The European Commission has formally requested Bulgaria, Hungary, Latvia, Lithuania and Slovakia to amend legislation on the acquisition of agricultural land on the grounds that it violates the free movement of capital and freedom of establishment.
The Treaty of Accession 2003 provided new Member States with a transitional period in which to bring their national rules on the acquisition of agricultural land into line with EU law. Following the expiration of these periods in 2014, Bulgaria, Hungary, Latvia, Lithuania and Slovakia adopted new laws regulating the acquisition of agricultural land.
These new national rules contain several provisions which the Commission considers to be a restriction to the free movement of capital and freedom of establishment. This may in turn discourage cross-border investment. Some of the restrictions may be pursuing justifiable objectives as they aim to combat speculative purchases, or serve planning purposes and rural policy objectives; however, in order to be lawful, they must be proportionate and cannot be discriminatory towards other EU citizens.
Today's request takes the form of a reasoned opinion. If Bulgaria, Hungary, Latvia, Lithuania and Slovakia fail to bring their national legislation into line with EU law within two months, the Commission may decide to refer these Member States to the Court of Justice of the EU.
Background
The Commission sent so-called 'letters of formal notice' to Bulgaria, Hungary, Slovakia, Lithuania and Latvia in March and April 2015 (see IP/15/4673 of 23 March 2015 and IP/15/4877 of 29 April 2015). After having received the replies from these Member States, the Commission is still concerned about the national provisions which are currently in force.
The main concern in Bulgaria and Slovakia is that buyers must be long-term residents in the country, which discriminates against other EU nationals. Hungary has a very restrictive system which imposes a complete ban on the acquisition of land by legal entities and an obligation on the buyer to farm the land himself. In addition, as in Latvia and Lithuania, buyers must qualify as farmers. While the Commission agrees that national authorities should be able to properly regulate farm land markets to maintain such land in agricultural use and promote local development, it found a number of these measures excessively restrictive and discriminatory in terms of attracting investment in rural development.
More information:
- On the key decisions of the May infringements package, please refer to the full MEMO/16/1823.
- General information on infringements proceedings in the areas of financial services.
- Information on the infringement procedures.
