BOSNIA: CONSULAR FRAUD PERSPECTIVES ON NIV APPLICANTS' LAND

UNCLAS SECTION 01 OF 02 SARAJEVO 001404

SIPDIS

DEPT FOR CA/EX, CA/FPP, CA/VO, AND EUR/SCE (MIKE FOOKS)
DEPT ALSO PASS TO KCC
POSTS FOR FRAUD PREVENTION MANAGERS
VIENNA FOR DHS MARLA BELVEDERE

E.O. 12958: N/A
TAGS: KFRD CVIS CMGT CPAS ASEC BK
SUBJECT: BOSNIA: CONSULAR FRAUD PERSPECTIVES ON NIV APPLICANTS' LAND
OWNERSHIP DOCUMENTS

Summary
--------------


1. FPU Sarajevo recently launched an investigation of land
ownership documents. These documents are frequently presented by
NIV applicants in an effort to prove economic or financial ties.
In some cases, applicants may not have as strong an interest in the
land as they may claim. End summary.


2. Like other processes in Bosnia and Herzegovina, the land
ownership system is undergoing slow reform. The entity ministries
of justice and the municipal administrations are involved in these
reforms. They are attempting to reconcile various deeds and
parcels, the legacy of two legal systems and the recent war. In
order to better understand the significance of local land records,
which are often presented to officers as proof of economic ties to
Bosnia, FPU Sarajevo met with local officials in East Sarajevo,
Mostar, Zenica and with the Land Administration Project
administrators in Sarajevo.


3. Two types of land records are currently in use. One,
colloquially called the Tapija and Grunt system, are property rights
recorded in the civil registry land books or "zemljisna knjiga."
These Grunt records are issued by regional courts. The second is
the Katastar, or possession/occupancy right, a record that is issued
by the municipality. Our field work indicates that both Grunt and
Katastar documents are legally recognized. However, only Grunt
documents can be used as collateral for loans from local banks.
This is therefore, a superior right. Due to the dual system, every
land parcel in Bosnia could potentially have two claims to ownership
because Grunt and Katastar records do not match for many parcels.

History
--------------


4. The first land registry-related document in Bosnia and
Herzegovina was the Tapija, implemented during the Ottoman period
(15th to 19th century). Tapijas were originally issued to
high-ranking members of the Turkish military and bureaucracy as a
reward for their service. With time, Tapijas became the standard
documents with which real estate ownership in Bosnia was claimed and
established. Tapijas were hand-written without any technical
drawings or measurements.


5. The Austro-Hungarian Empire replaced the Ottomans in 1878, and
inherited the Turkish Tapija system. The Austro-Hungarians
attempted to modernize this system in the 1890s and it became known
as the "Grunt" system. In the first phase, Tapija registries were
simply recorded into the new Grunt system. Later, the system was
expanded to match the European standards of the time.


6. However, the Grunt system leaves a significant segment of the
Bosnian population without land records because after 1945, the new
Yugoslavian government nationalized and expropriated land while
instituting ambitious agrarian reforms. Although Grunt land
registry records were still maintained by Yugoslav authorities, as
families were allocated parcels of land and estates were divided,
true physical ownership became increasingly different from the
official documentation. Thus, the Yugoslav authorities decided to
modernize the Grunt via technology-based land measurement in the
1970s. They conducted a massive aerial survey of the country, using
photographs to record the actual possession of land parcels. The
new system was named the "Katastar" (cadastre) system.


7. The Katastar system's main differences from the Grunt system are
that it serves as proof of possession, not ownership, and it is
maintained by the municipal authorities, not the courts. Katastar
possession is an inheritable right, however, the Grunt or Civil
Registry system still serves as the only absolute legal proof of
real estate ownership in Bosnia today.

Field Visits
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SARAJEVO 00001404 002 OF 002



8. Concern over land documents manifests itself in a variety of
ways throughout Bosnia. In East Sarajevo (Republika Srpska),real
estate experts explained the new political and administrative
difficulty they face following the division of Sarajevo between the
Federation and the Republika Srpska (RS) after the 1992-1995 war.
The newly-formed regional court in Sokolac, RS, created a new land
registry database in accordance with the entity borders. However,
for many disputed areas, the Cantonal Court in Sarajevo retains
their pre-war jurisdiction and continues to issue land registry
documents even as the Sokolac court does the same thing. Some
parcels now have multiple ownership documents and two different
owners can take out a loan on the same piece of land using the
documents from two different courts. Thus, in East Sarajevo, there
could be three potential claimants to land-one with Grunt ownership
rights, a second with Katastar possession rights and a third with
ownership rights issued by the Sokolac courts.


9. In Mostar, the acting mayor expressed frustration because his
citizens must wait years for the local courts to produce copies of
their land registry documents. In Zenica, the mayor's office
informed us that they estimate it will take two years and over two
million convertible marks (about 1.5 million dollars) to reconcile
the Katastar and Grunt systems within their municipal territory.
Currently, the municipality does not have adequate funding to tackle
the project.

International Involvement
--------------


10. The international community is aware of land ownership issues
in Bosnia. The German government sponsored Agency for Technical
Cooperation (GTZ) maintains an office in Sarajevo where they are
working with Swedish and Austrian partners on land reform. The Land
Administration Project began in 2003 and has thus far provided all
48 Bosnian land registry offices and their branches with IT
equipment and specialized software. The software is now in use by
the majority of Bosnian courts. In September 2008, representatives
from both entities and the Bosnian Geodetic Administration along
with representatives of Germany, Sweden and Austria signed a
Memorandum of Understanding on the Land Administration Project. The
memorandum allows for continued collaboration on land administration
reform. So far, only two municipalities (Visoko and Konjic) have
reconciled the Grunt and Katastar property records.

Consular Impact
--------------


11. Post currently accepts both Grunt and Katastar documents to
support claims to financial and economic ties in non-immigrant visa
applications. However, our discovery that multiple
ownership/possession documents may be obtained on a given land
parcel underscores the importance of further examination concerning
those documents. Since local banks only issue loans based on civil
registry (Grunt) documents, these documents demonstrate a much
stronger claim to the land. Additionally, incomplete land ownership
may indicate that even those who claim home ownership, may have only
a tenuous claim to remaining on the land. Additionally, there are
still disputes concerning ownership related to land nationalized by
former governments. Post will continue to closely monitor whether
documents concerning land ownership/possession truly demonstrate
economic ties to Bosnia.

ENGLISH