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Albania’s Property Restitution Quagmire

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Drini Cano Cover

The Albanian Property Restitution and Compensation Agency: The Property Restitution and Compensation Process as a Constitutional and Integration Obligation
by Drini Çano

(Saarbrücken: VDM Verlag Dr. Müller, 2009)
60 pp
US $68

In this horribly edited slim and dry booklet, Drini Çano argues in stilted and stultifying Euronglish legalese that Albania’s incomplete property restitution process, under way for the past 20 years,  has violated the nation’s constitution and jeopardized its effort to attract foreign investments and accede to the European Union. To make his case, the author focuses on the Albanian Property Restitution and Compensation Agency (PRCA). Instead of a team of “administrative judges” (p. 20), this is a board of potentially corruptible political appointees, a phenomenon that reflects on micro-scale the many pathologies of post-Communism. The continuity of Communism as post-Communism has, if not outright nullified, then at least greatly constrained justice, even if the law of the land pays lip service to restitution, as is the case in Albania, where “Article 181 of the Albanian Constitution declares the obligation of the Albanian Parliament to issue laws on the fair regulation of different matters related to expropriation and confiscations” which occurred under Communism (p. 5).

Unfortunately, Çano fails to identify post-Communism as the problem. He eschews a political commentary nearly altogether and forgoes a rudimentary historical background on the calamity that befell Albania after 1944. Instead, the author focuses on the legal aspects of the restitution process. His is a case study of his native land which, however, imparts generic lessons on property restitution for a broadly understood post-Soviet zone between the Adriatic, Black, and Baltic seas.

The trajectory of property issues in the wake of a Marxist-Leninist revolution has been invariably the same. First, the Communists confiscated it; then, the post-Communists appropriated it. In between, nationalized property was controlled by the state that somehow failed to wither away.  The leading vanguard of the proletariat took over as the wards of the stolen property. After a while, the red nomenklatura privatized its ill-gotten gains in a manner and scale permissible by the ideological flexibility of the ever dialectically transforming Soviet-style system.

The process accelerated with the speed of light after the so-called “fall” of Communism. From Angola through Hungary and Belarus to Mongolia, the pattern has been similar. Under the new post-Communist system, falsely dubbed a liberal free market democracy, the party kleptocrats, first, ascertained that they would continue to enjoy stolen goods with gleeful impunity and, second, that they could continue to rob property with rabid voraciousness. Theft of state property resulted on an unprecedented scale, including that which had belonged to private parties before the Communist takeover.

The rightful owners are usually seen as a threat to the ensconced post-nomenklatura. At best, a few have been given token compensation; at worst, they are denied any recognition for their property rights. In most cases, in Central and Eastern Europe in particular, the confiscated property holders have had to fight for their rights in courts. The problem is that the legal system is post-Communist; the constitutions are either “adjusted” old Stalinist contraptions or new legal instruments written by the post-Communists and their allies to maintain their grip on power; the judiciary is full of old Communist judges and their collaborators, now miraculously turned “liberals” and “democrats,” as well as “social democrats.” And the same applies to the state bureaucracy which views with a jaundiced eye the attempts by the old elite to stake its claims to confiscated properties.

All this retards the process of restoring property to rightful owners. As Çano put it in his trademark, run-on Aesopic style: “As a consequence of certain wrong solutions given to the regulation of property rights issues, a big number of abuses omitted by different commissions established to examine the applications [sic claims] of expropriated subjects, abuses of offices for registration of immovable properties, abuses of land registry office, courts and other institutions which are related to the process of restitution and compensation of property, the issue of restitution and compensation of property has become one of the biggest problems the Albanian society is facing nowadays” (p. 6).

This indispensable context is either inexplicably downplayed or simply missing from Çano’s opus. A Western reader is forced to reconstruct the proper background on his own out of such tidbits as a brief mention that under the 1976 constitution “private property was forbidden” (p. 4), or a reference to the 1945 law “On Agrarian Reform,” without, however, informing us that the “reform” consisted solely in wholesale confiscation of land from private owners (p. 9).
A glib remark about “those owners who have donated their property to the State” (p. 9) as being excluded from the property restitution/compensation process obscures the sordid truth that the Communists routinely forced, directly and indirectly, private owners to cede ownership of their property to the state. Some were hoping that by surrendering a portion of their possessions “voluntarily” they would prevent, or at least forestall, the confiscation of the rest. It usually was not the case anywhere in the Soviet Bloc, including Albania. Readers unfamiliar with the bliss of Communism will fail to understand this reality, which Çano fails to explicate. An omission of lesser kind is the author’s lack of explanation about the problems involving property restitution in the so-called “tourist areas.” Located along the coast, they were immediately confiscated and militarized under Communism, forming the first line of defense. Sometimes it is hard to tell whether such lacunae stem from just poor editing or assuming too much knowledge of the reader. Perhaps the author also indulges in customary obfuscation stemming from the trauma of totalitarianism, where its victims are still conditioned to avoid speaking plainly.

Instead of contextualizing property issues by anchoring them in history, Çano relies, perhaps pragmatically, on appealing to Albania’s self-interest. Namely, according to him, if property issues are not squared away, there will be neither foreign investment nor European integration, or at least both will be greatly retarded.

The author takes the legal charade after the “fall” of Communism at the face value and deadpans: “to regulate [sic to remedy] some of the injustices created by the communist regime in relation to private property, the new democratic state undertook a series of measures and legal initiatives that would perform the restitution of property back to its origin and to its legal owner, and whenever the restitution of property was not possible, to perform its fair compensation” (p. 5). But then the author admits that the task is practically insurmountable because “during the 1997 turmoil [anti-post-Communist government riots], a considerable amount of old property documentation [registers] that were administered and preserved in the Offices of Archives, Office of Registry of Immovable Property and Cadastre, were totally destroyed or lost. The lack of information and destruction of this documentary heritage makes the process even more problematic, because it is impossible it is quite impossible to judge in a fair way about complicated cases and overlapping claims, in the absence of the old legal documentation” (p. 45). Alas, Çano relegated this crucial piece of information to his conclusion. Why? It basically makes his entire work moot. His argument is thus reduced to an idle and vain exercise in legal theorizing, as well as wishful thinking. Still, it does impart a few useful tidbits.

In 1991 Albania’s first endeavor to deal with stolen property reflected itself in the law “On land.” This piece of legislation authorized mainly the breaking up of state and collective farms and placing the plots in private hands temporarily. Thus, private provisional stewardship resulted, but it is very doubtful whether most of the beneficiaries of the 1991 act were the original owners.  Çano is rather cryptic about it, writing only that the law “left open the possibility that after a certain economic stability was reached and the difficult period was over passed [sic], the [sic] private property would be returned to their [sic its] owners” (p. 6). As a result, the Communist state property was privatized and private property stolen by the reds was re-privatized (that is put back into private hands) but not necessarily restored to its rightful owners. Further, a 1995 law decreed that property thus privatized would accrue to the stewards “without payment” (p. 7). That legalized privatization to the detriment of restitution. Albanians considered it a “communist re-burglary of the property” (p. 7) because the former party kleptocrats were the law’s chief beneficiaries.

Tirana enacted its property restitution legislation proper in 1993. The law was amended so many times, however, as to render it inoperable. In addition, various ministries and other government bureaucracies issued a myriad competing, contradictory, and self-contradicting administrative regulations, pertaining to property restitution. Thus, the initial law was abolished and superseded by a new legal act of 2004, which was further amended in 2007.
The law contains a number of restrictions and loopholes (“legal gaps and abnormalities,” p. 12). For example, although there are no limits on regaining real estate, land can be returned only “up to 100 hectares,” and only if one has not already benefitted from the land privatization act of 1991. The law thus failed to consider the fact that at the time destitute original owners oftentimes would sell their reclaimed property at a pittance for they were in no position to maintain it, including paying taxes. More seriously, the law of 2004 is “fundamentally in contradiction with the constitutional provisions, and, moreover… not in conformity with the rights protected by the ECHR [European Court of Human Rights]” (p. 24). Çano argues further that, under the 2004 legislation, “we may say that the property rights are never guaranteed. This creates a state of total uncertainty for the Albanian property owners and foreign investors who may want to buy property or invest in Albania” (p. 32).

The execution of the new law is greatly hampered by the inadequacy and inefficiency of the institution created to carry out its provisions. The Property Restitution and Compensation Agency (PRCA) is established within the Ministry of Justice and its twelve subordinate regional offices throughout Albania’s districts. PRCA’s head is nominated by the prime minister and his deputies by the minister of justice.  All of them were political appointees reflecting the interests of the party currently in power. This is “a serious violation of the separation of powers principle” (p. 26). Unlike previously, the officials do not even have any legal, economic, agricultural, or engineering degree rendering them unqualified to tackle “the property restitution and compensation process” (p. 19). By law, “there is [not] any set time limit in relation to the terms of office of the Committee [PRCA] members, implying that the members of the Committee would keep their position until the process of restitution and compensation of immovable property was completed” (p. 16). Thus, there is no incentive for the bureaucrats to finish the restitution process. Case reviews go on forever.

Further, the work of PRCA is vetted by the Attorney General’s office, also subordinated to the minister of justice. “Legitimating [sic including] the Office of the State Attorney in this process is in clear contradiction with the overall accepted principle of law and natural justice according to which, no-one and even if this one is the State, should be a judge in its own cause [sic case]. (Nemo judex in causa sua)” (p. 25). Even more nefariously, the head of PRCA can retroactively challenge and reverse any ruling of previous property restitution review boards (“commissions”) which operated in congruence with the law of 1993. What happened to lex retro non agit? To complicate things, “most of these properties returned and recognized by the former commissions have been already sold to new owners” (p. 31).

The new system is fraught with many other problems. Property owners can appeal a PRCA decision denying them restitution to the courts, which are, of course, under the Ministry of Justice. There is clearly a conflict of interest all around. It is of little wonder that Albania (as well as other post-Communist countries such as Rumania) routinely lose property restitution cases brought against it by its own citizens at the ECHR. Even when Albania’s own courts order restitution, the government invariably plays the same refrain: there is no money to compensate the rightful owners. Over and over, the post-Communist governments have demonstrated that property restitution is not a priority.  So far 6,000 cases have been heard since 1993, and most of them ended in favorable verdicts to the unjustly expropriated. Only a few were able either to reclaim their properties or be compensated for them.

It is estimated that Albania owes $25 billion in property restitution claims. “The fragile Albanian economy could not support such heavy burdens; it looks simply impossible that the state can [sic will] be able to compensate the former owners, or simply put, to fulfill and enforce a right which is already accorded by the Law. On the other hand, it is a legitimate concern… raised by the Albanian taxpayers… that they will need to pay endlessly the financial bill that results from many wrong legal solutions taken by the Albania[n] government with regard to former owners” (p. 41). The governments have stalled consistently; and now the backlog of claimants has grown exponentially.  The government tries “to avoid, and postpone the legal obligation to compensate the ex-owners” (p. 41). Çano concludes that “this situation has created a total chaos” (p. 26). True enough. And no amount of legal tinkering will remedy the situation. The problem is post-Communism which must be overthrown if any meaningful reforms are to take place.

Posted in: Common Core
Marek J. Chodakiewicz

About the Author:

Marek J. Chodakiewicz is the current holder of the Kościuszko Chair in Polish Studies at The Institute of World Politics (IWP). Before joining IWP he taught at the University of Virginia and Loyola Marymount University, Los Angeles. From 2005-10 Dr. Chodakiewicz was the Presidential Appointee to the United States Holocaust Memorial Council. He has written, edited and co-edited seventeen monographs and documentary collections in English and Polish including Intermarium: The Land between the Black and Baltic Seas (2012), Golden Harvest or Hearts of Gold?: Studies on the Wartime Fate of Poles and Jews (2012), The Massacre in Jedwabne, July 10, 1941: Before, During, After (2005) and Spanish Carlism and Polish Nationalism: The Borderlands of Europe in the 19th and 20th Centuries (2003). Dr. Chodakiewicz was the recipient of the Richard Hofstadter Fellowship, the Office of the Prime Minister of the Republic of Poland Research Grant and the Earhart Foundation Fellowship Research Grant. His articles have appeared in The American Spectator, Glaukopis, International Journal of Intelligence and Counterintelligence, Najwyższy Czas!, New York Times, Rzeczpospolita, Sarmatian Review and World Politics Review. He is a regular contributor to the Selous Foundation for Public Policy Research (SFPPR) and writes the Agitprop blog for the Journal of Property Rights in Transition. Dr. Chodakiewicz was educated at San Francisco State University (B.A.) and Columbia University (M.A., M. Phil & Ph.D.).

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