Keywords
Summary

Keywords

1 Freedom of movement for persons - Freedom of establishment - Free movement of capital - Treaty provisions - Scope - National legislation regulating the acquisition of land - Covered

(EC Treaty, Art. 54(3)(e) (now, after amendment, Art. 44(3)(e) EC); Council Directive 88/361, Annex I)

2 Accession of new Member States to the Communities - Austria - Finland - Sweden - Freedom of movement for persons, free movement of services and capital - Transitional measures concerning Austria - Existing legislation regarding secondary residences - Concept of `existing legislation'

(1994 Act of Accession, Art. 70)

3 Free movement of capital - Restrictions on the acquisition of immovable property - Transitional measures, under the 1994 Act of Accession, concerning Austria - Scheme, adopted before the date of accession, for prior authorisation of the acquisition of immovable property - Exemption only for own nationals - Justification put forward - Article 70 of the Act of Accession

(EC Treaty, Art. 73b (now Art. 56 EC); 1994 Act of Accession, Art. 70)

4 Free movement of capital - Restrictions on the acquisition of immovable property - Transitional measures, under the 1994 Act of Accession, concerning Austria - Scheme, adopted after the date of accession, for prior authorisation of the acquisition of immovable property - Whether justified - No justification

(EC Treaty, Art. 73b (now Art. 56 EC); 1994 Act of Accession, Art. 70)

5 Community law - Rights conferred on individuals - Where breached by a Member State - To be assessed by the national courts

6 Community law - Rights conferred on individuals - Where breached by a Member State - To be assessed by the national courts - Obligation to make reparation for damage caused to individuals - In federal States, reparation to be ensured by public authorities - Application of national law - Limits

Summary

1 National legislation on the acquisition of land must comply with the provisions of the Treaty on freedom of establishment for nationals of Member States and the free movement of capital. As is apparent from Article 54(3)(e) of the Treaty (now, after amendment, Article 44 EC), the right to acquire, use or dispose of immovable property on the territory of another Member State is the necessary corollary of freedom of establishment. Capital movements include investments in immovable property on the territory of a Member State by non-residents, as is clear from the nomenclature of capital movements set out in Annex I to Directive 88/361 for the implementation of Article 67 of the Treaty.

2 The concept of `existing legislation' within the meaning of Article 70 of the 1994 Act of Accession - a provision which permits Austria to maintain its existing legislation regarding secondary residences for five years from the date of accession - is based on a factual criterion, so that its application does not require an assessment of the validity in domestic law of the national provisions at issue. Thus, any rule regarding secondary residences which was in force in the Republic of Austria at the date of accession is, in principle, covered by the derogation laid down in Article 70 of the Act of Accession. It would be otherwise if that rule were withdrawn from the domestic legal system by a decision by the constitutional court of the Member State concerned subsequent to the date of accession but with retroactive effect from before that date, thereby eliminating the provision in question as regards the past, it being for the courts of that Member State to assess the temporal effects of declarations of unconstitutionality made by the constitutional court of that State.

3 Article 73b of the Treaty (now Article 56 EC) and Article 70 of the 1994 Act of Accession do not preclude a scheme for acquiring land such as that introduced by the Tiroler Grundverkehrsgesetz 1993 (Tyrol Law on the Transfer of Land), exempting only Austrian nationals from having to obtain authorisation before acquiring a plot of land which is built on and thus from having to demonstrate, to that end, that the planned acquisition will not be used to establish a secondary residence. Although that legislation creates a discriminatory restriction against nationals of other Member States in respect of capital movements between Member States, that is authorised by the Act of Accession which allows Austria to maintain its existing legislation regarding secondary residences for five years from the date of accession.

4 Article 73b of the Treaty (now Article 56 EC) and Article 70 of the 1994 Act of Accession preclude a scheme for acquiring land such as that introduced by the Tiroler Grundverkehrsgesetz 1996 (Tyrol Law on the Transfer of Land), which places all prospective acquirers of land under an obligation to apply for administrative authorisation prior to the acquisition of such property.

As regards Article 73b, such a requirement entails, by its very purpose, a restriction on the free movement of capital and constitutes a restrictive measure which can be justified only if it meets a town and country planning objective such as maintaining, in the general interest, a permanent population and an economic activity independent of the tourist sector in certain regions, provided that it is not applied in a discriminatory manner and that the same result cannot be achieved by other less restrictive procedures. That is not the position, however, given the risk of discrimination inherent in a system of prior authorisation for the acquisition of land and the other possibilities at the disposal of the Member State concerned for ensuring compliance with its town and country planning guidelines.

As regards the purported justification based on Article 70 of the Act of Accession, which enables Austria to maintain its existing legislation regarding secondary residences for five years from the date of accession, the relevant provisions of the 1996 Law cannot be covered by the derogation provided for by that provision. Although no measure adopted after the date of accession is, by that fact alone, automatically excluded from the derogation - for example, it is covered by the derogation if, in substance, it is identical to the previous legislation or limited to reducing or eliminating an obstacle to the exercise of Community rights and freedoms in the earlier legislation - legislation such as that at issue, which is based on an approach which differs from that of the previous law and establishes new procedures, cannot be treated as legislation existing at the time of accession.