In a judgment of 11 June 2020 (KOB, C-206/19), the Court of Justice of the European Union found that certain conditions for the acquisition of agricultural land in Latvia are contrary to the Services Directive.
The Latvian legislation at issue in this judgment imposes several requirements for the acquisition of agricultural land. According to this legislation, a company that is represented or controlled by nationals from other Member States must comply with two additional conditions in order to obtain an authorisation to buy agricultural land in Latvia. In particular, companies must demonstrate that their non-Latvian representatives (i) have registered as residents in Latvia and (ii) have sufficient knowledge of the Latvian language corresponding to at least level B.2.
A company decided to challenge this legislation when it was denied the necessary authorisation to buy agricultural land for not complying with these conditions. Convinced that these conditions may run counter to internal market law, the referring court decided to refer the case to the Court of Justice for a preliminary ruling.
In its judgment, the Court of Justice first clarified that the above legislation must be assessed in light of the Services Directive, and more particularly Articles 9 to 14 of the Directive which harmonise the rules on the freedom of establishment for services providers.
Following a very short analysis, the Court of Justice concluded that both the authorisation procedure as a whole and the conditions in particular are discriminatory and therefore in violation of the Services Directive. Specifically, as pointed out in the judgment, authorisation schemes that discriminate against service providers violate Article 9(1)(a) of the Directive, while conditions for the granting of authorisation which discriminate on the basis of nationality are prohibited by Article 10(2)(a) and Article 14(1) of the Directive.
Please contact Pierre de Bandt or Jeroen Dewispelaere for further information on this case and/or for general legal advice relating to internal market rules.