On its way to becoming a Member State of the European Union, Serbia undertook the obligation to implement the fundamental EU principles into its legal system by entering into the Stabilization and Association Agreement (the “SAA”).
Under the SAA, Serbia was bound to introduce mechanisms so as to allow EU citizens to acquire agricultural land under the same conditions as its own citizens by September 1, 2017. In order to perform its obligation, Serbia adopted amendments to the Agricultural Land Act (the “Act) and became the first non-Member State allowing EU citizens to acquire the ownership title on agricultural land.
The Act stipulates that EU citizens may acquire ownership title on the agricultural land in accordance with the SAA. However, if one was to closely analyze the Act, it may be argued that EU citizens and Serbian citizens are practically not able to acquire agricultural land under the same conditions. Specifically, there are no specific restrictions for a Serbian citizen to acquire agricultural land whereas if an EU citizen wants to purchase the said land, it would have to: (i) live on the territory of the municipality where the land is located for at least 10 years; (ii) cultivate the land for at least three years; (iii) have a registered farmland ownership; and (iv) own the machines and equipment necessary for agricultural production.
Not only that, but if the EU citizen satisfies the above mentioned criteria, it would still be prevented to acquire more than 2 ha of agricultural land. Moreover, the right of disposal of the EU citizen would also be restricted since the Act stipulates that the Republic of Serbia has a pre-emption right over the agricultural land which is to be subject of the transaction.
Since the equalization of the EU citizens with Serbian citizens was the main goal of the above mentioned article of the SAA, it may be questioned whether Serbia actually liberalized the agricultural land marked in an expected manner. Moreover, the Act does not include provisions concerning the right of the EU legal entities to acquire agricultural land in Serbia.
By Radovan Grbovic, Partner, and Nevena Milosevic, Associate, Samardzic, Oreski & Grbovic