The CBI programs have proliferated over the number of years in terms of popularity and economic boost to the countries. Several countries offer citizenship in exchange for donation, real estate, creation of jobs by waiving residency and other statutory requirements for citizenship. CBI schemes require no genuine links maintained with the country, such as maintaining a permanent residency or other forms of stable allegiance. Infact 90% of CBI citizens dont live in the new country at all after receiving passport and very few make a personal visit.
Malta and Cyprus are the only two countries have imposed genuine link requirement for the citizenship by investment schemes. Malta requires one year residency requirement and Cyprus requires permanent resident for six months before becoming a cypriot national under the scheme for naturalization of investors.
A genuine link can be proved by the following actions
- Long term habitual resident with permanent resident status
- Paying taxes, healthcare and social contributions
- Integrating fully to culture and people
- Speaking and writing the language
- Donations to charity or philanthropy work or hurricane disasters
- Participation in public life
- Family ties
- Research, development, and new technologies benefiting local people
- Establishing business and creating jobs for local citizens
- Armed forces or military service
- Frequent trips
Citizenship should be based on a ‘genuine link’. As defined by the International Court of Justice (ICJ) in the Nottebohm case (1955), citizenship is ‘a legal bond having as its basis a social fact of attachment, a genuine connection of existence, interests, and sentiments, together with the existence of reciprocal rights and duties’.
Viviane Reding, EU Justice Commissioner said Member States should only award citizenship to persons where there is a “genuine link” or ‘genuine connection” to the country in question.
The concept of genuine link can only be explained through Nottebohm case which shook the foundations of citizenship for decades. The story of Nottebohm goes like this.
Friedrich Nottebohm was born September 16, 1881, in Hamburg, Germany. In 1905, he moved to Guatemala, where he went into business in trade, banking, and plantations with his brothers. The business prospered, and Nottebohm became its head in 1937. Nottebohm would live in Guatemala until 1943 as a permanent resident without ever acquiring Guatemalan citizenship. He would sometimes visit Germany on business, and had friends and relatives in both countries. He also paid a few visits to Liechtenstein to see his brother Hermann, who had moved there in 1931 and became a citizen.
In 1939, Nottebohm again visited Liechtenstein, and on October 9, 1939, shortly after World War II began, he applied for citizenship. His application was approved and he became a citizen. Under German law, he lost his German citizenship. In January 1940, he returned to Guatemala on a Liechtenstein passport and informed the local government of his change of nationality.
Although originally neutral, Guatemala soon sided with the Allies and formally declared war on Germany on December 11, 1941. In spite of his Liechtenstein citizenship, the Guatemalan government treated Nottebohm as a German citizen. As part of a massive program in which the US co-operated with various Latin American countries to intern in the US over 4,000 persons of German ancestry or citizenship, Nottebohm was arrested by the Guatemalan government as an enemy alien in 1943, handed over to a US military base, and transferred to the US, where he was interned until 1946. The Guatemalan government confiscated all his property in the country, and the US government also seized his company’s assets in the US. In 1950, the US government returned to the Nottenbohm family about half the value of what it had seized. The Guatemalan government held on to his property and returned 16 coffee plantations to his family only in 1962, after he had died. After his release, he returned to Liechtenstein, where he lived for the rest of his life.
In 1951, the Liechtenstein government, acting on behalf of Nottebohm, brought suit against Guatemala in the International Court of Justice for what it argued was unjust treatment of him and the illegal confiscation of his property. However, the government of Guatemala argued that Nottebohm did not gain Liechtenstein citizenship for the purposes of international law. The court agreed and so stopped the case from continuing.
Although the Court stated that it is the sovereign right of all states to determine its own citizens and criteria for becoming one in municipal law, such a process would have to be internationally scrutinized if the question is of diplomatic protection. The Court upheld the principle of effective nationality (the Nottebohm principle): the national must prove a meaningful connection to the state in question. That principle had previously been applied only in cases of dual nationality to determine the nationality that should be used in a given case. The court ruled that Nottebohm’s naturalization as a citizen of Liechtenstein had not been based on any genuine link with that country, but for the sole purpose of enabling him to replace his status as the national of a belligerent state with that of a neutral state in a time of war. The Court held that Liechtenstein was not entitled to take up his case and put forward an international claim on his behalf against Guatemala
In his paper Marco Mazzeschi, warns Second passport seekers without establishing a genuine, real and effective bond of attachment with the State which grants the second nationality (especially when the acquisition of a second citizenship is mostly driven by fiscal reasons) their costly shopping can result in an empty bag.
Therefore, CBI citizens are required to make more effort to establish genuine link to their new country, even after receiving their shiny new passport.
