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Commission issues guidelines

Restrictions on sale of agricultural land

The European Commission has issued guidelines to help their Member States protect agricultural land from threats such as excessive price speculation and concentration of ownership. EU Member States have the right to restrict the sale of arable land to preserve rural communities and promote sustainable agriculture. However, they must comply with EU law, in particular the rules on the free movement of capital.

In 2015, the Commission initiated infringement proceedings against a number of Member States which had discriminated against investors from other EU countries and had placed undue obstacles to cross-border investment.

In yesterday's communication, the Commission gives the Member States information on what they can do on the basis of the case law of the Court of Justice of the European Union to regulate the sale of agricultural land.

Cornerstones of the Commission's guidelines

The guidelines clarify how Member States are empowered to adopt measures to curb the sale of agricultural land. As clarified by the Court of Justice of the European Union, some restrictions may be acceptable under certain conditions:
  • Prior authorizations by the national authorities to purchase land;
  • Restrictions on the size of the area to be acquired;
  • Pre-emption rights which allow certain categories of buyers to purchase agricultural land before they are sold to others. Buyers who benefit from these rights may be tenants, neighbors, co-owners and the state;
  • Price intervention by the state.

However, EU law does not allow for discriminatory restrictions such as general residence regulations as a prerequisite for the purchase of land.

Disproportionate restrictions on cross-border investment are unlawful. According to the law, the following are disproportionate:

  •    To impose the obligation to farm the acquired lands themselves;
  •     Prohibiting companies from purchasing land;
  •    To impose agricultural qualifications connected to the acquisition of land.

Yesterday's communication is the result of a request from the European Parliament last March, calling on the Commission to establish clear and comprehensive criteria for the regulation of the land sales market in order to ensure a level playing field in line with EU law.

Source: ec.europa.eu

Publication date: 10/18/2017


 


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