Introduction |
To many of the victims of Romania’s brutal communist regime, the
government’s efforts at restitution seem to be more of a şmecherie
(pronounced “sch-mek-aree-a” - a Romanian ruse) than an honest effort at
justice. Tens of thousands of victims have been waiting in vain for
eight years or more for their claims to be resolved without any
information as to the status of their files, while thousands more have
gone to their graves without any justice at all. Twenty years after the
fall of communism, and eight years after implementing what should have
been the model for restitution throughout Central and Eastern Europe,
Romania’s restitution process is mired in indolence, insolence, and
obedience to political interests instead of a commitment to justice and
the rule of law.
Over the years, this publication has provided in-depth analyses of
Romania’s basic restitution law, Law 10/2001 (“Law 10”), the
amendments to it and the regulations promulgated to enforce it. (See
The Romanian Digest™ Archive at www.hr.ro
.) While the Romanian government has commendably provided restitution to
thousands of victims since 2001, this article focuses upon the terrible
reality faced by over a hundred thousand victims of communism who still
have no idea when or if they will ever receive justice from a state
whose subdivisions appear either unable or unwilling to rectify the
injustices of the past. |
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Restitution in practice |
It is morally unacceptable to provide restitution to half of Romania’s
victims and provide indecision, silence and impudence to the rest. But
this is the state of restitution in Romania as described in a recent
report of the Romanian Academic Society (“SAR”), entitled “Property
Restitution: What Went Wrong in Romania?” in which SAR characterizes the
restitution process as insensitive, confusing and abusive. Certainly, it
would be mistaken not to acknowledge that thousands of claimants have
obtained restitution from the Romanian state – either through their
relentless diligence or by the luck of having their claims assessed in
localities that acted promptly and pursuant to the law. Even some
claimants in the notorious black hole of restitution that is Bucharest
have managed to obtain restitution, although all too often after
protracted litigation. But we write of the thousands of claimants lost
in limbo – that first circle of hell where for eternity they are
deprived of any response from the Romanian government to their claims.
This is how the process is supposed to work. Restitution claims at the
local level are submitted to commissions specially created by the
locality. After completing the file with the necessary documents, the
commission issues a decision, either approving in-kind restitution or
restitution by equivalent, or rejecting the file or redirecting it to
another competent institution. If the commission decides upon
restitution by equivalent, the decision accompanied by all of the
documents on which it is based, is transmitted to the Central Commission
for Establishing Compensation within the National Authority for Property
Restitution (“ANRP”) which, in turn, checks the legality of the
rejection of the in-kind restitution claim. If the Central Commission
decides that in-kind restitution is no longer possible, then the entire
file is submitted to an independent evaluator who prepares an evaluation
report establishing the amount of compensation to be awarded to the
claimant.
According to the most recent activity report of ANRP, the total number
of restitution requests submitted throughout Romania was approximately
202,000, out of which decisions have been rendered in almost 103,000
cases, either approving, rejecting or redirecting the file to the
responsible institution. According to the SAR Report, out of the
restitution claims that had been fully resolved country, almost 63,000
received favorable decisions at the local level, around 1,700 at the
national level such as ministries and the Authority for State Assets
Recovery (“AVAS”), and approximately 15,000 files were fully evaluated
by ANRP. Based on this data, even at the government’s current level of
efficiency, the restitution process will last for at least eight years
more, since many of the decisions rendered are not final. But this
figure doesn’t take into consideration the sloth-like progress at the
local level where finality may not come for another twenty-four years –
well after all the remaining claimants are dead. Indeed, last years’
Parliamentary revisions to the law led to overlapping rights granted
both to former owners and to the current tenants, the latter of whom
have consistently benefited more from the protection of the Romanian
state than have the victims from whom the properties inhabited by the
tenants were stolen. In turn, this led to more indecision and therefore
delays in granting in-kind restitution or restitution by equivalent.
Situation at the local level
Although the processing of a request for restitution from the date of
its submission until the date of a decision seems simple enough, in
practice it has proven to be a long and troublesome process. The period
of time necessary for the commission within a local city hall to render
a decision differs from one county to another, depending on the volume
of files and also to the number of personnel dealing with these issues.
So while it may take a couple of years until the applicant receives a
resolution of the restitution claim, the fault lies with a nation that
simply does not care enough to allocate sufficient resources to the
process.
Because the implementation of legal provisions in force must take into
account so many local institutional factors, the restitution process at
the local level does not have a unitary profile in the country, as noted
in the SAR report. There are Romanian counties where the number of
restitution requests are small, and the percentage of cases that
received a decision thus far are high -- over 90% in Alba Iulia,
according to the SAR report. But there are other small counties where,
even though the number of restitution requests is low, the percentage of
cases which received a decision is low as well, such as, for example,
Calarasi. In fact, there are big cities with an incredibly poor
resolution rate such as Constanta or Iasi and, most notorious of all,
Bucharest. Unfortunately, the low percentage in resolving restitution
files is characteristic of the situation throughout most of the country.
The blame lies with the dreadful organization of most municipalities,
the inefficiency of their personnel or the lack of adequate personnel,
improper and unclear communications to claimants, the opaqueness and
lack of transparency of the process and, not so infrequently, the ill
will of those charged to resolve the restitution claims. Glaringly, the
absence of deadlines for the completion of files, the lack of sanctions
in case of delays or the lack of responses to restitution requests,
encourage the poor performance of the Romanian state and its
subdivisions in resolving restitution claims. In addition, some counties
simply ignore applicants’ requests for information despite being obliged
to provide responses pursuant to Law 544/2001 regarding the free access
to information of public interest. Undoubtedly, some responses to
restitution requests become entangled and dependent upon local interests
influenced by the increase over the past few years in the monetary value
of real properties. The interest generated at the local level for
certain properties can be assumed to have led to pressures on delaying
decisions or nullifying legitimate restitution requests for the
flimsiest of reasons.
Abominable Bucharest
Within this miserable picture of meager performance, Bucharest holds a
special place of scorn. Although it has the highest number of
restitution requests, almost 21% at the end of 2007, i.e. 42,430 files,
as posted on the website of the Bucharest City Hall, only 11,259 have
received decisions thus far. It took eight years to resolve only a
quarter of the files submitted to Bucharest’s city hall. At that rate,
Bucharest will not finish reviewing its restitution claims until 2033!
The Mayor of Bucharest is Sorin Oprescu. By all accounts, he is a decent
and well-meaning man. If this assessment is correct, we ought to expect
from him an immediate, resounding and uncompromising reorganization of
the restitution department of the Bucharest city hall adding many more
personnel and creating a much more efficient system of communication so
as to fully and adequately resolve the restitution claims of the victims
of communism. If the plight of the victims were not sufficient reason to
expedite the process in Bucharest, maybe what might spur the Mayor to
action is the realization that the failure to do so could result in an
avalanche of additional litigation against the city that will be far
more costly to resolve than would the cost of an efficient restitution
administration.
While the General City Hall of Bucharest is the one competent to resolve
restitution files submitted pursuant to Law 10, the five district city
halls are the ones competent to coordinate the restitution process based
on Law 18/1991 regarding land resources. This often leads to overlapping
jurisdiction with two restitution processes for one property – a
completely dysfunctional situation that further delays the rendering of
restitution decisions.
Before the last local elections in which Mayor Oprescu emerged the
victor, the number of restitution files resolved by the Bucharest city
hall had increased. However, since Mayor Oprescu’s election, the rate of
resolution of such claims has returned to its original snail’s pace.
Already, the institutional deficiencies at the Bucharest city hall in
providing answers to claimants have caused the submission of almost
30,000 court cases. This ought to strike just about everyone as an
absurdity that cries out for a speedy solution.
Situation at the State level
The situation is even worse at the State level, although the highest
number of restitution requests have been submitted to the local
administrations. According to the SAR report, three quarters of the
notices submitted to the central administration are with three
institutions, which just happen to have the highest rates of unsolved
cases: the Authority for State Assets Recovery (“AVAS”) with a total of
over 60% of the case, 67% of which remain unsolved; the Ministry of
Agriculture, also with 67% in unsolved claims; and the Ministry of
Economy and Finance, with 52% of its matters unresolved.
Since the effective date of Law 247/2005, the ANRP became the agency
that performs the evaluation of properties where restitution by
equivalent (instead of in-kind) has been decided. This is done by
independent real estate evaluators and based on international evaluation
standards. Although this was supposed to put an end both to the
unjustified delays, as well as to interference by local interests in
resolving restitution files at the local level, in practice, this system
is not functioning very well.
The ANRP has been exceedingly slow in resolving restitution files.
Often, it is because of missing documents or missing information in such
files due to the lack of land registry data and historical archives.
Other complaints were raised in connection with the ANRP’s improper and
deficient communication with claimants concerning the status of their
restitution files. It is not understandable and even less justifiable
that applicants must wait for years until they receive an answer
concerning the status of documentation in their files, and this despite
their repeated requests for information. Furthermore, most applicants
also complain about the non-transparent evaluation method for their
confiscated properties because even if they receive a decision stating
the amount of compensation, they are not informed regarding the methods
used in order to determine such amount, and, consequently, it is very
difficult for them to dispute the validity of the evaluation method.
Even after a compensation title has finally been issued, the possibility
to obtain shares in the Property Fund is still far off. The enactment of
Government Emergency Ordinance No. 81/2007 seemingly represented a step
forward in the restitution process by granting claimants the right to
opt between compensation in cash up to a limit of 500,000 RON or in
shares in the Property Fund. But, from the information posted on the
ANRP website, the actual payment of compensation in cash is very slow,
with only 2,826 requests resolved out of a total of 8,266 requests for
compensation in cash in 2007-2008. Indeed, the amounts necessary for the
payment of compensation in cash are quite significant, as properties are
evaluated, following the entry into force of Law 247/2005, based on
their market value, and that makes it impossible to predict when all
payments in cash will be made. Similarly, it is still uncertain when the
Property Fund will be listed with the Bucharest Stock Exchange, thereby
providing an efficient means for holders of shares to obtain benefits on
a regulated market. Indeed, at the moment, the selection of the Property
Fund Manager is still underway and, although the potential candidates
have submitted their offers, it is still uncertain when such process
will be finally over.
Potential Remedies in Court
A court proceeding is the last remedy that a rightful owner of
confiscated properties has to obtain justice. In case in-kind
restitution is denied, or if a restitution by equivalent decision
establishes an unsatisfactory compensation, claimants can go to court to
vindicate their rights from the judicial power of the state that failed
to protect them at the administrative level. In addition, many actions
had been commenced in court based on the provisions of civil law by
persons who had no grounds for pursuing theirclaims based on Law 10.
Consequently, thousands of claims were brought to court in the last
several years, but court decisions in restitution matters have been
characterized by huge discrepancies in their results. The opposing court
decisions rendered by courts in different counties resulted in
international criticism of the Romanian judicial system. Consequently,
the High Court of Cassation and Justice (“ICCJ”) unified the
practice of the Romanian courts by means of decision no. XX, dated March
19, 2007. Before this ICCJ decision, the practice of the Romanian courts
was divergent with regard to claims introduced against Romania’s
unjustified refusal to respond to a restitution request in the 60-day
term set by Law 10. Now, in case claimants face an unjustified lack of
response from the competent authorities, they are entitled to submit
claims in court. This will most certainly lead to a higher number of
actions in court in the near future, introduced by persons who are tired
of waiting for the competent authorities to act.
Another past problematic non-unitary practice of the Romanian court
system concerned the admissibility of restitution claims based on the
provisions of the Civil Code -- claims introduced in court after the
entry into force of Law 10. The ICCJ ruled, by decision no. 33, dated
June 9, 2008, that, in principle, persons whose matters are regulated by
Law 10 will have to submit claims in court only based on the provisions
of that law and not based on common civil law provisions. Furthermore,
persons who have already introduced claims based on the procedure set by
Law 10 cannot introduce any additional restitution claims based on
general civil law, under the principle electa una via. This may
lead in the future to more complaints before the European Court of Human
Rights submitted by those who are now no longer permitted to resort to
common civil law provisions in court.
The two aforementioned ICCJ decisions are important in unifying the
practice of the Romanian courts with regard to restitution files.
However, despite these significant changes, it is still possible that
the courts may render contradictory solutions. |
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Conclusion |
Nearly
twenty years after the fall of Romanian communism, large numbers of its
victims are still waiting for justice that is being doled out by the
Romanian state at a rate which may not bring finality to some claimants
for another twenty-five years or a period of almost forty-five years
after the fall of Ceausescu. The situation is a national disgrace. The
local and national authorities must seek immediate means to accelerate
the restitution process and bring finality to the people who have
suffered so much from the prior communist regime.
If the central government and local administrations are unwilling or too
incompetent to move the restitution process to a fair and speedy
conclusion, then the answer will lie in the Romanian courts, at the
European Court of Human Rights for some and, quite possibly, through
arbitration under Romania’s many bilateral investment treaties. This
later option may be utilized by the various associations representing
claimants so that persons with small claims that could otherwise
ill-afford arbitration at the International Centre for the Settlement of
Investment Disputes in Washington, D.C., can band together in one large
action.
The distressing aspect of all of this is that Romania’s restitution
efforts should not end in such derogatory fashion. A great and noble
effort has been shredded by incompetence, indolence, and political
expediency – and no Romanian political leader seems willing to correct
the muddle and chaos that has befallen the process before it blows up in
their face. |
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Editors Note: It is our policy not to mention our clients by name in
The Romanian Digest™ or discuss their business unless it is a matter of
public record and our clients approve. The information herein is correct
to the best of our knowledge and belief at press time. Specific advice
should be sought from us, however, before investment or other decisions
are made.
Copyright 2009 Rubin Meyer Doru & Trandafir, societate civila de avocati.
All rights reserved. No part of The Romanian Digest™ may be reproduced,
reused or redistributed in any form without prior written permission
from the publisher.
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