Malta has rejected EU calls to stop the sale of "golden passports", saying that granting citizenship is within the national competence of the member state and should remain so, Reuters reported.

The Mediterranean island's reaction comes after the European Commission issued a motivated opinion explaining why Malta needs to stop selling citizenship and warning of legal action if the practice continues.

The Commission considers that the granting of EU citizenship in exchange for predetermined payments or investments without any real link to the Member State concerned is a violation of EU law. Such citizenship schemes undermine the essence of EU citizenship and have implications for the Union as a whole. Every person who has the citizenship of an EU Member State is at the same time an EU citizen. EU citizenship automatically entitles you to free movement, access to the EU internal market, and the right to vote and be elected in European and local elections. The inherent risks of such schemes were once again highlighted in the context of Russian aggressionagainst Ukraine.

The Commission launched similar actions against Cyprus and Bulgaria last year. Both countries have since stopped processing new citizenship applications, and in October Nicosia canceled the citizenship of 39 investors.

Malta on March 2 suspended applications from Russia and Belarus, but continues to accept applications from other wealthy foreigners, in particular from China and other Asian and Arab countries.

Prime Minister Robert Abela has repeatedly defended the program, saying it is based on rigorous testing and is an important source of income.

It is partly because of these funds that we have been able to help our businesses and families during the pandemic, he said.