The European Commission has today decided formally to request Bulgaria, Hungary, Lithuania and Slovakia to submit their observations on their laws regulating the acquisition of agricultural land. These laws contain several provisions which, under EU law, may be considered to restrict the free movement of capital and freedom of establishment. Any restriction of these basic Treaty freedoms must be justified and comply with the principles of non-discrimination and proportionality. While Member States are permitted to set their own rules to promote rural development, to keep land in agricultural use and avoid speculative pressure on land prices, this must be done within the limits of EU law.
In the Commission's view, the provisions in question also contain certain restrictions that may leave room for discriminatory treatment of investors from other Member States. These include: a residence requirement in the given country; restrictions on persons without a local residence or previous local business activities; various restrictions on persons lacking professional knowledge, on ceding the use of land or on legal persons, as well as legal uncertainty related to the prior approval of sales contracts.
The Commission's requests take the form of a letter of formal notice, the first stage of infringement procedures under Article 258 of the Treaty on the Functioning of the European Union. The Member States concerned have two months to respond.
Further information on free movement of capital rules can be found at:
On the March infringement package decisions, MEMO/15/4666
On the general infringement procedure, see MEMO/12/12
For more information on infringement procedures: