European Court of Human Rights

FOURTH SECTION

CASE OF ZELENCHUK AND TSYTSYURA v. UKRAINE

(Applications nos. 846/16 and 1075/16)

JUDGMENT

STRASBOURG

22 May 2018

This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the cases of Zelenchuk and Tsytsyura v. Ukraine,

Vincent A. De Gaetano, President,
Ganna Yudkivska,
Paulo Pinto de Albuquerque,
Faris Vehabović,
Georges Ravarani,
Marko Bošnjak,
Péter Paczolay, judges,
and Marialena Tsirli, Section Registrar,

PROCEDURE

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

6. The first applicant was born in 1947 and lives in Dolyna, a city in the Ivano-Frankivsk Region.

7. The second applicant was born in 1939 and lives in Ternopil.

The land is rented by a limited liability company. Since 2010 the second applicant has received rent in the following amounts:

8. The applicants' land is subject to legislative restrictions on alienation and change of designated use, which are described in "Relevant domestic material" and, as regards their current state, in paragraph 22 below.

II. RELEVANT DOMESTIC MATERIAL

A. Background to the legal situation of land ownership in Ukraine

9. Under the laws of the Ukrainian Soviet Socialist Republic, prior to the enactment of the Land Code of 18 December 1990 (hereinafter "the Land Code"), individuals and non-State entities could not own land and all land was owned by the State.

10. Under Article 17 of the Land Code, local councils were authorised to transfer land to individuals and non-State entities. However, for a period of six years, those who acquired land could not sell or otherwise dispose of it (except in cases of inheritance). They could only transfer the property back to their local council. The courts could shorten this period if there was a valid reason for such a decision.

11. In the 1990s a large proportion of the country's agricultural land was held by the former Soviet collective and State-owned farms which, under the Law of 14 February 1992 were renamed "collective agricultural enterprises" (hereinafter "CAEs" or "collective farms").

12. Presidential Decree no. 720/95 of 8 August 1995 provided for a programme of gradual reform of the CAEs through the issuance to their current and former members of shares of land, that is to say land entitlements in the form of shares of the whole land mass of the CAE expressed as a number of hectares but without a specific physical location or defined boundaries. The decree provided that the shares were to be distributed to current and former members of CAEs as well as to certain categories of workers employed in the social sector (education, medicine and so forth) in rural areas. While the decree gave members of the CAEs the ability to withdraw from their CAEs with their shares, the large-scale process of dissolving the CAEs through the issuance of shares did not actually start until 1999 (see next paragraph).

14. A large-scale process of converting the shares into physical plots of land (defined on the ground) was then organised. As a result of this process, millions of new owners were issued with ownership certificates relating to specific plots of land.[1] The land owned by the applicants underwent this process (see paragraphs 6 and 7 above).

15. According to Parliamentary Resolution no. 882-IV of 22 May 2003 summarising the provisional results of the land reform, during the process 6.87 million Ukrainians obtained shares of land and 3.17 million had them converted into plots of land. Parliament noted some difficulties in the issuance of shares of land and their conversion into plots of land, with some regions falling behind: only 13% of share owners obtained property certificates to plots of land in the Zhytomyr Region, while this figure stood at 96% in the Kirovograd Region. Some 107,000 shares were sold or otherwise disposed of by their new owners, which, according to Parliament, showed that they had not been adequately informed about the land reform and their rights and duties.[2]

B. The initial "land moratorium"

16. Law no. 2242-III of 18 January 2001 prohibited, until the enactment of a new Land Code, the alienation of shares of land, except in cases of inheritance and expropriation for public needs.

18. Article 22 § 3 of the new Land Code defines the following categories of designated use for agricultural land: (i) individual smallholdings; (ii) land for fruit and vegetable growing; (iii) land for pasture and hay harvesting; (iv) land for commercial agricultural production; and (v) individual farming enterprises, that is to say commercial entities owned by individual farmers engaged in commercial agricultural production.

19. Article 15 of the Transitional Provisions of the new Land Code provided that until 1 January 2005 individuals and non-State entities could not sell or otherwise transfer title to two categories of land in their ownership: (i) plots zoned for individual farming enterprises or for other commercial agricultural production and (ii) shares of land. Swap transactions, inheritance cases and expropriation for public needs were exempt from the ban. The ban, which has been subsequently extended and modified (see the Table in paragraph 21 below) is commonly referred to in Ukraine as the "the land moratorium" (земельний мораторій).

20. According to the Government, the transcript of the parliamentary session at which the new Code was passed shows that the moratorium was introduced in view of the need for additional time to form a land market with "adequate" prices and enact legislation necessary for the creation of such a market. In particular, according to the transcript, at the opening of the debate Member of Parliament V. Asadchev expressed his concern that, if rules of the Code concerning the transfer of land into private hands were to be adopted, this would create a few large landowners (десять латифундистів) and transform the rest of the population into hired agricultural labour (батраки). In presenting the draft Code for the vote, Ms K. Vashchuk, Chairwoman of the Parliamentary Committee for Land Affairs and Agriculture, stated that, in order to address concerns such as those expressed by the MP, the draft suspended the operation of all provisions concerning the sale of land until 2005, until laws on the creation of a land cadastre, land registration and others were passed and a State land bank was established.[3]

C. Changes in the moratorium and its current form

21. The Land Code was amended on a number of occasions as to both the duration and scope of the original ban, as summarised in the Table below:

Table Key legislative developments concerning the land moratorium

22. As at today's date, the Transitional Provisions of the Land Code prohibit alienation in any form of most agricultural land, including of the categories owned by the applicants, except in cases of inheritance, swap transactions and expropriation for public use. They also prohibit any change in the designated use of such land, except where it has been allocated to an investor under a production-sharing agreement. Currently the Transitional Provisions state that those restrictions are to remain effective until the entry into force of the Circulation of Agricultural Land Act ("the CALA"), but in any case at least until 1 January 2019.

D. Constitutional matters

23. Article 13 § 1 of the Constitution of 1996 provides that land, its subsoil, air, water and other resources are the property of the Ukrainian people (є об'єктами права власності Українського народу). Article 13 § 4 requires the State to ensure protection of the rights of all property owners and economic players and social orientation of the economy. Article 14 § 1 provides that land is the main national asset, and is under the special protection of the State. Article 14 § 2 guarantees the right to land ownership and provides that land ownership may be acquired and exercised by citizens, legal entities and the State in accordance with the law.

24. Article 22 provides that human and citizens' rights and freedoms are guaranteed and may not be diminished by the enactment of new laws or the amendment of laws that are already in force.

25. Article 41 of the Constitution reads:

"Everyone shall have the right to own, use, or dispose of his or her property and the results of his or her intellectual or creative activities.

...

No one shall be unlawfully deprived of the right to property. The right to private property shall be inviolable..."

26. On 17 February 2017 fifty-five Members of Parliament lodged an application with the Constitutional Court seeking to have the Law of 6 October 2016 reaffirming the moratorium declared unconstitutional.[10] They invoked Articles 13, 14, and 41 of the Constitution set out above as well as Articles 8 (the principle of the rule of law), 24 (non-discrimination), 42 (the right to enterprise), 48 (the right to a sufficient standard of living), and 64 (general provision concerning the restriction of constitutional rights) of the Constitution.

E. Taxation and rules governing land ownership

27. Article 281.3 of the Tax Code of 2010 exempts from property tax land rented to commercial agricultural producers benefitting from the simplified taxation regime.[12] Article 281.1.3 exempts old-age pensioners from the payment of land tax.

28. Article 78 § 1 defines ownership as the right to possess, use and dispose of land.

29. Article 81 § 2 and Article 82 §§ 2 and 3 provide that foreign nationals, stateless persons, foreign legal entities and legal entities with foreign capital can only own non-agricultural land of certain categories.

30. Article 91 requires land owners to use land according to its designated use category, respect environmental rules, improve land fertility, respect neighbours' rights, and so forth. Article 143 provides that a court may order expropriation of land without compensation in cases of failure to respect the designated use of the land or rectify a serious breach of land protection rules despite a warning from the land protection authorities.

32. Item 13 of the Transitional Provisions of the Code, as in force in 2001, provided that a single person or entity could not acquire more than 100 hectares of agricultural land. The Law of 6 October 2004 (the first extension of the moratorium - see row 1 of the Table in paragraph 21 above) extended that limitation to 1 January 2015. It expired on that date. However, given that most agricultural land could not be sold throughout the period, it would appear that the restriction never had much practical application.

F. Rules and statistics concerning the land lease market

33. The Land Lease Act (section 21) provides that rent is set by agreement of the parties. However, Presidential Decree no. 92/2002 of 2 February 2002 instructed the Cabinet of Ministers and local executive authorities to take operational measures to ensure that the level of rent under land leases would be at least 3% of the land's estimated value. According to the statistics published by the State Land Cadastre Agency, in 2013 74.4% of leases provided for rent of at least 3% of the value.[13]

34. Section 19 of the Land Lease Act provides that for the main categories of agricultural land, the term of lease cannot be less than seven years and, for any lease, cannot exceed fifty years.

35. The State Land Cadastre Agency published certain statistics concerning the land lease market in Ukraine on which the parties relied in their submissions:

G. Policy statements and plans, legislative proposals and public attitudes towards the moratorium

36. On 31 May 2002, in his annual address to Parliament on the state of the nation, the President of Ukraine stressed the need to create the structure for an efficient and transparent land market by 2005, when the moratorium would expire. Important aspects were the creation of a transparent property registration system, introduction of the ability to use land as security for mortgage financing and completion of the conversion of shares of land into plots and the issuance of property certificates.[16]

37. Coalition Agreements of 22 June 2006 and 29 November 2007[17] and an action programme of the Cabinet of Ministers of 16 January 2008[18] stated, in nearly identical terms, that the coalition and government had the following priorities: creation of the conditions for the functioning of the land market (issuance of ownership certificates, demarcation of boundaries of plots of land, putting the land cadastre into operation, land valuations, introduction of the mechanism for land market regulation) and then revocation of the moratorium.

39. On 7 April 2011, in his annual address to Parliament on the state of the nation, the President of Ukraine stated that the moratorium was preventing the transfer of land to efficient owners, thus slowing down the development of the agricultural sector. Steps in order to introduce a regulated land market had to be taken urgently.[19]

40. On 9 December 2011 Parliament approved the draft Land Market Act at the first reading (see paragraph 21 above).[20] The draft law provided that only citizens of Ukraine, municipalities and the State could acquire agricultural land. A single citizen would not be permitted to own more than 100 hectares of land zoned for commercial agricultural production or rent more than 6,000 hectares of such land in any one district or more than 5% of the land in any one region. The caps would also apply to those associated with the individual. The bill provided that owners of neighbouring land would have a right of first refusal in the event of alienation of agricultural land and that such land could not be sold for less than the price determined by an expert, a procedure to be regulated by law. Rezoning of formerly publicly owned agricultural land would be prohibited for ten years after acquisition. The bill also contained a number of other rules aimed at safeguarding the efficient use of agricultural land.

42. In his annual addresses to Parliament on the state of the nation in 2016 and 2017, the President of Ukraine made the following remarks concerning the land moratorium.

"The inability to freely sell and buy agricultural land unquestionably inhibits investment in agriculture, reduces and breaches the rights of the rural population, among other things, lease rights, taking the last remaining kopeks out of their pockets. This is axiomatic. However, I am also aware of public opinion on this matter and the position of the majority of parliamentary groups. I value and respect that. But how can we resolve this problem, my dear legislators? This is within your purview. Either to stick your head in the sand and change nothing or to work to create a land market in Ukraine with all the possible safeguards against any possible negative impact."[22]

".. In Estonia they have privatised everything: ports, telecommunications, aviation and even the railways. In Poland out of 8,500 State companies the State has kept only 41. And, by the way, their land has not been bought up by foreigners, despite the fact that the residents of those countries can easily buy and sell agricultural land.

Until now, Ukrainians have been deprived of that right. Millions of people formally own land but it has been decided for them that they are unable to handle it and an unconstitutional moratorium was introduced. Why then do we allow people to sell their flats? Because you know, by this logic, someone could come along and buy them all up.

As a statesman, in making decisions I must have regard to public opinion. For now, unfortunately, it has been formed by the populists. I am not going to put pressure on Parliament to adopt the land reform, I will not do it. But I am asking you to make a resolution, for now at least a silent one, in your minds, in favour of such a reform. Enact such laws which would assuage the phobias, which would remove all the objections, introduce all the necessary safeguards, introduce minimum prices, make registers transparent, protect the rural population but also give them freedom. I am asking you to set, I invite you to set, a specific date when all of this could be launched, even if not today."[23]

43. On 3 April 2017 the Cabinet of Ministers approved its mid-term action plan for up until 2020 and its priority action plan for 2017. The 2020 plan describes the continuing maintenance of the moratorium as one of the main problems in the agricultural sector that deprives a large number of Ukrainian citizens of the opportunity to exercise their constitutional right to property and obstructs the development of the agricultural market. The plan provides that the problem created by the moratorium could be resolved through nationwide discussion and the introduction of a land market based on a model acceptable to the population. The 2017 plan stated that the draft CALA would be submitted to Parliament in the second quarter of 2017. However, it appears that no such bill has been introduced.[24]

44. The Government submitted information about protest actions led by farmers in early October 2016 in a number of regions, including highway blockades. The farmers called for the restoration of tax benefits for the agricultural sector. One of their demands was also to reaffirm the land moratorium.

III. COMPARATIVE LAW

45. It appears from the material available to the Court on the legislation of member States of the Council of Europe that none of the thirty-�two member States surveyed has a general ban on the sale or any other form of alienation of agricultural land. The same can be said about the two non-�member States surveyed, Canada and the United States of America.

46. Although twenty-two of the thirty-two member States surveyed have undergone a land-reform programme since 1990 (Armenia, Azerbaijan, Bosnia and Herzegovina, Croatia, the Czech Republic, Estonia, Finland, Germany (after unification), Greece, Hungary, Latvia, Lithuania, the Republic of Moldova, Montenegro, Poland, Romania, the Russian Federation, Serbia, Slovak Republic, Slovenia and the former Yugoslav Republic of Macedonia), none of those States have since that time imposed such a general ban, even though some used to impose time-limited restrictions on the resale of land acquired as a result of privatisation, for example three years in Armenia and ten years in Russia (according to pre-�2001 legislation).

47. However, in many of the member States surveyed transfers of agricultural land are subject to a number of restrictions and conditions.

54. Special restrictions also exist in certain sensitive areas such as border areas and areas adjacent to military installations (for example, in Greece and Serbia).

THE LAW

I. JOINDER OF THE APPLICATIONS

II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."

A. Admissibility

B. Merits

1. The parties' submissions

(a) The applicants and the Government

(i) Existence of an interference and the applicable rule

(ii) Lawfulness

(α) The applicants

63. The applicants argued that the interference with their rights could not be considered to be based on precise and foreseeable provisions of the law. The first and second applicants had inherited their shares of land in May 2000 and November 2004 respectively and could reasonably expect that the moratorium would expire on 1 January 2005, as indicated at the time in the Transitional Provisions of the Land Code. Three years, the original duration of the moratorium, could reasonably be regarded as sufficient time to enact the necessary legislation regulating the land market. Thus, even if the original duration of the moratorium had been foreseeable, its subsequent extensions had not been. Enactment of the necessary legislation had been cited as the reason for each extension but it had not been enacted throughout all those years. For instance, the draft Land Market Act had been approved at the first reading in 2011 but no further progress had been made on that bill. Likewise, the 2015 law extending the moratorium had required the Cabinet of Ministers to develop a draft law regulating the circulation of agricultural land, the enactment of which had been the precondition to the lifting of the moratorium, by 1 March 2016. However, no such bill had been submitted.

66. What is more, the reasons for extending the moratorium had evolved over time - even if initially the extensions had been motivated merely by the need to enact the necessary legislation and conduct technical preparatory work, additional, more vague reasons had been added over time. This rendered the applicants' situation even less foreseeable.

(β) The Government

(iii) General interest

(α) The applicants

70. As to the risk of excessive concentration of land holdings, the applicants referred to the third-party intervener's assessment that no international financial entity possessed the financial resources necessary to buy up land in quantities which would constitute a threat. High land fragmentation also made this risk unrealistic (see paragraph 96 below). The risk of excessive concentration could be easily mitigated by introducing caps on the maximum amount of land owned, as the draft Land Market Act had envisaged (see paragraph 40 above). It was the prohibition introduced by the moratorium which had pushed the land transactions into the shadow and de facto created a non-transparent shadow land market. It had led to the very problems the Government referred to, in particular a high concentration of land in the hands of large agricultural companies. This was because the moratorium presented the landowners with only two options: either to cultivate the land themselves (which they often could not do due to their age, health, the remoteness of the land, or land fragmentation making cultivation not viable economically) or accept leases under the conditions proposed by the agricultural producers. This market dominance of the agribusiness companies had led to low rents (they cited the State Land Cadastre Agency's statistics set out in paragraph 35 above) and "land devastation".

(β) The Government

76. Referring to the explanatory note to the law which extended the moratorium in 2015 (see row 11 of the Table at paragraph 21 above), the Government submitted that the goal of the moratorium was to protect food and national security. Releasing land into circulation risked creating conditions for the concentration of land in the hands of a few tycoons or "foreign and unfriendly power" in exchange for a fraction of its real value, its withdrawal from cultivation, and the impoverishment of farmers. The Government considered that the reality of those dangers was illustrated by the experience of a brief period in the early 2000s when free circulation of shares of land had been allowed and shares had been purchased en masse for meagre prices. The Government referred, in this respect, to the statistics summarised in Parliament's Resolution of 22 May 2003 (see paragraph 15 above).

(iv) Proportionality

(α) The applicants

81. As to the Government's reliance on the fact that the applicants' rights to use and rent out the land had been unaffected by the moratorium, they stressed that the right to dispose of property was an essential element of ownership and it was for an owner to decide whether to dispose of or retain his or her property. Moreover, their plots were small and were located 300 and 50 kilometres from their respective places of residence. They were also elderly persons in poor health. This had prevented them from cultivating the land on their own.

82. Renting the land out at "knockdown prices" was not a viable proposition either: unable to find offers for monetary rent at an acceptable level, the first applicant had had to accept rent in kind and the second applicant was receiving very low rent payments (see paragraphs 6 and 7 above). Moreover, domestic law imposed a number of duties on the applicants as landowners, including the need to comply with environmental rules and pay property tax (see paragraph 30 above) which they would be unable to comply with without renting their land out to an agricultural producer. If not for the moratorium, the only viable option for the applicants would be to sell their land.

(β) The Government

89. Certainly, there could be objective obstacles to farming but the applicants also had the right to rent out their land and this right was not subject to any restrictions. In fact the State was not depriving the applicants of income from their property. On the contrary, the State had taken steps to encourage a rise in rental income: while there were no caps on rent rates, a presidential decree had sought to ensure the observance of a minimum rent rate, at a level of 3% of the land's value (see paragraph 33 above). In fact, the majority of leases nationwide provided for even higher levels of rent than this minimum (see paragraph 35 above). Renting out land was a popular means of obtaining benefits of ownership for Ukrainian landowners, as evidenced by the large number of land leases in effect and the land area covered by them (see paragraph 35 above). Both applicants had also taken this opportunity and had rented out their land.

(b) Third-party intervener

93. EasyBusiness submitted certain information concerning the history of the land reform in Ukraine and the structure of its agricultural sector. In particular, according to them, from 1996 to 2009 two thirds of Ukraine's agricultural land was transferred into private ownership and 94% of the rural population converted their shares of land into land plots. As a result, legally the land was fragmented into small parcels. However, agricultural production had not been so fragmented since in practice the agricultural producers rented large areas from numerous owners, with the ten top agricultural companies renting from 150 to 654 thousand hectares. They were using the resulting economies of scale to accumulate additional financial resources which in turn skewed the balance in the rental market in their favour.

95. The existing situation did not mean that there was no market in land, but rather that it was non-transparent, leading economic players to use devious schemes to ensure control over land. It had also led to concentration of control over land in the hands of agricultural holding companies which, as the most common tenants, had disproportionate power over small land owners (the average plot size being four hectares) who had no choice but to accept low rents. The land market was fairly monopolised with the 100 biggest players renting 6.5 million hectares. This had led to abnormally low rents. The interveners pointed out that about two thirds of the seven million individuals who had obtained land in the course of privatisation were senior citizens, the average age of a landowner being fifty-seven, and 79% of them being over fifty.

96. The interveners considered the risks advanced to justify the continuation of the present situation exaggerated. Thus, as to the risk that the land would be sold at meagre prices, international experience showed, to the contrary, that in most countries the creation of a free land market had led to an increase in the value of land. As to the risk of land being bought out by foreigners, no international financial entity possessed the financial resources necessary to buy up the land in quantities which would constitute a threat and high land fragmentation made this risk even less realistic. As to the possible lifting of the moratorium increasing the pressure on small farmers, the interveners considered, to the contrary, that the lifting of the moratorium would be beneficial to them by increasing their access to financing.

2. The Court's assessment

(a) General principles

(i) The structure of Article 1 of Protocol No. 1

(ii) Lawfulness

(iii) General interest

(iv) Proportionality

(b) Application of the above principles to the present case

(i) Whether there is an interference and the applicable rule

(ii) Lawfulness

106. The Court notes the applicants' argument that the uncertainty created by the repeated extensions of the moratorium and the repeated failure of Parliament and the government to respect self-imposed deadlines for the creation of a sales market in agricultural land rendered the relevant legislation unforeseeable. However, it considers that this argument is rather relevant for determining whether the authorities struck a fair balance between the interests involved (see Hutten-Czapska, § 172, and Broniowski, § 151, both cited above).

(iii) General interest

(iv) Proportionality

(α) Legislative uncertainty

118. Moreover, it appears that, while the authorities considered the initial end date of the moratorium as the actual date by which the land market infrastructure had to be put in place and by which the moratorium was actually expected to expire, currently the moratorium is treated as, for all practical purposes, indefinite, despite the periodically set deadlines for the development of legislation which would regulate the land sales market and lift the moratorium which appear to be routinely pushed back (contrast the presidential address of 2002 at paragraph 36 above with that of 2017 at paragraph 42 above; see also, concerning failure to respect the self-imposed deadlines for development of the legislation, rows 10-12 of the Table and paragraph 43 above).

119. The Court has on many occasions stressed the need to look beyond appearances and the language used and to concentrate on the realities of the situation (see, for example, Blokhin v. Russia [GC], no. 47152/06, § 180, ECHR 2016). Applying this approach, the Court observes that the nature of the moratorium changed after the enactment of the above-mentioned laws of December 2007 and June 2008 and the moratorium became de facto indefinite and the conditions for its lifting indeterminate. No reason was given for this change. This change is also in apparent contradiction with the proclaimed aim of the gradual introduction of a land sales market.

120. In Bittó (cited above, §§ 108-110) the Court, in finding the then Slovakian rent-control scheme incompatible with Article 1 of Protocol No. 1, found it relevant that the scheme had been kept in place despite repeatedly announced Government policy plans envisaging the introduction of market-level rents. Likewise, in Skibińscy v. Poland (no. 52589/99, §§ 94-98, 14 November 2006), the Court found that repeated extensions of the rent-control scheme, initially justified in view of the transition from a State-controlled to a market economy, meant that a fair balance had not been struck between the competing general and individual interests. In Sporrong and Lönnroth (cited above, § 70), it was also relevant that the repeated extension of expropriation permits which restricted the full exercise of the applicants' ownership rights had left the applicants in "complete uncertainty as to the fate of their properties" which was a factor in the Court finding a violation of the applicants' property rights in that case.

(β) Reasons advanced for the introduction and maintenance of the moratorium

122. The Court notes that the Government did not advance any specific reasons as to exactly why the domestic authorities considered the temporary blanket ban on land sales as the only appropriate measure of achieving their desired social and economic goals, whether it seriously considered other means of achieving them short of a total ban or assessed the proportionality of a total ban to the aims sought (compare, in the context of Article 3 of Protocol No. 1, Hirst v. the United Kingdom (no. 2) [GC], no. 74025/01, § 79, ECHR 2005-�IX). Even though the Government did not advance this argument explicitly, the Court is prepared to accept that the reason for the choice of the temporary blanket ban may have been implicit in the initial moratorium, namely that time was needed to develop a land market infrastructure, which would supposedly include the consideration of less restrictive alternatives to a total ban. However, once the nature of that initial moratorium changed and the specific end date for its expiry was removed (see paragraph 119 above), no specific reasons were given for the continuing failure to legislate and consider such less restrictive alternatives.

(γ) The burden imposed on the applicants

131. In assessing the burden the impugned situation imposes on the applicants, the Government pointed out that the applicants had obtained their land of their free will at a time when it had already been subject to the legislative restrictions in question.

138. As the Government pointed out, and contrary to those rent-control cases, the applicants in the present case remain free to rent their land out at market rates. The respondent State does not cap those rates but rather takes measures to prop them up to the owners' benefit by setting minimum rents. While these minimum rents are, legally speaking, indicative rather than binding, as a matter of practice they appear to be followed in the majority of cases (see paragraph 33 above).

139. These positive aspects, however, are offset, to some extent, by certain other aspects of domestic law. Notably, tax law would appear to penalise owners who do not lease their land to agricultural producers and benefit those who do (see paragraph 27 above), even though the applicants would in any case appear to be entitled to a tax exemption due to their advanced age. Moreover, rules fixing the minimum duration of land leases at seven years also apparently aim to create stability for tenants but, by the same token, likely further restrict the owners' ability to seek higher rents in the process of lease renegotiation (see paragraph 34 above). It is also reasonable to assume that, as has been suggested (see paragraphs 82 and 95 above), the moratorium exercises a certain downward pressure on rents even though it is difficult to determine its precise extent, given there has never, in recent decades, been a functional land sales market in Ukraine (compare Chiragov and Others v. Armenia (just satisfaction) [GC], no. 13216/05, § 68, 12 December 2017).

143. Moreover, according to the Court's case-law, the fact that a property has been acquired without payment does not rule out a finding of a violation of Article 1 of Protocol No. 1 (see, for example, Edwards, cited above, §§ 5 and 75-79, and Vistiņš and Perepjolkins v. Latvia [GC], no. 71243/01, § 121, 25 October 2012). The Court considers, however, that this fact may be pertinent in its assessment under Article 41 of the Convention (see paragraph 155 below).

147. The Court concludes that the applicants have been made to bear as individuals the burden of the authorities' failure to meet their self-imposed goals and deadlines. In view of the weakness of the reasons given for the choice of the most restrictive alternative available to the authorities over less restrictive measures, the Court considers that the burden imposed on the applicants is excessive.

(v) Conclusion

III. APPLICATION OF ARTICLES 46 AND 41 OF THE CONVENTION

A. Article 46 of the Convention

B. Article 41 of the Convention

"If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party."

1. Damage

155. Concerning the matter of non-pecuniary damage, the Court reiterates that situations where the applicant has suffered evident trauma, whether physical or psychological, pain and suffering, distress, anxiety, frustration, feelings of injustice or humiliation, prolonged uncertainty, disruption to life, or real loss of opportunity can be distinguished from those situations where the public vindication of the wrong suffered by the applicant, in a judgment binding on the Contracting State, is an appropriate form of redress in itself. In some situations, where a law, procedure or practice has been found to fall short of Convention standards, this is enough to put matters right (see, for example, Chiragov, cited above, § 57, with further reference therein).

2. Costs and expenses

C. Default interest

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1. Decides to join the applications;

2. Declares the applications admissible;

3. Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention;

4. Holds that the finding of a violation constitutes in itself sufficient just satisfaction for any non-pecuniary damage sustained by the applicants;

5. Holds

(a) that the respondent State is to pay, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, EUR 3,000 (three thousand euros) to each applicant, plus any tax that may be chargeable to the applicants, in respect of costs and expenses, to be converted into the currency of the respondent State at the rate applicable at the date of settlement and to be transferred directly into the account of the applicants' lawyer Mr Tarakhkalo;

(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

6. Dismisses the remainder of the applicants' claim for just satisfaction.

Done in English, and notified in writing on 22 May 2018, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Marialena TsirliVincent A. De Gaetano
RegistrarPresident