Additional Explanations Concerning the Negotiating Position to Chapter 4 - Free Movement of Capital - Denationalisation
In the EU Common Position relating to Chapter 4 - Free Movement of Capital, Slovenia was requested to provide information on its plans for amending the relevant legislation in order to bring it in conformity with the acquis insofar as it relates to the principle of non- discrimination in the denationalisation process.
Quotation from the EU requirement: "Considering the Slovenian legal framework, under which foreigners may acquire real estate in Slovenia, based on reciprocity, the EU invites Slovenia to provide information on its plans for modifying the relevant legislation so as to bring it into conformity with the "acquis". This request also relates to the principle of non- discrimination in the de-nationalisation process."
Position of the Republic of Slovenia:
I. The principle of equality before the law is enshrined in Article 14 of the Constitution of the Republic of Slovenia. This is a basic constitutional principle prohibiting any discrimination. The Republic of Slovenia does not violate this principle. In drafting its legislation, within both the legal and actual possibilities, Slovenia has - like any other country and in compliance with international agreements - also in the case of denationalisation regulated the same cases in the same manner, and different cases in appropriately different ways. The principle of equality before the law was adhered to, which is a feature common to all states governed by the rule of law.
II. By passing the Denationalisation Act, Slovenia committed itself to concluding the process of denationalisation. The Denationalisation Act (hereafter DA) governs the conditions and methods of returning the nationalised property pursuant to the regulations adopted in the period from 1945 up to the entry into force of the Constitution of the Socialist Federal Republic of Yugoslavia (hereafter SFRY) in 1963. The legal base for the restoration of nationalised property is provided by Articles 3, 4 and 5 of DA. Under the provisions of the relevant Articles of DA, persons entitled under denationalisation are natural persons whose property was nationalised pursuant to the above-mentioned regulations.
DA stipulates that persons entitled under denationalisation are natural persons who, at the time of nationalisation, were Yugoslav nationals and whose citizenship was recognised after 9 May 1945 by law or international agreement.
Article 9, Paragraph 2 and Article 12 of DA lay down exceptions for cases where the property nationalised was held by a foreign citizen. Entitled persons also include persons who, at the time when their property was nationalised, were not Yugoslav nationals but had both permanent residence in the territory of the present Republic of Slovenia and Yugoslav citizenship recognised after 15 September 1947 by law or international agreement.
After reviewing whether the provision, according to which Yugoslav citizenship at the time when property was nationalised serves as a condition for acquiring the status of a person entitled under denationalisation, is in conformity with the constitutional provision of equality before the law, the Constitutional Court of the Republic of Slovenia issued Decision No. U-I- 23/93, whereby it was ruled that the provisions of Article 9, Paragraphs 1 and 2 of DA are not contrary to the Constitution of the Republic of Slovenia.
Persons entitled under denationalisation do not, however, include those natural persons who were either granted or held the right to compensation from a foreign country for the previously seized property in accordance with international agreements. Thus, rather than the criterion whether the person involved received the compensation or not, it is crucial that such a person was entitled to claim compensation. Failing to claim compensation resulted in losing that right, and no person is allowed to make equal or similar claims arising from the same right.
III. When considering the denationalisation process, one cannot avoid taking into account historical reasons for interference in the property of foreign citizens who were nationals of those belligerent states whose victims were Yugoslavia, its nationals and its property (in the territory of Slovenia, coercive measures were only applied to the property of Hungary, Italy and the Third Reich, including Austria, and the property held by their nationals). The actions taken by the said countries resulted in certain provisions contained in peace treaties which provided a basis for implementing regulations adopted by individual countries. On the basis of these regulations, measures agreed upon in peace treaties were implemented. Such measures laid down in peace treaties which resulted in interference in the property of the above countries and their nationals are contained in various international agreements; the latter served as a legal base for nationalising the property in question. In addition to the treaties concluded with individual countries (listed in the Annex), this issue is also covered by the Treaties of Bonn and Paris and by the Convention on the Settlement of Matters Arising out of the War and the Occupation and, last but not least, the Potsdam Agreement as well as the Yalta arrangements.
IV. Denationalisation does not constitute a part of the acquis. Therefore, there exists no obligation to harmonise legislation in this area. Denationalisation is not an issue to be covered in the negotiations for Slovenia's membership of the EU.
Article 6 of the Rome Treaty (as amended by Article 12 of the Amsterdam Treaty) stipulates: "Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited." As the above-mentioned principle is only applied to the spheres from the Community jurisdiction (denationalisation does not fall within the Community jurisdiction), Slovenia cannot, even after becoming a full EU member, be reproached for not complying with the principle of non-discrimination.
V. Considering the above facts, the Republic of Slovenia believes that there exist no grounds for addressing the issue of denationalisation within the framework of negotiating positions relating to free movement of capital, and therefore proposes that the issue be removed from the EU Common Position - Chapter 4.
Annex
a) State Treaty for the Re-establishment of an Independent and Democratic Austria
The Treaty was signed in Vienna on 15 May 1955, and was acceded to by the Federal Peoples' Republic of Yugoslavia as an Associated Power on the basis of the provision under its Article 37. The Treaty was ratified by the Act published in the Appendix to the Official Gazette of the Federal Peoples' Republic of Yugoslavia - International Agreements, No. 2/56. Article 27, Paragraph 2 of the Treaty provides that:
"Notwithstanding the foregoing provisions, the Federal Peoples' Republic of Yugoslavia shall have the right to seize, retain or liquidate Austrian property, rights and interests within Yugoslav territory on the coming into force of the present Treaty. The Government of Austria undertakes to compensate Austrian nationals whose property is taken under this paragraph."
With regard to other property, rights and interests (value of property) of Austrian nationals which were not subject to the measures pursuant to Article 27, Paragraph 2 of the Austrian State Treaty but to general denationalisation measures, the Treaty Regulating Certain Matters under Property Law was signed by the SFRY and the Republic of Austria on 19 March 1980. Article 1 thereof lays down a global compensation amount, whilst in Article 3 Austria commits itself not to advance against the SFRY any claims by Austrian natural or legal persons as legal successors resulting directly from the nationalisation under the Act Regulating the Nationalisation of Private Companies. Article 4 of the Treaty stipulated that, in relation to the payment of compensation under Article 1 of the Treaty, the SFRY and the Yugoslav natural and legal persons were discharged from any obligation towards the Republic of Austria and its nationals as regards the claims directly resulting from the measure under Article 1 of the Treaty taken by Yugoslavia.
b) Peace Treaty with the Italian Republic
The Peace Treaty with the Italian Republic, which entered into force on 15 September 1947, provided a basis for implementing various bilateral agreements which, to a certain extent, were related to the regulation of issues in terms of territories, transport, citizenship and property law. As regards what is termed annexed territory, the above issues differed considerably from the status of matters under property law in the territory of the former B Zone of the Free Territory of Trieste (FTT).
Article 79 of the Treaty stipulates that each of the Allied or Associated Powers has the right to seize, retain, liquidate or adopt any other measure with regard to any property, rights and interests held by Italy or its nationals within its territory on the day of entry into force of this Treaty. It is furthermore stipulated that each of the Allied or Associated Powers has the right, if need be, to use the above-mentioned property or the proceeds arising from its liquidation and not exceeding the amount of its claims or claims of its nationals on Italy and its nationals, including claims not fully settled on the basis of other Articles of the Treaty. The portion of Italian property or the proceeds arising from its liquidation exceeding the amount of the claims in question shall be returned.
Matters under property law, the central one being the agreement relating to the damage caused to Italian nationals - optants who, in the territory annexed to Yugoslavia, left behind their real estate which was disposed of at an agreed global lump-sum compensation, were regulated by several successive agreements rounded off by both the Agreement between Yugoslavia and the Italian Republic of 3 July 1965 on the application of the agreement dated 18 December 1954, and the Protocol entered into by the SFRY and the Italian Republic on defining what was termed the A List of 18 March 1983, which was made as an annex to the agreement between Yugoslavia and the Italian Republic of 3 July 1965 on the application of the agreement dated 18 December 1954, which entered into force on 23 October 1985.
The treaty entered into by the SFRY and the Italian Republic in Osimo was designed to settle, in particular, territorial disputes and disputes relating to frontiers. Moreover, the definite state border was fixed, and certain issues relating to citizenship of persons residing in the former FTT were settled. It was also agreed that the Governments would enter into an "agreement on a lump-sum compensation for goods, rights and interests of Italian natural and legal persons within one part of the territory referred to in Article 21 of the Peace Treaty" (in pursuance with the Yugoslav regulations, those goods, rights and interests within the Yugoslav part of the former FTT passed into the state ownership). The agreement between the SFRY and the Italian Republic on a final settlement of all reciprocal obligations arising out of Article 4 of the Osimo Agreement, signed on 10 November 1975, was drawn up in Rome on 18 February 1983. Final settlement and definition of compensation for all real estate subject to nationalisation, expropriation or other restrictive measures adopted by the Yugoslav military, civil or local authorities from 1945 on, was, to a considerable degree, subject to the settlement of issues relating to civil status which, in turn, affected matters under property law. By concluding the Osimo Agreement, the Italian Republic succeeded in ensuring that a certain number of Italian nationals in the territories of the Republic of Croatia and the Republic of Slovenia either acquired certain real estate or else had it restored to them. Names and land register data concerning those persons and individual items of real estate are stated in the list as a constituent part of the agreement.
c) Peace Treaty with Hungary
Under the provision of Article 29 of the Peace Treaty with Hungary from 1947, each of the Allied and Associated Powers, including Yugoslavia, has the right to seize, retain, liquidate or undertake any other action with regard to property, rights and interests of Hungary and its nationals within its territory on the entry into force of the Treaty; the property or the proceeds arising out of the liquidation may also be used differently, provided that they do not exceed the amount of the claims of an individual Allied or Associated Power or its nationals against Hungary or its nationals. This provision also involves claims which are not fully regulated on the basis of other articles of the Treaty. The portion of Hungarian property or the proceeds arising from its liquidation exceeding the amount of the claims under the Treaty shall be returned. The Government of Hungary undertook to compensate its nationals whose property was taken and not returned under the Article in question.
d) Property of nationals of the Third Reich
Yugoslavia has never entered into a peace treaty with Germany; however, several regulations were adopted both prior to the end of the war and immediately after the war, whereby the property held by nationals of the Third Reich and persons of German nationality was affected. Those regulations related de facto to the property of nationals of the Third Reich who, pursuant to the Third Reich Decree on German Citizenship dated 14 October 1941 - also applying to areas defined as "liberated territories" (Lower Styria, Upper Carniola, Carinthia) - held what was called permanent German citizenship. Anybody applying for this citizenship had to be of German nationality, and in fact had to fulfil the condition of being Volksdeutscher (German living outside Germany); the latter were normally associated within various Nazi organisations and distinguished by the colour of identity card.
Considering the fact that the Slovenian territory was divided between several occupying forces, the citizens of the Third Reich lost their property in various circumstances and on the basis of measures taken by several authorities. The Kocevarji* and Germans living in what was named the Ljubljana Territory (both territories were occupied by Italy) lost their property de facto and de jure as a result of either the Nazi assimilation programme or the decisions taken by the higher German authorities. Under these decisions, the Germans were obliged to sell their property and move either to the territory of the old Reich or to the occupied Slovenian territory from where the Slovene people were either resettled or germanised. The property of the citizens of the Third Reich was, to a considerable extent, seized on the basis of several administrative and judicial decisions issued pursuant to the decree adopted by AVNOJ**. This was a coercive measure taken against the Third Reich and its nationals and a consequence of both the war and the circumstances causing it.
The Federal Republic of Germany has passed a law whereby conditions were set according to which its nationals might claim compensation for damages caused during or after the war (not only in Yugoslavia but in other territories as well).
International agreements were also signed with other countries (Switzerland, Turkey). One of the criteria under the international agreements in question is the requirement that individuals be citizens of the respective foreign country at the time when the property was nationalised.
In Slovenia, the question of legal succession to international agreements entered into by Yugoslavia was regulated expressly by the provision of Article 3, Paragraph 1 of the Constitutional Act on the Implementation of the Basic Constitutional Charter on the Independence and Sovereignty of the Republic of Slovenia. Pursuant to Article 8 and Article 153, Paragraph 2 of the Constitution, Slovenia is, in its regulatory activities, obliged and entitled to comply with the said agreements. It is explicitly stipulated in Article 10, Paragraph 3 of the Denationalisation Act that persons entitled under denationalisation within the meaning of this Act do not include persons who were either granted or had the right to claim from another country compensation for the seized property.
Conclusion
As is evident from the above-mentioned international agreements, foreign citizens were in fact granted the right to claim compensation for expropriated property from the country whose citizens they were. Any claim for a subsequent compensation in the form of denationalisation would, in all relevant cases, imply redoubling, i.e. double compensation in the same case and to the same injured party. As injured parties had in fact been granted the right to claim compensation from their countries, this is a situation both immoral and inadmissible in terms of any legal system. Yugoslav citizens, on the contrary, had not been granted such a right; it is therefore evident from the position taken in enacting the Denationalisation Act that those cases of property seized, in which either inadequate or no compensation was paid, were considered by the legislators as unjust cases. The Constitutional Court of the Republic of Slovenia has decided that differentiation on grounds of citizenship is permissible under the Constitution, as the legislators have had substantiated reasons for enacting the above differentiation and can therefore not be reproached for arbitrary treatment. Consequently, the challenged provision of the Denationalisation Act is not contrary either to the Constitution or to the provisions of international agreements which are binding on Slovenia and which prohibit the legislators from acting arbitrarily, particularly of Article 14 of the European Convention on Human Rights and Article 26 of the International Civil and Political Rights Pact.
Government Office for European Affairs (http://www.gov.si/svez/), February 2000
* Germans living in the area of Kocevje
since the 14th century.
** AVNOJ (Anti-fascist Council of the
National Liberation of Yugoslavia), the highest political body in
Yugoslavia during and immediately after WW2.