Bulgaria’s muddle over moratorium on selling land to foreigners

Bulgaria’s muddle over moratorium on selling land to foreigners


By Clive Leviev – Sawyer of The Sofia Globe

Bulgaria’s Constitutional Court was expected to overturn a 2013 parliamentary resolution calling for an extension to the year 2020 of the moratorium on the sale of land to foreigners, public broadcaster Bulgarian National Television said on January 28 2014.

In terms of Bulgaria’s accession treaty with the European Union, the moratorium fell away on January 1 2014.

But even with wide expectations that the Constitutional Court would reject the resolution to extend the moratorium, it seems that in some quarters, the battle will continue.

It has been a story filled with ironies.

Not only was the Bulgarian Socialist Party, current holder of the mandate to govern, put in an awkward position by several of its MPs standing against the party line by voting to approve the motion tabled by ultra-nationalists Ataka to extend the moratorium, but also the moratorium itself hardly has made any difference to Bulgaria’s land market.

While the moratorium was in effect, it was customarily circumvented by foreigners setting up companies, with real estate then purchased in the names of these companies.

A further irony is that the battle is continuing, albeit with less prominence than at the time of Parliament’s controversial resolution in October 2013, against a background of scant demand among foreigners for Bulgarian land – a fact admitted by top government officials.

The challenge to the resolution on the extension of the moratorium was lodged in the Constitutional Court by 55 MPs who argued that the resolution was in contradiction to Bulgaria’s EU treaty obligations. On the face of it, it would hardly seem to require the brightest legal mind to grasp this point.

But, according to a January 26 report by local television station bTV, plans are afoot for “urgent legislative changes” that would introduce a requirement that foreigners would be able to buy land only if they have resided in Bulgaria for at least three years.

According to Svetla Buchvarova, head of the parliamentary committee on agriculture and who has background of stating that there would be limitations on sales of land to foreigners, the proposal would be for an EU citizen who wanted to buy land to have resided in Bulgaria for at least three years, “the reason for taking this step being that we want to make sure that those who buy land intend to work it”.

As the bTV report pointed out, if such legislation was indeed approved, it would be circumvented in the same way, by having a Bulgarian-registered company buy the land.

Bulgaria’s cabinet already effectively rejected the resolution handed to it by Parliament and took no action to implement it, with the government making it clear that it held the resolution to be unconstitutional and in violation of Bulgaria’s EU obligations.

Separately, Radoslav Hristov of the Bulgarian Grain Producers Association, another figure who repeatedly has called for the extension of the moratorium, earlier again expressed concern about what he saw as the risk of “foreign invasion” and large-scale purchases of land.

He said that the rule of law and parliamentarianism should be applied in Bulgaria. The resolution voted by Parliament had not been cancelled, Hristov said earlier in January, and therefore “it should be applied”.

According to Bulgaria’s Agriculture Ministry, in the days since the moratorium ended on January 1, foreign interest in buying agricultural land in the country had added up to “zero”.

These facts have not deterred ultra-nationalist groups, for which the “issue” of foreigners buying land is core to their political existence.

On January 7, one such group, the “National Social Movement” gathered a little band outside the Cabinet office in central Sofia to protest against the application to the Constitutional Court to annul the resolution on the extension of the moratorium on the sale of land to foreigners.

According to Roumen Detchev of this movement, “Bulgarian land should not be sold to foreigners because it threatens national security. The plan is to repeat the case with Palestine in Bulgaria, the buying of agricultural land by foreigners, then they settle and change the ethnic composition of the Bulgarian state”.

Buchvarova, speaking the same day (but seeking to make her case without the thinly veiled anti-Israel reference used by Detchev) said that in only six EC countries was it possible for anyone, including foreigners, to buy and sell land freely.

In all other countries, she said, there were various mechanisms to regulate the sale and purchase land, mainly so that the owner would have to ensure that the land was worked.

“The preservation of the land is the responsibility of the state, but must be implemented by the owner,” Buchvarova said.

She said that one of the specific problems of Bulgaria’s land market was fragmentation and the low market price of land, which could cause interest in purchases for resale and not for actual agricultural use. Buchvarova added that it was important to know the origin of the funds used for land purchases.

Asked what the impact of a Constitutional Court ruling on such a legislative initiative, she said that the socialist party was ready with changes on the law on the ownership and use of agricultural land.

She said that in some EU countries, there were restictions against foreigners buying land in border areas.

However, this question remained opened, and much of the land in Bulgaria’s border regions was incorporated in the EU’s Natura 2000 environmental conservation network, which was likely to discourage anyone from wanting to buy it, Buchvarova said.

Interviewed by local media on January 7, agriculture minister Dimitar Grekov said that at the ministry, there had been no inquiries about the purchase of land. “There is no queue,” he said.

As an EU member state, Bulgaria had to keep to its obligations, lifting the moratorium on January 1 in the same way that the labour market elsewhere in the EU had been opened fully to Bulgarians, he said.

“But we have problems with both land consolidation and the ability for it to be sold in a certain way.”

He said that he and the ministry had undertaken consultations with “various experts” from the EU to learn about the experience in those countries.

Grekov has spoken of creating an agency to handle the land issue, “and those who want to enter our country should be aware that we do not sell the land to be destroyed, but to processed and invested in”.