WHILE THE President has urged Cypriots to ignore the immoveable property commission (IPC) in the north, one lawyer argues that the IPC could actually make occupation too costly for Turkey while adding to state coffers through taxation.
Human rights lawyer Achilleas Demetriades told the Sunday Mail that the latest decision by the European Court of Human Rights (ECHR) to recognise Turkey’s IPC as an effective domestic remedy has opened up a number of possibilities.
One is to make the cost of occupation so high that Turkey will have little incentive to stay on the island, while another is for the government to raise tax revenues by imposing transfer fees and capital gains tax on property sales or transfers at the IPC.
A key part of the ECHR decision is Paragraph 108 which highlights Turkey’s acceptance of responsibility for the occupied north as well as the rights of Greek Cypriot owners to remedies for breach of their rights.
As Demetriades noted: “Paragraph 108 is the de-recognition of the ‘TRNC’ by Turkey which has made a U-turn in accepting responsibility under the Convention, in confirming that the IPC mechanism is its own, and also in acknowledging the rights of Greek Cypriot owners, which of course entitles them to certain remedies.”
One of those remedies is compensation for loss of use from 1974 to the date of application, presumably plus interest. “The IPC has stated in its law that it will entertain claims from 1974 onwards. But they are very clever in that so far they have given a lump sum and people settled for that. So we don’t know whether it’s for loss of use or expropriation,” said Demetriades.
The human rights lawyer acknowledged that the ECHR cannot order Turkey to leave the island, but it can help make the cost of occupation too great for Turkey. While getting to Strasbourg is no longer easy, as applicants must now go via the north, paragraph 108, however, makes Turkey legally and financially responsible for occupying Greek Cypriot properties.
So whether Turkey is paying for expropriation or just compensation for loss of use or both, “this creates a high economic cost for Turkey which at some point will be too burdensome to carry and they will have to release part of this property or leave it all together. This is not a legal remedy, but it’s an implication of the legal remedy,” argued Demetriades.
“If they want to continue occupying, they must at least pay the rent. If they cannot afford the rent, they should move into a smaller apartment or leave altogether,” he added.
Demetriades said the potential number of claims constitute a valid contingent liability for Turkey which could be calculated by working out the loss of use of occupied property per year, multiplying it by the number of years (for example 1974-2010) and adding interest.
“So it will be a very interesting question to calculate the contingent liability that this accepted responsibility will generate. If Turkey’s responsible, they have to pick up the bill. Can they afford to pay?”
Asked how Turkey would be made to pay, the lawyer replied: “One possibility would be to have mass applications properly documented to the IPC. Another possibility is contacting international organisations like the International Monetary Fund (IMF) or credit rating agencies and explaining to them that there is this contingent liability, that will affect Turkey’s credit rating.”
Following the success of the Titina Loizidou case at the ECHR, Demetriades had contacted the IMF in 2000, informing them that 200,000 Greek Cypriot refugees were being denied use of property, leaving Turkey with a potential financial liability of over $16 billion. Based on his calculations, in 2000, this would have amounted to about 70 per cent of Turkey’s international reserves or 15 per cent of its foreign debt.
He believes Turkey’s latest admission of responsibility as highlighted in paragraph 108 makes this economic argument more valid than ever.
On recourse to the IPC, Demetriades reminded that the ECHR did not make it obligatory. It’s up to each individual to decide. For those that choose to go before December 2011, these are the main options:
One, the IPC may allow people to return to their properties, either now or after a solution to the Cyprus problem. President Demetris Christofias warned on Thursday that very few would be awarded this remedy. Demetriades argues Turkey has no excuse not to give restitution to former inhabitants of the fenced-off part of Famagusta.
Two, the applicant receives a one-off payment for expropriation of their land, thereby giving up ownership – the most likely option.
Three, an exchange of Greek Cypriot property in the north takes place with Turkish Cypriot property in the government-controlled areas, though for now the government is refusing to acknowledge these exchanges.
In addition, one may also apply for compensation for loss of use since 1974 while there is also the possibility of seeking moral damages.
The big question, according to Demetriades, is how the value of the property in any option is calculated, as well as compensation for loss of use?
The ECHR may have found the IPC payments to be adequate, but they only had before them cases where the Greek Cypriot applicants had approved the result. Strasbourg has yet to examine a contested case. Meanwhile, by the end of this year, the ECHR will award damages in 30 property cases against Turkey that made it passed the starting line before the gates were closed.
“The most important aspect of this exercise is for people to get a fair value of compensation of their property,” said Demetriades.
This is where the government could come in, he argued, by assisting people who want to go to the IPC, providing solid and objective valuations from the Land Registry, for free even.
“After all, do not forget that the Cyprus government may be collecting transfer fees for sale or transfer of properties in the occupied areas. And who knows, they may actually ask for tax through capital gains through any such dealings,” he said.
“Our job is not to answer these questions but to pose them. I don’t know what people will come up with but my point is that we should start thinking about this,” he added.
Addressing the public after two years in government earlier this week, Christofias clarified that in his view, mass appeals to the IPC would harm Cyprus politically, as mass appeals to the ECHR already have. Perhaps in a sign that the questions have already been answered, he stressed that the property issue could only be solved through a political solution.
