Resolving the issue of restitution, or the return of property confiscated during the communist period in Montenegro, is one of the final benchmarks for closing Chapter 23 (Judiciary and Fundamental Rights) in negotiations with the European Union (EU), which obliges the state to implement a fundamental reform of the system of restitution and compensation of confiscated property.
This was assessed for "Vijesti" by the NGO "Restitution", whose president is Marika Novakovic.
The Association said that instead of repeating well-known criticisms about the slowness and inefficiency of the procedures, they expect concrete steps that will enable the end of decades-long processes and provide fair compensation to the former owners.
“Vijesti” recently published details from the document “Country Profile of Montenegro in the Field of Urban Development, Housing and Land Management”, prepared by the United Nations Economic Commission for Europe (UNECE), which stated that the restitution process in Montenegro continues to be slow due to insufficient funding and limited institutional capacity, while outstanding obligations towards former owners exceed 240 million euros. The Country Profile of Montenegro in the Field of Urban Development, Housing and Land Management was prepared in response to a request from the Government, sent through the Ministry of Spatial Planning, Urbanism and State Property.
"We are glad that the UNECE Commission has engaged with issues related to restitution in Montenegro. However, at the same time, we believe that they have not told us anything new. Everything that the Commission has written is contained in the annual reports of the EU Commission on the state of Montenegro's progress in fulfilling Chapter 23. Our Association has been writing all this to all competent institutions in Montenegro for four years since its establishment. We have been seeking reform in the area of regulations regulating restitution, providing specific proposals for eliminating irregularities that prevent the quick, high-quality and efficient completion of proceedings that have largely entered their third decade of trials. But our institutions have remained silent," the organization emphasized.
The NGO "Restitution" asked whether anyone would ever bear the consequences of the fact that a large part of the real estate, which was the subject of the restitution procedure, was alienated during that procedure to private companies and individuals, who made millions from that property.
"One such example is in Podgorica, where at the time the proceedings were initiated, the real estate whose return was sought and the conditions for that were met was undeveloped construction land. During the proceedings, the state, through the municipality, alienated the land to private companies that built huge residential and commercial buildings, sold them and made a huge fortune. The former owners are still in the proceedings and can no longer seek the return of the land," the association stated.
According to them, in this case, the former owners can seek and receive compensation that is not even 20% of the actual value of the land.
"If the procedure had been completed within a reasonable time, the former owners would have received a refund and perhaps they could have built something on their land and made a profit," the association said.
The UN Economic Commission for Europe has warned that property restitution is progressing slowly due to insufficient funding and limited institutional capacity, and that the Compensation Fund faces numerous challenges, including insufficient annual budget allocations, as well as slow administrative processing of cases due to limited staffing.
"What we expected was not an excuse that the state has no money. We expected someone to do a serious analysis, by demanding answers from the state about how much money the state earned from the privatization of property that it took from its former owners during the communist era, how much, according to the regulations at the time, it was obliged to allocate for restitution, and how much it actually allocated."
When the state does not have the money to compensate the former owners, as they pointed out, it resorts to conducting proceedings that last 20 years or more, and even when it is obliged to pay compensation by decision, it then decides to do so in installments, once a year, without interest and for a period of several decades. They also said that no one, not even the SDT, has addressed the issue of where the money from privatization is intended for restitution.
The Association believes that the problem of compensation cannot be justified solely by a lack of money, because the state has shares and assets that could be used to settle the claims of former owners. They recall that during the implementation of the "Luštica Development" project, it was announced that a part of the state shares would be intended for restitution, which was publicly announced to the investor, while they see the allocation of state land instead of monetary compensation for the confiscated property as one of the possible solutions.
They said that what is needed is not repetition from international institutions about what is wrong, but assistance in how to implement regulatory reform in this area.
"Reform means establishing a Restitution Agency, independent of the Government, or professional commissions independent of the Ministry, reducing the level of decision-making instances from four to two, setting deadlines by which procedures must be completed, prohibiting the state and municipalities from alienating and encumbering property that is the subject of restitution. In addition, creating conditions for transparent work and records of the Agency or Commissions, providing funds for compensation, abolishing decades-long payments (because many former owners and their heirs did not live to see the completion of the procedure and the return or payment), and introducing mechanisms for acquiring shares in state-owned enterprises as compensation, or in exchange for state-owned land," the Association stated.
They also believe that mechanisms should be introduced for the return of property that can be returned, and as an example, they cited the building that houses the Ivan Crnojević National Library, which was the Italian embassy in Montenegro before World War II, and was then purchased by the majority owner of Zetska plovidba.
"The state has not been able to build a building for a public library for 80 years," the Association said.
Inflation has devalued the amount of compensation for 22 years
The association pointed out that the analysis should also include the reduction in the value of compensation, which, due to amendments to the Law on Restitution and Compensation from 2007, devalued the value of compensation by four to six times.
"Inflation over the past 22 years has devalued that amount even more, so it turns out that the state now needs less money to pay it than when it passed the law," they state from "Restitution".
The international commissions and institutions that monitor restitution as a condition for fulfilling the requirements of Chapter 23 do not mention, the association says, the discrimination of tens of thousands of former owners, whose requests were rejected because their property was taken away after 1968, and with the amendments to the Law from 2007, they lost that right, in relation to those who were lucky enough to have their proceedings completed by 2007, as well as in relation to the owners of only one location in the Municipality of Ulcinj.
"When the parties needed to get votes before the elections, they all voted in parliament for a lex specialis, to return the property at the Valdanos location to its former owners, even though it was taken from them after 1968."
The state is complaining about its own decision, which is absurd.
This association points out that even when a first-instance decision is obtained after 20 or more years, a new legal "dishonor for the former owners" follows.
"The state is appealing its own decision to itself. And this procedure continues indefinitely. The Ministry of Spatial Planning and State Property is an integral part of the Government. It consists of three regional Commissions that make first-instance decisions. The Protector of Property Interests of Montenegro, who is a party to the procedure, as well as the Compensation Fund (whose participation as a party to the procedure is legally questionable) is an institution that protects the state, and appoints and dismisses him. The Government is appealing the decision of the Commission on Restitution and Compensation to the Government Commission for Appeals in Restitution Procedures," said the NGO.
As they pointed out, the Government is both the first-instance and second-instance body, and the complainant, and one state institution protects the state from another state institution, within the same state.
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