Brussels, 18 March 2010
Internal Market: Commission acts to remove restrictions on investment in agricultural real estate in Austria
The European Commission has today acted to remove restrictions on investment in agricultural real estate in Austria. Under regional rules, an authorisation procedure is required for the acquisition of land previously used for agricultural purposes and of shares in companies owning agricultural plots. In the Commission's view, the restrictions are unjustified and breach EU principles of free movement of capital and freedom of establishment. The Commission's request to Austria takes the form of a "reasoned opinion", the second stage of the infringement procedure under Article 258 of the EU Treaty. If the national authorities do not reply satisfactorily within two months, the Commission may decide to refer the matter to the Court of Justice.
What is the aim of the EU rules in question?
Free movement of capital and freedom of establishment are fundamental Treaty freedoms which may only be restricted based on a Treaty exception or in the general interest, if measures are non-discriminatory and proportionate.
How is Austria not respecting this rule?
The Tyrol Land Transfer Law (TGVG) requires an authorisation procedure for the acquisition of agricultural land even if plots were previously in agricultural use within the last 10 years. The procedure is also required for shares in limited companies, registered private partnerships or cooperatives, where the company or cooperative in question owns agricultural plots, provided that this results in a decisive influence on the company or cooperative in question. In the Commission's view, both provisions are disproportionate.
How are EU citizens and/or businesses suffering as a result?
Land acquirers from other EU countries face restrictions even if a plot is no longer in agricultural use. Moreover, if they intend to acquire shares in a company which happens to own agricultural plots, the acquisition is subject to prior authorisation. In this way, investment is rendered less attractive.
What are the next steps?
If there is no satisfactory reply, the case may be referred to the Court of Justice of the European Union (see also below).
The case is originally based on a complaint, however other aspects of the Tyrol Land Transfer Law (in the version before its amendment as of October 2009) had also been included in the letter of formal notice sent in May 2009. Some provisions addressed there have been clarified by Austria, or have been repealed or modified. The reasoned opinion deals with remaining issues originally addressed in the letter of formal notice.
About infringement procedures
The European Commission has powers to take legal action – known as infringement procedures – against a Member State that is not respecting its obligations under EU law. These procedures consist of three steps. The first is that the Member State receives a letter of formal notice and has two months to respond. In case the Member State does not entirely comply with EU legislation, the Commission can send a reasoned opinion. Again the Member State has two months to reply. If there is no satisfactory reply, the Commission can refer the matter to the Court of Justice in Luxembourg. It can also request that the Court impose a fine on the country concerned if it does not comply with the Court's ruling.
Free movement of capital:
Latest information on infringement proceedings concerning all Member States: