VZCZCXRO2667
OO RUEHAG RUEHROV
DE RUEHNC #0085/01 0301607
ZNY CCCCC ZZH
O 301607Z JAN 07
FM AMEMBASSY NICOSIA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7476
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE IMMEDIATE
RUCNDT/USMISSION USUN NEW YORK IMMEDIATE 0763
RUEHBS/USEU BRUSSELS IMMEDIATE

C O N F I D E N T I A L SECTION 01 OF 02 NICOSIA 000085 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR EUR/SE, IO/UNP 
 
E.O. 12958: DECL: 01/14/2017 
TAGS: PGOV PREL UNFICYP ECON CY
SUBJECT: PARLIAMENT TO CONSIDER "COMMANDEERING" T/C 
PROPERTIES IN SOUTH 
 
REF: 06 NICOSIA 2010 
 
Classified By: Ambassador Ronald Schlicher, Reasons 1.4 (b), (d) 
 
¶1.  (SBU) SUMMARY:  As a result of a landmark 2005 Supreme 
Court decision that returned the property of a Turkish 
Cypriot who had resettled in the south, Greek Cypriot 
"refugees" inhabiting T/C houses have lived with the constant 
threat of eviction should legal T/C owners move south and 
seek restitution.  In an attempt to reassure Greek Cypriots 
that they will not be removed from Turkish Cypriot properties 
soon, the governing DIKO party recently submitted draft 
legislation proposing that the RoC "commandeer" all lands 
used for the housing of refugees.  Such a move would not 
transfer title to G/C inhabitants, but would provide them 
greatly increased protection from displacement and put the 
government, rather than individual refugees, on the spot for 
any compensation claims.  In a related development, the 
Supreme Court January 19 rejected the appeal of a T/C who was 
seeking immediate compensation for his expropriated property 
in the government-controlled area, citing the fact he was 
living in the north.  The Court's decision allayed G/C 
concerns that freer travel between north and south would lead 
to a wave of applications by Turkish Cypriots to reclaim 
their "abandoned" properties.  Unhappy with the decision, the 
T/C owner's attorney has threatened to follow the example of 
Greek Cypriots similarly displaced from properties in the 
north, taking the case to the European Court of Human Rights. 
 END SUMMARY. 
 
REFUGEE OR IDP?  A BIT OF BACKGROUND 
------------------------------------ 
 
¶2.  (U) As a result of the 1974 conflict and the population 
exchange agreements which followed, nearly 200,000 Greek 
Cypriots relocated from northern Cyprus to the 
government-controlled area south of the Green Line.  More 
accurately classified as internally displaced persons (IDPs), 
these "refugees" and their descendants -- males can transmit 
the status to their offspring -- now account for 34 percent 
of the G/C population and enjoy considerable state benefits, 
from cash handouts to subsidized mortgages.  Parliamentarians 
have tabled two bills recently that would expand their 
numbers further by ending "discrimination" against female 
refugees' rights of transmission; the RoC is resisting the 
move, citing its effect on the national budget (estimated in 
the hundreds of millions of Cyprus pounds) and resulting 
implications for the RoC's Eurozone admittance. 
 
SEARCHING FOR WAYS TO QUELL FEARS OF EVICTION 
--------------------------------------------- 
 
¶3.  (U) Since the opening of the Green Line checkpoints in 
April 2003, Greek Cypriot "refugees" have voiced concern that 
Turkish Cypriots would resettle in the south en masse and 
reclaim their properties.  Those fears have proven somewhat 
exaggerated, since only a few T/Cs have done so.  Of those 
who moved to the RoC-controlled area, however, most either 
received property restitution or reached out-of-court 
settlements with the government.  At the end of 2006, 35 
cases of Turkish Cypriots reclaiming their properties were 
pending before Republic of Cyprus courts. 
 
¶4.   (U) In early January, DIKO MP Andreas Angelides 
submitted to the House Committee on Refugees a draft bill 
proposing the government "commandeer" all properties that 
have been used for the housing and other immediate needs of 
Greek Cypriots displaced after the events of 1974.  According 
to the proposal, this acquisition, unlike outright 
expropriation, would last only as long as the "abnormal 
situation" in the country continues.  Meanwhile, the legal 
owner would be entitled to compensation.  Although the draft 
bill does not specifically refer to Turkish Cypriot land, in 
practice the only privately-owned properties used for housing 
"refugees" without having been previously expropriated were 
Turkish Cypriot (Greek Cypriot privately-owned land used for 
the same purpose, more than one-third of the total, was 
expropriated outright, with compensation.)  During the first 
discussion of the draft bill on January 17, the chairman of 
the Committee on Refugees, AKEL MP Aristofanis Georghiou, 
urged careful consideration, due to the complexity and 
potentially serious political implications of the 
legislation.  Georghiou has requested that Attorney General 
Petros Clerides appear before the Committee to provide MPs 
advice. 
 
¶5.  (U) Besides calming eviction fears of current G/C users 
of T/C properties, the bill's proponents hope to strengthen 
 
NICOSIA 00000085  002 OF 002 
 
 
the RoC's legal position in court cases that Turkish Cypriots 
have filed.  In a landmark 2005 case, the Supreme Court 
ordered the return of the property of Arif Mustafa, a Turkish 
Cypriot who had fled to the north in 1974 but resettled in 
the RoC-controlled area five years ago.  As a result of the 
decision, the RoC relocated the Greek Cypriots living on his 
property and returned it to Mustafa.  Some 5,000 T/C homes 
are now occupied by G/C "refugees," while one-third of the 
land that was used to build refugee houses -- 8,556 building 
plots -- belong to Turkish Cypriots who fled north.  Those 
properties have not been expropriated and effectively still 
belong to their Turkish Cypriot owners.  Along with all other 
"abandoned" T/C immovable property, they have been placed 
under the guardianship of the Ministry of Interior pursuant 
to the 1991 "Caretaker Law."  This legislation stipulates 
that Turkish Cypriot owners can take possession of their 
properties only after they permanently resettle in the 
RoC-controlled area.  Turkish Cypriot plaintiffs, however, 
contend that their human rights as property owners should not 
be contingent on where they physically reside. 
 
SUPREME COURT UPHOLDS CARETAKER LAW 
----------------------------------- 
 
¶6.  (U) In a related development, a Supreme Court justice 
January 19 rejected the appeal of Ali Kiamil, a T/C residing 
in the Turkish Cypriot-controlled area, who had requested 
restitution or immediate compensation for land the RoC had 
expropriated.  The judge based the first instance decision on 
the Caretaker Law, which suspends payments to Turkish 
Cypriots whose property is in the custody of the Ministry of 
Interior until a final CyProb settlement is reached (the ROC 
Auditor General told the House Watchdog Committee in 
mid-January that the government owes over $1 billion to T/C 
owners whose properties have been expropriated for public 
benefit.)  Kiamil's attorney vowed to appeal the justice's 
decision to the Supreme Court's full bench and did not 
exclude the possibility of applying to the ECHR, should the 
Cyprus court reject his motion. 
 
¶7.  (U) Pro-government G/C media hailed the Court's rejection 
of Kiamil's appeal as further confirmation of the Caretaker 
Law's legality.  Opposition daily "Politis," however, wrote 
January 25 that a final rejection of Kiamil's appeal could 
open the floodgates for T/C applications to the European 
Court of Human Rights.  Top property law expert Achilleas 
Demetriades believes the law will not withstand ECHR 
scrutiny.  Aware of the possible political ramifications of 
such an outcome, the RoC has so far stalled for time and/or 
backed down.  In the crucial Arif Mustafa case, for example, 
the government chose to withdraw its appeal and thus prevent 
an application to the ECHR. 
 
COMMENT 
------- 
 
¶8.  (C) Greek Cypriots and the RoC are fighting a two-front 
war on property, seeking redress for G/C land located north 
of the Green Line while also attempting to protect usage 
rights of "refugees" squatting on appropriated (but not 
expropriated) Turkish Cypriot property.  Mainly, they have 
turned to legislation and the courts, both local and 
European, enlisting polished attorneys like Demetriades in 
the fight.  Recent court verdicts, however, have proven to be 
a double-edged sword, not always favoring Greek Cypriot 
litigants nor supporting RoC political goals.  One 
high-ranking official from opposition DISY even told us 
January 23 that developments regarding property should prove 
to Greek Cypriots that the status quo is actually worse than 
what is perceived the worst possible conclusion of the Cyprus 
issue -- the permanent division of the island. 
 
¶9.  (C) For now, however, G/C concern has not translated into 
pressure on the government of Tassos Papadopoulos to pursue 
negotiations on a final CyProb settlement, or even its real 
estate component.  In UN-brokered exploratory talks in 
Nicosia, for example, Greek Cypriot experts tackling the 
property issue continue to focus on process, not substance, 
seemingly determined to drag out the talks as long as 
possible (to be fair, however, the Turkish Cypriot side has 
dug in as well.)  Meanwhile, the real estate boom in the 
north continues, the pre-1974 ownership of land between 
Turkish and Greek Cypriots recedes further into history, and 
the property element of the Cyprus Problem -- perhaps its 
most complex and contentious -- looks increasingly 
intractable. 
SCHLICHER