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policy paper

Xenophobic Property
Rights

Ana Tchiabrishvili
April, 2018
“I observe, that it will be for my interest
founding a legal entity3. In 2003, the provision
to leave another in the possession of his goods, was amended to permit ownership of Georgian
provided he will act in the same land by only those legal entities that primarily op-
manner with regard to me“1 erated in the field of agriculture4. Ten years later

in 2007, the provision that recognized aliens as


rightful owners of agricultural land if they had
Introduction inherited it or owned it legally as a citizens of
Georgia (i.e. an individual had lost Georgian cit-
In 2013, population of Ditsi did not allow Indi- izenship after acquiring foreign citizenship) was
an businessmen to plant saplings on the village reintroduced in the law. However, this very reg-
territory. As stated by one of the locals “they ulation obligated such individuals to alienate the
have seized our plots... Indians are here... We land within 6 months after origination of the title
stopped them, this land belongs to our children, to the land. In an event of failure to do so, the
our village and our Georgia, not to Indians2”. At land would be seized from the owner in favor of
a glance, such attitude may seem fair, but in re- the state.
5

ality, it illustrates the constant fears of certain


groups in Georgia. The “seizure” that the res- In 2011, the above provision was challenged in
ident of Ditsi is talking about is not the same the Constitutional Court of Georgia by a Danish
as the legal term “seizure”. The village local is citizen named Heike Cronqvist (who had resi-
alleging seizure of land that was never his to dence permit in Georgia), who argued that the
begin with. Since farmers in Georgia are used legal obligation to alienate the land received as
having agricultural land plots nearby that are not inheritance ran against the universal property
owned by anyone in particular and to them the and inheritance rights guaranteed by the Consti-
state is more of an abstract owner than a real tution of Georgia.
one, they’ve come to develop a perception that
the land belongs to the village. Amidst such at- During the proceedings the legislative body of
titudes, the issue of sale of agricultural lands to Georgia – Parliament, was naturally obligated to
foreigners, is speculated for many years by the provide evidence proving that limiting the con-
6

ruling government. stitutional right of aliens to purchase and use


property on equal basis with citizens of Georgia
The Legislative Reality and the Deci- was in public interest. Back then representative
of Parliament stated that “the main purpose of
sion of the Constitutional Court such prohibition is to avoid purchase in bulk of
cheap agricultural land by citizens of rich coun-
As early as in 1996, the law of Georgia on Own-
tries, which may negatively affect economic se-
ership of Agricultural Lands recognized citizens
curity of the state, environmental protection and
of Georgia as the only rightful owners of such
national security.”
land, while aliens and individuals without Geor-
gian citizenship could only lease it and if an in-
On 26 June 2012, the court ruled in favor of
dividual who inherited such land was not legally
Heike Cronqvist because the respondent failed
authorized to own it, the land had to be alienated.
to provide a single argument that would illustrate
In 1997 the provision on inheritance of Georgian
any logical connection between the limitations
land by aliens completely disappeared from the
imposed by the state and the declared legitimate
said law, followed by introduction of an exception
goals. Such logical connection should exist in or-
in 2000 to allow aliens to acquire the land by
der for court to be convinced that interference

1 David Hume, ”A treatise of human nature” 1978 [1739], p. 490


2 https://goo.gl/JzofQh
3 Para.1 of Art.4
4 https://goo.gl/48Vu1G
5 https://goo.gl/JhnXyG, Art.4
6 Since para.2 of Art.21 of the Constitution of Georgia allows restriction of the right to property based on a pressing social need

1
with rights of an individual is legitimate.
TIMELINE OF LEGISLATIVE REALITY ON AGRICULTURAL LAND

1996
OWNER OF THE LAND CAN BE ONLY CITIZEN OF

1997
GEORGIA. OTHERS CAN ONLY LEASE. FOREIGN-
ERS MUST ALIENATE IT IF THEY RECEIVE IT AS
INHERITANCE.
THE PROVISION THAT REGULATES
ISSUES OF AGRICULTURAL LANDS
INHERITED BY ALIENS COMPLETELY

2000 DISAPPEARS FROM THE LAW.

THE LAND CAN BE OWNED BY A CITIZEN OF

2003
GEORGIA AND A LEGAL ENTITY REGISTERED
IN GEORGIA.

THE RIGHT TO OWN THE LAND IS

2007
ENJOYED BY A GEORGIAN
CITIZEN, HOUSEHOLD OR A LEGAL
ENTITY REGISTERED IN GEORGIA,
THAT OPERATES PRIMARILY IN
OWNERSHIP OF THE LAND CAN BE ENJOYED BY THE FIELD OF AGRICULTURE.
EVERYONE, BUT FOREIGNER AND A LEGAL ENTITY
REGISTERED ABROAD CAN ENJOY THE RIGHT TO
PROPERTY IN RELATION TO AN AGRICULTURAL
LAND THAT THEY INHERIT, WHILE A FOREIGNER
CAN ALSO ENJOY THE RIGHT TO PROPERTY THAT
S/HE OWNED LEGALLY AS A CITIZEN OF GEORGIA
[HOWEVER, WERE OBLIGATED TO ALIENATE THE
2012
LAND WITHIN 6]. THE CONSTITUTIONAL COURT
OVERTURNED THE BAN ON ACQUI-
SITION/INHERITANCE OF AGRICUL-

2013
TURAL LAND BY ALIENS.

THE LAND (INCLUDING INHERITED LAND) CAN BE


OWNED BY EVERYONE, BUT IN THE CONTEXT OF

2014
FOREIGNER AND LEGAL ENTITY REGISTERED
ABROAD, THIS RIGHT WAS SUSPENDED UNTIL 31
DECEMBER 2014.

THE LAND (INCLUDING INHERITED LAND) CAN BE


OWNED BY EVERYONE, BUT IN THE CONTEXT OF
FOREIGNER AND LEGAL ENTITY REGISTERED

2017
ABROAD, THIS RIGHT WAS SUSPENDED UNTIL 31
DECEMBER 2014.

THE EFFECTIVENESS OF THE PROVISION THAT


ALLOWED FOREIGNERS TO ACQUIRE OR INHERIT
THE LAND WAS SUSPENDED UNTIL ENACTMENT OF
THE CONSTITUTIONAL LAW OF GEORGIA. PARLIA-
MENT ENACTED NEW CONSTITUTIONAL LAW: AN
AGRICULTURAL LAND AS A RESOURCE OF SPECIAL
IMPORTANCE CAN BE OWNED ONLY BY THE STATE,
A SELF-GOVERNING ENTITY, AND A CITIZEN OF
GEORGIA OR AN ASSOCIATION OF CITIZENS OF
GEORGIA.

2
The court stated that “the right to property is not to purchase or inherit the property was suspend-
only a basic foundation of existence of an indi- ed until 31 December 2014. Reasons and goals
vidual but it also ensures the individual’s free- cited by initiators and authors10 of the bill were
dom, adequate realization of his/her abilities and the ones that the court had clearly and unequivo-
capacities [and allows him/her] to live his/her life cally declared to have no logical connection with
responsibly”7, and indicated that: purchase of an agricultural land by foreigners.

• “The modern understanding of lawful state A few months after the moratorium was declared,
does not allow use of narrow, citizenship criteria then Prime Minister of Georgia Bidzina Ivanish-
in order to identify the subject of a right... There-vili made the following announcement – “... We
fore, understanding that an individual is a subject decided not to continue the moratorium ... We
to property rights is related to the fact that he/sheshould start transferring lands immediately, at
is a human being and does not depend on his/ least by leasing. The more restrictions and mor-
her citizenship of any country.8“; atoriums there are in the economy, the less free
the market will be. This hinders development of
• The right to inheritance entails not only an economy and inflow of investments... 11” Howev-
individual’s right to receive inherited goods but er, the authorities have not yet fulfilled the pledge
also the right of a testator to determine subse- made by the former Prime Minister.
quent owner of his/her property independently.
The court found that the said aspects of the right On 17 September 2013, another citizen of a for-
to property serve as an integral part of freedom.9 eign country Mathias Huter applied to the Con-
stitutional Court of Georgia and demanded “ab-
The court also stated that clearly the state enjoys olition of the moratorium”. The respondent, the
broad discretion to determine by the legislation Parliament of Georgia could not provide a single
the meaning of property in general and establish fact or example that would illustrate necessity of
the rule for acquiring property. However, it is also the moratorium. In addition, during preliminary
obligated not to regulate property in a way that hearing the plaintiff proved that adoption of the
would deplete the essence of the field protected disputed norm was driven by the same legal
by the constitutional right to property. goals that the norms declared as unconstitution-
al sought to achieve.
Moratorium: Means for Limiting
Aliens’ Right to Property The Constitutional Court invoked its power to de-
liver a ruling on inadmissibility of the case and
The court’s decision caused much grievance, es- recognition of invalidation of the impugned norm.
pecially in Parliament. Even though the Consti- Thus, the Court repealed the disputed norm that
tutional Court’s decision should be immediately contained similar norms that had already been
enforced, it took the legislative branch one year declared as unconstitutional by the court.12 The
to add one word (“alien”) in the legislative pro- court’s motivation was based on the argument
vision about land ownership. In addition, despite about the goals of imposing the moratorium co-
the norm was declared unconstitutional, Parlia- inciding with the legitimate goals of the norms
ment came up with a way around it and declared abolished back in June 2012 and the lack of any
a moratorium under the same law that “enforced” logical connection between the limitation and the
the decision. As a result, the possibility for aliens declared goals.13

7 Decision no.1/2/384 of the Constitutional Court of Georgia in Citizens of Georgia – Davit Jimsheleishvili, Tariel Gvetadze ad Neli Dalalishvili v the Parliament of Georgia,
2 Jul 2007, II-5
8 Decision no.3/1/512 of the constitutional Court of Georgia in Danish Citizen Heike Cronqvist v the Parliament of Georgia, 26 Jul 2012, II-44
9 Ibid. II-76.
10 MPs Zurab Tkemaladze and Gigla Agulashvili
11 https://goo.gl/sa24Z1
12 Para.41 of Art.25 of the organic law of Georgia on the constitutional Court of Georgia
13 Ruling no.1/2/563 of the Constitutional Court of Georgia in Citizen of Austria Mathias Huter v the Parliament of Georgia, 24 June 2014

3
cheap price, the new reality will leave the state
Grievances about Alienation of Land facing a major blow... It should not cause the
to Foreigners loss of our biggest material wealth, our lands and
turn our citizens into service staff.”15 It is confus-
In the public opinion poll carried out for the Na- ing, if majority of population is “at the brink of
tional Democratic Institute in August 2013,14 55% poverty”, why would this reality be worsened by
of respondents sided with and 20% sided against a chance to sell land for a higher price to for-
the Constitutional Court’s ruling to abolish the eigners who are somehow automatically thought
moratorium on agricultural land sale to aliens. to have more material resources, or why does
The survey clearly illustrates that individual citi- selling of land mean turning sellers into service
zens are not as fearful as xenophobic politicians. staff? Even if it were true, what is so bad about
The ruling of the Constitutional Court was met creating new jobs in the growing field of service?
by clear disapproval by the legislature, since the Such statements have a tendency of stirring up
court had disregarded the will of legislators for xenophobic and irrational fears in the Georgian
the second time by allowing ownership of agri- context, while the head of the Church should be
cultural land by aliens. working to neutralize such fears.

“ I thought everyone understood that arable land ...


and especially Georgian land needs to be treated
with care ... They understand it well in France,
Poland ... or, I won’t enumerate, I will simply say
that every European country understands it...”

- Tea Tsulukiani

In France, not only EU-member states but also citizens


of any other state can purchase agricultural land.

Poland’s example is irrelevant because of the special


context. When Poland joined the EU in 2004, together
with other new Member States it requested an opt-out
and was allowed to keep the legislation that banned
non-Poles from buying rural lands during the transition
period that lasted until 2 May 2016.

Belgium, Germany, Monaco, Great Britain, Ireland,


Czech Republic, Estonia, Spain, France, Italy,
the Kingdom of Netherlands, Iceland, Austria,
Norway, Portugal and Sweden do not impose such prohibition.

Besides Members of Georgian Parliament, peo- Minister of Justice Tea Tsulukiani, who once
ple who greatly form public opinion, expressed used to make positive statements about the Con-
their attitudes about the issue too. More spe- stitutional Court, was especially alarmed by the
cifically, Patriarch of Georgia, Ilia II made the Court’s ruling. She wrote on her blog: “I thought
following announcement: “... Due to the social everyone understood that arable land ... and es-
and economic hardships, vast majority of rural pecially Georgian land needs to be treated with
population lives on the brink of poverty and ... care ... They understand it well in France, Poland
they are forced to sell their property for a very ... or, I won’t enumerate, I will simply say that

14 https://goo.gl/a69Dqf
15 https://goo.gl/5AtHtF

4
every European country understands it...”16 nounced about new regulations that would pro-
tect agricultural lands as well as interests of
Unfortunately, in her blog-post Tea Tsulukiani investors. Indeed, since then the Georgian au-
does not address the question of what makes thorities were constantly working on different lim-
Georgian agricultural land special compared to itations on sale of agricultural land to foreigners
agricultural lands of other countries or why is ag- but none of the models that were developed led
ricultural land more sacral than non-agricultural to legislative changes.
one in the 21st century. In addition, the state-
ment about foreigners not being able to buy ag- The Constitutional Reform of the
ricultural land in France is not true. Not only cit- Right to Property
izens of EU-member states but also citizens of
any other state can purchase such property in With announcement of the constitutional reform
France, however the Association of Farmers of in 2017, the issue of agricultural land sale re-
France has preferential right to purchase. As for gained prominence. In January MP Koba Narche-
the example of Poland, it is irrelevant because of mashvili unveiled the position of the ruling power
the country’s unique history and context. Poland stating that the parliamentary majority supports
joined the EU in 2004, together with other new introduction of ban on agricultural land sales to
Member States it requested an exception and foreigners in the Constitution.17 On January 24,
was allowed to keep the legislation that banned Deputy Chair of Parliament, member of the fac-
non-Polish people from buying rural lands during tion “Patriots of Georgia”, Irma Inashvili held a
the transition period that lasted until 2 May 2016. briefing to announcet: “Today, we encounter total
disorder in alienation of agricultural lands. Geor-
Leading European countries do not impose lim- gian lands shall be protected. It is the primary
itations because they do not believe that agri- obligation of the state...” During the briefing she
cultural lands need to be protected from aliens. also stated that within her powers as a member
In particular Belgium, Germany, Monaco, Great of the State Constitutional Commission (SCC)
Britain, Ireland, Czech Republic, Estonia, Spain, she was going to propose the new provision in
France, Italy, the Kingdom of Netherlands, Ice- the Constitution banning agricultural land sales
land, Austria, Norway, Portugal and Sweden do to foreigners. Leader of the “Georgian Mission”
not impose such prohibition. Gia Korkotashvili responded to the initiative by
expressing readiness to fight with the “Alliance of
The Minister of Justice also expressed her con- Patriots”, whom they trusted, for implementation
cern over the fact that the Constitutional Court of the said changes in the Constitution.18 Howev-
did not apply the test of proportionality in Mathi- er, the constitutional law of Georgia on Amend-
as Huter’s case – “judge’s robe is beautiful but ments to the Constitution of Georgia published on
use of the so-called test of proportionality during May 3 clearly showed that the SCC did not con-
consideration of a case is more important.” Nat- sider the said initiative. Under the constitutional
urally, the Court that clearly used the proportion- law the land was designated as a resource of
ality test in its decision in 2012 did not use it special importance and a reference was made to
again in 2014. Naturalness stems from the fact the organic law to indicate that the right to prop-
that the Court repealed the disputed norm with- erty would be regulated by the law. According to
out main hearing. “Missing” such detail serves the draft, the Constitution would not define who
the purpose of misleading society and stirring up was allowed to own land and it would not impose
negative feelings towards court. a ban on grounds of citizenship.19 However, on
June 8 the Chairperson of Parliament announced
In the same blogpost Tea Tsulukiani also an- that agricultural land sales to foreigners would

16 https://goo.gl/Q4gWyg
17 https://goo.gl/cB9Q42
18 https://goo.gl/afgTse
19 https://goo.gl/BCDkJ7

5
be prohibited by the Constitution.20 According to “the motherland” in exceptional cases and we
the Chairperson, Parliament was considering a suspect that in reality such alienation will not oc-
bill that ensured prohibition of agricultural land cur as infrequently as exceptions do. The ruling
sales to foreigners before the Constitution came forces certainly haven’t addressed the fact that
into force. Even though the ruling authorities un- such powers pose a significant risk of creating
derstood very well that the moratorium was un- the source of corruption.
constitutional, they fulfilled the “order” of radical
groups (similar to the demand to define the right Irrationality of “Rational Use of the
to marriage at the constitutional level) and vio- Land”
lated once more the principle of separation of
power. In particular, on 16 June 2017, 87 MPs
The Parliament of Georgia is limiting foreigner’s
voted in favor of the second moratorium on the
right to own an agricultural land at the consti-
agricultural land sales to foreigners, none voted
tutional level, while the arguments cited by the
against. As a result, effectiveness of the legal
Constitution of Georgia back in 2012 about the
foundation for allowing foreigners to purchase/
ban being unfair, are still relevant.
inherit the property was suspended before en-
actment of the new Constitution.
First, we should note that designating agricul-
tural land in general as a resource of special
On 26 September 2017, the Parliament of Geor-
importance is irrational because “...There may
gia approved the draft revised Constitution with
be a specific plot of land, ownership of which,
the third reading. The new Constitution will be-
based on its strategic importance, may be a part
come upon taking an oath by the President of
of state security interest, however, overall agri-
Georgia elected in October 2018.
cultural land cannot be considered as such.”21
The right to property has certainly undergone im-
Years ago Parliament cited the purpose of ra-
portant changes. While the existing Constitution
tional use of agricultural lands as an argument
does not provide the list of individuals that enjoy
for imposing such limitation. This purpose is still
the right to property, the new Constitution distin-
cited as a motive of the amendment. Rational
guishes agricultural lands as a resource of spe-
use is clearly a valid reason, however “for ratio-
cial importance and clearly indicates that they
nal use of land and resulting organized farming,
can only be owned by a citizen of Georgia, an
equal attention should be paid to use of agricul-
association of Georgian citizens, a self-govern-
tural land by any individual, whether it is a for-
ing unit or the State. The new constitutional pro-
eigner or a citizen of Georgia”.22 It is unclear why
vision also provides an exception to be regulated
a citizen of Georgia is considered a more rational
by the organic law. The authorities used this very
user of agricultural land while s/he is free not
exception to appease opponents of the ban.
to use at all the land that s/he owns, so as the
land remains uncultivated for years, which is also
Based on the exceptions allowed by the organic
his/her right. There is no evidence that would
law, agricultural land sales to foreigners will still
lead us to believe that a citizen of Georgia and a
be possible, however the State will be the seller
foreign citizen have different perceptions of and
and it will make decisions about alienation of the
attitudes towards Georgian agricultural land, and
land based on its own perceptions and prefer-
that a citizen of our country will use the land
ences, all the while the State does not recognize
more rationally every time.23
citizens as capable of making such decision.
This means that the only State’s bureaucratic
machinery holds the exclusive power to alienate

20 https://goo.gl/NhMM6i
21 Decision no.3/1/512 of the constitutional Court of Georgia in Danish Citizen Heike Cronqvist v the Parliament of Georgia, 26 Jul 2012, II-69
22 Amicus curiae brief by Free University: Danish Citizen Heike Cronqvist v the Parliament of Georgia, https://goo.gl/aVuL9M
23 https://goo.gl/aVuL9M

6
Parliament of Georgia believes that the limita- agree to a lucrative offer for a phony cause of
tions will serve national interests too, which is yet protecting dignity of the country.
another populist step because part of the pop-
ulation fears that foreigners may buy the entire It is also peculiar that in the 21st century agri-
land of the country and it may affect the issue cultural land is considered to have more benefits
of sovereignty. Clearly, the fear is irrational be- and more “social bondage” than non-agricultural
cause no matter who owns the land, sovereign- land in a city, amid mass migration from rural to
ty of the country is not alienated along with the urban areas and increasing demand for commer-
land. The state has sovereignty on its own ter- cial properties, while selling/leasing such proper-
ritory and therefore, the competence to regulate ties provides a very lucrative source of income.
private property rests with the state.24
By imposing another moratorium on the sale of
Another argument cited during discussions about agricultural lands to foreigners on 16 June 2017,
the new formulation was that agricultural land is the Parliament of Georgia also disregarded the
different because of the benefits that it brings, will of current and former citizens of Georgia. Be-
owner of such land has work to do and unlike cause of the ban imposed by Parliament, today,
other types of land such land has a “social bond- citizens of Georgia are unable to leave inheri-
age”.25 tance to their children who are foreign citizens
and the children are unable to receive their par-
The above evaluation is firstly disputable be- ents’ inheritance. For instance, former citizens
cause ownership of an agricultural land does not of Georgia who reside in the country Prokopi
a priori mean its cultivation. It could be that a Savvidi and Diana Shamanidi (who lost Geor-
farmer does not find cultivation to be profitable gian citizenship after accepting citizenship of an-
and if this is true selling the land to a foreign in- other state) are unable to exercise their rights
vestor would be far more profitable than having to property and inheritance guaranteed by the
an uncultivated land. If cultivation of land is an current Constitution. Prokopi Savvidi is unable to
adequate source of income for a farmer, as a claim the title to a house and adjoining land that
rational person the farmer is not expected to sell he built himself, which are registered under his
his/her property that holds value. The legislators name in the state-issued household book. Diana
and experts who support the limitation, often for- Shamanidi cannot receive the inheritance left by
get that right to property is not one-sided, rather her parents on account of the said moratorium.
it is related to freedom of contract that has two The legislators failed to consider individuals with
parties – a buyer and a seller. It is the latter that strong emotional ties with Georgia, who as Geor-
is overlooked by the legislator. Today the Geor- gian citizens used to have a legal ownership of
gian authorities are telling citizens of Georgia property, the fate of which is currently unclear.
that the bureaucratic machinery knows best who These individuals have filed constitutional com-
to sell the property to or who to give the prop- plaints with hope that before enactment of the
erty as inheritance and on what terms. This lim- new Constitution the court will be able to make
its an individual’s freedom to determine terms of pro-human decision in consideration of their in-
contact and choose the option that suits him/her terest.
best. It has outmost importance that the prohibi-
tions affect agricultural lands only, i.e. the prop-
erty owned mostly by the least well-off groups
of the society, meaning that we are stripping the
poorest people of a hypothetical opportunity to

24 Decision no.3/1/512 of the constitutional Court of Georgia in Danish Citizen Heike Cronqvist v the Parliament of Georgia, 26 Jul 2012, II-68, 69.
25 Ana Pirtskhalaishvili, expert of the parliamentary legal affairs committee and a member of the SCC made the following announcement during the week of the human
rights law at the university: “...it [agricultural land] is different because agricultural land provides benefits and an individual who lives there has livelihood, unlike other types
of land ... Therefore, it has social significance, social bondage...”

7
Conclusion

Coordinated and targeted attack of the Govern-


ment and the Parliament of Georgia on property
right of foreigners caters to populism and the de-
mands of concrete political groups. Exploitation
of the issue of different types of land has allowed
the ruling forces to reinforce pseudo-patriotic
sentiments about agricultural land being a “moth-
erland”. It is unclear which aspects in particular
make an agricultural land a resource of a special
importance and if this is true, why is the State
allowing long-term lease of such a sacral land
to foreigners. Right after enactment of the new
Constitution, the State will have a discretionary
power to alienate agricultural lands to foreigners
of its choice, which can be motivated by busi-
ness and corrupt deals.

Such constitutional regulation serves the purpose


of placing a limitation on rights of ordinary citi-
zens, which is essentially unfair and in the long-
term perspective the State will have to change
its policy, especially if it continues approximation
with the EU and the consistent accession policy.