KRIB's position on the proposal for changes to the Law on the Ownership and Use of Agricultural Lands

Mr. DANAIL KIRILOV
CHAIRMAN OF
THE LEGAL AFFAIRS COMMITTEE
TO THE NATIONAL ASSEMBLY

CONCERNING: Proposal for changes to the Law on the ownership and use of agricultural lands

DEAR MR KIRILOV,

The Confederation of Employers and Industrialists in Bulgaria is addressing you in your capacity as Chairman of the Committee on Legal Affairs to notify you of a change in the Law on the Ownership and Use of Agricultural Lands, promulgated in SG No. 38 of 2014. , which newly adopted norm, according to our expert opinion, is introduced retroactively, with the administrative sanctions provided for in Article 40a for non-compliance with the requirements of Article 3, Paragraph 7 coming into force on May 1, 2015.

What is the case? The acquisition of agricultural land by the persons referred to in Article 3, Paragraph 7 was legal until the adoption of the law. It did not constitute an infringement. After the change was made, the result was that the law in a sense took on the character of a retroactive law, as the law made it an offense not only to acquire but also to own agricultural land and attacked those who had legally acquired land.

In our opinion, the opposite action is fatal. With the adoption of such a norm, already legally acquired rights are sanctioned. Such a norm may cover future acquisitions, but not sanction already acquired rights.

In our opinion, this legal case is entirely within the competence of the Committee on Legal Affairs. In this regard, we bring to your attention the following specific proposal to amend and supplement the Law on the Ownership and Use of Agricultural Lands (Official Gazette No. 17 of March 1, 1991,………., amended and supplemented. SG No. .38 of May 7, 2014, amended SG No. 49 of June 13, 2014, amended SG No. 98 of November 28, 2014, amended SG No. 12 of February 13, 2015, amended and supplemental State Gazette No. 14 of February 20, 2015)

1. At the beginning of Article 3, Paragraph 7, add the phrase "After the entry into force of this law", drop the phrase "and own" and start the current text with a small letter, i.e. paragraph 7 to be amended as follows

"Art. 3. (7): After the entry into force of this law, they cannot acquire the right of ownership of agricultural lands:”

Motives:

In this way, the inadmissible reverse action of the civil law is avoided, legally acquired rights are not revoked, legal entities' legitimate expectations of the stability of commercial turnover are not violated.

Article 14 paragraph 1 of the Law on normative acts requires that the retroactive effect of normative acts be granted only exceptionally and with an express provision. There is no such express provision in the ZSPZZZ. In this way, the legislator did not take into account and discuss the interests of the owners who did not legally acquire agricultural land in a past period. The reverse action is derived from the tacit coercion of the affected owners to free themselves from their property by 1.5.2015. /art. 40a of the law/.

It is also inadmissible to impose sanctions on persons who acquired fully legal real rights before the law came into force. And in this case, the ZNA stipulates in Article 14 paragraph 3 that "provisions that provide for sanctions cannot be given retroactive effect..." This norm of the law is imperative and cannot be ignored. This prohibition applies to both criminal and administrative sanctions.

The law should only apply going forward. Otherwise, the country will face a large number of cases before the European courts. Forcing owners to transfer their properties at short notice puts them at an unequal position in the market and is tantamount to nationalization. This will lead to an outflow of investors not only in listed public companies, but in general. The measure will have a very negative impact on the image of Bulgaria as an investment destination, and also in terms of legal stability and legal predictability. This will deepen the investment and legal mistrust towards Bulgaria.

The decision of the Constitutional Court No. 7 of 2001 should also be taken into account here. The Constitutional Court ruled that the right of use can be alienated without the consent of the owner, only under the conditions of the Constitution /art.17/, and against fair compensation. In the case of retroactive effect, a real right is compulsorily rearranged. The legislator's violation against the Constitution is not only in the tacit retroactive effect of a civil law, but also in the fact that it gives a new regulation to legally arisen property rights - it imposes a sanction on these property rights, thus forcing the owners in a short period of time to release from them under the threat of this sanction. In addition to the fact that such a mandatory transfer at short notice harms the owners, it is completely unconstitutional. The imposition of a sanction, even when it is an administrative one, for past lawful behavior is a legal absurdity, prohibited by all modern legislation.

The decision cited above refers to the protection of the right of use. With even greater force, the arguments of the court will be valid against a legislative rearrangement of the property right that has already arisen!

With respect,
Eugene Ivanov
Ex. director