Criminal proceedings against Uwe Kay Festersen.
Date: 2007-01-25
22. It should be recalled at the outset that the right to acquire, use or dispose of immovable property on the territory of another Member State, which is the corollary of freedom of establishment, as is apparent from Article 44(2)(e) EC (Case 305/87 Commission  v Greece  [1989] ECR 1461, paragraph 22), generates capital movements when it is exercised (Joined Cases C-515/99, C-519/99 to C-524/99 and C-526/99 to C-540/99 Reisch and Others  [2002] ECR I‑2157, paragraph 29).
23. As is clear from the nomenclature of capital movements set out in Annex I to Council Directive 88/361/EEC of 24 June 1988 for the implementation of Article 67 of the Treaty (article repealed by the Treaty of Amsterdam) (OJ 1988 L 178, p. 5), capital movements include investments in real estate on the territory of a Member State by non-residents. That nomenclature still has the same indicative value for the purposes of defining the notion of capital movements (see Case C‑222/97 Trummer and Mayer  [1999] ECR I-1661, paragraph 21; Case C-464/98 Stefan [2001] ECR I-173, paragraph 5; Reisch and Others , paragraph 30; and Case C‑386/04 Centro di Musicologia Walter Stauffer  [2006] ECR I‑0000, paragraph 22).
24. It must thus be examined whether national legislation such as that at issue in the main proceedings constitutes a restriction on capital movements. In that regard, it follows from settled case‑law that the measures prohibited by Article 56(1) EC, as restrictions on the movement of capital, include those which are likely to discourage non‑residents from making investments in a Member State or to discourage that Member State’s residents to do so in other States (see, to that effect, Case C‑513/03 Van Hilten-van der Heijden  [2006] ECR I‑1957, paragraph 44).
26. Such a measure may nevertheless be permitted provided that it pursues an objective in the public interest, that it is applied in a non‑discriminatory way and that it respects the principle of proportionality, that is to say that it is appropriate for ensuring that the aim pursued is achieved and does not go beyond what is necessary for that purpose (Case C‑302/97 Konle  [1999] ECR I‑3099, paragraph 40; Reisch and Others , paragraph 33; and Case C‑452/01 Ospelt and Schlössle Weissenberg  [2003] ECR I‑9743, paragraph 34).
27. As regards the condition relating to the pursuance of an objective in the public interest, the Danish Government submits that the national legislation seeks, first, to preserve the farming of agricultural land by means of owner-occupancy, which constitutes one of the traditional forms of farming in Denmark, and to ensure that agricultural property be occupied and farmed predominantly by the owners, second, as a town and country planning measure, to preserve a permanent agricultural community and, third, to encourage a reasonable use of the available land by resisting pressure on land.
28. Such objectives are themselves in the public interest and are capable of justifying restrictions to the free movement of capital (see, to that effect, Konle , paragraph 40; Reisch and Others , paragraph 34; and Ospelt and Schlössle Weissenberg , paragraphs 38 and 39). In addition, as the Danish Government and the Commission of the European Communities maintain, those objectives are consistent with those of the common agricultural policy which, under Article 33(1)(b) EC, aims ‘to ensure a fair standard of living for the agricultural community’ in the working-out of which, according to Article 33(2)(a), account must be taken ‘of the particular nature of agricultural activity, which results from the social structure of agriculture and from structural and natural disparities between the various agricultural regions’ (see, to that effect, Ospelt and Schlössle Weissenberg , paragraph 40).
36. Article 6(2) EU states that ‘the Union shall respect fundamental rights, as guaranteed by the [ECHR] and as they result from the constitutional traditions common to the Member States, as general principles of Community law’ (Case C‑540/03 Parliament  v Council  [2006] ECR I‑0000, paragraph 36).
43. In addition, in providing only one example of such cases, that circular does not inform potential acquirers about the specific and objective situations in which a derogation from the residence requirement will be granted or refused. Such vagueness does not enable individuals to become familiar with the extent of their rights and obligations resulting from Article 56 EC, so that a system of that nature must be regarded as being contrary to the principle of legal certainty (see, to that effect, Case C‑483/99 Commission  v France  [2002] ECR I‑4781, paragraph 50, and Case C‑463/00 Commission  v Spain  [2003] ECR I‑4581, paragraphs 74 and 75). In any event, it does not appear that that system has taken into account the situation of citizens of the Union who are not resident in Denmark in order to avoid discriminatory application.