Introduction

 

The problem of property rights in Cyprus originated nearly forty years ago, and unfortunately, at this point, still continues. Negotiations to solve the  Cyprus conflict had reached an advanced stage earlier this year, but ceased when the Turkish Cypriot leader, Rauf Denktash, declined to put SG Kofi Annan’s proposed peace settlement agreement to his people in referendum. Talks had been ongoing since 1999, and had produced the most detailed and, many believe, most fair, balanced and realistic peace plan ever produced for Cyprus. Many of the people on both sides of the conflict, both Greek Cypriot and Turkish Cypriot, are in favour of the Plan, but a segment of the population and the political leadership – on both sides, but particularly on the Turkish Cypriot side – are seeking significant changes before they will agree to entrust it to their people to decide. Nevertheless, the Plan remains on the table, and hopes remain that agreement may yet be reached before the end of 2004.

 

The aim of this presentation is to offer some insights into the property dimension of this conflict, as well as into the United Nations’ proposed arrangements for a solution. The proposals are complex but, the UN believes, the only viable way forward to address all legal, political and humanitarian concerns for Cyprus. I will begin with a very brief historical outline, to give you a sense of the context. I will then describe the current property situation and the positions of the two sides, as well as the UN proposals to deal with property arrangements under the 2003 Plan.

 

Historical background

 

Cyprus and Palestine share the undesirable distinction of being among the longest-running conflicts of international concern continuing today. The events which led to the de facto division of the island began in the early 1960s, shortly after independence from British rule. At the time of independence, and still today, approx 80% of the island’s population was Greek Cypriot, with around 18% Turkish Cypriots. The remainder was made up of Maronites, Armenians and Latins (Greek-speaking Roman Catholics). The total number of people living in the island at that time was just under 573,000; the figure today being just under 1 million. The different groups were spread throughout the island, living mainly in agricultural, rural villages which were Greek Cypriot, Turkish Cypriot or, in some cases, mixed.

 

Tensions began to rise in the early 1960s. The nationalist Greek elements which had agitated against the British, launched their first attacks on Turkish Cypriot villages in December 1963. The United Nations immediately sent the first peacekeeping troops, in an operation known as UNFICYP, which continues to this day. Significantly, the UN also at that time chose to deal with – and effectively accord recognition to – the Government of Cyprus, which at that time was constituted only by Greek Cypriots. The Turkish Cypriots had withdrawn in protest from the government after alleged attempts to reduce their constitutional powers.

 

For the next ten years, until 1974, the initial violence continued and worsened, as Greek Cypriot nationalists continued their campaign against Turkish Cypriots, and a Turkish Cypriot militia was formed to fight back. Leaders on both sides exacerbated the situation with their rhetoric. The Turkish Cypriot side suffered most during those years, with many deaths and widespread displacement of Turkish Cypriots who left their homes and other property, (particularly in mixed areas) and fled to Turkish Cypriot-controlled areas or enclaves where their fighters held sway.

 

Cutting a long and very complex story short: after a decade of violence, a major crisis occurred in July 1974 when the Athens-based Greek military junta of the day sponsored an attempted coup in Cyprus. After three days, Turkish troops landed on the island, and began a military campaign that lasted for 27 days, in which they gained control of 37% of the island. Turkey argues that she intervened in order to protect the island’s beleaguered Turkish Cypriot population, who would have perished at the hands of the Greek nationalist coupists. The Greek Cypriot side today argues that Turkey had always wanted to occupy Cyprus, and were simply looking for an excuse. But that debate about motivations is largely academic for our purposes today. The total number of civilian casualties on both sides is estimated at around 2000 [with some 3000 Greek and Turkish military killed in total]. With the onset of fighting, a large number of Greek Cypriot civilians fled their homes, mainly in the north, as the Turkish troops swept through. A ceasefire was finally brokered and a buffer zone established between the opposing forces on 16 August 1974, and placed under UN control.

 

As a result of the events from 1963 to 1974, the UN estimates unofficially that approximately 45,000 Turkish Cypriots were displaced from their homes what is today the Greek Cypriot-administered south; while around 165,000 Greek Cypriots were displaced from their properties in the Turkish Cypriot-controlled north.

 

Political discussions under UN auspices between the two sides reconvened shortly after the Turkish intervention, with property and displacement among the top items on the agenda. Those negotiations did not produce any decisive agreement – and the stalemate continued as the years stretched on. Until recently, the closest the parties had come to reaching any substantial agreement was in 1992, when the so-called ‘Set of Ideas’ was produced under the mediation of UN Secretary-General Boutros Boutros-Ghali. That document recorded that both parties had agreed that the preferred model of statehood for a reunited Cyprus should be a bizonal, bicommunal federation – namely, one that was bicommunal regarding governmental arrangements (with representation from both communities), and bizonal as regards its territory (with two generally autonomous and self-regulating areas, within the one federal state).

 

Current situation regarding property

 

Following ten years intercommunal violence, Turkey’s 1974 intervention and the establishment of a buffer zone between the two sides, Cyprus in practical terms is divided into two almost homogeneous parts. The division is de facto rather than de jure, as the UN Security Council and all states except for Turkey have not recognised the breakaway Turkish Cypriot administration of the ‘Turkish Republic of Northern Cyprus’, and consider the Greek Cypriot-run government based in the south to be the legitimate, recognised state authority of Cyprus.

 

north

 

Today, the northern part of the island, comprising 37% of its land area, is home to approx 200,000 people, the vast majority of whom are Turkish Cypriot or ethnic Turkish. This number represents just under 20% of the total population of Cyprus today.

 

According to Greek Cypriot figures, the total amount of Greek Cypriot privately-owned property in what is today the north is approx 1.4 million donums (ca. 318,000 acres or 134,000 ha).

 

Following the military intervention and subsequent departure of most of the Greek Cypriot population in 1974, the Turkish Cypriot administration began to allocate Greek Cypriot property to Turkish Cypriots for their use, based on a ‘points’ system. Turkish Cypriots who had themselves been displaced from the south were invited to hand in the title deeds to their properties, and received a number of points in exchange, based on the value of their old property. They could then use their points to apply for a Greek Cypriot property. Points were also awarded on grounds other than property ownership – such as military service during the years of militia fighting, or to the needy families of killed fighters. It is reported that later these points were given on less transparent grounds described as ‘service to the state’. At first, the certificates of possession which were given to Turkish Cypriots in respect of Greek Cypriot property allowed limited dealings only with property. In 1982, the Turkish Cypriots legislated to permit transfer or mortgaging of those possessory rights; and then, in 1995, the possessory certificate was elevated to the status of title deed under the Turkish Cypriot administration’s ‘law’ – a change designed to ensure that Turkish Cypriots could freely sell, buy, lease and otherwise deal with this property, and to negate any claim of right by the Greek Cypriot owner. During the years since the intervention, substantial dealings in Greek Cypriot property have occurred in the north. Turkish Cypriots and foreigners have bought and occupied Greek Cypriot property (which is always notably cheaper on the market than Turkish Cypriot property, which has objectively undisputable title), and extensive building and development has taken place.

 

When challenged in political negotiations over the years, the Turkish Cypriot side has argued that it is prepared, at the appropriate time, to agree to payment of compensation to the Greek Cypriot side – not in monetary form, but on the basis of “global exchange” of titles. In other words, they argue that all Greek Cypriot-owned property in the north should notionally be exchanged for all Turkish Cypriot-owned property in the south. Each side should keep what it has, and distribute property to its people in accordance with what they lost. They argue that the financial value of the property lost on each side is the same, because even though the Greek Cypriots lost more land, its value is significantly less, due to the poor state of the north’s economy following years of economic “embargoes”. Denktash would argue that the values of the two sides’ collective properties can be ‘zeroed out’ against each other. His side absolutely rejects the idea of any form of restitution or return into possession, arguing that it would lead to massive further displacement, social and economic chaos, and a return to violence, and should therefore be excluded altogether.

 

south

 

The legal, factual and political picture is different in the south, which comprises some 63% of the land and is home to around 80% of the population (mainly Greek Cypriot with Maronites, Armenians and Latins). The Turkish Cypriots have never provided the UN with exhaustive figures about their claimed landholdings in the south. Official pre-1974 figures (i.e. Greek Cypriot statistics) suggest that approximately 415,000 donums (ca. 95,000 acres or 38,000 ha) was lost by Turkish Cypriots in what is now the south. These figures would thus show an area ratio of approx 3.5:1. [The Greek Cypriots also argue that based on 1974 values, the difference in land values between the property they lost and that lost by the Turkish Cypriots is 19.3:1. (GkCyp non-papers of 14 Feb and 25 June 2002). ]

 

Under Greek Cypriot legislation, all Turkish Cypriot property in the south has been placed notionally under the care of the Minister of Interior, who has received the title of ‘guardian of Turkish Cypriot property’. In theory, the government is holding that land on trust for its eventual return to its true Turkish Cypriot owners – which it proposes, of course, when Greek Cypriot land is returned to them. In the interim, the Interior Minister has power to allocate such property for temporary use, primarily to displaced Greek Cypriots from the north. They are required to pay a form of symbolic rent, which is supposed to go into an escrow account for ultimate payment to the owner. The legislation is not clear about who gets the interest from such moneys. The Minister is obliged to maintain such property, and in certain circumstances to build upon and develop it. As long as no political solution is found, no Turkish Cypriot who lives in the north of Cyprus is entitled to claim his/her property or receive the money collected as rent. In the meantime, while the Greek Cypriot law does not actually permit alienation of the Turkish Cypriot land contrary to the interests of the owners, it has permitted significant development and productive use of the property in practice.

 

The Greek Cypriots argue that the best solution for the property problem in Cyprus is full return into possession. They argue that all Greek Cypriots should immediately be reinstated into possession of all of their former properties, and that Turkish Cypriots should also have the same option. They argue this despite the fact that many of them - or more accurately today, their forebears – who formerly lived in villages from subsistence farming, are today completely urbanised, with white-collar jobs in the cities. When pressed, they admit that in talking about ‘return’, they are seeking their old homes as weekend houses to visit, rather than as full-time permanent residences.

 

The Greek Cypriots also argue that they should be entitled to compensation for loss of use – namely, for the profits they could have gained from the use of their property in the intervening years since displacement. This argument is based on a famous case brought by a Greek Cypriot woman against Turkey in the European Court of Human Rights. In Loizidou v Turkey  (1996-VI) ECHR, the court found that Turkey was guilty of a violation of Article 1 of Protocol 1 of the ECHR, by preventing her from gaining access to her property. The large damages that were awarded have never been paid by Turkey, despite significant political pressure. Turkish and Turkish Cypriot commentators, as well as the dissenting judges in the case, criticize the majority finding on the grounds that it disregarded the political complexities surrounding the Cyprus problem and was too generous in its calculation of damages. Nevertheless, the judgment stands as an important precedent on at least one aspect of the subject – and a further factor that increases the urgency of the need for a sustainable settlement.

 

UN 2003 proposals – philosophy and aims

 

Against this background, the UN Secretary-General in February 2003 put forward his revised proposal to the parties: one which sought to strike a fair and workable compromise between the two sides’ ideal positions on the main contentious questions, and which was balanced across all issues. The Plan’s proposals on property are amongst its most complex provisions, and probably attracted greatest public interest and concern, given the emotional, economic and political significance of the issue to both sides.

 

Initially, it would be useful to say a few words about the guiding principles or philosophy underlying the property proposals. The S-G indicated in his April 2003 report to the Security Council that international law was a major guiding element in the formulation of the proposals, including the provisions of the European Convention of Human Rights and emerging norms and practice, which would favour a settlement based on respect for individual property rights, and include the possibility of repossession or restitution. But the UN had also to address the fact that 40 years had passed since the first displacements, and that displaced people and communities on both sides had been forced to rebuild their lives and their economies. As a text for political negotiation, the UN Plan had also to take into account the agreements reached by the parties on key parameters over the years, including the principle of bizonality It was thus necessary to find a formula which stood a real chance of political agreement – a proposal which, while not giving either side all that it wanted, would strike a fair and workable balance between the aims of the two. In its final form, the UN’s proposal is thus based firmly on international law, but seeks also to address the key political concerns of the two sides, including respect for individual rights and the need for a substantial majority of refugees to return to their homes – but also humanitarian concerns, namely the need to minimize displacement and dislocation of current users (many of whom were themselves displaced more than once).

 

The key international instrument here is the European Convention of Human Rights (to which both Cyprus and Turkey are signatories). Article 1 of Protocol 1 states that ‘every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.’ This provision enshrines in clear terms a right to property – but it also expressly envisages that the exercise of that right may be regulated and subject to certain limitations in the public interest.[2]

 

In keeping with these principles, the UN Plan for Cyprus starts from the principle that the property rights of all lawful owners must be recognised and respected – and where possible, through restitution, or reinstatement into physical possession. However, it also provides that the manner of exercise of such rights – namely the form of use and enjoyment of property - may be regulated and circumscribed in some cases. In cases where their exercise through reinstatement is not possible, it provides for the payment of full compensation in recognition of the owner’s entitlements.

 

Put in very simple terms, it must be noted that the property provisions for Cyprus do not leave anyone empty-handed – or homeless. For all people who owned property and were displaced (and their immediate heirs), the Plan provides for their rights to be realised and exercised in tangible and valuable form – either through reinstatement, through sale/exchange or lease, or by way of compensation. In the case of current users, those who themselves owned property will also have the right to claim. But even those who did not would be entitled to seek assistance in the form of housing or financial aid. This clear entitlement on the part of all those affected to receive recognition of their rights or assistance based on genuine need is a vital part of the Plan’s balanced approach, recognising both ownership rights and humanitarian concerns.

 

Claims and options: The Plan provides for the establishment of a Property Board, empowered to receive claims and issue decisions on entitlements to affected properties. Under the scheme, dispossess owners of affected property are entitled to file claims with the Board, in which they must specify how they wish to exercise their property right. They may select:

(i)     compensation,

(ii)   reinstatement into possession, or

(iii) sale, exchange or long-term lease, which can arranged with the assistance of the Property Board.

 

In the case of those choose reinstatement - immediate reinstatement or restitution would not always be available for some categories of property which would be ruled ineligible (which will be outlined below). The legal rationale underlying limited exclusions is the qualification stated in Article 1 of Protocol 1 of the ECHR: namely, the public interest, which in this case requires some controls and limits on the enjoyment of property rights through reinstatement. This public interest lies in ensuring the stability and sustainability of a political settlement, based on the agreed principle of bizonality; and in regulating the flow of return movements so that sudden and massive new displacements do not occur – with the associated violence, public disorder and social breakdown that would accompany them. This idea that the exercise of rights, including property rights, can be restricted in the public interest is well established in the jurisprudence of the European Court. That jurisprudence requires, however, that any such limitations must be non-discriminatory, and must be proportionate to the aim which they serve. This means, for instance, that the Turkish Cypriot proposal for Global Exchange – under which no dispossessed owner would ever receive reinstatement – goes too far, and in the UN’s view, would be illegal. Less far-reaching restrictions, however, applied on the basis of well-defined, certain, non-discriminatory criteria that will be applied through an accessible procedure which examined every individual claim, would be permissible, and, in the UN’s view, would be found lawful if challenged before an international court.

 

To explain further the detailed application of the proposed rules:

 

Property not eligible for reinstatement: A property is not eligible for reinstatement if the case falls into one of three categories. These are if the current user:

(a)him/herself was dispossessed of another property of similar value.

(b)is currently using the property, and has bought it from someone else who was dispossessed of a property of a similar value; or

(c )owns a significant improvement to the property (that is, the improvement has a greater value than the property in its original state).

 

Briefly, on each of these in turn: (a) a current user of a claimed property who lost a property of similar value: In this case, the Property Board would look at the respective values of the two properties. If the current value of the claimed property is worth the same, or up to 50% more, than the property from which the current user was displaced, then that current user may be entitled to apply to keep the property where s/he lives.

 

BUT – that current user must first agree to give up title to his/her old property, and transfer it to the Property Board. If the current property is worth more, s/he must also pay the difference in value to the Property Board, which in turn will be used to compensate the owner. This provision has been described as a form of individual exchange of rights to a property in one constituent state, in exchange for title to property in the other.

 

As for (b) – a buyer of property from someone who was dispossessed may also apply to keep the property, provided the values are similar. It must first be shown that the vendor and the purchaser in combination have been using the property for at least ten years – and that title to the vendor’s original property will be transferred to the Property Board. Any difference in value must be paid to the owner of the more valuable property. 

 

Finally, on (c ) - a significant improvement means a construction or work on the original land, which was made after displacement – which has a value greater than the value of the property in its original state. Where a significant improvement exists, the rationale is that owner of that improvement has an entitlement based on his/her own property right to that improvement, and s/he may apply to keep the property – provided s/he pays compensation for the current value of the original property, as it was in its unimproved state.

 

Percentage limitations or ‘ceilings’ on reinstatement

 

There is also a provision stating that properties that are eligible for reinstatement may nevertheless be subject to certain percentage or numerical limits, or ‘ceilings’. These are: (a) 20% of the total land area and number of residences per village or municipality; and (b)10% of the total land area and number of residences overall in a constituent state.

 

The Plan also includes certain percentage limits on residency rights. This means that in some cases, there may be people who are not entitled to come back and live full-time in property which might be reinstated to them. But they would be entitled to come back and use the reinstated property without taking up permanent residency – meaning less than an average of three nights a week [or 156 days per year in total] – e.g. as a weekend house. Those affected by ceilings on residency would also be entitled to rent out, sell, exchange or otherwise dispose of their interest in reinstated property.

 

Long term leases

 

Special provisions apply to long-term leases. In case an owner chooses not to claim reinstatement, but to lease out his/her property to the current user [or someone else from that constituent state], s/he has the benefit of not being included in the numbers of people counted towards the ceiling on reinstatement. This is an important provision, because it means that owners may choose to forgo any right to immediate possession in the short term - but ultimately retain the right to repossess the property in the long run, after 20 years if they still wish to do so.] The aim of these provisions is to allow owners to exercise their property rights, but at the same time, to minimise still further the dislocation of current users.

 

Compensation

 

If reinstatement does not occur, full and effective compensation must be paid – as required by the European Convention and other relevant international standards.  Compensation is calculated at current value - meaning the ‘value of property at time of dispossession, plus an adjustment reflecting appreciation based, among other things, on increase in average sale prices of properties in Cyprus in comparable locations’. Compensation would be paid in the form of bonds drawn on a Compensation Fund, which would be established in the Central Bank of Cyprus.

 

Property owned by ‘institutions’: compensation only

 

The Plan also provides that ‘institutions’ generally should be entitled to compensation only for affected property, rather than reinstatement.  Institutions include: non-natural persons, being private or public bodies, trusts, religious institutions, military, and most private companies. The rationale underlying this provision is that for corporate entities, property in general does not have an emotional significance. For a company, a property right is an asset – and rights to that asset can be enjoyed equally well through financial compensation. For individuals, by contrast, property may have an emotional significance which is not so easily calculated in monetary terms. Thus it is more difficult to argue for non-reinstatement as a necessary and proportionate limitation on an individual’s property rights, than on the rights of a company.

 

An important exception to this rule, however, permits reinstatement in all cases for religious sites – defined to include churches, mosques, chapels, cemeteries, monasteries, shrines, tombs or other place of worship.

 

Measures in favour of current users

 

The Plan also contains specific rules designed to assist and protect current users of properties subject to reinstatement. These provisions also have their own grounding in international law. Article 8 of the European Convention on Human Rights enshrines a right to respect for private and family life, home and correspondence. The key element in this context is home. There are arguments made by some commentators and jurists that this amounts to a limited right to shelter, or at least not to be deprived wilfully and disproportionately of housing by a public authority or others.

 

The Annan Cyprus Plan provisions on alternative housing are also responding to clearly-expressed political imperatives in the Cyprus case, where there would be massive resistance to the idea of restitution of property without help for those who would be dislocated as a result. Thus, in Cyprus, for all categories of affected property, there is a moratorium on reinstatement lasting five years for any occupied property. Thereafter, the rules treat differently two categories of people:

 

Firstly, those with ‘sufficient financial means’ – who may, as a matter of course, apply for an extension of up to three years after the PB’s decision, before they will be required to vacate. 

Secondly, those current users without sufficient financial means in most cases will not be required to vacate the property until accommodation is available, either by provision in kind, or through financial assistance enabling him/her to secure his/her own accommodation. ‘Alternative accommodation’ must meet a defined minimum level, including being reasonably comfortable by modern standards, with a fixed minimum amount of living space per person.

 

Conclusion

 

What lessons can be drawn from the Cyprus case? Given the difficulty of comparing different cases, where key distinctions clearly appertain, I would prefer to limit myself to commenting specifically on Cyprus. In Cyprus, I believe we have learned that as a matter of political and practical reality, it is not possible in this long-standing displacement situation, to achieve an agreement to unfettered restitution and return. The arguments of international law are persuasive, but they cannot overcome the concrete fact of the humanitarian problems posed by potential further displacement of large numbers of Turkish Cypriots; nor those Turkish Cypriots’ genuine fears, based in many cases on violence experienced in the past. These complications become more difficult to addresss with the passage of time. What is sought here is a political agreement - and agreement is essential, because something imposed which favoured one side over the other would not be durable in the long run.

 

In Cyprus, it is significant to note that the Greek Cypriot side, which is the side seeking restitution, is the stronger party in economic, political and numeric terms. It has the resources to take this matter to the European Court of Human Rights, where it has made some headway. But nevertheless, it does not have the means or arguments to dispel the political and practical imperatives which necessitate a solution based on something falling short of full return and restitution. The Greek Cypriots have accepted in negotiations, albeit begrudgingly and provisionally, that their rights to property must be exercised in a more limited and qualified form than universal reinstatement. And that acceptance opens the door to negotiations on compromise with the Turkish Cypriots - who are the stronger side militarily, but weaker in every other sense – and who in reality must accept that a complete no-restitution agreement is equally unfeasible. A balance must be struck, and it must be in the form of a complex agreement providing both for reinstatement and compensation – and for regulation of the exercise of rights in a non-discriminatory and transparent way.