State nationality challenged by Union law
Étienne PatautProfessor of Private Law at the Sorbonne Law School (University of Paris 1)
In its precise sense under French law, nationality is the “legal and political bond, defined by the law of a State, uniting an individual to the said State.” 1
This precision makes it possible to measure how much incongruity there is in questioning the links between nationality and the European Union, the most obvious answer being, at first glance: none. Since the European Union is not a State, it cannot have a “nationality;” having no competence in the matter, it cannot have any influence on the state law of nationality either. The Treaties do not say anything else, 2 we will come back to this.
However, nationality is not a purely abstract concept; the legal bond that it represents indeed has a function, that of describing membership in the population constituting a State and that of carrying legal consequences.
From this perspective, the clear distinction between the domain of the State and that of the Union is blurred. The Union does indeed confer special rights on nationals of the Member States, rights which have gradually acquired such importance that the concept of “European citizenship” has emerged, now enshrined in Article 20 of the Treaty on the Functioning of the European Union (“TFEU”). According to the well-known terms of this provision:
« 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.”
Reading the treaties alone, European citizenship could certainly only be a convenient vehicle for bringing together various rights, the list of which is given by the treaty itself. The fact remains that the discourse on citizenship and the very content of this list (right to vote, right to diplomatic protection, right to petition the European Parliament and of course freedom of movement) can only sow doubt. The rights in question, in fact, are undoubtedly major and symbolic prerogatives, which are frequently attached to membership of a determined political community, characteristic of nationality. In this sense, the dynamic of European citizenship is properly political and potentially rich in future extensions 3 .
The temptation would then be strong to see in European citizenship a “pre-nationality,” a nationality in the making, destined to take its full measure if the Union were to move towards a more complete federalism.
However, we must resist this temptation.
Notwithstanding the fact that the future of a federal of Europe is, to say the least, in no way defined, European citizenship, in spite of its importance, is far from having acquired sufficient scope to be able to claim, today as in the future, to replace state nationality.
The fact remains that insofar as state nationality – which remains the exclusive competence of each State – is the key to entry into this specifically European statute that in turn creates specific rights independent of national rights, the question of the articulation between the two cannot fail to arise. This is how, progressively, specifically European directives on the matter emerged, in turn retroacting on the purely state law of nationality.
The articulation of competences gradually unveiled by the Court (I) thus had a significant impact on the legal regime of nationality, as evidenced today by the important controversy relating to programs for the sale of nationality (II).
I. State competence and European competence
There is absolutely no doubt that access to nationality is a national law matter. Exclusive state competence is regularly reaffirmed in Europe, including by the European courts (A). That said, the emergence of fundamental rights and the control of proportionality are gradually changing this solution (B).
At first glance, the Rottmann case is almost a missed opportunity, 4 where the Court refused to consider that the combined effect of two nationality rights that risked leading to statelessness was contrary to Article 17 EC (now 20 TFEU).
The situation of a person of Austrian nationality was at issue in this case. Leaving for Germany, he applied for and obtained German nationality, which had the consequence, under Austrian law, of revoking his Austrian nationality. Shortly thereafter, however, it emerged that he had concealed the existence of criminal proceedings against him in Austria. Considering this to be a fraud, German authorities then decided to revoke the recently granted nationality. The result of the combination of German and Austrian laws was therefore to render Mr. Rottmann stateless and thus to revoke his status as a citizen of the Union. Puzzled as to the compatibility of such a result with the provisions of European law, the German authorities appealed to the Court for a ruling in interpretation. Two questions were raised, the first to determine whether European law opposed such a result; the second to know how to adapt the state laws of nationality in the event of a positive response.
Contrary to its tenacious and justified reputation for audacity, the Court stuck to a solution which appeared to be very cautious, according to which “It is not contrary to European Union law, in particular to Article 17 EC, for a Member State to withdraw from a citizen of the Union the nationality of that State acquired by naturalisation when that nationality was obtained by deception, on condition that the decision to withdraw observes the principle of proportionality.”
On first reading, it therefore seems that a State can freely withdraw nationality from an individual, even when this withdrawal also deprives him of his status as a citizen of the Union. This solution may, of course, seem a little behind; it can be explained, however, by the exclusive competence of States in matters of nationality.
As the Court asserts, “according to established case-law, it is for each Member State, having due regard to Community law, to lay down the conditions for the acquisition and loss of nationality” (paragraph 39).
Everything, it is true, converged towards it. First of all, the EC Treaty then applicable, which bound strictly, and still does, nationality and citizenship, by affirming that a citizen of the Union is “every person holding the nationality of a Member State” (Article 17 EC). Article 20 of the TFEU further reinforces this exclusive state competence by asserting that citizenship “shall be additional [and no longer a “complement”] to and not replace national citizenship.” Undoubtedly, the granting of citizenship is a decision which does not belong to the Union: it goes hand in hand with the nationality of a Member State.
The distribution of powers is therefore very clear: each State has the right to determine its own nationals; Union law can then draw consequences for the purpose of Union citizenship. The European solution therefore does not seem to present any specificity in relation to the principle of exclusive state competence in matters of nationality laid down by public international law 5 , which the Court of Justice already had the opportunity to transpose into European law 6 .
The fact remains that if the Rottmann case drew so much attention, it is because this reaffirmation of exclusive competence was accompanied by a precision which opens up a great deal of debate 7 .
The exclusive competence of the States in no way implies that the Court, as certain intervening States urged it, should purely and simply refrain from any review. As it points out, “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” (point 41) 8 . Valid in many areas of the law, this affirmation is applicable in nationality law, as the Court already had the opportunity to affirm 9 . However, EU law is clearly affected by the German decision, insofar as the withdrawal of nationality causes the person concerned to lose his status as a citizen of the Union, that is to say, his “fundamental status” under the law of the Union. Consequently, as the Court asserts (paragraph 48), if the principle of exclusive competence cannot be challenged, it remains that its modalities of exercise could infringe the law to the Union.
The Court’s solution, in fact, establishes important instruments of control for the future, which it will be able to mobilize if necessary. It is true that in this case it uses them extremely cautiously. It appropriates, in particular, the rule of international law authorizing the withdrawal of a nationality when it has been obtained fraudulently. For the Court, there is indeed a reason of general interest, whereby States legitimately control the special relationship of solidarity between a State and its nationals. Such a justification encompasses in the spirit of the Court not only the loss of nationality, but also the possible concomitant loss of European citizenship. EU law therefore aligns well with national law 10 .
However, the Court did not relinquish the possibility of review. As we have seen, the Court enjoined the national courts to verify that such a withdrawal does indeed respect the principle of proportionality. In practice, this involves some concrete checks, in particular ensuring that the loss of nationality is justified in relation to the gravity of the offense or to the time elapsed between the naturalization decision and the withdrawal decision.
The exact content of this review under Union law is undoubtedly called upon to become clearer, in particular in the face of a certain tightening of state rights of nationality, which portend closer control 11 .
In this respect, the principle of proportionality may well find its first application in the near future. Indeed, Advocate General Szpunar proposed it in his important conclusions in a case not unlike Mr Rottmann’s. 12
Once again, the poor articulation of the nationality laws of two States led to rendering the applicant stateless. Originally Estonian, Ms. JY applied for Austrian naturalization. The Land of Lower Austria granted the request in principle, on condition that the applicant renounced her Estonian nationality. So she did. Despite the assurances given, however, she was ultimately denied Austrian nationality on account of various offenses, in particular traffic violations. No longer Estonian, but not Austrian, the person had therefore become stateless and, therefore, deprived of her European citizenship.
The rich conclusions of the Advocate General, in line with the many precedents cited, provide a better understanding of the principle and scope of the intervention of Union law.
If indeed the situation falls within the scope of EU law, it is not because Estonian and Austrian state laws do not comply. It is from their combination that the potential infringement results: the renunciation of Estonian nationality was only accepted in contemplation of future Austrian naturalization; assurance as to naturalization was only granted on condition of a renunciation of the initial nationality. The final denial therefore comes up against a situation which can only be understood globally and which therefore leads to the person being deprived of her European citizenship.
If the situation then clashes with the principle of proportionality, it is because of the disproportion that exists between the seriousness of the offenses (driving while intoxicated and a failure to affix a vehicle inspection sticker) and that of the sanction (a refusal of naturalization and, consequently, a definitive loss of European citizenship). Justified in principle, a review under European law would therefore lead, in this case, to condemning a state decision on the granting of nationality. The shake wouldn’t be thin.
It remains of course, to await the decision of the Court. In any event, this example shows once again how much nationality laws must from now on be used by States in contemplation of their overall European impact: casuistry, little by little, brings out the requirements of the Union in this area.
In this regard, two particularly fruitful fields of experience must be examined with attention.
The first, conflicts of nationality, will not be discussed here. Let it be simply noted that the questioning of traditional principles of resolving nationality disputes is not in doubt. Over the course of abundant case law, the Court has completely overturned the usual principles of primacy of the nationality of the forum and of taking into account the effectiveness of foreign nationality, to the point that it is now proposed to abandon them 13 . This reversal took place with relative discretion, which seems to be explained by the fact that the reasoning of the Court is not based on an abstract vision of conflicts of nationality, but on a concrete approach to the rights guaranteed to the citizen. As soon as a subjective right guaranteed by the treaty is in question, it must be guaranteed to the citizen, whether or not she has another nationality 14 , whether or not the other nationality is that of the forum 15 , whether or not the nationality of the other Member State was acquired under questionable conditions 16 .
In any event, the question of the conflict of nationality, although it affects the nationality regime, does not constitute its conceptual heart. This is all the difference with the second example, that of nationality sales programs, which pose a much more formidable challenge to the Union.
II. Nationality Sales Programs
Some States around the world have implemented actual policies to sell their nationality. “National havens” have thus been created, just as there are “tax havens.” In both cases, in fact, the existence of exclusive state competence allows certain states and private firms providing lucrative advice to engage in opportunistic — some would say disloyal — behavior for economic gain. Born in the Caribbean, these mercantile policies undermining the very heart of the idea of nationality have spread to Europe 17 . These programs have elicited almost unanimous condemnation. Can these programs go so far as to make the nationality of one Member State unenforceable against another Member State?
A. European condemnations
Certain Member States, foremost among them Malta and Cyprus, have a particularly explicit policy in this matter and thus allow, under extremely liberal conditions, the purchase of their nationality 18 . This creates a major difficulty for the Union, insofar as the nationality of these States has, by virtue of European citizenship, an effect which goes well beyond the respective borders of these two islands.
These programs have therefore led to strong condemnations of these States by the European institutions.
First of all, the European Parliament has on several occasions vigorously criticized these programs as undermining the values of the Union 19 . Also, in the 13th point of its resolution, the Parliament:
“Calls on the Member States that have adopted national schemes which allow the direct or indirect sale of EU citizenship to third-country nationals to bring them into line with the EU’s values.”
The formula is pleasant but very ineffective. In the current state of Union law, in fact, invoking its values can in no way provide a key to analysis (or condemnation) of national policies on nationality. The Parliament is perfectly aware of this, and in point 6 of its resolution “acknowledges that matters of residency and citizenship are the competence of the Member States” and, therefore, “calls on the Member States, nevertheless, to be careful when exercising their competences in this area and to take possible side-effects into account.” The incentive remains very vague.
Exclusive state competence in matters of nationality is in fact the insurmountable obstacle against which calls for respect of the values of the Union stumble. In the current state of Union law, it is the States and not the Parliament, which are the judges in this matter of the interpretation to be given to them. Therefore, apart from the pressure exerted on a country in particular regarding a practice whose political condemnation is unanimous, the invocation of values is of absolutely no use, neither to describe the possible lack of conformity between state law as it stands and Union law, nor, prospectively, to determine the direction which European law should take 20 .
The European Commission then took up the subject, first of all through an important report presented to the European Parliament, the Council, the European Economic and Social Committee and the European Committee of the Regions which, far from the usual diplomatic prudence, is extremely vigorous in its criticisms of these programs of nationality sale and, more generally, of granting of a residence permit by direct investment 21 . Most clearly, the Commission describes and condemns the “the possible security gaps resulting from granting citizenship without prior residence, as well as risks of money laundering, corruption and tax evasion associated with citizenship or residence by investment.” 22 This report criticizes the possibility of obtaining the nationality of these States without any link being established between the applicant and the Member State, sometimes without even requiring a residence other than a formal address, or a physical presence other that on the day of the delivery of the title. More broadly, the Commission describes in great detail the various crimes likely to be committed in connection with these programs (attack on the security of States, money laundering, corruption, tax evasion, etc.).
These programs are all the more open to criticism as the Commission notes that the advantages of Union citizenship are precisely at their core: what is sold here is not only Maltese or Cypriot nationality but the possibility of benefiting from all the prerogatives attached to the status of European citizen.
More theoretically, the Commission sees these practices as calling into question a conception that would be common to the Member States, that of effective nationality.
As it states :
“Such a common understanding of the bond of nationality also lies at the basis of Member States’ acceptance that Union citizenship and the rights entailed by it under the Treaty on the Functioning of the European Union (TFEU) would accrue automatically to any person becoming one of their citizens. Granting naturalisation based on a monetary payment alone, without any further condition attesting to the existence of a genuine link with the awarding Member State and/or its citizens departs from the traditional ways of granting nationality in the Member States and affects citizenship of the Union.” 23
The principle of loyal cooperation, invoked by the Commission, would therefore oblige the States to adopt rules on nationality more in line with the requirements of Union law which, in the present case, would therefore require the adoption of rules relating to the effectiveness of nationality.
Then moving from theory to practice, the Commission launched two infringement proceedings against Cyprus and Malta, considering that these programs, on the one hand, are not compatible with the principle of loyal cooperation enshrined in Article 4§3 TEU and, on the other hand, that they undermine the integrity of the status of Union citizen provided for in Article 20 TFEU 24 .
These proceedings are ongoing and it is not easy to know what is likely to happen. The fact remains that the legal bases invoked make it possible to assess the difficulty.
B. Sale of nationality, effectiveness and enjoyment of rights
As we have seen, States, including in the Union, in fact continue to enjoy unquestioned exclusive competence; in the absence of the Union’s competence in matters of nationality, an eventual conviction therefore seems uncertain. It is certainly not excluded, because if the principle of exclusive competence prevents any encroachment of Union law, the exercise by the States of the latter could be contested when it undermines a policy of the Union. Conviction, although uncertain, is therefore not excluded.
But, in any event, this cannot lead to a modification of the internal law of the nationality of the countries concerned; only to the intervention, to a greater or lesser extent, of the Union in the exercise by the Member States of their exclusive competence. This is evidenced by the follow-up given to the European Parliament’s resolution of 2014. This had led to negotiations between the European Commission and Malta leading the Maltese State to back off. But its concession was only partial. The Maltese State had in fact in no way given up on its program, but simply agreed to subject it to a residence condition, itself also very vague 25 , even if the Commission had then declared that it was satisfied with it, which had therefore enabled the definitive adoption of the Maltese law on personal investments. Six years later, the compromise has clearly proved insufficient, since the Commission has launched infringement proceedings against the State.
It is therefore plausible to expect political and diplomatic intervention from the Union, supported by the legal instruments at its disposal; and it is not excluded that this intervention will indeed lead to changes, even reluctantly, in the States involved. Nationality selling programs are undoubtedly a serious deviation from the very idea of nationality and the raison d’être of the European Union. As such, the legitimacy of the fight against these rules is not in doubt.
The fact remains that on an individual basis, citizens who were granted their nationality in this way remain European citizens and as such benefit and must continue to benefit from the rights attached to this status. In the current state of Union law, it seems quite out of reach to prevent nationals of Member States, on the pretext of too weak a link with their State of nationality, from enjoying the prerogatives attached to their European citizenship. It is one thing that States grant their nationality too liberally, but it is another of quite different dimensions that the individuals who have benefited from such largesse be sanctioned. From the moment interested parties have fulfilled the legal conditions required from them, in a matter that leaves almost no room for individual autonomy but which, on the contrary, is entirely in the hands of the States and of their administration, no reason justifies making a distinction between nationals who deserve to have access to the rights guaranteed by the treaties and others.
States, of course, are not totally powerless to challenge the exercise of their rights by these citizens. Thus, in particular with regard to entry and residence, Directive 2004/38, applicable to citizens and their families, contains provisions allowing for the removal of nationals of other Member States, in particular in the event of a public order violation. Likewise, assuming any offenses committed by these neo-Europeans, the resources of criminal law could be mobilized to punish these acts. In any event, the very principle of citizens’ access to their rights remains guaranteed.
In this situation, the review of effectiveness would constitute a double interference, in the exclusive competence of another Member State and in the enjoyment of her rights by the European citizen, which appears neither legally valid nor politically desirable.
One could only rejoice if States agreed on common criteria in matters of nationality; but it would be fatal to the very principle of European citizenship if a State made itself the judge of the conditions under which the nationals of other states enjoy their prerogatives attached to their citizenship.
This is undoubtedly the main conclusion of this confrontation between state nationality and European citizenship. The movement involved, it is obvious, is not a replacement of the former by the latter. The fact remains that the identification of a new collectivity, that of European citizens, to which new prerogatives are conferred, has not remained without influence on state nationality. The logic of subjective rights, which is that of Union law, undoubtedly has its limits. But it also has its own dynamic, which allows us to understand both the reason and the extent of this influence.
The European people may not exist as an autonomous political community; yet the European citizen does exist, and her conquering prerogatives cannot be ignored.
- Vocabulaire Cornu, see “Nationalité;” for a similar definition, see for instance P. Lagarde, La nationalité française, Dalloz, 2011, n° 00.02.
- See in particular the Declaration attached by the Member States to the Final Act of the Treaty on European Union, OJEC n ° C 1992, 191, p. 98, reaffirming at the very moment of the creation of European citizenship, the exclusive competence of States in matters of nationality.
- On these points, see the important works of V. Révéillère, Le juge et le travail des concepts juridiques – Le cas de la citoyenneté européenne, Institut Varenne, 2018 and S. Ganty, L’intégration des citoyens européens et des ressortissants de pays tiers en droit de l’Union européenne, Bruylant, 2021.
- CJEU, 2 March 2010, Case C-135/08, Rottmann v. Freistaat Bayern. On this decision, see in particular J. Heymann, “De la citoyenneté de l’Union comme révélateur de l’Union européenne,” Europe, June 2010, n° 7.
- Paul Lagarde, op. cit., n° 11.21.
- CJEC, 7 July 1992, Micheletti, Case C-369/90.
- See in particular J. Basedow, “Le rattachement à la nationalité et les conflits de nationalité en droit de l’Union européenne,” Rev. Crit. DIP. 2010. 427; S. Corneloup, “Réflexions sur l’émergence d’un droit de l’Union européenne en matière de nationalité,” JDI 2011. 491 and S. Bariatti, “Multiple Nationalities and EU private international law,” Yearbook of PIL, 2011, p. 1.
- The solution is classic. For instance in tax matters, where the Court uses a formula that has become a case-law standard: “Although, as Community law stands at present, direct taxation does not as such fall within the purview of the Community, the powers retained by the Member States must nevertheless be exercised consistently with Community law,”CJCE, 14 February 1995, Case C-279/93 Schumacker, n°21; same solution in social matters, as shown by the well-known decisions Laval and Viking : CJEC, 11 December 2007, Case C-488/05, Viking and CJEC, 18 December 2007, Case C-341/05, Laval.
- CJCE, Micheletti, aforementioned.
- Since then, see CJEE, Grand Chamber, 12 March 2019, Case C-221/17, Tjebbes et al., which, however, concerned a Dutch rule that was very questionable because of its excessive rigor. On this matter, see in particular D. Kochenov, “The Tjebbes Fail,” European Papers, April 2019, available online at: www.europeanpapers.eu.
- Sur l’ensemble, v. S. Carrera Nunez et G. R. de Groot, European Citizenship at the Crossroads. The role of the EU on loss and acquisition of Nationality, 2015, WLP Pub.
- Request for a preliminary ruling from the Verwaltungsgerichtshof (Austria) lodged on 3 March 2020, Case C-118/20, JY
- See the large-scale codification model developed by the European Group for Private International Law at its Lausanne session in 2013 (in French) : “Position du Groupe européen de droit international privé sur la solution des conflits positifs de nationalités dans les instruments existants de droit international privé de l’Union européenne,” Lausanne 2013, available at: https://gedip-egpil.eu/wp-content/uploads/2013/10/Position-du-Groupe-europ%C3%A9en-de-droit-international-priv%C3%A9-sur-la-solution.pdf
- CJEC, 7 July 1992, Case C-369/90, Micheletti.
- CJEU, 14 November 2017, Case C-165/16, Toufik Lounes.
- CJEC, 19 October 2004,Case C-200/02, Zhu and Chen.
- On this topic, see A. Shachar, “Citizenship for sale?”, in A. Shachar, R. Bauböck, I. Bloemraad, M. Vink, Oxford Handbook of Citizenship, Oxford University Press, 2017, p. 789.
- For the description of these programs, see in particular European Commission, “Investor Citizenship and Residence Schemes in the European Union,” COM (2019)12 Final, 23 January 2019.
- European Parliament resolution of 16 January 2014 on EU citizenship for sale: 2013/2995 (RSP); in the same vein, but this time linked to the fight against money laundering and the financing of terrorism, see resolution of 10 July 2020: 2020/2686 (RSP).
- On this appeal (and its ambiguity) to the values of the Union, see in particular I. Pingel, “Les valeurs dans le traités européens,” JDI, 2020. 845 et 1169.
- European Commission, “Investor Citizenship and Residence Schemes in the European Union,” COM (2019)12 Final, 23 January 2019.
- COM (2019)12 Final, 23 January 2019, n° 1; in the same vein, see European Commission, « Report from the Commission to the European Parliament and the Council on the assessment of the risk of money laundering and terrorist financing affecting the internal market and relating to cross-border activities», COM (2019) 370 final, 24 July 2019, p. 7 and concl., p. 23.
- COM (2019)12 Final, 23 January 2019, n° 2.4, p. 5-6.
- https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1925; the procedure gave rise on 9 June 2021 to a formal opinion from the Commission: https://ec.europa.eu/cyprus/news/20210609_2_en.
- On all these matters, see S. Carrera, “How much does EU citizenship cost? The Maltese citizenship-for-sale affair: A breakthrough for sincere cooperation in citizenship of the union?,” CEPS Paper in Liberty and Security in Europe No. 64 / April 2014, available at: http://www.ilecproject.eu/, pp. 7 and 8. It seems indeed that Maltese law, imposing a “substantial connection” between the candidate and the State is much less rigorous than the 12 months of residence referred to by the Commission in its press release cited below, in the following footnote.
To cite the article
Étienne Pataut, State nationality challenged by Union law, Dec 2021,
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