The Status of the Negotiations regarding Property

1. The Status of the Negotiations regarding Property Proposals, Positions, Prospects

2. 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

3. 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

4. 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

5. 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

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

7. Institutions (property commission and property court for appeals)

8. 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

9. 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).

10. 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)

11. 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’)

12. 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.