VZCZCXRO0548
PP RUEHAST
DE RUEHPS #0863/01 2861714
ZNR UUUUU ZZH
P 131714Z OCT 06
FM USOFFICE PRISTINA
TO RUEHC/SECSTATE WASHDC PRIORITY 6597
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 0877
RHMFISS/CDR USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RHFMIUU/AFSOUTH NAPLES IT
RHMFIUU/CDR TF FALCON
RHEFDIA/DIA WASHDC
RUEKJCS/SECDEF WASHINGTON DC
RUEPGEA/CDR650THMIGP SHAPE BE
RHEHNSC/NSC WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUFOANA/USNIC PRISTINA SR

UNCLAS PRISTINA 000863 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR DRL, INL, AND EUR/SCE, NSC FOR BRAUN, USUN FOR 
DREW SCHUFLETOWSKI, USOSCE FOR STEVE STEGER 
 
E.O. 12958: N/A 
TAGS: PGOV KJUS KCRM EAID KDEM UNMIK YI
SUBJECT: KOSOVO: KOSOVO PROPERTY AGENCY BOARD MEETING 
HIGHLIGHTS RENTAL SCHEME, NEW DRAFT LAW, FUNDING WOES 
 
 
SENSITIVE BUT UNCLASSIFIED -- PLEASE HANDLE ACCORDINGLY. 
 
 
¶1. (SBU) SUMMARY:  At an October 10 meeting of the 
five-member supervisory board of the Kosovo Property Agency 
(KPA), which includes USOP, KPA head Knut Rosandhaug 
confirmed that the rental property scheme by which illegal 
Albanian occupants pay rent to Serb owners had begun on 
October 2.  Rosandhaug also shared a draft law, soon to be 
promulgated by UNMIK, that would provide for resolution of 
claims by means of a property claims commission, rather than 
through the Kosovo court system.  PDSRSG Steve Schook, who 
chaired the meeting, said that UNMIK would call a donors 
conference to fund KPA operations, which Rosandhaug later 
estimated at around 6 million euros over two years.  The 
launch of the rental scheme, even if not yet on a massive 
scale, is good news and is an important step toward 
fulfillment of one of the most important of the Contact 
Group's 13 priority standards for Kosovo.  END SUMMARY. 
 
Background 
 
¶2.  (U)  On October 10 the Supervisory Board of the KPA met 
for the second time since the KPA's establishment in July 
¶2006.  The KPA took over responsibility from UNMIK's Housing 
and Property Directorate and is mandated by UNMIK to resolve 
claims relating to private immovable property, including 
agricultural and commercial property, arising out of the 1999 
conflict.  The KPA currently has some 5,400 properties under 
its administration and has worked toward institututing a 
rental scheme to provide an income source to displaced 
owners, mostly Kosovo Serbs who now reside in Serbia, 
Montenegro or Serb-majority municipalities in Kosovo. 
Implementation of the rental scheme is one of the Contact 
Group's 13 priority standards for Kosovo.  The Supervisory 
Board consists of five members:  PDSRSG Steve Schook (chair); 
Ardian Gjini, Minister of Environment and Spatial Planning; 
P/E Chief, as USOP representative; David Blunt, Head of the 
UK Liaison Office; and Milorad Todorovic, former deputy CCK 
leader, representing Kosovo Serb interests. 
 
Rental Property Scheme Underway 
 
¶3. (SBU)  KPA head Knut Rosandhaug told the KPA's 5-member 
supervisory board that the rental property scheme had begun 
on October 2.  Although the initial number of properties 
involved thus far is small (in the tens), Rosandhaug said 
this figure was growing by about 5-6 properties per day, and 
predicted this would increase even more as the KPA mounts a 
media campaign, including in Serbia and Montenegro, on how 
owners can file claims.  (Rosandhaug later told P/E Chief 
that of the 5,400 properties under KPA administration, some 
1,800 involved owners who could not be identified or who did 
not want to participate in the rental scheme.  He said he 
favored collecting rents from these properties, but that the 
PISG had not yet agreed to this.) 
 
New Draft Law to Speed Up Adjudicating Claims 
 
¶4.  (SBU)  Rosandhaug shared with the board a draft law, soon 
to be promulgated by UNMIK, that would provide for resolving 
claims by means of a property claims commission composed of 
two international members and one Kosovar member.  In this 
way, he went on, claims could be processed faster and more 
effectively than relying solely on domestic courts, as is the 
case at present.  Domestic courts could play an enforcement 
role, he noted, if the two sides in a dispute came to 
agreement on their own.  Rosandhaug added that after six 
months, the draft law provides for the replacement of one of 
the international claims commission members by a Kosovar 
member, if the SRSG deems it appropriate, and stressed that 
the KPA is a "joint venture" between the PISG and UNMIK, with 
strong buy-in from local institutions. 
 
KPA's Funding Problems 
 
¶5.  (SBU)  PDSRSG Steve Schook said he feared that KPA 
 
operations would come to a halt if donor funding could not be 
secured soon.  He faulted the KPA's current legal framework 
for remaining in force only until the end of February 2007, 
saying this had caused donors to shy away from committing 
themselves, and asked UNMIK legal adviser Borg-Olivier to 
ensure the draft law was more open-ended.  Everyone present 
agreed with this reasoning, although Minister Gjini asked if 
the timeframe could be given a specific limit (two years, for 
example) so as to encourage greater involvement by local 
institutions.  Schook took this on board and said he would 
soon make a presentation to key donors, including USAID, the 
European Agency for Reconstruction, and the UK's DFID, on 
KPA's activities and needs.  After the meeting, Rosandhaug 
told P/E Chief that KPA would need around six million euros 
over two years for its operations. 
 
¶6.  (SBU)  COMMENT:  The KPA has a hard slog ahead of it, but 
getting the rental scheme off the ground, even if not yet in 
a massive way, is a start.  It represents a serious attempt 
to fulfill a priority standard set by the Contact Group.  The 
KPA will need to secure funding, including for a media 
campaign, to get the word out on how to file claims and keep 
the momentum going. END COMMENT. 
 
¶7. (SBU) U.S. Office Pristina clears this cable in its 
entirety for release to U.N. Special Envoy Martti Ahtisaari. 
KAIDANOW