C-300/01

SALZMANN

OPINION OF ADVOCATE GENERAL LÉGER delivered on 30 January 2003 1

1. Under Austrian law, the Länder may I — Legal framework make acquisitions of immovable property subject to a regime of administrative super- vision. In its judgments in Konle 2 and in Reisch and Others, 3the Court considered the land acquisition regimes adopted by the Land of Tyrol (Austria) and the Land of A — Community law Salzburg (Austria) respectively.

3. Article 73b of the EC Treaty (now, after amendment, Article 56 EC) provides:

'1. Within the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited. 2. In the present case, the Landesgericht (Regional Court) Feldkirch (Austria) has made a reference to the Court for a preliminary ruling on the compatibility with the free movement of capital of the land acquisition regime established by the 2. Within the framework of the provisions Land of Vorarlberg (Austria). The Land- set out in this Chapter, all restrictions on esgericht also asks what effect the standstill payments between Member States and clause in the Agreement on the European between Member States and third countries Economic Area of 2 May 1992 4 could have shall be prohibited.' on such a regime.

1 — Original language: French. 2 — Case C-302/97 Konle [1999] ECR I 1099. 3 — Joined Cases C-515/99, C-519/99 to C-524/99 and 4. According to Article 73d( 1 ) of the EC C-526/99 to C-540/99 Reisch a n d Others [20021 ECR I-2157. Treaty (now Article 58(1) EC), the provi- 4 — OJ 1994 L 1, p. 3 (hereinafter referred to as the 'EEA sions of Article 73b of the Treaty are Agreement'). without prejudice to the right of Member

'during transition periods, EFTA [Euro- pean Free Trade Association] States shall not treat new and existing investments by companies or nationals of EC Member 7. The Vorarlberger Grundverkehrsgesetz States or other EFTA States less favourably (Vorarlberg Land Transfer Law) of than under the legislation existing at the 23 September 1993, as amended, 7provides date of signature of the Agreement, without that, as a rule, authorisation by the com- prejudice to the right of EFTA States to petent land transfer authority is required introduce legislation which is in conformity for any purchase of land. 8If authorisation with the Agreement and in particular is refused, the acquisition may not be provisions concerning the purchase of sec- entered in the land register, the act by ondary residences which correspond in which right of ownership is established. their effect to legislation that has been The transaction is thus void by force of upheld within the Community in accord- law. 9 ance with Article 6(4) of the Directive [Council Directive 88/361/EEC of 24 June 1988 for the implementation of Article 67 6 — OJ 1994 C 241, p. 21, and OJ 1995 L 1, p. 1 (hereinafter of the Treaty 5]'. referred to as the 'Act of Accession'). 7 —LGB1. 1993/61, amended in LGB1. 1995/11, 1996/9 and 1997/85 (hereinafter the 'VGVG'). 8 — Order for reference, point 4. 5 —OJ 1988 L 178, p. 5. 9 — Ibid., point 5.

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8. The VGVG distinguishes between build- setting aside in 1996, by the Verfassungs- ing land and land which is built on. gerichtshof (Constitutional Court) (Aus- tria), of the previous provision. 10

residing in Fußach, a building plot in that to the Court in Case C-178/99 Salzmann commune. She did not apply for the auth- for a preliminary ruling. 13In its judgment orisation provided for in Paragraph 8 of the in that case, the Court declared that it had VGVG. no jurisdiction to rule on the questions on the ground that the function being per- formed here by the Bezirksgericht Bregenz was of an administrative nature. Following that judgment, the Bezirksgericht Bregenz remitted the case to the Landesgericht 14. On 9 November 1998, the applicant Feldkirch. applied to the Bezirksgericht (District Court) Bregenz (Austria) for registration in the land register of her ownership of the building plot. She produced a declaration similar to what would have been required if the acquisition had concerned built-on land, by which she undertook not to use the acquired land to build a holiday I I I— The questions referred residence thereon. She argued that the authorisation scheme contravened the Community obligations of the Republic of Austria and that a declaration should be 18. The Landesgericht Feldkirch decided to sufficient for the purpose of registration. stay proceedings and to refer to the Court for a preliminary ruling three questions which were virtually identical to those referred in Case C-178/99, cited above. The questions referred were: 15. By decision of 16 November 1998, the Bezirksgericht Bregenz refused to grant her application on the ground that the land transfer authorisation was lacking. '1. May nationals of a Member State of the European Union rely on free move- ment of capital for a domestic trans- action if national law prohibits dis- 16. On 18 November 1998, the applicant crimination against that country's own brought an action before the Landesgericht nationals but has no legislation Feldkirch seeking to have that decision set expressly guaranteeing free movement aside. 12 of capital for citizens of the Union?

20. The question of the admissibility of the present reference for a preliminary ruling nevertheless arises on another count. In 3. What effect does the "standstill" clause their written observations on the first in point 1(e) of Annex XII to the [EEA] question referred, the Commission of the Agreement have on wholly new kinds European Communities 15 and the Austrian of situations regarding authorisation Government 16 maintain that the main under land transfer law, not created proceedings do not fall within the scope until after signature of the [EEA] of Community law and that there is there- Agreement on 2 May 1992?' fore no call to interpret that law. They emphasise that all the facts in the proceed- ings are confined to a single Member State and argue that in such cases Article 73b of the Treaty does not apply. They rely in support of their analysis on the wording of that article and on the case-law of the Court according to which the Treaty IV — Assessment provisions concerning fundamental free- doms do not apply to circumstances which are purely national in scope.

22. I consider that the admissibility of the extent that it applies to situations related to present reference for a preliminary ruling intra-Community trade. 21 can be inferred from the judgment in Reisch, cited above, which was delivered prior to the hearing in the present proceed- ings and the legal and factual circumstances of which are very similar to those in the main proceedings. 25. The Court went on to explain that those findings did not relieve it of the obligation to answer the questions put by the referring court. It pointed to the Court's consistently held view that it is for the 23. As indicated in point 1 of the present national courts alone, which are seised of a Opinion, the judgment in Reisch concerns case and which must assume responsibility the compatibility of the land acquisition for the judgment to be given, to determine, regime adopted by the Land of Salzburg having regard to the particular features of with the free movement of capital. Under each case, both the need for a preliminary that regime, the transfer of ownership of a ruling in order to enable them to give their building plot is conditional upon the pres- judgment and the relevance of the questions entation of a certificate issued on the basis which they refer to the Court. A reference of a declaration and, in some cases, of a for a preliminary ruling from a national land transfer authorisation. One of the court may be rejected only if it is quite parties which submitted observations chal- obvious that the interpretation of Commu- lenged the admissibility of the reference for nity law sought by that court bears no a preliminary ruling on the ground that the relation to the actual nature of the case or main dispute was purely internal in nature the subject-matter of the main action. 22 in so far as it concerned the acquisition by an Austrian company of a parcel of land situated in Austria.

30. In the light of these points, it does not seem to me appropriate to reopen dis- 28. The judgments cited above in Reisch cussion on that case-law. and Guimont are consistent with the rule in Dzodzi, 25 by virtue of which the Court declares that it has jurisdiction to rule on references for a preliminary ruling concern- ing provisions of Community law in situ- ations where the facts in the main proceed- ings fall outside the scope thereof but where the provisions of Community law 31. I will merely observe therefore that in concerned have been made applicable by the present case the referring court has force of national law. In both those situ- indicated, in the grounds for the reference ations, whether the Court has jurisdiction for a preliminary ruling 29 and in the depends solely on national law. formulation of the first question, that national law prohibits discrimination against Austrian nationals. In such a situ- ation, the interpretation sought by the referring court may, considering that Aus- trian nationals may rely on the same rights as those which a national of another 29. As I indicated in my Opinion in Ber- M e m b e r State would enjoy under liner Kindl Brauerei, 26 this case-law has Article 73b of the Treaty, help resolve the prompted considerable debate. In its judg- main proceedings. ment in BIAO, 27 the Court, sitting in plenary session, confirmed the rule in

33. In submitting these two questions, which it is appropriate to consider together, the referring court asks in essence whether 37. It cannot be disputed that provisions Article 73 b of the Treaty should be under- which, like Paragraph 8 of the VGVG, lay stood as meaning that a prior authorisation down a procedure of prior authorisation scheme such as that provided for in the for the acquisition of immovable property land acquisition regime established by the restrict, by their very purpose, the free VGVG is unlawful. movement of capital. 33 The objective pur- sued by these provisions is precisely that of enabling the competent authorities of the Member State concerned to oppose such acquisitions. They are therefore such as to prevent nationals of other Member States investing their capital in this way or to dissuade them from doing so. 34. It should first be noted that although the system of property ownership is, under Article 222 of the EC Treaty (now Article 295 EC), a matter for each Member State, that provision does not have the effect of exempting such a system from the rules of the Treaty concerning fundamental 38. The free movement of capital, as a freedoms. 30 fundamental principle of the Treaty, may be restricted by national rules only if they satisfy certain conditions. They must be justified by reasons referred to in Article 73d(1) of the Treaty or by overrid- ing requirements of the general interest. Furthermore, the national legislation must be suitable for securing the objective which 35. Measures which, as here, regulate the it pursues and must not go beyond what is acquisition of immovable property must necessary in order to attain it, so as to comply with the rules governing the free accord with the principle of proportional- movement of workers, the freedom of ity. 34 establishment and the freedom to provide services. 31 32 — Konle, paragraph 22, and Reisch, paragraph 28. 33 — Konle, paragraph 39, and Reisch, paragraph 32. 34 —Case C-367/98 Commission v Portugal [2002] ECR 30 — Case 182/83 Fearon [1984] ECR 3677, paragraph 7, and I-4731, paragraph 49, Case C-483/99 Commission v Kotile, cited above, paragraph 38. France [2002] ECR I-4781, paragraph 45, and Case 31—See, to that effect, Case 305/87 Commission v Greece C-503/99 Commission v Belgium [2002] ECR I-4809, paragraph 45. [1989] ECR 1461, paragraphs 18 to 27.

42. The Court has held that those are grounds capable of justifying restrictions on the free movement of capital. Since the 1. The objective pursued Court first accepted that restrictions on the exercise of the fundamental freedoms could be justified on grounds that were not provided for in the Treaty but pursued the Objective... of protecting the public inter- est' 37 or could be classified as Overriding reasons relating to the public interest', 38 39 40. This condition does not seem to me to it has regularly extended the list of legit- present any real problems in the present imate reasons that could be invoked by the case in view of the explanations provided Member States in support of such restric- by the Austrian Government and of the tions. 40 It has in particular ruled that Court's decisions. maintaining, in a specific geographical area within a Member State a permanent popu- lation and an economic activity indepen- dent of the tourist sector may be regarded as an objective in the public interest capable of justifying restrictions on the free movement of capital. 41 41. It is apparent from the Austrian Gov- ernment's explanations that the primary objective pursued by Paragraph 8 of the 35 — See the Austrian Government's written observations, pages VGVG has to do with land-use planning. It 16 and 17. 36 — See the Austrian Government's oral observations. is to ensure that building plots are, within a 37 — See, in particular, Case C-204/90 Bachmann [1992] ECR reasonable time, used for building purposes I-249, paragraph 29. that are in the public interest and are in 38 — See, in particular, Case C-1S4/89 Commission v France [1991] ECR I-659, paragraph 15. accordance with the land-use plan. The 39 — See, in particular, Case C-288/89 Collectieve Antenne- purpose pursued by the regime at issue is voorziening Couda [1991] ECR I-4007, paragraph 14. 40 — See, in this respect, the examples of overriding reasons therefore to prevent the purchase of unbuilt relating to the public interest already accepted by the parcels of land by persons who do not Court and cited in Collectieve Antennevoorziening Gouda, cited above, paragraph 14. intend to build or build within a reasonable 41 — Konle, paragraph 40, and Reisch, paragraph 34.

45. The Austrian Government argues that Paragraph 8(3) of the VGVG is propor- tionate to the objective assigned to it and is as unrestrictive as possible. In its view, procedures such as prior notification, though deemed adequate in the case of 47. Conversely, Mrs Salzmann, the Com- built-on land, would manifestly be inad- mission and the EFTA Surveillance Auth- equate in the case of building plots. Such ority contend that the rules at issue are procedures would not, in its view, guaran- disproportionate to the objective pursued tee optimum utilisation of the available and that the latter could have been building land. The Government observes in achieved by a less restrictive scheme invol- this connection that no action can be taken ving prior notification or declaration. Mrs against the author of a false declaration Salzmann and the Commission consider until the period granted the acquirer of title further that, in requiring the acquirer of to build, namely 15 years, has elapsed. In title to provide proof of the future use to contrast, the prior authorisation require- which the property is to be put, ment, allowing as it does certain specific Paragraph 8(3) of the VGVG gives the steps to be demanded of the acquirer of competent administration a degree of lati- title, may prevent such a situation arising. tude that could potentially be used in a This is all the more necessary in view of the discriminatory fashion.

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(b) Assessment 51. In its judgments in Bordessa 42 and Sauz de Lera, 43 the Court held that the restrictions on the free movement of capital resulting from provisions making currency exports conditional upon prior authori- sation by the administrative authorities could be eliminated by an adequate system 48. Like Mrs Salzmann, the Commission of declaration, without compromising the and the EFTA Surveillance Authority, I aims of those rules. take the view that the rules at issue must be deemed contrary to the provisions of Article 73b of the Treaty.

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54. The Court concluded from this analysis patible with Community law. On the other that a procedure simply involving a declar- hand, it held that the prior authorisation ation cannot in itself ensure that the land is scheme could not be viewed as a strictly used in accordance with the national legis- indispensable measure, given the oppor- lation, but that that did not mean that a tunity for supervision which the prior prior authorisation procedure is neverthe- notification scheme affords to the public less always necessary. It took the view that authority, the existence of criminal sanc- the State may take other measures to ensure tions and a specific action for annulment compliance with its policies concerning which may be brought before the national land-use within its territory, such as fines, court should the project carried out fail to a decision requiring the acquirer of title to comply with the initial declaration. 47 terminate the unlawful use of the land forthwith under penalty of its compulsory sale or a declaration that the sale is void. 45

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59. All the same, it has not in my view been chase fulfils certain requirements and, in demonstrated that the achievement of these particular, whether the acquirer of title objectives can be ensured only by a prior undertakes to use land acquired to establish authorisation scheme such as that estab- his principal residence. lished by the Land of Vorarlberg, which is to say a scheme under which all transfers of unbuilt plots of land are conditional upon approval by the administrative authorities, which must be sought by special appli- cation and has suspensory effect in respect of the validity of the transaction. 62. Such a scheme would also, in my view, provide a means of verifying that the acquirer of title undertakes to construct on the land purchased a building complying with the land-use plan. All that would be needed would be for the acquirer of title to be invited to state, in his written declar- 60. I maintain in this connection that the arguments put forward by the Austrian ation, the type of building he intended to Government to demonstrate that a prior construct. The administrative authorities notification scheme backed up by penalties would thus be in a position to ascertain would have been inadequate fail to con- whether this type of building was consistent vince. Those arguments are considered in with one of the types provided for by the turn below. legislation and, if not, to oppose the build- ing project, subject to doing so within a short, predetermined period after receipt of the declaration.

or the exercise of an activity subject to — Such a system of penalties would not public service obligations, 52 or again rec- ensure optimum utilisation of building land ognition of a diploma obtained in another in so far as 15 years would have to elapse Member State. 53 In these situations, the before the system could be applied public interest demands that authorisation by the administrative authorities have sus- pensory effect in respect of the exercise of the freedom being asserted. The exercise of that freedom, even during the period in which a prior declaration is being exam- 66. It should be borne in mind that deter- ined, would represent a risk to the collec- mination of the period granted the acquirer tive interest. This is not the case in the of title to proceed with the building project present instance. provided for in the land-use plan falls within the sovereign competence of the Austrian authorities or those of the Land of Vorarlberg. The length of that period cannot therefore constitute a valid argu- ment for rejecting a notification scheme in favour of a prior authorisation scheme. Moreover, even a prior authorisation scheme would not suffice to ensure that 64. It should be noted, in this connection, all purchasers of building plots fulfil their that in Ketsch the Court indicated that the undertakings. prior examination carried out in the light of the declaration by the acquirer of title could serve to prevent certain damage, reparable only with difficulty, caused by hastily completed building projects. 54 — An application for prior authorisation would be more advantageous to the acquirer of title

71. As to the first condition, it is not, as the Court indicated very clearly in Konle, 69. Having regard to these considerations, possible for the person seeking authori- a town and country planning policy such as sation to provide incontrovertible proof of that pursued in the present case is not, in the future use of the land to be acquired. It my view, a valid ground for making follows that the administrative authorities acquisitions of building plots conditional have, in determining the probative value of upon a prior authorisation scheme having the information received, considerable lati- suspensory effect in respect of the validity tude which is closely related to a discre- of the transaction. This assessment is borne tionary power. 57 out by the degree of latitude which Paragraph 8 of the VGVG offers the competent administrative authorities.

77. As a subsidiary plea, the Austrian Government has submitted that, if the Court were to deem the scheme at issue to be contrary to Article 73b of the Treaty, the scheme would have to be regarded as covered by Article 70 of the Act of 74. It is settled case-law that a prior auth- Accession, according to which the Republic orisation scheme such as that in the present of Austria may maintain its existing legis- case must be based on objective, non-dis- lation regarding secondary residences for criminatory criteria which are known in five years from the date of accession. advance to the persons concerned, in such a way as to circumscribe the exercise of the national authorities' discretion, so that it is not used arbitrarily. 58

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79. The Court also indicated that it is for was adopted in 1997 and which was the national court to determine the content applied in the main proceedings. 63 I would of the existing legislation regarding second- add that the national court, which, it ary residences at the date of accession of should be remembered, has not referred the Republic of Austria. 61 for a preliminary ruling a question concern- ing the interpretation of Article 70 of the Act of Accession, has not specifically cited the provision that was in force in 1995.

80. It is thus a matter for the referring court to determine whether Paragraph 8(3) 83. In the light of the foregoing consider- of the VGVG satisfies the conditions which ations, I will therefore be proposing that the Court identified in Konle as having to the Court, in its response to the referring be met in order to benefit from the court, rule that Article 73 b of the Treaty derogation provided for in Article 70 of must be interpreted as meaning that it the Act of Accession. precludes a prior authorisation scheme such as that provided for by the land acquisition regime established by the VGVG.

86. According to its case-law, the Court is not competent to answer such a question. 89. The Court stated further that the fact that the EFTA State in question sub- sequently became a Member State of the European Union, so that the question emanates from a court or tribunal of one of the Member States, cannot have the effect of attributing to the Court jurisdic- 87. In Andersson and Wåkerås-Anders- tion to interpret the EEA Agreement as son, 64 the Court was similarly invited to regards its application to situations which rule on the effects within the legal system of do not come within the Community legal a Member State of a provision of the EEA order. 66 Agreement during a period prior to that State's accession. In essence, a Swedish court asked whether Article 6 of the EEA Agreement should be interpreted as mean- ing that the Kingdom of Sweden could be held responsible for damage caused to 90. In its judgment in Rechberger, 67 individuals as a result of the incorrect delivered on the same date as Andersson transposition of a directive prior to that and Wåkerås-Andersson, the Court repro- State's accession to the European Union. duced this analysis, asserting that it did not have jurisdiction, either under Article 177 of the Treaty or under the EEA Agreement, to rule on the interpretation of that Agree- ment as regards its application by an EFTA State during the period prior to its acces- sion to the European Union. 88. The Court ruled that while it has, in principle, jurisdiction to give a preliminary ruling on the interpretation of the EEA Agreement where such a question is raised before a court or tribunal of one of the 91. In the light of these considerations, I Member States, that jurisdiction under suggest that the Court declare that it does Article 177 of the Treaty (now Article 234 not have jurisdiction to answer the third EC) applies solely with regard to the question submitted by the national court. Community. It does not therefore have jurisdiction to rule on the interpretation of 65 — Andersson and Wăkerâs-Andersson, paragraphs 27 to 31. 66 — Ibid., paragraph 30. 64 — Case C-321/97 Andersson and Wåkerås-Andersson [1999] 67—Case C-140/97 Rechberger and Others [1999] ECR ECR I-3551. I-3499, paragraph 38.

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