Brussels, 17/06/2016 (Agence Europe) - On Thursday 16 June, the European Commission decided to bring an action before the Court of Justice of the EU against Hungary over an infringement of European rules governing the rights of cross-border investors in agricultural land (see EUROPE 11560).
The Commission has several times requested clarifications from Hungary over a law of December 2013, which put an end to various usufruct rights giving beneficiaries the right to use and enjoy real property, with effect from 1 May 2014. This new law provided for a four-month transition period before the end of these contracts, compared to 20 years previously.
The investors, who expected to be able to continue to exploit certain land for 20 years, made their investment decisions on that basis. The new law therefore appears to deprive them of the value of their investments, according to the Commission. “The Commission is of the opinion that this violates the principles of free movement of capital and freedom of establishment” in the EU, according to a press release. (Original in French by Lionel Changeur)