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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Salzmann (Free movement of capital) [2003] EUECJ C-300/01 (15 May 2003) URL: http://www.bailii.org/eu/cases/EUECJ/2003/C30001.html Cite as: [2003] ECR I-4899, [2003] EUECJ C-300/1, [2003] EUECJ C-300/01

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JUDGMENT OF THE COURT (Sixth Chamber)

15 May 2003 (1)

(Free movement of capital - Article 73b of the EC Treaty (now Article 56 EC) - Prior authorisation procedure for the acquisition of building plots - Purely internal situation - Article 70 of the Act of Accession of the Republic of Austria - Concept of existing legislation - Point 1(e) of Annex XII to the EEA Agreement)

In Case C-300/01,

REFERENCE to the Court under Article 234 EC by the Landesgericht Feldkirch (Austria) for a preliminary ruling in the land registration case brought before that court by

Doris Salzmann,

on the interpretation of Article 73b of the EC Treaty (now Article 56 EC) and of point 1(e) of Annex XII to the Agreement on the European Economic Area of 2 May 1992 (OJ 1994 L 1, p. 3),

THE COURT (Sixth Chamber),

composed of: J.-P. Puissochet (Rapporteur), President of the Chamber, R. Schintgen, V. Skouris, F. Macken and J.N. Cunha Rodrigues, Judges,

Advocate General: P. Léger,

Registrar: M.-F. Contet, Principal Administrator,

after considering the written observations submitted on behalf of:

- Ms Salzmann, by W.L. Weh, Rechtsanwalt,

- the Austrian Government, by C. Pesendorfer, acting as Agent,

- the Commission of the European Communities, by G. Braun and M. Patakia, acting as Agents,

- the EFTA Surveillance Authority, by V. Kronenberger, acting as Agent,

having regard to the Report for the Hearing,

after hearing the oral observations of Ms Salzmann, represented by W.L. Weh, the Austrian Government, represented by P. Kustor and H. Kraft, acting as Agents, and the Commission, represented by G. Braun and M. Patakia, at the hearing on 24 October 2002,

after hearing the Opinion of the Advocate General at the sitting on 30 January 2003,

gives the following

Judgment

1. By order of 10 July 2001, received at the Court on 27 July 2001, the Landesgericht Feldkirch (Regional Court, Feldkirch) referred for a preliminary ruling under Article 234 EC three questions on the interpretation of Article 73b of the EC Treaty (now Article 56 EC) and point 1(e) of Annex XII to the Agreement on the European Economic Area of 2 May 1992 (OJ 1994 L 1, p. 3, hereinafter the EEA Agreement).

2. Those questions were raised in the course of an appeal brought by Ms Salzmann against the refusal of registration in the land register of the contract of sale of an unbuilt plot of land at Fußach in the Land of Vorarlberg (Austria).

   Legal background

   Community law

3. Article 73b(1) of the Treaty provides:

   Within the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited.

4. Point 1(e) of Annex XII to the EEA Agreement states that during transition periods, EFTA [European Free Trade Association] States shall not treat new and existing investments by companies or nationals of EC Member States or other EFTA States less favourably than under the legislation existing at the date of signature of the Agreement, without prejudice to the right of EFTA States to introduce legislation which is in conformity with the Agreement and in particular provisions concerning the purchase of secondary residences which correspond in their effect to legislation that has been upheld within the Community in accordance with Article 6(4) of the Directive [Council Directive 88/361/EEC of 24 June 1988 for the implementation of Article 67 of the Treaty (OJ 1988 L 178, p. 5)].

5. Article 6(4) of Directive 88/361 provides:

   Existing national legislation regulating purchases of secondary residences may be upheld until the Council adopts further provisions in this area in accordance with Article 69 of the Treaty. This provision does not affect the applicability of other provisions of Community law.

6. Article 70 of the Act concerning the conditions of accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden and the adjustments to the Treaties on which the European Union is founded (OJ 1994 C 241, p. 21, and OJ 1995 L 1, p. 1, hereinafter the Act of Accession) provides:

   Notwithstanding the obligations under the Treaties on which the European Union is founded, the Republic of Austria may maintain its existing legislation regarding secondary residences for five years from the date of accession.

   National law

7. Under the Bundes-Verfassungsgesetznovelle (Law amending the Federal Constitution) of 5 June 1992 (BGBl. 1992/276), the Länder are authorised to introduce administrative controls on property transactions in respect of plots of building land. In the case of the Land of Vorarlberg, Paragraph 3(1) of the Vorarlberger Grundverkehrsgesetz (Vorarlberg Land Transfer Law) of 23 September 1993 (LGBl. 1993/61), as amended in LGBl. 1995/11, 1996/9 and 1997/85 (hereinafter the VGVG), provides:

   Insofar as follows from the law of the European Union, the rules on the acquisition of land by foreigners ... shall not apply to

   ...

   (e) persons and companies for the purpose of direct investments, real property investments and other capital transactions.

8. Under Paragraph 7 of the VGVG:

   1. Acquisition of rights ... in built plots of land other than for holiday purposes shall not require the authorisation of the land transfer authority if the owner ... makes a declaration in writing in accordance with subparagraph 2 ...

   2. The acquirer shall declare that the plot of land is built on, that the acquisition is not for holiday purposes, and that he is an Austrian national ... or satisfies one of the conditions in Paragraph 3 ...

9. Paragraph 8(3)(b) of the VGVG provides:

   Acquisition of rights in unbuilt plots of land other than for holiday purposes shall be authorised if

   ...

   (b) the acquirer shows that the land will within a reasonable time be put to a use in conformity with the land use plan or is required for public interest, charitable or cultural purposes. A need of the acquirer is also to be taken into account in this connection.

10. That version of Paragraph 8(3) of the VGVG, which was published in LGBl. 1997/85 and entered into force on 1 January 1998, was adopted after the Verfassungsgerichtshof (Austrian Constitutional Court), by judgment of 10 December 1996, set aside the previously applicable version, adopted on 23 September 1993, which was worded as follows:

    Acquisition of rights in building plots other than for holiday purposes shall be authorised where

    ...

    (a) it is required for the purpose of building a dwelling, for industrial and commercial buildings, or for public interest, charitable or cultural purposes.

    ...

    The main proceedings and the questions referred for a preliminary ruling

11. Ms Salzmann, an Austrian national residing at Fußach, purchased a building plot in that commune from Walter Schneider, another Austrian. She did not apply for the prior administrative authorisation of transfer of ownership provided for in Paragraph 8(3) of the VGVG (hereinafter prior authorisation), upon which the validity of that type of transaction depends.

12. Ms Salzmann applied to the Grundbuchsrichter (land registry judge) of the Bezirksgericht Bregenz (Austria) for entry of that real property transaction in the land register, and annexed to her application a declaration analogous to that provided for in Paragraph 7(2) of the VGVG, by which she undertook not to use the land acquired for the purpose of building a holiday home. She claimed that the prior authorisation procedure introduced by Paragraph 8(3) of the VGVG contravened the Community obligations of the Republic of Austria and was unnecessary, since a declaration analogous to that provided for in Paragraph 7(2) of the VGVG was sufficient, in her view, for the purpose of effecting entry in the land register.

13. Ms Salzmann's application was rejected by order of 16 November 1998 of the Rechtspfleger (Registrar) of the Bezirksgericht Bregenz, a judicial official employed by the Bezirksgericht Bregenz and performing certain duties by delegation and under the authority of that court, on the ground that prior authorisation, which has constitutive effect for the purpose of establishing title, was lacking. Ms Salzmann then brought a Rekurs (appeal) against that order, which was heard by the Bezirksgericht Bregenz.

14. The Bezirksgericht Bregenz having made a reference to the Court for a preliminary ruling, the Court, by its judgment in Case C-178/99 Salzmann [2001] ECR I-4421, paragraph 21, held that it had no jurisdiction to answer the questions submitted to it, since the Bezirksgericht Bregenz was acting in an administrative capacity in the context of the proceedings pending before it and could not, therefore, be regarded as a court or tribunal within the meaning of Article 177 of the EC Treaty (now Article 234 EC).

15. The Bezirksgericht Bregenz then submitted Ms Salzmann's Rekurs to the Landesgericht Feldkirch.

16. The Landesgericht Feldkirch has doubts as to the compatibility of the prior authorisation procedure with Community law.

17. First, it is uncertain whether Ms Salzmann, who is an Austrian national, is entitled to rely on Article 73b(1) of the Treaty, which prohibits restrictions on the movement of capital, in the light of the absence of any transnational element in the main proceedings.

18. The Landesgericht considers, secondly, that, if Ms Salzmann were entitled to invoke that provision, it would be necessary to examine the three cumulative conditions of validity set out by the Court in Case C-302/97 Konle [1999] ECR I-3099, paragraph 40. First, it would need to be verified that Paragraph 8(3) of the VGVG is justified by an objective in the general interest. Second, it would need to be ascertained that the competent authority for the purpose of issuing the prior authorisation does not enjoy, in view of the fact that the acquirer of a plot of building land is required to show what the future use of the plot in question is to be, an element of latitude which could be applied in a discriminatory manner. Finally, it would be necessary to determine whether or not Paragraph 8(3) of the VGVG is proportionate to the objective assigned to it by the legislature of the Land of Vorarlberg. According to the Landesgericht, the validity of the VGVG seems uncertain with reference to those three conditions.

19. Third, if the prior authorisation procedure were found to be incompatible with Article 73b(1) of the Treaty, the Landesgericht wonders whether it might nevertheless be covered by the derogation provided for in Article 70 of the Act of Accession. If so, it considers that the Republic of Austria was entitled to maintain that procedure in force for a period of five years with effect from its accession to the European Union.

20. Lastly, the Landesgericht is uncertain whether the prior authorisation procedure is compatible with point 1(e) of Annex XII to the EEA Agreement, in view of the fact that the VGVG applicable to the case in the main proceedings entered into force after the signature of that agreement.

21. In those circumstances, the Landesgericht Feldkirch decided to submit the following questions to the Court for a preliminary ruling:

    1. May nationals of a Member State of the European Union rely on free movement of capital for a domestic transaction if national law prohibits discrimination against that country's own nationals but has no legislation expressly guaranteeing free movement of capital for citizens of the Union?

    2. Is it compatible with free movement of capital for authorisation by the land transfer authority with constitutive effect to be required for the acquisition of building land which has not been built on?

    3. What effect does the standstill clause in point 1(e) of Annex XII to the EEA Agreement have on wholly new kinds of situations regarding authorisation under land transfer law, not created until after signature of the EEA Agreement on 2 May 1992?

    The first and second questions

22. By its first and second questions, the national court seeks in essence to ascertain whether Article 73b(1) of the Treaty precludes national rules such as the prior authorisation procedure at issue in the main proceedings and, if so, whether that procedure is nevertheless covered by the derogation provided for in Article 70 of the Act of Accession.

    Admissibility

23. The Austrian Government and the Commission maintain that the situation at issue in the main proceedings is purely internal in nature and that there is, accordingly, no need to interpret Article 73b(1) of the Treaty. The questions referred for a preliminary ruling are therefore inadmissible.

24. Ms Salzmann and the EFTA Surveillance Authority claim, conversely, that the interpretation of Article 73b(1) of the Treaty is justified by the fact that there are aspects of the action in the main proceedings which connect it with Community law.

25. Ms Salzmann argues, first, that Paragraph 3(1) of the VGVG refers essentially to the content of Community law. Thus, prior determination by the Court of the exact scope of the obligations imposed on the Member States by Article 73b(1) of the Treaty is necessary to enable the national court to apply Paragraph 3(1) of the VGVG. In any event, Ms Salzmann submits that it is for the national court to assess the relevance of the questions which it refers. In that regard, she relies on paragraph 33 of the judgment in Konle, in which the Court held that it can refrain from giving a preliminary ruling on a question submitted by a national court only in exceptional circumstances, namely where it is quite obvious that any interpretation of Community law bears no relation to the facts of the main action or its purpose, or where the problem is hypothetical and the Court does not have before it the factual or legal material necessary to give a useful answer to the question submitted to it. In this instance, Ms Salzmann submits that those exceptional circumstances are not established in the case in the main proceedings.

26. Ms Salzmann observes, secondly, that Paragraph 3(1) of the VGVG grants Community nationals equal treatment with regard to the acquisition of real property. The lack of prior authorisation, which was the argument raised against her by the Bezirksgericht Bregenz, could, therefore, also be used to refuse to give effect to the acquisition by nationals of other Member States of building plots in the Land of Vorarlberg. In such a situation, prior authorisation would constitute an obstacle to the free movement of capital guaranteed by Article 73b(1) of the Treaty. Consequently, the fact that the material circumstances in the main proceedings are confined to a single Member State is purely accidental, the potential existence of a transborder element being all the more significant since the commune of Fußach borders on Germany. Ms Salzmann is of the opinion that, in such situations, the Court agrees to interpret Community law (Joined Cases C-321/94 to C-324/94 Pistre and Others [1997] ECR I-2343, paragraphs 44 and 45).

27. On that point, the EFTA Surveillance Authority adds that the Court has in general held that it has jurisdiction, on a reference for a preliminary ruling, to interpret Community law where national law requires that a national be allowed to enjoy the same rights as those which nationals of other Member States would derive from Community law in the same situation (Case C-281/98 Angonese [2000] ECR I-4139, paragraphs 14 and 18, and Case C-448/98 Guimont [2000] ECR I-10663, paragraph 23).

28. In that regard, it must first be observed that Article 234 EC is an instrument of judicial cooperation, by means of which the Court provides the national courts with the points of interpretation of Community law which may be helpful to them in assessing the effects of a provision of national law at issue in the disputes before them (see, to that effect, Case C-254/98 TK-Heimdienst [1998] ECR I-151, paragraph 12, and 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 22).

29. In this case, the national court seeks the interpretation by the Court of Article 73b(1) of the Treaty for the purpose of determining the scope of rules of national law which refer thereto. Since the questions submitted relate to the interpretation of Community law, the Court is, in principle, obliged to give a ruling (see, to that effect, Case C-415/93 Bosman [1995] ECR I-4921, paragraph 59).

30. Moreover, it is settled case-law that it is for the national courts alone to determine, having regard to the particular features of each case, both the need to refer a question for a preliminary ruling and the relevance of such a question (see, to that effect, the judgments in Guimont, paragraph 22, and Reisch, paragraph 25).

31. It follows that, in the factual and legislative context which the national court is responsible for defining and the accuracy of which is not a matter for this Court to determine, the questions submitted by the national court enjoy a presumption of relevance (Case C-355/97 Beck and Bergdorf [1999] ECR I-4977, paragraphs 22 to 24).

32. It is true that it is apparent from the documents before the Court that all the facts in the main proceedings are confined to a single Member State, and that national legislation such as the VGVG, which applies without distinction to Austrian nationals and to nationals of other Member States of the European Union, may generally fall within the scope of the provisions of the Treaty relating to fundamental freedoms only to the extent that it applies to a situation related to intra-Community trade. However, those findings do not affect the Court's obligation to reply to the national court by interpreting the provisions of Community law which set the framework for the scope of the national provisions at issue in the main proceedings. It is only in the exceptional case, where it is quite obvious that the interpretation of Community law sought bears no relation to the facts or the purpose of the main action, that the Court refrains from giving a ruling (see, to that effect, Konle, paragraph 33; Angonese, paragraph 18, and Reisch, paragraph 25).

33. A situation where national law requires that a national be allowed to enjoy the same rights as those which nationals of other Member States would derive from Community law in the same situation does not correspond to the abovementioned exceptional case. On the contrary, in such a situation, the Court has already held that its reply might be useful to the national court (Reisch, paragraph 26).

34. Moreover, where, in relation to purely internal situations, domestic legislation adopts solutions which are consistent with those adopted in Community law in order, in particular, to avoid discrimination against foreign nationals, it is clearly in the Community interest that, in order to forestall future differences of interpretation, provisions or concepts taken from Community law should be interpreted uniformly, irrespective of the circumstances in which they are to apply (see Case C-43/00 Andersen og Jensen [2002] ECR I-379, paragraph 18). In this case, the documents before the Court show that the Austrian courts consider that Austrian nationals may rely, when exercising the rights which they derive from the free movement of capital, on the equal treatment to which nationals of the Member States of the European Union and the EEA are entitled under Paragraph 3(1) of the VGVG.

35. Consequently, it is not evident that the interpretation of Community law sought bears no relation to the facts or the purpose of the action before the national court. The questions referred for a preliminary ruling are therefore admissible.

36. It must therefore be considered whether Article 73b(1) of the Treaty precludes national rules such as the prior authorisation procedure at issue in the main proceedings.

    Substance

37. Ms Salzmann maintains that in the first place the prior authorisation procedure laid down in Paragraph 8(1) of the VGVG is, by its very existence, a restriction on the free movement of capital and does not comply with any of the three conditions of validity set out by the Court in paragraph 40 of Konle. In that connection, she submits, first, that prior authorisation, which entails an obligation to build for the acquirer of a building plot, is not justified by an objective in the general interest. Next, by requiring the acquirer to provide proof of the future use of the land to be acquired, Paragraph 8(3) of the VGVG allows the competent authorities an element of latitude which could be applied in a discretionary manner, as referred to in paragraph 41 of Konle. Finally, as to whether or not Paragraph 8(3) of the VGVG is proportionate, Ms Salzmann argues that the Landtag Vorarlberg (Parliament of the Land of Vorarlberg) was free to introduce measures more observant of fundamental freedoms. She therefore concludes that the prior authorisation procedure is incompatible with Article 73b(1) of the Treaty.

38. In the second place, Paragraph 8(3) of the VGVG is not covered by the derogation provided for in Article 70 of the Act of Accession, since it entered into force on 1 January 1998, several months after the accession of the Republic of Austria to the European Union, and it is more restrictive than the system established by the provision previously in force.

39. As a preliminary point, it must be recalled that, although the legal regime applicable to property ownership is a field of competence reserved for the Member States under Article 222 of the EC Treaty (now Article 295 EC), it is not exempted from the fundamental rules of the Treaty (Konle, paragraph 38). Thus, national measures such as those at issue in the main proceedings, which regulate the acquisition of land for the purposes of prohibiting the establishment of secondary residences in certain areas, must comply with the provisions of the Treaty on the free movement of capital (Konle, paragraph 22, and Reisch, paragraph 28).

40. It is therefore necessary to consider whether Article 73b(1) of the Treaty precludes national measures such as those at issue in the main proceedings, as the national court asks the Court to do.

41. Although the wording of Paragraph 8(3) of the VGVG does not establish any formal discrimination between Austrian nationals and nationals of the other Member States of the European Union or the EEA, the prior authorisation procedure which it introduces restricts, by its very purpose, the free movement of capital (see, to that effect, Reisch, paragraph 32). That procedure therefore falls within the scope of the prohibition laid down in Article 73b(1) of the Treaty.

42. Such a measure may nevertheless be permitted, provided that it pursues an objective in the public interest, is applied in a non-discriminatory way and observes the principle of proportionality, that is to say, is appropriate for ensuring that the aim pursued is achieved and does not go beyond what is necessary for that purpose (Konle, paragraph 40; Case C-390/99 Canal Satélite Digital [2002] ECR I-607, paragraph 33, and Reisch, paragraph 33).

43. With regard, first, to the condition relating to meeting an objective in the public interest, the Austrian Government maintains that, by introducing the prior authorisation procedure, the Landtag Vorarlberg is pursuing a specific objective of town and country planning. Apart from desiring to prevent the establishment of buildings contravening the specifications of land use plans, the Landtag Vorarlberg is also seeking to encourage the most judicious use of the available building land by acquirers. The explanatory memoranda on Paragraph 8(1) and (3) of the VGVG (published in the official record of proceedings of the XXVIth Landtag Vorarlberg, 1997), the significance of which in the interpretation and application of the law in Austria has been accepted by the Court (Konle, paragraph 41), attest to the concerns of the Landtag Vorarlberg.

44. In that regard, it is settled case-law that restrictions on the establishment of secondary residences in a specific geographical area, which a Member State imposes in order to maintain, for town and country planning purposes, a permanent population and an economic activity independent of the tourist sector, may be regarded as contributing to an objective in the public interest (see Konle, paragraph 40, and Reisch, paragraph 34).

45. Second, with regard to the condition of non-discriminatory application of the restrictive measure, the Austrian Government argues that the wording of Paragraph 8(3) of the VGVG must be interpreted both in the light of the principle of compliance with the law, as enshrined in Article 18 of the Austrian Federal Constitution, and in the light of the explanatory memoranda mentioned in paragraph 43 of this judgment. The effect of Article 18 of the Austrian Federal Constitution is that the competent authority must grant prior authorisation provided that the conditions to which the grant thereof is subject are fulfilled. Likewise, on the basis of those explanatory memoranda, prior authorisation must be regarded as a non-discriminatory restriction at the time of the acquisition of unbuilt plots of land. Consequently, it should not, on that basis, be held to be incompatible with Article 73b(1) of the Treaty.

46. It must be observed, however, that, in so far as it requires the acquirer to produce proof of the future use of the land he is acquiring, a measure such as Paragraph 8(3) of the VGVG allows the competent administrative authority considerable latitude which may be akin to a discretionary power (see, to that effect, Konle, paragraph 41).

47. It is therefore possible that a prior authorisation procedure such as that at issue in the main proceedings could be applied in a discriminatory way.

48. Finally, with regard to the condition of proportionality, the Austrian Government claims that Paragraph 8(3) of the VGVG is proportionate to the public-interest objective assigned to it by the Landtag Vorarlberg. In any event, a prior declaration procedure, while deemed sufficient for built land, clearly does not constitute, in the case of building land, a less restrictive alternative to prior authorisation, since it would not guarantee optimal utilisation of the available building land. Only the prior authorisation procedure, which makes it possible, where appropriate, to demand certain specific steps of the acquirer, guarantees such a result.

49. It must be acknowledged, in that regard, that a procedure simply involving a declaration is not necessarily sufficient to enable the aim pursued by the public authority by recourse to a prior authorisation procedure to be achieved (Konle, paragraph 46).

50. However, as the Court has already held, a procedure simply involving a declaration may in fact, if it is coupled with appropriate legal instruments, make it possible to eliminate the requirement of prior authorisation without undermining the effective pursuit of the aims of the public authority (Joined Cases C-163/94, C-165/94 and C-250/94 Sanz de Lera and Others [1995] ECR I-4821, paragraph 27, and Konle, paragraphs 46 and 47).

51. In this case, in a situation characterised, on the one hand, by the fact that under the system of prior declaration the public authority can check that acquisition and building projects conform to the land use plan, and, on the other hand, by the availability of pecuniary sanctions, of a specific action for annulment of the contract of sale, provided for in Paragraph 25(2) of the VGVG, and of a penalty consisting of the compulsory sale of the land in question, which may be ordered under Paragraph 28 of the VGVG, the prior authorisation procedure cannot be regarded as a measure strictly necessary in order to achieve the town and country planning objective pursued by the national legislation at issue in the main proceedings (see, to that effect, Konle, paragraph 47, and Reisch, paragraph 38). In such a situation, the public interest does not demand that the examination by the administrative authorities of the proposed acquisition of a plot of building land have the effect of suspending the exercise of the freedom claimed.

52. In view of the risk of discrimination inherent in a prior authorisation procedure such as that at issue in the main proceedings, and of the fact that it is not strictly necessary in order to achieve the town and country planning objective pursued by it, that procedure constitutes a restriction on the free movement of capital, which is incompatible with Article 73b(1) of the Treaty.

53. The Austrian Government argues that the prior authorisation procedure is nevertheless covered by the derogation provided for in Article 70 of the Act of Accession. Its maintenance in force until 1 January 2000 is therefore not incompatible with Community law. Although it is not disputed that Paragraph 8(3) of the VGVG was adopted several months after the accession of the Republic of Austria to the European Union, the Landesgericht's statement that the building requirement imposed on the acquirer of a plot of building land has existed only since the entry into force of Paragraph 8(3) in its present form is incorrect. On the contrary, certain land purchases were already subject to a prior authorisation procedure under Paragraphs 5(2) and 1(b) of the Vorarlberger Grundverkehrsgesetz (LGBl. 1977/18), as amended in LGBl. 1987/63 (hereinafter the VGVG 1977). Paragraph 8(3) of the VGVG is, in substance, identical to that legislation, which was in force on the date of accession of the Republic of Austria to the European Union. Consequently, in accordance with the Court's findings in Konle (paragraph 52) and Beck and Bergdorf (paragraph 34), it is covered by Article 70 of the Act of Accession.

54. It must be recalled that any provision adopted after the date of accession is not, by that fact alone, automatically excluded from the derogation laid down in Article 70 of the Act of Accession. Thus, if it is in substance identical to the previous legislation or if it is limited to reducing or eliminating an obstacle to the exercise of Community rights and freedoms in the earlier legislation, it will be covered by the derogation (Konle, paragraph 52, and Beck and Bergdorf, paragraph 34).

55. The criterion of substantive identity, which allows legislation adopted after the date of accession to be included within the scope of Article 70 of the Act of Accession, is to be strictly interpreted, so that later legislation which is based on an approach which differs from that of the previous law and establishes new procedures cannot be treated as legislation existing at the time of accession. Thus, Article 70 of the Act of Accession cannot be applied to later legislation which includes a number of significant differences when compared with the legislation existing on the date of accession (Konle, paragraph 53).

56. In this case, it is for the national court to determine whether Paragraph 8(3) of the VGVG has as its sole purpose the maintenance in force of the legislation on secondary residences which was applicable on 1 January 1995, or whether it includes significant differences which preclude its being covered by the derogation established by Article 70 of the Act of Accession (see, to that effect, Beck and Bergdorf, paragraph 36).

57. The answer to be given to the first two questions referred for a preliminary ruling must therefore be that Article 73b(1) of the Treaty precludes a prior authorisation procedure such as that established by the VGVG and that it is for the national court to determine whether such a procedure is covered by the derogation established by Article 70 of the Act of Accession.

    The third question

58. By its third question, the national court seeks in essence to ascertain whether point 1(e) of Annex XII to the EEA Agreement precluded the adoption in 1993 of legislation making the acquisition of building land conditional upon a system of prior authorisation.

59. Ms Salzmann claims that prior authorisation is incompatible with point 1(e) of Annex XII to the EEA Agreement.

60. On the one hand, she submits that that standstill clause applies in particular to the Austrian legislation on secondary residences. She points out that the Bundes-Verfassungsgesetznovelle, which authorised the Länder to introduce restrictions on land transactions relating to building land, was adopted on 5 June 1992. Since it was adopted after the date of signature of the EEA Agreement, it is inherently incompatible with point 1(e) of Annex XII to the EEA Agreement. The VGVG, which was adopted on 23 September 1993 on the basis of that constitutional law, is likewise and a fortiori incompatible with the EEA Agreement.

61. On the other hand, Ms Salzmann acknowledges that the concept of legislation existing [at the date of signature of the EEA Agreement] may cover national provisions adopted after the signature of the EEA Agreement, but she points out that, under the case-law of the Court, that is only on the condition that such provisions are in no case more restrictive than the provisions existing on 2 May 1992. That condition is not satisfied in the case of the national legislation at issue in the main proceedings.

62. The Austrian Government, the Commission and the EFTA Surveillance Authority point out that, in the judgment in Case C-321/97 Andersson and Wåkerås-Andersson [1999] ECR I-3551, paragraph 27 et seq., the Court held that it had no jurisdiction to interpret the EEA Agreement in relation to the period prior to the accession of the Member States concerned to the European Union.

63. The Austrian Government, the Commission and the EFTA Surveillance Authority infer from that that it is unnecessary to answer the second question submitted by the national court.

64. The Austrian Government submits, in the alternative, that, if the Court takes the view that it has jurisdiction in this case to interpret point 1(e) of Annex XII to the EEA Agreement, it should be acknowledged that the VGVG adopted on 23 September 1993 is not, on any view, more restrictive than the VGVG 1977, which it superseded.

65. In that regard, it must be recalled that the Court has, in principle, jurisdiction under Article 234 EC to give a preliminary ruling on the interpretation of the EEA Agreement where such a question is raised before a court or tribunal of a Member State of the European Union (Andersson and Wåkerås-Andersson, paragraph 27).

66. However, that jurisdiction to interpret the EEA Agreement under Article 234 EC applies solely with regard to the Communities. The Court therefore has no jurisdiction to rule on the interpretation of that agreement as regards its application in the EFTA States (Andersson and Wåkerås-Andersson, paragraph 28).

67. Nor has such jurisdiction has been conferred on the Court of Justice in the context of the EEA Agreement. Under Article 108(2) of that Agreement and Article 34 of the Agreement between the EFTA States on the establishment of a Surveillance Authority and a Court of Justice (OJ 1994 L 344, p. 1), the EFTA Court has jurisdiction to rule on the interpretation of the EEA Agreement applicable in the States of EFTA. There is no provision in the EEA Agreement for parallel jurisdiction to be exercised by the Court of Justice (Andersson and Wåkerås-Andersson, paragraph 29).

68. The fact that the EFTA State in question subsequently became a Member State of the European Union, so that the question emanates from a court or tribunal of one of the Member States, cannot have the effect of conferring on the Court of Justice jurisdiction to interpret the EEA Agreement as regards its application to situations which do not come within the Community legal order (Andersson and Wåkerås-Andersson, paragraph 30).

69. The jurisdiction of the Court of Justice covers the interpretation of Community law, of which the EEA Agreement forms an integral part, as regards its application in the new Member States with effect from the date of their accession (Andersson and Wåkerås-Andersson, paragraph 31).

70. In this case, the Court has been asked to interpret the concept of existing legislation within the meaning of point 1(e) of Annex XII to the EEA Agreement, for the purposes, for the national court, of determining whether or not the VGVG adopted on 23 September 1993 is more restrictive than the VGVG 1977 and whether, in 1993, the EEA Agreement precluded that amendment of legislation. The Court would thus be led to rule on the effects of the EEA Agreement, within the national legal system of which the referring court forms part, during the period prior to the accession of the Republic of Austria to the European Union, that is to say, in a situation which does not come within the Community legal order.

71. Accordingly, the Court has no jurisdiction to answer the third question submitted.

    Costs

72. The costs incurred by the Austrian Government, by the Commission and by the EFTA Surveillance Authority, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions submitted to it by the Landesgericht Feldkirch by order of 10 July 2001, hereby rules:

1. Article 73b(1) of the EC Treaty (now Article 56(1) EC) precludes an administrative authorisation procedure prior to acquisition of land, such as that established by the Vorarlberger Grundverkehrsgesetz (Vorarlberg Land Transfer Law) of 23 September 1993, as amended in LGBl. 1997/85. It is for the national court to determine whether such a procedure is covered by the derogation established by Article 70 of the Act concerning the conditions of accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden and the adjustments to the Treaties on which the European Union is founded.

2. The Court of Justice of the European Communities has no jurisdiction to answer the third question submitted.

PuissochetSchintgen Skouris MackenCunha Rodrigues

Delivered in open court in Luxembourg on 15 May 2003.

R. Grass J.-P. Puissochet

Registrar President of the Sixth Chamber

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1: Language of the case: German.