine Southwick, ‘Ethiopia-Eritrea: Statelessness and State Succession’ (Forced Migration, 2017) accessed 10 August 2018. Shahnawaz A Mantoo, ‘Bihari Refugees Stranded in Bangladesh Since 1971’ (2013) 1(2) J. S. Asian Stud. 123 accessed 10 August 2018. See Anne Peters, ‘Extraterritorial Naturalizations: Between the Human Right to Nationality, State Sovereignty and Fair Principles of Jurisdiction’ (2010) 53 gyil 623, 674–675. Basheska, ‘The Position of the Good Neighbourliness Principle’ 27 with further references in n 15. Basheska, ‘The Position of the Good Neighbourliness Principle’. See also Iftene Pop, Components of Good Neighbourliness between States – Its Specific Legal Contents – Some Considerations Concerning the Reports of the Sub-Committee on Good-Neighbourliness Created by

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UN Charter including the duty of all Members to refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state.97 Restrictive norms that emanate from the principle of good neighbourliness include: (a) the duty of states to refrain from domestic activities which can have harmful effects on the territory of neighbouring states; (b) states’ duty to take measures to eliminate or minimize the harm of domestic activities which may have negative impact on a neighbouring territory; (c) states’ duty to consult and negotiate with neighbouring countries about domestic activities which may affect the neighbouring country; (d) states’ duty to tolerate minimal damage caused by actions of neighbouring states; (e) the duty of states take measures to reduce rather than aggravate a conflict; (f) the more general duty of states to take steps to strengthen friendly relations.98 The term ‘neighbouring countries’ in the context of neighbourliness should not be understood in a narrow sense applying to bordering countries only but also applying ‘to the interstate relations of countries from the same geographical region and even the relations of all states of the world’.99 Fields in which the principle of good neighbourliness is applied are not strictly defined or limited. Outside of the legal framework, friendly relations are largely reflected in visa policies of states. Indeed, as noted by Amaya-Castro, [s]tates that are on friendly terms with each other will give each other’s citizens visa waivers, or may revoke these if relations turn sour. It is often the first thing states do to signal the re-establishment of friendly relations, or to signal that relations are bad. The determinant factors that result in the ranking of a nationality are unclear and seem various. There might be a colonial relation between countries, or a regionalist d­ imension. There might be a history of good or bad relations. There could be a situation of path dependency or protraction, where visa policies are either not important or too important in the relation between the two states.100 the Legal Committee of the General-Assembly of the United Nations (Editura R.A.I., Bucharest 1991). 97 Basheska, ‘The Position of the Good Neighbourliness Principle’. See also Pop, Components of Good Neighbourliness between States. 98 For other norms, see Basheska, ‘The Position of the Good Neighbourliness Principle’. 99 Basheska, ‘The Position of the Good Neighbourliness Principle’ 28. 100 Juan M Amaya-Castro, ‘“In its Majestic Inequality”: Migration Control and Differentiated Citizenship’ in Jürgen Mackert and Bryan S Turner (eds), The Transformation of Citizenship, Volume 2: Boundaries of Inclusion and Exclusion (Routledge, Abingdon 2017) 84, 91 (footnotes omitted).

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Duties imposed on states by the principle of good neighbourliness may, in theory, have implications to their freedom to decide in the field of immigration and citizenship law. Nation-state sovereignty101 can be assigned various functions in this context,102 ranging from mere regulatory law on integration and ­immigration control to the protection of ethnic, cultural, political and religious minorities. On one hand, nation-state sovereignty defines the status of a community subordinated exclusively to public international law, and thus to international law directly (so-called ‘internal sovereignty’), on the other, it underpins an obligation not to intervene in other countries out of respect for their territorial sovereignty103 and thus for peace (so-called ‘external sovereignty’).104 Had the UK in its Naturalisation Act of 1870, for example, granted British Citizenship to all of the world’s native English speakers, it would have been responded to by a declaration of war by the United States:105 a completely arbitrary conferral of citizenship to another state’s detriment would be contrary to the principle of good neighbourliness under the public international law. In particular, as noted by The Fact-Finding Mission, which was ‘aimed to investigate the origins and the course of the conflict in Georgia, with regard to international law, humanitarian law and human rights, and the accusations made in that context’ the mass conferral of Russian citizenship to citizens of Abkhazia and South Ossetia ‘constitutes interference in the internal affairs of Georgia, because Georgia does not allow dual citizenship’106 and ‘risks violating the international legal principle of good neighbourly relations’.107 However, while the Fact-Finding Mission put emphasis on the non-permitted dual 101 For greater detail on the concept of national sovereignty in the context of Europeanisation and globalisation, see David Burchell, ‘Ancient Citizenship and its Inheritors’ in Isin and Turner, Handbook of Citizenship Studies; Bryon Fong, ‘People, Citizens, and Inclusion/Exclusion’ in Talani, Globalisation, Migration, and the Future of Europe; Hailbronner, ‘Rights and Duties of Dual Nationals’; with reference to the situation in France, see Patrick Weil, ‘The History of French Nationality’. 102 For greater detail on the different functions of citizenship, see Siegfried Wiessner, Die Funktion der Staatsangehörigkeit (Attempto, Tübingen 1989). 103 For more on the content of the principle of the external sovereignty of a state, especially the principle of non-interference in the internal affairs of another state and the principle of territorial integrity, see Vaughan Lowe, International Law (oup, NY 2007). 104 See Hailbronner and Kau, ‘Der Staat und der Einzelne als Völkerrechtssubjekte’. 105 Triepel, ‘Internationale Regelung der Staatsangehörigkeit’. 106 ‘Report of the Independent International Fact-Finding Mission on the Conflict in Georgia’ (2009) Vol 2 (Report of the Fact-Finding Mission) 173, available at: last accessed 10 August 2018 (Report of the FactFinding Mission). 107 Report of the Fact-Finding Mission 174.

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c­ itizenship as a reason for the established interference in the internal affairs of Georgia, Bolzano Recommendations108 suggest that the situation would have been the same even if dual citizenship was permitted by Georgia: [s]tates may take preferred linguistic competencies and cultural, historical or familial ties into account in their decision to grant citizenship to individuals abroad. [s]tates should, however, ensure that such a conferral of citizenship respects the principles of friendly, including good neighbourly, relations and territorial sovereignty, and should refrain from conferring citizenship en masse, even if dual citizenship is allowed by the [s]tate of residence. If a [s]tate does accept dual citizenship as part of its legal system, it should not discriminate against dual nationals.109 The question that arises in this respect is whether the citizenship by investment practices allowing for such benefits (which can, at least potentially, affect other states) could disturb friendly relations between states and constitute infringement of the good neighbourliness principle. As noted, states are obliged to act with due care of diligence and refrain from domestic activities which would have harmful effects on other countries under the principle of good neighbourliness. Legal obligation of states in the field of immigration law, while somewhat disputed,110 may require cooperation of states for preventing uncontrolled migration in other countries.111 Such interpretation would be consistent with the interpretation of the Fact Finding Mission and Bolzano Recommendations prohibiting mass conferral of citizenship. The number of naturalised applicants who received their citizenship through CbIPs is much smaller compared to, for instance, ordinary naturalisations around the world and as such can hardly be viewed as a mass conferral of citizenship.112 Therefore, the impact of granting citizenship through investment on other countries is very limited, if any. Should such impact be deemed as having a harmful effect upon other states – be that because of their ­newly acquired rights of free travel and settlement or for any other reason – the 108 hcnm, Bolzano/Bozen Recommendations on National Minorities in Inter-State Relations and Explanatory Note (The Hague, June 2008) accessed 10 August 2018 (Bolzano/Bozen Recommendations). 109 Recommendation 11, Bolzano/Bozen Recommendations. 110 See Kay Hailbronner, ‘Readmission Agreements and the Obligation of States under Public International Law to Readmit Their Own and Foreign Nationals’ (1997) 57 ZaöRV 1, 31. 111 Hailbronner, ‘Readmission Agreements’. 112 Malta, for instance has a cap of 1800 passports and, as of October 2017, has approved about 1500 citizenship applications, see, for instance, accessed 10 August 2018.

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i­mpact of naturalisations granted on other bases, and especially other modes of non-mass facilitated naturalisation, must be deemed equally harmful. 2.2

Dual Nationality and Residence

The opposite situation of statelessness ˗ persons with more than one nationality ˗ is also recognised in international law. To prevent loyalty conflicts, such as in the context of the military service, and to avoid conflicts of jurisdiction, which in the context of consular or diplomatic protection could be to the detriment of those affected, it follows that those limiting factors of multiple citizenships are potential obstacles in the design of citizenship regulation addressed to national legislators.113 The Hague Convention clarified that persons with more than one nationality shall be treated as citizens by each of their states of citizenship,114 but no diplomatic protection shall be provided by any of the states against their other state of citizenship.115 A person possessing two ­citizenships may renounce one of them with the authorization of the corresponding state.116 Yet, there is no general duty under public international law to prevent dual citizenship117 apart from the constraints arising from international instruments, such as the Council of Europe Convention on the Reduction of Cases of Multiple Nationality and on Military Obligations in Cases of Multiple Nationality. On the contrary, nowadays, even some of the intergovernmental contracts present dual citizenship as desirable, in particular various treaties between Spain and Latin American countries or Portugal and Brazil.118 Dual nationality is often related to the question of residence, especially in the domain of diplomatic and consular protection where the concept of ‘effective’ citizenship is applied. Vaguely speaking, a state’s population can be defined as those individuals residing within the borders of a national territory. However, the residence element within the meaning of permanent place of 113 cf. Tido Oliver Hokema, Mehrfache Staatsangehörigkeit: Eine Betrachtung aus völkerrechtlicher und verfassungsrechtlicher Sicht. Unter Berücksichtigung des Staatsangehörigkeitsreformgesetzes vom 15. Juli 1999 (Peter Lang, Frankfurt am Main 2002); see also Topal, Staatsangehörigkeitsverlust und Mehrstaatigkeit. 114 Article 3 Hague Convention. 115 Article 4 Hague Convention. 116 Article 6 Hague Convention. 117 Hokema, Mehrfache Staatsangehörigkeit. 118 Donner, The Regulation of Nationality in International Law; and Karl-Alexander Hampe, Das Staatsangehörigkeitsrecht von Spanien, Portugal und Irland (Metzner, Frankfurt am Main and Berlin 1960).

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abode is not congruent with the basic assumption that the permanent component of a national polity requires a certain minimal cultural consensus, which cannot be achieved merely by taking up residence. The increased mobility that people enjoy today internationally also reduces the likelihood that their physical residence guarantees a long-term commitment to people’s host country.119 While having domestic parents promises immediate, interference-free communication between governors and governed, the objectives pursued by the nation-state in its design of citizenship law and its functions must conform to those boundaries set particularly by the constitutional principle of legality and the prohibition of arbitrary rules. If nationality is to be understood as the formal recognition of successful integration and the culmination of the adaptation and assimilation process, as for instance, in Denmark,120 Germany,121 Luxembourg,122 Austria,123 Greece,124 Switzerland,125 and, since 2003, also in the Netherlands;126 and on the other hand in e.g. United Kingdom, Ireland, Belgium, Italy, Spain, Portugal, Sweden and Finland as well as in the traditional 119 Spiro, Beyond Citizenship 40. 120 Denmark has been tightening its nationality legislation in the 2000s, introducing new requirements for loyalty and allegiance to the country, ‘reinforc(ing) the idea of citizenship as a reward for a complete successful integration into Danish society’ see Arnfinn H Midtbøen, ‘Citizenship, Integration and the Quest for Social Cohesion: Nationality Reform in the Scandinavian Countries’ (2015) 3(3) cms 1 . 121 For analysis of the roots and development of the ‘integration before naturalisation’ principle in Germany, see Michael Brenner, ‘Rewarded for Good Behaviour’ translated in Deniz Göktürk et al. (eds), Germany in Transit: Nation and Migration, 1955–2005 (ucp, CA 2007) 176 et seq. 122 With regard to the amendments of the Luxembourgish law in this respect, see Kristine Horner, ‘Language, Citizenship and Europeanization: Unpacking the Discourse of Integration’ in Gabrielle Hogan-Brun et al. (eds), Discourses on Language and Integration: Critical Perspectives on Language and Integration (John Benjamins, Amsterdam 2009) 117. 123 For an extensive analysis see Sara Wallace Goodman, Immigration and Membership Politics in Western Europe (cup, Cambridge 2014). 124 See, for instance, the analysis of George P Markou and Christos Parthenis, ‘Intercultural Education in Europe: The Greek Experience’ in Marco Catarci and Massimiliano Fiorucci, Intercultural Education in the European Context: Theories, Experiences and Challenges (Ashgate, Farnham 2015). 125 For the further tightening of the Swiss law in this respect and beyond, see Alberto Achermann et al., Country Report: Switzerland, eudo Citizenship Observatory RSCAS/EUDOCIT-CR 2013/23 (Robert Schuman Centre for Advanced Studies and European Union Institute, Florence 2013). 126 For the ‘New Style’ integration policy of the Netherlands, introduced in 2003, and beyond, see Chapter 3 in Karin De Vries, Integration at the Border: The Dutch Act on Integration Abroad and International Immigration Law (Bloomsbury, London/NY/Sydney/Delhi 2013).

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immigration countries like the usa, Canada, and Australia, where granting of citizenship in particular improved access to public goods in the host country – it should act as an incentive to increasingly integrate into the host society.127 Citizenship law creates a link between a domestic natural person and the national legal order to the extent that is deemed necessary. It acts as a filter for access to social and other services which are monopolised by states as public goods.128 Its ability to function appears to be elementary to the continuity of existence of the state order, which is committed to the principle of subsidiarity and which is sustained by civil commitment. The state monopoly helps control access to these uneconomic goods and thereby fulfils its obligations arising from human dignity and other constitutional principles. Yet, if the contact with the public sphere is restricted to a daily trip to and from work and a visit to the shopping centre, sport club or cultural event, considering that increasing proportion of the public infrastructure (such as traffic routes, schools and kindergartens) are privately (pre-) financed and organised, the question which arises is whether the idea of a basically state-organised community – and thus the idea of citizenship – or other ideas of belonging have obtained primary relevance.129 2.2.1 Dual Citizenship: from Resistance to Acceptance While dual citizenship is widely recognised by states today, this has not always been an easy and uncontroversial matter. In fact, the phenomenon of dual citizenship130 has acquired a wider impact in the wake of globalisation and the expansion of human rights in international law.131 The new 127 The term ‘assimilation’ is commonly defined as the adaptation of one group to the norms of another as a one-sided process, and is contrasted with integration, which requires both groups to adapt, and for which responsibility for the maintenance of cohesion in the system is, generally, one of the state, see David Reichel, Staatsbürgerschaft und Integration (VS Verlag für Sozialwissenschaften, Wiesbaden 2011). 128 Public goods are defined in financial theory as – firstly, those characterised by lack of substitution in consumption and – secondly, those to which the exclusion principle is not applicable. Public goods are therefore not dependent on direct payment and nor is  the extent to which benefit is derived dependent on the price paid, cf. Stefan Bechtold, ‘Zur rechtsökonomischen Analyse im Immaterialgüterrecht’ (2008 grur Int.) 484; Gerhard Graf, Grundlagen der Finanzwissenschaft (2nd edn, Heidelberg 2005); Horst Zimmermann, Kommunalfinanzen – Eine Einführung in die finanzwissenschaftliche Analyse der kommunalen Finanzwissenschaft (Nomos, Baden-Baden 1999). 129 cf. also the considerations of Walzer, Spheres of Justice. 130 Also referred to as dual citizenship or plural citizenship; for a comprehensive overview on multiple citizenship, see Thomas Faist and Peter Kivisto (eds), Dual Citizenship in Global Perspective: From Unitary to Multiple Citizenship (Palgrave Macmillan NY 2007). 131 cf. Helmut Rittstieg, ‘Doppelte Staatsangehörigkeit im Völkerrecht’ (1990) 43 njw 1401.

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r­ ealities of ­dramatically increased availability of improved transportation and ­communication technologies, also make pursuing one’s life in more than one country more realistic and possible.132 Beyond migration, this global trend is driven by geopolitical, economic and technological factors. The Fear over loyalty of citizens – the main argument used against dual citizenship – faded after the Cold War ended and increased international political cooperation has calmed international relations. Unlike earlier migrants in the eighteenth and nineteenth century, who had little contact with those they left behind them, the twenty-first century migrants communicate with their families on a daily basis by phone and internet; they visit them for holidays and go back to their native country for retirement.133 There are many advantages for individuals holding dual citizenships: an alternative country or countries in which to live and work, an additional locus and source of rights and community ties, more visa-free travel and, thus, better personal mobility, not to mention increased personal security.134 Those who gain their citizenship through investment usually retain their previous nationality.135 This is even the case in Austria, which generally still strictly requires the renunciation of previous citizenships as a condition of naturalisation. However, in the case of naturalisation pursuant to Section 10(6) of the Austrian Citizenship Act, i.e. the acquisition of citizenship due to extraordinary contributions to the state – including economic contributions – retention of previous citizenships is permitted. With this trend, gaining an additional citizenship and passport in a prospective country ‘no longer extracts a potentially prohibitive cost (from the emigrant’s perspective) of severing her membership ties with the country of origin. She can hold both, simultaneously’.136 Viewed from the perspective of the individual, or ‘consumer citizenship’,137 which is seen to flow from the neo-liberal premises

132 Bosniak, The Citizen and the Alien. 133 Benoit Bréville, ‘Citizens by choice’ (Le Monde Diplomatique, January 2014) accessed 10 August 2018. 134 cf. H&P, The Global Residence and Citizenship Programs; See also Pickus (ed), Immigration and Citizenship. 135 Except for Russia, which in 2014 also introduced a CbIP, which – oddly – requires the applicants to relinquish their current citizenship if they want to become Russian. 136 Shacher and Hirschl, ‘On Citizenship, States and Markets’ 206–234, 228 (note 2). 137 Melanie White, ‘Neo-liberalism and the Rise of the Citizen as Consumer’ in David Broad and Wayne Antony (eds), Citizens or Consumers? Social Policy in a Market Society (Halifax, Fernwood Books 1999).

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regarding the subjectivity of each new citizen,138 dual citizenship reflects the commodification of citizenship itself, where instead of merely accumulating material goods, the international consumer citizen collects access to various rights: citizenships and passports.139 However, viewed from the state perspective, dual citizenship has also become more attractive because it allows a state more easily to take away one’s citizenship without making a person stateless as a result.140 Thus dual citizenship enables citizenship revocation and deportation of the concerned person to the other country of citizenship.141 The most recent examples of it are the more recent amendments to the Canadian Citizenship Act, which allows, under certain circumstances, the withdrawal of Canadian citizenship if the person in question holds second citizenship, effectively introducing two classes of Canadian citizens: those with single Canadian citizenship and those who also hold other citizenships.142 Dual citizenship was once an unacceptable situation, since it was assumed that a person could have a relationship and corresponding loyalty only to one state. This was during periods in history when countries had large-scale standing armies and military service obligations and were regularly in conflict with each other. Dual citizenship was seen as a threat to territorial sovereignty.143 In the words of US Attorney General Jeremiah Sullivan Black, ‘no government would allow one of its subjects to divide his allegiance between it and another sovereign; for they all know that no man can serve two masters’.144 Dual citizenship has been also compared to bigamy and polygamy and seen as an ­offence to the nature.145 In 1849, George Bancrof argued that states should ‘as soon tolerate a man with two wives as a man with two countries; as soon 138 Regarding neo-liberal citizenship in general, see Barry Hindess, ‘Neo-liberal Citizenship’ (2002) 6(2) Citizenship Studies 127˗143, 127 et seq. 139 Daiva Stasiulis and Darryl Ross, ‘Security, Flexible Sovereignty, and the Perils of Multiple Citizenship’ in Nyers (ed), Securitisations of Citizenship 99. 140 Audrey Macklin, ‘The Securitisation of Dual Citizenship’ in Thomas Faist and Peter Kivisto, Dual Citizenship in Global Perspective (Basingstoke, NY 2007). 141 Macklin, ‘The Securitisation of Dual Citizenship’ 42 et seq. 142 Canadian Citizenship Act (R.S.C., 1985, c. C-29), last amended by Bill C-24 on 19 June 2014 (entered into force 29 May 2015). 143 Peter J Spiro, ‘Dual Citizenship as Human Right’ (2010) 8 I-CON 111–130. 144 J Hubley Ashton, Official Opinions of the Attorneys General of the United States: Advising President and Heads of Departments in Relation to Their Official Duties and Expounding the Constitution, Treaties with Foreign Governments and with Indian Tribes, and the Public Laws of the Country (W.H. & O.H. Morisson, Washington D.C. 1866) 361. 145 Peter J Spiro, At Home in Two Countries: The Past and Future of Dual Citizenship (ny up, NY 2016) 3.

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bear with polygamy as that state of double allegiance which common sense so ­repudiates that it has not even coined a word to express it’.146 Spiro somewhat sympathetically explains the ‘logic’ behind such comparisons: [s]ingular affiliations inherently have greater meaning than nonexclusive relationships. (…) The contexts of marriage and religion present ready examples; because (for the most part) those affiliations are exclusive, the resulting bond – the ‘community’, if you will – looms larger on the individual’s horizon.147 In 1895, the Institute du Droit International recognised, as a guiding principle for the work of the Commission for the treatment of legislation conflicts in the field of citizenship, that no-one can have two citizenships simultaneously.148 For example, since the Expatriation Act of 1907, and especially during the Cold War in the 1950s, dual citizenship was regarded almost as a treason in the US149 and was not allowed until the various relevant provisions of the Nationality Act of 1940, which were successively suspended in the nineteen-sixties by the US Supreme Court as unconstitutional.150 Former President of the US, Theodore Roosevelt, described dual citizenship as a ‘self-evident absurdity’,151 to add one opinion more. In short, dual citizenship was often a target of condemnation, ‘considered an anomaly, at best, and an abomination, at worst’152 through the nineteenth and into the twentieth century.153 Increased number of international marriages and family ties and migration but also, and in particular, professionalisation of the military forces and, consequently, diminished relevance of compulsory military service in many 146 Letter from George Bancroft to Lord Palmerston (26 January 1849) in S. Exec. Doc. No. 36˗38, at 164 (1850). 147 Spiro, Beyond Citizenship. 148 Topal, Staatsangehörigkeitsverlust und Mehrstaatigkeit. 149 Randall Hansen and Patrick Weil (eds), Dual Nationality, Social Rights and Federal Citizenship in the U.S. and Europe: The Reinvention of Citizenship (Berghahn Books, NY/Oxford 2002); See also Savorgnan v United States et al., [1950] 338 U.S. 49; and Perez v Brownell; also Donner, The Regulation of Nationality in International Law. 150 According to the Trop v Dulles as interpreted in the Kennedy v Mendoza-Martinez, [1963] 372 U.S. 144; Schneider v Rusk, [1964] 377 U.S. 163, and then, especially in Afroyim v Rusk, [1967] 387 U.S. 253, where the Supreme Court held that a US citizen has a constitutionally guaranteed right to remain a US citizen, ‘unless he voluntarily relinquishes that citizenship’. 151 Theodore Roosevelt, Fear God and Take Your Own Part (George H Doran Co., NY 1916) 291. 152 Peter J Spiro, ‘Dual Citizenship as Human Right’ 114. 153 Peter J Spiro, ‘Dual Citizenship as Human Right’.

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states – one of the main problems arising from multiple citizenship – as well as a long period of general world peace since the Second World War, has established that today multiple citizenship is recognised or at least tolerated by an increasing number of states.154 Currently, dual citizenship is increasingly tolerated even in the countries which still oppose dual citizenship.155 The political attitude has also changed with more states accepting dual citizenship every year: Czech Republic in 2014 and Denmark in 2015, to mention only two recent examples. Today dual citizenship is valued for its potential capacity for international influence.156 As noted by French Senator, Joëlle Garriaud-Maylam, ‘[t]he two and a half million French citizens living abroad, half of whom are binationals, constitute a rich and varied network of entrepreneurs, project managers, importers and exporters, consultants and teachers who are indispensable to our external trade and our soft power’.157 2.2.2 Diplomatic and Consular Protection Wide acceptance of the trend aside (Table 2), dual citizenship often entails limited rights in the international arena. The concept of effective citizenship has been regularly applied for the purposes of diplomatic and consular protection 154 Triadafilos Triadafilopoulos, ‘Dual Citizenship and Security Norms’ in Faist and Kivisto, Dual Citizenship in Global Perspective 27 and 34, 35. 155 In Germany, for instance, public officials must be German citizens but there is no requirement that they are only German citizens; thus, even in core areas of public authority, Germany does not regard multiple citizenship as an issue. See in this respect Christian Walter et al., ‘Der Bürgerstatus im Lichte von Migration und europäischer Integration’ (Klaus Ferdinand Gärditz’ contribution) in Christian Walter et al., Repräsentative Demokratie in der Krise?: Referate und Diskussionen auf der Tagung der Vereinigung der Deutschen Staatsrechtslehrer in Kiel vom 3. bis 6. Oktober 2012 (Veröffentlichungen der Vereinigung der Deutschen Staatsrechtslehrer, Berlin 2013) 49 et seq. There are numerous instances where dual citizenship is allowed by the German Nationality Act, including, since 28 August 2007, nationals of EU Member States and Switzerland and, since 20 December 2014, dual citizenship is extended to persons born in Germany to foreign parents who have: (a) lived in Germany for at least eight years by the time of their 21st birthday; (b) who have attended six years of school in Germany; or (c) who completed schooling or occupational training in Germany. See ss 25, 29, German Nationality Act of 22 July 1913 (Reich Law Gazette i) 583 and (Federal Law Gazette iii) 102–1, as last amended by Article 1 of the Second Act Amending the Nationality Act of 13 November 2014 (Federal Law Gazette i) 1714. 156 Bréville, ‘Citizens by choice’. 157 Bréville, ‘Citizens by choice’. About the growing importance of diasporas for countries, see ‘Gone but not Forgotten’ The Economist (London, 25 June 2015) accessed 10 August 2018. With regard to the Chinese view that ‘in practice, one cannot count on the loyalty of overseas Chinese, only on their desire to make a profit’ see Ong, Flexible Citizenship 61 with further references.

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Table 2

Selected countries which allow or recognize dual citizenship

Albania

Canada

Finland

Kenya

New Zealand

São Tomé and Príncipe

Trinidad and Tobagoa

Algeriaa

Central African Republic Chad Chile

France

Kosovo

Nicaraguaa

Senegalb

Tunisia

Gambia Germanya

Kyrgyzstana

Niger Nigeria

Serbia Seychellesa

Turkeya Tuvalu

Colombia Comoros

Ghana Greece

Latviaa Lebanon

Norwayb

Sierra Leone Slovakiab

Australia

Costa Rica

Grenada

Lithuaniab

Pakistana

Sloveniaa

Bangladesha Barbados

Cote d’Ivore Croatia

Guatemala GuineaBissau

Luxemburg Macedonia

Paraguay Peru

Belgium Belize

Cyprus Czech Republic Denmark Djibouti

Guyanab Hondurasa

Mali Malta

Philippines Poland

South Africa Korea (Republic of)a Spaina Sri Lanka

Uganda United Kingdom United States of America Uruguay Vietnam

Hungary Iceland

Mauritaniaa Mauritius

South Sudana Zimbabwea Sudana

Dominica

Iranb

Mexico

Portugal Republic of the Congo (Brazzaville) Romania

Dominican Republic Ecuador Egypta

Iraq

Moldova

Russiaa

Switzerland

Ireland Israel

Montenegroa Morocco

Syria Tajikistana

El Salvador Equatorial Guinea

Italy Jamaica

Namibiaa Nauru

Rwanda St. Kitts & Nevis St. Lucia St. Vincent and the Grenadines

Angola Antigua and Barbuda Argentina Armenia

Benin Bolivia Bosniaand Herzegovinaa Brazil Bulgaria Burkina Faso Burundi Cape Verde

Yemena Zambia

Sweden

Tanzaniab Timor-Leste

a Dual citizenship is allowed, with certain restrictions, however. In most instances a bilateral agreement with the country of second nationality is required, naturalized citizens are obliged to request permission/notify the government prior to obtaining a second citizenship, or dual citizenship is not permitted in all circumstances. b Generally not permitted, but allowances are made in very specific circumstances.

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in line with Article 4 of the 1930 Hague Convention, even were that legal ­instrument has been ratified by a limited number of states.158 The application of ‘effective’ and ‘dominant’ citizenship doctrine, application can be traced back to more than a century before the icj’s ruling. In the case of James Lewis Drummond (1834), the British Privy Council rejected the claim of the applicant – a French-British dual national – whose property was expropriated by the French Government in 1792, explaining the specific circumstances: although James Lewis Drummond was technically (by a statutory superinduction of that quality,) a British subject in the years 1792 and 1794, yet he was also at the same time, in form and in in substance, a French subject domiciled in France, with all the marks and attributes of French character. He and his family had resided in France for more than a century; and the act of violence that was done towards him was done by the French Government in the exercise of its municipal authority over its own subjects.159 The International Law Commission has formulated a number of principles in its draft articles on diplomatic protection. Thus, Article 6 on multiple citizenship and claim against third state, clarifies that ‘[a]ny [s]tate of which a dual or multiple national is a national may exercise diplomatic protection in respect of that national against a [s]tate of which that person is not a national’160 and also that ‘[t]wo or more [s]tates of nationality may jointly exercise diplomatic protection in respect of a dual or multiple national’.161 States are often clear about the question. The US Department of State explains, for instance, on its official website that: Dual nationals owe allegiance to both the United States and the foreign country. They are required to obey the laws of both countries, and either country has the right to enforce its laws. It is important to note the ­problems attendant to dual nationality. Claims of other countries upon U.S. dual-nationals often place them in situations where their obligations to one country are in conflict with the laws of the other. In addition, their dual nationality may hamper efforts of the U.S. Government to ­provide 158 Hailbronner, ‘Rights and Duties of Dual Nationals’; John Dugard, ‘First Report on Diplomatic Proctection’, ilc, 52nd Session, A/CN.4/506 (Geneve, 2000) 42. 159 James Louis Drummond case 2 Knapp, [1834] P.C. Rep 295, 12 Eng., 492. 160 ilc, ‘Draft articles on Diplomatic Protection’ in Report of the International Law Commission, Fifty-eighth Session, UN gaor, 58 Sess, Supp. No. 10, UN Doc A/61/10 (2006) 16. 161 ilc, ‘Draft articles on Diplomatic Protection’.

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consular protection to them when they are abroad, especially when they are in the country of their second nationality.162 Other Governments inform similarly their citizens about the limited protection they may offer in the state of the other citizenship: ‘the Australian Government may be limited in its ability to provide [them] with consular assistance should [they] seek it’.163 The Canadian Government explains that ‘[i]f you are a dual citizen and travel to the other country where you hold citizenship, local authorities could refuse to give you access to Canadian consular services. This could prevent Canadian consular officers from providing you with those services’.164 The International Law Commission confirms this in Article 7 of the Draft articles on Diplomatic Protection: a ‘[s]tate of nationality may not exercise diplomatic protection in respect of a person against a [s]tate of which that person is also a national unless the nationality of the former [s]tate is predominant, both at the date of injury and at the date of the official presentation of the claim’.165 The effect of dual citizenship is more controversial in the field of investment law, and particularly under the investor-state arbitration under the icsid Convention. Article 25(1) of the Coonvetion stipulates in part that: [t]he jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre.166 The phrase ‘National of another Contracting State’ includes natural and juridical persons but excludes any person, who either on the date on which the parties consented to submit the dispute to conciliation or arbitration, or on the 162 See the U.S. Department of State ˗ Bureau of Consular Affairs website on ‘Dual Nationality’ accessed 10 August 2018. 163 See the Australian Government – Department of Foreign Affairs and Trade website on ‘Dual Nationals’ accessed 10 August 2018. 164 See the Government of Canada website on ‘Travelling as a Dual Citizen’ accessed 10 August 2018. 165 ‘Travelling as a Dual Citizen’. 166 Article 25(1) icsid Convention.

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date on which the request was registered, was a citizen of the contracting state to the dispute.167 Tribunals have not intensively relied on the interpretation of the genuine link theory, as established in Nottebohm, although it has been suggested that such link should be indeed applied to exclude persons who lack the kind of meaningful link.168 Sloane explains the possible problems arising from abuse of rights in investment practices by the following example: Suppose an Azanian national wants to invest in Ruritania. But no bit or other investment treaty exists between Azania and Ruritania. Also, the investor believes that, in the event of a dispute, reliance on the internal legal system of Ruritania will prove futile, either because its law affords no relief to an investor so situated or because of corruption in the Ruritanian legal system. Fortunately, Ruritania has entered into a bit with Khazaria, and the investor has highly placed friends in the Khazar government. A few weeks later, Khazaria (perhaps unusually but in strict conformity with its internal nationality law) confers the nationality of Khazaria on the Azanian investor. He then proceeds to invest in Ruritania as he had planned, secure in the knowledge that if the Ruritanian government subsequently adopts measures that violate the bit, he may vindicate his newfound treaty rights before an independent international tribunal operating under the auspices of the icsid Convention. In that arbitration, he will also enjoy robust rights and guarantees that would have been unavailable to him as an Azanian.169 Instances like the above, intended to circumvent arbitration rules of international law, are problematic from the aspect of states which may grant citizenship by infringing domestic procedures. As noted by the Tribunal in Flegenheimer, The profound reason for (the) broad powers of appreciation which are guaranteed to an international court for resolving questions of n ­ ationality, even though coming within the reserved domain of [s]tates, is based on the principle, undenied in matters of arbitration, that complete equality must be enjoyed by both Parties to an international dispute. If it were 167 Article 25(2) icsid Convention. 168 Robert D Sloane, ‘Breaking the Genuine Link: The Contemporary International Legal Regulation of Nationality’ (2009) 50 Harv. Int’l L.J. 39–40 (with further notes). 169 Sloane, ‘Breaking the Genuine Link’ 40–41.

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to be ignored, one of the Parties would be placed in a state of inferiority vis-à-vis the other, because it would then suffice for the Plaintiff State to affirm that any given person is vested with its nationality for the Defendant State to be powerless to prevent an abusive practice of diplomatic protection by its Opponent. The right of challenge of the international court authorizing it to determine whether, behind the nationality certificate or the acts of naturalization produced, the right to citizenship was regularly acquired, is in conformity with the very broad rule of effectivity which dominates the Law of Nations entirely and allows the court to fulfil its legal function and remove the inconveniences specified.170 As implied by the Tribunal, states may also manipulate their internal law to claim, for instance, a foreign citizen as its own.171 There may be numerous other instances of abuse of rights and manipulation of internal law including structured investments or ‘mailbox’ companies used as investment vehicles for enabling natural and judicial persons, respectively, enjoy valuable rights.172 2.2.3 Genuine Link and Acquisition of Citizenship The majority of states require several years of domestic residence as a condition of naturalisation, which implies certain minimum commitment on the part of an individual to the domestic polity. However, lack of such factual link does not prevent nation-states from deciding to whom and how to grant citizenship to which even the icj’s ruling in the Nottebohm which has been traditionally connected to the ‘genuine link’ (or ‘genuine connection’) testifies. In the case of Nottebohm the icj explained ‘nationality’ as a legal bond based on ‘a social fact of attachment, a genuine connection of existence, interests and sentiments, together with the existence of reciprocal rights and duties’.173 The icj also emphasised that: in order to be capable of being invoked against another [s]tate, nationality must correspond with the factual situation. (…) It may be said to constitute the juridical expression of the fact that the individual upon whom it is conferred, either directly by the law or as the result of an act of the authorities, is in fact more closely connected with the population of the [s]tate conferring nationality than with that of any other [s]tate. 170 Flegenheimer Case – Decision No. 182, Reports of Int’l Arbitral Awards (20 September 1958) 327. 171 See also Sloane, ‘Breaking the Genuine Link’. 172 See also Sloane, ‘Breaking the Genuine Link’. 173 icj, Liechtenstein v Guatemala [1955] icj Rep 18, 4 (Nottebohm).

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Conferred by a [s]tate, it only entitles that [s]tate to exercise protection vis-a-vis another [s]tate, if it constitutes a translation into juridical terms of the individual’s connection with the [s]tate which has made him its national.174 The icj thus called for taking account of the essential, actual points of connection in the justification of citizenship: the individual’s ‘tradition, his establishment, his interests, his activities, his family ties, his intentions for the near future’.175 Therefore, an objective element, presence of which suggests that a natural person chose a specific place as the centre of his personal interests, and a subjective inner or voluntary element, which must manifest itself outwardly and whose presence in the sense of loyalty suggests an inner connection with a specific polity, must coincide. The Court used the term ‘genuine connection’. Such connection required – considering the purpose of citizenship law – more than a one-off appearance at a competent national registration authority to register as a member of a national community; it required fulfilment of material criteria along with a merely formal criterion. That said, the icj’s ‘genuine connection’ does not necessarily amount to an actual obligation on states, unless it originates from a misreading of the icj’s judgement.176 The surrounding circumstances in that case and icj’s reasoning are of particular importance in that respect. Born in Hamburg to German parents (and thus German national by blood and soil), Friedrich Nottebohm moved to Guatemala in 1905 where he settled, making that country the ‘main seat of his interests’.177 He had been settled in Guatemala for 34 years by 1939 when he applied for naturalisation in Liechtenstein. Mr. Nottebohm applied for his citizenship on 9 October 1939, applying at the same time for the previous conferment of the citizenship in the Commune of Mauren. The Commune of Mauren conferred the citizenship to Mr. Nottebohm in less than one week, on 15 October 1939. Mr. Nottebohm has paid necessary fees and taxes, and indicated that he would never become a burden to the Commune. However, he was seeking exemption from the three years residence condition while not stating the special circumstances warranting such waiver as prescribed by law. On 20 October 1939, he took the oath of allegiance and three days later tax liability arrangements were concluded. Except for visiting one of his brothers in Liechtenstein, Mr. Nottebohm had, reportedly, no other ties with that country. Furthermore, his application for citizenship of 174 175 176 177

Nottebohm, 23. Nottebohm, 24. Sloane, ‘Breaking the Genuine Link’. Nottebohm, 25.

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L­ ichtenstein came only a little more than a month after Germany’s attack on Poland, which initiated the wwii, as an attempt to substitute for his status as a citizen of a belligerent state and to secure his business interests in the then neutral Guatemala. After receiving a Guatemalan visa in his Liechtenstein passport, Mr. Nottebohm returned to Guatemala, where he continued his business activities informing the Ministry of External Affairs about his new ­citizenship and requesting the entry related to him in the Register of Aliens to be altered accordingly – a request that was shortly granted to him by the Guatemalan authorities. The Civil Registry of Guatemala also issued him a certificate with regard to the requested amendments in the identity documents. In October 1943, Mr. Nottebohm was arrested by the Guatemalan authorities and turned over to armed forces in the United States. He was deported three days later and interned for more than two years without any trial or inquiry in either country, or an opportunity to confront his accusers or defend himself. In 1944, a large number of legal proceedings was commenced against Mr. Nottebohm. They were designed to confiscate all of his properties which eventually happened. After he was released in 1946, Mr. Nottebohm took up his permanent residence in Liechtenstein following Guatemalan refusal to readmit him. In 1949, Guatemala confiscated the property of all ‘private persons or corporations holding the nationality of any of the countries with which the Republic was at war, or who held such nationality on the 7th of October 1938, even though they claimed to have acquired another nationality subsequently’,178 including Mr. Nottebohm’s property. In 1951, the Government of Liechtenstein brought suit against Guatemala in front of icj claiming restitution and compensation on the basis that Guatemala had ‘acted towards the person and property of Mr. Friedrich Nottebohm, a citizen of Liechtenstein, in a manner contrary to international law’.179 The Government of Guatemala asserted that the claim was inadmissible because of the citizenship of Mr. Nottebohm. It referred to an earlier pcij’s stance relating to the form of diplomatic protection according to which ‘the bond of nationality between the [s]tate and the individual alone confers upon the [s]tate the right of diplomatic protection’.180 The icj established that Guatemala was under no obligation to recognize the citizenship of Mr. Nottebohm under the circumstances it was granted, and held that Liechtenstein was not entitled to extend its protection to him. Liechtenstein claim was thus inadmissible. 178 Article 7, Legislative Decree No. 690 of 25 May 1949, Pleadings Vol 1, 138–139. 179 Nottebohm, 12. 180 Nottebohm, 13.

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The above details of the Nottebohm case are of paramount importance for assessing whether the ‘genuine link’ theory amounts to an actual obligation for  states to take the applicant’s habitual residence, interests, activities, family ties and intentions into account when deciding about the granting of citizenship. If the Nottebohm case amounts to such an obligation, then the scope of states’ competence in citizenship matters is far from broad, let alone unlimited, being rather heavily constrained by international law. Indeed, the icj’s reasoning in the Nottebohm formed a basis on which the stance that states are obliged to comply with the ‘genuine link’ theory has not only built its argument but spread as a more general constraint applicable to a wide range of issues. As noted by Bederman, for instance: The Nottebohm decision’s ‘genuine link’ language has had important influences on many areas of international law that involve tracing a connection between non-[s]tate actors and nations. Whether it is ­establishing the place of incorporation for a business or the proper [s]tate of registry for vessels or aircraft, a real – not fictional – connection is required.181 The genuine link theory has ‘escaped’ the Nottebohm circumstances being transposed to vessels in the context of law of the sea and even corporate entities, becoming ‘a kind of mantra’182 to a certain extent. However, impact of the ‘genuine link’ theory on states’ broad discretion in the field of citizenship matters is, if any, questionable. First of all, while the icj considered that Guatemala was not obliged to recognize Mr. Nottebohm’s Liechtenstein citizenship, it has confirmed that it is for every state ‘to settle by its own legislation the rules relating to the acquisition of its nationality, and to confer that nationality by naturalization granted by its own organs in accordance with that legislation’,183 thus recognizing that Liechtenstein conferral of citizenship was valid despite lacking a ‘genuine connection’.184 The icj deemed unnecessary to determine whether international law imposes any limitations on states’ freedom of decision in that domain. Instead, it focused on the legal effects of the decision taken on a national 181 David Bederman, International Law Frameworks (3rd edn, Foundation Press/Thomson Reuters, NY 2010) 76. 182 Sloane, ‘Breaking the Genuine Link’ 26. 183 Nottebohm, 20. 184 Sergio Carrera, ‘How Much does EU Citizenship Cost? The Maltese Citizenship for Sale Affair: A Breakthrough for Sincere Cooperation in Citizenship of the Union? ’ ceps Working Papers 2014/64.

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level in ­international law, given that ‘[i]t is international law which determines whether a state is entitled to exercise protection and to seise the Court’.185 In other words, the question which had to be answered was not whether Liechtenstein was allowed to grant citizenship to Nottebhom in the exercise of its domestic jurisdiction, but whether that act had the international effect providing for diplomatic protection. The icj focused, in particular, on determining whether Guatemala was under the obligation to recognize the naturalization of Mr. Nottebhom rather than doubting the decision of Liechtenstein to naturalize him. For, as explained by the icj: International practice provides many examples of acts performed by [s]tates in the exercise of their domestic jurisdiction which do not necessarily or automatically have international effect, which are not necessarily and automatically binding on other [s]tates or which are binding on them only subject to certain conditions: this is the case, for instance, of a judgment given by the competent court of a [s]tate which it is sought to invoke in another [s]tate.186 It is in this context only that the icj assessed circumstances of Mr. Nottebhom’s naturalization and confirmed the applicability of the ‘genuine link’ theory, for it is for each state to determine its rules in citizenship matters. That said, the Court concluded that a state cannot claim that it is entitled to have its rules recognised by another state unless it has acted in conformity with the ‘genuine link’ theory, ‘which assumes the defence of its citizens by means of protection as against other [s]tates’.187 However, as rightly observed by Judge Klaestad in his dissenting opinion, physical or real link rather than a mere intention and effective will might not be required by international law.188 In line with the previous case law,189 the Guatemalan Government would have had to prove the acceptance of genuine link ‘as law’ as evidenced by the constant and uniform state practice as a derogation from state’s sovereign right to regulate its citizenship matters which are in principle within its exclusive competence.190 No such evidence was produced by Guatemala. Furthermore, whether Guatemala has actually recognized Mr. Nottebhom’s new citizenship of Liechtenstein by granting him visa on that passport and admitting him to 185 186 187 188 189 190

Nottebohm, 21. Nottebohm, 21. Nottebohm, 23. Dissenting opinion of Judge Klaestad in Nottebohm. Colombia v Peru [1950] icj 6 (Asylum case). Dissenting opinion of Judge Klaestad in Nottebohm.

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the country after his naturalization as well as by changing the entry relating to him in the Register of Aliens and issuing him the certificate of amendments in his identity documents are yet different questions that go beyond the scope of this work. And so is the question of exclusion from diplomatic protection of, for instance, numerous Chinese, French, British and Dutch ‘non-resident citizens (who) form an important part of the body politic and are numbered in their hundreds of thousands or millions’191 if the icj’s ‘genuine link’ is applied, as asserted by the Judge Read in his dissenting opinion. Had the icj decided in Nottebohm that states must align their national legislation with the ‘genuine link’ principle in citizenship matters, it would have been difficult to discuss the broad discretion of states in that field. It does not only relate to mode of acquisition of citizenship by naturalization but also to the more traditional ways of acquisition of citizenship – ius soli and ius sanguinis – which may be, in many instances, incompatible with icj’s ‘genuine link’ principle. The opposite situation, where an individual has lived most of his life in a country of which he is not a citizen, even if he does not know any other country or does not speak any other language, is not unheard of. As of 2017, there were around 800,000 young undocumented individuals who entered the US as minors and either entered or remained in the country illegally with no fault of their own.192 These people, known as the Dreamers after the Development, Relief, and Education for Alien Minors Act,193 are, as noted by the former President, Obama ‘Americans in their heart, in their minds, in every single way but one: on paper. They were brought to [the US] by their parents, sometimes even as infants, and often have no idea that they’re undocumented until they apply for a job or a driver’s license or a college scholarship’.194 The rights of the Dreamers in the US are far from being certain, let alone their opportunities to travel abroad, which is conditional upon an advance parole document, while their deportation from the country which is the main or the only seat

191 Dissenting opinion of Judge John Erskine Read in Nottebohm. 192 Max Matza and Courtney Subramanian, ‘Daca Plan: Reaction as it Happened’ (bbc, 2017) accessed 10 August 2018. 193 American Immigration Council, The Dream Act, daca, and Other Policies Designed to ­Protect Dreamers (aic, 6 September 2017) accessed 10 August 2018. 194 Barack Obama, ‘Immigration Speech of 15 June 2012’ (15 June 2012) accessed 10 August 2018.

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of their interests is not excluded.195 Questioning the genuine link theory in legitimate democratic states, where a large number of residents with resident permit for limited periods, or lacking official status altogether, live and participate without ever having any prospect of legally acquiring citizenship and with the fear of deportation, is certainly justified. Immigrants and residents are potential citizens and territorial admission should, therefore, not be taken lightly.196 That said, citizenship conditions – naturalisation in particular – are controlled more strictly than immigration rules. Walzer’s reasons behind such discrepancy are somewhat hard-hearted but not unrealistic: ‘Why are they admitted? To free the citizens from hard and unpleasant work. Then the [s]tate is like a family with live-in servants. That is not an attractive image, for a family with live-in servants is inevitably (…) a little tyranny’. Without investigating other possible reasons of states, but agreeing with Walzer, ‘the rule of citizens over non-citizens, of members over strangers, is probably the most common form of tyranny in human history’.197 The story of numerous unaccompanied asylum-seeking children arriving in the UK is equally sad. In 2015, the Bureau of Investigative Journalism reported that 605 individuals were deported to Afghanistan after they turned 18, when their temporary leave to remain ran out.198 As with the US Dreamers, those deported from the UK have often spent significant portion of their lives in the country, ‘learning impressive English, going to school, playing cricket, taking gcses and A-levels, and forming close bonds with new friends and foster families’.199 Their genuine link with the UK notwithstanding, ‘they are wrenched from their new lives and frequently placed terrified on special charter flights, sometimes in handcuffs, to a country 195 In 2012, a policy was established by the Obama administration. It was called Deferred ­Action for Childhood Arrivals (daca) and has allowed the Dreamers to receive a renewable two-year period of deferred action from deportation and to be eligible for a work permit. The policy was rescinded by the Trump administration in September 2017, which has raised concerns over the future of the affected individuals who may lose protection and face deportation, see Catherine E Shoichet et al., ‘US Immigration: daca and Dreamers Explained’ (cnn Politics, 4 September 2017) accessed 10 August 2018. 196 Attorney Charles Jerome Ware, The Immigration Paradox: 15 Tips for Winning Immigration Cases (iUniverse, NY/Bloomington, Indiana 2009) 87. 197 Walzer, Spheres of Justice 62. 198 Maeve McClenaghan, ‘Schooled in Britain, Deported to Danger: UK Sends 600 Former Child Asylum Seekers back to Afghanistan’ (The Bureau of Investigative Journalism, Human Rights Migration Crisis, 16 July 2015) accessed 10 August 2018. 199 McClenaghan, ‘Schooled in Britain, Deported to Danger’.

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they no longer know’.200 Such severed links with what is for them nothing else but their nominal country, after their long stay in the UK, are well expressed by one of the deported individuals: ‘[w]hen I returned back to Afghanistan it was the worst situation of my life. No one helped me at all because I was completely different (…) I was strange to them and they were for me. I dressed differently I was not able to communicate with anyone’.201 Indeed, as noted by Schuster, ‘[w]hen you come back from Europe, especially if you’ve spent your adolescent years there, you’ve learnt different habits and behaviours’.202 It is difficult to imagine that icj’s intention in the Nottebhom was to change established practices of states in the field of citizenship law by imposing an obligation on states to adhere to the genuine link theory when deciding on either citizenship allocations or revocations. In line with Article 1 of the Hague Convention on Certain Questions Relating to the Conflict of Nationality Laws of 1930, states ‘shall’ recognise citizenship law of other state if it is consistent with international conventions, international custom, and principles of law generally recognised with regard to citizenship. However, rather than imposing further obligations in that respect, the icj confirmed in Nottebhom the lack of obligation on states to recognize citizenships granted by other state, which is not in conformity with the genuine link theory.203 As also noted by the Court, [t]he practice of certain [s]tates which refrain from exercising protection in favor of a naturalized person when the latter has in fact, by his prolonged absence, severed his links with what is no longer for him a­ nything but his nominal country, manifests the view of these [s]tates that, in ­order to be capable of being invoked against another [s]tate, nationality must correspond with the factual situation.204 The effective and dominant citizenship doctrine205 has been merely engaged to resolve factual issues where the question concerns diplomatic protection in the context of collisions of multiple citizenship.206 Indeed, national courts and the practice of various states have made reference to the ‘effective citizenship’ in the event of collisions with multiple nationalities, which can be interpreted either as the citizenship of the country with which the person concerned 200 201 202 203 204 205 206

McClenaghan, ‘Schooled in Britain, Deported to Danger’. McClenaghan, ‘Schooled in Britain, Deported to Danger’. McClenaghan, ‘Schooled in Britain, Deported to Danger’. Nottebohm, 21. Nottebohm, 22. See Section 2.2. Sloane, ‘Breaking the Genuine Link’ 13.

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may be assumed to have the closest connection207 or priority is given to the [s]tate in which the person with multiple nationalities in question lives.208 The genuine link theory might also not be the most appropriate solution in circumstances which do not involve dual citizenship, even if these are related exclusively to diplomatic protection of individuals. Indeed, the application of the genuine link theory in circumstances like those of Mr. Nottebohm, who lost his German citizenship and was only a citizen of Liechtenstein after acquiring a citizenship of that country, would be problematic as having a potential effect of leaving millions of people without diplomatic protection under the existing international order. If any state at all could be said to be satisfied with regard to the genuine link theory in the case of Nottebhom, it would be Guatemala –̶ the state where Mr. Nottebhom had been settled for 34 years, ­carried on his activities and the state which was ‘the main seat of his interests’.209 As rightly pointed by Sloane, ‘none of this would change had he been born in Liechtenstein’.210 As further suggested by Sloane, a correct reading of the Nottebhom case implies that the icj has ‘invoked a general principle of law, viz., abuse of rights, to prevent what it saw as a manipulative effort by the claimant to evade a critical part of the law of war’,211 rather than imposing citizenship criterion on states.212 2.2.4 Residence and Ius Doni Residence is often waived as a citizenship requirement in the case of ius doni. Investors rarely want to live in the state of investment. Work takes multinational businessmen to different places where they spend substantial time while retaining their original citizenship. As recognised by the Tribunal in Soufraki v United Arab Emirates, ‘it is difficult for Mr. Soufraki, whose business interests span continents and who constantly travels the world, to reconstruct his actual residence during a twelve or thirteen month period more than ten years earlier’.213 As put by Sloane, ‘[i]t is hard to reconcile the peripatetic modern world of countless businessmen like Soufraki with the archaic vision of 207 See The Secretary of State for Justice of the Netherlands, at: accessed 10 August 2018. 208 Donner, The Regulation of Nationality in International Law. 209 Nottebohm, 25. See Section 2.2. 210 Sloane, ‘Breaking the Genuine Link’ 18. 211 Sloane, ‘Breaking the Genuine Link’ 1. 212 See also Sloane, ‘Breaking the Genuine Link’ 42; and G D S Taylor, ‘The Content of the Rule against Abuse of Rights in International Law’ (1972–1973) 46 Brit. YB Int’l L. 323. 213 clr, Hussein Nuaman Soufraki v The United Arab Emirates (2004) icsid Case No. ARB/ 02/7, Award of 7 July 2004.

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­ ationality articulated in Nottebohm, that of a durable, monolithic bond based n on abiding loyalties and interests’.214 In fact, states would hardly attract applicants if they introduced a physical presence requirement for the investors.215 Citizenship acquired through investment is rather a consequence ‘of the changing perception of the core of state power and the relationship between the individual and the state: in the majority of countries around the “Western” world, we, the citizens, are being freed from the “suffocating bonds”’.216 Physical presence does not necessarily build strong bonds and vice versa, physical absence does not necessarily mean lack of such bonds. The legal notion of residence should not be confused with physical presence.217 Legal duties and entitlements that come with residence can be held where residence and presence do not overlap.218 In the case of CbIPs, it is not the investor but his money that must stay in the respective state for a defined period.219 Lastly, regardless of whether the genuine link between the citizen and the state is physical (taking up residence, permanent residence etc.), ethical (proof of a moral code), intellectual (knowledge of the sociocultural norms of the national community etc.) or is of a financial nature (independence from government transfer payments, investment in the host country)220 it justifies as such not only a right of residence but creates a (comprehensive) integration and fiduciary duty on the state towards its citizens.221 The latter forms the equivalent for citizens of the not uncontroversial duty of allegiance and loyalty.222

214 Sloane, ‘Breaking the Genuine Link’ 34. 215 Madeleine Sumption, ‘The Growing Market for Citizenship and Residence: A Policy Perspective’ in H&P, The Global Residence and Citizenship Programs 12˗13, 13. 216 Dimitry Kochenov, ‘Introduction ˗ A Glimpse of Global Trends’ in H&P, The Global Residence and Citizenship Programs 6. See also Spiro, ‘Cash-for-Passports’ 9. 217 See ‘Continuous Residence and Physical Presence Requirements’ (Citizenpath, 2013–2018),

­accessed 10 August 2018. 218 Dimitry Kochenov, ‘Introduction ˗ A Glimpse of Global Trends’. 219 Kristin Surak, ‘Global Citizenship 2.0: The Growth of Citizenship by Investment Programs’ IMC-RP 2016/3, 7. 220 cf. the corresponding differentiation in Džankić, ‘The Pros and Cons of Ius Pecuniae’. 221 cf. Becker Ulrich, ‘Staatsangehörigkeit und Aufenthalt als Anknüpfungspunkte für die Gewährung sozialer Rechte in der Europäischen Union – Thesen zur abgestuften territorialen Verantwortung der Mitgliedstaaten für den sozialen Schutz von Unionsbürgern’ in Peter-Christian Müller-Graff et al. (eds), Europäisches Recht zwischen Bewährung und Wandel (Nomos, Baden-Baden 2011) with reference to the Nottebohm decision of the icj. 222 The loyalty and the duty of loyalty are, for example, expressed in military service; cf. also Weil, Qu’est-ce qu’un français?

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Some scholars have criticised that aspect as discriminatory towards those naturalising after a few years of residence.223 It can be argued that beneficiaries of general naturalisation – compared to those who have received their citizenship by investment – either receive individual incentives for their personal input into the host country’s society or receive appreciation for their integration efforts, exerted and proven, or both. The main objective of such naturalisation is to recognise and strengthen their integration into the host country’s society. The motives and motivations underlying this objective can in any case remain unexamined in keeping with the proportionality test. Naturalisation authorities of the state have to verify whether granting of citizenship is justified, based on the acquired overall picture of the applicant. In the states where citizenship is acquired by investment, the emphasis isn’t placed overly on the recognition or promotion of the individual integration of a natural person but on the commitment of capital. More importantly, the theory of the ‘genuine link’ does not oblige states to adhere to a certain mode of acquisition of citizenship that would require established type of ties.224 Indeed, the legal essence of citizenship is of a rather formal nature and consequently its acquisition may, at the discretion of the relevant state, be linked to nothing more than a simple formal declaration of intent to the competent national authority and the acceptance of such intent by the competent national authority.225 There are many historical and current examples where citizenship was, and is, awarded purely formally and recognised internationally. The conferral of citizenship for entering the civil service was formerly common in many states (Adolf Hitler, as a grotesque example, only became a German national by [pro forma] employment in the German state of Brunswick’s civil service).226 The citizenship of the Vatican City State, in turn, cannot be tied to birth; consequently, only those entering the service of the state receive its citizenship,227 which is nonetheless recognised internationally. However, the rule of law prohibits the national legislature from regulating something other than what can be understood from the perspective of the addressees of the text of the statute itself, the limits of which correspond to the extremes of its permissible interpretation. To allow the constitutive people adequate control of laws and regulations through their actions, the national legislature is also bound by both the purpose and the functions of citizenship in the area of citizenship 223 224 225 226 227

See, for instance, Shachar, ‘Dangerous Liaisons’. Sloane, ‘Breaking the Genuine Link’. Sloane, ‘Breaking the Genuine Link’. von Münch, Die Deutsche Staatsangehörigkeit 54. Jorri C Duursma, Fragmentation and the International Relations of Micro-States: Self-­ determination and Statehood (cup, NY 1996) 394.

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law (ultra vires doctrine). An act of a person exercising the state authority as an organ of a state, mandated by the constitutive people for this purpose, which exceeds the established limits is an unlawful, and probably invalid, application of the law ultra vires228 because a nation-state in its capacity as a subject of public international law may not act outside of its statutorily, or otherwise defined, competencies.229 Whether the justification of the bond between the individual and the national legal order should be interpreted as a genuine link in the sense of a factual, ethical-normative or legal presence, has never been decided conclusively on an international level. It can be argued, for instance, that exceptional economic criteria should also be considered as indicative of a special ­relationship with the domestic polity and, given the key objectives of citizenship law (integration, internal social peace, and the realisation of subsidiarity between public and private spheres). Considering that the sovereignty of a state polity is only permanently guaranteed under the premise of sufficient financial resources, which is particularly bound up in sufficient tax revenue, it does not seem unreasonable to base the discretionary decision of the granting of the citizenship (naturalisation) on economic criteria such as the payment of taxes or a one-time contribution to the state, or on investments leading to a onetime, as well as permanent, benefit for the economy or directly for the state. If one has made a substantial investment in a country, the links with that country can be significant and will be greater than if one has no other tie to a country than being accidently born there. Other scholars, however, consider residence an issue rather than a desirable requirement. In particular, they are concerned with the political equality which can be claimed on the residence grounds,230 with participation of ‘outsiders’ who only got their political membership for being able to pay a certain price,231 or with the missing nexi and political influence of citizens-investors.232 Bauböck, for instance, suggests that acquiring citizenship by investment corrupts democracy, supporting that argument by the example of Frank Stronach, a Canadian citizen who retrieved his Austrian citizenship once he established European headquarters of his company in Austria.233 Bauböck explains: .

228 See, in greater detail, Karl Doehring, Völkerrecht (3rd edn, CF Müller 2004). 229 See, in greater detail, Georg Dahm et al., Völkerrecht (De Gruyter Recht, Berlin 2002). 230 Paulina Ochoa, ‘What Money Can’t Buy: Face-to-Face Cooperation and Local Democratic Life’ in Shachar and Bauböck (eds), Should Citizenship be for Sale? 31; and Rainer Bauböck, ‘What is Wrong with Selling Citizenship?’ 19. 231 Shachar, ‘Dangerous Liaisons’ 4. 232 Bauböck, ‘What is Wrong with Selling Citizenship?’. 233 Bauböck, ‘What is Wrong with Selling Citizenship?’.

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[Stronach] was granted citizenship under a special provision that requires neither residence nor renunciation of another nationality and that has also been used to naturalise Russian oligarchs alongside famous artists and sportsmen on grounds of ‘extra-ordinary achievements in the interest of the republic’. Once he had retrieved his Austrian citizenship, Stronach started buying political influence by recruiting former politicians for his company. In 2012, Stronach bought himself also a political party that he called ‘Team Stronach’ and ran an expensive election campaign. He made a bit of a fool of himself in TV debates and got fewer votes than expected, but there is now a party in the Austrian Parliament established by and named after an investor-citizen. Maybe Stronach should not have lost Austrian citizenship in the first place. But the way in which he was able to reacquire it through his investment opened the doors widely to his subsequent corruptive influence on Austrian politics.234 Stronach lost his Austrian citizenship with his naturalisation in Canada, where he lived and worked for many years that followed becoming ultra-rich. Bauböck is right to note that ‘[m]aybe Stronach should not have lost Austrian citizenship in the first place’.235 He did not lose his Austrian citizenship because of his corruptive attitude but because of the restrictive citizenship law of Austria prohibiting dual citizenship, which might have started to change most recently with the plans for granting Austrian citizenships to Italian citizens of South Tyrol.236 It remains to be seen, however, whether or not the intention of  the Austrian Government is to liberalise Austria’s approach towards dual citizenship which has been enforced strictly in the recent past.237 Bauböck is also right to point out that some ˗ rather than all ˗ have been spared from the rigid citizenship rules. Being famous helps in Austria: Arnold Schwarzenegger, for instance, was allowed to retain his Austrian citizenship upon becoming a US citizen, and Christoph Waltz ˗ a German actor ˗ was granted Austrian citizenship after winning an Oscar for the film ‘Inglourious Basterds’.238 234 Bauböck, ‘What is Wrong with Selling Citizenship?’ 20. 235 Bauböck, ‘What is Wrong with Selling Citizenship?’ 20. 236 See ‘Austria and Italy Clash over South Tyrol Citizenship Proposal’ (FT, 2017) accessed 10 August 2018. 237 See, for instance, George Jahn, ‘Austria Cracks Down on Turkish Citizens with 2 Passports’ The ­Associated Press (24 June 2017) accessed 10 August 2018. 238 Lewis Sanders iv, ‘India, China, Germany: A World of Rules on Dual Citizenship’ (DW, 27 October 2017) accessed 17 February 2018.

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All these examples, however, have very little to do with the rationale of CbIPs. First of all, it should be recalled that Austria does not have a structured CbIP but a rather well-established practice of citizenship by investment which as such, however, leaves a large amount of state discretion. Secondly, Stronach established headquarters of his company in Austria in 1986 and only entered Austrian politics 25 years later, in 2011, being by then very well (re)integrated in Austria, where he has ‘spent a lot of time’.239 While buying political influence might have been ‘a new phenomenon’240 in Austria, Stronach was not any more or less Austrian back then, than when he left the country for Canada. In such case, there is no difference if it was Stronach, who retrieved his Austrian citizenship, or any other ultra-rich Austrian who only ever had Austrian citizenship who made the country ‘kneeling’241 before him. The problem that needs to be tackled lies rather with the allegedly corrupt politicians – neither less nor more Austrians than Mr. Stronach – who allowed ‘to be bought’ by the rich businessman. While assessment of the alleged corruptive attitude of Mr. Stronach goes beyond the topic of this work, Bauböck’s suggestion that his reacquisition of citizenship by investment ‘opened the doors widely to his subsequent corruptive influence on Austrian politics’ moves far from the point of corruption of democracy by citizens-investors. To assume that citizens-investors would try to use their wealth for political gains would be simply wrong and in contradiction with the mere fact that most citizens-investors don’t even settle or wish to settle in their new ‘home’ state, let alone are interested in politics. Besides, gaining political influence does not require citizenship, it requires financial capacity. They rather wish to secure better mobility and security by means of an additional passport.242 Moreover, increasingly many people worldwide favour avoiding political and citizenship issues concentrating on their careers, enjoying the ‘fruits’ thereof, maintaining their private spheres, following the stock price of internationally operating companies rather than p ­ olitics, ­attending sporting 239 Jonathon Gatehouse, ‘Frank Stronach on Founding a Political Party for $26 Million ˗ and Tackling Corruption in Austria’ (Macleans, 19 December 2012) accessed 10 August 2018. 240 Barbara Franz and Jürgen Pfeffer, ‘The Austrian Way: Neocorporatism and Neoliberal Corruption’ in Jonathan Mendilow and Ilan Peleg, Corruption in the Contemporary World: Theory, Practice, and Hotspots (Lexington Books, London 2014) 140. 241 Dominic Baur, ‘Herr Stronach kauft sich Österreich’ Spiegel (4 July 2003) accessed 10 August 2018. 242 H&P, The Global Residence and Citizenship Programs 56˗58.

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events (or sharing the same experience with millions or sometimes billions of spectators by watching television) or fostering other cultural ­interests.243 Furthermore, states may decide to restrict electoral rights of non-resident citizens. For instance, St Kitts and Nevis does not enfranchise citizens-investors244 while all other states with formal CbIPs ˗ Antigua and Barbuda, Cyprus, Dominica, Grenada, Malta and Saint Lucia ˗ impose physical presence requirements for electoral participation of their citizens including of citizens-investors.245 However, agreeing with Surak, ‘[t]hough residence may be a requirement for voting, it is not for the extension of political membership. This holds not only for investor citizens, but also for less publicly contentious cases of descent-based naturalization programs’.246 That said, it is also important to note that most states also allow ‘resident non-citizens to join political parties and to contribute time and money to political activities, presumably because they see such activities as intimately connected to basic civil liberties’.247 Thus, while Article 25 iccpr explicitly restricts political rights to citizens248 and Article 21(1) udhr249 might be also restricted to citizens,250 the message of the UN Office of the Commissioner for Human Rights, responsible for monitoring the implementation of the iccpr, was clear: ‘[s]tates should consider granting the right to participate

243 For a sobering account of the political ignorance in modern democracies, see Ilya Somin, Democracy and Political Ignorance: Why Smaller Government Is Smarter (sup, Stanford 2013) 17 et seq. 244 Surak, ‘Global Citizenship’ 5. 245 Surak, ‘Global Citizenship’ 5–6. 246 Surak, ‘Global Citizenship’ 6. 247 Joseph H Carens, ‘Citizenship and Civil Society: What Rights for Residents?’ in Hansen and Weil (eds), Dual Nationality, Social Rights and Federal Citizenship 108. 248 This legal provision stipulates: ‘Every citizen shall have the right and the opportunity, without any of the distinctions mentioned in article 2 and without unreasonable restrictions: (a) To take part in the conduct of public affairs, directly or through freely chosen representatives; (b) To vote and to be elected at genuine periodic elections which shall be by universal and equal suffrage and shall be held by secret ballot, guaranteeing the free expression of the will of the electors; (c) To have access, on general terms of equality, to public service in his country’, Article 25 iccpr. 249 On the meaning of the udhr for the enforcement of universal rights under the impact of economic globalisation and transnationalism, see Elias, ‘The Impact of Globalisation’. 250 Delia Rudan, ‘Nationality and Political Rights’ in Serena Forlati and Alessandra Annoni (eds), The Changing Role of Nationality in International Law (Routledge, NY/Oxford 2013) 120; For rather critical approach, see Eide Asbjørn, ‘The Rights of “Old” Versus “New” ­Minorities’ in Tove H Malloy and Joseph Marko (eds), Minority Governance in and beyond Europe: Celebrating 10 Years of the European Yearbook of Minority Issues (Martinus Nijhoff, Leiden 2014) 33–34.

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in public life at the ­local level, including the right to vote in local elections, to long-term non-citizen residents’.251 Many countries (including the Netherlands, Sweden, New Zealand or the Swiss canton of Jura) grant foreign citizens at least a right to vote in local elections.252 Such a right is granted to all EU nationals in the EU,253 and in most Commonwealth states. The citizens of other Commonwealth states acquire full voting rights if they are lawful residents or after a brief period of residence (e.g. one year), even if they are not citizens of the country of residence. In the UK for example, any citizen of a Commonwealth member country who is lawfully resident in the UK can register to vote in European parliamentary and British parliamentary elections.254 Citizenship itself has little to do with the attitude towards corruptive actions. An ultra-rich individual who intends to manipulate politics and ‘buy’ politicians needs no citizenship of the state but simply ‘fruitful’ ground. Residence is practically irrelevant for the question of genuine link, and citizenship ties are formal in nature. 2.3

Conclusions to Chapter 2

States have wide discretion to regulate citizenship matters. This principle has been recognised in international law and widely respected by states. Limitations with regard to states discretion emanates from international treaties to which states are parties and from other sources of international law. That said, in lack of strict obligations imposed on states and global police force efficiency and enforcement of international law might not be entirely sufficient to which the violation of the right to a nationality and global statelessness testify. The general principle of non-discrimination is one of the limitations which has certainly influenced the way states regulate citizenship matters. In particular, a number of legally binding and non-binding instruments include prohibition of discrimination on various grounds. However, differences in treatment 251 Joan Fitzpatrick, ‘The Human Rights of ­Migrants’ (Conference on International Legal Norms and Migration, Geneva, May 2002) accessed 10 August 2018. 252 Rainer Bauböck, ‘Expansive Citizenship: Voting Beyond Territory and Membership’ (2005) 38(4) Political Science and Politics 683. 253 Council Directive (EC) 2004/38 of the EP and of the Council on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States [2004] OJ L158/77. 254 See Representation of the People Act 1983, ss 4(1)(c); 4(3)(c).

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are not always impermissible. International rules rather provide for equal treatment of equal rather than different people. Citizens and non-citizens have been traditionally treated differently and no legal provision in international law provides for prohibition of granting citizenship on economic basis just as no such provision prohibits granting citizenship to physical talents. It is also difficult, if not impossible to see the relation between other relevant rules of international law such as mass conferral of citizenship, for instance, and granting citizenship through investment given the very small number of economic citizenships granted annually. A more important aspect, however, is the effect of ius doni as a second citizenship of his holder given the fact that countries with citizenship by investment schemes tolerate dual nationality. Dual nationality has been recognised in international law and now widely accepted by most states. That said, dual citizenship often entails limited rights in the international arena. Thus for the purposes of diplomatic and consular protection the concept of effective citizenship has been widely applied. However, the effect of dual citizenship is more controversial in the field of investment law where there might be, for instance, attempts to circumvent arbitration rules of international law where states grant citizenship by infringing domestic procedures. Such risks, however, are not exclusively related to any mode of acquisition of citizenship. While useful as guidelines in diplomatic and consular protection, effective residence is not a requirement for acquisition of citizenship imposed on states by international law. The icj’s decision in Nottebohm, while often used by advocates of the ‘genuine link’ theory as an evidence for effective residence, does not in fact oblige states to adhere to a certain mode of acquisition of citizenship that would require certain type of ties. The acquisition of citizenship may be linked to nothing more than a declaration of intent to the national authority and the acceptance of such intent by the latter should the state of citizenship wish and decide to simplify its citizenship requirements to that extent.

Chapter 3

Ius Doni in EU Law 3.1

Supranational Cooperation and Citizenship beyond the Nation-State

Cooperation between the European states in the post-war history departs from some of the most commonly established practices of international law testifying that integration among former enemies may be achieved even when the goals of reconstruction and reconciliation are not completely fulfilled.1 Already in 1946, the British leader of the conservative opposition at the time, Winston Churchill, spoke about the ‘Tragedy of Europe’ calling for the re-creation of the European Family.2 He considered European unity as a structure promising long-lasting peace, safety and freedom and building of some form of United States of Europe as the only way for regaining ‘the simple joys and hopes which make life worth living’.3 The re-creation of the European Family in Churchill’s 1 The term ‘reconstruction’ is used not only to describe rebuilding physical infrastructures, but also refers to consolidation of economies and functioning of institutions in the states affected by the war. The term ‘reconciliation’ providing the simplest meaning of ‘restoring friendship, harmony, and communication’ has been borrowed from Ann L Phillips, Power and Influence After the Cold War: Germany and East-Central Europe (Rowman and Littlefield, Lahnam, MD 2000) 52; There are different approaches as whether reconstruction and reconciliation in post-conflict societies belong together, for instance Charles Villa-Vicencio, ‘A Difficult Justice: Reparation, Restoration and Rights’ in Eric Doxtader and Charles Villa-­ Vicencio, To Repair the Irreparable: Reparation and Reconstruction in South Africa (David Philip Publishers, Claremont 2004) 79, underlines the interdependence between reconstruction and reconciliation, arguing that neither may happen without the other, given that ‘social harmony (i.e. the reconciliation) makes for economic growth (i.e. for the reconstruction) and economic growth makes for social harmony’ (emphasis added). The United States Air Force Academy, ‘Proceedings of the Forty-Forth United States Air Force Academy Assembly: The Future of Europe: Integration or Fragmentation?’ (usafa, Colorado Springs 2002) 27, developed different opinion implying that reconstruction necessarily precedes reconciliation and that integration is preceded by both reconstruction and reconciliation. András Inotai, ‘Remarks on the Future Challenges of the European Union’ in Richard H Tilly, Paul JJ Welfens and Michael Heise (eds), 50 Years of EU Economic Dynamics: Integration, Financial Markets and Innovations (Springer, Berlin/Heidelberg/NY 2007) 263, reminds that the post-war reconstruction in Europe was connected to the Franco-German reconciliation. 2 Winston S Churchill, ‘The Tragedy of Europe’ (Speech at the University of Zurich, 19 September 1946) printed in Anjo G Harryvan and Jan Van Der Harst, Documents on European Union (Palgrave Macmillan, Hampshire, UK 1997) 38˗42. 3 Churchill, ‘The Tragedy of Europe’ 39.

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view was to be based on a partnership between former enemies – France and Germany in particular – who would thus regain their spiritual integrity. In his opinion, only after these two countries have made their first step, all other European states willing and able to join could do so. Recognizing the importance of equality among states, Churchill additionally emphasized that small countries would not feel inferior in such an entity but would gain their honour by contributing to a common cause, the cause of the united European countries. And so it happened. The speech of the US Secretary of State, George Marshall, of 5 June 1947, where he emphasized the administration’s will for contributing to the European recovery, marked the official beginning of the Economic Recovery Program known as the ‘Marshall Plan’.4 Cooperation between European states took different shapes in the following years,5 reflecting primarily their security concerns and, more particularly, the threat from a possible repetition of wartime’s bloodshed and aiming at securing stability and prosperity in the region by way of (re)establishing good neighbourly relations among European states, cultivating a habit of dialogue, cooperation and loyalty and sharing a common vision. European and non-European countries were entering agreements and alliances to protect their territories from possible foreign aggression.6 Besides the creation of defensive alliances, the post-war period has advanced many ideas of European

4 Harryvan and van Der Harst, Documents on European Union, 43˗45. 5 Kenneth W Thompson, Cold War Theories: Volume I: World Polarization, 1943–1953 (Louisiana State UP, 1981) 142–154. 6 Clive Archer, The European Union: Structure and Process (3rd edn, Continuum, London 2000) 6. On 4th of March 1947, France and Great Britain signed a Treaty in the Belgian city of Dunkrik (Dunkrik Treaty), which established a defensive alliance against a possible attack from Germany. The Dunkrik Treaty was further expanded by Treaty of Brussels from 17 March 1948, which was also signed by the neighbouring Belgium, Netherlands and Luxemburg (henceforth Benelux). This military organisation had small practical value but it had truly significant political effect, as it expressed the common will of the five participating countries to defend themselves jointly in line with the necessity of re-establishing good neighbourly relations and strengthening cooperation between neighbouring countries in the post-war period in Europe. It also encouraged the US to join talks to establish a treaty allowing for wider self-defence, which has resulted in formulation of the North Atlantic Treaty Organisation (henceforth nato). The North Atlantic Treaty establishing nato was adopted on 4 April 1949, and entered into force on 24 August 1949. nato was set up as a defensive alliance against Russia. On the opposite side, on 14 May 1955 the Soviet Union set up the Warsaw Pact as a military alliance of Communist countries to rival nato. The twelve founding members of the nato were: Belgium, Canada, Denmark, France, Iceland, Italy, Luxemburg, the Netherlands, Norway, Portugal, UK and the US.

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unity and brought about a number of groups promoting the cooperation among states.7 The establishment of the European Coal and Steel Community (ecsc) has marked the beginnings of the most advanced form of integration.8 The first commonly agreed European tax, allowed for by the ecsc, came into force on 1 January 1953, and a common market including removal of custom duties and quantity restrictions for coal and steel has been set up between the six Member States.9 The ecsc was shortly followed by the establishment of the European Atomic Energy Community (Euratom) and the European Economic Community (eec) ˗ both of which have started operating on 1 January 1958. Euratom strengthened cooperation of the participating Member States in the field of nuclear energy and the eec created customs union covering all of the trade in goods among Member States and prohibiting all custom duties on imports and exports and all charges having equivalent effect,10 as well as adopting a common custom tariff in their relations to third countries.11 It did not take the Court of Justice long to distinguish the new legal order based on supranational cooperation among states from other traditional forms of international cooperation. The first major revision of the Community Treaties12 introduced the notion of a single European Community (EC) constituting of all three Communities. The second major revision of the Community Treaties13 marked a historical epoch in the European integration process with signing of the Maastricht Treaty, i.e. the Treaty establishing the European Union. With a certain delay due to the ratification process, the treaty entered into force on 1 November 1993. The newly established entity was essentially broader than the EC, which focused mainly on the economic integration between the states. Apart from signifying ‘constitutionalisation’ of the integrative process, the Maastricht Treaty also introduced the concept of EU citizenship, which had an effect of creating new 7

8 9 10 11 12 13

Detailed analysis of European movements in the post-war period may be found in Carole Webb, ‘Europeanism and the European Movements’ in Martin Kolinsky and William E Paterson (eds), Social and Political Movements in Western Europe (Croom Helm, London 1976). Peter Hay, Federalism and Supranational Organisations: Patterns for New Legal Structures (University of Illionis Press, Urbana 1966) 4. Carlo Altomonte and Mario Nava, Economics and Policies of an Enlarged Europe (Edward Elgar, Cheltenham 2005) 2. Article 28 of the Treaty on the Functioning of the European Union [2012] OJ C 326/47 (tfeu). Article 29 tfeu. Single European Act (adopted 28 February 1986, entered into force 1 July 1987). Treaty on European Union (adopted 7 February 1992, entered into force 1 November 1993).

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rights and duties for EU citizens becoming a ‘fundamental status of nationals of the Member States’.14 3.1.1 The New Legal Order The ecj recognised fairly early that the EU law forms a ‘new legal order’ of international law.15 As such it has been attached a special identity separate from international law. This necessarily means that the ‘new legal order’ demonstrates certain properties which are not found in the traditional international legal order. Yet, although existing for nearly sixty years now, the supranational model of cooperation is still ‘matter of approach and interpretation’.16 In lack of clear definition of its legal nature and some of its powers, otherwise reserved for states,17 the EU has often been compared to international organisations.18 However, ‘it is neither exactly an international organisation, nor a state, but stands between both’.19 The supranational model of cooperation depends on ‘powers and functions actually accorded an organisation’20 rather than stipulations.21 The (more or less) common understanding however provides that ‘the term (supranationality) is typically used to identify a particular type of international organisation that is empowered to exercise directly some of the powers otherwise reserved to states’.22 Thus indicated powers of the 14 C˗184/99 Rudy Grzelczyk v Centre public d’aide d’Ottignies-Louvain-la-Neuve, [2001] ECLI: EU: C: 2001:458 (Grzelczyk), para. 31. 15 In Case 26/62 NV Algemene Transporten Expeditie Onderneming van Gend en Loos v Nederlandse Administratie van Belastingen [1963] ECLI: EU: C: 1963: 1 (Van Gend en Loos), the cjeu has confirmed that ‘the Community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields’. In Case 294/83 Parti écologiste ‘Les Verts’ v European Parliament, [1986] ECLI: EU: C: 1986: 166, para. 23, the Court went further emphasising to a certain extent the municipal nature of Community law by characterising the (then) eec Treaty as a ‘basic constitutional charter’. 16 Hay, Federalism and Supranational Organisations 17. 17 Many scholars tried to clarify the nature of the EU legal order as compared to the traditional international law: see, for instance, Eileen Denza ‘Two Legal Orders: Divergent or Convergent?’ (1999) 48 iclq 257, for similarities and differences between International public law and European law; for earlier discussions on the subject, see also Pierre Pescatore, ‘International Law and Community Law – A Comparative Analyses’ (1970) 7 cml Rev 167; Derrick Wyatt, ‘New Legal Order or Old?’ (1982) 7 ELRev 147; Richard Plender, ‘The European Court as an International Tribunal’ (1983) 42(2) clj 279; etc. 18 Elena Basheska, ‘The Good Neighbourliness Principle in EU Law’ (PhD thesis, University of Groningen 2014) 57. 19 Basheska, ‘The Good Neighbourliness Principle in EU Law’ 57. 20 Hay, Federalism and Supranational Organisations 30. 21 Hay, Federalism and Supranational Organisations 29–30. 22 Laurence A Helfer and Anne-Marie Slaughter, ‘Toward a Theory of Effective Supranational Adjudication’ (1997) 107 Yale L.J. 273, 287 (emphasis added).

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s­ upranational organisation have been traditionally affiliated to states as the only subjects of international law possessing rights inherent in full sovereignty. Accordingly, the exercise of such powers by the EU presupposes transfer of some sovereign rights from its Member States,23 or, as explained by Helfer, ‘if a supranational organisation is to regulate some spheres of economics, politics or defence, the right to perform this regulation should be taken from the Member States, as there it resides’.24 Given the broad scope of competencies conferred to it by its Member States, EU has advanced its own supranational legal order embodied primarily in the concepts of direct effect and supremacy. The concept of direct effect enables individuals to invoke EU law before their national courts25 and administrative authorities.26 Closely related are the concept of direct applicability and supremacy of EU law. Direct applicability implies that EU law is directly incorporated in national legislation without any need or possibility for its transformation,27 and supremacy implies primacy of EU law over national law.28 Unlike the new EU legal order, international law does not regulate 23 24 25

26 27

28

See, in this context, Dimitry Kochenov, ‘Sovereignty Lying in Between? The Case of the European Community and the Member States’ (2003) 2 jer 36. Helfer and Slaughter, ‘Toward a Theory of Effective Supranational Adjudication’ 287. The landmark case is Van Gend en Loos, where the Court of Justice of the European Communities confirmed the concept of direct effect stating that: ‘[i]ndependently of the legislation of Member States, Community law (…) imposes obligations on individuals but is also intended to confer upon them rights which become part of their legal heritage. These rights arise not only when they are expressly granted by the Treaty but also by reason of obligations which the Treaty imposes a clearly defined way upon individuals as well as upon the Member States and upon the Institutions of the Community’. Robert Schütze, ‘On “Federal” Ground: The European Union as an (Inter)national Phenomenon’ (2009) 46(4) cml Rev 1069, 1088. The concepts of direct applicability and direct effect have been widely used as synonyms. In C–58/93 Yousfi v Belgian State, [1994] ECLI: EU: C: 1998: 13, Advocate General, Tesauro, has considered the alleged distinction between the two concepts concluding that ‘the difference between the expressions used, at least in the case law is merely terminological and not substantive’. However, many scholars highlight the importance of making distinction between the two because of different legal impact of various community acts. For instance, Juha Raitio, The Principle of Legal Certainty in EC Law (Kluwer Academic, Dordrecht 2003) 108–109, highlights the importance of making distinction in the context of emphasising that directives are not directly applicable but may be directly effective; along the similar lines, Anthony Arnull, The European Union and its Court of Justice (oup, NY 1999) 108, referring to the case law concludes that while ‘direct applicability is a sufficient precondition for direct effect, it is by no means a necessary precondition’. Roman Kwiecień, ‘The Primacy of European Union Law Over National Law Under the Constitutional Treaty’ in Philipp Dann and Michał Rynkowski (eds), The Unity of the European Constitution. Beiträge zum ausländischen öffentlichen Recht und Völkerrecht, vol 186 (Springer, Berlin/Heidelberg 2006).

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its own internal applicability and effect.29 The concept of direct applicability of international acts focuses generally on the monist or dualist approach of states. While according to the monist approach, international law is directly applicable and has a direct effect and as such does not differ to the concept of direct applicability adopted in the EU legal order, most of the states accept the dualist approach whereby international law does not form a part of the domestic law directly.30 Contrary to EU law whereby the Member States are definitively and unconditionally bound to the monist approach, the international law leaves the inherent right of the states to decide whether to adopt the monist or dualist approach. In the words of Uerpmann: If a constitution arranges direct effect within the states it decides in ­favour of a comprehensive observance of international law (…) without making its own faithfulness to international law dependent on the behaviour of other states. This decision is particularly friendly towards international law.31 The concept of supremacy implies that if the EU law and national law are in conflict, the former would prevail.32 In traditional international law, the 29

30 31 32

Robert Uerpmann, ‘International Law as an Element of European Constitutional Law: International Suplementary Constitutions’ Jean Monnet Working Papers 9/03 accessed 10 August 2018. The author refers to the concept of direct effect, referring to direct applicability of international law in the sense of direct applicability in the EU legal order. France D Alland, ‘Jurisprudence en matière de droit international public’ (1998) rgdip 203, 220, highlights that all concepts of integration of international law are dualistic with different degree of monistic influence. Uerpmann, ‘International Law as an Element of European Constitutional Law’. The supremacy of law has been first confirmed and broadly discussed in Case 6/64 Flaminio Costa v enel, [1964] ECLI: EU: C: 1964: 66 (Costa v enel). The Court of Justice of the European Communities underlined in the case that ‘[t]he obligations undertaken under the Treaty establishing the Community would not be unconditional, but merely contingent if they could be called in question by subsequent legislative acts of the signatories (…) The presidencies of Community law is confirmed by Article (288 tfeu) whereby a regulation shall be binding and directly applicable in all Member States (…) It follows (…) that the law stemming from the Treaty, an independent source of law, could not, because of its special and original nature be overridden by domestic legal provisions, however framed, without being deprived of its character as Community law and without the legal basis of the Community itself being called into question. The transfer by the states from their domestic legal system to the Community legal system of the rights and obligations arising under the Treaty carries with it a permanent limitation of their sovereign rights, against which a subsequent unilateral act incompatible with the concept of the Community cannot prevail’. (emphasis added).

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c­ oncept of supremacy is a fundament of the monistic approach. This implies that the supremacy of international law over national legal systems may be possible in exceptional circumstances only, as opposed to the EU legal order where the concept has been established as a rule. While differing from international organisations, EU is not a federal state and has limited individual authority conferred to it by its Member States (Article 5(2) teu). The doctrine of pre-emption governs the question of conflict and consequences between EU law and national legislation. The Union is only competent to act within the scope of the powers allocated to it with the Treaties.33 Referring to the principle of conferral, Article 4 (1) teu underlines that ‘competencies not conferred upon the Union in the Treaties remain with the Member States’. In addition, in line with the principle of subsidiarity, the Union may act in areas which are not in its exclusive competence – if the objectives of the proposed action may be better achieved at the Union level than on central or regional and local level of Member States.34 Finally, the EU may use its implied powers in order to attain the objectives set out in the Treaties.35 33 The tfeu distinguishes between three types of competences of the Union: exclusive competences in the fields enumerated in Article 3(1) tfeu; shared competencies in the fields enumerated in Article 4(2) tfeu; and complementary competencies in the fields enumerated in Article 6 tfeu. In exercising its complementary competencies, the EU is empowered to support, coordinate and supplement actions of Member States without any power to legislate or interfere in the competences reserved for Member States. In addition to these three groups of competencies, the EU has specific competencies in line with Article 5(3) tfeu to coordinate economic and employment policies by defining guidelines to be followed by Member States and has also competences in line with Article 24(2) teu in all fields connected to the cfsp although not being empowered to adopt legislative acts in this field. 34 In line with the principle of subsidiarity as provided in Article 5(3) teu [2012] OJ C 326/13, the EU shall act beyond its external competencies ‘only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level’. In this particular context see Alina Kaczorowska, European Union Law (Routledge, NY/Oxon 2008) 51–52, suggesting that the principle of subsidiarity shall be used as a yardstick for determining whether the EU may take an action in the fields of shared competences, and deducing for that purpose four different criteria of the provision contained in Article 5(3) teu. 35 The doctrine of implied powers of the (E)EC and EU respectively i.e. powers which although have not been specifically mentioned in the Treaties are conferred upon it as being essential to the performance of its duties i.e. to enter into international commitments has been established in Case 22/70, Commission of the European Communities v Council of the European Communities, [1971] ECLI: EU: C: 1971: 32, para.16 (erta). The Lisbon Treaty has codified the implied powers of the Union in the external relations developed by the cjeu in Article 3(2) tfeu.

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The opposite side of that matter is the consequence that ‘[w]hen the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the [M]ember [S]tates being able to do so themselves only if so empowered by the Union or for the implementation of acts of the Union’.36 In the areas where the EU shares its competencies with Member States, the latter ‘shall exercise their competence again to the extent that the Union has decided to cease exercising its competence’.37 Last but not least, EU Member States may not submit disputes concerning the interpretation or application of EU Treaties to other methods of settlement than those provided for by the Treaties.38 Similarly, EU Member States may not use traditional measures under the international law, such as retaliation, when another Member State is noncompliant with EU law. The infringement procedures are clear. Actions that may be undertaken in case of a failure of a Member State to fulfil its obligations in line with the treaties are covered under Articles 258 and 259 tfeu. The first article empowers the Commission as the ‘guardian of the treaties’ to open infringement procedure against a Member State which failed to meet its obligation under the treaties, while the second leaves the same possibility to the Member States. The Commission enjoys discretion with regard to its right to open the infringement procedure pursuant to Article 258 tfeu. If it finds that a Member State has not applied the EU law and accordingly failed to meet its obligations, it shall not take the Member State before a court immediately. Namely, Article 258 tfeu proceedings comprise two stages: administrative and judicial. Under the first stage the Commission will make various attempts to negotiate agreement with the concerned Member State informally, most of the time by exchange of correspondence, documents, data etc. If there is no agreement in the pre-infringement stage and the Commission decides to initiate infringement procedure, it sends a formal notice to the Member State. The member state is then given the opportunity to submit its observations. After the submission of those by the Member State, the Commission decides whether it should deliver a reasoned opinion explaining why it considers that the Member State has failed to fulfil its treaty obligations. After the reply of the Member State to the reasoned opinion of the Commission (or lack thereof), the Commission refers the matter to the Court of Justice, thus starting the judicial procedure. Similarly, the Commission will follow the infringement procedure described in cases when a Member State considers that another Member State has failed 36 37 38

Article 2(1) tfeu. Article 2(2) tfeu. Article 344 tfeu. See also Case 459/03, Commission of the European Communities v Ireland, [2006] ECLI: EU: C: 2006: 345 (Mox Plant) paras 122–130, 133, 135.

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to fulfil its obligations under the treaties. The procedure is described in Article 259 tfeu according to which the Member State alleging the infringement shall bring the matter before the Commission which may then deliver a reasoned opinion after each of the states involved has been given an opportunity to submit its case and its observations on the case of the other party orally and in writing. However, if the Commission does not deliver reasoned opinion within three months of the date of the receipt of the complaint, the matter may be brought before the Court of Justice. This is also the case if the Commission decides to bring the matter before the Court under Article 258 tfeu. In ­accordance with Article 344 tfeu, if a Member State considers that another Member State has violated its obligations under the EU law, it may not submit a dispute to any method of settlement other than those provided by the Treaties.39 The opportunity given to Member States under Article 259 teu has been rarely used.40 In cases of infringement, Member States prefer to call upon the Commission which would then take the appropriate steps and possibly start an action under Article 258 than to confront directly with another Member State. 3.1.2 EU Citizenship While the legal meaning of EU citizenship is profoundly contested,41 citizenship beyond the nation-state is now a reality in Europe.42 Although the eec 39

40

41 42

Henry G Schermers and Denis F Waelbroeck, Judicial Protection in the European Union (Kluwer Law Int’l, The Hague 2001) 643. A more recent judgment of the Court has shown that a Member State may be held liable under Article 344 if it refers a dispute for which the cjeu has jurisdiction before a court outside of the European legal framework. See Mox Plant. The cjeu has also established that a Member State may not take unilateral measures to obviate breaches of Community law by other Member States: Joined Cases 90 and 91/63 Commission of the European Economic Communities v Grand Duchy of Luxemburg and the Kingdom of Belgium, [1964] ECLI: EU: C: 1964: 80, 1323; Case 232/78 Commission of the European Communities v French Republic, [1964] ECLI: EU: C: 1979: 215, para. 9; C–5/94 The Queen v Ministry of Agriculture, Fisheries and Food, ex parte: Hedley Lomas (Ireland) Ltd., [1996] ECLI: EU: C: 1996: 205, para. 9; Case 11/95 Commission of the European Communities v Kingdom of Belgium, [1996] ECLI: EU: C: 1996: 316, paras 37–39. Only four actions have been brought under Article 259 so far, two of which have resulted with a final decision: Case 141/78 French Republic v United Kingdom of Great Britain and Northern Ireland, [1979] ECLI: EU: C: 1979: 225; C–388/95 Kingdom of Belgium v Kingdom of Spain, [2000] ECLI: EU: C: 2000: 244. Dimitry Kochenov, ‘The Essence of EU Citizenship Emerging from the Last Ten Years of Academic Debate: Beyond the Cherry Blossoms and the Moon?’ (2013) 62 iclq 97. See Walter et al., ‘Der Bürgerstatus im Lichte von Migration und europäischer Integration’ (Klaus Ferdinand Gärditz’ contribution) 140 et seq.; Kochenov, ‘The Essence of EU Citizenship’ and very detailed Christoph Schönberger, Europas föderales Bürgerrecht in vergleichender Sicht (Mohr Siebeck, Tübingen 2005).

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Treaty in its original version only had the ‘market citizens’43 in mind, the Treaty on the European Union since Maastricht also extends to a political ‘Union citizen’.44 Giegerich notably characterised EU citizenship45 as a legal relationship to growth, in the context of which the metamorphosis from mere ‘market citizens’ or economic citizen (‘bourgeois’) into the political subject (‘citoyen’) occurs.46 EU citizenship entails rights which not only relate to a person’s state of citizenship, but they extend to other EU Member States.47 More than half a billion Europeans hold EU citizenship, and the residents of many regions in the EU have overlapping legal statuses: citizenship of a Member State, citizenship of sub-national entities and EU citizenship.48 At the Treaty level, the EU citizenship is primarily confined to articles 20–25 tfeu, being regulated separately from the internal market. Article 20 tfeu (former Article 17 tec) stipulates: 1 Citizenship of the Union is hereby established. Every person holding the nationality of a Member State shall be a citizen of the Union. Citizenship of the Union shall be additional to and not replace national citizenship. 2 Citizens of the Union shall enjoy the rights and be subject to the duties provided for in the Treaties. They shall have, inter alia: (a) the right to move and reside freely within the territory of the Member States; 43

The term ‘market citizen’ was coined by the German European jurisprudence, see Eberhard Grabitz, Europäisches Bürgerrecht zwischen Marktbürgerschaft und Staatsangehörigkeit (Europa Union Verlag, Köln 1970). 44 von Münch, Die deutsche Staatsangehörigkeit. Joppke, Citizenship and Immigration. For a detailed analysis of the relationship between EU citizenship and the internal market see Kochenov, ‘Ius Tractum of Many Faces’. 45 For greater detail on Union citizenship: Schönberger, Unionsbürger.; Henri de Waele, ‘The Ever-evolving Concept of EU Citizenship of Paradigm Shifts, Quantum Leaps and Copernican Revolutions’ in Leila Simona Talani (ed), Globalisation, Migration and the Future of Europe: Insiders and Outsiders (Routledge, London 2012). 46 cf. Thomas Giegerich, ‘Unionsbürgerschaft, politische Rechte’ in Reiner Schulze, Manfred Zuleeg and Stefan Kadelbach (eds), Europarecht: Handbuch für die Deutsche Rechtspraxis (2nd edn, CH Beck, Baden˗Baden 2010); and Hans von der Groeben, Jürgen Schwarze and Armin Hatje (eds), Europäisches Unionsrecht (7th edn, Nomos, Baden-Baden 2009). 47 cf. Marco Martiniello, ‘Citizenship in the European Union’ in T Alexander Aleinikoff and Douglas B Klusmeyer (eds), From Migrants to Citizens: Membership in a Changing World (Carnegie Endowment for International Peace, Washington D.C. 2000) 342˗380. 48 cf. Kochenov, ‘The Present and the Future of EU Citizenship’ 3; cf. also Richard Bellamy, Dario Castiglione and Jo Shaw (eds), Making European Citizens: Civic Inclusion in a Transnational Context.

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(b) the right to vote and to stand as candidates in elections to the European Parliament and in municipal elections in their Member State of residence, under the same conditions as nationals of that state; (c) the right to enjoy, in the territory of a third country in which the Member State of which they are nationals is not represented, the protection of the diplomatic and consular authorities of any Member State on the same conditions as the nationals of that state; (d) the right to petition the European Parliament, to apply to the European Ombudsman, and to address the institutions and advisory bodies of the Union in any of the Treaty languages and to obtain a reply in the same language. These rights shall be exercised in accordance with the conditions and limits defined by the Treaties and by the measures adopted thereunder. Article 20(1) tfeu makes clear that EU citizenship is of a derivative nature in that it is only acquired and lost through Member State citizenship. EU citizens are those holding a citizenship of any Member State. Therefore, the power to regulate in the field of citizenship law in national legislation remains with Member States. This is also in line with the ‘Declaration on the Nationality of a Member State’ appended to the Treaty of Maastricht: The Conference declares that, wherever in the Treaty establishing the European Community reference is made to nationals of the Member States, the question whether an individual possesses the nationality of a Member State shall be settled solely by reference to the national law of the Member State concerned. Member States may declare, for information, who are to be considered their nationals for Community purposes by way of a declaration lodged with the Presidency and may amend any such declaration when necessary.49 The starting point of any further analysis of the scope of EU citizenship must be the recognition of national government’s discretion in citizenship matters.50 Such discretion of states, as well recognised in international law,51 has been confirmed by the cjeu on numerous occasions. Thus, in Micheletti 49 50 51

teu [1992] OJ C 191/98 – ‘Declaration on nationality of a Member State’ (7 February 1992). cf. Herdegen, Völkerrecht; Klaus Stern, Das Staatsrecht der Bundesrepublik Deutschland. Band I: Grundbegriffe und Grundlagen des Staatsrechts. Strukturprinzipien der Verfassung (CH Beck, Munich 1977). Article 1 Hague Convention; see also Chapter 1 for extensive discussuion.

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the Court confirmed discretion of states in the field of citizenship law noting ­however that: ‘[u]nder international law, it is for each Member State, having due regard to (EU) law, to lay down the conditions for the acquisition and loss of nationality’.52 Moreover, the cjeu clarified in Micheletti that the EU law established mutual recognition of Member States’ citizenships thus setting aside exceptions under international law set out in Article 1 of the Hague Convention and of Article 3(2) ecn. In the word of the cjeu: ‘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 by imposing an additional condition for recognition of that nationality with a view to the exercise of the fundamental freedoms provided for in the Treaty’.53 In other words, EU Member States have been explicitly prohibited to question decisions of other Member States. Thus, under the EU law, the ‘genuine links’ or effectiveness of citizenship shall not be questioned in case of dual citizenship.54 Mr. Micheletti ˗ a dual national of Italy and Argentina ˗ was denied the right to establishment in Spain due to the fact that he resided in Argentina before he arrived in Spain. As noted by the cjeu, it is not permissible to interpret Article (49 tfeu) to the effect that, where a national of a Member State is also a national of a non-member country, the other Member States may make recognition of the status of (EU) national subject to a condition such as the habitual residence of the person concerned in the territory of the first Member State.55 Advocate General Tesauro further elaborated on the issue in his Opinion in the case, noting that: ‘the issue of the permanent residence card may not be made conditional on fulfilment of a further requirement such as actual residence

52 C-369/90, Mario Vicente Micheletti and others v Delegación del Gobierno en Cantabria, [1992] ECLI: EU: C: 1992: 295 (Micheletti), para. 10; C-179/98, Belgian State v Fatna Mesbah, [1999] ECLI: EU: C: 1999: 549, para. 29; see, also, C-192/99, The Queen v Secretary of State for the Home Department, ex parte: Manjit Kaur, intervener: Justice Case, [2001] ECLI: EU: C: 2001: 106 (Kaur), para. 19; C-200/02, Kunqian Catherine Zhu and Man Lavette Chen v Secretary of State for the Home Department, [2004] ECLI: EU: C: 2004: 639, para. 37. 53 Micheletti, para. 10. 54 Opinion of Mr. Advocate General Poiares Maduro delivered on 30 September 2009 in C-135/08 Janko Rottman v Freistaat Bayern, [2010] ECLI: EU: C: 2009: 588, para 5 (Maduro’s opinion in Rottman). 55 Micheletti, para. 11.

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(or a similar criterion); instead, it is sufficient for the applicant to be a national of a Member State in the aforesaid sense’.56 Furthermore, ‘the time at which or the manner in which’57 a person acquires the status of citizen are irrelevant and Member States may not treat EU citizens differently on such bases ‘as long as, at the time at which they rely on the benefit of the provisions of (EU) law, they possess the nationality of one of the Member States and that, in addition, the other conditions for the application of the rule on which they rely are fulfilled’.58 In his Opinion in Micheletti, Advocate General Tesauro went further to criticise the ‘effective nationality’ (or ‘genuine link’ doctrine), ‘whose origin lies in a “romantic period” of international relations and, in particular, in the concept of diplomatic protection’.59 The ‘controversial’60 Nottebohm judgment was irrelevant to the case, in Advocate General Tesauro’s opinion, and it was unnecessary to view the issue in terms of applicable law from the viewpoint of international private law. As a more general illustration, even individuals who do not have any personal or territorial link with the existing Republic of Germany and do not in any event meet the requirements of effective nationality laid down in the Canevaro judgment, still less those laid down in the Nottebohm judgment, are regarded as German nationals.61 If one citizenship was to always prevail, EU citizens with dual citizenship would have been treated differently in each Member State given the divergent criteria across EU Member States.62 Furthermore, the situation on the ground is that the wide diversity of naturalisation rules in each individual EU Member State lead to a single and common status of membership.63 The diverse naturalisation regimes in the EU Member States are anachronistic, as the Member

56 57 58 59 60 61 62 63

Opinion of Advocate General Tesauro delivered on 30 January in Micheletti, ECLI: ECLI: EU: C: 1992: 47. Case 271/82, Vincent Rodolphe Auer v Ministère public, [1983] ECLI: EU: C: 1983: 243 (Auer) para. 28. Auer, para. 28. Maduro’s opinion in Rottman, para. 5. Maduro’s opinion in Rottman, para. 5. Maduro’s opinion in Rottman, para. 7. Maduro’s opinion in Rottman, para. 6. Kochenov, ‘Ius Tractum of Many Faces’ (note 92).

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States maintaining stricter naturalisation requirements cannot thereby limit immigration flows.64 3.1.3 Discretion of Member States in Citizenship Matters In Kaur the cjeu recognised discretion of states in the field of citizenship law as a ‘principle of customary international law’.65 It held that on the basis of that principle ‘the United Kingdom has, in the light of its imperial and colonial past, defined several categories of British citizens whom it has recognised as having rights which differ according to the nature of the ties connecting them to the United Kingdom’.66 It is thus for the Member States to define which of their citizens are to be considered EU citizens for the purposes of EU law and to limit their own body of citizenry for that same purpose. This is normally done by putting on notice by means of a declaration. Such declarations were generally made by Member States at the time of their accession.67 While repeating in Kaur that Member States must have ‘due regard to (EU) law’ when determining conditions for the acquisition and loss of nationality, the cjeu did not clarify the exact meaning of that notion. It has emphasised, however, that the declaration of UK in respect of its citizens for the purpose of EU law ‘did not have the effect of depriving any person who did not satisfy the definition of a national of the United Kingdom of rights to which that person might be entitled under (EU) law. The consequence was rather that such rights never arose in the first place for such a person’.68 The situation was different in Rottmann, where the applicant in the main proceedings enjoyed his rights under EU law as an EU citizen but lost them due to withdrawal of his citizenship. Dr. Rottmann, was originally an Austrian citizen, naturalized in Germany but failed to mention during his application for German citizenship the open legal proceedings on account of suspected serious fraud against him in Austria. According to the Austrian citizenship regulations, Dr. Rottmann lost his Austrian citizenship at the moment of his naturalization in Germany. Also, German authorities decided to withdrew Dr. Rottmann’s citizenship with retroactive effect when they were informed 64 65 66 67

68

Kochenov, ‘Ius Tractum of Many Faces’. Kaur, para. 20. Kaur, para. 20. cf. Declaration of the United Kingdom of 31 December 1982 on the definition of the term ‘nationals’ or German Declaration on nationality from 1957. Furthermore, from these Declarations appended to the Treaties, the intention of the Member States to retain full sovereignty in the area of citizenship is abundantly clear (cf. in particular the Danish Declaration). Kaur, para. 25.

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by Austrian authorities that there was an arrest warrant against him and that he has been questioned in the criminal court as an accused person. Dr. Rottmann challenged the decision of the German authorities for withdrawal of his citizenship on the basis that this had an effect of rendering him stateless and depriving him of his EU citizenship and all rights attached to it. The Bundesverwaltungsgericht decided to send these questions to the cjeu for preliminary ruling. After repeating its position on discretion of EU Member States in the field of citizenship law having due regard to EU law,69 the cjeu referred to declarations and decisions of Member States to the effect that regulating acquisition and loss of citizenship was a matter for national legislation.70 It then stated, however, that ‘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’.71 The cjeu then clarified that the decision for withdrawing Dr. Rottmann’s naturalization places him in a position to lose his status of an EU citizen under Article 20 tfeu and all rights attached to that status.72 The cjeu reaffirmed its stance in Dereci noting that ‘Article 20 tfeu precludes national measures which have the effect of depriving Union citizens of the genuine enjoyment of the substance of the rights conferred by virtue of that status’.73 This reasoning of the Court was in line with its earlier statement on the citizenship of the Union which has been ‘intended to be the fundamental status of nationals of the Member States’.74 It confirms that one needs to avoid thinking of EU citizenship and Member State citizenships ‘as two separate and unrelated phenomena’75 as these two are inseparable from each other. While EU law somewhat increases the scope of discretion of Member States, which determine not only who their citizens are but also who EU citizens are,76 this 69 C-135/08 Janko Rottman v Freistaat Bayern, [2010] ECLI: EU: C: 2010: 104 (Rottman judgement), para. 39 (see also references to other case law as enumerated in that paragraph). 70 Rottman, para. 40. 71 Rottman, para. 41 (see also references to other case law as enumerated in that paragraph). 72 Rottman, para. 42. 73 C-256/11, Murat Dereci and Others v Bundesministerium für Inneres, [2011] ECLI: EU: C: 2011: 734 (Dereci), paras 64 and 66. See also C-434/09, Shirley McCarthy v Secretary of State for the Home Department, [2011] ECLI: EU: C: 2011: 277, paras. 47 and 53; C-34/09, Gerardo Ruiz Zambrano v Office national de l’emploi (ONEm), [2011] ECLI: EU: C: 2011: 124, para. 42. 74 See Grzelczyk, para. 31; C-413/99, Baumbast and R v Secretary of State for the Home Department Case, [2002] ECLI: EU: C: 2002: 493, para. 82; and Rottman, para. 43. 75 Jo Shaw, ‘Citizenship: Contrasting Dynamics at the Interface of Integration and Constitutionalism’ in Paul Craig and Gráinne de Búrca (eds), Evolution of EU Law (oup, Oxford 2011) 575, 578. 76 Kochenov, ‘The Present and the Future of EU Citizenship’ 2, 28 (with further references).

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discretion is at once limited by virtue of the principle of EU law according to which Member States must have due regard to EU law even when regulating citizenship law which falls under their exclusive competence. The Court explained the notion of ‘due regard to EU law’ in Rottmann as follows: The proviso that due regard must be had to European Union law does not compromise the principle of international law previously recognised by the Court (…) that the Member States have the power to lay down the conditions for the acquisition and loss of nationality, but rather enshrines the principle that, in respect of citizens of the Union, the exercise of that power, in so far as it affects the rights conferred and protected by the legal order of the Union, as is in particular the case of a decision withdrawing naturalisation such as that at issue in the main proceedings, is amenable to judicial review carried out in the light of European Union law.77 The list of situations where ‘the effect of depriving Union citizens of the genuine enjoyment of the substance of the rights conferred by virtue of that status’78 is manifested is virtually non-exhaustive.79 To agree with Spaventa, ‘no national rule falls a priori outside the scope of the Treaty, since movement is enough to bring the situation within its scope’80 and such movement does not need even be physical.81 Accordingly, EU law has undoubtedly played a role in the sphere of citizenship shaping Member States national rules, albeit to certain extent, and shall continue to so in future. The ‘ability to guarantee the rights of EU citizens in this supranational capacity by automatically acquiring jurisdiction where such rights are infringed (...) moved EU citizenship closer to a citizenship in the Arendtian sense: a “right to have rights”’.82 Furthermore, this seems to render the cjeu ‘the final arbiter’ in citizenship cases,83 as ‘not 77 78 79 80 81 82 83

Rottman, para. 48. Dereci, paras 64 and 66; McCarthy, paras. 47 and 53; Zambrano, para. 42; Rottmann judgement, para. 42. cf. Dimitry Kochenov, ‘The Present and the Future of EU Citizenship’. Eleanor Spaventa, ‘Seeing the Wood Despite the Trees? On the Scope of Union Citizenship and its Constitutional Effects’ (2008) 45 cml Rev 13, 14. Kochenov, ‘The Present and the Future of EU Citizenship’ 30. Dimitry Kochenov, ‘The Right to Have What Rights? EU Citizenship in Need of Clarification’ (2013) 19 elj 502. cf. also Arendt, Men in Dark Times and Chief Justice Earl Warren in Perez v Brownell, 64. Gareth Davies, ‘The Entirely Conventional Supremacy of Union Citizenship and Rights’ in Jo Shaw (ed), Has the European Court of Justice Challenged Member State Sovereignty in Nationality Law? eui Working Papers rscas 2011/62, 5.

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to leave the EU any possibility to protect the status of EU citizenship from ­encroachments of the Member States would be to leave it entirely to the Member States to decide who EU citizens are, even when such decisions are taken in breach of the core principles of EU law’.84 However, compliance with EU law has been only discussed by the cjeu in citizenship cases involving either refusal or loss of EU citizenship but not acquisition of citizenship. In other words, the Court has not placed the ‘due regard to EU law’ notion in context of acquisition of EU citizenship. The European Commission might have made the first step towards determining compliance with EU law in circumstances involving acquisition of citizenship. The ‘case’ of Malta concerns citizenship by investment and is analysed in greater detail in the following section. The section discusses the involvement of the Commission questioning the rightfulness of its bid to influence Maltese citizenship law. 3.1.4 Rights of EU Citizens The rights attached to EU citizenship have largely shaped today’s look of the Union. The concept of EU citizenship includes primarily the right to move and reside freely within the EU. The free movement and residence of EU citizens and their family members has been regulated by the Citizenship Directive.85 The legal basis is found in Article 3(2) teu;86 Article 21 tfeu;87 Titles iv and v 84 85 86

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Kochenov, ‘The Present and the Future of EU Citizenship’ 23. Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States [2004] OJ L 158/77 (Citizenship Directive). Article 3(2) teu stipulates: ‘The Union shall offer its citizens an area of freedom, security and justice without internal frontiers, in which the free movement of persons is ensured in conjunction with appropriate measures with respect to external border controls, asylum, immigration and the prevention and combating of crime’. Article 21 tfeu stipulates: 1. Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect. 2. If action by the Union should prove necessary to attain this objective and the Treaties have not provided the necessary powers, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may adopt provisions with a view to facilitating the exercise of the rights referred to in paragraph 1. 3. For the same purposes as those referred to in paragraph 1 and if the Treaties have not provided the necessary powers, the Council, acting in accordance with a special legislative procedure, may adopt measures concerning social security or social protection. The Council shall act unanimously after consulting the European Parliament.

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tfeu;88 Article 45 cfreu.89 The principle of non-discrimination on the basis of nationality is at the heart of free movement of EU citizens. On the basis of that principle, all Union citizens and their family members residing in a Member State on the basis of (the Citizenship Directive) should enjoy, in that Member State, equal treatment with nationals in areas covered by the Treaty, subject to such specific provisions as are expressly provided for in the Treaty and secondary law.90 In practice, EU citizens who decide to move to other Member State escape visa formalities and are treated equally to domestic citizens ˗ ‘more like movement within a state than moving between states’.91 As vividly portrayed by Kochenov: the Union offers a much broader playground of opportunities than any individual [s]tate would, enabling EU citizens to live their lives as they, as opposed to a [s]tate where they were born and of which they are nationals see fit, from work to marriage, from healthcare to education. Through the EU, Member States act as facilitators of personal choices not limited by their own borders or particular ideologies.92 Free movement and residence within the EU is ‘subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect’.93 These include limitations on free movement of workers,94 establishment95 and services96 on grounds of public policy, public security or public

88 Title iv tfeu regulates free movement of persons, services and capital; Title v tfeu regulates the Area of freedom, security and justice. 89 Article 45 cfreu stipulates: 1. Every citizen of the Union has the right to move and reside freely within the territory of the Member States. 2. Freedom of movement and residence may be granted, in accordance with the Treaty establishing the European Community, to nationals of third countries legally resident in the territory of a Member State. 90 Para 20 Preamble of the Citizenship Directive. 91 Basheska, ‘The Position of the Good Neighbourliness Principle’ 24, 47. 92 Kochenov, ‘The Essence of EU Citizenship’ 130 (footnotes omitted). 93 Article 21(1) tfeu. 94 Article 45(3) tfeu. 95 Article 52(1) tfeu. 96 Article 62 tfeu to which Article 52(1) tfeu applies.

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health.97 Chapter vi of the Citizenship Directive regulates restrictions on the right of entry and the right of residence and limitations to such restrictions.98 In particular, these grounds must not serve economic ends99 and cannot be imposed automatically.100 Previous criminal convictions shall not in themselves constitute grounds for taking public policy or public security measures.101 Furthermore, measures taken on grounds of public policy or public security,102 97

Other exclusions on these grounds include free movement of goods and capital under Articles 36 tfeu and 65(1)(b) tfeu respectively. 98 Chapter vi of the Citizenship Directive (Restrictions on the right of entry and the right of residence on grounds of public policy, public security or public health) is the key section. Article 45(3) tfeu provides for limitations on the free movement of workers justified on grounds of public policy, public security or public health. 99 Article 27(1) Citizenship Directive. 100 Article 27(2) Citizenship Directive. See also AG Mazak in C-33/07 Ministerul Administraţiei şi Internelor – Direcţia Generală de Paşapoarte Bucureşti v Gheorghe Jipa, [2008] ECLI: EU: C: 2008: 396 (Gheorghe Jipa), para 23, noting that: ‘limitations on the freedom of movement may only be imposed after an examination of an individual’s conduct and may never be imposed automatically’. 101 Gheorghe Jipa, para. 43. 102 Article 28(2)(3) Citizenship Directive regulates that prohibition. While para. 28(2) refers to ‘serious grounds of public policy or public security’ as an exception to the prohibition of expulsion of EU citizens and their family members, para. 28(3) underlines that: ‘An expulsion decision may not be taken against Union citizens, except if the decision is based on imperative grounds of public security, as defined by Member States, if they: (a) have resided in the host Member State for the previous 10 years; or (b) are a minor, except if the expulsion is necessary for the best interests of the child, as provided for in the United Nations Convention on the Rights of the Child of 20 November 1989’. The distinction between ‘serious grounds’ under Article 28(2) and ‘imperative grounds’ under Article 28(3) or between high and higher level of protection against expulsion of EU citizens was tackled by the cjeu in Pietro Infusino v Oberbürgermeisterin der Stadt Remscheid and Tsakouridis. In both cases the referring national courts asked whether Article 28(3) Citizenship Directive should be interpreted as meaning that only threats to the external or internal security of the Member State in terms of the state existence, with its institutions and important public services, the population survival, foreign relations and the peaceful co-existence of nations can justify an expulsion. In Tsakouridis the cjeu clarified that: ‘[i]t follows from the wording and scheme of Article 28 of Directive 2004/38 (…) that by subjecting all expulsion measures in the cases referred to in Article 28(3) of that directive to the existence of “imperative grounds” of public security, a concept which is considerably stricter than that of “serious grounds” within the meaning of Article 28(2), the European Union legislature clearly intended to limit measures based on Article 28(3) to “exceptional circumstances”, as set out in recital 24 in the preamble to that directive’ (para. 40). See for detailed and critical analysis Theodora Kostakopoulou and Nuno Ferreira, ‘Testing Liberal Norms: The Public Policy and Public Security Derogations and the Cracks in European Union Citizenship’ (2013) Legal Stud. Research Paper 2013/18, available at: . For more general analysis on exceptions from Panos Koutrakos, Niamh Nic

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in particular against the right of residence, shall comply with the principle of proportionality which ‘means that national measures adopted on that subject must be necessary and appropriate to attain the objective pursued’.103 Refusal of admittance or deportation of EU citizens is only permitted if they represent a ‘genuine, present and sufficiently serious threat affecting one of the fundamental interests of society’.104 Security of residence strengthens over time – the longer an EU citizen resides in the host Member State and the more integrated he is, the more difficult his expulsion will be.105 Further restrictions include free movement of workers in the public service106 and activities connected to exercise of official authority.107 Under Article 45(4) tfeu, free movement of workers does not apply to employment in the public service. This derogation, however, has been restrictively interpreted by the cjeu to cover only certain activities in the public service.108 In particular, public services covered by Article 45(4) involve: direct or indirect participation in the exercise of powers conferred by  public law and duties designed to safeguard the general interests of the state or of other public authorities. Such posts in fact presume on the part of those occupying them the existence of a special relationship of allegiance to the state and reciprocity of rights and duties which form the foundation of the bond of nationality.109

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Shuibhne, Phil Syrpis (eds), Exceptions from EU Free Movement Law: Derogation, Justification and Proportionality (Hart, Oxford/Portland/OR 2016). Baumbast, para 43; This has been emphasized by the cjeu in many cases: see, in particular, Kostakopoulou and Ferreira, ‘Testing Liberal Norms’ with further references (note 3). Article 27(2) Citizenship Directive. See also Case 36–75, Roland Rutili v Ministre de l’intérieur, [1975] ECLI: EU: C: 1975: 137, para 28; Case 30–77, Régina v Pierre Bouchereau, [1977] ECLI: EU: C: 1977: 172 para. 35; and C-503/03, Commission of the European Communities v Kingdom of Spain, [2006] ECLI: EU: C: 2006: 74, para. 46; C-217/97, Communities v Federal Republic of Germany, [2006] ECLI: EU: C: 1999: 34, para. 35. Article 28(1) Citizenship Directive. See also, C˗441/02, Commission v Germany (Italian migrants), [2006] ECLI: EU: C: 2006: 253. See in this respect Dimitry Kochenov, ‘Mevrouw de Jong Gaat Eten: EU Citizenship and the Culture of Prejudice’ eui Working Papers rscas 2011/6. Article 45(4) tfeu. Article 51 tfeu. Case 152–173, Giovanni Maria Sotgiu v Deutsche Bundespost, [1974] ECLI: EU: C: 1974: 13, para. 4. Case 149/79, Commission of the European Communities v Kingdom of Belgium, [1980] ECLI: EU: C: 1980: 297, para. 10; Case 66/85, Deborah Lawrie-Blum v Land Baden-­Württemberg, [1986] ECLI: EU: C: 1986: 284, para. 27.

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Moreover, ‘[t]he scope of Article 45(4) must be limited to what is strictly necessary for safeguarding the general interests of the Member State concerned’.110 The cjeu adopted a functional rather than an institutional approach to Article 45(4) which means that the work required for the job rather than the institutional affiliation is of importance for the relevant derogations to apply.111 However, rights from which citizens of other Member States are excluded under Article 45(4) should be ‘exercised on a regular basis and (should) not represent a very minor part of their activities’.112 Unlike Article 45(4) tfeu ˗ the application of which requires powers to be exercised on a regular basis and not to represent a very minor part of the workers’ activities ˗ article 51 tfeu applies to activities which are connected, even occasionally, with the exercise of official authority in a Member State. For other parts Article 51 tfeu is largely an equivalent to Article 45(4) tfeu with regard to freedom of establishment and Article 62 tfeu extends this to services even if the two Treaty provisions use different terms for the exclusions covered ˗ ‘public service’ with respect to employment and ‘official authority’113 with respect to establishment.114 Just like Article 45(4) tfeu, Article 51 tfeu has to be restrictively interpreted.115 Given the similar objective and substance of these two legal provisions, Articles 45(4) tfeu case law is likely to apply to Article 51 tfeu and subsequently to Article 62 tfeu.116 Last but not least, certain conditions can be applied that restrict free ­movement of EU citizens from new Member States within the EU during the ­transitional period after their accession. Such transitional arrangement can 110 C-405/01, Colegio de Oficiales de la Marina Mercante Española v Administración del Estado, [2003] ECLI: EU: C: 2003: 515, para. 44. 111 Catherine Barnard, The Substantive Law of the EU: The Four Freedoms (5th edn, oup, Oxford 2016) 471. See also C-473/93, Commission of the European Communities v Grand Duchy of Luxembourg, [1996] ECLI: EU: C: 1996: 263, para. 27. 112 C-47/02, Albert Anker, Klaas Ras and Albertus Snoek v Bundesrepublik Deutschland, [2003] ECLI: EU: C: 2003:516, para. 69. 113 AG Mayras attempted to define the concept of ‘official authority’ in his Advisory Opinion in Case 2/74 Jean Reyners v Belgium, [1974] ECLI: EU: C: 1974: 68 (Reyners), in the following terms: ‘Official authorities is that which arises from the sovereignty of the State, for him who exercises it, it implies the power of enjoying the prerogatives outside the general law, privileges of official power and powers of coercion over citizens’ 664. 114 In C-283/99 Commission of the European Communities v Italian Republic, [2001] ECLI: EU: C: 307, para. 25, the cjeu suggested that ‘exercise of official authority’ implies a more functional approach than Article 45(4) tfeu. However, this might be of little relevance given that the cjeu applied a functional approach to the Article 45(4) tfeu derogation. 115 In Reyners the cjeu emphasized that (now) Article 51 tfeu applies only to activities which have ‘direct and specific connection with official authority’ (para. 45). 116 See Barnard, The Substantive Law of the EU 475.

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last for a maximum period of seven years divided in three stages (2+3+2 formula) during which different conditions apply.117 However, transitional periods can only be applied to workers but not to self-employed persons or other category of EU citizens.118 Transitional periods for citizens of Bulgaria and Romania ended on 1 January 2014 and Croats are currently facing restriction to free movement in one EU Member State ˗ Austria.119 Restrictions for Croats must be lifted by 1 July 2020 at the latest. Political rights of EU citizens include the right to vote in municipal elections and in the elections to the European Parliament in the host Member State.120 However, voting to the European Parliament may be extended by Member States to non-EU citizens. As noted by the cjeu, nothing in EU primary law excludes ‘a person who is not a citizen of the EU (…) from being entitled to the right to vote and stand for election [to the European Parliament]’.121 It is in the competence of each EU Member States to grant such rights ‘to certain persons who have close links to them other than their own nationals or citizens of the Union resident in their territory’.122 This might be seen as a feature of the complementary function of European citizenship which is also reflected through the option left to EU citizens to vote in their country of residence or in their home state. Next is the right of EU citizens to ‘diplomatic or consular protection’ in the Member State of their residence. In international law, citizenship acts in this respect in providing a formal element to the requirement to the exercise of state protection, binding individuals to their home state, its sovereignty, and its protection. The extraterritorial fiduciary duty of the state towards ‘its’ nationals is concretised in particular in its obligation to provide diplomatic and

117 Ulrich Sedelmeier, ‘Europe after the Eastern Enlargement of the European Union: 2004–2014’ accessed 10 August 2018. 118 With the exception of Germany and Austria which can exceptionally apply restrictions, as set out in para. 13 of the transitional arrangements of the country-specific annexes of the 2003 and the 2005 Acts of Accession. 119 See Paul Minderhoud, ‘Access to Which Social Rights?’ (2014) Online Journal on Free Movement of Workers within the European Union No 7 available at 10 August 2018. 120 Article 22 tfeu. 121 Spain v United Kingdom, para. 70 See also C-300/04, M.G. Eman and O.B. Sevinger v College van burgemeester en wethouders van Den Haag, [2006] ECLI:EU:C:2006:545 (Eman and Sevinger). 122 Spain v United Kingdom, para. 78.

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consular protection.123 In EU law the basis for the enforcement of the law on extraterritorial care in a home country by another EU Member State in third countries for nationals of EU Member States with no diplomatic or consular representation in their country of residence is created under Article 23(1) tfeu.124 Member States have to adopt the necessary provisions and start the international negotiations required to secure this protection (Article 23(2) tfeu). Specifically, this means that Article 23 obliges EU Member States to undertake necessary international negotiations with third countries appear necessary to enforce the rights of EU citizens. Article 23(1) tfeu provides that ‘[e]very citizen of the Union shall, in the territory of a third country in which the Member State of which he is a national is not represented, be entitled to protection by the diplomatic or consular authorities of any Member State, on the same conditions as the nationals of that [s]tate’.125 While Article 23 tfeu uses the adjectives ‘diplomatic’ and ‘consular’ simultaneously diplomatic protection and consular assistance are separate legal concepts under international law.126 The granting of diplomatic protection concerns the international legal authority of the home country to take preventive steps with international legal means against threats of violations of international law, especially emanating from other countries, if these international contractual obligations towards the person concerned disregard or fall short of those required by general international law or minimum standards of alien law and in responding under international law to the treatment of its nationals by another state in case of damage.127 Article 1 of the Draft Articles on Diplomatic Protection adopted by the International Law Commission states that Diplomatic protection, consists of the invocation by a [s]tate, through diplomatic action or other means of peaceful settlement, of the responsibility of another [s]tate for an injury caused by an internationally wrongful act of that [s]tate to a natural or legal person that is a national of the former [s]tate with a view to the implementation of such responsibility.128 123 For a good overview, cf. Ralph G Feltham, Diplomatic Handbook (8th edn, Martinus Nijhoff, The Hague 2004). 124 cf. Giegerich, ‘Unionsbürgerschaft, politische Rechte’. 125 Article 23 tfeu. 126 See in particular Patrizia Vigni, ‘Diplomatic and Consular Protection in EU Law: Misleading Combination or Creative Solution?’ eui Working Papers LAW 2010/11, 9. 127 John Dugard, ‘Diplomatic Protection and Human Rights: The Draft Articles of the International Law Commission’ (2005) 24/75, Australian YB Int’l L. 128 Stefan Talmon, Essential Texts in International Law (Edward Elgar, Cheltenham/Northa­ mpton MA 2016) 11.

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In contrast, the aim of consular protection is to provide advice and support outside of the state’s territory, within the framework of public international law, by providing general support or promoting the interests of non-residents. Unlike diplomatic protection which ‘is still considered an exclusive prerogative of the [s]tate of nationally’,129 the right to consular assistance has been recognized by the icj as an individual right.130 Its limits arise from general public international law.131 Differences between diplomatic protection and consular assistance aside,132 the wording of Article 23(1) tfeu is not necessarily misleading as this legal provision entails only that EU citizens are entitled to seek protection by the ­diplomatic or consular authorities (rather than providing for diplomatic protection and consular assistance).133 Consular assistance which is covered under Article 23(1) can be indeed sought from diplomatic and consular authorities.134 While future EU action in the area of diplomatic action is not excluded, Article 23(1) tfeu is largely confined to consular assistance.135 Indeed, as noted by the European Commission, ‘[i]t appears that the majority of cases in which EU citizens need help in third countries concern consular protection (…) the Commission will therefore concentrate on improving consular protection of

129 Vigni, ‘Diplomatic and Consular Protection in EU Law’ 17. 130 In icj, La Grand (Germany v United States of America) [2001] icj Rep 494, para. 77, the icj affirmed that Article 36 ‘provides that, at the request of the detained person, the receiving [s]tate must inform the consular post of the sending [s]tate of the individual’s detention “without delay”. It provides further that “any communication by the detained person addressed to the consular post of the sending [s]tate must be forwarded to it by authorities of the receiving [s]tate “without delay”’. It further noted that: ‘“The said authorities shall inform the person concerned without delay of his rights under this subparagraph” (…) Based on the text of these provisions, the Court concludes that Article 36, paragraph 1, creates individual rights’. In greater detail, see Patrizia Vigni, ‘The Right to Diplomatic and Consular Protection’ in Dimitry Kochenov (ed), EU Citizenship and Federalism. 131 See Article 5 Vienna Convention on Consular Relations (adopted 24 April 1963, entered into force 19 March 1967) 596 unts 261 (vccr), which provides for consular functions. 132 See in detail Vigni, ‘The Right to Diplomatic and Consular Protection’. 133 Stefano Battini, ‘The Impact of EU Law and Globalization on Consular Assistance and Diplomatic Protection’ in Edoardo Chiti and Bernardo Giorgio Mattarella (eds), Global Administrative Law and EU Administrative Law (Springer-Verlag, Berlin Heidelberg 2011) 177–178. 134 Steven Blockmans and Ramses A Wessel (eds), ‘Principles and Practices of EU External Representation’ cleer Working Papers 2012/5, Centre for the Law of EU External Relations. 135 Peter Pavlovič, ‘Protection of EU Citizen According to Article 23 tfeu: Diplomatic Protection as Defined by International Law?’ (2012) 2/1, AD ALTA: J. Interdisciplinary 30.

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Union citizens in third countries. This is without prejudice to possible future action in the area of diplomatic protection’.136 Notwithstanding this, however, EU law, Article 23 tfeu first, and foremost, departs from the general principle that the extraterritorial fiduciary duty of the state covers only its own nationals,137 EU citizenship establishes different territorial limits under Article 355 tfeu to the personal relationship between individual Europeans and the EU or one of the Member States acting on its behalf,138 in that – based on the objective of the European Union as a means of creating an identity of inward solidarity among its citizens with respect to the outside – Article 23 tfeu provides that any EU citizen in the territory of a third country in which the Member State he is a national of is not represented, may require protection from the diplomatic and consular authorities of any other Member State on the same conditions as their own nationals enjoy. This certainly breaks with the personnel authority of the home country139 which essentially has a monopoly in international law to provide consular assistance to its nationals.140 Indeed, as noted by Vermeer-Künzli, ‘traditionally it is through [the bond of nationality] that receiving [s]tates would allow activities by sending [s]tates that otherwise could constitute an interference in the domestic affairs of the domestic state’.141 The EU consular practice diluted the international law requirement for bond of nationality.142 Lastly, EU citizens have the right to submit a petition to the European Parliament and to apply to the European Ombudsman or to address the institutions and advisory bodies in any EU official language and obtain a reply in the same language. The right to petition is a subjective-public right of EU citizens, which is theirs in parallel to the primary rights of redress. The petition right presupposes the petitioner’s concern in the, not necessarily legal, interests. It is sufficient if the petitioner outlines a ‘serious and real concern about his

136 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Effective consular protection in third countries: the contribution of the European Union – Action Plan 2007–2009 {C(2007) 5841 final} {SEC(2007) 1600} {SEC(2007) 1601}, COM/2007/0767 final, para. 5.2. 137 Article 23 tfeu. 138 cf. Giegerich, ‘Unionsbürgerschaft, politische Rechte’. 139 cf. Giegerich, ‘Unionsbürgerschaft, politische Rechte’. 140 cf. von der Groeben, Jürgen Schwarze and Armin Hatje (eds), Europäisches Unionsrecht. 141 Annemarieke Vermeer-Künzli, ‘Where the Law Becomes Irrelevant: Consular Assistance and the European Union’ (2011) 60(4) iclq 965, 967. 142 Vermeer-Künzli, ‘Where the Law Becomes Irrelevant’ 967.

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demand’143 or, objectively and verifiably, the matter is not of negligible significance to the petitioner. The European petitioner is entitled to receiving substantive examination and justified reasons, which he can enforce as a failure to act under Article 265 tfeu, if necessary.144 The right of petition to the European Parliament (Article 24 in conjunction with Article 227 tfeu) aims to promote an added proximity, to promote the social legitimacy of the EU and complete the legal protection which is guaranteed by EU law.145 In view of the fact that the European Parliament146 is the only original directly elected body among other EU institutions the right to petition the European Parliament not only acts as a link between citizens of the Union, but it gives EU executives regular feedback from the citizenry on their work performance. Petitions ensure constant contact between Parliament and the public, since they enable the Parliament on the one hand, to provide regular topical debate, and on the other hand, helps the European Union appear reachable, as the right to petition in accordance with Article 227 tfeu opens in principle the possibility of direct influence on policies.147 The European right to petition thus underlies the idea of an ‘integrating active citizenship’148 – the mere possibility of being able to bring a petition in the European ‘policy operation’ and to actually reach the Members of the European Parliament, counteracts the political centrifugal forces and has a system-stabilising effect. The above discussion shows high level of protection of rights of EU ­citizens beyond their national states. Indeed, citizenship ‘can no longer be confined within the framework of national–statist communities’.149 EU citizenship rights are granted and protected not by individual Member States but by the Union itself, transcending national jurisdiction and state borders.150 ­Transboundary 143 cf. Giegerich, ‘Unionsbürgerschaft, politische Rechte’. 144 cf. Walter Frenz, Handbuch Europarecht Vol. 4 (Springer, Berlin/Heidelberg 2009); Giegerich, ‘Unionsbürgerschaft, politische Rechte’; Annette Guckelberger‚ Der Europäische Bürgerbeauftragte und die Petitionen zum Europäischen Parlament: Eine Bestandsaufnahme zu Beginn des 21. Jahrhunderts Vol 162 (Schriftenreihe der Hochschule Speyer, Berlin 2004). 145 cf. Giegerich, ‘Unionsbürgerschaft, politische Rechte’. 146 Article 223 et seq. tfeu. 147 cf. Saskia Eckhardt, Die Akteure des aussergerichtlichen Verfassungsrechtsschutzes in der Europäischen Union (Peter Lang, Frankfurt am Main 2010). 148 cf. Report on the petition system in the early twenty-first century, A5-0088/2001, 10. 149 Theodora Kostakopoulou, ‘Nested “Old” and “New” Citizenship in the European Union: Bringing out the Complexity’ (1999) 5 cjel 389, 391. 150 See in this context the analysis of Gareth Davies, ‘The Humiliation of the State as a Constitutional Tactic’ in Fabian Amtenbrink and Peter AJ van den Berg (eds), The Constitutional Integrity of the European Union (T.M.C. Asser Press, The Hague 2010).

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character of citizenship of EU Member States is at the core of EU citizenship and attempts to alter that, contrary to EU law, may affect rights of EU citizens and open a possibility for infringement action. Notwithstanding that, however, solidarity and loyal cooperation upon which the Union was built and which are important cornerstones of EU citizenship must neither be misinterpreted in the light of the law nor be taken lightly. 3.2

Solidarity and Loyal Cooperation

The EU citizenship is one of the greatest achievements of the Union. Article 4 teu requires that Member States are not supposed to undermine EU’s achievements, in particular concerning the Internal Market and the substance of EU citizenship rights.151 As a consequence, any Member State that were to violate the rationale of EU citizenship and of the Internal Market would be potentially in breach of the law. Indeed, the European Union is built on solidarity. As put by Juncker, ‘[s]olidarity is the glue that keeps [the European] Union together’.152 Such solidarity, as noted by the European Commission, is expressed through: [S]olidarity between (EU’s) citizens, solidarity across borders between (EU) Member States, and solidarity in its action inside and outside the Union. Solidarity is a shared value which is strongly felt throughout European society. It defines the European project which should be time and again restated and reinforced. It is part of the core fabric that makes the European dream inspire generation after generation. The European Union is about more than common rules, institutions or markets: it is a community of values. More solidarity will keep Europe together. It provides the necessary unity to cope with current and future crises by holding a strong moral ground. It provides a clear compass to guide the European youth in

151 As noted by Vasiliki Brisimi, The Interface between Competition and the Internal Market: Market Separation under Article 102 tfeu (Bloomsbury, London/NY/Sydney/Delhi 2014) 176, the more recent case law on citizenship, cf. among others Zambrano, ‘confirm the heated debate as to the extension of EU residence and movement rights when there is no link to cross-border movement’. 152 State of the Union speech of the President of the European Commission, Jean-Claude Juncker, of 14 September 2016 (State of the Union speech), available at: accessed 10 August 2018.

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their ­aspirations of a better Union. It is in their minds and hearts that lie the  strength and wit to further advance the European project. And it is the moral duty of current leaders to prepare the ground for it.153 It is true that solidarity is most noticeable in emergency situations. Italian planes dousing flames in Portuguese fires, Swedish generators turning back light turned off by floods in Romania, Slovakian tents providing shelter for refugees arriving in Greece, as exemplified by Juncker, are clear examples of solidarity between EU Member States.154 Yet, solidarity between EU Member States goes far beyond emergency situations and, to disagree with Juncker,155 beyond voluntariness. 3.2.1 Article 4(3) teu The principle of solidarity has been embodied in the principle of loyal cooperation which is a duty rather than a choice for EU Member States156 even if these two principles do not always overlap.157 Article 4(3) teu stipulates an obligation on the EU158 and the Member States to ‘assist each other in ­carrying out tasks which flow from the Treaties’.159 Furthermore, ‘Member States shall take any appropriate measure, general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the Union’.160 Finally, the Member States shall facilitate the achievement of the Union’s tasks and refrain from any measure which could jeopardise the attainment of the Union’s objectives’.161 As summarized by Wessel, duties of states in accordance with Article 4(3) include: 153 European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions (A European Solidarity Corps) Com (2016) 942 final (Brussels, 7 December 2016), available at: accessed 10 August 2018. 154 State of the Union speech. 155 State of the Union speech. 156 Christophe Hillion, ‘Mixity and Coherence in EU External Relations: The Significance of the “Duty of Cooperation”’ cleer Working Papers 2009/1, 8. See also Ramses A Wessel, ‘The International Legal Status of the European Union’ (1997) 2 EFARev 109, 120. 157 Marcus Klamert, The Principle of Loyalty in EU Law (oup, Oxford 2014) 31 et seq. 158 In C-2/88,  J. J. Zwartveld and others [1990] ECLI: EU: C: 1990: 315, para. 15, the Court noted that (now) Article 4(3) ‘imposes on the European institutions and the Member States mutual duties of loyal co-operation with a view to attaining the objectives of the [Treaties]. 159 Article 4(3) teu. 160 Article 4(3) teu. 161 Article 4(3) teu.

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(a) The duty to take all necessary measures for effective application of EU law; (b) The duty to ensure the protection of rights resulting from primary and secondary EU law; (c) The duty to act towards achievement of the Treaty objectives, especially in absence of EU actions; (d) The duty not to take measures which would harm the effet utile of EU law; (e) The duty not to take measures which may hamper functioning of institutions; (f) The duty not to act against the development of the integrative process of the EU.162 The duty of loyal cooperation enshrined in Article 4(3) ‘is of general application and does not depend either on whether the [EU] competence concerned is exclusive or on any right of the Member States to enter into obligations towards non-member countries’163 and may even spread beyond the limits of EU law. Indeed, as noted in Annunziata Matteucci back in 1988, [Article 4(3) teu] provides that the Member States must take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of the Treaty. If, therefore, the application of  a provision of [EU] law is liable to be impeded by a measure adopted pursuant to the implementation of a bilateral agreement, even where the agreement falls outside the field of application of the Treaty, every Member State is under a duty to facilitate the application of the provision and, to that end, to assist every other Member State which is under an obligation under [EU] law.164 In other words, Article 4(3): sets out the expectations of what a state must be capable of to sustain the obligations of membership. It sets out responsibilities of comity but, above all, it sets out expectations about the commitments and resources that states must both have and commit – be these effective judicial

162 Ramses A Wessel, ‘The International Legal Status of the European Union’ 120. 163 C-266/03, Commission v Luxembourg, [2005] ECLI: EU: C: 2005: 341, para. 58; C-433/03, Commission v Germany, [1987] ECLI: EU: C: 2005: 462, para. 64. 164 Case 235/87, Annunziata Matteucci v Communauté Française de Belgique, [1988] ECLI: EU: C: 1988: 460, para.19.

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s­ ystems, proactive, well-resourced, non-corrupt policing or a clear and universal rule of law – for membership of the European Union.165 The duty of loyal cooperation is particularly reflected in citizenship matters where independent actions of a single Member States may significantly affect other Member States in which case consultation with all potentially affected parties is needed before action has been undertaken. While approached from the perspective of Article 4(3) teu within the EU this duty largely resembles the duties to inform, consult and negotiate with neighbouring states stemming from the international principle of good neighbourliness.166 To agree with Maduro, ‘the [EU] principle of sincere cooperation laid down by Article [4(3) teu], (…) could be affected if a Member State were to carry out, without consulting the Commission or its partners, an unjustified mass naturalisation of nationals of non [M]ember States’.167 Furthermore, as noted by the cjeu ‘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’.168 Indeed, one needs to avoid thinking of EU citizenship and Member State citizenships ‘as two separate and unrelated phenomena’169 as these two are inseparable from each other. The development of EU citizenship in direction of delimiting discretion of EU Member States in the sphere of acquisition and loss of citizenship in the light of EU law has not only been helped by interpretations of the EU Court System and detailed scholarly analysis but also by the development of the citizenship by investment industry across EU Member States. The ‘case’ of Malta which is analysed in detail in the following section might have been only the beginning of shaping citizenship by investment by EU institutions and further interpretation of EU principles and values. While possible infringement of the good neighbourliness principle in the field of citizenship law might be the most visible expression of lack of solidarity and loyal cooperation between Member States, other illicit practices of states or acting with mala fide intent in citizenship sphere may also have an eroding 165 Damian Chalmers, Gareth Davies and Giorgio Monti, European Union Law: Cases and ­Materials (Cambridge, cup 2010) 225. 166 Elena Basheska, ‘The Good Neighbourliness Principle in EU Law’ (PhD thesis, University of Groningen 2014) 57. 167 Maduro’s opinion in Rottman, para. 30. 168 Rottman judgement, para. 41 (see also references to other case law as enumerated in that paragraph). 169 Shaw, ‘Citizenship: Contrasting Dynamics’ 578.

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effect. This might be, for instance, the case where some of the programs has undermined the rule of law as one of the EU fundamental values as defined in Article 2 teu. Article 7 teu aims at securing that EU Member States respect the EU values.170 This safeguarding provision should not be understood only as a protective mechanism of fields covered by EU law. As further explained by the European Commission, Article 7 teu: seeks to secure respect for the conditions of Union membership. There would be something paradoxical about confining the Union’s possibilities of action to the areas covered by Union law and asking it to ignore serious breaches in areas of national jurisdiction. If a Member State breaches the fundamental values in a manner sufficiently serious to be caught by Article 7, this is likely to undermine the very foundations of the Union and the trust between its members, whatever the field in which the breach occurs.171 Taking the above into consideration, EU Member States cannot construct and implement Citizenship and Residence programs by infringing national law and disregarding values of the Union, including the rule of law. The question then arises whether some of the Citizenship by Investment or Residence Programs across EU Member States might have infringed the EU values. Most illustrative example for such an abuse would be corruption of governments and state administration with regard to both preparation and implementation of Citizenship by Investment or Residence Programs. Indeed, [t]he pillars of anticorruption should be the values of solidarity and social cohesion that hold citizens together in any legal system. Such principles should exclude any tolerance for corruption, as corruption undermines fundamental rights. People’s representatives are all too often captured by non-transparent economic interests and divert the pursuit of public and citizens’ interests. Corruption in the public sector represents an emblematic case of such diversion determining the betrayal of trust in public administration. Systemic corruption costs to the citizens and they pay it with lower-quality public services. In the past often stakeholders 170 Dimitry Kochenov, ‘Busting the Myths Nuclear: A Commentary on Article 7 teu’ eui Working Papers LAW 2017/10. 171 Communication from the Commission to the Council and the European Parliament on Article 7 of the Treaty on European Union – Respect for and promotion of the values on which the Union is based, COM/2003/0606 final.

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have been kept unaware of such distortions due to a lack of transparency, information asymmetries, or undeveloped competences. A wider transparency and the oversight by civil society might be extremely useful for ensuring that the public activities are correctly performed.172 Corruption of governments and lack of transparency in construction and implementation of Citizenship by Investment or Residence Programs may seriously undermine rule of law and infringe Article 2 teu in which circumstances triggering of Article 7 teu might be necessary. 3.2.2 The Maltese Matter: Article 4(3) in Practice? Malta’s introduction of an Individual Investor Program (iip) in late 2013, occasioned wide debate in several countries in Europe – especially Germany (where many politicians are fundamentally against the ‘sale’ of citizenship) and Great Britain (which fears the endangering of its own investor immigration program)173 – which was expanded EU-wide.174 The debate over Malta’s iip has raised very interesting legal questions which aim at some of the fundamental aspects of the concept of EU citizenship and the principles on which the current EU treaties are based. It would therefore be remiss not to examine the key aspects, and to review some of the arguments, which have been brought forward in the debate surrounding the Malta Individual Investor Program. It should be recalled that the acquisition of Maltese citizenship (or a citizenship of any other EU Member State) essentially means acquisition of EU citizenship and the rights attached to it. In practical terms, the investor/donor is able to move and reside freely within the EU territory, to work and stand as candidate in European and municipal elections in their Member States of residence, would have right to consular protection, and would also have right to petition the European Parliament, to apply to the European Ombudsman, and to address the institutions and advisory bodies of the Union in any of the 172 Gabriela M Racca and Roberto Cavallo Perin, ‘Corruption as Betrayal of Trust in Public Administration and as a Violation of Fundamental Rights’ (2015) 2(3) rcj accessed 10 August 2018. 173 See, for instance, Helen Warrell and Cynthia O’Murchu, ‘“Passport for sale” Plan Raises Concern among EU Members’ (Financial Times, 9 December 2013) accessed 10 August 2018. See also Helen Warrell and James Fontanella-Khan, ‘Malta Passport Sale Puts UK under Pressure’ (Financial Times, 9 December 2013) accessed 10 August 2018. 174 Shachar and Bauböck (eds), Should Citizenship be for Sale? provides a good overview of the spectrum of opinion.

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Treaty languages and to obtain a reply in the same language, in addition to all other benefits from the achievements of the Single Market. Hence, the loud response to the introduction of the Maltese CbIP not only by political elites and scholars but also by EU institutions were not totally unexpected and should be welcome as a fresh wave of initiatives for further clarification of the many different facets of EU citizenship. What is less clear, however, is why such response did not couple other Citizenship and Residence Programs across EU. Neither the announcement of the Cypriot Government to introduce a very similar naturalisation scheme for investors which took place a few months before the presentation of the iip by the Maltese Program attracted any serious attention nor EU institutions were particularly alarmed by the existing residence schemes at that time.175 While residence programs of other Member States might be different in the eyes of EU institutions the Cypriot Citizenship Program was certainly very similar and should have provoked a similar reaction. It did not happen. Moreover, the immediate reaction of the European Commission to the launch of the Malta iip176 was that the EU had no jurisdiction to interfere in that matter. Indeed, on 13 November 2013, the European Commission clarified that ‘it has no power to stop Malta, or any other Member State, from selling EU citizenship’.177 The EU Home Affairs spokesman, Michele Cercone, told the press that ‘Member [S]tates have full sovereignty to decide to whom and how they grant their nationality’,178 adding that the cjeu has confirmed in a number of cases that ‘it is for each [M]ember [S]tate to lay down the conditions for granting citizenship’.179 Yet, quickly after that and without any prior legal discussion on the possible effects of CbIPs on EU law, the Commission reportedly started to plan for infringement proceedings on the basis of article 4(3) teu against Malta.180 However, no ­infringement ­proceedings were filed while the debate over the Maltese iip 175 Carrera, ‘How Much does EU Citizenship Cost?’ 19–20. 176 See Act No. xv of 2013 – Maltese Citizenship (Amendment) Act. 177 Andrew Rettman, ‘Malta Free to Sell EU Citizenship, Commission Says’ (EU Observer, Brussels, 14 November 2013) accessed 10 August 2018. 178 Rettman, ‘Malta Free to Sell EU Citizenship’. 179 Rettman, ‘Malta Free to Sell EU Citizenship’. 180 Ivan Camilleri, ‘EU to Quiz Malta on Passport Scheme EU Balks at “A Legal War”’ (Times of Malta, 24 January 2014) accessed 10 August 2018; cf. Matthew Vella, ‘Can European Commission Take Malta to Court Over Citizenship Scheme? – meps’ Resolution on Citizenship Could Have Lasting Effect in Court Action’ (Malta Today, 19 January 2014) accessed 10 August 2018.

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and its ­compatibility with EU values and achievements started in the European Parliament and was concluded by the European Commission. Yet, on 15 January 2014 the European Parliament discussed citizenship for sale at its Plenary Session and the next day it adopted a Resolution condemning that practice. Shifting significantly away from the previous position of the European Commission, the then Vice-President of the European Commission, Viviane Reding, delivered a rather emotional speech at the Plenary Session emphasizing that ‘[c]itizenship must not be up for sale’.181 While making clear that the acquisition of citizenship is in principle exclusively a matter of domestic law, Reding reminded the audience that by granting their citizenship Member States also grant EU citizenship and the rights attached to it.182 Hence ‘naturalisation decisions taken by one Member State are not neutral with regard to other Member States and to the EU as a whole’.183 Moreover, the Vice President touched upon a few other important aspects in her speech: In compliance with the criterion used under public international law, Member States should only award citizenship to persons where there is a ‘genuine link’ or ‘genuine connection’ to the country in question. (…) [T]he Commission (…) expects that Member States act in full awareness of the consequences of their decisions. (…) It is a fact that the principle of sincere cooperation, which is inscribed in the EU Treaties (Article 4.3 of the Treaty on European Union), should lead Member States to take account of the impact of decisions in the field of nationality on other Member States and the Union as a whole.184 The European Parliament followed almost an identical approach. In its Resolution on ‘EU citizenship for sale’ of 16 January 2014,185 the EU Parliament condemned CbIPs for a number of reasons. It has noted in the Preamble to the Resolution that Member States are expected to respect EU common values and achievements which are ‘invaluable and cannot have a price tag

181 Viviane Reding, Vice-President of the European Commission and EU Justice Commissioner, Speech, ‘Citizenship Must Not Be up for Sale’ – European Commission, Plenary Session debate of the European Parliament on ‘EU citizenship for sale’ (Strasbourg, 15 January 2014) (Viviane Reding’s Speech). 182 Viviane Reding’s Speech. 183 Viviane Reding’s Speech. 184 Viviane Reding’s Speech. 185 European Parliament Resolution of 16 January 2014 on EU citizenship for sale OJ C 482/117 (2013/2995(rsp)) of 16 January 2014 (EU Citizenship for Sale Resolution).

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attached to them’.186 It has further noted that ‘in some cases (the) investment programmes have possible negative side-effects, such as distortion of local housing markets’187 pointing at the Maltese Government, in particular, which has ‘taken steps to introduce a scheme for the outright sale of Maltese citizenship, which automatically entails the outright sale of EU citizenship as a whole without any residency requirement’.188 The European Parliament then expressed its concern with such way of obtaining citizenship, which it noted, ‘undermines the very concept of European citizenship’189 and called on the Commission ‘as the guardian of the Treaties, to state clearly whether (such) schemes respect the letter and spirit of the Treaties and the Schengen Borders Code, as well as the EU rules on non-discrimination’.190 The Parliament further reiterated that ‘Article 4(3) of the Treaty on European Union enshrines the principle of “sincere cooperation” between the Union and the Member States, which are, in full mutual respect, to assist each other in carrying out the tasks which flow from the Treaties’.191 While acknowledging their competence in matters of residence and citizenship, the European Parliament called on the Member States ‘to be careful when exercising their competences in this area and to take possible side-effects into account’192 and ‘to take account of fraudrelated criminal concerns such as money laundering’.193 Finally, the European Parliament noted that EU citizenship ‘depends on a person’s ties with Europe and the Member States or on personal ties with EU citizens (and) should never become a tradable commodity’.194 The European Commission evidently took the notes of the European Parliament on board at the meeting with the Maltese authorities held on 29 January 2014 where compatibility of the Maltese iip with EU law was discussed.195 After that discussion the two involved parties reached a compromise which came in a joint statement clarifying that Malta will amend its iip to ‘include genuine links to Malta through the introduction of an effective residence status in 186 187 188 189 190 191 192 193 194 195

Point A of the Preamble of the EU Citizenship for Sale Resolution. Point E of the Preamble of the EU Citizenship for Sale Resolution. Point F of the Preamble of the EU Citizenship for Sale Resolution. Point G of the Preamble of the EU Citizenship for Sale Resolution. Para. 3 of the EU Citizenship for Sale Resolution. Para. 3 of the EU Citizenship for Sale Resolution. Para. 6 of the EU Citizenship for Sale Resolution. Para. 9 of the EU Citizenship for Sale Resolution. Para. 7 of the EU Citizenship for Sale Resolution. European Commission memo, Joint Press Statement by the European Commission and the Maltese Authorities on Malta’s Individual Investor Programme (iip) (Brussels, 29 January 2014) (  Joint Press Statement), available at 27 April 2018.

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Malta prior to the possibility to acquire Maltese naturalisation’.196 The Commission ‘welcomed the announced amendments concerning the residence requirement – done in good faith and in a spirit of sincere cooperation and both parties express satisfaction about the understanding reached on this issue’.197 Malta amended its iip in line with the requirements introducing 12-months residence requirement for potential investors who wanted to acquire their citizenship through the iip.198 Commission President Jean-Claude Juncker later stated: As a matter of principle, nationality is not a product. Selling nationality is selling part of the dignity of a country. I am quite satisfied with the compromise that has been reached between the Maltese government and the European Commission, but I never understood this initiative. That is my personal point of view. I was Prime Minister for 19 years and I would never have sold Luxembourg’s passports. Never.199 Citizenship is indeed not a product but can be conferred inter alia to eligible individuals who contribute to the state economy and welfare through the formal or informal Citizenship by Investment options. Improvement of economic conditions is certainly in the national interests of states. In fact, ‘[b]y 2016, each EU Member State has adopted at least one legal mechanism for facilitating investment-based migration, be it through the state’s discretion to naturalise, an investor citizenship scheme or a program granting ‘a path to citizenship’.200 Yet, while the mode of acquisition of citizenship may be indeed understood as an indirect sale of passports a number of key factors including ‘the hypocrisy and randomness underlying any determination of citizenship (…) the problem of de facto statelessness, which reveals a questionable understanding of

196 Joint Press Statement. 197 Joint Press Statement. 198 For detailed analysis, see, Eugène Buttigieg and Daniela DeBono, Country Report on Citizenship Law: Malta, eudo Citizenship Observatory, RSCAS/EUDO-CIT-CR 2015/5 accessed 10 August 2018. 199 See ‘Malta Will Play an Important Part in the EC – Jean Claude Juncker’ (Malta Independent, 4 May 2014) accessed 10  ­August 2018. 200 Jelena Džankić, ‘Immigrant Investor Programmes in the European Union (EU)’ (2018) 26(1) J. Contemp. Eur. Stud. 64.

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d­ iscrimination (and) the political dimension of citizenship’201 must not be overlooked before any serious claims suggesting that ‘[c]itizenship must not be up for sale’202 are put forward by EU institutions. In lack of legal arguments such claims are nothing but an emotional cry for ‘one of the most sacred cows in the division of competences between the Member States and the EU’.203 3.2.3 Genuine Link and Sincere Cooperation The compromise that both Juncker204 and the European Commission205 were satisfied with resulted from the introduction of the residence requirement in the Maltese iip which was an expression of the genuine link ‘criterion used under public international law’,206 in the understanding of the Vice-President of the European Commission, Viviane Reding. By introducing the residence requirement Malta acted ‘in good faith and in a spirit of sincere cooperation’,207 according to the Commission. The Commission thus tied the international law theory of genuine link and Article 4(3) teu indicating that naturalisation without a genuine link jeopardises Union objectives. Such move is legally incorrect and the intention of the Commission to infiltrate the genuine link as a naturalisation requirement to be complied with by EU Member States is practically unattainable. As already discussed in Chapter 1 of this book, the genuine link is not a requirement but has been merely engaged to resolve diplomatic protection issues in the international arena in cases of multiple citizenship. As summarised by Boll, rather than obliging states not to legislate in a certain way with respect to attribution of nationality, international law dictates that when the consequences of such attribution are felt on the international level, it is up to international law whether a bestowal or removal of nationality must be recognised by other states.208

201 Kochenov, ‘Citizenship for Real’. 202 Viviane Reding’s Speech. 203 Christian H Kälin, ‘Attracting Global Citizens’ (Times of Malta, 29 April 2016) accessed 10 August 2018. 204 Joint Press Statement. 205 Joint Press Statement. 206 Joint Press Statement. 207 Viviane Reding’s Speech. 208 Alfred Michael Boll, Multiple Nationality and International Law (Brill, Leiden 2007).

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Furthermore, the very existence of EU citizenship essentially presupposes rights beyond the Member State conferring the citizenship rather than tying up to the conferring state’s territory.209 In practice, EU citizenship weakens ties with a Member State, as otherwise the Internal Market would be undermined. Indeed, ‘[i]n practice, EU citizenship has effectively destroyed the ties between citizenship and state territory’.210 The Internal Market and EU ­citizenship are a success, when any considerations of correlation between the citizenship of a Member State (i.e. strong ties – or genuine links – with a Member State of citizenship) and EU citizenship rights are removed. Article 18 tfeu established the principle of non-discrimination on the basis of citizenship, which expressly prohibits the Member States from taking any ties of EU citizens with their Member States of citizenship or residence into account. Residence or the exercise of any other rights of EU citizens in any Member State is not conditional on any cultural, linguistic or other considerations, stemming directly from Part ii tfeu provisions, and are not subject to any restrictions. In fact, EU equality rules, when applied to EU citizens cover also those who do not have any cultural links with a Member State.211 Accordingly, even EU citizens born and permanently residing in the Caribbean possessions of the Member States which are not part of EU territory are thus fully covered by EU law, notwithstanding the fact that the Member State in question (the Netherlands) itself submitted that these people had no links with it.212 The only link of relevance is that of the legal status of citizenship as established by the law of one of the Member States. EU Member States have been explicitly prohibited from questioning citizenship conferral by other Member State. As clarified by the cjeu: Under international law, it is for each Member State, having due regard to (EU) law, to lay down the conditions for the acquisition and loss of nationality. However, 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 by imposing an additional condition for recognition of 209 For different opinion see Rainer Bauböck, ‘Citizenship and National Identities in the European Union’ in Eugen Antalosvky, Josef Melchoir and Sonja Puntscher-Riekmann (eds), Integration durch Demokratie. Neue Impulse für die Europäische Union (Metropolis, Marburg 1997) 297. 210 Dimitry Kochenov and Justin Lindeboom, ‘Pluralism through its Denial: The Success of EU Citizenship’ in M Avbelj and G Davies (eds), Research Handbook on Legal Pluralism in the EU (Edward Elgar, Cheltenham/Northhampton, MA 2018) 179. 211 Eman and Sevinger, para. 61. 212 Eman and Sevinger, para. 60.

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that nationality with a view to the exercise of the fundamental freedoms provided for in the Treaty.213 Furthermore, it should be recalled that residence must not be confused with physical presence. Indeed, residence ‘comes with a thick bundle of popular assumptions, as well as legally consequential duties and entitlements. These can be held by an individual even in the legal contexts where residence and presence do not overlap’.214 Yet, the European Commission did not discuss this or other aspects of Citizenship and Residence Programs with other states. 3.2.4 Ius Doni and Mass Conferral of Citizenship Malta iip discussions with the EU Commission represented a first direct incursion of EU institutions in a previously exclusive terrain of competence of the EU Member States. While the Court of Justice has been ‘willing to accept extensive variants of the jus soli and jus sanguinis principles fro [sic] acquiring the nationality of a Member State’215 ius doni remains unfairly condemned and judged by EU institutions ˗ although somewhat selectively ˗ despite the lack of evidence that such mode of acquisition of citizenship is contrary to  the duty of loyal cooperation of Member States in light of Article 4(3) teu. The most fundamental question to ask against this background is whether the EU was actually right to ask Malta to modify its citizenship law, and in particular, whether the including of the residence requirement into the Maltese iip has rectified the alleged infringement of Article 4(3) teu. Both the Resolution adopted by the European Parliament and the subsequent discussion with Malta initiated by the Commission involved more emotions than legal substance. The only argument that had something to do with law was the suggestion that Malta’s initial iip was not in a spirit of sincere cooperation pursuant to Article 4(3) teu given the inseparable connection between Member States’ citizenship and EU citizenship rights enjoyed by citizens beyond the host country. 213 Micheletti, para. 10. 214 Dimitry Kochenov, ‘Introduction ˗ A Glimpse of Global Trends’ 6. cf. Carrera, ‘How Much does EU Citizenship Cost?’ 8; and Malta Independent, ‘Government Amends Citizenship Act Again, but Residency Still Remains Undefined’ (Malta Independent, 16 F­ ebruary 2014) accessed 10 Augustw 215 Steve Peers, ‘Want to be an EU Citizen? Show me the Money!’ (EU Law Analysis, 28 January 2014) accessed 10 August 2018.

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It should be recalled in this context that the duty of loyal cooperation as enshrined in Article 4(3) teu concerns the achievement of the goals of integration and genuine compliance with EU law. Such duty does not concern the use by the Member States of their own national competences in cases when that use does not undermine the ability of the Union or other Member States to comply with EU law or to reach the goals of integration.216 Yet there is ­nothing in the mode of acquisition of citizenship by investment suggesting collision with EU law or the goals of integration. Quite the contrary, ‘[r]ich newly-­minted Maltese will satisfy all the formal requirements of the EU citizenship Directive 2004/38, thus becoming ideal EU citizens in London and Paris’.217 A possible infringement of Article 4(3) teu in the context of the granting of citizenship could be imagined in the case of mass naturalisations,218 or where a Member State would, without prior consultation, confer its citizenship to a large, disproportionate number of non-EU citizens.219 Apparently, however, not even the grant of German citizenship to over 3 million people mainly from the former Soviet Union who could claim some sort of German link, or the grant of Italian citizenship to over a million Argentineans with no real ties to Italy, or the handing out of Hungarian passports to hundreds of thousands of ‘Hungarians’ living in Ukraine, Romania, Serbia and other countries, were sufficient to be regarded a violation of the principle of sincere cooperation. The iip of Malta and citizenship by investment options offered in other Member States certainly do not produce a disproportionally large number of citizens which would in any way jeopardise EU law or the goals of integration. Quite the contrary. For instance, in 2016, the last year where such statistics are available, the 28 EU Member States granted citizenship to a total of not less than 994 800 persons (Table 3).220 The five Member States which granted most citizenships in 2015 include: Italy which granted 201,591 citizenships of the total number or citizenships granted in the EU, Spain participated in the total number with 150,944, the United Kingdom with 149,372, France with 119,152, Germany with 112,843 and all other 23 Member States with 303,659 ­citizenships.221 None 216 cf. Marcus Klamert, The Principle of Loyalty in EU Law. 217 Kochenov, ‘Citizenship for Real’. 218 Jo Shaw, ‘Citizenship for Sale: Could and Should the EU Intervene?’ in Shachar and Bauböck (eds), Should Citizenship be for Sale? 33. 219 Carrera, ‘How Much does EU Citizenship Cost?’; see also opinion of Maduro’s opinion in Rottman. 220 See ‘Acquisition of citizenship statistics’, available at: accessed 10 August 2018 (Eurostat information). 221 Eurostat information.

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Acquisitions of citizenship per 1000 persons, EU-28 and efta, 2016

EU

1.9

Sweden Luxembourg Cyprus Italy Malta Spain Greece Belgium Denmark Portugal United Kingdom Ireland France Finland

6.2 5.7 5.5 3.3 3.3 3.2 3.1 2.8 2.6 2.4 2.3 2.1 1.8 1.7

Netherlands Germany Estoniaa Latvia Austria Croatia Slovenia Hungary Czech Republic Romaniab Bulgaria Poland Slovakia Lithuania

1.7 1.4 1.4 1 1 1 0.6 0.4 0.4 0.2 0.2 0.1 0.1 0.1

source: Eurostatc a break in series b estimated c Eurostat statistics.

of the five  EU Member States which granted most citizenships have typical CbIPs. In fact, only 0.1 per cent of the citizenship applications are on average made under CbIPs.222 The EU Member States with such programs have granted much smaller number of citizenships in 2016. For instance, Bulgaria granted around 1,780 citizenships, Cyprus granted 4,700 citizenships and Malta granted around 1,626 citizenships. While all three states are much smaller in size and the number of issued citizenships is expectedly lower it is important to note that the number of issued citizenships per 1000 persons in these countries is not higher than in other EU Member State with no typical CbIPs. Taking the above figures into consideration the impact of granting citizenship through investment on other countries should be very little if any. Should such impact be deemed as having harmful effect on other states – be that because of their newly acquired rights of free travel and settlement or for any

222 See Eurostat statistics, available at: accessed 10 August 2018.

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other reason – the impact of naturalisations granted on other bases and especially other modes of non-mass facilitated naturalisation, would be equally harmful. Other aspects mentioned by some scholars include the effects of programs. Thus, Carrera has noted that ‘[w]hile the consequences of the Maltese iip would be indeed marginal in pure numerical terms, the qualitative or substantive effects of the iip seemed to be given far more weight’.223 However, qualitative or substantive effects of the iip, such as the interconnection between the Maltese citizenship and EU citizenship and the cost of the latter,224 neither infringe EU law nor are in contrast with the goals of integration. The due diligence on the applicant is extensive and exceeds the standards applied to ordinary naturalisations in EU countries by far, meaning that no argument about a negative impact on the EU or Member States in this respect can be supported, not least because of the rather minimal numbers of naturalisations under the Malta iip. Furthermore, it must be also kept in mind that EU citizenship does not have independent existence but is derivative in nature and none of the EU institutions have the power to confer it.225 It would be therefore hard to imagine that the derivative EU citizenship can be undermined by an additional mode of its indirect acquisition. Moreover, the duty of cooperation in the context of citizenship law replicates the international principle of good neighbourliness which imposes a duty on states to refrain from domestic activities which may have harmful effects on other states and to consult with the latter. This notwithstanding, it should be also recalled that states are equally responsible to tolerate minimal damage caused by actions of other states. So if there were claims that the acquisition of citizenship by investment had harmful effects on other states these would have been insufficient to infringe the duty of sincere cooperation applied through the principle of good neighbourliness beyond EU law and the goals of integration. 3.3

Conclusions to Chapter 3

European states have established most advanced cooperation in the postwar years. The new legal order, as early described by the cjeu as such, has ­special and unique identity, separate from international law. It is ­primarily 223 Carrera, ‘How Much does EU Citizenship Cost?’ 25. 224 Joint Press Statement. 225 Article 20 tfeu.

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c­ haracterised by direct effect, supremacy and pre-emption. Sovereignty of states has necessarily weakened in such supranational system. Citizenship beyond borders was born with the Maastricht Treaty allowing citizens of each Member State to feel equally home in all other Member States. In other words, the concept of citizenship has been primarily based on non-discrimination on the basis of nationality. It has further undoubtedly developed through the interpretations of the cjeu. Most importantly, the cjeu has ruled that EU law established mutual recognition of Member States which necessarily means that Member States are not allowed to question decisions of other Member States to grant citizenship one way or another. Member States are expected, however, to have due regard to EU law when laying down the conditions for the acquisition and loss of nationality. These relate primarily to situations which may have an effect of depriving EU citizens of their rights conferred to them by virtue of that status and are as such prohibited by EU law. Due regard to EU law aside, regulating citizenship matters is in exclusive competence of Member States which decide independently who their and EU citizens are. EU citizenship is possible through the principle of loyal cooperation enshrined in Article 4(3) teu which stipulates an obligation on the EU and the Member States to assist each other in carrying out tasks which flow from the  Treaties. In citizenship matters, such principle could be affected where a Member States carried out, for instance, an unjustified mass naturalisation of third country nationals without consulting the Commission or other Member States. The number of passports issued through CbIPs are, however, insignificantly small to be considered mass naturalisation and thus breach of the principle of loyal cooperation. Yet, the European Commission and the European Parliament questioned the Maltese iip. The Commission went even further to suggest that the Program undermined the principle of loyal cooperation. These was a serious accusation which, however, never brought Malta before the cjeu. Instead, the Maltese Citizenship Program was amended following a consultation between the Government of Malta and the European Commission, after which a one-year residence requirement was included. In other words, the theory of ‘genuine link’ has been somewhat reinforced politically by the EU Commission outside their legal competence through invoking the principle of loyal cooperation given that international law does not impose such a requirement on states.

Chapter 4

Ius Doni: Procedures and Practices 4.1

Justification and Procedures

The citizenship by investment industry has grown considerably over the past ten years, and it is still developing further at a fast pace. Given that a nationstate’s scope of action in the field of citizenship law can only reach as far as its sovereignty, which remains somewhat constrained by international legal commitments to a certain extent, a question with regard to a definition of nation-state’s interests that could justify citizenship by investment arises. The central idea of the citizenship by investment approach is to attract foreign capital in order to stimulate domestic investment projects. These can be investments in private projects (often property development), ‘seed capital’ for the establishment of other companies or a nucleus of infrastructural development located in the beneficiary territory. It is in primary interest of each state to secure sufficient foreign direct investment for its economy.1 Citizenship as a ‘consideration’ for such investment is functionally a legitimate means to promote foreign direct investment and remains entirely within the bounds of the nation-state discretion in the field of citizenship law. In accepting the ‘extraordinary economic contributions to the state’ as an application criterion, the national legislature in no way acts ultra vires, because it affects the mode of acquisition of citizenship rather than the fundamental purpose and function of citizenship. Although the national legislature is in principle bound by the ultra vires doctrine not to use its control and power inappropriately – here again the precept of legal determination applies, in particular of intervention – it cannot totally ignore the common good, but must respond to the changing social conditions. Within the scope of the requirement for clarity and definiteness, the principle of consistency and the ultra vires doctrine, the granting of citizenship can be and is regularly linked to economic criteria such as the availability of a regular minimum income from gainful economic activities. Those who work in the domestic market pay taxes, thereby contributing to the financing of the general government functions and through their daily interactions with colleagues, are 1 James K Jackson, Foreign Investment and National Security: Economic Considerations (Congressional Research Service, Washington D.C. April 2008) accessed 10 August 2018.

© koninklijke brill nv, leiden, ���9 | doi:10.1163/9789004357525_006

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more familiar with the domestic community and its culture than a recipient of public aid, who may not contribute to any community work and even merely render himself a ward of the state. The link between the acquisition of citizenship and the economic criteria can, in the light of the economic globalisation and increasing transnational investment and worker migration, contribute to attracting more of foreign investment, improve matching of labour as well as the investor and investment demand and supply, and thereby secure the foundations of domestic prosperity, which in the foreseeable future – if one believes the World Bank study mentioned – may otherwise be undermined by demographic developments, especially in Europe but also in other parts of the world. 4.1.1 The Economic Imperative As legitimate and desirable the demand for a ‘national culture’2 in the face of cherished conventions and traditions may be, the national legislature should not prevent the development of modern citizenship law from reasonably taking into account changing circumstances and altered understanding of citizenship and nationality. Many Western welfare states have created excessive public debt3 due to shift in attitudes towards entitlement in wide sections of the population since the nineteen-sixties.4 It appears increasingly important under the conditions of economic globalisation that a state can focus on its specific original core tasks, which include providing an adequate supply of schools, police services and the administration of justice. Only a ‘lean state’ focusing on specific sovereign core tasks, and performing them well, can remain a strong state. A dollar can be spent only once, and a large part of the funds obtained by government redistribution which should be used to fulfil core state functions or the realisation of social projects actually ‘remain’ in the redistribution administration. Moreover, countries which are unable to address the economic deficit resulting from an investment or labour deficit5 2 For this concept, see Christian Joppke, ‘Multicultural Citizenship’ in Isin and Turner, Handbook of Citizenship Studies. 3 For an overview of the issues regarding the (Western) welfare states, see Dambisa Moyo, How the West Was Lost: Fifty Years of Economic Folly – And the Stark Choices Ahead (Penguin, London 2011). 4 See also Paul Spicker, ‘Poverty and the Welfare State: Dispelling the Myths’ (2002) Catalyst Working Papers accessed 10 August 2018 and Guy Standing, Promoting Income Security as a Right: Europe and North America (Anthem Press, London 2005). 5 On the immigration of skilled workers, see Chiswick, High-Skilled Immigration in a Global Market; on the correction of the skilled workers deficit in Germany through the specific control of immigration, see Flora Wisdorff and Stefan von Borstel, ‘Weise: Deutschland Braucht

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or a similar suboptimal matching between demand and supply for labour and ­capital, steadily lose economic power, growth and prosperity or stagnate at best. Within the scope of operation of a functioning pricing mechanism,6 such conditions result in the constant increase in the prices of goods and services. Internationally, a place loses competitiveness and declines in country ­rankings – to the detriment of the people who reside, live and work there.7 Among the steps that lend themselves to better coordination between the opposite sides of the market – in addition to improved educational programs, in particular in the occupations in the areas of mathematics, informatics, natural sciences and technology – is the specific recruitment of overseas workers, such as the one conducted with the use of the ‘blue card’,8 which also indirectly brings reform of the citizenship law into play. Targeted promotion of direct Zwei Millionen Zuwanderer’ Die Welt (14 May 2011) ­accessed 10 August 2018; and Strunden and Pasenow, ‘Fachkräftegesucht! – Ausländerrecht fit?’. 6 At the centre of the principles constituting the market economy (private ownership, liability, consistency of the economic policies, contractual freedom, primacy of the economic policies, and last but not least – open markets) there must be a functional pricing system, which controls the market power of the individual players, steers the limited resources in efficient directions and fulfils essential social functions, see Karen Horn, Die Soziale Marktwirtschaft: Alles, was Sie über den Neoliberalismus wissen sollten (faz Institut, Frankfurt 2010). 7 As in other European states, there is a shortage of qualified skilled workers in Germany. This finding has prompted the presiding German Federal Government to lower the minimum income required for a residence permit from the previous eur 66,000 to eur 33,000 for occupations in the field of mathematics, informatics, natural sciences and technology and to eur 44,000 for other occupations, see Wisdorff and von Borstel, ‘Weise: Deutschland Braucht Zwei Millionen Zuwanderer’. 8 The ‘Blue Card’ as an instrument of targeted control of transnational (economic) migration flows is intended to harmonise and simplify the migration of suitable skilled workers throughout Europe. In this respect, see Martin Kahanec and Klaus M Zimmermann, ‘High-Skilled Immigration Policy in Europe’ in Chiswick, High-Skilled Immigration in a Global Market. See also Wisdorff and von Borstel, ‘Weise: Deutschland Braucht Zwei Millionen Zuwanderer’; on the development of a migration-related law on citizenship in Europe, see Sükrü Uslucan, Zur Weiterentwicklungsfähigkeit des Menschenrechts auf Staatsangehörigkeit: Deutet sich in Europa ein migrationsbedingtes Recht auf Staatsangehörigkeit an – auch unter Hinnahme der Mehrstaatigkeit? (Duncker & Humblot, Berlin 2/012). The ‘Blue Card’ based on EU Directive 2009/50/EC includes evidence, provided by one of the 28 EU Member States, of the legal residence of relatives from the third countries for the purpose of gainful occupation in one of the 28 EU Member States. Although the European Blue Card Directive is mainly aimed at qualified migrants and usually targets those who earn a comparatively good income, the European resettlement programme and the German Labour Migration Control Act (labour market Act on the adequate control of the immigration of highly qualified persons and the modification of further residence legislation of 20 December 2008 – ArbMigrG – announced in Volume 2008 No 63 of 24 December 2008) are approaches to an overall liberal immigration right in Europe and Germany, see, for instance, Eichenhofer, Hörich and Pichl, ‘Ist D ­ eutschland Noch

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investment and control of immigration support the model of a self-sustaining civil society and the practical realisation of subsidiarity.9 To achieve it, sufficient specific, transparent and comprehensible criteria to enable navigation of the migration flows are necessary. In view of the foregoing considerations, a state-initiated, targeted support of the selected market sectors by attracting foreign direct investment can represent a step in the right direction – if it supports the state in its performance of non-core tasks and optional core tasks. The latter benefit internal cohesion of the host country’s society by helping to fulfil the basic public needs, or by preventing erosion of the organic social structures. A tendency can be discerned not only in the described examples of citizenship by investment nations, but also in the welfare states of other economies not to distribute public funds to support economic development with a ‘watering can’ but to ensure that the selected projects benefit, hoping for their long-term prospects of profitability, monetary return of the investment to the investors involved, and ‘social return on investment’10 for the country or region as a whole. The latter might be achieved by increasing the number of people who gain the opportunity to employ their individual skills and abilities in the service of ‘their’ society, and thereby gain economic independence from government transfers and make ‘their own’ contribution to the domestic tax revenue. The ‘social return on investment’ might mean that an initially aid-­ dependent, government-supported market sector turns into a ‘cash cow’, and that services of general interest such as the nationwide supply of nursery and kindergarten places, or the expansion and maintenance of the public road networks – which were originally delivered by the state and, due to the changed conditions (national debt, excessive costs of government redistribution and bureaucracy, increased entitlement by a wider range of people etc.) could no longer be maintained. If the right objectives are chosen for promotion, companies can develop from individualistic, selfish and exclusively marketoriented participants to ‘clusters’ of a modern civil society. With a reasonable investor due diligence, development in this direction is in the public interest, because it means that apart from the direct beneficiaries, i.e. the employees of the ­beneficiary company, an indefinite number of persons is also served by the virtue of its ­socio-stabilising effect. Last but not least, attention should be 9 10

Ein Einwanderungsland?’. With regard to the ‘Blue Card’, see also Wisdorff and von Borstel, ‘Weise: Deutschland Braucht Zwei Millionen Zuwanderer’. Regarding the possible macroeconomic dependencies and resource-rent implications, however, see Xu, El-Ashram and Gold ‘Too Much of a Good Thing?’. See also Johannes Pennekamp, ‘Weltverbesserer ohne Wollpullis’ Frankfurter Allgemeine Zeitung (Frankfurt, 12 May 2012).

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d­ irected not only to the import of capital as such, but also to the person of the investor as a mean to avoid the influence of the investors with dubious integrity. Both state power and private power should be assessed in terms of their social benefits (in welfare terms) and to adjust the boundary between the two spheres appropriately. The ‘social return on investment’ can be achieved, at least in small states.11 As more than half of the world’s countries are small states,12 there is significant potential for CbIPs to be successfully implemented. 4.1.2 Requirements of Citizenship and Residence Programs Today, immigration and citizenship laws of most countries provide for residence or citizenship on the basis of a significant economic contribution. Residence is granted by most countries to wealthy foreign investors. Residence programs secure the investor’s residence in the state in which the program is implemented and, after a relatively long period of time, a citizenship of the host state.13 Citizenship by investment options are formulated variously in different states. The majority of states with such option require, in their relevant legal standards, that the monetary inflow is in their domestic (national) interest, without specifically defining this interest, however. Many programs have poorly defined goals, while other struggle to demonstrate a meaningful economic benefit.14 A smaller number of countries has programs specifically designed to attract foreign investors (CbIPs). The investment or donation requirements differ from state to state and largely depend on the attractiveness of the host country, as well as on the quality of the passport it has to offer to the potential investor.15 Unlike residence programs, CbIPs rarely add residence as a condition for acquisition of citizenship.16 Also, unlike discretionary investments, which often leave the residence question to the states’ discretion, CbIPs offer a short and transparent path to citizenship. Thus, while with the residence programs such as that of Australia, Canada (Quebec), UK or the US, to name a few, the

11 12 13 14 15 16

Xu, El-Ashram and Gold, ‘Too Much of a Good Thing?’. Alberto Alesina and Enrico Spolaore, The Size of Nations (The mit Press, London 2005). H&P, The Global Residence and Citizenship Programs. Madeleine Sumption and Kate Hooper, Selling Visas and Citizenship: Policy Questions from the Global Boom in Investor Immigration (mpi, Washington, D.C. 2014) 3. See qni 2017. See Shachar and Bauböck (eds), Should Citizenship Be For Sale?.

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applicant has to wait between 4 and 8 years and be physically present for a substantial amount of time in the respective country,17 CbIPs such as those of Antigua and Barbuda, Cyprus, Grenada, Moldova, St. Kitts and Nevis or St. Lucia, do not add residence as a qualifying criterion for obtaining citizenship and the time it takes for investors to obtain citizenship is, on average, three to four months.18 The Maltese CbIP provides access to citizenship after 1 year of residence, which need not be necessarily physical residence but ‘can be fulfilled by setting out a plan for developing connections to the island, joining local clubs, and donating to local charities, rather than physically residing on the island for twelve months’.19 Waiting time for citizenship acquired through discretionary investment is not always certain and, as Surak has pointed out, ‘if unhindered by formal procedures and application forms can shrink to the moment of negotiation’.20 An applicant may apply, for instance, for Croatian citizenship invoking his investment in the country under article 12 of the Citizenship Act, which allows for facilitated naturalisation to foreigners whose contribution is considered to be ‘of interest’ by the competent ministry without then having to meet the 5 years residence requirement, which is required for ordinary naturalisation.21 However, the Croatian Citizenship Act does not specify time required to obtain citizenship in cases of such facilitated naturalisation, instead it is usually left to the state’s discretion.22 Time needed to obtain permanent residence or even citizenship across ­various schemes within a same country can largely depend on the amount of money the investor is willing and able to spend there. Under the UK’s Tier 1 ­Investor visa program, a £2 million investment allows the investor to apply for residence permit after five years of residence and for citizenship after six years of residence. If the investment is £5 million, the investor can apply for permanent residence after three years, and if he invests £10 million time required for permanent residence shortens to two years.23 Bulgaria requires at least two years for the main applicant and minor children to become fully naturalised while spouses’ applications are processed independently and need to go through the permanent residence scheme, which only allows to apply for 17 18 19 20 21 22 23

See, for instance, Residency & Citizenship by Investment Programs as presented by ‘High Net Worth Immigration’ (hnwi 2016). hnwi, Residency & Citizenship by Investment Programs. Surak, ‘Global Citizenship’ 16. Surak, ‘Global Citizenship’ 16. The Law on Croatian Citizenship (Official Gazette, No. 53/91, 70/91, 28/92, 113/93); Decision of the Constitutional Court of the Republic of Croatia as of 4/94. The Law on Croatian Citizenship. See https://www.gov.uk/tier-1-investor. See also Surak, ‘Global Citizenship’ 15.

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citizenship after five years.24 An investment of about €0.5 million in Bulgaria will secure permanent residence for the investor who would be able to apply for citizenship after six years of residence. For €1 million investment the time to citizenship shortens for the investor to two years.25 It is not known for certain how many applications have been successful, if any.26 Programs’ processing time length varies substantially depending on the individual program and whether it offers fast track options or not.27 Malta’s iip together with Austria’s and Bulgaria’s citizenship by investment schemes have been identified as the programs with the slowest turnover times.28 Characteristic of Austria’s citizenship by investment practice lies also the fact that its processing times vary, but it is estimated that the entire process takes no less than 24 months.29 Irrespective of the discussion whether Bulgaria is in fact offering a CbIP or rather a hybrid residence program with an option to apply for citizenship at the end of it, the entire process is estimated to take between two and six years, depending on the size of the investment.30 The Maltese Program, known to be the most thorough scheme worldwide in terms of due diligence,31 subsequently features among the programs with the longest processing times. While average times to process applications take up to twelve months, the programs that stick out to be the fastest include the Comoros, Cyprus, Antigua and Barbuda, Dominica, St. Kitts and Nevis and Vanuatu.32 With a turnover period of barely three months, the Comoros not only offers one of the fastest routes to obtain the second citizenship available, but the mandatory contribution for the main applicant amounting to only usd 45,000 makes it also the cheapest program worldwide. However, liberties gained by ownership of this 24 25 26 27 28 29 30 31

32

See Christian Nesheim, ‘The Truth about Bulgarian Citizenship by Investment – An Expert Panel Comments’ (imi, 4 December 2017) accessed 10 August 2018. See Surak, ‘Global Citizenship’ 5–6. Nesheim, ‘The Truth about Bulgarian Citizenship by Investment’. See ‘The cbi Index: Key Findings – Caribbean Programmes Out in Front’ (pwm, 28 June 2017) accessed 10 August 2018 (The cbi index). The CBI index. H&P, The Global Residence and Citizenship Programs. See ‘Bulgaria – Bulgarian Residency through Bond Investment’ (La Vida, 2018) accessed 10 August 2018. See, for instance, Christian Nesheim, ‘Malta Should Mentor Caribbean cips on Due Diligence, Says Thomson Reuters General Counsel’ (Investment Migration Insider, 23  ­November 2017) accessed 10 August 2018. The cbi index.

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passport are limited. The Comorian nationality offers visa free or visa on arrival travel to 52 countries and territories and was ranked 83rd in the 2018 Henley Passport Index33 while the 2018 qni ranked Comorian nationality 143rd, falling just in the category of Medium Quality of nationalities.34 With usual approval time of up to 90 days, Cyprus claims a spot among the fastest programmes globally, and it offers all the advantages of EU citizenship, including the right to work, reside and buy property in all 27 EU Member States of the EU.35 In addition, the Cypriot nationality allows for visa free or visa on arrival access to 171 desinations, being ranked 14th in the 2018 Henley Passport Index and 24th in the 2018 qni.36 In Antigua and Barbuda one has to wait marginally longer – three to four months from submission of the application to the issuance of the passport. However, should an applicant opt to invest in real estate, the time frame may vary according to the development of the building project.37 The nationality of Antigua and Barbuda allows for visa free or visa on arrival travel to 149 countries and territories, being ranked 25th in the 2018 Henley Passport Index and 56th in the 2018 qni.38 The Dominican process is similar in that it requires four to six months from the submission of the application to the issuance of the certificate of naturalisation and passport, in the cases where there are no issues with the application. Its nationality allows visa free or visa on arrival access to 136 destinations, being ranked 34th in the 2018 Henley Passport Index and 69th in the 2018 qni.39 Currently, the fastest program is that of Vanuatu, which seems to be able to process applications in just one months’ time.40 Vanuatuan nationality allows for visa-free or visa on arrival travel to 129 destinations, being ranked 37th in the 2018 Henley Passport Index and 85th in the 2018 qni.41 The regular time between submission of the application and approval under the program of St. Kitts and Nevis, which is elaborated in greater detail in the next section of this Chapter, takes normally from three months to four months. However, in October of 2016, the ­Government of St. Kitts and Nevis introduced 33 34 35 36 37 38 39 40 41

Scores and rankings are available at the H&P Passport Index website: (H&P Passport Index) accessed 10 August 2018. All rankings are available at the qni website: (Nationality Index) accessed 10 August 2018. H&P, The Global Residence and Citizenship Programs. See H&P Passport Index and Nationality Index. Citizenship by Investment Unit (ciu) Antigua & Barbuda, ‘Citizenship – Legislation’ (ciu, 2018) accessed 10 August 2018. See H&P Passport Index and Nationality Index. See H&P Passport Index and Nationality Index. See ‘Citizenship’ (vic, 2018) accessed 10 August 2018. See H&P Passport Index.

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a new fast track version of processing applications within the CbIP, namely the Accelerated Application Process (aap).42 As explained by the St. Kitts and Nevis Government, applicants are still required to comply and submit the necessary supporting documents for citizenship by investment but they ‘will be given an accelerated treatment from the Citizenship by Investment Unit, Due Diligence Providers and the St. Kitts and Nevis Passport Office. As a bonus this process also includes the application and processing of the St. Christopher (St. Kitts) and Nevis passport’.43 The ‘Accelerated Application Process’ promises a 60-day turnaround for an extra fee.44 Various residence and financial requirements of Residence and Citizenship programs are summarised in the tables below (Tables 4–5). Table 4

Selected residence programs

Country of residence program

Physical residence required

Australia

2 years in a Investment or Business 5-year period business turnover of aud 500,000 and net assets of aud 800,000 183 days per Business, None year education, private residence Yes Business None

Austria

Belgium

42 43 44

Nature of Minimum Time to contribution contribution citizenship

4 years of permanent residence

6/10 years

5 years

For more details on the aap, see the Government of St. Kitts & Nevis – CbIP website accessed 10 August 2018 (St. Kitts & Nevis’ app). See St. Kitts & Nevis’ app. See St. Kitts & Nevis’ app.

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Country of residence program

Physical residence required

Nature of Minimum Time to contribution contribution citizenship

Bulgaria Canada

None 2 years in a 5-year period 1 visit required every 2 years No more than 6 consecutive months spent outside the uae None 7 years for permanent residence More time spent in Jersey than anywhere else None

Investment eur 511,000 5 years Investment or None 6 years employment Real estate eur 300,000 7 years

Cyprus Dubai/uae

Greece Hong Kong Jersey

Latvia Malta

Monaco

Portugal

Business or property purchase

None

Not available

Real estate eur 250,000 7 years Investment or None 10 years employment Tax contribution

Investment or real estate None Investment, contribution, and real estate purchase or rental Proof of pres- Business ence such as or proof of utility bills funds to live in Monaco 35 days dur- Capital transing a 5-year fer, various period investment options, real estate, or business

None

5 years

eur 35,000

10 years

eur 330,000 6 years unless under miip

None

10 years

eur 250,000 6 years or creation of 10 jobs

158 Table 4

Chapter 4 Selected residence programs (cont.)

Country of residence program

Physical residence required

Nature of Minimum Time to contribution contribution citizenship

Singapore

Presence in Investment Singapore for at least 50% of the time Spain None. Investment, real estate or business Switzerland None Employment, tax commitment or selfsufficiency Thailand None Single Fee United 185 days per Investment Kingdom year for 5 years United States 2.5 years in a Investment 5-year period Table 5

sgd 2.5 million

2 years

eur 500,000 10 years None

10 years

usd 15,000 13 years gbp 2 million 5 years usd 500,000 5 years

Selected citizenship programs

Country of citizenship program

Residence Nature of required contribution

Minimum Time to contribution citizenship

Antigua and Barbuda Austria Cyprus

5 days in 5 years None None

usd 200,000 3 months

Dominica Grenada

None None

Real estate, investment, or contribution Investment Real estate, business or investment Contribution Donation or investment in an approved real estate project

Variable eur 2 million usd 100,000 usd 200,000

1–2 years 6 months 3 months 3 months

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Ius Doni: Procedures and Practices

Country of citizenship program

Residence Nature of required contribution

Jordan

None

Malta

Moldova

St. Kitts and Nevis St. Lucia

Minimum Time to contribution citizenship

Bank deposits, usd 1.5 or investment in million treasury bonds, securities, small and medium enterprises or investment project 1 year’s Investments, real es- eur 880,000 legal resi- tate, insurance, and dence and residence minimum physical presence of 14 days None Contribution to eur 100,000 the the Sustainable Development Fund or investment in Real Estates or Government Bonds None Real estate or usd 150,000 contribution None Contribution, real usd 100,000 estate or business

2 months

1 year

3 months

4 months 2 months

4.1.3 The Due Diligence Process Countries with minimal or no residence requirements have to protect their reputation and provide for respectful programs which require a rigorous due diligence process. It has been said that ‘[t]he standards and the integrity of due diligence checks form the bedrock of cbi programmes’.45 It has been further noted that, 45

Private Wealth Management in association with CS Global Partners, ‘Due Diligence: The Key to a Successful Programme’ in A Guide to Global Citizenship (pwm Special Report June/ July 2017) accessed 10 August 2018.

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Change in the international, political and economic landscape has brought with it the need for more detailed levels of scrutiny, with a focus on financial crime. Terrorist financing, sanctions violations, bribery, corruption, fraud and money laundering are all under the microscope. This is nothing new, but the stakes are much higher in the citizenship by investment context, because countries seek to protect the integrity of their programmes, the reputation of their institutions, and the value of their citizenship.46 Hence, due diligence in CbIPs is the regulatory factor safeguarding that direct foreign investment does not come irrespective of ethical standards, but that the provenance of the investment matters as CbIPs are only as credible as their successful applicants. Due diligence serves to separate desired legal, ethical and ‘clean’ foreign direct investment from unwanted illegal, unethically gained and ‘laundered’ resources. Furthermore, it protects nationality’s value and standing, its citizens and institutions and, last but not least, the reputations of the programs themselves. This is, however, equally important to residence programs and acquisition of citizenship by investment through discretionary decisions of states. Fraudsters and other criminals often try to take advantage of the immigration options to evade justice. Excluding, or at least minimising, the possibility of admitting untrustworthy individuals who may bring the state granting citizenship into disrepunte is therefore of particular importance for the l­ atter. For instance, the case of naturalisation of the former Thai Prime Minister Thaksin Shinawatra – who was suspected of corruption and is believed to have invested, or promised to invest, several million Euros in the Montenegrin tourist i­ ndustry47 – i­ ndicated that strengthened due diligence and greater ­transparency with regard to the naturalisation requirements are needed. This situation was brought to light by  the strenuous efforts of the civil society organisations, which demanded that the criteria for the award of Montenegrin citizenships should be published.48 The award of the Montenegrin passport and granting of the privileged

46 47 48

pwm Special Report June/July 2017. Neil MacDonald, ‘Montenegro Steers towards Clearer Waters’ Financial Times (London, 2 December 2010) accessed 16 February 2018. Džankić, ‘The Pros and Cons of Ius Pecuniae’.

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citizenship to Shinawatra generated lively debate, particularly in the Montenegrin mass media, ngos and among the interested public.49 The naturalisation by the Commonwealth of Dominica of Francesco Corallo, an Italian businessman who found himself on an interpol most-wanted list and was extradited to Italy in 2017 allegedly for tax evasion, bribery and money-­laundering raised many eyebrows notwithstanding the fact that the Dominican government denied any wrongdoing.50 Without entering into discussion of the veracity of the above alegations or similar situations, bad publicity may cause severe damage, criticism and sanctions, including visa restrictions, against the country of the program.51 In principle, a strict due diligence process should reduce, if not eliminate, ‘the risk of bad apples entering through the program’.52 The due diligence process involves checks of the individual considering investment migration, and in particular his personal information and declarations, absence of criminal record, financial resources and legitimacy of their acquisition. ­Personal information is easily ascertainable from official documents of the applicant while checks of good character and absence of criminal records are more complex. Due diligence methodologies vary among states. Some states have introduced a number of stages to determine suitability of applicants. For instance, Antigua and Barbuda conducts a four-tier due checks of its applicants and associated businesses: tier one involves use of risk intelligence databases and other internet searches to scan the name of the main applicant and any businesses he may be associated with; tier two involves the use of third party due diligence service providers to conduct checks on the main applicant and associated family members; tier three involves checks of information by regional and international governmental partners; and tier four involves summarising the findings and making recommendation to senior management. Another nation that takes pride in and promotes itself for the stringent due diligence in the citizenship by investment matters is St. Kitts and ­Nevis. Les Khan, the current Chief Executive Officer of St. Kitts and Nevis’ ciu detailed the due diligence process of his country in a recent interview.53 He described 49 50 51 52 53

See ‘Nat Rothschild Gains Montenegrin Passport’ (BalkanInsight, 24 September 2013) accessed 10 August 2018. See, for instance, ‘Francesco Corallo (Catania, Italy, 1960) was Extradited Today to Italy’ Curaçao Chronicle (16 August 2017) accessed 10 August 2018. Damien Martinez, ‘Due Diligence in the Context of Investment Migration Programs’ in H&P, The Global Residence and Citizenship Programs 20. Sumption, ‘The Growing Market for Citizenship and Residence’ 13. See ‘ceo Khan Outlines Due Diligence Process for cbi Applications’ (St Kitts & Nevis Observer, 5 October 2017) accessed 10 August 2018.

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a five-step process, while stressing the importance of its stringent due ­diligence. Hence, at the first point of contact between an applicant and a certified citizenship by investment agent, the agent will run a background check using World Check or World Compliance tools. If the applicant ­passes this initial check, the application will proceed to a service provider in St. Kitts and Nevis, who will then submit the application and the due diligence report to the ciu. Then, the ciu screens the submitted files using a ‘test of documentation’ and, upon this test being passed successfully, passes them on to an international due diligence company. St. Kitts and Nevis engages the services of up to six companies such as Thomson Reuters and bdo Consulting. In the next step, the international due diligence company runs the information against various sanctions lists, social media and other media channels searching for negative results. The outcome of this is subsequently forwarded to an agency which dispatches investigators to discretely confirm the individual’s various details, including place of residence, occupation, utility (­ water/ electricity) reports, educational history, bank statements, flow of funds and more. The flow of funds and its origin are carefully scrutinized. Once the ­investigation process is concluded, the file is returned to the ciu. The Unit then conducts another review and submits a final recommendation to approve or deny the application. Mr. Les Khan admitted that, although this p ­ rocess seemed onerous, he insists on its necessity as a safeguarding tool to protect the reputation of St. Kitts and Nevis’ nationality and high standard of the program. Malta’s status as the world leader in citizenship by investment due diligence was confirmed in a raving review by Thomson Reuters’ General Counsel, Peter Vincent. In the interview with the industry journal Investment Migration Insider,54 Vincent noted that Malta’s due diligence process – albeit not ­perfect – should serve as a model for the entire world.55 Having some of the strictest due diligence standards of any immigrant investor program in the world, Malta uses interpol and engages other sources including the ­International

54

Nesheim, ‘Malta Should Mentor Caribbean cips on Due Diligence’ (Investment Migration Insider, 23 November 2017) accessed 10 August 2018; see also Kurt Sansone, ‘Malta’s Due Diligence of Rich Passport Buyers Gets Glowing Review’ (Malta Today, 24 November 2017) accessed 10 August 2018. 55 Nesheim, ‘Malta Should Mentor Caribbean cips on Due Diligence’.

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Criminal Court to ensure that only reputable applicants are granted Maltese citizenship.56 Article 7(2) of the Legal Notice 47 of 2014 explicitly regulates that due diligence in Malta has to be a four-tier process, the responsibility for it ­lying with Identity Malta.57 Although there are no written regulations detailing the four tier process, a ‘Country Report on Citizenship Law: Malta’58 describes how a spokesperson of the Office of the Maltese Prime Minister outlined it to be at the heart of the iip. In the first tier when the application is submitted, the agents or the concessionaire for the Individual Investor Program, conducts a preliminary check. This serves to verify if all accompanying documents (e.g. birth certificates, police clearance certificates) are authentic and whether investor’s money comes from legitimate sources. Paperwork requirements are assessed according to Malta’s anti-­money ­laundering legislation. United Nations’ and European sanctions are checked to establish whether the applicant is blacklisted. The second tier of the due diligence process is characterised by hiring of external specialists in order to perform background checks. The third level consists of the ‘risk weighting a­ ssessment’. Parallel to said checks, Identity Malta and its subcontractors also undertake investigations into the applicant’s affairs. The fourth and final due diligence tier is characterised by the use of special state resources, such as Europol and Interpol databases, by Maltese authorities. Interviewing candidates is not a regular feature of the Maltese application process. Instead, interviews may only be conducted should there be any room for doubt with regard to the application. But even in these situations, interviews are not a mandatory requirement of the application process. Nationals from countries which are subject to international sanctions, where due diligence is difficult to achieve, including ­Iranians, Afghani and North Koreans, are excluded from the iip.59 However, there is a procedural difference between not admitting an application from a specific country to rejecting an 56 57

58 59

See, for instance, Nesheim, ‘Malta Should Mentor Caribbean cips on Due Diligence’. Legal Notice 47 of 2014, Maltese Citizenship Act, Individual Investor Programme of the Republic of Malta Regulations 2014 (Maltese Citizenship Act 2014). The wording of Article 7(2) has been commented on in the Second Report by the Office of the Regulator of the iip (oriip) in 2015 as not being entirely clear with regards to Identity Malta having to conduct its own due diligence parallel to that of an independent concessionaire. This point has not be raised in following reports by the oriip in neither 2016 nor 2017. Office of the Regulator Individual Investor Programme, ‘Second Annual Report on the iip Programme of the Government of Malta’. Buttigieg and De Bono, Country Report on Citizenship Law: Malta. See the official website for Identity Malta, ‘Individual Investor Programme’ (Identity Malta Individual Investor Programme) accessed 10 August 2018.

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application due to failed due diligence. Declining an application on the basis of its provenance or on the basis of Government policy decision, happens at the onset of the application process, prior to the due diligence process. Rejecting an application because of its origin is a generic decision which is made without looking at the individual circumstances. Due diligence happens once the application process has been initiated, as it is only carried out on applications that have already been admitted to the iip process. It considers the provenance of the applicant’s wealth and as such involves an in-depth investigation of background of the individual and his or her dependants. The due diligence process aside, sanctions on states with citizenship programs may be imposed for various reasons. For instance, in 2014, Canada has implemented visa requirements on St. Kitts and Nevis ‘due to concerns about the issuance of passports and identity management practices within its Citizenship by Investment [P]rogram’.60 In 2017, Canada implemented visa requirements on Antigua and Barbuda, noting that ‘[a]fter carefully monitoring the integrity of Antigua & Barbuda’s travel documents, the government of Canada has determined that Antigua & Barbuda no longer meet criteria for a visa exemption’.61 The concern of Canada, as noted by the Canadian High Commissioner to Antigua and Barbuda, was that ‘Antigua and Barbuda’s Citizenship by Investment Programme is not a residency programme’.62 That said, neither the Cypriot nor the Maltese CbIPs are residence programs but Canada has not taken any measures against the visa free regime for the citizens of these two states. Visa restrictions for citizens of the aforementioned Caribbean states imposed by Canada can be, therefore, hardly justified without detailed argumentation of the decision. 4.1.4 Associated Risks More recently, the oecd opened consultations by issuing a document on preventing abuse of residence by investment schemes to circumvent the crs. The consultation document is equally important for CbIPs which may raise 60

61 62

See ‘St. Kitts & Nevis Now Need Visas to Enter Canada in Light of cip Concerns’ The Daily Observer (St. John’s, 22 November 2014) accessed 10 August 2018. See ‘Notice – Canada imposes a visa requirement on Antigua and Barbuda’ on the the Government of Canada website accessed 10 August 2018. See ‘Press Release: Canada Issues New Policy on Visa-Free Travel’ The Daily Observer (St. John’s, 26 June 2017) accessed 10 August 2018.

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similar concerns. In particular, oecd’s main concern was that the existing various schemes offer a possibility circumventing reporting under the crs. The oecd noted the following in that respect: More and more jurisdictions are offering ‘residence by investment’ (rbi) or ‘citizenship by investment’ (cbi) schemes. (…) Individuals may be interested in these schemes for a number of legitimate reasons, including greater mobility thanks to visa-free travel, better education and job opportunities for children, or the right to live in a country with political stability. (…) At the same time, they can also offer a backdoor to moneylaunderers and tax-evaders. In this regard, information released in the market place and obtained through the oecd’s crs public disclosure facility, highlights the abuse of rbi and cbi schemes to circumvent reporting under the Common Reporting Standard (crs). (…) Public input is sought both to obtain further evidence on the misuse of cbi/rbi schemes and on effective ways for preventing such abuse. Such input will be taken into account in determining the next steps that will be taken.63 The possibility for exploiting the existing schemes for circumventing the crs were explained with the possibility to undermine crs due diligence procedures through the cbi/rbi schemes. In particular, not disclosing all jurisdictions of tax residence to Financial Institutions may lead to inaccurate or incomplete reporting under the crs. High risk of being used to circumvent the crs is, according to oecd, associated to schemes: (a) with no or limited requirements of physical presence; (b) offered by either low/no tax jurisdictions; jurisdictions which exempt foreign source income; jurisdictions offering a special tax regime for foreign individuals who have obtained residence through the cbi/rbi schemes; and jurisdictions not receiving crs information; (c) absence of other mitigating factors.64 Accordingly, the oecd has concluded in its document that the circumvention of the crs through the above schemes can be largely prevented if the existing crs due diligence procedures are correctly applied emphasizing the importance of the requirements: (a) to have a real and permanent physical address which must be confirmed by documentary evidence;

63

64

oecd, Preventing Abuse of Residence by Investment Schemes to Circumvent the crs (oecd, 19 February 2018–19 March 2018) 2, available at: accessed 10 August 2018 (oecd Consultation document). oecd Consultation document 3–4.

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(b) to instruct the account holders to include all jurisdictions of tax residence in their self-certification; (c) to rule that financial institutions cannot rely on self-certification or documentary evidence if they are aware that such documents are incorrect or incomplete. Finally, the oecd called for interested parties to send their contribution with the intention of obtaining further evidence on the misuse of cbi/rbi schemes and determining next steps to be taken.65 Public comments of 21 interested parties were published in April 2018.66 While opinions with regard to the possible misuse of cbi/rbi schemes and further steps for strengthening due diligence procedure differ among interested parties, the latter have confirmed their willingness to work towards eliminating the possibilities of circumventing the crs. Most agents and providers of cbi/rbi among the ­interested parties have emphasized that citizenship does not automatically award tax residence.67 Other important facts emphasized by interested parties was that dual residence or citizenship obtained by other means does not allow citizens lesser possibility of circumventing crs than economic citizenship.68 Furthermore, it has been also emphasized that the procedure to receive residence or citizenship in a certain state does not simplify receipt of documents that could be used to evade crs rule: ‘as an example, it does not matter if a foreign person is on a tourist visa in Canada or an immigrant investor status, or is a refugee in Canada, the process of renting a property or receiving a driver’s license is always the same’.69 Relying on their survey, Henley & Partners enumerated greater visa travel, career opportunities and security as main reasons of their clients for choosing cbi/rbi programs. The results of their research are included in the table below (Table 6).

65 66

67 68 69

oecd, Consultation document 7. oecd, Public Comments Received on Misuse of Residence by Investment Schemes to Circumvent the Common Reporting Standard (oecd, 17 April 2018) accessed 10 August 2018 (Compilation of comments). Compilation of comments: see, in particular, Antigua and Barbuda, 12; oecd/ctpa, 20; Global Investor Immigration Council, 48; H&P Holdings Ltd, 59; Investment Migration Council, 63; step, 87. See, for instance, Compilation of comments 12, 48 Compilation of comments 48.

19%

29% 31%

20%

23%

5% 0%

17%

a Compilation of comments 58

21%

21%

2%

0% 0%

10%

3%

0% 0%

14% 3%

North Asia South East Asia Middle East Europe, Russia and cis Africa North and South America Global

23% 30%

Relocation because of crs and/or better tax environment

Reasons for choosing RbIP and CbIP programsa

Resident Relocation Relocation country of for better for better applicant education lifestyle, of children security and career opportunities

Table 6

22%

31% 39%

19%

14%

12% 19%

No relocation – visa free access to more countries is primary goal

12%

7% 2%

12%

7%

32% 15%

No ­relocation – interesting real estate investment is primary goal

19%

29% 27%

12%

24%

15% 9%

No ­relocation – having an additional residence or citizenship brings more security

3%

0% 0%

3%

2%

4% 10%

No relocation – an additional residence or citizenship can help with regard to crs and/or tax planning

4%

0% 0%

0%

8%

0% 15%

Other reasons

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Various measures were proposed by interested parties for strengthening c­ ooperation under the crs. For instance, including additional information in the crs self-certificate; requiring the account holder to represent that they have not tried to circumvent crs; standardization of compliance procedure including a rigorous due diligence process; sharing information between countries that meet the global standards; monitoring compliance of states; submission of intermediaries to anti money laundering regulation; etc. The Financial Transparency Coalition (ftc) and Transparency International (TI) identified the following measures: improvement of the due diligence process which should not be limited in time, checks to be carried out in local languages in jurisdictions where the applicant has resided for more than six months or has a citizenship of, independent verification of information provided by the applicant, reporting of suspicious applications to the relevant authorities; publishing names of successful applicants and considering any reports from the public that indicate false statement of the applicant or his family members.70 Yet, while publishing of names of new citizens is not an unheard practice among some states,71 targeting specifically new citizens who gained their ­citizenship under some of the schemes and no other new citizens who naturalized under different terms can be certainly seen as disproportional and a discriminatory measure. Publishing names of all newly naturalized citizens and applying same compliance criteria to them without emphasizing the method under which they have gained their citizenship might be, however, more acceptable and constructive. Furthermore, TI has suggested the adoption of the following checks as standard: sanctions list checks; business checks of the applicant; asset checks; media and internet searches in English and local languages; education and employment verification; source of funds verification; court records verification; criminal record verification; bankruptcy/insolvency checks; regulatory checks; undeclared second nationality checks; and business intelligence research. Interestingly, all the cbi programs today already are doing these checks. Finally, ftc and TI recommended strengthened transparency and accountability of citizenship and residence schemes through a number of measures, including: information regarding the number of applications received, ­approved and refused as well as regarding the agents involved in the project; publishing in the official gazette a list of individuals and their dependants who acquired nationality under the schemes including information on their country 70 71

Compilation of comments 43, 92. For instance, the Government of Malta has been publishing, the names of all naturalized citizens of Malta in the Malta Government Gazette. The most recent list of naturalized citizens is published in the Malta Government Gazette of 22 December 2017, 14 018˗14 052.

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of ­origin and other nationalities they hold. As discussed above, however, those who have received citizenship under the schemes should not be discriminated in this or other regard; Relevant documents must be kept by government departments; properties purchased as part of the scheme should be registered on the name of the applicant, while properties owned through domestic and offshore companies should not qualify; payments related to the schemes must be made through the applicant’s personal bank account; information on the amounts received through the schemes and their allocation to relevant departments and their use. The funds and the operation of the schemes must be regularly audited; there should be whistleblowing protection mechanisms and safe reporting mechanisms for report concerns.72 4.2

Ius Doni Practices and National Legislation

Some programs operate on a bare minimum of legal stipulations while other have created entire laws dedicated to this specific form of naturalisation. At one end of the spectrum are, for example, Austria and Montenegro, neither of which provide a comprehensive legal framework but instead operate a discretionary naturalisation practice. At the other end of the spectrum are the legislations of St. Kitts and Nevis, as well as Malta, which both provide a detailed legal framework allowing for predictability, accountability and stability from the point of view of the applicant. Austria has never had a structured, formal CbIP. Instead, it has developed an established practice of granting citizenship without prior residence requirements on the basis of exceptional contributions to suitable foreign investors, based on the Act on Austrian Citizenship. The country joined the United Nations in 195573 and was a founding member of the Organisation for European Economic Co-operation which came into being in 1948 and was superseded in September 1961 by the oecd.74 In 1995, Austria became a member of the ­European Union75 and subsequently signed the Schengen Agreement.76 A per

72 73 74 75 76

Compilation of comments 45–46, 94–95. United Nations Meetings Coverage and Press Releases (United Nations Member States, 2018) accessed 10 August 2018. oecd, Austria and the oecd (oecd Austria, 2018) accessed 10 August 2018. Data on EU Member States is available at: accessed 10 August 2018. (EU Member States data). EU Member States data.

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­capita gdp of 47, 3 thousand usd in 201777 illustrates why Austria is consistently positioned among the richest countries in the world. The country has developed a high standard of living and was 24th in the world for its human development in the 2016 Index.78 In addition, Austria has been ranked as the 3rd most peaceful country in the world in the Global Peace Index 2018.79 The freedoms entailed in the Austrian passport have earned it the stellar status of ‘extremely high quality’, ranking 10th out of 209 citizenships in the qni 2018.80 Such quality of Austrian nationality does not only result from the internal high value such as the economic strength, wide opportunities and peacefulness of the country but also of the very high external value which is reflected through both the large number and high value of destinations where Austrians can travel visa-free or with visa-on-arrival for tourist or business purposes or can work without restrictions. In 2017, holders of Austrian passport could travel without obstacles to 186 destinations including to countries of all top nationalities, and Austrian nationality was ranked 6th in the Travel Freedom Ranking.81 Austrians can freely settle and feel home in 40 destinations with the Austrian nationality being ranked 11th in the Settlement Freedom Ranking.82 Therefore, both Austria and Austrian nationality are very attractive to foreign investors. However, as discussed further in this chapter, Austrian citizenship law is very restrictive and gaining citizenship by investment from Austria does not only require a very large contribution compared to other countries issuing citizenship by investment of comparable quality but is also somewhat uncertain given the vague rules and discretionary decision of the state in that respect. For applicants providing extraordinary scientific, artistic, cultural or economic benefits to the Republic of Austria, a joint decision between the provincial government in question as well as the Federal government has to be made. Once all government ministers approve that conferring citizenship to the applicant is in the particular interest of the Austrian state, citizenship is granted. There is no entitlement to citizenship by investment under the Austrian law; instead, it is a purely discretionary process. In Montenegro, the situation is similar, as citizenship by investment is granted through a discretionary process. Montenegro became a candidate country 77 World Bank data, available at: accessed 10 August 2018. 78 undp, Human Development Reports, Austria (undp-hdr, 2018), available at: accessed 10 August 2018. 79 Institute for Economics & Peace, Measuring Peace in a Complex World (Global Peace ­Index, 2018) accessed 10 August 2018. 80 qni 2016, 18, and Nationality Index. 81 See H&P Passport Index. 82 H&P Passport Index.

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for EU membership in 2010, and negotiations for its accession have advanced substantially since then. As such, it faces the pre-accession conditionality pressures from the EU which affect its citizenship by investment practices.83 The Montenegrin attempt to formalize the procedure was rather unsuccessful. This was due to the European countries’ threat to reintroduce visa requirements for the Montenegrin citizens shortly after the launch of this ‘program’, the government in Podgorica announced its suspension and was said to have reverted to the discretionary practice exercised previously. In late July 2018 Montenegro decided to draw up its own program and is in the process of its internal drafting aiming to launch in October 2018.84 While Austria continues to stick to its discretionary practice of conferring citizenship by investment, Montenegro seems to be in the process of crafting a more transparent legal framework. Most recently Montenegro joined the nato in 2017. The country’s gdp per capita has steadily grown to usd 7,000, while its human development and peace and stability are relatively stable. Citizens of Montenegro can travel without restrictions to 125 destinations, although not being a part of the EU, they do not enjoy free movement of citizens with EU Member States and in 2017 they could only freely settle in Georgia ˗ a country with a rather liberal approach to settlement of holders of around 100 nationalities,85 and to the Norwegian archipelago of Svalbard which is an entirely visa-free zone. The citizenship of Montenegro might be therefore less attractive for foreign investors than a citizenship of an EU Member States. However, with its developed tourism and possible EU future, the Montenegrin passport should gain in value and attractiveness over time. St. Kitts and Nevis is the longest standing modern CbIP dating back to 1984, which coincides with the longest existing legal framework offered in this field. Such legal framework adds transparency to the application process and, hence, makes it more reliable and predictable for prospective applicants. The country’s more recent history can be summed up generically as one ­moving from the 83

84

85

For the discussion about the EU enlargement and the pre-accession conditionality, see Dimitry Kochenov, EU Enlargement and the Failure of Conditionality: Pre-accession Conditionality in the Fields of Democracy and the Rule of Law (Kluwer Law Int’l, Alphen aan den Rijn 2008). See also Chris Nesheim, ‘Montenegro to Design Citizenship by Investment Program InHouse, Wish to Avoid Hungarian Model, Says Ministry’ (imi, 11 August 2017) accessed 10 August 2018. See, in that regard, Gaga Gabrichidze, ‘Legal Aspects of Labour Migration Governance in Georgia’ carim-East Research Report 2012/09, available at: accessed 10 August 2018. The list of nationalities who can freely settle for one full year is available at: accessed 10 August 2018.

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c­ olonization and slavery in sugar production via rebellion,86 decolonization and independence, to the current state of being an exclusive tourist destination and the world forerunner in citizenship by investment.87 Upon gaining independence in 1983, the federal island state chose to remain a constitutional monarchy with Queen Elizabeth ii as the head of state.88 Additionally to being a part of the Commonwealth, St. Kitts and Nevis has also been a member of the caricom since 197489 and of the oecs since 1981.90 The relationship between the two islands has not always been free of tension, as Nevis has felt underrepresented by the government of St Kitts. This feeling of resentment caused a referendum to be held on Nevis in 1998, its result has nevertheless failed to meet the necessary two-thirds majority threshold required for secession.91 The gdp per capita has developed significantly from usd 241.6 in 1960 to usd 17,100 in 2017.92 The qni 2018 has ranked nationality of St. Kitts and Nevis on the 58th place.93 The country has been positioned among the high human development category countries ˗ 74th out of 188 countries and territories.94 As of February 2018, holders of the nationality of St. Kitts and Nevis could travel visa-free or with visa-on-arrival to 141 destinations95 including to S­ chengen countries. Free settlement of citizens of St. Kitts and Nevis is, however, restricted. While certain categories of skilled labour can settle freely in other ­c aricom countries free movement of all persons has yet to be established.96 However, 86 87

Gabrichidze, ‘Legal Aspects of Labour Migration’. See ‘Why St. Kitts and Nevis?’ at the Government of St. Kitts & Nevis – CbIP website accessed 10 August 2018. 88 See for more details ‘St Kitts and Nevis: History’ at the The Commonwealth’s website accessed 10 August 2018. 89 More information is available at the caricom website accessed 10 August 2018. 90 More information is available at the oecs website: accessed 10 August 2018. 91 Peter Radan, ‘Secessionist Referenda in International and Domestic Law’ in Matt Qvortrup, Nationalism, Referendums and Democracy: Voting on Ethnic Issues and Independence (Routledge, London/NY 2014) 9˗22, 16. 92 World Bank data, available at: accessed 10 August 2018. 93 qni 2016. 94 undp, Human Development for Everyone, Briefing note for countries on the 2016 Human Development Report: Saint Kitts and Nevis (undp, 2016) accessed 10 August 2018. 95 See accessed 10 August 2018. 96 For better overview, see Jason Haynes, ‘The Right to Free Movement of Persons in Caribbean Community (caricom) Law: Towards “Juridification”?’ (2016) 2(2) J. Human Rights Commonwealth, available at: accessed 10 August 2018.

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all citizens of St. Kitts and Nevis are free to move, reside and work within the oecs without work permit or skills certificate.97 Thus, the new citizen also obtains the rights associated with these memberships. However, the citizenship acquired by registration through St. Kitts and Nevis’ CbIP, is not equal to citizenship acquired through normal naturalisation or registration since the law does not afford voting rights if citizenship was acquired under the CbIP, providing for an individual to be ‘registered as a citizen of St. Kitts and Nevis without any rights of voting save under and in accordance with the provisions of any law governing the qualification of voters, if the Cabinet is satisfied that such person has invested substantially in St. Christopher and Nevis’.98 Finally, Malta has firmly rooted its Individual Investor Program (miip) in legal grounds by anchoring it in the Maltese Citizenship Act and the Individual Investor Program Regulations of the Republic of Malta 2014. To achieve transparency in the running of the program, the Maltese Citizenship Act, when ­providing for the Individual Investor Program, was amended to include a provision for the appointment of an independent Regulator for the purposes of the correct implementation of the program. Furthermore, the said Act establishes a high-level committee to monitor the program. Considered as a whole, although more recently established Malta’s Individual Investor Program is more detailed and mature than the program of St. Kitts and Nevis, and even more so in comparison with similar ones in Austria or Montenegro, as the latter two have not yet acquired transparent structures and processes. Malta has been a member of the EU since 2004 and, although it is the smallest state with respect to its surface area and population size, Malta is one of the most densely populated countries of the EU. The main island is home to the majority of the citizens and the capital Valletta; it is also the political and cultural centre of the country. The other two inhabited islands are the slightly quieter Gozo, which is more rural and linked with Malta via ferry service, and peaceful Comino, situated in between. Malta was a British colony from 1813 until its independence in 1964. Maltese and English are the two official languages, while Italian is also widely spoken. The country has a very high development level and its gdp has raised to 26.9 thousand in 2017. As other EU Member States, Malta has a citizenship of an exceptional quality, which was

97

98

For more information about the oecs see the explanation on the organisation’s website: ‘The Organisation of Eastern Caribbean States (oecs) is an International Inter-Governmental Organisation dedicated to economic harmonisation and integration, protection of human and legal rights, and the encouragement of good governance among independent and non-independent countries in the Eastern Caribbean’. The oecs accessed 10 August 2018. S 3(5) St Kitts and Nevis Citizenship Act, 1984 (No. 1 of 1984).

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most recently ranked 23rd in the General QNI Ranking.99 Citizens of Malta could  travel freely to 182 destinations in 2018100 and can settle without restrictions in 41 countries and territories, including to all EU Member States, Iceland, Norway and Switzerland. The citizenship of Malta is, therefore, very much desired by foreign investors. 4.2.1 Austria Article 6 (1) of the Austrian Constitution (‘Bundesverfassung’ or B-VG) regulates that there is one unified citizenship for the entire Republic of Austria. This may not sound surprising at first; however, a single Austrian citizenship was only introduced as late as 1988.101 Up until then, each of the nine federal provinces within Austria had its own ‘provincial citizenship’.102 Becoming a citizen of one of these provinces entailed the national citizenship of the Federal Republic of Austria. The introduction of a single Austrian citizenship made the national citizenship the primary one, limiting the relevance of provincial citizenships to a mere symbolic meaning.103 The regulation of citizenship law is assigned to the Federation of Austria via Article 11(1)(1) of the Constitution, whereas the individual provinces have far-reaching administrative powers and – especially in discretionary naturalisations – room for interpretation.104 What it means is that passing of the legislation regarding citizenship is a prerogative of the Federal Government, whereas its implementation falls within the powers of the individual federal provinces.105 Austrian citizenship law is distinguishable by the fact that it continues to strictly adhere to the principle of ius sanguinis106 and, alongside with Switzerland, belongs to the group of European countries with the most restrictive naturalisation policies.107 Another distinctive feature of Austrian citizenship law – apart from its strong emphasis on gender equality and the still existing 99 100 101 102 103

See Nationality Index. See H&P Passport Index. Bauböck et al., Acquisition and Loss of Nationality. Bauböck et al., Acquisition and Loss of Nationality. According to Stern and Valchars provincial citizenship has never gained any political or legal importance beyond a symbolic meaning. See Joachim Stern and Gerd Valchars, Country Report: Austria, revised and updated 2013, eudo Citizenship Observatory rscas/ eudo-cit-np 2013/4  17. 104 Rainer Bauböck and Dilek Çinar, ‘Austrian Nationality Law’ in Hansen and Weil (eds), Towards a European Nationality. 105 öb-vg 1945, Article 11(1)(1). 106 Bauböck et al., Acquisition and Loss of Nationality. 107 Howard, The Politics of Citizenship in Europe 94 et seq.; cf. also Joppke, Citizenship and Immigration, regarding Austria in particular cf. Reichel, Staatsbürgerschaft und Integration.

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compulsory military service – is the fact that it permits dual nationality only in exceptional circumstances.108 Hence, anyone applying for the Austrian citizenship needs to renounce the previous one (except ius doni cases). The same obligation applies to Austrians opting for citizenship elsewhere or voluntarily entering military service in another country.109 Austria morphed into an immigration nation over the past years.110 Its citizenship law can be described as the result of a historically grown compromise in which a casuistic lack of structure and restrictive tendencies prevail.111 With the idea of citizenship needing to be earned or awarded as a price for successful integration into the Austrian society being increasingly prominent, the requirements for those considering naturalisation have also become more cumbersome, meaning the necessity of having a good command of German and taking the citizenship test.112 Citizenship and detailed conditions for its acquisition, granting and loss, are regulated by the Federal Act on Austrian Citizenship (‘Staatsbürgerschaftsgesetz’ of 1985 or ‘Austrian Citizenship Act’). Austrian citizenship can be acquired either by birth through descent or legitimisation (sec. 7, 7a, 8 aca), after birth by granting of citizenship as a result of naturalisation (sec. 10–24 aca), or by notification (sec. 57, 58c, 59 aca). There is a distinction in law between an entitled naturalisation and a discretionary naturalisation.113 Entitled to naturalisation are – provided they meet the necessary criteria – those born in Austria; eea citizens; spouses and minor children of Austrians, or offspring of the applicants for Austrian citizenship; recognised refugees; stateless persons born in Austria; former Austrian nationals and long-term residents after 30 years.114 However, regular naturalisation for resident non-nationals after 10 years is discretionary, meaning that even if all necessary criteria are met, there exists no right to naturalisation but only one to the fair decision- making process by the relevant authorities.115 Austria’s comparatively restrictive naturalisation policy is further reflected in the fact that an applicant’s ability to earn his livelihood is taken into consideration as much as minor administrative road traffic offenses. 108 Article aca 1985, s 27 et seq. 109 Article aca 1985, s 32b. 110 Stern and Valchars, Country Report: Austria. 111 Stern and Valchars go even as far as calling the Austrian Citizenship Act ‘incoherent and rather unstructured’ (see, Stern and Valchars, Country Report: Austria 22). 112 See ‘Requirements for Naturalisation in Austria’ at the City of Vienna website accessed 10 August 2018. 113 Jeremias Stadlmair, ‘Earning Citizenship: Economic Criteria for Naturalisation in Nine EU Countries’ (2018) J. Contemp. Eur. Stud. 42. 114 Stern and Valchars, Country Report: Austria. 115 aca 1985, s 10–24; see ‘Requirements for Naturalisation in Austria’.

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A court conviction for these would prove a barrier to naturalisation (sec. 10(1) (2) aca)116 and, in the same way, dependence on government assistance would be a ground for exclusion (sec. 10(7) aca). What constitutes material assurance of livelihood is set out in sec. 10(5) aca. According to this article, livelihood is regarded as sufficiently ensured if the applicant’s fixed and regular personal income from employment; other income; legal claims for maintenance, or insurance benefits on average for the three years preceding the time of the decision, allow him or her to live without recourse to social assistance, and the amounts correspond to the average indicative rates listed in sec. 293 of the Austrian General Social Insurance Act (öasvg).117 Apart from the above described scenarios of regular naturalisation, Austrian citizenship can also be granted to suitable foreigners in the form of ius doni based on either sec. 10(6) aca, or, more restrictive, sec. 11a(4)(4) aca. The latter legal provision stipulates that applicants who have legally and uninterruptedly resided for at least six years in the federal territory of Austria can apply for citizenship if the granting of nationality is in the interest of the Austrian Republic due to the applicants’ prior, as well as expected, outstanding scientific, economic, artistic or sport-related contributions. It is additionally provided that the applicants prove a good command of German language and renounce any other citizenships which they might be holding prior to acquisition of the Austrian one. In the case of naturalisation via sec. 11a(4)(4) aca, the conditions of sec. 10(1)(2) to (8) as well as sec. 10(2) and (3) apply and have to be fulfilled. An even more distinctive process of naturalisation is presented by sec. 10(6) aca, whereby Austrian citizenship can be acquired for a rendered and, expectedly, outstanding scientific, economic, artistic or athletic contribution to the country by applicants who are thereby in particular interest of the Austrian Federal Republic. Under these conditions, neither proof of regular income nor the renunciation of the original nationality is required.118 Austria has never had a structured, formal CbIP. The creation of a legal entitlement to grant citizenship by investment appears to be inconsistent with the history of the Austrian citizenship law119 and its immigration practices, which are very restrictive and underpinned by concerns to prevent a foreign

116 Stern and Valchars, Country Report: Austria. 117 Allgemeines Sozialversicherungsgesetz (asvg) 1955. 118 cf. Dilek Çinar and Harald Waldrauch, ‘Austria’ in Bauböck et al., Acquisition and Loss of Nationality. 119 See Gabriela Kleeber, ‘Die Erlangung der österreichischen Staatsangehörigkeit durch besondere, insbesondere wirtschaftliche, Leistungen für die Republik Österreich im Vergleich zu anderen Rechtsordnungen’ (PhD thesis, Vienna 2007).

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incursion.120 Nevertheless, Austria has developed a practice of granting citizenship on the basis of extraordinary contributions to suitable foreign investors, based on the sec. 10(6) aca which is the pure ius doni provision of the Austrian law. Should the Austrian government decide that granting someone citizenship is of particular interest to Austria, because of their previous and, possibly, future extraordinary contributions to the country, then such a person is exempted from any residence requirements prior to naturalisation (sec. 10(1) (1)), as well as testing (sec. 10(1)(7) aca). Further exemptions provided by this particular type of naturalisation grant that applicants do not have to prove any command of German, nor does the government have to publish any figures about the number of naturalisations acquired under this norm.121 Sec. 10(6) is another example of the few exceptions in Austrian citizenship law, where dual nationality is permitted. The citizen naturalised under this specific norm is allowed to retain his prior nationality. An additional nationality, however, cannot be obtained without losing the Austrian citizenship granted by sec. 10(6) aca, except for extraordinary cases requiring special permission. Granting of citizenship based on this norm requires governmental approval on various levels, including the Cabinet. As an administrative act by the Federal state would breach the general distribution of competences between the legislative Federation and the executive federal provinces as stated above,122 sec. 10(6) aca was passed as a constitutional norm. It creates a specific competence for the Federation123 to confirm in individual cases whether the granting of citizenship on the basis of prior and expected extraordinary contributions is in the particular interest of the Republic of Austria.124 Citizenship is only granted once various Austrian government authorities, as well as all government ministers, approve that all conditions have been met. The constituent elements of ‘extraordinary’ and ‘in the particular interest’ are concerned with

120 Roderick Parkers, ‘Immigrant Integration Meets European Integration’ (2008) Working Papers FG 1 2008/6. 121 However, according to a Parliamentary report of 21 January 2009, in 2009 alone, 34 natural persons were granted citizenship in Austria based on extraordinary contribution to the state. For further reference, see ; accessed on 10 August 2018. 122 Article 11(1)(1) B-VG stipulates that the Federation is responsible for legislation and the federal provinces for law enforcement. 123 cf. Peter Fessler et al., Das neue österreichische Staatsbürgerschaftsrecht – Mit zahlreichen Anmerkungen, Verweisungen und grundlegenden Entscheidungen der Gerichtshöfe des öffentlichen Rechts (manz, Vienna 2006). 124 s 10 (6) aca 1985.

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vague concepts of law, which are not elaborated further in the aca. The aca uses a series of indefinite legal concepts which are (or used to be) specified by the Austrian Federal Interior Ministry (öbmi) in internal ‘policy’ documents, which remain largely opaque to the public, however.125 Interpreted systematically, the term ‘extraordinary’ (within the meaning of Section 10(6) aca) can be taken to mean that the applicant must contribute something to the Republic of Austria, not required of him under the general requirements of the aca. It is not enough for the applicant to fulfil the general requirements for naturalisation in accordance with the aca particularly well or better than average. Rather, there must be a contribution to an area which – bearing in mind that the Austrian Federal Government as part of the state executive is in particular bound by the principle of legal equality (Article 1 öb-vg) – clearly sets him apart from the majority of applicants as he or she is believed to support something felt to be essential to the Republic of Austria. This is supported by the wording of sec. 10(6) aca, ‘in the special interest of the Republic’, as well as sec, 11a(4)(4) aca, which simply provides for ‘interest’. Against this background, only contributions which exceed those normally made by other people with the same level of wealth, talent and skills would be expected to qualify. It can be deduced from the judgments of the Austrian Higher Administrative Court (ÖVwGH),126 that the required contribution differs from those of other people. The other specific characteristics of extraordinary contributions are a matter for representatives of the respective provincial governments to decide, given the undefined legal concepts of ‘extraordinary contribution’ and the ‘special interest’.127 What does ‘in the special interest of the Republic’ mean cannot be inferred alone from the wording of sec. 10(6) aca and must therefore be deduced from the legislative context or the regulatory purpose of the aca. Sec. 10(6) aca, by its use of the indefinite legal terms ‘extraordinary’ and ‘of special interest’, leaves substantial leeway for government action. The ­decision-making powers of the Austrian Government is equally derived from ­Article  11(1)(1) öb-vg, according to which citizenship or the definition of the relevant qualifying material criteria is a federal matter. The overall behaviour of the foreigner in relation to the general good, the public interest and the 125 See the request by a Member of Parliament to the Austrian Federal Interior Ministry on 26 January 2010 for clarifying these indefinite legal concepts after promises of citizenship to a Russian investor in exchange for donations to a political party as well as investments in Carinthia had ignited public debate: accessed 10 August 2018. 126 For example, ÖVwGH judgment of 27 August 1998, Case 93/13/0023; judgment of 15 December 1976, Case 2004/76. 127 Kleeber, Die Erlangung der österreichischen Staatsangehörigkeit.

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extent of his integration should be taken into account (sec. 11(1) aca). In the process of determining whether those conditions are fulfilled, the relevant Austrian state government is absolutely bound by the principle of statutory reserve and supremacy of law, which can be implied from Article 1 öb-vg and is directly expressed in Article 18(1) of the Austrian Federal Constitution. According to these principles, all public administration must be exercised only on the basis of the law. This particularly refers to the orientation of foreigners in the social, economic and cultural life in Austria, and their commitment to the fundamental values of a democratic European State and society (sec. 11(2) aca). Based on this directive, an extraordinary contribution within the meaning of sec. 10(6) aca is in the interest of the Republic of Austria, if integration and cohesion of the Austrian society are furthered by generating significant welfare gains – such as in the case of scientific or economic contributions – or if the general identification with Austrian values and social order are strengthened – as in the case of artistic or athletic performance. A possible criterion for the concretisation of the concept of extraordinary contribution, within the meaning of sec. 10(6) aca, is provided by a regulation of the government of the Austrian state of Burgenland. According to this regulation, the applicant must make a contribution, which promotes Burgenland’s economy: through investments; by establishing a company in Burgenland; or investing in sporting events, which increase the attractiveness of the provincial state to tourists. Likewise, it may be sufficient that the applicant promotes folk festivals and the preservation of local traditions in Burgenland through donations. To acquire Austrian citizenship, an applicant can also participate in a joint venture or make substantial direct investments that help to create new jobs or generate new export earnings.128 However, not every investment in Austria qualifies for the acquisition of citizenship. It may be sufficient, however, that a foreign investor’s contribution in the form of technical innovation benefits the country or creates a substantial number of new jobs.129 Given the absence of any legislative definition, a specific number of new jobs required for the acquisition of Austrian citizenship cannot be quantified in absolute terms. The value of the jobs created also depends on the market segment they are created in, and their importance in the context of globalisation. In the hightechnology and information technology segments, for example, a much smaller number of newly created jobs may suffice, compared to the food, retail or 128 Kleeber, Die Erlangung der österreichischen Staatsangehörigkeit; Džankić, ‘The Pros and Cons of Ius Pecuniae’ and H&P, The Global Residence and Citizenship Programs. 129 Džankić, ‘The Pros and Cons of Ius Pecuniae’.

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hotel industry. Furthermore, it is also possible to grant Austrian citizenship to an investor who does not establish a new company in Austria, but who saves an existing one from insolvency instead. This is particularly valid in the regions that depend substantially on the continued existence of ailing businesses, if the latter support social institutions for example, or if a substantial pension liability is brought into question by the collapse of said company. It is worth highlighting that on one hand, Austria requires multi-year residence in its territory as a supplementary condition of citizenship (sec. 10(1) (1) aca), and on the other hand, it offers a ‘citizenship by investment’ facility, which only requires capital commitment, includes a considerable discretion for the Federal state and provincial governments, and waives the usual legal requirements.130 The Federal government’s discretion extends however only to the extent that it may confirm if an application is in accordance with sec. 10(6) aca, while the justiciable administrative decision rests with the provincial governments,131 according to sec. 39(1) and (2) aca. The discretion must be exercised within the meaning of this Act (sec. 130(2) öb-vg). Austrian state and provincial governments are allowed considerable discretion in deciding whether, in their view, the basic requirements for citizenship, the stipulations of the aca and the relevant constitutional provisions are met. This includes proving the absence of any conviction (sec. 10(1)(2) aca) – in particular for financial offenses (Section 10(1)(3),(4) aca); the non-impairment of the international relations of the Republic of Austria (sec. 10(1)(5) aca); that the grant is in the interest of the Austrian Republic and preserves public peace, order and security (sec. 10(1)(6) aca); and the absence of relations with foreign states which would harm the interests of the Republic of Austria (sec. 10(1) (8) aca). Regarding all of these requirements, the Federal Government has no competence to overrule the authority of the Provincial Government. The Federal Government only decides whether granting of citizenship is ultimately in the interest of the Austrian Republic. Furthermore, the applicant must not have been refused residence, nor can there be a deportation order against her, nor should there be any affiliation to a criminal, extremist or terrorist group.132 Under current Austrian citizenship law, there is no individual right to the grant of citizenship by investment. By the positive confirmation of the state interest, the decision falls predominantly within the political scope of co-­decision by the Federal Government. The applicant, nevertheless, has a subjective right 130 H&P, Citizenship Programs (Austria Overview) accessed 17 March 2018; Džankić, ‘The Pros and Cons of Ius Pecuniae’. 131 aca s. 39(1) and (2). 132 Kleeber, Die Erlangung der österreichischen Staatsangehörigkeit.

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to the error-free discretionary decision which results from the general principle of equality (Article 7(1)(1) öb-vg) The classification of the confirmation as a decision and the possibility of a legal recourse for the applicant thereby contribute to disciplining the Austrian Federal Government to actually observe the aforementioned principles in the individual cases, which is in the general public interest and justified by the Constitution. The Constitution requires that an individual legal formative act must be verifiable.133 According to the principle of unity of the legal system, constitutional control mechanisms should not be undermined by unverifiable forms of action, at least not by the simple legislator.134 Sec. 10(6) aca transfers the competence to examine the naturalisation requirement of extraordinary contribution ex lege to the Austrian Federal Government and, in a case of affirmation, the other review to the relevant provincial government.135 A material condition for the grant of citizenship in Austria – equally the general requirements for naturalisation and those under ius doni provisions of Section 10 (6) aca – is the absence of circumstances indicative of a lack of integrity or unreliable character on the part of the applicant. As a catchall clause, sec. 10(1)(6) aca brings ‘public safety’ into consideration, which is a general provision for all statutory Austrian legal rights, therefore also includes the provisions of international and public international law ratified by the Republic of Austria and which are thus binding on all branches of public authority. As the result of the statutory reservation principle, Austrian citizenship ‘by investment’ may be granted only on the basis of the formal law and must not cause violation of any legislative standards protected within the meaning of sec. Given that citizenship by investment is an absolute exception to the usual process of granting citizenship, applicants need to provide a certificate of good conduct; a detailed business or project plan and positive business reference in addition to other necessary documents, such as identity cards and birth or marital certificates. The business or project plans need to communicate the feasibility and sustainability of the envisaged business venture. On approval of an application for citizenship based on the outstanding contribution, in accordance with sec. 10(6) aca, the applicant acquires the unimpaired status of 133 Austria’s Constitution of 1920, reinstated in 1945, with amendments through 2009, available at: accessed 10 August 2018. 134 Thio Li-ann, ‘Administrative and Constitutional Law’ (2016) 17 sal Annual Rev. 135 oecd, Austria and the oecd (oecd Austria, 2018); cf. Rudolf Thienel and Eva SchulevSteindl, Verwaltungsverfahrensrecht (Österreich Verlag, Vienna 2009); Robert Walter, Heinz Mayer and Gabriele Kucsko-Staldmayer, Grundriss des österreichischen Bundesverfassungsrechts (manz Verlag, Vienna 2007).

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the Austrian citizen – this is supported by Article 6(1) öb-vg, which provides for uniform citizenship in the Republic of Austria, i.e. not graded by the extent of political or other rights. In addition to the acquisition of citizenship, one of the outstanding benefits associated with the acquisition of Austrian nationality by investment is that the investor is entitled to an Austrian passport to travel visa-free worldwide136 and to freely choose his or her place of residence in the European Union, eea or in Switzerland.137 However, a compulsion to stay or to settle in Austria with the awarding of a ‘citizenship by investment’ is as little justified as the applicant’s commitment to pay tax based on her worldwide income in Austria. In the latter case, consequences only arise if one actually chooses her domicile or habitual residence permanently in Austria.138 4.2.2 Montenegro Concerning its citizenship,139 the regaining of the country’s independence is reflected in the fact that all Montenegrin citizens who had other citizenships prior to 3 June 2006, were entitled to retain them until a bilateral agreement with the respective state of origin enters into force, but not for longer than one year after the entry into force of the Montenegrin Constitution. (­ Article 12 of the Annex to the MC). Article 12(1) MC regulates the existence of a ­Montenegrin citizenship. Article 1 mna specifies the constitutional determinants of Montenegrin citizenship by regulating the manner of and conditions for its a­ cquisition and cessation. Article 1 (2) mna defines citizenship as representing the legal relationship between a physical person and Montenegro, regardless of their national or ethnic origin. The various modes of becoming a citizen are further defined by Article 4 et seq. mna: namely, acquisition by origin; by birth on the territory of Montenegro; by admittance; and that based

136 See Citizenship in Austria, Background and Legal Considerations’ on the H&P website at: accessed 10 August 2018. 137 ‘Citizenship in Austria, Background and Legal Considerations’. 138 H&P, The Global Residence and Citizenship Programs. 139 See Montenegrin Nationality Act (mna), Official Gazette of Montenegro No. 13/08 based on Article 95(3) of the Constitution of Montenegro, Podgorica No. 01-288/2 (entered into force 14 February 2008); available in English at: accessed 10 August 2018. For an overview on Montenegrin citizenship see Jelena Džankić, ‘Transformations of Citizenship in Montenegro: A Context-generated Evolution of Citizenship Policies’ citsee Working Papers 2010/03 accessed 10 August 2018.; Džankić, ‘The Pros and Cons of Ius Pecuniae’.

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on international treaties and agreements. A closer look reveals that ius sanguinis is the dominant principle for the acquisition of citizenship in Montenegro. The acquisition of Montenegrin citizenship by naturalisation is governed by Article 8 et seq. mna. According to that legal provision, a foreigner can acquire the Montenegrin citizenship by application, if she meets all of the following cumulative requirements: – she must be over eighteen years of age (Article 8(1) mna); – she must have renounced her previous citizenship (Article 8(2) mna); – she must have resided lawfully in Montenegro for an uninterrupted period of ten years before submitting the application (Article 8(3) mna); – she must have accommodation and a guaranteed source of income in Montenegro that ensures her material and social security (Article 8(4) mna); – she must not have been sentenced in Montenegro or elsewhere to a minimum prison sentence of one year for a crime prosecuted ex officio, unless the conviction was overturned in the meantime (Article 8(5) mna); – she must demonstrate sufficient knowledge and the basic command of the Montenegrin language (Article 8(6) mna); – there must be no legal obstacles to the individual’s naturalisation for the reasons of public order and the security of the state; and, – she must have complied with all tax and other legal obligations (Article 8(7) mna). Montenegro used to grant and still grants citizenship by investment on the basis of discretionary practice. In June 2010, a formalized CbIP was introduced, whereby citizenship could be acquired through investing in the Montenegrin economy provided that the investment amount was at least eur 500,000.140 As several EU countries threatened to reintroduce visas for Montenegrin citizens shortly after the launch of the Program, the g­ overnment in Podgorica announced its suspension.141 However, more recently, in August 2018, Montenegro announced the launch of a CbIP which is should open for foreign investors in due course. The Montenegro CbIP is intended to be limited to 2000 140 See Džankić, ‘The Pros and Cons of Ius Pecuniae’; Džankić, ‘Transformations of Citizenship in Montenegro’; Decree of Promulgating the mna (Official Gazette of Montenegro, No. 13/08 of 26 February 2008) 3. Acquiring Montenegrin Citizenship by Admission, and Decision on Criteria for Determining Scientific, Commercial, Economic, Cultural and Sports Interest of Montenegro Montenegrin citizenship to Grant (Acquiring Montenegrin Citizenship by Admission). 141 Patrick Cooke, ‘Montenegro Abandons Citizenship Sales Plans’ (Times of Malta, 29 January 2014) accessed 10 August 2018; MacDonald, ‘Montenegro Steers towards Clearer Waters’.

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applicants over a period of three years and should be offering two investment options to foreign nationals who would like to become Montenigrin citizens through the Program: either a eur 250,000 investment in real estate projects in less developed areas or a eur 450,000 investment in real estate projects in developed areas. An additional fee of eur 100,000 will be collected by the government which will be directed to a special fund for underdeveloped areas.142 It remains to be seen how attractive and successful this Montenigrin cip will be in practice. So far, the Article 12(1)(2) mna has served as the legal basis for the citizenship by investment practice. In terms of a privileged naturalisation standard, Article 12 mna provides an exception to the above described general conditions for naturalisation, determining that a person of full age who does not fulfil the requirements of Article 8 mna can nevertheless be awarded Montenegrin citizenship if this is either in the scientific, economic, cultural, sporting, national or other interest of Montenegro (Article 12(1) mna). Since Article 12(1) mna does not further clarify the requirements for naturalisation on the basis of an investment in Montenegro, the decision regarding naturalisation is predominantly within the scope of the political governmental discretion. The decision whether or not a contribution satisfies the requirements for a privileged citizenship is namely a subject to the decision by the Montenegrin Minister of the Interior, to whom the execution of the privileged naturalisation procedure is assigned.143 The subjective right of actual and potential investors can be derived from the constitutional right of access to information (Article 51 MC), under which at least the key criteria for decision should be disclosed, because otherwise a naturalisation process which is sufficiently fair and in keeping with the rule of law cannot be guaranteed. Just as in Austria, there is significant latitude for governmental action at the top political bodies in Montenegro, because Article 12(1) mna is vague on the conditions of the grant and what is understood by the interests of Montenegro. However, from the wording of Article 12(1) MC, it can be deduced that the contributions in question should serve the welfare of the Montenegrin community. Furthermore, Montenegrin citizenship by investment is not necessarily linked to the physical presence such as a domestic residence – which is widely supported by the assumption that the domestic investment is in itself a viable basis for the robust anchoring of the investor to the domestic community.144 The applicant is thereby not bound to take up domestic residence but – as in Austria – he 142 See, for instance, accessed 10 August 2018. 143 Džankić, ‘Transformations of Citizenship in Montenegro’ 15. 144 Džankić, ‘The Pros and Cons of Ius Pecuniae’.

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or she is a subject to the discretion of the Montenegrin Ministry of Interior regarding the final naturalisation decision. In its decision of June 2010, the Montenegrin Government affirmed (Article 100 MC) the substantive requirements for the privileged naturalisation in Montenegro. Thus, the privileged Montenegrin citizenship is available to persons who invest in the Montenegrin economy or bring substantial assets to the Republic of Montenegro.145 According to Article 3 of the Government’s 2010 decision, which was suspended,146 this route was particularly open to proven investors with impeccable international reputation. Furthermore, on the basis of Article 3 of the 2010 decision, the Montenegrin Government has issued guidelines on the implementation of the criteria for capturing business and economic interests. According to these, a minimum investment of eur 500,000 is required to qualify for privileged citizenship in Montenegro.147 The Government should decide on the award of Montenegrin citizenship on the grounds mentioned in Article 12(1) mna, after having obtained a binding decision or the opinion of the relevant administrative authority under Article 12 mna (Article 12(2) mna). The amendments to the mna, which came into force in 2010, have empowered the Montenegrin President (Article 11(5),(95) MC), the Prime Minister (Article 102(1)(1),(2) MC) and the Speaker of Parliament (Article 89(1) and (2) MC) to propose candidates for the grant of privileged citizenship. Thus, the Montenegrin Prime Minister represents the Montenegrin Government and assumes its administrative authority (Article 102(2) MC). Nevertheless, the above-mentioned authorities are only entitled to propose suitable candidates for naturalisation. The final decision-making power with regard to the extent to which the contributions in question justify the grant of Montenegrin citizenship continues to remain with the Ministry of the Interior or the Secretary of the Interior.148 These decisions are also ultimately bound by any opinion requested by the Minister of Finance.149 As in Austria, the decision of the Government whether to grant citizenship by investment in Montenegro is binding, i.e. the relevant authority may not grant privileged citizenship under Article 12(1) mna if the Montenegrin 145 146 147 148

Džankić, ‘Transformations of Citizenship in Montenegro’ 15, 16. Džankić, ‘Transformations of Citizenship in Montenegro’ 15. Džankić, ‘Transformations of Citizenship in Montenegro’ 16. Kristina Ruzhilo, ‘Examination of Montenegro Citizenship by Investment Program: A Study of EU & Caribbean Alternatives’, available on the Migronis Citizenship website at: accessed 10 August 2018. 149 Džankić, ‘Transformations of Citizenship in Montenegro’.

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Government denies its interest in the naturalisation. Article 12(2) mna acknowledges the explicit duties of the various bodies involved in such decisions under the principle of separation of powers, as set out in Article 11 MC. According to Article 11(4) MC, the relationship between the state authorities should be balanced, and it should always be supported by consistent mutual control. De lege ferenda, it would benefit the worldwide reputation of Montenegro and the citizenship by investment industry as a whole if the focus was directed on in-depth due diligence and background verification of the potential investor.150 4.2.3 St. Kitts and Nevis By applying a combination of the ius soli and ius sanguinis principles, Articles 90 – 95 of Chapter viii of the Constitution of St. Kitts and Nevis151 regulate how the Kittitian or Nevisian nationality can be obtained. The law stipulates who was conferred citizenship at the day of the country’s independence on 19th September 1983 (Article 90); who becomes a citizen after independence (Article 91); and who is entitled to citizenship via registration (Article 92). Article 93 of the Constitution also explicitly permits dual nationality. There are three ways in which one can become a national of St. Kitts and Nevis: through birth, by marriage or via economic support of the country.152 The main criterion for the application for citizenship based on descent is to provide proof of parents’ and/or grandparents’ citizenship by, for example, supplying birth ­certificates. The same is valid when an application for citizenship is based on marriage. Here, the applicant has to prove that his/her spouse holds citizenship. Commonwealth citizens who have ordinarily resided in St. Kitts and Nevis for up to 14 years may also apply for citizenship by registration.153 Furthermore, Article 92 (3) requires that all those who become citizens via registration swear an oath of allegiance, should they not already owe allegiance to the Crown in other form. In 1984, one year after gaining independence from British rule, St. Kitts and Nevis created the Economic Citizenship Program.154 Internationally weak 150 MacDonald, ‘Montenegro Steers towards Clearer Waters’. 151 Statutory instruments 1983 No 881, The Saint Christopher and Nevis Constitution Order 1983 (adopted 22nd June 1983, entered into force 23rd June 1983) as amended (Constitution of St. Kitts and Nevis) for a full text version see accessed 10 August 2018. 152 Article 90 et seq. Constitution of St. Kitts and Nevis. 153 Article 92 (1)(b) Constitution of St. Kitts and Nevis. 154 For an authoritative treatment of the CbIP of St. Kitts and Nevis, see ‘Government of St. Kitts & Nevis – Citizenship By Investment Program’; See also Džankić, ‘The Pros and

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balance of payments, barely existing competitiveness of its agricultural sector, and finally the fact that its domestic value creation was regularly affected by hurricanes155 had encouraged the political authorities in their decision to introduce a specific program for direct investment in the domestic real estate sector.156 In the following years, the young nation was challenged by further hurricanes, of which George in 1998 had the biggest impact causing damage of 80% of the housing stock and economic losses estimated at usd 445 million.157 The islands’ undiversified economy, which relied heavily on the century-old monoculture of sugar cane production exacerbated matters further. After the independence, the state-run sugar factory was under considerable pressure from both the European Union and the World Trade Organisation (wto), since its sugar production ceased to be competitive in the world market due to the high production costs.158 Hence, the industry which once formed the economic backbone of the island state had to be shut down in 2005, after decades of operating at a loss. With sugar beet farming ­increasing ­worldwide, sugar cane lost its profitability and the government decided to close its sugar industry after the last harvest in 2005.159 Realising the need to find new resources, the government decided to act and one year later established the Sugar Industry Diversification Fund (sidf) with the purpose to diversify the economy

155

156 157

158 159

Cons of Ius Pecuniae’ and from an economic perspective, see Xu, El-Ashram and Gold, ‘Too Much of a Good Thing?’. Due to its location in the hurricane belt between the Atlantic Ocean and Caribbean Sea, St. Kitts and Nevis is highly exposed and vulnerable to natural disasters, mostly hurricanes and flooding, and occasional volcanic and tectonic activity. The impact of these on economic activities, property, human welfare, and natural resources has been severe in the past. For a compilation of past disaster events in St. Kitts and Nevis, see ‘Past Disaster Events in St. Kitts & Nevis at: accessed 10 August 2018. Džankić, ‘The Pros and Cons of Ius Pecuniae’. See International Monetary Fund, Country Report, St. Kitts and Nevis 2016 Article 4 Consultation (Press Release and Staff Report 16/250, 26 July 2016) accessed 26 February 2018 (imf Country Report, St. Kitts and Nevis 2016).; Report from the International Federation of Red Cross and Red Crescent Societies, Caribbean – Hurricane Georges Appeal No. 29/1998 final report ( 29/1998 Hurricane Georges, 30 June 2002) accessed 24 February 2018. Džankić, ‘The Pros and Cons of Ius Pecuniae’. See Duncan Bartlett, ‘Island Essence Dissolves with Sugar’ (bbc News, 9 January 2006)

and St Kitts and Nevis Country Profile (bbc News, 23 May 2017) also The Commonwealth’s website, St Kitts and Nevis: Economy all accessed 10 August 2018.

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by researching and funding the development of alternative industries.160 This opened a new possibility for foreign direct investment into St. Kitts and Nevis, alongside the well-established real estate option of the Economic Citizenship Program. The Economic Citizenship Program underwent a reform in 2007. A non-refundable contribution to the sidf of St. Kitts and Nevis was to support the grant of citizenship under the predetermined minimum investment criteria. The sidf has seen a significant increase in deposits and assets, particularly in the years leading up to 2015 when the last data is available.161 According to the imf, at the end-2015, St. Kitts and Nevis’ national development fund had accumulated assets equivalent to 20 percent of gdp from the cbi-related flows.162 However, the imf assumes the cbi budgetary revenues to decline from 11.9 percent of gdp in 2015 to 1.5 percent of gdp by 2021163 due to higher competition in the citizenship by investment industry worldwide (estimates by the imf).164 The legal basis of the current programs lies in St. Kitts and Nevis’ Constitution,165 the St. Kitts and Nevis Citizenship Act,166 as well as in the St. Kitts and Nevis Citizenship by Investment Regulations,167 all as amended. ­Oddly, in St. Kitts and Nevis, the ius doni provisions are dealt with as citizenship by registration, not naturalisation. Section 5 of the Citizenship Act provides that ‘a person registered under Section 3 (…) shall be a citizen of St. Christopher and Nevis by registration as from the date on which he or she is registered’.168 Naturalization is provided under the separate Section 6 and, unlike citizenship by registration, requires that an oath of allegiance be sworn.169 Thus, under the St. Kitts and Nevis CbIP, no oath of allegiance is required.

160 For further detail, see St. Kitts and Nevis Sugar Industry Diversification Foundation website: accessed 10 August 2018. 161 imf Country Report, St. Kitts and Nevis 2016. 162 imf Country Report, St. Kitts and Nevis 2016, 42. 163 imf Country Report, St. Kitts and Nevis 2016, 42. 164 imf Country Report, St. Kitts and Nevis 2016, 42. 165 Articles 90–95 Constitution of St. Christopher and Nevis. 166 S 3(5) St. Kitts and Nevis Citizenship Act 1984 stipulates: ‘Subject to subsections (8) and (9) of this section, a person is entitled, upon making application under this subsection to the Minister in the prescribed manner and upon payment of any fee that may be prescribed, to be registered as a citizen of St Christopher and Nevis without any rights of voting save under and in accordance with the provisions of any law governing the qualification of voters, if the Cabinet is satisfied that such person has invested substantially in St Christopher and Nevis’. 167 Statutory rules and orders No. 52 of 2011, St. Kitts and Nevis Citizenship by Investment Regulations, Official Gazette No. 48 of 2011. 168 s 5, St. Kitts and Nevis Citizenship Act 1984. 169 s 6, St. Kitts and Nevis Citizenship Act 1984.

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The CbIP provides a significant relief compared to the usual conditions of naturalisation, particularly to the requirement of a continuous residence for fourteen years. St. Kitts and Nevis’ Program not only waives the requirement of domestic residence, but it also derogates from the otherwise usual naturalisation criteria, such as mastery of the local language, or the necessity of proving knowledge of the country, its culture and history. Here the focus is set on the import of capital in form of foreign direct investments. The regulations based on the Citizenship Act’s provisions allow to choose from two options in order to earn the economic citizenship of St. Kitts and Nevis; although legally there is also an option for the Cabinet to grant citizenship by registration directly to someone who invests substantially in the country, based on Section 3(5) Citizenship Act. Investment options have changed over time depending on the needs of the country.170 Most recent investment options under the CbIPs include investments in a pre-approved real estate project for which the minimum investment for each main applicant is usd 200,000 (­resalable after 7 years) or usd 400,000 (resalable after 5 years) for each main applicant, or a non-refundable contribution by the main applicant to the n ­ ewly established Sustainable Growth Fund (sgf) of or usd 150,000.171 In either investment option, non-refundable due diligence and processing fees for the main applicant, as well for each dependant, must be paid upon submission of an application. The overriding concern for the promotion of investment in the real estate sector by the means of the CbIP is to support domestic tourism, treated as an economic factor. This is of paramount importance to the island nation, which is undiversified and vulnerable to natural disasters – and for this reason the 170 For instance, autumn 2017 saw several highest category hurricanes ravaging in the Caribbean causing hitherto unseen levels of destruction. Following immediately onto each other, hurricanes Irma and Maria claimed the lives of at least 550 people with many still unaccounted for while creating estimated damages of usd 300 billion. See AJ Willingham, ‘A Look at Four Storms from One Brutal Hurricane Season’ (cnn, 21 November 2017) accessed 10 August 2018. Among the countries mostly affected were Puerto Rico, Haiti, Dominica and Barbuda. In October 2017, the ciu created a Hurricane Relief Fund (hrf), with the view to assist the Government with repairs of public infrastructure and private property damaged during the 2017 Hurricane season. This investment option was considered to provide emergency relief and therefore has a limited period of availability, ending after only six months on 30 March 2018. In order to raise money immediately, the government aimed to incentivize prospective applicants by substantially lowering the minimum levels for required contributions to non-refundable usd 150,000. 171 Citizenship options available at the St. Kitts and Nevis Government website: accessed 10 August 2018.

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investor does not have a free selection of investment property: eligible projects are published by the Government in a regularly updated list.172 They include, for example, tourist resorts, the expansion of the marina infrastructure and the construction of golf courses – all an expression of the public intention to make the Caribbean country, which was economically struggling after the acquisition of its independence, an attractive destination for tourists, thus providing it with a new economic basis.173 Considered as a whole, the CbIP of St. Kitts and Nevis seems detailed and mature when compared to, for example, discretionary citizenship by investment practices.174 The CbIP of St. Kitts and Nevis distinguishes itself positively in terms of its transparency and certainty from the point of view of the rule of law. 4.2.4 Malta After becoming an independent nation, Malta introduced its first legal provisions regulating citizenship using a combined approach of the ius soli and ius sanguinis principles.175 The constitution conferred Maltese citizenship to all persons who were born in Malta and were citizens of the United Kingdom and its colonies before independence, provided that one of their parents had also been born in Malta.176 Dual nationality was strictly prohibited.177 The Maltese Citizenship Act of 1965 introduced the alternative acquisition of nationality through naturalisation and registration, while upholding the rule of single nationality.178 In 1989 however, the idea of dual nationality as an exception found its way into Maltese citizenship law as the consequence of the diaspora of the 1950s and 1960s, when well over 100,000 Maltese citizens left the islands 172 For the current list of approved real estate investment options see Government of St. Kitts & Nevis – Citizenship By Investment Program. 173 eclac – Port of Spain, Trinidad and Tobago, ‘Migration in the Caribbean – What Do We Know? An Overview of Data, Policies and Programmes at the International and Regional  Levels to Address Critical Issues’ (2006) UN/POP/EGM-MIG/2005/09, Expert Group Meeting on International Migration and Development in Latin America and the Caribbean, Population Division – Department of Economic and Social Affairs, United Nations Secretariat, Mexico City. 174 Džankić, ‘The Pros and Cons of Ius Pecuniae’. 175 For a historic overview of Maltese citizenship, see Buttigieg and DeBono, Country Report on Citizenship Law: Malta. 176 Buttigieg and DeBono, Country Report on Citizenship Law: Malta. 177 Buttigieg and DeBono, Country Report on Citizenship Law: Malta. 178 Maltese Citizenship Act, Cap 188 (last amended 1989), Act 30 of 1965, 21 September 1964 (as amended), available at: accessed 10 August 2018 (Maltese Citizenship Act).

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in search of work (this represents about a fourth of the current population) and became citizens of other countries.179 Emigrants born in Malta who had spent at least six years abroad were from then on granted exceptional permission for dual citizenship, so that they could keep their Maltese passports ­alongside their newly acquired nationality. This development was taken even a step further in 2000 with Acts iii and iv completing the shift in policy towards dual and multiple citizenship and turning the Maltese Citizenship Act180 into the main law regulating citizenship after it received the detailed provisions on this matter transferred from the Constitution.181 Malta’s accession to the EU in 2004 was followed by further extension of dual citizenship rights in 2007 to subsequent generations of Maltese born outside of the country and living abroad.182 The more recent development in Maltese citizenship law is the CbIP, called ‘Individual Investor Program (iip)’, which was launched in the spring of 2013 by the then newly elected parliament and Labour government under Joseph Muscat. Amendments to Article 10(9)(b) of the Maltese Citizenship Act had provided that, from then on, citizenship could be conferred ‘to any person who is an applicant or a spouse or an eligible dependant of such applicant, under the individual investor programme of the Republic of Malta, and satisfies the requirements as prescribed in regulations made under this Act’.183 The related regulations, which provide for the mechanism to implement the program, were adopted on 23 December 2013 and entered into force in the following January.184 However, they stirred further controversy and, as a result, the new regulations, which are still in force, were published on 4 February by means of Legal Notice 47 of 2014.185 On 14 February 2014, the accompanying application forms were published.186 In this context, it will be recalled that the 179 Chetcuti Cauchi Advocates, ‘Maltese Dual/Multiple Citizenship’ (CC Advocates, 2010) accessed 10 August 2018. 180 Maltese Citizenship Act. 181 Buttigieg and DeBono, Country Report on Citizenship Law: Malta. 182 See ‘Acquisition of Maltese Citizenship by Naturalisation’ at the Identity Malta website:   accessed 10 August 2018. 183 Article 10(9)(b) Maltese Citizenship Act. 184 L.N. 450/2013 Maltese Citizenship Act, Individual Investor Programme of the Republic of Malta Regulations 2013, available at: accessed 15 August 2018 (Maltese Citizenship Act 2013). 185 Maltese Citizenship Act 2014. 186 L.N. 17 of 2014, Maltese Citizenship Act, Citizenship (Amendment) Regulations 2014, available at: accessed 15 August 2018.

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introduction of the iip led to a wider debate in Europe,187 as well as to a resolution in the European Parliament188 and a review by the EU Commission,189 as discussed in detail in the previous chapter. The iip allows foreign individuals and their families who contribute to the economic development of Malta to be granted Maltese citizenship by naturalisation. The total number of successful applications through this program is capped at 1,800, not counting dependant family members of the main applicants.190 Therefore, the actual total figure of naturalisations is a multiple of 1,800 depending on the average family size of applicants.191 The position of Regulator of the Individual Investors Programme was created with the task to monitor the compliance and regularity of the program. The Office of the ­Regulator iip (oriip) has so far published annual reports towards the end of each year since the running of the program, giving information about application statistics; the number and geographical origins of the applicants; amounts of money invested; progress of applications making it to the final stages of the naturalisation process; the number and geographical background of the declined applications; difficulties experienced in the running of the program as well as suggestions for improvement.192 187 Covered by most major European newspapers and accompanied by an extensive academic debate, see Shachar and Bauböck (eds), Should Citizenship be for Sale?, for a good overview and spectrum of opinions. 188 European Parliament, ‘EU Citizenship Should Not Be for Sale at Any Price, Says European Parliament’, Press Release (16 January 2014) accessed 10 August 2018. 189 Viviane Reding’s Speech. 190 Article 12 Maltese Citizenship Act 2014. 191 The Joint Press Statement informed that the Maltese Government already then inquired about a possible extension of the cap of 1,800 main applicants. Related news articles published early in 2018 seem to confirm this intention of the Maltese government, as Identity Malta launched an online opinion to ask the Maltese public whether the programme should be extended, see ‘Public Consultation on How, Not If, Passports Scheme Will Be Extended’ (Times of Malta, 19 January 2018) accessed 10 August 2018; also ‘Public Consultation on Extending the Malta iip’ (Malta News, 5 February 2018) accessed 10 August 2018. 192 In its last annual report covering the period from 1 July 2016 to 30 June 2017, 377 applications had been submitted, while 1101 applications had been received since the inception of the iip. Since the launch of the Programme until the end of June 2017, there were 566 successful main applicants. For more information, see Office of the Regulator Individual Investor Programme (oriip), ‘Fourth Annual Report on the Individual Investor

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The iip requires applicants to provide proof of a clean criminal record as well as proof of a comprehensive global health insurance policy in addition to the submission of a file containing information about the applicant’s background, skills, career, source of assets, income and other personal details. This file is checked comprehensively and in detail by ‘Identity Malta’,193 which is the government agency entrusted with the responsibility for immigration and citizenship matters. With its introduction of an Individual Investor Program, Malta has, in many ways, set a new standard for CbIPs. It is one of very few countries which have conducted a public tender to invite specialist firms to advise and assist with the design, implementation and operation of the program. The failures and successes of investor immigration and citizenship programs show the need for expert advice. The Malta iip also sets a new standard in that a special team within the Identity Malta Agency, i.e. outside the general government administration but still accountable to government as a government agency, works hand-in-hand with a concessionaire under a public services concession contract to operate and strategically navigate the program and to manage the program’s international positioning. This is crucial, as it allows the government to ensure tight controls over how the program is promoted and derives significant benefits from strategic advice from experts to ensure the program remains well positioned and properly managed. The legal basis for Malta’s due diligence process was laid down in Articles 4(2), 7(2) and (4), and 8(1) of Legal Notice 47 of 2014, which introduced the Individual Investor Program into Maltese legislation.194 These norms stipulate that at the point of submitting of the application, a non-refundable due diligence fee has to be paid, i.e. right at the onset of the application process. The investment options include: a non-refundable grant of eur 650,000 to the National Development and Social Fund; further investment of at least eur 150,000 in approved investments which is to be held for a minimum five-year period; an investment of at least eur 350,000 in property in Malta, which must be retained for a minimum period of five years, or alternatively the rental of a residential property in Malta for at least five years, the annual rent of which Programme of the Government of Malta’ (1st July 2016 – 30th June 2017)’ (November 2017) accessed 10 August 2018. 193 Subsidiary legislation 497.07 Identity Malta Agency (Establishment) Order 2013 as amended, available at: https://identitymalta.com/wp-content/uploads/2018/05/Identity -Malta-AgencyEstablishment-Order.pdf accessed 15 August 2018. 194 Maltese Citizenship Act 2014.

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must be no less than eur 16,000.195 Additional contributions apply to a spouse or dependants of the main applicant, as well as costs of undertaking due diligence.196 These conditions are currently under review, in line with a planned extension of the Program. Applicants are required to prove that they took up residence in Malta at least 12 months prior to swearing the oath of allegiance. There are, however, no language demands on applicants, nor does a citizenship test exist. Citizenship is acquired on the date of the issuing of the naturalisation certificate. Children of applicants born before this date will not automatically become Maltese citizens whereas those born after this date will. Citizenship is not revocable, unless an applicant fails to comply with the requirements as highlighted in the Maltese Citizenship Act and Article 10 of the Legal Notice 47 of 2014. Names of people that have acquired Maltese citizenship are published in the Government Gazette.197 Successful applicants receive full and permanent citizenship of Malta and further rights resulting from the formal bond associated with citizenship between the individual and the state of Malta. For international ­investors Malta represents an attractive ‘safe haven’. Apart from being a stable, neutral, and efficient state, the added advantages of the EU citizenship constitute an important inducement for international investors looking to apply under a CbIP, not least from the perspective of seeking safety and security. 4.3

Conclusions to Chapter 4

Citizenship by investment or ius doni has developed significantly in the past three decades, and especially in the last ten years, and is expanding further. Foreign investments, including investments through various citizenship programs have become a significant financial source and important mechanisms for the economic development of small states. States have opted for various citizenship or residence programs. The requirements for such programs differ and depend on the quality of the respective nationality. Countries with strong nationalities can naturally require higher investments than those offering more modest citizenship. Other requirements, such as length of residence, nature 195 Maltese Citizenship Act 2014. 196 See for more information the official website of Malta’s Individual Investor Programme accessed 10 August 2018. 197 See ‘Malta Publishes Names of Foreigners who Acquired Citizenship through iip’ (­Citizenship by Investment, 29 December 2017) accessed 10 August 2018.

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of contribution and due diligence process also differ across states. Programs with stricter due diligence process such as the Maltese iip are certainly good examples which make the misuse of the program difficult if not impossible. The possibility for exploiting the existing schemes for circumventing the crs emphasised most recently by the oecd, however, is hardly a problem which is exclusively related to the ius doni mode of citizenship. The risk is equally present where a dual national has obtained his second citizenship by other means than investment. Ius doni is differently regulated in national legislation of various states. While citizenship laws of many states include provisions which allow for granting citizenship on the basis of extraordinary contribution including economic contribution, a small number of states have opted for detailed programs dedicated specifically on citizenship by investment. Austria and Montenegro are examples where no detailed programs exist but citizenship by investment is nevertheless possible under provisions of national citizenship laws of the two countries. Malta, and St. Kitts and Nevis are opposite examples, providing for detailed CbIPs. While states are free to decide how they are going to structure their citizenship requirements there is no right or wrong way of offering citizenship by investment. However, unlike national laws which merely include the possibility for obtaining citizenship through investment without explaining the procedure and details about the investment and deciding ­discretionally in each case, CbIPs are transparent and detailed. CbIPs are therefore a better solution for economic citizenship than discretionary decisions of states.

Chapter 5

Conclusion: The Reality of Citizenship in the xxist Century Citizenship can no longer be considered an exclusive bond between an ­individual and a home country. This is a natural correlate of the somewhat changed nature of sovereignty from one which provides states with a number of impeccable rights, to one which endows states with responsibilities, or from one that is the only protector of individual’s rights, to only one of the protectors of these rights, along with non-state actors, such as the EU for instance. A majority of states now allow dual citizenship, which also indicates watering down of sovereignty and a shift in the traditional perception of the concept of citizenship. States increasingly recognise membership in more than one political community, which testifies to the change in the relationship between the individual and the state. A number of questions have been answered through this study to provide a detailed assessment of the essence and application of ius doni. Relying ­extensively on international legal instruments and EU law, a particular emphasis has been put on legal aspects of citizenship and possible restrictions with regard to ius doni. An important aspect must be clarified in that respect given the frequently voiced criticism against citizenship by investment: the clash b­ etween legality and morality. A distinction has to be made between legality and morality.1 Far from implying that ‘legal and moral rules properly understood could not ever have the same content’,2 laws and morality do not always and necessarily overlap. An action can be legal but considered ­morally wrong and judged as such. To borrow Shaw’s and Barry’s example: ‘it may have been perfectly legal for the chairman of a profitable company to lay off 125 workers and use three-quarters of the money saved to boost his pay and that of the company’s other top manager, but the morality of his doing so is open to debate’.3 The opposite situation is equally realistic ˗ an action can be ­illegal but morally praised: ‘helping a Jewish family to hide from the Nazis was against 1 cf. Michael D Bayles, Hart’s Legal Philosophy: An Examination (Kluwer Academic, Dordrecht/ Boston/London 1992) 101–139. 2 Herbert LA Hart, The Concept of Law (oup, Oxford 2012) 173. 3 William H Shaw and Vincent Barry, Moral Issues in Business (Cengage Learning, Boston, MA 2014) 7.

© koninklijke brill nv, leiden, ���9 | doi:10.1163/9789004357525_007

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German law in 1939, but it would have been a morally admirable thing to have done’.4 While, in principle, states can decide who to admit as citizens and Citizenship and Residence Programs are in line with their national legislation such programs have been often disapproved and seen as morally rather than legally wrong.5 Where money gets involved things become more sensitive than usual and criticism becomes louder. Acquisition of citizenship by investment makes no exception. Yet, moral condemnations were not in the focus of this study let alone the complexity of morality which has been said to be ‘determined by sentiment, not reasoning’.6 Different aspects of citizenship were instead discussed through the book in light of relevant laws while particular emphasis was put on ius doni and citizenship rules in international and EU law. As has been demonstrated in Chapter 1, the individual state is left at a ­national level to set the criteria for the acquisition of citizenship. Traditional methods of citizenship acquisition – ius soli and ius sanguinis – but also early forms of ius doni has survived since antiquity. Yet, the key function of ­citizenship remains essentially unchanged ˗ exclusion from entitlements, such as residence in a territory, exclusion from a society, benefits or equality before the law. As such it is always distributed uniquely by the authority itself as testified through the historic development of citizenship.7 To agree with Kochenov, however, ‘[c]rucially, there is nothing “natural” in citizenship’s meaning, nothing inherent and “rooted”: citizenship is a dynamic concept denoting a fight for inclusion and equality, rather than a static description of “goodness”, or cozy feelings of belonging’.8 Indeed, extension of citizenship to previously e­ xcluded groups such as women or minorities and extension of citizenship rights testify to the fact that inclusion and recognition are accompanying aspects of citizenship.9 EU citizenship is a major step forward towards greater inclusion. Traditional modes of citizenship acquisition, ius soli and ius sanguinis in particular, do not correspond with today’s global mobility, needs of international business, global inequality of nationalities or people’s life preferences. Further inclusions and recognitions are thus necessary and it is for states and states alone to decide who their citizens will be.

4 Shaw and Barry, Moral Issues in Business 7. 5 Jelena Džankić, ‘The Maltese Falcon, or: My Porsche for a Passport!’ in Shachar and Bauböck (eds), Should Citizenship be for Sale? eui Working Papers rscas 2014/1, 17–18. 6 David Hume, ‘Morality is Based on Sentiment’ in James White (ed), Contemporary Moral Problems (8th edn, Thomson Wadsworth, Belmont, CA 2006) 30. 7 Kochenov, ‘The Citizenship of Personal Circumstances in Europe’ 39. 8 Kochenov, ‘On Tiles and Pillars’ 43 (footnotes omitted). 9 Kochenov, ‘On Tiles and Pillars’ 43.

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Allocation of citizenship to individuals who make a contribution to the economy and society of the host state by way of investment or donation is one of the latest trends, and quickly spreading among states. Ius doni is comparable to other forms of facilitated naturalisation in that it provides a faster route for acquisition of citizenship and often waives additional requirements such as language and naturalisations tests. Yet, citizenship by investment has raised some criticism. The fundamental issue is to what extent monetary or economic considerations should play a role with regard to the status of citizenship or the acquisition of citizenship. There seems to be a distinction between two kinds of goods: things which money cannot buy, like friends and Nobel Prizes, and things which money can buy but arguably should not, like kidneys and children.10 There are many other things, including citizenship, which are widely felt to be unsuitable for sale: land, sex, salvation ˗ yet ‘land can be bought, prostitution is often legal, and some of the greatest art was sponsored by those who wanted to purchase salvation for themselves’.11 Footballers are regularly ‘bought and sold’ all over the world;12 a second baby in China was easily affordable by rich Chinese during the one-child policy in the country13 – ­notwithstanding the fact that the ‘deal package’ was arranged as a 200 000 yuan fine rather than as a fee,14 and commercial surrogacy is perfectly legal in a number of states in the US, India, Thailand, Ukraine and Russia;15 freedom of travel is not for sale but visas, including Schengen visas which allow free movement in the Schengen area, are effectively ‘sold’ to eligible candidates or granted free of charge to desired applicants;16 national defense is not for sale but a fast track through airport security is effectively sold;17 people’s health is not for sale but those who can afford private medical insurance can cut waiting times and have wider choice of hospitals and treatments which may be often matter of life and dead. The avoidance of military service duty is also seemingly unsellable thing but military service in many countries is no longer a civic duty for all and is left to those in society who have no other good options and ‘who may 10 Sandel, What Money Can’t Buy. 11 Kochenov, ‘Citizenship for Real’ 2. 12 See ‘Dangers of Acquiring Citizenship by Investment’ (Legal Malta, 5 December 2017)

accessed 10 August 2018. 13 Jeffrey Hays, ‘One-child Policy in China’ (Facts and Details, June 2015) accessed 10 August 2018. 14 Sandel, What Money Can’t Buy. 15 cf. Sandel, What Money Can’t Buy 94 et seq. 16 More detailed information about visa fees is available at: 10 August 2018. 17 Sandel, What Money Can’t Buy.

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be conscripted, in effect, by economic necessity’18 – or to poor foreigners who ‘buy’ citizenship in effect by risking their lives for the military, an ultimate form of ius doni.19 Notwithstanding the status of candidates and legal basis of naturalisation, it is for states to determine the criteria for naturalisation of different groups.20 Most importantly, ‘there is no ethical point to be made in arguing against money when loving a citizen, expensive education, or muscular power can also do the trick. Money is no less random a criterion and this is exactly what citizenship is about’.21 Arguments that citizenship should not be for sale have small legal significance and moral condemnations fall short of the main purpose of citizenship, ‘i.e. random exclusion of large parts of society’.22 Naturalisation, as noted by Kochenov, serves three functions including ‘reinforcing the society with talent, money, inspiration and diversity – which translates into inviting the rich, the beautiful and the smart’23 (the other two functions being: ‘providing citizenship status to long-term resident immigrants, respecting and recognising citizens’ family ties through special naturalisation rules for family members’).24 Certain goods of course have value in ways that go ­beyond the utility they provide and ‘how a good is allocated may be part of what makes it the kind of good it is’.25 Marketing a good can in fact also change its character.26 Furthermore, a good can be corrupted by being treated according to a lower standard of valuation than is appropriate to it. If market reasoning is applied to certain domains in life, such as ‘sex, procreation, child rearing, education, health, criminal punishment, immigration policy (...) it’s less plausible to assume that everyone’s preferences are equally worthwhile’.27 However, as Paskalev points out, the opposite can also be true, and can be the case with selective citizenship by investment practices: giving citizenship and a passport to a highly regarded person can make this ­citizenship and passport highly ­regarded, too.28 It is also a question of to what extent the ­commercialisation 18 Sandel, Justice: What’s the Right Thing to Do? 82. 19 Armstrong, ‘The Price of Selling Citizenship’. 20 Iseult Honohan, ‘Bounded Citizenship and the Meaning of Citizenship Laws: Ireland’s Ius Soli Citizenship Referendum’ in Linda Cardinal and Nicholas Brown (eds), Managing Diversity: Practices of Citizenship in Australia, Canada and Ireland (Ottawa, University of Ottawa Press 2007). 21 Džankić, ‘The Maltese Falcon’ 17–18. 22 Sandel, Justice: What’s the Right Thing to Do?. 23 Peter Van Elsuwege and Dimitry Kochenov, ‘On the Limits of Judicial Intervention: EU Citizenship and Family Reunification Rights’ (2011) 13 ejml 443. 24 Van Elsuwege and Kochenov, ‘On The Limits of Judicial Intervention’ 25 Sandel, What Money Can’t Buy 33. 26 Hirsch, Social Limits to Growth. 27 Sandel, What Money Can’t Buy 89. 28 Paskalev, ‘If You Do Not Like Selling Passports, Give Them for Free’.

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of state sovereignty can and should go. Citizenship by investment and the attraction of foreign capital in this way is comparable with the commercialisation of state sovereignty in other ways, such as by creating beneficial company incorporation laws which then compete with other jurisdictions, or more controversially, the creation of a tax haven or the licensing and hosting of online casinos.29 As demonstrated in Chapter 2, international law provides for certain guidelines for states to regulate in citizenship matters while not imposing an obligation on states to introduce further requirements ˗ ‘genuine link’ or other ˗ for acquisition of citizenship. States are only limited by their commitments under international treaties, general principles of international law and customary law. Instead, international law puts emphasis on equality and non-­discrimination as well as on reduction of statelessness. Enabling the commodification of citizenship is felt to create levels of access to the rights it bestows,30 and to inequality among citizens and non-citizens, exacerbating the wrongs of statelessness.31 However, this approach to the issue conflates the political desire to cure the ills of statelessness and the unlawful denationalization practiced in some countries,32 or the wrongs of unequal citizenship or discriminatory nationalisation rules, with concerns about the politically neutral provision of access to citizenship on an economic basis. Yet, to agree with Hepple: the law is directed at only one element in the many causes of disadvantage, namely ‘discrimination’. (…) Whether we rely on negative concepts like ­direct or indirect discrimination or a broader positive notion of ‘equal’ opportunity, or even ‘fair opportunity’, it would be illusory to believe that these can be translated into legal terms of art which will lead, without more, to the promised land of (transformative) equality. (…) Law is both too specific and too selective in its choice of the causes in the ‘cycle of disadvantage’ to be capable in itself, of delivering real substantive equal rights.33

29 30 31 32 33

On the commercialisation of state sovereignty, cf. Joel Slemrod, ‘Why is Elvis on Burkina Faso Postage Stamps?’ (2008) 5 J. Empirical L. Stud. 683. Gordon Laxer and Dennis Soron (eds), Not for Sale: Decommodifying Public Life (Broadview Press, Peterborough, Ontario 2006) 30. David Weissbrodt, ‘Human Rights of Noncitizens’ in Rhoda E Howard-Hassman and Margaret Walton-Roberts, The Human Right to Citizenship: A Slippery Concept (University of Pennsylvania Press, Pennsylvania, phl 2015). Kristy A Belton, ‘Statelessness: A Matter of Human Rights’ in Howard-Hassman and ­Walton-Roberts, The Human Right to Citizenship 34. Bob Hepple, Equality: The Legal Framework (2nd edn, Hart, Oxford/Portland, OR 2014) 227.

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Equal treatment does not require extension of all rights to all people but ­merely that all subjects of specific rights be treated equally. There is no ­essential ­relationship between citizenship by investment and inequality as a subject of rights, provided that the rules providing for such citizenship themselves treat individuals equally. In other words, provided that the state organising a CbIP respects the rule of law in the administration of its laws, including in the administration of the program in question, then its grant bears no substantive differences from a rights perspective than the acquisition of citizenship by any other means. What is more concerning, however, is the global inequality without which CbIPs might have not existed. Not all countries and nationalities provide equal opportunities. Economic development, peace and stability and human development challenges and opportunities significantly differ between states and so do opportunities for travelling and settling without obstacles outside the country. As long as such disparities exist there will be demand for inclusion and recognition. With the ever wider acceptance, if not promotion, of dual nationality, citizenship by investment is only a natural consequence of the growing mobility and a convenient method for improvement of the lives of those who can afford it. Having received a second nationality through investment does not make new citizens better or worse than naturalised or other citizens of the host state. Chapter 3 introduced citizenship beyond states. While derivative in nature, the EU citizenship provides for rights enjoyed beyond the borders of home Member States. Apart from some very limited restrictions, EU citizens can feel equally home in any other Member State or in the eea countries and Switzerland.34 Feeling home does not imply becoming a citizen of the new host state but not being discriminated on the basis of nationality to citizens of that state. In other words, EU citizenship has made a huge step forward towards inclusion and recognition of non-citizens. The ‘genuine link’ theory is not only ­irrelevant but also antithetical to the EU citizenship which is activated through cross-border movement of EU citizens. 34

As explained in Chapter 3, Croats still need work permission for Austria and the principle of reciprocity is applied by Croatia. Thus, Austrians who wish to work in Croatia will also need a work permit. Furthermore, Croats who still need a work permit for Switzerland while citizens of Bulgaria and Romania have a limited access to the Swiss labour market. See the EU website on work permits in this respect: 16 August 2018. Finally, Liechtenstein operates a restrictive policy, granting only a limited number of residence permits per year. The special status of Liechtenstein was recognized by the EU due to the ‘specific geographic situation of Liechtenstein’: see European Commission Press Release at: accessed 15 August 2018.

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The application of EU law is uniform throughout the EU Member States and therefore decisions of the latter with regard to grant of citizenship cannot be questioned. Every Member State decides not only who its citizens are but also who the citizens of the EU are. The new citizens even of the smallest or poorest EU Member States such as Malta or Bulgaria respectively are also EU citizens enjoying rights in any other Member State. However, when deciding in citizenship matters, EU Member States must have due regard to EU law. In particular, decisions of Member States must not have an effect of depriving EU citizens of the enjoyment of their rights confirmed by the EU citizenship. A list of situations where such effect exists is virtually non-exhaustive. That said, ‘due regard to EU law’ has not been placed in the context of EU citizenship. Yet, respect for the principle of loyal cooperation certainly fits that EU requirement. The only situation where an EU Member State may infringe that principle (Article 4(3) teu) by granting citizenship to third country nationals might be the instance of mass naturalisations where a disproportionally large number of citizenships by a Member State without prior consultation with its partner or the Commission. Even in such case, there has to be a negative impact on other Member States for any genuine infringement procedure to be initiated under Article 4(3) teu. Yet, the number of citizenships issued through investments is insignificantly small to discuss any connection between ius doni and Article 4(3) teu. The Commission opined differently with regard to the Maltese iip claiming that citizenship must not be for sale and that Malta would have infringed its duty to loyal cooperation by introducing the iip. However, no infringement procedure was initiated against Malta. Instead, the Commission and Malta agreed that the iip includes a residence requirement. By introducing the requirement, Malta agreed to cooperate and respect Article 4(3) teu according to the Commission. This is certainly not what EU law is about. From a legalistic point of view, the Maltese iip was perfectly in line with EU law, residence or no residence notwithstanding. Having due regard to EU law certainly does not mean asking new citizens to live in their new home country in order to get a citizenship. Millions new Italians from Argentina and new Germans from the former Soviet Union know that already. The complaint of the Commission was not about law it was about morals and prejudice. Finally, Chapter 4 discussed ius doni procedures and practices. It demonstrates that the investment or donation requirements and the ways in which citizenship is granted differ from state to state – from less to more expensive citizenship options, from shorter to longer tracks to citizenship, from states applying a strong due diligence process to states applying weaker criteria, to name but a few. Terms and conditions for investments leading to citizenship are set in national legislation. The national legislation of most countries

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provides for the allocation of citizenship on the basis of a significant economic contribution, and a smaller number of countries has programs specifically ­designed to attract foreign investors. Requirements of different programs or investment conditions included in national legislation largely depend on the quality of nationality offered. Countries of best quality nationalities require higher investments compared to countries of other nationalities to which the examples of Malta and St. Kitts and Nevis testify. While both programs are transparent and offer good passports the EU citizenship offered through the Maltese nationality is an advantage which makes Maltese citizenship much more a­ ttractive than the citizenship of St. Kitts and Nevis. That said, the latter citizenship is much more attractive than citizenships that do not offer visa-free access to Schengen countries like that of Comoros, for instance. Yet, the CbIPs of both St. Kitts and Nevis and Malta are supported by more detailed legislative schemes than those of Austria and Montenegro, where the governments have far-reaching discretionary latitude in terms of deciding whether to grant naturalisation to investors, without it being clear in the relevant laws under what conditions an investment will be considered as ‘sufficient consideration’ for naturalisation. Theoretically, this limited legislative specification enables government decision-makers to better evaluate appropriate investors as part of a comprehensive due diligence process and to refuse naturalisation in case of doubt. The criteria for citizenship by investment should be enshrined in precise laws and regulations, not least also from a general rule of law perspective. The citizenship which people receive at birth is completely arbitrary. As noted by Carens, ‘citizenship in the modern world is a lot like feudal status in the medieval world. It is assigned at birth; for the most part it is not subject to change by the individual’s will and efforts; and it has a major impact upon that person’s life chances’.35 In the face of this global injustice of citizenship allocation, ius doni allows people randomly allocated at birth citizenships that they feel are inadequate for them, the opportunity to seek actively an alternative citizenship on the basis of clear criteria, including the most universally accepted criteria which transcends all borders: money. Even though it could be argued that this excludes all those who cannot afford to pay the price set by states, it is in fact a less random, less arbitrary and less restrictive criterion than any other criteria for the allocation of citizenship. The traditional conception of citizenship is ‘increasingly at odds with the reality of modern life’.36 Liberal states can no longer explicitly reproduce and 35

Joseph H Carens, ‘Migration and Morality: A Liberal Egalitarian Perspective’ in Brian Barry and Robert E Goodin (eds), Free Movement: Ethical Issues in the Transnational Migration of People and of Money (Pennsylvania State UP, University Park, PA 1992) 26. 36 Pickus, Immigration and Citizenship 110.

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r­ einvigorate particular nationhood through immigration and citizenship policy. The state now has to consider individuals for what they do, and not for what they are.37 Individuals are, at least to some extent, selected according to ‘achievement’ and not ‘ascription’,38 and this transition from ascription to achievement is the hallmark of modernisation.39 In this sense it can be argued that ‘an immigration policy under the sign of skills and achieved individual characteristics, rather than primordial givens, has finally caught up with modernity’.40 Citizenship by investment fulfils exactly that function, by at least enabling those people who meet certain criteria, in particular character and economic criteria, to obtain access to citizenship in a more interconnected world. Citizenship law should also generally and from its foundations be designed so that the foreign individuals who aspire to citizenship know precisely the conditions under which the citizenship can be obtained.41 This can be ensured not least by transparent CbIPs in an exemplary manner: an accurate catalogue of criteria can be published, enabling whoever meets the requirements to expect to be admitted. This leads to a new kind of cosmopolitanism, as, at least for wealthy people (and equally for the highly qualified in the immigration laws of most states today), arbitrary limits are reduced or are removed. This would also replace the monopoly exercised by any single state over its own citizens, at least in part, by a certain free market mechanism. This is only possible if viable alternatives exist,42 which is achieved already by the fact that globally, many CbIPs have already been established. Wealthy people who seek a transnational identity thus have choices and are able to overcome obstacles to ­personal mobility and traverse borders opportunistically.43 In the era of globalisation, the opportunity to gain and exchange citizenships through CbIPs, and in this respect not to be subject to any particular state monopoly, would appear to be a positive liberalising step towards a free cosmopolitism, comparable to the liberalisation of traditional state m ­ onopolies as the basis for

37

Christian Joppke, Selecting by Origin: Ethnic Migration in the Liberal State (Harvard UP, Cambridge, Mass./London 2005). 38 Talcott Parsons, The System of Modern Societies (Prentice-Hall, Englewood Cliffs, NJ 1971). See also Joppke, Selecting by Origin 3. 39 Parsons, The System of Modern Societies. See also Joppke, Selecting by Origin 3. 40 Joppke, Selecting by Origin 3. See also Parsons, The System of Modern Societies. 41 Benhabib, The Rights of Others 139˗140. 42 cf. Friedman Milton, Capitalism and Freedom (The University of Chicago Press, Chicago/ London, 1962). 43 van Fossen, ‘Citizenship for Sale: Passports of Convenience’.

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a free national society.44 In this regard, on an international level it can even be argued that all states should make their citizenship available to anyone interested and willing to pay, in effect creating a global market for citizenships, enabling market forces to then determine prices. The largest economic benefits for a country are generated by programs which require direct, non-refundable economic contributions to the government or to a national fund. There is no guarantee that the money will be wisely spent, however this model faces fewer problems related to the investments, is straightforward, and non-refundable contributions cannot be withdrawn.45 Significant positive macroeconomic impact can also be achieved by incentivising private sector investments, notably in the real-estate sector. At the other end of the spectrum, we can find investor immigration programs which merely ask for an investment in government bonds, which are repaid to the investor after a period, so that the actual impact in the destination country is minimal and raises the question whether such models actually make sense for countries who wish to attract foreign investment and serious investors.46 Just like ordinary naturalisation, legal boundaries are drawn for Citizenship by investment, which in liberally constituted states not only result from the principle of democracy (‘no sale of sovereign rights’), but in particular from the prohibition of tying arrangements as a manifestation of the rule of law. Regardless the dogmatic classification of naturalisation, the ‘consideration’ – here the direct investment – must be reasonable, all circumstances must be taken into account, and the decision must be within the competence of the relevant authority. The constitutional principle of legality in itself requires that the criteria for the granting of Citizenship by investment are adequately specified, based on the rule of law. Over the last two hundred years, citizenship and nationhood have been ­woven together, ‘inextricably linked in defining political identity and place in

44 45 46

Friedrich A Hayek, The Road to Serfdom, Text and Documents (George Routledge & Sons, London 1944). Sumption and Hooper, Selling Visas and Citizenship. Xu, El-Ashram and Gold, ‘Too Much of a Good Thing?’. For a recent view regarding this and in particular the US EB-5 program, see Eric Posner, ‘Citizenship for Sale: The “Immigrant Investor” Program is Unfair, Ineffective, and Way Too Cheap’, available at: accessed 10 August 2018.

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the global landscape’.47 However, when the modern concept of citizenship crystallised following the American and French revolutions, people did not understand citizenship as it is understood today. Similarly, in the future, very different ideas of membership and belonging will be developed, of citizenship and of how citizenship can be acquired.48 To agree with Habermas, ‘[t]he a­ rrival of world citizenship is no longer merely a phantom, though we are still far from achieving it. State citizenship and world citizenship form a continuum that already shows itself, at least, in outline form’.49 We are in the midst of a global trend of transformation of citizenship, which includes the advent of ius doni, an idea whose time has come. The future of citizenship, the conception of citizenship in the twenty-first century, will be very different indeed. 47 Jacobson, Rights Across Borders vii. 48 Pickus, Immigration and Citizenship. 49 Jürgen Habermas, ‘Citizenship and National Identity’ in Beiner (ed), Theorizing Citizenship 279.

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