Romania plans another national fund for property restitution, with landplots and forestry as main assets

agriculture 2Romanians who stand to be compensated for properties confiscated during the Communist regime, but who were unable to get shares in the Fondul Proprietatea will go through a new system, as the Romanian Government plans to create a new fund to compensate them. After setting up the Fondul Proprietatea, where the Romanian state contributed with shares in large state – owned companies, especially to compensate former owners, and subsequently running out of share, there were still some owners who were not compensated. As a result, the state plans to create another scheme. Former owners with about 200,000 restitution files yet unresolved will get points as compensation, depending on the amount by which they should be compensated, and they can use these points to bid for properties owned by a new national fund.

This fund will receive from 2014 agricultural and forestry land of some 3.6 million hectares, which are now owned by the state via public institutions, agricultural research centers, among others. The new restitution procedure seems to be complicated enough to raise issues, according to pundits, who see another high risk of intermediaries ending up with the properties, similarly to what happened in Fondul Proprietatea’s case in 2005, when it was set up. As the procedure was long and complicated, actual owners entitled to restitution preferred to sell their restitution files to intermediaries, who ended up as shareholders in the fund.

The new system is currently a legislative project and the Government led by Victor Ponta is preparing to assume responsibility for the project towards the end of March. Former owners entitled to restitution compensation will be able to use their points from 2016 onwards to buy other agricultural properties.

One point is worth RON 1, and a new commission, the National Commission for Compensating Building Owners, which will be under the Prime Minister’s auspices, will decide how much money, hence points, a former owner stands to receive, and how many points a landplot or a forest area is worth. If former owners choose not to use their points to buy properties, they will receive cash from 2017, in installments, over seven years.

According to Ziarul Financiar, the value of the properties the Government wants to include in this new national fund is some EUR 10 billion, higher than the EUR 4 billion stakes in the Fondul Proprietatea, which makes Romania the only country which stands to compensate former owners with such high amounts.

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