In a landmark ruling in April 2025, the European Court of Justice declared the Maltese "golden passport programme" to be incompatible with the Member State's obligations to the European Union. The programme commercialises the granting of European citizenship, thereby undermining mutual trust between Member States and violating the principle of sincere cooperation.

With the end of "golden passports", media attention is shifting to "golden visas". Although such programmes may be compatible with EU law, they are by no means immune to the risk of abuse. This is where the EU comes in with its money laundering package adopted in May 2024 and is now regulating the "trade" in residence permits.

Investment-based migration programmes enable wealthy individuals to acquire citizenship ("golden passport") or a residence permit ("golden visa"). Although the programmes differ in detail, what they all have in common is the injection of a minimum amount of capital into the economy of the issuing country as a primary qualification requirement. This is achieved through the acquisition of property, government bonds or company shares, among other things. In return, applicants receive citizenship or a residence permit in an accelerated procedure, which often has significantly reduced requirements compared to the regular procedure, for example with regard to the duration of residence.

In a study published in 2018, the non-governmental organisations Transparency International and Global Witness registered a total of 17 such programmes in 14 member states of the European Union. Over a period of ten years, more than 6,000 citizenships and around 100,000 residence permits were granted through these programmes, generating €25 billion in direct investment in return. For small member states such as Malta and Cyprus in particular, these programmes have made a significant contribution to the development of the location.

In their joint report from 2023, the Financial Action Task Force and the Organisation for Economic Co-operation and Development (OECD) highlighted the risks of abuse of investment-based residency and citizenship programmes. The programmes are susceptible to bribery and corruption and are likely to support applicants in money laundering, tax evasion and the avoidance of sanctions. Even though applicants regularly have to prove the legal origin of their investment funds, the due diligence procedures carried out by the competent authorities are often inadequate. These checks are also regularly outsourced to external agencies, which opens up further opportunities to exert influence.

In response to the risks identified, the European legislator issued the Money Laundering Regulation in May 2024 and thus decided to include investment migration consultancies in the group of entities subject to money laundering obligations.

Investment migration consultancies represent third-country nationals or provide them with intermediary services aimed at acquiring residence rights in a member state in return for an investment of any kind (including gifts). The regulation applies equally to natural and legal persons who provide such services on a commercial basis.

According to the recitals, the regulation does not apply to the investment-based acquisition of citizenship. In a recommendation, the Commission set out its view that "golden passport" programmes violate EU law.1 Consequently, the Commission initiated infringement proceedings against the member states Malta and Cyprus back in 2020. While Cyprus has since discontinued its programme, the Commission's position has now been confirmed in the proceedings against Malta.

Emerging risks, which often take on new forms of materialisation or include risks that are still poorly understood or are still developing, pose new challenges for risk management techniques. In order to identify and understand such events, it is not enough to think in terms of processes. Rather, it is a matter of identifying problem areas on a situational basis, asking relevant questions and identifying the necessary players in order to recognise answers and options for action. Dealing with these risks therefore goes hand in hand with a conscious decision and the implementation of appropriate measures - the management of emerging risks is therefore essentially also a question of (risk) culture.

Emerging risks require new answers. Our publication provides impulses on how organisations can adapt their risk strategies - in regulatory, organisational and cultural terms. Managing the future requires less control from yesterday - and more forward-looking intelligence.

Investment migration advisors now have until 10 July 2027 to prepare for their new obligations. As they are confronted with the requirements of money laundering law for the first time, it is advisable to deal with them at an early stage. In particular, carrying out a risk analysis for the first time and setting up an appropriate and effective risk management system are challenging. The necessary structures, personnel and material resources as well as databases must be created from scratch.

If you have any questions about the requirements of the Money Laundering Ordinance and the associated obligations, please do not hesitate to contact us. We look forward to hearing from you.

_{1      Cf. Art. 4 para. 3 of the Treaty on European Union in conjunction with Art. 20 of the Treaty on the Functioning of the European Union. Art. 20 of the Treaty on the Functioning of the European Union}