THE STATUS OF THE NEGOTIATIONS REGARDING PROPERTY Proposals, Positions, Prospects

Overview  No chapter/dossier under negotiation has been closed  Sides have agreed on the need to categorize and list types of property (and have made progress on this)  Following the election of Eroglu the sides agreed to focus on property  But there is no joint paper on property

Positions on property  Maximalist versus Current Positions  GC position had been that all properties should be returned to dispossessed owners  TC position has been in favor of a ‘global exchange’ (plus compensation to account for the difference)  Current negotiation positions are somewhat different

GC Positions in Current Negotiations  GC position is that original/dispossessed owner must decide on the fate of the property  GC side appears to consider that in many cases GCs would not opt to return (to the north) as residents, implying that some would favor compensation  Perhaps as a consequence, GCs no longer insisting on 100% restitution

TC Positions  Against the GC starting position that owners decide, TC position favors objective criteria for determining the fate of (different categories) of properties  Decisions would be made by an autonomous property commission  TC position envisions (limited) reinstatement of properties to original owners  TC position implies that ‘exchange’ title deeds (esdeger) will remain in TC hands, whereas other categories could be subject to return  It remains a matter of speculation what percentage of affected properties would be returned and is complicated further by different territorial adjustment scenarios

Convergences?  Mix of remedies  Compensation  Exchange of affected properties  Restitution In the constituent state where the displaced person does not reside Via territorial adjustment

 Institutions (property commission and property court for appeals)

 Compensation  But financing mechanisms remain undetermined.  Donors conference (not much hope there….but we could speculate as to whether hydrocarbons could be of some use!) GC side envisions public debt issued by property commission while implying that current users also contribute. Compensation payments linked to value of property over time. TC side suggests “Guaranteed Financial Entitlement” (GFE) Payable and guaranteed by TC constituent state Collect funds to pay the GFEs from current users who gain title Hybrid form of property and capital gains tax Tax linked to value

 Property development corporation (TC proposal)  PDC would develop “adversely affected property”  “Urban transformation” (grand improvement plans)  TCs says this is to ensure fair basis for exchange  ‘trapped value’ should be released  ‘Structurally depressed’ properties: values (of TC properties in the south) mostly due to zoning and the guardian laws  By contrast, GC properties in north developed (infrastructure)  So far, GCs have not rejected outright (since it may make exchange more attractive).

Divergences, etc.  Authority: who decides the fate of the affected property on what basis?  Dispossessed owner or an independent body?  Criteria….  TC concern is that GC position will undermine bizonality (“a clear majority of property ownership and population”)  In any event, we would need to simulate different models of exchange and territorial adjustment to assess probable outcomes  GCs reluctant to concede authority to an autonomous body  Recent ECHR decisions suggest that interests of current users should be balanced with ownership rights (competing rights)

 Assumptions: Mediators think territory and property issues can be linked.  GCs might accept less property reinstatement (in TC constituent state) in return for more territory.  GCs ask for 100,000 (out of 162,000 displaced persons) be allowed to return as a result of territorial adjusment.  These figures imply indirect negotiations regarding Karpas peninsula.  Thus far, sides have not discussed numbers or maps (supposedly to be left to the final ‘give and take’)

Compromise?  Reconciling the two positions?  Some suggest model of ‘hierarchy’ whereby owners are categorized (which is logic of ECHR actually – determining how to resolve competing interests).  Living displaced persons could be high in the hierarchy (thus among those to exercise first right of refusal)  Similar categories could be made among current users.  Ultimately the agreement would require approval in referenda, so the particular model must satisfy the majority and be deemed equitable.