ROUND-TABLE:
PROPERTY RESTITUTION/COMPENSATION:
GENERAL MEASURES TO COMPLY WITH THE
EUROPEAN COURT’S JUDGMENTS
WORKSHOP 1
organised with financial support from the Human Rights Trust Fund
under the project “Removing obstacles to the enforcement of domestic
court judgments/Ensuring an effective implementation of domestic
court judgments”
Bucharest, Howard Johnson Hotel,
5-7 Calea Dorobantilor Dist. 1, Bucharest, 010551 Romania
Presentation prepared
by Mr Tomáš Doucha, the Czech Republic
The views expressed are those of the author only
Restitution of agricultural assets in the Czech Republic after 1989
1.
Objects of resitution – agricultural assets
-
agricultural land
agricultural assets of long-term consumption (buildings, constructions, machinery,
etc.)
other agricultural assets (livestock, seeds, feeds, etc.)
2.
Forms of restitution
-
restitution of ownership rights, really put down during the communist regime
restitution of agricultural assets expropriated after 1948
restitution of assets as members investments brought into former agricultural
cooperatives
restitution as the allotment of new created (revaluated) assets of former
cooperatives
-
3.
Political background for restitution
-
-
restitution linked to the deadline of February, 25, 1948, it means to the legal
situation in the property to this date (in the case of the land, the situation to this date
was given by three land reforms after 1918, when the former Czechoslovak
Republic was established)
it is not possible to ensure 100% of justice, it means a partial solution of injuries of
the communist regime
restitution relates only to physical persons (for example, the former market
agricultural cooperatives are excluded)
specific approach to emigrants after 1948
specific approach to the church property (see point 7)
4.
Starting structure of users of agricultural assets in 1989
-
-
agricultural cooperatives based on members investments and new created own
assets (about 64 % of farmed land)
state farms based on the state, expropriated and other assets (about 33 % of farmed
land)
family farms based prevailingly on own assets (about 3 % of farmed land)
5.
Legislation for restitution of agricutural assets1
-
The Land Law (1991) – the basic law for the restitution of ownership rights to land
and to other agricultural assets and for the restitution of expropriated agricultural
assets
The Transformation Law (1992) for the transformation of agricultural cooperatives:
.
rules for the allotment of new created (revaluated) assets to persons-in-right
(according to their used land and other assets and according to their working
-
-
-
1
The legislation defines the persons-in-duty, which are obliged to hand over the assets to restituted
persons (person-in-right).
2
participation) in the form of the so-called transformation shares to be settled
by the transformed cooperatives (originally) in 7 years (by 1999)
.
rules for the restitution of members investments to physical persons, who
decided to establish family farms
- The Penalty Law (1993) defining the personal responsibility of managers of the
transformed cooperatives for the realisation of restitution according to the Land
Law and to the Transformation Law (the law reacted to the unwillingness of
successors of the former cooperatives to realize restitution)
- The Law on the Privatisation of the State Land (1999): the law enables to use the
state land for the compensatory restitution of land (it means the land already built
or devaluated in the past); the land in the state property is administered and
privatised by the Land Fund as an independent state institution.
6.
Current situation in restitution
Form of restitution
Transformation
shares of
cooperatives
Restitution of land
Situation 1990
(estimate)
CZK 55 bil.
Situation 2010 –
remains (estimate)
CZK 4 – 6 bil.
Remains (%)
CZK 7,8 bil.
CZK 0,9 bil.
12 %
7 – 11 %
7.
Causes of a slow progress in restitution, or in completion of restitution, respectively
-
in general: relatively high transaction costs for many persons-in-right to be
restituted
information assymetry between persons-in-right and persons-in-duty and a
„sleeping“ behaviour of many persons-in-right with their perception of high
transaction costs on the recovery of assets compared with real value of these assets
a significant discrepancy between the extreme concentration in land use and the
extreme land ownership fragmentation: about 20 000 larger land users compared
with 3 – 3,5 millions of land owners
the physical features of the land use structure: extremely large fields without
physical property boundaries, abolished during the communist regime, as an
obstacle for the physical identification and for the physical access to parcels/plots
a slow progress in the land consolidation in cadastres, enabling also to solve the
physical identification of plots and their property links; the slow progress caused
especially by the political unwilligness some of the governments and also by
limited projection/planning capacities and investment sources for this long term
process
the interruption of the land ownership registration after 1964 (after a real abolition
of the land ownership rights)
the behaviour of successors emerging after the transformation of cooperatives: the
so-called second transformation characterised with the tranfer of assets subdued to
persons-in-right from the transformed cooperatives to new join stock and other
companies, issuing to the interruption of legal obligations (there is a frequent but
still unsuccessful effort of governments for rectification, accompanied by an unclear
-
-
-
-
-
3
-
-
-
social consensus to settle the claims: the government does not struggle for a
settlement and persons-in-duty „explain the justice in their own way“)
insufficient private sources of persons-in-duty (farms as successors) to settle
restitution claims and public sources to speed up land consolidation (however, in
the both cases there is an improvement after EU accession, linked with the
outstanding increase of subsidies and with the possibility to use the Programme of
Rural Development for land consolidation)
problems with restitution of large agricultural property of the former nobility and
similar landlords, stemming from (a) the uncompleted First Land Reform after 1919
(the shortage of public money in the interwar period for the compensation and the
interruption of the process during the World War II); (b) the lengthy identification
of contingent claims of persons as enemies and collaborators, whose assets were
expropriated after the World War II
problems with restitution of the property of church, religious orders and
congregations (about 30 000 ha of agricultural land and 180 000 ha of forest land):
an agreement between the state and the church to the size of restitution and its form
(in kind, financial, shared both forms) has not been still settled, and at the same
time (according to the Land Law) the pertinent land is not tranferable till the matter
of the church restitution is not solved (it locally creates a signifant barrier for the
development of rural municipalities, because they cannot gain the pertinent land in
their ownership from the Land Fund).
8. What next?
-
Further attempts for speeding up or completion of the settlement of remaining
transformation shares?
It is necessary to add, that the effort to settle the remaining transformation shares
has up to now ever failed because of the unwillingness of the Parliament to amend
the Transformation Law. Among the main reasons are the supposed costs on the
primary settlement of obligations, which (according to bills) shall be covered by the
state and which the state shall claim back on persons-in-duty (on transformed
cooperatives or their successors). Because of many such cooperatives are in
liquidation or already went through bankruptcy and do not exist, the recovery of
debts by the state would not be probably fully successful.
Conclusions
In spite of the fact that only few persons-in-right and little value of assest remain to
complete restitution by the laws, it is not possible to expect a 100% settlement. For all
that the problem continues to be politically sensitive. In the case of transformation shares,
where some former governments tried for a legislative rectification of the situation, there
is evidently the risk of a future phasing out of the problem. The situation in the
completion of land restitution, where the land in the state property is still available, is
better.
February, 1, 2011
Tomáš Doucha, Institute of Agricultural Economics and Infomation, Prague, Czech
Republic
4
Restitution of Agricultural Assets
- Czech Republic –
Tomas Doucha
Institute of Agricultural Economics and
Information Prague
Bucharest, 17. 2. 2011
1
1. OBJECTS OF RESTITUTION
• Agricultural land
• Agricultural buildings, constructions,
machinery, …
• Other agricultural assets – livestock,
feeds, seeds, …
Bucharest, 17. 2. 2011
5
2
2. FORMS OF RESTITUTION
• Restitution of ownership rights (to land)
• Restitution of expropriated assets
• Restitution of assets of former agricultural
cooperatives
– restitution of members investments brought
into former agricultural cooperatives
– allotment of new created (revaluated) assets
of former cooperatives in the form of
transformation shares
Bucharest, 17. 2. 2011
3
3. POLITICAL BACKGROUND
•
•
•
•
Deadline February, 25, 1948
100 % of justice is not real
Restitution only for physical persons
Specificity: restitution of emigrants after
1948
• Open question: restitution of the church
property
Persons-in-duty x persons-in-right
Bucharest, 17. 2. 2011
6
4
4. STARTING STRUCTURE OF USERS OF
AGRICULTURAL ASSETS (% of farmed land)
3
33
coops
state farms
family farms
64
Bucharest, 17. 2. 2011
5
5. LEGISLATION FOR RESTITUTION
Year
Law
Purpose
1991 Land Law
restitution of ownership rights to land
and to other agricultural assets and
restitution of expropriated agricultural
assets
1992 Transformation
Law (for coops)
- allotment of new created assets in
the form of transformation shares to
be settled in 7 years (by 1999)
- restitution of members investments
to persons, who decided to establish
family farms
1993 Penalty Law (for
coops)
Personal responsibility of
managements to enforce restitution
Compensations in the case of built
1999 Law on State
Land Privatisation land, etc.
Bucharest, 17. 2. 2011
7
6
6. CURRENT SITUATION
Forms
Start
(CZK bil.)
2010
(CZK
(bil.)
Remains
(%)
Transformation
shares of coops
55
4-6
7-11
Restitution of
land
7,8
0,9
12
Bucharest, 17. 2. 2011
7
7. CAUSES OF UNCOMPLETED RESTITUTION
• In general: high transaction costs for persons-inright to be restituted
• Discrepancy between land concentration in (20 000) land
users and fragmentation of (millions) land owners
• Physical access to land in extremely large fields
• Slow land consolidation
• Land ownership registration interrupted (1964)
• The second transformation of coops
• Insufficient private and public sources for compensations
• Information assymetry
• Uncompleted Land Reform I (1919) – landlords as
persons-in-right
• Church property – open question
Bucharest, 17. 2. 2011
8
8
7. WHAT NEXT?
• Further attempts to speed up/complete the
settlement of remaining transformation shares?
• But the effort to settle them has up to now ever
failed
• Problems
– costs on the primary settlement of obligations:
according to bills costs shall be covered by the state
and the state shall claim back debts on persons-induty - on transformed cooperatives or their
successors
– because of many such cooperatives are in liquidation
or already went through bankruptcy, the recovery of
debts by the state would not be probably successful
Bucharest, 17. 2. 2011
9
CONCLUSIONS
 It is not possible to expect a 100%
settlement.
 For all that the problem continues to
be politically sensitive.
 For transformation shares there is the
risk of a future phasing out of the
problem.
 For land restitution, where the land in
the state property is still available, the
situation is better.
Bucharest, 17. 2. 2011
9
10