old houses and blue sky in Berlin KreuzbergThe Polish government has presented guidelines for a new restitution bill

On the 11th of October 2017, the Polish deputy Minister of Justice Mr. Patryk Jaki has held a press conference during which he has presented general guidelines of a proposed new legislative effort intended to cover all cases of properties nationalized by the Polish communist government after World War II.

The exact details of the new regulations are unknown due to the fact that the draft of the bill is subject of consultation in a parliamentary committee and it is expected that the text of the proposed bill will be made public in about two weeks’ time. Minister Jaki informed that the government will make a strong effort for the new restitution bill to enter into force before the end of this year.

During today’s conference Minister Patryk Jaki described the general guidelines under which the new law is being drafted:

  1. Most importantly the bill will introduce a deadline for filing a claim for nationalized property – there will be only one year time period from the time the legislature will be put into force to submit a claim;
  2. During that one year period the State Treasury (or housing cooperative in case of properties built-up with cooperative buildings) will conduct a call out procedure for properties with unregulated legal status. If no claims will be made during that year, the State Treasury (or housing cooperative) will become the rightful owner of properties with unregulated legal status.
  3. Only physical persons will be eligible for submitting of a claim. Moreover, the claim can be brought either by the original owners or a limited circle of their heirs. To be eligible to receive the remedies, the previous owner of the property and the entitled heirs must be Polish citizens.
  4. The Act will regulate remedies – but no damages, as they are excluded from being applied to the proceeding – for nationalized properties. It will be impossible to restitute the property itself, but rather there will be compensation provided in form of monetary instruments. The value of the said remedies will be determined through special valuation proceedings, and will be based according to a number of factors such as the date of nationalization, including all liabilities, such as mortgages or outlays – for instance, the fact that the building was a ruin on day of nationalization and was rebuilt following years by City or Treasury.
  5. The cases will be resolved in one of three ways, depending on Petitioner claims:
    • First, in form of cash payments, equal to 20% of nationalized property value;
    • Second, in form of long-term bonds, equal to 25% of nationalized property value;
    • Third, in form of voucher for settlements with the Treasury, equal to 20% of nationalized property value.
  6. However, the pay-out process will be stretched over a longer period of time as it is believed that it is impossible for the State budget to cope with payments conducted over a relatively short period of time. Therefore even obtaining of the administrative act that grants the compensation will not necessarily mean that the claimant will actually receiving the funds. Each year the Minister of Treasury will allocate the appropriate amount for said remedies and they will be awarded to the stated value, while the remaining claims will be transferred for the new year. There are two concepts how to decide the priority of awarding the claims – first one is to base them as of date of receipt, while the second one is to base them on pro rata basis.
  7. Institution of court appointed administrator will be excluded from remedy proceedings.
  8. There will be new legal institution for renewing the cases – both administrative and the ones that ended in final and binding sentence made by the courts.
  9. In case of the “Warsaw properties”, that is those encompassed by the so called Bierut Decree often also referred to as the Warsaw Act, there will be a possibility to submit a claim for the compensation even if the owners of the nationalized properties failed to submit a claim during the time frame described in Bierut decree.
  10. The Act will ensure a possibility of suspension of executions of administrative acts and court rulings related to properties nationalized in Warsaw.
  11. The proceeding will be conducted by Provincial Office (Urząd Wojewódzki), while the appeals will be filed directly to the Minister of Justice.
  12. All proceeding currently pending before administrative bodies or courts will be dismissed.

It is too early to comment on the details of this proposal before the actual draft of the bill will become publicly available. It is certainly a positive development that the current government decided to take on the long overdue problem of lack of comprehensive legislature which could potentially enable the compensation of families who have lost properties during the communist time in Poland and have never received fair compensation. Poland is the only country in the Central European region which has failed to put a comprehensive legislative effort in place after the shift from communist regime to a democratic state.

One can only hope that this legislative effort will concentrate more on giving the victims of communism a chance to receive fair and equal treatment and fair value compensation rather than to simply put a large number of unresolved claims finally to rest.

The worrying fact is the number of the already announced requirements which the claimants will have to face. The one year long deadline for filing claims seems to be very short especially in matters where the heirs of the rightful owners are scattered over different regions of the world, or where the families do not possess documents or a lot of factual information regarding the claim which triggers the necessity to undergo a painstaking and time consuming process of looking for the documents and information in the archives. The citizenship requirement will also present a problem for some claimants especially those who are currently abroad and while they may actually be entitled to holding of a Polish passport, they will have to undergo a certification of citizenship proceeding which will add another layer of complication to the process. It is still not certain, but the fact that not all heirs, but rather a limited circle of heirs – e.g. siblings are to be excluded – will be entitled to file the claim is more than problematic. There seems to be little justification not to include all heirs of the original owners as possible claimants.

There will be a lot of controversy surrounding the proposal of compensating the victims not in full value of the lost property, but rather in form of the equivalent of 20-25% of the value of the property. Similar values were used in order to resolve the claims for the so called Bug River property. Those cases dealt with property abandoned by Polish owners after the borders of Poland have shifted after the end of WWII. Therefore it was expected that if any legislative efforts will be made to address other claims resulting from times where Poland was ruled by the communist regime that similar proposal as to the value of the compensation will be made. The perhaps more worrying fact is that the payments will be stretched out over a longer period of time and the details as to the length of this period or whether the parties will in such instance be eligible for interest on the due payments is unknown.