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Cablegate: 2008 Report On Investment Disputes and Expropriation

VZCZCXYZ0029
RR RUEHWEB

DE RUEHVB #0568 2121428
ZNR UUUUU ZZH
R 301428Z JUL 08
FM AMEMBASSY ZAGREB
TO SECSTATE WASHDC 8529

UNCLAS ZAGREB 000568

SIPDIS

DEPARTMENT FOR EB/IFD/OIA Heather Goethert, EEB/IFD/OIA Kimberly
Butler, L/CID Gabriel Swiney, AND EUR/SCE

E.O. 12958: N/A
TAGS: EINV KIDE HR
SUBJECT: 2008 REPORT ON INVESTMENT DISPUTES AND EXPROPRIATION
CLAIMS: EMBASSY SUBMISSION

REF: STATE 43784

1. In response to reftel, paragraphs 2 and 3 provide Post's proposed
language for Croatia for the 2008 Report on Investment Disputes and
Expropriation Claims. There are no new investment disputes for
inclusion in the report this year.

2. More than two hundred United States persons of Croatian descent,
who were not U.S. citizens at the time their property was
expropriated by the former Yugoslav Government, have claims against
the Government of Croatia. A 2002 amendment to Croatia's 1996
Property Restitution Law allows claims by non-Croatian citizens only
if a bilateral agreement exists between Croatia and a claimant's
respective country. The USG has notified the Croatian Government of
its desire to negotiate the necessary bilateral agreement as soon as
possible. However, in early 2006, the Croatian Government decided
it would propose an amendment to the 1996 property restitution law
that would eliminate the requirement for such bilateral agreements
and allow foreigners full access to the 1996 restitution law, on an
equal basis with Croatian citizen claimants. The amendment,
however, was never submitted to the Croatian parliament. Following
the election of December 2007, the Croatian Government again stated
its intention to amend the 1996 law to permit equal treatment of
claims from foreign citizens. As of June 2008, the amendment was
still being drafted and officials had no estimate as to when it
would be completed.

3. At the same time, the issue is being considered in the Croatian
court system. On April 2, 2008, the Administrative Court ruled,
after an 11-year trial, that property expropriated during WWII from
the family of Zlata Ebenspanger, a Brazilian citizen of Jewish
origin, should be returned. This decision overruled the ruling of
the court of first instance, which had denied her claim because she
was not a Croatian citizen. As of June 2008, the Supreme Court was
reviewing the Administrative Court's decision. The outcome of the
Supreme Court's decision (expected in six months to one year) could
significantly affect future court practice or even the efforts to
amend the 1996 law on property restitution.
BRADTKE

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