Conclusions:
Violation of Article 1 of Protocol No. 1 – Protection of property (Article 1 para. 2 of Protocol No. 1 – Control of the use of property)
Respondent State to take measures of a general character (Article 46-2 -General measures)
Non-pecuniary damage – finding of violation sufficient (Article 41 – Non-pecuniary damage Just satisfaction)
FOURTH SECTION
CASE OF ZELENCHUK AND TSYTSYURA v. UKRAINE
(Applications nos. 846/16 and 1075/16)
JUDGMENT
STRASBOURG
22 May 2018
This judgment will become final in the circumstances set out in Article 44 ? 2 of the Convention. It may be subject to editorial revision.
In the cases of Zelenchuk and Tsytsyura v. Ukraine,
The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:
Vincent A. De Gaetano, President,
Ganna Yudkivska,
Paulo Pinto de Albuquerque,
Faris Vehabovi?,
Georges Ravarani,
Marko Bo?njak,
P?ter Paczolay, judges,
and Marialena Tsirli, Section Registrar,
Having deliberated in private on 10 April 2018,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in applications (nos. 846/16 and 1075/16) against Ukraine lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (?the Convention?) by two Ukrainian nationals, OMISSIS (?the applicants?), on 22 and 23 December 2015 respectively.
2. The applicants, who had been granted legal aid, were represented by OMISSIS, a lawyer practising in Kyiv. When the applicants? observations and claims for just satisfaction were submitted on 14 December 2016 the applicants were also represented by OMISSIS, who at that time was a lawyer practising in Kyiv. The Ukrainian Government (?the Government?) were represented by their Agent, Mr I. Lishchyna.
3. The applicants alleged that the legislative restrictions imposed on them as owners of agricultural land had breached their rights under Article 1 of Protocol No. 1 to the Convention.
4. On 4 May 2016 the applications were communicated to the Government.
5. Written submissions were received from EasyBusiness, an non-governmental organisation based in Kyiv, which had been granted leave by the President of the Section to intervene as a third party (Article 36 ? 2 of the Convention and Rule 44 ? 3 of the Rules of Court).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
6. The first applicant was born in 1947 and lives in Dolyna, a city in the Ivano-Frankivsk Region.
In December 1996 her mother obtained a share of land in the village of Kopytkove in the Zdolbunivsky district of the Rivne region (see paragraphs 11 to 14 below concerning the nature of shares of land and their subsequent conversion into plots). Following her mother?s death in November 1999, the first applicant inherited that share and obtained a certificate confirming that she had become its new owner on 25 May 2000. On 10 January 2006 the Zdolbuniv District State Administration allocated a plot of land to her measuring 2.5917 hectares, zoned for use as an individual smallholding (???????? ????????? ????????????, see paragraph 18 below for a description of zoning categories of agricultural land under Ukrainian law).
The applicant obtained a property certificate in respect of that land on 13 August 2007. She rented out 2.0917 hectares to a company under a lease registered on 30 May 2015 and due to expire on 10 November 2021, and 0.5 hectares to another company under a fifteen-year lease registered on 10 August 2016. According to the applicant, she receives rent in kind, either in grain or sunflower oil, depending on the crops grown on the land in a given year.
7. The second applicant was born in 1939 and lives in Ternopil.
On an unspecified date his mother obtained the right to a share of land in the village of Rakovets in the Zbarazh district of the Ternopil region. In November 2004 he inherited it from her. On 27 March 2008 the Zbarazh District State Administration allocated 3.41 hectares of agricultural land to him, zoned for commercial agricultural production (??????? ??????????????????? ???????????). He obtained a property certificate on 22 July 2008.
The land is rented by a limited liability company. Since 2010 the second applicant has received rent in the following amounts:
Year UAH
(in total) UAH
(per hectare) Approximate equivalent in EUR
(per hectare)
2010 729.29 213.87 20
2011 749.44 219.78 20
2012 1316.02 385.93 36
2013 1316.02 385.93 33
2014 1316.02 385.93 19
2015 2191.73 642.74 24
2016 2191.73 642.74 22
8. The applicants? land is subject to legislative restrictions on alienation and change of designated use, which are described in ?Relevant domestic material? and, as regards their current state, in paragraph 22 below.
II. RELEVANT DOMESTIC MATERIAL
A. Background to the legal situation of land ownership in Ukraine
9. Under the laws of the Ukrainian Soviet Socialist Republic, prior to the enactment of the Land Code of 18 December 1990 (hereinafter ?the Land Code?), individuals and non-State entities could not own land and all land was owned by the State.
10. Under Article 17 of the Land Code, local councils were authorised to transfer land to individuals and non-State entities. However, for a period of six years, those who acquired land could not sell or otherwise dispose of it (except in cases of inheritance). They could only transfer the property back to their local council. The courts could shorten this period if there was a valid reason for such a decision.
11. In the 1990s a large proportion of the country?s agricultural land was held by the former Soviet collective and State-owned farms which, under the Law of 14 February 1992 were renamed ?collective agricultural enterprises? (hereinafter ?CAEs? or ?collective farms?).
12. Presidential Decree no. 720/95 of 8 August 1995 provided for a programme of gradual reform of the CAEs through the issuance to their current and former members of shares of land, that is to say land entitlements in the form of shares of the whole land mass of the CAE expressed as a number of hectares but without a specific physical location or defined boundaries. The decree provided that the shares were to be distributed to current and former members of CAEs as well as to certain categories of workers employed in the social sector (education, medicine and so forth) in rural areas. While the decree gave members of the CAEs the ability to withdraw from their CAEs with their shares, the large-scale process of dissolving the CAEs through the issuance of shares did not actually start until 1999 (see next paragraph).
13. Presidential Decree no. 1529/99 of 3 December 1999 accelerated the land reform by requiring the dissolution of all CAEs by April 2000, through the distribution of shares of land and other assets to their members. In the process of dissolving the CAEs, a large proportion of the rural population acquired shares of land.
14. A large-scale process of converting the shares into physical plots of land (defined on the ground) was then organised. As a result of this process, millions of new owners were issued with ownership certificates relating to specific plots of land. The land owned by the applicants underwent this process (see paragraphs 6 and 7 above).
15. According to Parliamentary Resolution no. 882-IV of 22 May 2003 summarising the provisional results of the land reform, during the process 6.87 million Ukrainians obtained shares of land and 3.17 million had them converted into plots of land. Parliament noted some difficulties in the issuance of shares of land and their conversion into plots of land, with some regions falling behind: only 13% of share owners obtained property certificates to plots of land in the Zhytomyr Region, while this figure stood at 96% in the Kirovograd Region. Some 107,000 shares were sold or otherwise disposed of by their new owners, which, according to Parliament, showed that they had not been adequately informed about the land reform and their rights and duties.
Parliament observed that, due to a lack of funding, the Cabinet of Ministers was only planning to complete the share conversion and titling work by 2006, which made it impossible to introduce the land sales market from 1 January 2005, as the Land Code provided at the time (see paragraph 19 below).
B. The initial ?land moratorium?
16. Law no. 2242-III of 18 January 2001 prohibited, until the enactment of a new Land Code, the alienation of shares of land, except in cases of inheritance and expropriation for public needs.
17. On 25 October 2001 a new Land Code was enacted. It entered into force on 1 January 2002.
18. Article 22 ? 3 of the new Land Code defines the following categories of designated use for agricultural land: (i) individual smallholdings; (ii) land for fruit and vegetable growing; (iii) land for pasture and hay harvesting; (iv) land for commercial agricultural production; and (v) individual farming enterprises, that is to say commercial entities owned by individual farmers engaged in commercial agricultural production.
19. Article 15 of the Transitional Provisions of the new Land Code provided that until 1 January 2005 individuals and non-State entities could not sell or otherwise transfer title to two categories of land in their ownership: (i) plots zoned for individual farming enterprises or for other commercial agricultural production and (ii) shares of land. Swap transactions, inheritance cases and expropriation for public needs were exempt from the ban. The ban, which has been subsequently extended and modified (see the Table in paragraph 21 below) is commonly referred to in Ukraine as the ?the land moratorium? (????????? ?????????).
20. According to the Government, the transcript of the parliamentary session at which the new Code was passed shows that the moratorium was introduced in view of the need for additional time to form a land market with ?adequate? prices and enact legislation necessary for the creation of such a market. In particular, according to the transcript, at the opening of the debate Member of Parliament V. Asadchev expressed his concern that, if rules of the Code concerning the transfer of land into private hands were to be adopted, this would create a few large landowners (?????? ?????????????) and transform the rest of the population into hired agricultural labour (???????). In presenting the draft Code for the vote, Ms K. Vashchuk, Chairwoman of the Parliamentary Committee for Land Affairs and Agriculture, stated that, in order to address concerns such as those expressed by the MP, the draft suspended the operation of all provisions concerning the sale of land until 2005, until laws on the creation of a land cadastre, land registration and others were passed and a State land bank was established.
C. Changes in the moratorium and its current form
21. The Land Code was amended on a number of occasions as to both the duration and scope of the original ban, as summarised in the Table below:
Table Key legislative developments concerning the land moratorium
No. Date of the law End date of the ban Changes in the scope of the moratorium and other related changes Summary of the reasons given in the explanatory note to the draft law
1 06/10/2004 01/01/2007 Swap transactions involving land, including swaps of land for equity in companies, prohibited Legislation governing the land market had not yet been developed by the Cabinet of Ministers; technical work was needed to prepare the administrations for processing land transactions. The ?extension? was needed to prevent ? impoverishment of the Ukrainian people? and the buying up of land by Ukrainian and foreign tycoons (???????)
2 09/02/2006 Contracts and powers of attorney envisaging future (after expiry of the moratorium) transfers of land subject to the moratorium declared invalid Legislation aimed at preventing circumvention of the moratorium through the issuance of powers of attorney by land owners to third parties authorising them to dispose of the land subject to the moratorium
3 19/12/2006 01/01/2008 Moratorium extended, in addition to land for commercial agricultural production, to individual smallholdings (see paragraph 18 above); any change of designated use of the land subject to the moratorium forbidden; swap transactions involving a swap of one land plot for another allowed again Develop private land ownership, ensure the unrestricted exercise of owners? rights, and ensure free circulation of land except in the cases provided for by law. The creation of a land market would allow transfers of land to more efficient users but in order to do so the market had to be subject to reasonable regulation. Such regulation should include: limits on changing the designated use, the imposition of criteria to qualify as a buyer of land, limiting the maximum plot sizes of certain land and the concentration of land in the hands of a single person and family etc.
4 28/12/2007 and 03/06/2008 Until entry into force of the Land Cadastre Act and Land Market Act No notable changes The amendments were incorporated in omnibus bills covering mostly budgetary matters and containing a wide range of changes; there were apparently no specific comments made on the moratorium issue
5 19/01/2010 Until entry into force of the Land Cadastre Act and Land Market Act, but not before 01/01/2012 No notable changes Legislation regulating land relations had not yet been developed; technical work was needed to prepare administrations for processing land transactions. The ?extension? was needed to prevent ?impoverishment of the Ukrainian people? and the buying up of land by Ukrainian and foreign tycoons
6 07/07/2011
and 01/01/2013
Land Cadastre Act was enacted and entered into force
7 09/12/2011 Parliament approved the draft Land Market Act at the first reading (see paragraph 40 below). It appears that no further progress on the bill was made In the course of the parliamentary debate it was proposed to rename the Land Market Act the Circulation of Agricultural Land Act (?the CALA?).
8 20/12/2011 Until entry into force of the Land Market Act, but not before 01/01/2013 No notable changes The Land Cadastre Act would enter into force on 1 January 2013 and the end of moratorium should be set for that specific date
9 02/10/2012 Change of designated use was allowed where land was allocated to an investor under a production-sharing agreement Encourage investment under production-sharing agreements, particularly in the field of the exploration and extraction of hydrocarbons
10 20/11/2012 Until entry into force of the CALA, but not before 01/01/2016 The law extending the moratorium instructed the Cabinet of Ministers to produce the draft CALA and submit it to Parliament within six months. Even though the draft Land Market Act had been approved at the first reading on 9 December 2011, it had not yet been passed into law. A change to the concept of that bill was envisaged, with the name changing to the CALA. An ?extension? of the moratorium was needed to develop an effective mechanism for sales and overseeing sales of land and to prevent possible abuses
11 10/11/2015 The same as in row 10, but not before 01/01/2017 The law extending the moratorium instructed the Cabinet of Ministers to produce the draft CALA and submit it to Parliament by 01/03/2016 Lifting the moratorium in times of war and economic crisis would be a threat to national and food security and the threat of a loss of land, as an important national resource. A step-by-step roadmap for introducing agricultural land into circulation, which would be clear to the public, needed to be developed. The moratorium created difficulties in obtaining finance for agricultural production, and led to depopulation of the countryside. In order to solve these and other problems created by the moratorium, the CALA had to be passed and the land eventually introduced into circulation
12 06/10/2016 The same as in row 10, but not before 01/01/2018 Draft CALA to be submitted by 01/07/2017 Apparently no such draft was submitted by the Cabinet of Ministers by this or the previously set deadlines, although two drafts of the CALA were submitted in 2016 by certain MPs (see paragraph 43 below)
While the creation of a land market was a necessary element of the development of a market economy, the market had to be transparent and fair, competitive and efficient, and be able to prevent shadow transactions. Therefore the ?extension? was needed to develop legislation regulating the land market
13 07/12/2017 The same as in row 10, but not before 01/01/2019 Draft CALA to be submitted by 01/07/2018 Abolition of the moratorium in times of war and economic crisis without having in place legislation regulating the circulation of agricultural land would create risks for national and food security. A lifting of the moratorium had to be preceded by legislative work to encourage the creation of a network of strong farmers? enterprises and cooperatives. The prohibition on the sale of agricultural land was a barrier for attracting investment in the agricultural sector since land could not be used as security for loans, but its lifting could not be the end in itself and needed to be thought of as a measure to encourage investment in the agricultural sector without, at the same time, leading to landlessness among the rural population
22. As at today?s date, the Transitional Provisions of the Land Code prohibit alienation in any form of most agricultural land, including of the categories owned by the applicants, except in cases of inheritance, swap transactions and expropriation for public use. They also prohibit any change in the designated use of such land, except where it has been allocated to an investor under a production-sharing agreement. Currently the Transitional Provisions state that those restrictions are to remain effective until the entry into force of the Circulation of Agricultural Land Act (?the CALA?), but in any case at least until 1 January 2019.
D. Constitutional matters
23. Article 13 ? 1 of the Constitution of 1996 provides that land, its subsoil, air, water and other resources are the property of the Ukrainian people (? ????????? ????? ????????? ???????????? ??????). Article 13 ? 4 requires the State to ensure protection of the rights of all property owners and economic players and social orientation of the economy. Article 14 ? 1 provides that land is the main national asset, and is under the special protection of the State. Article 14 ? 2 guarantees the right to land ownership and provides that land ownership may be acquired and exercised by citizens, legal entities and the State in accordance with the law.
24. Article 22 provides that human and citizens? rights and freedoms are guaranteed and may not be diminished by the enactment of new laws or the amendment of laws that are already in force.
25. Article 41 of the Constitution reads:
?Everyone shall have the right to own, use, or dispose of his or her property and the results of his or her intellectual or creative activities.
…
No one shall be unlawfully deprived of the right to property. The right to private property shall be inviolable…?
26. On 17 February 2017 fifty-five Members of Parliament lodged an application with the Constitutional Court seeking to have the Law of 6 October 2016 reaffirming the moratorium declared unconstitutional. They invoked Articles 13, 14, and 41 of the Constitution set out above as well as Articles 8 (the principle of the rule of law), 24 (non-discrimination), 42 (the right to enterprise), 48 (the right to a sufficient standard of living), and 64 (general provision concerning the restriction of constitutional rights) of the Constitution.
On 14 February 2018 the Constitutional Court rejected the application without examining it on the merits. It found the arguments presented in support of that application for abstract review insufficiently developed to permit the opening of the constitutional review proceedings and its substantive examination. It concluded that the application failed to meet the requirements of section 51 ? 3 of the Constitutional Court Act which sets out the details an application must contain, namely the reasoning as to why the applicant considered a given provision unconstitutional.
According to the information on the Constitutional Court?s web site, as of 6 April 2018, which appears to be the most recent information publicly available on the date of examination of the case by the Court, there was no new application for constitutional review of the matter in question pending.
E. Taxation and rules governing land ownership
27. Article 281.3 of the Tax Code of 2010 exempts from property tax land rented to commercial agricultural producers benefitting from the simplified taxation regime. Article 281.1.3 exempts old-age pensioners from the payment of land tax.
28. Article 78 ? 1 defines ownership as the right to possess, use and dispose of land.
29. Article 81 ? 2 and Article 82 ?? 2 and 3 provide that foreign nationals, stateless persons, foreign legal entities and legal entities with foreign capital can only own non-agricultural land of certain categories.
30. Article 91 requires land owners to use land according to its designated use category, respect environmental rules, improve land fertility, respect neighbours? rights, and so forth. Article 143 provides that a court may order expropriation of land without compensation in cases of failure to respect the designated use of the land or rectify a serious breach of land protection rules despite a warning from the land protection authorities.
31. Article 130 provides that land zoned for commercial agricultural production can only be acquired by a Ukrainian national with sufficient educational qualifications or experience to engage in agricultural production or by a Ukrainian legal entity which has agriculture listed in its articles of association among the types of business it can engage in. The municipality where the land is located, as well as its permanent residents, have a right of first refusal in respect of the land sold.
32. Item 13 of the Transitional Provisions of the Code, as in force in 2001, provided that a single person or entity could not acquire more than 100 hectares of agricultural land. The Law of 6 October 2004 (the first extension of the moratorium ? see row 1 of the Table in paragraph 21 above) extended that limitation to 1 January 2015. It expired on that date. However, given that most agricultural land could not be sold throughout the period, it would appear that the restriction never had much practical application.
F. Rules and statistics concerning the land lease market
33. The Land Lease Act (section 21) provides that rent is set by agreement of the parties. However, Presidential Decree no. 92/2002 of 2 February 2002 instructed the Cabinet of Ministers and local executive authorities to take operational measures to ensure that the level of rent under land leases would be at least 3% of the land?s estimated value. According to the statistics published by the State Land Cadastre Agency, in 2013 74.4% of leases provided for rent of at least 3% of the value.
34. Section 19 of the Land Lease Act provides that for the main categories of agricultural land, the term of lease cannot be less than seven years and, for any lease, cannot exceed fifty years.
35. The State Land Cadastre Agency published certain statistics concerning the land lease market in Ukraine on which the parties relied in their submissions:
(i) as at 2013 there were 4,741,400 leases concerning shares of land in former CAEs or plots converted from former shares, covering 17.5 million hectares. Of them 35.5% were with entities which were successors of former collective farms, 14.2% with individual farming enterprises (see paragraph 18 above) and 50.3% with other entities. The national average rent was UAH 563.50 (around EUR 48 at the time). 52.2% of landlords were pensioners;
(ii) as at April 2015 the number of leases rose to 4.8 million, the national average annual rent was UAH 727.6 per hectare (about EUR 29 at the time) and the average rent for the Rivne and Ternopil regions, where the first and the second applicant?s land was located, were UAH 1068.80 and 546.10 per hectare (EUR 42 and 21 respectively).
G. Policy statements and plans, legislative proposals and public attitudes towards the moratorium
36. On 31 May 2002, in his annual address to Parliament on the state of the nation, the President of Ukraine stressed the need to create the structure for an efficient and transparent land market by 2005, when the moratorium would expire. Important aspects were the creation of a transparent property registration system, introduction of the ability to use land as security for mortgage financing and completion of the conversion of shares of land into plots and the issuance of property certificates.
37. Coalition Agreements of 22 June 2006 and 29 November 2007 and an action programme of the Cabinet of Ministers of 16 January 2008 stated, in nearly identical terms, that the coalition and government had the following priorities: creation of the conditions for the functioning of the land market (issuance of ownership certificates, demarcation of boundaries of plots of land, putting the land cadastre into operation, land valuations, introduction of the mechanism for land market regulation) and then revocation of the moratorium.
38. On 17 June 2009 the Cabinet of Ministers approved the outline of a State programme for the development of land relations until 2020. It noted a number of problems in land relations and listed a number of measures to resolve them, including the gradual introduction into circulation of land and rights to it and the creation and development of a land market.
39. On 7 April 2011, in his annual address to Parliament on the state of the nation, the President of Ukraine stated that the moratorium was preventing the transfer of land to efficient owners, thus slowing down the development of the agricultural sector. Steps in order to introduce a regulated land market had to be taken urgently.
40. On 9 December 2011 Parliament approved the draft Land Market Act at the first reading (see paragraph 21 above). The draft law provided that only citizens of Ukraine, municipalities and the State could acquire agricultural land. A single citizen would not be permitted to own more than 100 hectares of land zoned for commercial agricultural production or rent more than 6,000 hectares of such land in any one district or more than 5% of the land in any one region. The caps would also apply to those associated with the individual. The bill provided that owners of neighbouring land would have a right of first refusal in the event of alienation of agricultural land and that such land could not be sold for less than the price determined by an expert, a procedure to be regulated by law. Rezoning of formerly publicly owned agricultural land would be prohibited for ten years after acquisition. The bill also contained a number of other rules aimed at safeguarding the efficient use of agricultural land.
41. On 3 July 2012, in his annual address to Parliament on the state of the nation, the President of Ukraine stated that that year, before revocation of the moratorium, a mechanism for the effective protection of the interests of agricultural producers and of food security of the country needed to be created and their effective functioning secured.
42. In his annual addresses to Parliament on the state of the nation in 2016 and 2017, the President of Ukraine made the following remarks concerning the land moratorium.
On 6 September 2016 he said:
?The inability to freely sell and buy agricultural land unquestionably inhibits investment in agriculture, reduces and breaches the rights of the rural population, among other things, lease rights, taking the last remaining kopeks out of their pockets. This is axiomatic. However, I am also aware of public opinion on this matter and the position of the majority of parliamentary groups. I value and respect that. But how can we resolve this problem, my dear legislators? This is within your purview. Either to stick your head in the sand and change nothing or to work to create a land market in Ukraine with all the possible safeguards against any possible negative impact.?
On 7 September 2017 he said:
?.. In Estonia they have privatised everything: ports, telecommunications, aviation and even the railways. In Poland out of 8,500 State companies the State has kept only 41. And, by the way, their land has not been bought up by foreigners, despite the fact that the residents of those countries can easily buy and sell agricultural land.
Until now, Ukrainians have been deprived of that right. Millions of people formally own land but it has been decided for them that they are unable to handle it and an unconstitutional moratorium was introduced. Why then do we allow people to sell their flats? Because you know, by this logic, someone could come along and buy them all up.
As a statesman, in making decisions I must have regard to public opinion. For now, unfortunately, it has been formed by the populists. I am not going to put pressure on Parliament to adopt the land reform, I will not do it. But I am asking you to make a resolution, for now at least a silent one, in your minds, in favour of such a reform. Enact such laws which would assuage the phobias, which would remove all the objections, introduce all the necessary safeguards, introduce minimum prices, make registers transparent, protect the rural population but also give them freedom. I am asking you to set, I invite you to set, a specific date when all of this could be launched, even if not today.?
43. On 3 April 2017 the Cabinet of Ministers approved its mid-term action plan for up until 2020 and its priority action plan for 2017. The 2020 plan describes the continuing maintenance of the moratorium as one of the main problems in the agricultural sector that deprives a large number of Ukrainian citizens of the opportunity to exercise their constitutional right to property and obstructs the development of the agricultural market. The plan provides that the problem created by the moratorium could be resolved through nationwide discussion and the introduction of a land market based on a model acceptable to the population. The 2017 plan stated that the draft CALA would be submitted to Parliament in the second quarter of 2017. However, it appears that no such bill has been introduced.
44. The Government submitted information about protest actions led by farmers in early October 2016 in a number of regions, including highway blockades. The farmers called for the restoration of tax benefits for the agricultural sector. One of their demands was also to reaffirm the land moratorium.
III. COMPARATIVE LAW
45. It appears from the material available to the Court on the legislation of member States of the Council of Europe that none of the thirty two member States surveyed has a general ban on the sale or any other form of alienation of agricultural land. The same can be said about the two non member States surveyed, Canada and the United States of America.
46. Although twenty-two of the thirty-two member States surveyed have undergone a land-reform programme since 1990 (Armenia, Azerbaijan, Bosnia and Herzegovina, Croatia, the Czech Republic, Estonia, Finland, Germany (after unification), Greece, Hungary, Latvia, Lithuania, the Republic of Moldova, Montenegro, Poland, Romania, the Russian Federation, Serbia, Slovak Republic, Slovenia and the former Yugoslav Republic of Macedonia), none of those States have since that time imposed such a general ban, even though some used to impose time-limited restrictions on the resale of land acquired as a result of privatisation, for example three years in Armenia and ten years in Russia (according to pre 2001 legislation).
47. However, in many of the member States surveyed transfers of agricultural land are subject to a number of restrictions and conditions.
48. Thus, in seven of the member States surveyed (Austria, France, Germany, Hungary, Lithuania, Norway and Sweden), the transfer of ownership of agricultural land must be authorised by a special government body. Generally speaking, the authorisation procedure is normally aimed at preserving the effective use of the land for agriculture, so that for example in Austria for the authorisation to be issued the buyer needs to provide assurances that he or she will actually cultivate the acquired land. In another example, in Norway a typical condition on which authorisation is granted may be that the buyer must move onto the land and live on it for five years. In a further three member States (Poland, the Slovak Republic and Slovenia) some categories of buyers, notably those already engaged in farming or their family members, are exempted from the authorisation procedure.
49. In seven of the member States surveyed (Austria, Hungary, Latvia, Lithuania, Poland, the Slovak Republic and Slovenia), qualifications or prior experience in the agricultural sector on the part of the buyer are required for the transfer of ownership of land or to confer priority over other buyers. Some States, such as Estonia, Poland and Sweden, generally authorise only individuals, and not legal entities, to acquire agricultural land of a certain size and subject acquisition by legal entities to additional conditions, such as the need to obtain a permit.
50. More than half of the member States surveyed ? eighteen out of thirty-two, namely Austria, Bosnia and Herzegovina, the Czech Republic, Finland, France, Georgia, Hungary, Italy, Latvia, Lithuania, the Netherlands, Poland, Romania, the Russian Federation, Serbia, the Slovak Republic, Slovenia and the former Yugoslav Republic of Macedonia ? have pre-emption laws, securing a right of first refusal mostly to co-owners, close family members, neighbouring or other farmers, tenants, agricultural enterprises, municipalities and in some cases the State.
51. In nine of the member States surveyed (Armenia, Azerbaijan, Bosnia and Herzegovina, Croatia, Georgia, the Republic of Moldova, Montenegro, the Russian Federation and the former Yugoslav Republic of Macedonia), agricultural land cannot generally be sold to foreign persons. In addition, the majority of the surveyed former Soviet Union and other Central and East European member States make a distinction between European Union nationals, who generally can acquire agricultural land subject to compliance with other restrictions and after the expiry of certain time-limited transitional periods, and third-country nationals, for whom restrictions are more severe (for example, the requirement to obtain a special permit in Estonia and a ban on ownership by third-country nationals in Hungary). However, these restrictions are subject to exceptions, notably in cases of inheritance and where more liberal rules are provided by international agreements. A special regime may thus be in place with member States of the European Economic Area and of the Organisation for Economic Co operation and Development.
52. In eight of the member States surveyed (Estonia, Hungary, Latvia, Lithuania, Poland, the Russian Federation, the former Yugoslav Republic of Macedonia and Turkey) there are restrictions on the size of agricultural land that can be disposed of. Generally, these States impose caps on the maximum amount of land which can be owned by the same person (ranging from 300 hectares in Hungary to 10% of the agricultural land area in a territorial unit in Russia) although some also limit the minimum size of land parcels, seeking to prevent excessive subdivision of land below a certain size.
53. Certain States have particular procedures in place for the sale of agricultural land. For instance, Bosnia and Herzegovina requires land most suitable for agriculture to be sold at public auctions. States, such as Italy, which have pre-emption laws, also have in place detailed procedures aimed at ensuring the effective exercise of pre-emption rights.
54. Special restrictions also exist in certain sensitive areas such as border areas and areas adjacent to military installations (for example, in Greece and Serbia).
THE LAW
I. JOINDER OF THE APPLICATIONS
55. The Court considers that, pursuant to Rule 42 ? 1 of the Rules of Court, the applications should be joined, given their common factual and legal background.
II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1
56. The applicants complained that the legislative restrictions applicable to their land had breached their right to peaceful enjoyment of their possessions, guaranteed by Article 1 of Protocol No. 1, which reads as follows:
?Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.?
A. Admissibility
57. The Government submitted that the first applicant had omitted to inform the Court in her application form that she had rented out her land. They accordingly invited the Court to reject her application for abuse of the right of individual application. The first applicant, implicitly admitting that she had omitted to mention the leasing arrangements in her application form, stated that she had believed this fact to be irrelevant to her application since her complaint concerned the restrictions on transfers of land other than leases. The negative impact of the restrictions on sales and other transfers on the value of the land, including its rental value, was only one aspect of her complaint.
58. The Court reiterates that the submission of incomplete and thus misleading information may amount to an abuse of the right of application, especially if the information concerns the very core of the case and no sufficient explanation has been provided for the failure to disclose that information. However, the applicant?s intention to mislead the Court must always be established with sufficient certainty (see Gross v. Switzerland [GC], no. 67810/10, ? 28, ECHR 2014, with further references therein).
59. Turning to the circumstances of the present case, the Court observes that the first applicant?s initial submissions did not contain information about the fact that she had rented out her land. However, the Court cannot establish that by omitting to make such submissions she intended to mislead the Court. It cannot find, therefore, that she has abused the right of application.
60. The Court notes that the application is not manifestly ill-founded within the meaning of Article 35 ? 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.
B. Merits
1. The parties? submissions
(a) The applicants and the Government
(i) Existence of an interference and the applicable rule
61. The parties agreed that there had been an interference with the applicants? rights guaranteed by Article 1 of Protocol No. 1 and that this interference constituted ?control? of the use of property within the meaning of the second paragraph of that provision.
(ii) Lawfulness
62. The parties agreed that the moratorium had basis in domestic law and that the relevant provisions were accessible. They disagreed as to whether they were ?foreseeable?.
(?) The applicants
63. The applicants argued that the interference with their rights could not be considered to be based on precise and foreseeable provisions of the law. The first and second applicants had inherited their shares of land in May 2000 and November 2004 respectively and could reasonably expect that the moratorium would expire on 1 January 2005, as indicated at the time in the Transitional Provisions of the Land Code. Three years, the original duration of the moratorium, could reasonably be regarded as sufficient time to enact the necessary legislation regulating the land market. Thus, even if the original duration of the moratorium had been foreseeable, its subsequent extensions had not been. Enactment of the necessary legislation had been cited as the reason for each extension but it had not been enacted throughout all those years. For instance, the draft Land Market Act had been approved at the first reading in 2011 but no further progress had been made on that bill. Likewise, the 2015 law extending the moratorium had required the Cabinet of Ministers to develop a draft law regulating the circulation of agricultural land, the enactment of which had been the precondition to the lifting of the moratorium, by 1 March 2016. However, no such bill had been submitted.
64. For the applicants, those factors made the moratorium ?virtually perpetual? and the relevant law unforeseeable. The applicants relied in this connection on judgments in which the Court reproached the authorities for failing to regulate certain relations for a period of time and resolve legal uncertainty (Zagorodniy v. Ukraine, no. 27004/06, ?? 53-56, 24 November 2011; Vyerentsov v. Ukraine, no. 20372/11, ?? 51-53, 11 April 2013; R & L, s.r.o. and Others v. the Czech Republic, nos. 37926/05 and 4 others, ?? 117 23, 3 July 2014; and Veniamin Tymoshenko and Others v. Ukraine, no. 48408/12, ?? 84 and 85, 2 October 2014). They contested the Government?s submission that each extension had given a clear new deadline, as only the extensions of 2004 and 2006 had given specific expiry dates (see paragraph 21 above) and the others had linked the lifting of the moratorium to the enactment of certain laws. For the applicants, this meant that the moratorium was of a virtually unlimited duration; the law did not contain sufficiently clear indicators as to when exactly it would be lifted, if at all. The wide margin of appreciation afforded to the national authorities in economic and social matters did not mean the right to put individuals in a situation of such protracted uncertainty.
65. If the State had wished to prohibit transfers of agricultural land into private property, it could have done so from the outset. Instead, the State had transferred land to members of former collective farms and expressed a clear intention to authorise the owners of the land to dispose of it. Once it had done so, it should have provided a legislative framework for the exercise of that right. Failure to do so for many years, without a clear indication as to when it would be done, had created a situation contrary to the requirements of ?legality? inherent in Article 1 of Protocol No. 1.
66. What is more, the reasons for extending the moratorium had evolved over time ? even if initially the extensions had been motivated merely by the need to enact the necessary legislation and conduct technical preparatory work, additional, more vague reasons had been added over time. This rendered the applicants? situation even less foreseeable.
(?) The Government
67. The Government submitted that the applicants? allegation that the moratorium was in place for an indefinite period was not true. Each extension of the moratorium had contained a clear endpoint, and each new extension had been adopted before the previous end date and at no point could the applicants entertain any expectation that they would be able to sell before the end date. Article 1 of Protocol No. 1 could not be interpreted as protecting the applicants against the changes in the legal regime of their possessions. The Government cited Van Marle and Others v. the Netherlands (26 June 1986, ? 43, Series A no. 101) in support of their argument. The extensions had been passed following a wide discussion of the matter and the applicants could not claim to be unaware of the possibility of those extensions.
(iii) General interest
(?) The applicants
68. The applicants submitted that even though nominally additional reasons other than the need to enact the necessary land market legislation had been given in the explanatory notes to the laws extending the moratorium (see the Table in paragraph 21 above), these had been mere ?cover? for the State?s inability to enact the relevant legislation, which, if properly drafted and enacted, could in fact have addressed all the alleged possible risks and concerns stated in the explanatory notes. The applicants concentrated, in this connection, on the concerns expressed by the legislature in the explanatory note for the 2015 extension, namely that the moratorium was needed to ensure national and food security and the Government?s argument that the release of agricultural land into circulation would risk it being purchased en masse for meagre prices and its concentration in the hands of a few tycoons or unfriendly powers, its withdrawal from cultivation and the impoverishment of farmers (see paragraph 76 below).
69. As to the risk of impoverishing farmers and a massive selloff of land at low prices, the applicants stated that lifting the moratorium would not mean that landowners would be compelled to sell, rather it would be their free decision whether to do so. The applicants referred to the third-party intervener?s submissions and other material showing that, in the opinion of some experts, international experience showed that the opening up of land markets normally led to a rise in land prices (see paragraph 96 below). They referred in particular to the alleged experience of Romania, which had experienced a high rate of growth in land prices. They also referred to the opinion of a former head of the State Land Cadastre Agency who had said, reportedly, that the lifting of the moratorium would lead to a 25% increase in land prices and a rise in land productivity. They submitted that, according to ?expert opinion?, a fully open land market would generate from 50 to 100 billion US dollars in ?GDP growth, foreign and domestic investment? as well as additional tax revenue.
70. As to the risk of excessive concentration of land holdings, the applicants referred to the third-party intervener?s assessment that no international financial entity possessed the financial resources necessary to buy up land in quantities which would constitute a threat. High land fragmentation also made this risk unrealistic (see paragraph 96 below). The risk of excessive concentration could be easily mitigated by introducing caps on the maximum amount of land owned, as the draft Land Market Act had envisaged (see paragraph 40 above). It was the prohibition introduced by the moratorium which had pushed the land transactions into the shadow and de facto created a non-transparent shadow land market. It had led to the very problems the Government referred to, in particular a high concentration of land in the hands of large agricultural companies. This was because the moratorium presented the landowners with only two options: either to cultivate the land themselves (which they often could not do due to their age, health, the remoteness of the land, or land fragmentation making cultivation not viable economically) or accept leases under the conditions proposed by the agricultural producers. This market dominance of the agribusiness companies had led to low rents (they cited the State Land Cadastre Agency?s statistics set out in paragraph 35 above) and ?land devastation?.
71. For the applicants, it had precisely been the extension of the moratorium that had created and aggravated the problems cited by the Government as the reasons for extending it. It had prevented the flow of resources into the agricultural sector, in particular to small and medium farmers, because it had blocked their access to bank loans which could be secured on their land, and had thus prevented the development of the agriculture sector in general. This had also been admitted by the President of Ukraine (see paragraph 42 above).
72. As to the supposed protests against the lifting of the moratorium, the applicants alleged that the main opponents of the lifting of the moratorium had cited the absence of an appropriate legislative framework as the main reason for their support for its continuation. Support for the moratorium had mainly come from non-farmers and large agricultural companies benefitting from the absence of a transparent land market and lobbying to keep it in place for as long as possible.
73. The applicants submitted that the moratorium was harming the economy, the landowners and the agrarian sector, instead of protecting them from ?imaginary risks?. Its extensions had not been dictated by any necessity but by purely populist political considerations. Therefore, the legislature?s judgment as to what was in the ?general interest? was manifestly without reasonable foundation.
(?) The Government
74. The Government stressed that the legislature enjoyed a wide margin of appreciation in matters of economic policy. The Court had to respect their judgment unless it was manifestly without reasonable foundation.
75. They submitted that agricultural land accounted for 70% of Ukraine?s territory, the country having one of the world?s highest indicators of agricultural land per capita. This constituted great potential for the country but required implementation of an effective model of rational land use. The Government pointed to the constitutional provisions declaring land the main national asset and requiring appropriate regulation of land ownership and use (see paragraph 23 above). The moratorium was needed to create an appropriate framework for the protection of the rights of citizens and of the State. The extended period of operation of the moratorium was due to the need to create appropriate legal, institutional, financial and economic conditions for the introduction of free circulation of the land.
76. Referring to the explanatory note to the law which extended the moratorium in 2015 (see row 11 of the Table at paragraph 21 above), the Government submitted that the goal of the moratorium was to protect food and national security. Releasing land into circulation risked creating conditions for the concentration of land in the hands of a few tycoons or ?foreign and unfriendly power? in exchange for a fraction of its real value, its withdrawal from cultivation, and the impoverishment of farmers. The Government considered that the reality of those dangers was illustrated by the experience of a brief period in the early 2000s when free circulation of shares of land had been allowed and shares had been purchased en masse for meagre prices. The Government referred, in this respect, to the statistics summarised in Parliament?s Resolution of 22 May 2003 (see paragraph 15 above).
77. The adoption and extensions of the moratorium had created considerable debate inside and outside of Parliament in the course of which both supporters and opponents of the moratorium had been free to express their opinions.
78. While Ukrainian society was sharply divided on the matter of the moratorium, a very substantial part of society, political parties, local authorities and academics, were in favour of maintaining it. The Government pointed to the protests which had taken place in 2016 demanding that the moratorium be maintained (see paragraph 44 above).
(iv) Proportionality
(?) The applicants
79. The margin of appreciation available to the national authorities could not cover a measure as extreme as a fifteen-year-long absolute prohibition on the alienation of land. No other State had such an absolute prohibition in place, only imposing certain conditions on sale or resale.
80. To the extent the Government argued that the applicants had acquired the land of their free will at a time when it had already been subject to restrictions, the applicants stressed that they had inherited the land by right and that, at the time, there had been specific deadlines in place for the expiry of the restrictions on land transactions. In this connection, they referred to their observations concerning the lawfulness of the interference (see paragraphs 63 to 66 above) and stressed that, when they had acquired the land, they could legitimately expect that the moratorium would expire and that they would be able to dispose of their land. As to the fact that the applicants had received their land free of charge, they argued that the protection provided by the Convention could not be made dependent on whether property had been acquired for free or otherwise (citing Ghigo v. Malta, no. 31122/05, 26 September 2006).
81. As to the Government?s reliance on the fact that the applicants? rights to use and rent out the land had been unaffected by the moratorium, they stressed that the right to dispose of property was an essential element of ownership and it was for an owner to decide whether to dispose of or retain his or her property. Moreover, their plots were small and were located 300 and 50 kilometres from their respective places of residence. They were also elderly persons in poor health. This had prevented them from cultivating the land on their own.
82. Renting the land out at ?knockdown prices? was not a viable proposition either: unable to find offers for monetary rent at an acceptable level, the first applicant had had to accept rent in kind and the second applicant was receiving very low rent payments (see paragraphs 6 and 7 above). Moreover, domestic law imposed a number of duties on the applicants as landowners, including the need to comply with environmental rules and pay property tax (see paragraph 30 above) which they would be unable to comply with without renting their land out to an agricultural producer. If not for the moratorium, the only viable option for the applicants would be to sell their land.
83. The applicants drew parallels between their situation and those of the applicants in the case of Sporrong and L?nnroth v. Sweden (23 September 1982, Series A no. 52), in that the Ukrainian legislature?s persistent failure to enact legislation which would allow the moratorium to be lifted and land to be sold was analogous to the Swedish authorities? repeated extensions of a prohibition on construction which had created a prolonged situation of uncertainty for the applicants in that case.
84. This uncertainty and the legislature?s prolonged failure to adopt the necessary rules and lift the moratorium upset the balance between the protection of the applicants? rights and the general interest, and imposed an excessive individual burden on them.
(?) The Government
85. The Government stressed that the member States had wide discretion to establish rules governing the circulation of agricultural land. Although they had a common origin in the ?common understanding? of the need to control the circulation of agricultural land and ensure food security, the specific rules varied across States. They cited examples of various regulations in effect, according to them, in several European countries according to which: (i) a buyer had to show that he was capable of cultivating the bought land (Denmark), (ii) an authority annually inspected the use to which the buyer had put the acquired agricultural land (Austria), and (iii) sales of agricultural land were subject to the approval of a public authority (Sweden). The measure chosen by Parliament was within its power to regulate the economy as it saw fit and had broad public support.
86. The applicants had not had to bear an individual and excessive burden. Their predecessors in title had obtained their shares of land of their free will, and the applicants had freely chosen to accept them as their inheritance. When the applicants had obtained the land, they had known about the restrictions it was subject to, either those imposed within the framework of the moratorium in the 2001 Land Code or those set out in the 1990 Land Code (see paragraph 10 above). There had never been any undertaking on the part of the State that those restrictions would not be extended beyond the original deadlines which had been in effect when the applicants had acquired the land.
87. The applicants had received their land free of charge. Other than alienation and change of designated use they were not limited in their rights: they could cultivate the land themselves or rent it out to tenants on freely negotiated terms.
88. In response to the applicants? argument that engaging in cultivation had not been a practical possibility for them due to the small size of their holdings, the Government submitted that farms of two to five hectares, comparable in size to those of the applicants, made up a sizeable proportion of all agricultural holdings in Europe. In this connection, they cited the 2013 Farm Structure Survey published by Eurostat according to which 4.9 million agricultural holdings, close to half of all holdings in the 28 EU Member States, were less than two hectares in size. In any event, given that the applicants did not see farming as practical, it was unclear why they had volunteered to obtain their land, zoned for farming, in the first place.
89. Certainly, there could be objective obstacles to farming but the applicants also had the right to rent out their land and this right was not subject to any restrictions. In fact the State was not depriving the applicants of income from their property. On the contrary, the State had taken steps to encourage a rise in rental income: while there were no caps on rent rates, a presidential decree had sought to ensure the observance of a minimum rent rate, at a level of 3% of the land?s value (see paragraph 33 above). In fact, the majority of leases nationwide provided for even higher levels of rent than this minimum (see paragraph 35 above). Renting out land was a popular means of obtaining benefits of ownership for Ukrainian landowners, as evidenced by the large number of land leases in effect and the land area covered by them (see paragraph 35 above). Both applicants had also taken this opportunity and had rented out their land.
90. As to the right to sell, Article 1 of Protocol No. 1 to the Convention guaranteed no right to acquire property or obtain profit (citing, in particular, R & L, s.r.o. and Others v. the Czech Republic, cited above, ? 103) and the State had at no time guaranteed to the applicants that they would be able to derive profit from the sale of their land. In the context of ?control? of the use of property, which was the case here, the requirement to compensate for interferences with property rights had only a limited application. Here, the applicants were aware of the principle that no compensation in principle would be payable (citing Depalle v. France [GC], no. 34044/02, ? 91, ECHR 2010) and had not invested anything into the property (citing Pindstrup Mosebrug A/S v. Denmark (dec.), no. 34943/06, 3 June 2008). Moreover, even if compensation were needed, the State policies aimed at protecting the rights of landlords and propping up of rent rates amounted to such compensation.
91. The Government also stressed that the moratorium applied to all agricultural land without distinction. The Government cited in this connection the Court?s decision in Lohuis and Others v. the Netherlands, where the Court found it relevant that the legislation in issue in that case was intended to reduce the environmental impact on an ?entire farming sector? (no. 37265/10, 30 April 2013). They also referred to the Court?s decision in Pindstrup Mosebrug (cited above) dealing with a general regulatory act requiring the preservation of bogs and a general limitation on the right to extract peat.
92. Accordingly, for the Government, the moratorium did not impose an individual and excessive burden on the applicants, and a fair balance had been struck between the interests of the community and those of the applicants.
(b) Third-party intervener
93. EasyBusiness submitted certain information concerning the history of the land reform in Ukraine and the structure of its agricultural sector. In particular, according to them, from 1996 to 2009 two thirds of Ukraine?s agricultural land was transferred into private ownership and 94% of the rural population converted their shares of land into land plots. As a result, legally the land was fragmented into small parcels. However, agricultural production had not been so fragmented since in practice the agricultural producers rented large areas from numerous owners, with the ten top agricultural companies renting from 150 to 654 thousand hectares. They were using the resulting economies of scale to accumulate additional financial resources which in turn skewed the balance in the rental market in their favour.
94. The intervener argued that the moratorium violated the constitutional provisions guaranteeing property rights (see paragraphs 24 and 25 above). It prevented the creation of a transparent land market and owners from earning adequate income from their land.
95. The existing situation did not mean that there was no market in land, but rather that it was non-transparent, leading economic players to use devious schemes to ensure control over land. It had also led to concentration of control over land in the hands of agricultural holding companies which, as the most common tenants, had disproportionate power over small land owners (the average plot size being four hectares) who had no choice but to accept low rents. The land market was fairly monopolised with the 100 biggest players renting 6.5 million hectares. This had led to abnormally low rents. The interveners pointed out that about two thirds of the seven million individuals who had obtained land in the course of privatisation were senior citizens, the average age of a landowner being fifty-seven, and 79% of them being over fifty.
96. The interveners considered the risks advanced to justify the continuation of the present situation exaggerated. Thus, as to the risk that the land would be sold at meagre prices, international experience showed, to the contrary, that in most countries the creation of a free land market had led to an increase in the value of land. As to the risk of land being bought out by foreigners, no international financial entity possessed the financial resources necessary to buy up the land in quantities which would constitute a threat and high land fragmentation made this risk even less realistic. As to the possible lifting of the moratorium increasing the pressure on small farmers, the interveners considered, to the contrary, that the lifting of the moratorium would be beneficial to them by increasing their access to financing.
2. The Court?s assessment
(a) General principles
(i) The structure of Article 1 of Protocol No. 1
97. The Court reiterates that, according to its case-law, Article 1 of Protocol No. 1, which guarantees in substance the right of property, comprises three distinct rules: the first, which is expressed in the first sentence of the first paragraph and is of a general nature, lays down the principle of peaceful enjoyment of property. The second rule, in the second sentence of the same paragraph, covers deprivation of possessions and subjects it to certain conditions. The third, contained in the second paragraph, recognises that the Contracting States are entitled, among other things, to control the use of property in accordance with the general interest (see Depalle, cited above, ? 77).
(ii) Lawfulness
98. The first and most important requirement of Article 1 of Protocol No. 1 is that any interference by a public authority with the peaceful enjoyment of possessions should be lawful: the second sentence of the first paragraph authorises a deprivation of possessions only ?subject to the conditions provided for by law? and the second paragraph recognises that States have the right to control the use of property by enforcing ?laws?. Moreover, the rule of law, one of the fundamental principles of a democratic society, is inherent in all the Articles of the Convention. The principle of lawfulness also presupposes that the applicable provisions of domestic law are sufficiently accessible, precise and foreseeable in their application (see Broniowski v. Poland [GC], no. 31443/96, ? 147, ECHR 2004 V).
(iii) General interest
99. Any interference
