EC refers Hungary to Luxembourg court over farmland contracts

Budapest, June 16 (MTI) – The European Commission has referred Hungary to the European Court of Justice for failing to comply with EU rules on the rights of cross-border investors in farmland.

A 2013 law terminated certain usufruct or “pocket” contracts that confer rights to use a property and profit from it. The contracts were terminated on May 1, 2014, although earlier it was announced that holders of the contracts would enjoy a transitional period of 20 years.

The commission sent a letter of formal notice in October 2014 and a reasoned opinion in June 2015 requesting Hungarian authorities to bring their rules into line with EU law, but was not notified of any measures.

The commission also contested another provision in the same law that allows for the unilateral termination of certain land lease contracts concluded more than 20 years ago, subject to a very short notice period.