Moratorium on sale of farmland in Ukraine: PwC Legal advocates the right of landowners to dispose of their property

The team of lawyers and legal experts of PwC Legal Ukraine, led by Head of Real Estate practice Olga Balytska and Head of Dispute Resolution practice Dmytro Donets, filed a lawsuit seeking to protect the property rights of a Ukrainian landowner breached as a result of the existing "moratorium on sale of agricultural land".

On September 11, 2018, a private domestic investor and a Ukrainian farmer while exercising their right to freely dispose of their property, asked a private notary to register/record the Purchase and Sale Agreement for a plot of agricultural land with total area of 1.1391 hectares located in Lviv region. The notary denied their request by issuing a Notice of Denial to perform the notarial act, citing Para 15 of the Transitional Provisions of the Land Code of Ukraine that establishes the so-called "Moratorium on sale of agricultural land". The moratorium was introduced in 2002 as a "temporary" measure, but remains in effect 15 years later, despite the fact that the main risks that existed at the time of its introduction have long been gone.

Despite the ruling by the European Court of Human Rights in case “Zelenchuk and Tsitsyr v. Ukraine” from May 22, 2018, which specifically states that landowners have the right to freely dispose of their property, provisions of the First Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms, Ukraine’s  Constitution and other legislative acts, to date, Ukraine remains the only country in Europe and one of six remaining countries in the world, where the sale of land is prohibited - along with Tajikistan, Cuba and Congo.

The main arguments for lifting the moratorium on land sales state that Ukraine is currently facing the following needs to:

• Create a land market at a sufficient price point and pass legislation to create such market - as the main conditions for a favourable investment climate in Ukraine’s agricultural market.
  
• Create an efficient and transparent land market structure and fill the State Land Cadastre.
  
• Ensure national security, addressing the threat of loss of land as an important national resource.
  
• Ensure food supply security.