BOSNIA: VISIT OF AMB. CHRISTIAN KENNEDY

UNCLAS SECTION 01 OF 02 SARAJEVO 001664

SENSITIVE
SIPDIS

EUR/SCE FOR HYLAND, FOOKS, STINCHCOMB; NSC FOR HELGERSON

E.O. 12958: N/A
TAGS: PGOV PREL BK
SUBJECT: BOSNIA: VISIT OF AMB. CHRISTIAN KENNEDY
HIGHLIGHTS RESTITUTION ISSUES


1. (SBU) Summary: The visit of Amb. Christian Kennedy,
Special Envoy for Holocaust Issues, highlighted for Bosnian
political and religious leaders the importance the United
States attaches to restitution issues, including restitution
of properties lost to victims of the Holocaust. Bosnian
Jewish Community leaders stressed the importance they place
on their co-equal position as one of Bosnia's four historical
religious communities, and the importance of enacting a
restitution law that would address outstanding property
issues for all victims of expropriation, nationalization, and
forcible donation since 1945. Amb. Kennedy's visit was
covered positively in all major print media. End Summary.

Background: Jewish Community as Co-equal
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2. (U) Bosnia has four "historical" religious communities,
the roots of which all date back more than 500 years in the
country: The Jewish, Catholic, Serb Orthodox, and Muslim
communities. Each of these communities holds a seat on the
Inter-Religious Council (IRC),where they meet to discuss
issues and find ground for common positions on matters
including restitution. The IRC has formulated a common
position on restitution which calls for both communal
property (such as churches, synagogues, mosques, schools, and
community centers) and private property of private members of
their communities (such as houses, farm and forest land, and
apartment buildings) to be restituted under a single
state-level law.


3. (U) Bosnia's Jewish community, estimated before World War
II at 12 percent of the population of Sarajevo alone, now
numbers less than 1,000 people throughout the country as a
whole. Despite the ethnic tensions of both WWII and the
1992-1995 war, BiH is largely free of traditional forms of
anti-Semitism, however. During the 1992-1995 conflict, the
Jewish Community cemented its position as an honest broker by
offering charitable assistance to members of all ethnic
groups. The President of the BiH Jewish Community, Jakob
Finci, told us he values this position, and reiterated to
Amb. Kennedy his belief that the Jewish Community's property
issues must be addressed within the framework of a larger,
state-level restitution law.

The Failed Restitution Law
--------------


4. (SBU) The BiH Council of Ministers (CoM) had formed a
Restitution Commission, which drafted a Law on Restitution
that was approved by the CoM and submitted to the state
Parliament in late 2007. In January 2008, the law was passed
by the lower House of Representatives, and sent to the House
of Peoples, where it was defeated by Serb parliamentarians.
Despite claims that the Serbs voted against the legislation
due to an unacceptably low limit on the maximum compensation
offered to a title holder for a single property (150,000 KM,
or about 100,000 USD),most observers believe Serb
politicians opposed the Law on Restitution as a competency
that would be given to BiH state-level institutions (as
opposed to the entities). At present, the BiH Ministry of
Justice and Ministry of Human Rights have been tasked by the
CoM to offer a new draft of the law, now that a mandatory
six-month waiting period has elapsed since the legislation's
failure.

Spiric says PM not empowered
--------------


5. (SBU) In a meeting with Amb. Kennedy, PM Spiric stressed
that one significant problem in addressing restitution issues
is the inability of individual ministers, and the state-level
government generally, to act in the current acrimonious
political climate. Spiric was harshly critical of unnamed
political leaders who have focused on short-term gains,
thereby strengthening ethnic division throughout the country.
He claimed that the absence of consensus on the proper
functioning of the state made pursuing ad hoc restitution
impossible, and the passage of a new restitution law unlikely
in the near future. Spiric called for international pressure
to focus Bosnian politicians (which he himself is) on the
necessary tasks at hand, one of which is a restitution law.


SARAJEVO 00001664 002 OF 002


Religious communities underline common position
-------------- --


6. (SBU) Amb. Kennedy, hosted by Amb. English, had lunch with
IRC representatives, who underlined their collective support
for a single, state-level law which would solve the problem
of both community and private property that was nationalized,
expropriated, or forcibly donated property (often donated as
the price extorted from Bosnian Jews for an exit visa to
leave Yugoslavia for Israel). IRC members said they had come
to several common positions on a future restitution law,
including: 1) that the law cover the period from January 1,
1945 until the date of the law's enactment; 2) that return of
property be the primary goal, with restitution in kind as a
second alternative, and restitution in monetary terms as a
final option; 3) that no limit be placed on potential
monetary restitution, as 150,000 KM would not be suitable
compensation for even a small apartment in the historical
area of most cities in BiH; and 4) that religious communities
would be generous in the terms offered to current tenants of
property returned, possibly including tenancy rights for the
lifetime of current occupants. Finci said the 1945 start
date would cover property lost during the Holocaust period,
as well.


7. (SBU) IRC representatives complained that the Restitution
Commission did not consult with IRC members in formulating
its (failed) draft legislation. While IRC members
appreciated the complexity of the property issues which the
Commission had tackled, and the statistical information it
had brought to bear in analyzing the problem, they objected
to several aspects of the draft (including, most notably, the
150,000 KM cap on monetary restitution which was, in the end,
the bone of contention for Serb parliamentarians). To date,
the IRC noted, no BiH Ministry of Justice or Ministry of
Human Rights officials had discussed possible future draft
legislation with them.

Restitution law would improve business climate
-------------- -


8. (SBU) Amb. Kennedy met with board members of the MIMS
Group, a large Bosnian holding company with interests in
media, beverage, packaging and retail industries. MIMS
Group board membersnoted the difficulty of improving
Bosnia's businss climate given the municipal, cantonal,
entity and state levels of government approval needed in
most business endeavors. They complained of RS Prime
Minister Milorad Dodik's interference in their attempts at
expanding in the Banja Luka market, based (they believe) on
his dislike for the editorial position of Oslobodenje, a
major paper they own. Additionally, they noted that the
restitution law, irrespective of ethnicities, would be of
benefit to all BiH citizens, as it would clear up many title
questions which inhibit foreign direct investment in BiH.
Amb. Kennedy offered similar examples in years past in other
former Warsaw Pact countries which have now largely been
dealt with.

Alkalaj suggests restitution effort on entity level
-------------- --------------


9. (SBU) Amb. Kennedy met with BiH Foreign Minister Sven
Alkalaj, who concurred that a new draft of the restitution
law was badly needed, and that PM Spiric and others would be
unable to provide much further impetus in the current
political climate. Alkalaj opined, however, that a law on
the Federation level, specifically addressing only private
property concerns (and not community property) might be a
productive means of addressing some part of the restitution
issue. Subsequent discussion with Jewish Community
representatives made clear, however, that they and other IRC
members are firm in their belief that a restitution law must
be both state-level and all-encompassing.


10. (U) Ambassador Kennedy cleared on this cable.
ENGLISH