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The EU Court on seaside resorts: "Expropriate legitimate immovable works at the end of the concession"

The EU Court ruled on the appeal of the Italian Society of Seaside Enterprises against the Municipality of Rosignano Marittimo which, at the end of the concession, had seen some immovable works pass into the hands of the State free of charge

The EU Court on seaside resorts: "Expropriate legitimate immovable works at the end of the concession"

- expropriations from seaside resorts at the end of the concession period are legitimate. The Italian law which establishes that non-removable works built on beaches are acquired free of charge by the Italian State at the end of a concession does not in fact constitute a restriction on the freedom of establishment. She decided it European Court of Justice ruling on the appeal of Italian seaside business company (Siib) against the Municipality of Rosignano Marittimo (Livorno).

The appeal to the EU Court

A Rosignano Marittimo, in the province of Livorno, Siib had built various works in the bathing establishment of the stretch it had under concession. At the end of the concession period these works passed free of charge to the State, as required by the Italian navigation code, consequently requiring the payment of increased state fees.

At that point the company appealed Council of State who in turn turned to the EU Court of Justice to ask whether the national law which provides that non-removable works built on a beach are automatically acquired by the State upon expiry of the trial period - moreover without compensation for the concessionaire which created them – represents a restriction on the freedom of establishment enshrined in Article 49 of the Treaties. The Luxembourg judges ruled that the procedure followed was correct.

The rule of the Italian navigation code, the Luxembourg judges highlight, applies "to all operators carrying out activities in Italian territory" and for this reason "does not constitute a restriction on the freedom of establishment", we read in the sentence, according to which all operators, "are faced with the same concern: that of knowing whether it is economically sustainable to present their application and submit an offer for the purposes of awarding a concession knowing that, at the expiry of the latter, the non-removable works constructed will be acquired by the public domain".

Furthermore, "the rule does not concern the conditions for the establishment of concessionaires authorized to manage a tourist-recreational activity on public maritime property", providing "only that, upon expiry of the concession and unless otherwise established, the non-removable works are confiscated immediately and without financial compensation in the maritime public domain".

The free and uncompensated appropriation by the State, the EU Court further underlines, “constitutes the very essence of the inalienability of public property“. A principle that "implies" that the latter "remains the property of public entities and that the employment authorizations are precarious", i.e. they have "a fixed duration and are revocable". All elements which, according to the EU judges, "the Siib could not ignore".

Sector associations: “Unacceptable”

The decision of the EU Court was welcomed with “dismay and concern” by sector associations, with Assobalneari Italia speaking of a "sentence that destroys Italian tourism excellence". For the category, "the prospect of losing" the investments made "without any compensation calls into question the ability and willingness to invest in the face of the threat of not seeing such investments recognized at the end of the concession".

“This sentence foreshadows a violation of property rights, as it is a form of expropriation without compensation, in contrast with the general principles of property protection guaranteed by our legal system", says Assobalneari again, asking the Government to "intervene immediately". “Letting this ruling affect the seaside sector in Italy means letting technocrats from Brussels determine the fate of the Italian economy. It is unacceptable".

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