Chinese investor’s Iceland resort construction bid rejected by minister

Ögmundur Jónasson, Iceland’s Minister of the Interior, has rejected Chinese billionaire Huang Nubo’s application to buy 30,639 hectares in northeast Iceland for the construction of a luxury resort.

Ögmundur says his decision not to grant Mr. Huang’s application for an exemption to the law barring non-EEA nationals from acquiring large plots of land in Iceland is in accordance with Icelandic law and rules. The size of the proposed purchase would have rendered the law pointless had an exemption been made, the minister said.

Ögmundur explained to RÚV after yesterday’s extended cabinet meeting that it was not an individual trying to buy Grímsstaðir á Fjöllum, but rather a limited company, largely owned by the individual: Huang Nubo. It was the opinion of the minister and the Ministry of the Interior, after careful consideration, that the company did not qualify for an exemption to the law. To provide the exemption in this case would have set such a huge legal precedent that non-EEA parties would have felt confident in gaining exemptions for almost any land purchases in the future, Ögmundur added. The land in question amounts to roughly 0.3 percent of Iceland’s entire land area.

Asked if his decision had been universally welcomed, or at least accepted, by his cabinet colleagues, Ögmundur dodged the question; saying it was a decision which fell solely on the Minister of the Interior to make.

Unsurprisingly the decision has split opinion within the two government parties. The larger Social Democrats were widely seen as being more pro- the potentially lucrative deal than Ögmundur’s Left Green Movement.

Northeast Iceland Social Democrat MP Sigmundur Ernir Rúnarsson was quick to criticise; describing the decision as “crazy”:

“I find this a crazy decision by the minister who, in his intransigence, is probably unfit to take this decision in light of the declarations he has made on the case in the lead up to the decision. Quite apart from that, there are at least 25 precedents for cases of this kind. This is a deplorable message to the people outside the capital region where there is a need to distribute the tourism industry better across the country and better across all times of year — and this is a devastating message to send out into the world to investors who are eyeing the country,” Sigmundur said.

He added that he has called for a special Social Democrat working group to go over the matter and he also said he wants to hold a meeting with Ögmundur Jónasson in person — adding that the matter is by no means over in his opinion.

Prime Minister Jóhanna Sigurðardóttir (leader of the Social Democrats) also commented later in the day, describing Ögmundur’s decision as “a disappointment”.

Background to this story can be read here:

Chinese investor wants to build luxury country hotel in Iceland

North Iceland tourism officials support Chinese land purchase plan

Chinese investment in Iceland making world headlines

Icelandic ministers gearing up for Chinese investment battle?

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