213981 6/25/2009 15:26 09BUDAPEST453 Embassy Budapest UNCLASSIFIED 09SECSTATE62772 VZCZCXRO8905 RR RUEHKW DE RUEHUP #0453 1761526 ZNR UUUUU ZZH R 251526Z JUN 09 FM AMEMBASSY BUDAPEST TO RUEHC/SECSTATE WASHDC 4269 INFO RUEHBM/AMEMBASSY BUCHAREST 1449 RUEHPG/AMEMBASSY PRAGUE 0661 RUEHRA/AMEMBASSY RIGA 0107 RUEHVL/AMEMBASSY VILNIUS 0203 RUEHWR/AMEMBASSY WARSAW 0519 RUEHKW/AMCONSUL KRAKOW 0006 UNCLAS BUDAPEST 000453
DEPARTMENT FOR L/CID SHARLA DRAEMEL, EUR/OHI JOHN BECKERAND, EUR/CE JAMIE LAMOUR
E.O. 12958: N/A TAGS: ECON, ODIP, PREL, HU SUBJECT: HUNGARY'S INPUT ON PROPERTY RESTITUTION FOR HOLOCAUST SURVIVORS AND HEIRS
REF: SECSTATE 62772
1. Presently, property restitution issues appear to have minimal impact on the real estate market in Hungary. Most claimants seek financial compensation under the 1991 Hungarian Compensation Act rather than reacquiring properties. The title search process can be lengthy, but rarely are title disputes due to restitution reasons.
2. PolOff accompanied a U.S. Holocaust services attorney to the Compensation Office in November 2008. Dr. Lajos Szabo, the General Deputy Director of the Compensation Office, told us that of the 5,600 claims from the U.S. in which a final decision has been issued, 4,500 --nearly 80 percent-- were denied. The majority of claims filed by U.S. Holocaust survivors are denied due to the onerous documentation requirements imposed by the Hungarian government.
3. In 2005, the GOH adopted a resolution to fast-track property restitution negotiations in order to close outstanding claims in 2006 rather than by 2011 as the original law set forth. Three religious groups (Roman Catholic, Jewish and Budai Serb Orthodox) chose to use the new procedure. As of January 2009, 2,502 properties (worth approximately USD 623 million) were restituted, and a total of USD 418 million was paid as compensation. The Catholic, Protestant, and Lutheran churches had 196 outstanding cases valued at USD 23.5 million at the end of 2008.
4. While most participants generally considered the procedure satisfactory, members of the Jewish community viewed the restitution process as generally fair but wanted to see compensation paid for the estimated USD 2.3 to 18 billion worth of heirless Jewish properties specifically excluded from the restitution process. On November 27, 2007, the GOH issued a resolution to establish a joint commission, which included representatives of the government and the Jewish communities, to agree on the financial compensation for heirless Jewish properties. Based on the agreement, the GOH agreed to transfer USD 21 million over five years to the Jewish Heritage of Hungary Public Endowment (MAZSOK). In December 2007, the first payment, USD 12.6 million, was transferred to MAZOK,s account. The Federation of Jewish Communities in Hungary plans to use the funds to benefit Holocaust survivors. Levine