On Ownership of Agricultural Land

On Ownership of Agricultural Land

Organic Law of Georgia

On Ownership of Agricultural Land

This Law recognises the land existing on the territory of Georgia as the national wealth of the State, which has special political, social, economic, ecological and cultural value for the performance of state tasks and the realisation of fundamental human rights, provides for the principles of rational use of agricultural land as an exhaustible resource of special importance, and, protecting public and private interests, establishes ownership of agricultural land, promotes the implementation of the state policy of sustainable land management, the protection of national security and the development of the local economy.

Article 1. Scope of regulation of the Law🔗

The effect of this Law extends to agricultural land existing on the territory of Georgia. This Law regulates relations related to the ownership of an agricultural land plot.

Article 2. Legal grounds for ownership of an agricultural land plot🔗

The legal grounds for ownership of an agricultural land plot are: the Constitution of Georgia, international treaties of Georgia, this Law and other legal acts of Georgia.

Article 3. Definition of terms🔗

For the purposes of this Law, the terms used herein have the following meaning:

a) agricultural land – land of the pasture, hayfield, arable (including that occupied by perennial plantings) or household plot category, which is used or may be used for agricultural purposes, with or without buildings or structures located thereon;

b) citizen of Georgia − a citizen of Georgia, including a citizen of Georgia who, in accordance with the procedure established by the legislation of Georgia, is simultaneously a citizen of a foreign country;

c) foreigner – a natural person who is not a citizen of Georgia, a stateless person having status in Georgia;

d) dominant partner − a partner or group of partners of a legal entity of private law registered in Georgia, to whom more than 50 percent of a share/stock/interest belongs and/or who represents the majority of the partners (in the case of a general partnership, of the partners, or in the case of a limited partnership, of the general partners) or of the founders/members (in the case of a non-entrepreneurial (non-commercial) legal entity) and at the same time has a practical ability to exercise decisive influence on a decision of the legal entity related to agricultural land;

e) investment plan − documentation reflecting the use of an agricultural land plot, which envisages the making of an investment for the purposes of producing agricultural products and/or other products, introducing innovative activities, arranging tourist infrastructure, implementing projects of international, national and/or local importance, which will contribute to the socio-economic development of the state, the protection of national security, and the creation of new jobs.

Article 4. Ownership of Agricultural Land🔗

1. Agricultural land may be:

a) in the ownership of the State of Georgia, the Autonomous Republic of Georgia, a municipality of Georgia;

b) in the ownership of a Legal Entity of Public Law of Georgia − in the cases provided for by the legislation of Georgia;

c) in the ownership of a citizen of Georgia;

d) in the ownership of a private law legal entity registered in Georgia, whose dominant partner is a subject provided for by subparagraphs „a“−„c“ of this paragraph;

e) in the ownership of an organisational formation which is not a legal entity, if the subjects provided for by subparagraphs „a“−„d“ of this paragraph constitute the majority of its members and at the same time have a practical possibility to exercise decisive influence on the decision of this organisational formation related to agricultural land.

2. Taking into account the restrictions established by this Law, agricultural land may be:

a) in the ownership of a foreigner, if he received this land by inheritance;

b) in the ownership of a private law legal entity registered in Georgia whose dominant partner is a foreigner and/or a legal entity registered abroad, or whose dominant partner cannot be determined in accordance with subparagraph „d“ of the first paragraph of this Article, − by a decision of the Government of Georgia on the basis of an investment plan.

3. The restrictions established by this Law shall not apply to an international financial institution determined by a resolution of the Government of Georgia or to a financial institution determined by the legislation of Georgia, whose dominant partner is a foreigner and/or a legal entity registered abroad, or whose dominant partner cannot be determined in accordance with subparagraph „d“ of the first paragraph of this Article, if the right of ownership to an agricultural land plot arises in the course of the exercise, by the international financial institution or the financial institution, of an activity permitted by the legislation of Georgia (including where the object of security is acquired by the creditor).

4. The ownership of a private law legal entity registered in Georgia, whose partner is a private law legal entity registered in Georgia, over an agricultural land plot shall be determined according to the dominant partner of the partner legal entity, taking into account the rules established by the first and 2nd paragraphs of this Article. This rule shall apply to every subsequent partner legal entity.

Article 5. Obligation to alienate an agricultural land plot🔗

1. A private law legal entity registered in Georgia whose dominant partner is a foreigner and/or a legal entity registered abroad, or whose dominant partner cannot be determined in accordance with subparagraph „d“ of paragraph 1 of Article 4 of this Law, in the event of non-fulfilment of the obligation envisaged by the investment plan, shall, within 1 year from the adoption of the decision by the authorised body, ensure the alienation of the land plot.

2. When privatising an agricultural land plot owned by the State of Georgia, an Autonomous Republic of Georgia or a municipality of Georgia, if the party is a private law legal entity registered in Georgia whose dominant partner is a foreigner and/or a legal entity registered abroad, or whose dominant partner cannot be determined in accordance with subparagraph „d“ of paragraph 1 of Article 4 of this Law, the privatisation condition shall comply with the requirements defined for the investment plan, and in the event of non-fulfilment of the obligation, the rules established by the relevant legislation of Georgia shall apply.

3. In the event of failure by the obligated person to alienate the agricultural land plot, this land plot shall pass into state ownership in accordance with the procedure established by the legislation of Georgia.

Article 6. Use of an agricultural land plot as a means of security🔗

1. The requirements defined by the legislation of Georgia shall apply to the use of an agricultural land plot as a means of security, unless otherwise provided by this Law.

2. It shall be inadmissible to use an agricultural land plot as a means of security subject to the condition of transfer into ownership in favour of a foreigner, a legal entity registered abroad and/or a private law legal entity registered in Georgia whose dominant partner is a foreigner/a legal entity registered abroad, or whose dominant partner cannot be determined in accordance with subparagraph „d“ of paragraph 1 of Article 4 of this Law.

3. It shall be inadmissible, in favour of a foreigner, a legal entity registered abroad and/or a private law legal entity registered in Georgia whose dominant partner is a foreigner and/or a legal entity registered abroad, or whose dominant partner cannot be determined in accordance with subparagraph „d“ of paragraph 1 of Article 4 of this Law, to assign any claim or right that envisages the emergence of the right of ownership over agricultural land.

4. The prohibitions established by this Article shall not apply to the subjects envisaged by paragraph 3 of Article 4 of this Law, in the case of their carrying out activities permitted by the legislation of Georgia.

Article 7. Change of partner of a legal entity of private law registered in Georgia🔗

1. Inadmissible shall be such change of partner of that legal entity of private law provided for by subparagraph „d“ of paragraph 1 of Article 4 of this Law, in whose ownership there is an agricultural land plot, as a result of which the dominant partner becomes a foreigner, a legal entity registered abroad and/or a legal entity of private law registered in Georgia whose dominant partner is a foreigner/a legal entity registered abroad or whose dominant partner cannot be determined in accordance with subparagraph „d“ of paragraph 1 of Article 4 of this Law.

2. If the share/stock/interest of that legal entity of private law provided for by subparagraph „d“ of paragraph 1 of Article 4 of this Law, in whose ownership there is an agricultural land plot, is used as a means of security to such an extent that, in the event of transfer of the object of pledge into the ownership of the pledgee as a result of non-fulfilment of an obligation, the dominant partner becomes a foreigner, a legal entity registered abroad and/or a legal entity of private law registered in Georgia whose dominant partner is a foreigner/a legal entity registered abroad or whose dominant partner cannot be determined in accordance with subparagraph „d“ of paragraph 1 of Article 4 of this Law, the use of the right of pledge with the condition of transfer of the object of pledge into the ownership of the creditor shall be inadmissible.

3. Such change of partner of that legal entity of private law provided for by subparagraph „d“ of paragraph 1 of Article 4 of this Law, in whose ownership there is an agricultural land plot, as a result of which the dominant partner becomes a foreigner, a legal entity registered abroad and/or a legal entity of private law registered in Georgia whose dominant partner is a foreigner/a legal entity registered abroad or whose dominant partner cannot be determined in accordance with subparagraph „d“ of paragraph 1 of Article 4 of this Law, shall be permissible on the basis of an investment plan by decision of the Government of Georgia.

4. The change of partner of that legal entity of private law provided for by subparagraph „b“ of paragraph 2 of Article 4 of this Law, which has acquired ownership of an agricultural land plot on the basis of an investment plan, shall not require an additional agreement, unless otherwise provided by the investment plan.

5. The prohibitions established by paragraphs 1 and 2 of this Article shall not apply to the subjects provided for by paragraph 3 of Article 4 of this Law, as well as to the case of acquisition of a right by a foreigner by inheritance.

Article 8. Ownership of the State of Georgia, the Autonomous Republic of Georgia and the municipality of Georgia over agricultural land🔗

1. Ownership of the State of Georgia, the Autonomous Republic of Georgia and the municipality of Georgia over agricultural land shall be determined by the Constitution of Georgia, this Law and other legislative and subordinate normative acts of Georgia.

2. Agricultural land in State ownership which is not subject to privatisation shall be determined by the legislation of Georgia.

3. For the purpose of regulating the land market of Georgia, financing measures for the use and protection of land and the improvement of land quality, the Land Fund of Georgia shall be established, the source of financing of which is the State Budget of Georgia. Through the Land Fund of Georgia, in accordance with the procedure established and in the cases provided for by the legislation of Georgia, the State shall have the pre-emptive right to purchase agricultural land.

Article 9. Ownership of agricultural land located in the occupied territories of Georgia🔗

Agricultural land located in the occupied territories of Georgia is part of the land fund of Georgia, to which a special legal regime applies. The State shall be obliged to protect and ensure the rights of the person who lawfully possessed a plot of agricultural land located in the occupied territories of Georgia, used the land plot and/or held the right of ownership over the land plot. Any transaction concluded in violation of the requirements determined by the legislation of Georgia in relation to a plot of agricultural land located in the occupied territories of Georgia shall be considered void from the moment of its conclusion and shall not give rise to legal consequences.

Article 10. Transitional Provisions🔗

1. The restrictions established by this Law shall not suspend the registration of a right over an agricultural land plot held in lawful possession (use) under the procedure established by the Law of Georgia "On Recognition of the Right of Ownership over Land Plots Held in Possession (Use) of Natural Persons and Legal Entities of Private Law", nor shall they suspend such registration on the basis of a document establishing a right (a court (arbitration) act, an individual administrative-legal act, a transaction or another legal act which gives rise to the right of ownership over an agricultural land plot) issued/drawn up in compliance with the requirements determined by the legislation of Georgia before the entry into force of this same Law.

2. At the moment of entry into force of this Law, if the right of ownership over an agricultural land plot of a foreigner or of a legal entity of private law registered in Georgia whose dominant partner is a foreigner and/or a legal entity registered abroad, or whose dominant partner cannot be determined in accordance with subparagraph "d" of paragraph 1 of Article 4 of this Law, is registered or will be registered in accordance with paragraph 1 of this Article, the obligations determined by this Law shall not apply to the said right.

3. After the entry into force of this Law, if a citizen of Georgia whose right over an agricultural land plot is registered is deprived of Georgian citizenship, the obligations determined by this Law for a foreigner shall not apply to the registered right.

Article 11. Normative acts declared invalid🔗

Shall be declared invalid:

a) Law of Georgia of 22 March 1996 "On Ownership of Agricultural Land" (Parliamentary Bulletin, No 007, 30.04.96, p. 17);

b) Law of Georgia of 15 May 1997 "On the Entry into Force of the Law of Georgia 'On Ownership of Agricultural Land'" (Parliamentary Bulletin, No 23-24, 7 June 1997, p. 16).

Article 12. Entry into force of the Law🔗

1. This Law, except for paragraph 1 of Article 5 and paragraph 3 of Article 7 of this Law, shall enter into force upon publication.

2. Paragraph 1 of Article 5 and paragraph 3 of Article 7 of this Law shall enter into force from 1 January 2020.

President of Georgia Salome Zourabichvili

Tbilisi,

25 June 2019

No 4848-IIs