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06PRISTINA972 2006-11-15 18:16:00 CONFIDENTIAL Embassy Pristina
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1. (C) SUMMARY: The head of the Kosovo Property Agency (KPA)
gave us updated statistics on the KPA's rental property
scheme and enforcement of property claims pending
implementation -- two of the 13 Contact Group priority
standards. Some 361 properties out of a total of
approximately 5,400 administered by the KPA are in the scheme
by consent of the owners. Poloff raised the issue of
including properties in the rental scheme where owners had
not given their consent for various reasons (e.g., they
cannot be easily identified or located), representing some
1,800 properties. For its part, the PISG, now clearly aware
that we do not yet consider these two CG standards met, has
taken a more active interest, agreeing to help promote the
rental scheme. However, Kosovo Police Service (KPS) SOPs on
enforcing evictions and deterring reoccupations have yet to
be put in force. COM will raise these issues with PM Ceku
and press for expedited action. END SUMMARY.

Rental Scheme Update

2. (SBU) At a November 8 meeting, KPA head Knut Rosandhaug
gave updated statistics to poloff and British DHOM O'Connell
on the rental property scheme. The program is designed to
provide income to owners, mainly ethnic Serbs displaced by
the war, from those now living in their property:

-- 361 owners had given their consent to take part in the
rental scheme. Of this figure, the first 106 rent bills had
been issued in October and the KPA was in the process of
including the other 255.

-- Regarding the 106 rent bills, 39 had agreed to start
paying, 57 had refused, and 10 had not responded.

-- Eviction notices, which would be enforced by the Kosovo
Police Service (KPS), had been served on those who had
refused or not responded. They would have 30 days to vacate
the premises or prove they were now part of the scheme and
paying rent.

-- 35 payments had been received, and 10,000 euros had been
collected thus far.

-- Monthly rent of less than 200 euros accounted for nearly
three-quarters of the rent bills.

3. (SBU) To spark greater interest in the scheme,
Rosandhaug said that ads starting in mid-November and running
through February 2007 would be placed on television, radio
and major dailies in Kosovo, Serbia and Montenegro, provided
that funding could be secured. British DHOM noted that the
UK had recently contributed 500,000 euros which could be used
for this purpose, but that the donation had gotten stuck on a
technicality with the UNMIK legal office and had not yet been

What About the 1,800?

4. (C) Asked about the approximately 1,800 properties where
the owner could not be identified or had other complications
(such as being under construction when the 1998 conflict
began), Rosandhaug responded that there had been a
"gentlemen's agreement" between former SRSG Jessen-Petersen
and the PISG not to include properties where the owner's
consent had not clearly been obtained. Poloff noted that
this understanding limited the effectiveness of the scheme
and degraded the rule of law generally in Kosovo: anyone
living in housing not their own should be paying rent. If
the owner could not be found, rental income could be put into
an escrow account. Rosandhaug agreed that this would make
his job easier, and would encourage owners to come forward
since they would see money being collected. (Note: COM will
urge PM Ceku to agree to include these properties in the
scheme. End Note.)

PRISTINA 00000972 002 OF 002

KPA Enforcement of Decisions and Deterring Reoccupation

5. (SBU) Addressing KPA decisions on the 2,804
still-outstanding appeals made to the previous UNMIK Housing
and Property Directorate, another Contract Group priority
standard, Rosandhaug said this number was now down to 1,150
and "being reduced on a daily basis." He added that
cooperation with the KPS was excellent and saw no reason not
to expect that all these decisions would be implemented by
the end of 2006. The cases were time-consuming not for
logistical or political reasons, he asserted, but because the
parties involved generally exhausted every statutory right
available to challenge the decisions. On the problem of
deterring reoccupation, Rosandhaug referred to draft KPS
Standard Operating Procedures, which the KPA had helped
write, that he said clearly give the KPS the responsibility
to remove and arrest anyone who enters premises after an
eviction. However, he was unsure whether these SOPs were in
force. In any event, he noted, the PISG through the KPS was
responsible for deterring this reoccupation. (Note: We
learned on November 15 that these SOPs are still not in force
and will add this to the agenda with PM Ceku. End Note.)

What is the PISG Doing?

6. (SBU) In recent meetings, USOP has strongly encouraged
the PISG to get involved in promoting the rental scheme and
to make certain the KPS enforces KPA decisions and deters
reoccupation. Standards Coordinator Avni Arifi told us in
early November that PM Ceku, during his monthly meetings with
Kosovo mayors, would urge them to get out of the word on the
rental scheme. Arifi noted other recent actions the
government had taken: getting Kosovo banks to lower their
transfer fee for the rental scheme and helping to negotiate
discounts for the KPA in the media market in Serbia.

7. (C) COMMENT: The KPA is making some progress on the
rental scheme and even greater progress on reducing
outstanding claims inherited from its predecessor, the
Housing and Property Directorate. With the anticipated start
of a concerted media campaign in mid-November, more displaced
owners should become aware and take part in the scheme. As
for the Kosovo government, we have certainly gotten its
attention by saying we do not consider complete the two
property-related Contact Group standards. The PISG can and
must do more, for example, by agreeing to include all
properties in the rental scheme, regardless of whether the
owner's consent can be obtained. This should have a
catalyzing effect on the scheme and give us the confidence to
say it has indeed been implemented. END COMMENT.

8. (SBU) U.S. Office Pristina clears this cable in its
entirety for release to U.N. Special Envoy Martti Ahtisaari.