On 19 September 2014, the Government of Georgia approved the package of reforms concerning the new rules for selling agricultural land to foreigners. If the Parliament of Georgia approves the amendments (the bill has not yet come into force), various restrictions will be imposed upon foreign individuals and legal persons for possessing and purchasing agricultural land. Member of the Parliamentary Minority, Giorgi Gabashvili, commented upon the approval of the reforms package by the Government. He said: “The Constitutional Court says that the moratorium on the sale of land is non-constitutional. Bypassing the aforementioned, the Ministry of Justice says that if one spouse is Georgian and another is a foreigner and if they get divorced, the foreigner is obliged to sell all assets purchased in Georgia.”FactCheck
verified the accuracy of Mr Gabashvili’s statement.
The verdict of the Constitutional Court of Georgia regarding the case of Citizen of Austria Mathias Huter against the Parliament of Georgia was published on 24 June 2014. The Constitutional Court published a decision on a similar case on 26 June 2012; namely, Citizen of Denmark Heike Kronqvist against the Parliament of Georgia.
In 2012, Heike Kronqvist, a citizen of Denmark, appealed a norm of the then acting Law of Georgia on the Possession of Agricultural Land according to which a foreign individual could gain ownership of agricultural land only by inheritance or by possessing the land legally as a Georgian citizen. Moreover, according to the then edition of the law, a foreigner who gained ownership of agricultural land was obliged to sell it to a citizen, household or a legal person registered in Georgia within six months from acquiring ownership. Therefore, the edition of the law in force in 2012 did not allow foreigners to possess agricultural land except when it was obtained by inheritance or in the cases of lawful possession. Even in the event of these exceptional cases, a foreigner was obliged to sell the property within a six month period.The Constitutional Court pointed out that restricting the right to property is justified only in the cases when such restriction is determined by law, serves a legitimate goal and is a necessary and adequate tool for achieving it. The legitimate goals for restricting the right to property were defined as protecting state security and supporting the improvement of the agricultural sector. According to the representative of the Parliament in the Court, this norm served to prevent the massive purchase of land on the territory of Georgia by citizens of wealthier countries and did not allow the massive transfer of agricultural land to foreigners. The Constitutional Court decided that the state has the opportunity to support the improvement of the agricultural structure regardless of the nationality of the landowner. The Court also added that the possession of land by a foreigner does not correlate with state or ecological security. The plenum of the Constitutional Court made a decision that there was no logical connection between the legitimate goal and the means for achieving it.
Therefore, the Court announced the norms appealed by Heike Kronqvistas unconstitutional.
After issuing the aforementioned verdict, foreigners were permitted to purchase agricultural land. On 28 June 2013, the Parliament of Georgia made an amendment to the Law of Georgia on the Possession of Agricultural Land that disabled foreigners from acquiring land on the territory of Georgia until 31 December 2014 meaning that a moratorium was announced on purchasing agricultural land by foreigners.Mathias Huter, a citizen of Austria, appealed the amendments made by the Parliament of Georgia on 28 June 2013. The claimant argued that the norm was violating the right to property and was discriminative by its nature. Mr Huter also added in his claim that the norm was analogous to the norm voided by the Constitutional Court. According to the Organic Law of Georgia on the Constitutional Court, the Constitutional Court issues a recording note concerning the adoption of a claim whilst it only issues a verdict if a claim is rejected. The only case when the Constitutional Court can void a norm without any substantial discussion is when the normative act or a part of it contains substantially the same notes which have been recognised as unconstitutional by the Constitutional Court.
The claimant was admitting that the amendment adopted by the Parliament was exactly analogous in nature.The Constitutional Court pointed out that the similarity between the norms should be assessed based not only upon the formal view but also upon the estimated legal consequences which are likely to be uniting the disputed norms. According to the reasoning of the Court, the legitimate goal of the amendment was analogous to the void norm as both deprived foreigners of the right to possess agricultural land of any category. Moreover, the Constitutional Court decided that the amendment made by the Parliament was a stricter prohibition as it was ruling out the possibility of a foreigner temporarily possessing land. The Court also discussed the extent to which the nature of the norm was influenced by the temporary restriction in place until 31 December 2014. The Court decided that this fact did not have a decisive importance as the norm was declared unconstitutional because it did not logically connect with the legitimate goal mentioned by the Parliament and not because of a harsh or intensive violation of rights.
Considering these aforementioned reasons, the Constitutional Court regarded the adopted amendment as analogous to the void norm and did not accept it for consideration, declaring it unconstitutional.
Giorgi Gabashvili stated that the new bill initiated by the Ministry of Justice was one of the ways to avoid the decision of the Constitutional Court. The package approved by the Government of Georgia embodies the following amendments:
- A company or any other legal person, whichis based abroad, is not allowed to purchase agricultural land in Georgia.
- A foreign individual or company will not be able to purchase land within a five-kilometre strip adjacent to the border of Georgia and the respective border area as defined by the Government of Georgia.
- If one spouse is a citizen of Georgia and another is a foreigner, in the case of divorce, the spouse who is a citizen of Georgia has the preferential right to purchase the land. If the ex-spouse does not use this right, the foreign ex-spouse will be obliged to sell the land.
- Companies founded in Georgia will have the right to purchase agricultural land only in the case if they have at least five years of experience working in the agricultural sector in Georgia. A foreign individual, apart from the five years of relevant experience, is required to hold a permanent residence permit oran investment residence permit.
- Under these conditions, foreign individuals and legal persons will have the right to purchase no less than five and no more than 100 hectares of agricultural land.
- Moreover, foreigners who receive agricultural land by inheritance will have the right to possess them.
Therefore, the Constitutional Court may regard the sale of land within the border area as inappropriate.The new criteria proposed by the bill stating that a foreign spouse is obliged to sell any land that is in co-ownership comprise a matter of separate discussion. FactCheck
believes that such a restriction might not meet the criteria of proportionality of the Constitutional Court as it is absolute in its nature and envisages the full deprivation of the land owned by a person. Nevertheless, the new criteria proposed by the Government of Georgia (in the case of the Parliament approving them) are subject to a separate and independent assessment based upon a reference from a concerned person and this is a new matter of discussion for the Constitutional Court.Of note is that FactCheck has researched
the European practice concerning this issue as well. As it turned out, restrictions upon foreign citizens purchasing agricultural land have indeed existed in Poland, the Czech Republic and Romania before these countries became members of the EU although these restrictions were not full prohibitions.Naturally, it is impossible to say without the discussion of the Constitutional Courtwhether or not the proposed amendments are constitutional. FactCheck
does not rate the constitutionality of the initiated norms. As Mr Gabashvili notes, these amendments represent a way to avoid the decision of the Constitutional Court, meaning that the amendment is unconstitutional. It is clear that the Government of Georgia is endeavouring to impose certain restrictions upon foreigners who try to purchase agricultural land. Even though the 2012 decision of the Constitutional Court was in existence, the Parliament nonetheless decided to impose a temporary moratorium on the purchase of land. After the Constitutional Court cancelled this norm, the Government of Georgia published a new bill of amendments that imposes conditional, rather than absolute, restrictions upon the purchase of land.
On 26 June 2012, the Constitutional Court of Georgia issued a decision on the case of Citizen of Denmark Heike Kronqvist against the Parliament of Georgia. Based upon the decision, the norms of the Law of Georgia on the Possession of Agricultural Land which prohibited foreigners from possessing agricultural land were voided. The Constitutional Court pointed out that the restriction was not a legitimate means for achieving a legitimate goal.
Later, on 28 June 2013, the Parliament of Georgia adopted the package of amendments according to which foreigners were prohibited from purchasing land until 31 December 2014. Mathias Huter, a citizen of Austria, addressed the Constitutional Court of Georgia with a claim and demanded the norm to be voided as it violated his right to property and was analogous to the discriminative norm which had already been voided by the Constitutional Court. The Constitutional Court agreed with the claimant and declared the norm unconstitutional without substantial discussion.
On 19 September 2014, the Government of Georgia approved a bill that imposes conditional, rather than absolute, restrictions upon foreigners wishing to purchase land. The extent to which this corresponds to the Constitution of Georgia may become a matter of discussion for the Constitutional Court of Georgia. Nevertheless, a part of the proposed amendments; more precisely, the rule for selling land by a foreign spouse, might not be a proportional means for achieving a legitimate goal and, therefore, does not correspond to the content of the right to property as granted by the Constitution.The Government of Georgia decided to initiate amendments following the Constitutional Court’s declaring the moratorium unconstitutional. Despite this fact, it is not correct that the aforementioned proposed amendments represent a way for avoiding the decision of the Constitutional Court. FactCheck
considers that the amendment obliging a foreign spouse to sell land which is in co-ownership is absolute in its nature and envisages an unjustified deprivation of the land owned by a person.
Mr Gabashvili is wrong when stating that the foreign spouse is obliged to sell all assets purchased in Georgia based upon the new amendments. The bill of amendments concerns not all assets but only the sale of agricultural land. It should be noted that the initiated amendments do not foresee such total restrictions as they were in the case of the acting norm of 2012 (United National Movement rule) and the moratorium adopted in 2014 (Georgian Dream rule). If the Parliament approves the bill, a foreign individual will still be able to purchase land in Georgia provided the person has five years of experience in the agricultural sector. In addition, it is necessary for the individual to hold a permanent residence permit or an investment residence permit.
In this particular case, we abstain from reaching a verdict although we will continue to work on this issue and provide readers with information in parallel with the development of the process.
Decision of the Constitutional Court of Georgia №3/1/512 of 26 June 2012 on the case of Citizen of Denmark Heike Kronqvist against the Parliament of Georgia, Paragraph 60. Ibid.,
Paragraph 62. Ibid.,
Paragraph 65. Article №25, Part 41
of the Organic Law of Georgia on the Constitutional Court.
Decision of the Constitutional Court of Georgia №1/2/563of 24 June 2014 on the case of Citizen of Austria Mathias Huter against the Parliament of Georgia, Paragraph 9. Ibid.,
Paragraph 13. Ibid.,
Paragraph 20. Decision of the Constitutional Court of Georgia №3/1/512 of 26 June 2012 on the case of Citizen of Denmark Heike Kronqvist against the Parliament of Georgia, Paragraph 69.