After 14 years from the adoption of the Croatian Restitution Act, restitution to non- Croatian citizens of their nationalised property has become possible after the issuance of a Croatian Supreme Court ruling. Will the remaining restitution proceedings be finalised at last?

Restitution of nationalised property regardless of citizenship or exceptions

Initially, the Croatian Restitution Act (CRA) enabled restitution of property nationalised during the former Yugoslav regime only to Croatian citizens. In 1999, three years after the passage of the CRA, the Croatian Constitutional Court abolished this restriction as being discriminatory and unjust and mandated the Croatian parliament to amend the CRA to permit restitution regardless of citizenship. In 2002, the CRA was amended accordingly, but with certain exceptions.

According to the amended CRA (CRA 2002), no restitution for nationalised property could be granted to a non- Croatian citizen if the restitution was regulated by a bilateral treaty between Croatia and that person’s state. The same provision left open the possibility that restitution may be possible if so determined under (another) bilateral treaty between Croatia and such state.

No coherency in proceedings on restitution to non-Croatian citizens

The provisions of CRA 2002 raised substantial doubts and questions when it came to their interpretation and enforcement in administrative proceedings initiated by non-Croatian citizens seeking restitution. Due to a lack of a uniform, authoritative interpretation of CRA 2002, the decisions of administrative authorities varied widely – from accepting the claim to rejecting all such claims to preliminary suspension of all such proceedings. Decision granting or rejecting restitution were regularly appealed, either by the Croatian state (represented by the Croatian Attorney General’s Office) or by the claimant. The appeal proceedings usually ended before the Croatian Administrative Court, who in 2008 took a stand in favour of non-Croatian claimants.

However, the Attorney General’s Office always appealed against such decisions, thus pushing the matter before the Croatian Supreme Court.

The Croatian Supreme Court ruling

The Ruling of the Croatian Supreme Court of 26 May 2010 (the Ruling), publicly announced in September 2010, provided the long-expected clear, uniform and authoritative interpretation of the CRA 2002. It stated that a non-Croatian citizen is entitled to restitution provided no bilateral treaty on the matter has been concluded between Croatia and the respective state.

Finalisation of ongoing restitution proceedings?

According to some estimates, there are currently more than 4,000 proceedings in which non-Croatian clai-mants are seeking restitution of nationalised property. Although each claim must be verified and decided upon individually, the Ruling should move “dormant” proceedings forward and speed up those based on the until recently unclear question of the claimant’s citizenship.

One of the expected effects of the Ruling may also be a significant decrease of future appeals by the Croatian Attorney General’s Office based (solely) on the claimant’s non-Croatian citizenship, thus enabling a faster resolution of restitution proceedings.

Experts expect that further governmental decisions and instructions on the handling of ongoing proceedings (restitution in kind, monetary compensation, etc) will now be passed.

Although the Ruling does not necessarily ensure a finalisation of restitution proceedings, it is a significant milestone. Finalising this restitution issue is certainly a high priority for Croatia’s admission to the EU. For the real estate market, clear ownership over such former nationalised property means safer, and thus more, property transactions.