Do farmland sale caps infringe free flow of capital?

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The European Commission has filed an infringement procedure and formally requested that Latvia explain its reasons for passing laws to limit purchases of agricultural land, which the EC believes provide for excessive restrictions on such acquisitions, it announced in a press release Wednesday.

The EC wants to understand how Latvia sees its law to be in compliance with the EU’s need for the free movement of capital and freedom of establishment not subject to any kind of discrimination or proportionality.

Latvia’s law contains provisions requiring potential farmland buyers to have appropriate professional and educational qualifications and be free of any tax debts. The EC wants such articles “to strike a better balance between the different fundamental interests at stake.”

Latvia now has two months to prepare its response to the formal notice of the infringement procedure, which follows similar EC actions filed against member states Bulgaria, Hungary, Lithuania and Slovakia.

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