The notion of Bug River property regards the property abandoned within the territory of the Republic of Poland within its pre-war borders which after the year 1945 were abandoned outside the present-day territory of the Republic of Poland

1. General information regarding Bug River property.

2. Persons entitled to compensation for Bug River property – the state before the act’s coming into force.

3. The essence of entitlement to compensation for the lost Bug River property.

4. Information of the State Treasury Ministry on works on the implementation of the Constitutional Court’s decision of December 19th, 2002 (K 33/02) regarding Bug River entitlements.

5. The procedures of implementing entitlements to compensation for Bug River property.

1. General information regarding Bug River property

The notion of the Bug River property regards the property abandoned within the territory of the Republic of Poland within its pre-war borders which after the year 1945 was left outside the present territory of the Republic of Poland. Bug River property is the property located within the territory of the present-day Belarus, Ukraine and Lithuania.

The situation of Polish citizens residing on these territories before August 31st, 1939 was regulated in agreements concluded in 1944 with Ukraine, Belarus and Lithuania as well as the agreement concluded between the Interim Government of National Unity and the USSR’s government, which confirmed provisions of the three preceding republican agreements.

The provisions of the above-mentioned international agreements regarded the manner of evacuating people covered by these agreements and the principles of describing the property abandoned by these people outside Polish borders. The agreements did not provide detailed rules and procedure of awarding compensation for movable property abandoned outside these borders. The Polish law provided rules and procedure of awarding compensation. In particular the following acts should be mentioned:

• The decree of September 6th, 1944 on agricultural reform,
• The decree of September 6th, 1946 on agricultural system and settlement on Regained Territories and the former Free City of Gdańsk,
• The decree of December 6th, 1946 on the transfer by the State of immovable non-agricultural property on Regained Territories and the former Free City of Gdańsk,
• The decree of December 10th, 1952 on the transfer by the State of immovable non-agricultural property for housing purposes and purposes of family housing,
• The act of July 14th, 1961 on land management in cities and settlements,
• The act of April 29th, 1985 on land management and expropriation of real property (Journal of Laws of 2000, No 46 item 543 as amended.)

The data of the Department of Restitution and Shares Disbursement as of February 29th, 2003 reveal that 82,000 applications were submitted, whose total estimate value exceeds 10,500 million PLN.

Additionally, so far the starosts issued 4,119 decisions and certificates of the total estimated value 3,000 million PLN.

At present, the act of December 12th, 2003 on offsetting the value of property abandoned outside the current borders of the Polish state against sales price or fees for perpetual usufruct of State Treasury property provides possibilities of the state compensating to Polish citizens the value of property abandoned abroad due to the war started in 1939.

At present this act constitutes the only legal basis for confirming the entitlement and taking advantage of it on account of sales price or fees by way of perpetual usufruct of State Treasury real property.

2. Persons entitled to compensation for Bug River property – the state before the act’s coming into force

Pursuant to principles adopted in the previously-mentioned republican agreements, persons subject to repatriation procedure who met the conditions stipulated below acquired the so called Bug River entitlement:

• Having Polish citizenship before September 17th, 1939,
• Residing from the day of a given republican agreement coming into force within the territory defined in that agreement,
• Declaring Polish or Jewish nationality,
• Voluntary declaration of the will to resettle,
• Officially recorded handing over of movable or immovable property to competent authorities,
• Submitting to the resettlement rigour on specially defined conditions (collective transports.)

Pursuant to the resolution of the Supreme Court, Bug River entitlement extends also to those persons who before September 1, 1939 resided on the territory not encompassed within the present-day borders of the Polish state, had Polish citizenship, abandoned on this territory immovable property but could not submit to evacuation along the procedure provided for in the mentioned before republican agreements due to being transported to labour camps and who returned to the country after the end of the war.

Entitlement was extended also to Polish citizens repatriated to the country pursuant to the agreement of June 25th, 1957 concluded between the Government of the Polish People’s Republic and the USSR’s on the time and manner of further repatriation of Polish nationals from the Soviet Union. Pursuant to the Supreme Court’s resolution of May 30th, 1990 (III CZP 1/90), persons who were subject to repatriation pursuant to the agreement mentioned previously, abandoned abroad their immovable property and did not manage it for reasons independent of them receive Bug River entitlement.

The Supreme Court’s interpretation in respect of determining who the entitled persons are was upheld also in the presented above decision of the Constitutional Tribunal of June 10th, 1987 (P1/87.) According to the notion of an entitled person as shaped by the Supreme Court’s decisions, the entitlements extend to persons who had the citizenship and lived on the territory not encompassed within the present borders of the Polish state, abandoned there due to the war started in 1939 real estate for which they were entitled to compensation pursuant to international agreements concluded by the Polish state and returned to the country:

• Submitting to evacuation (repatriation) pursuant to individually concluded agreements,
• Without repatriation documents.

In the event of death of the owner of the property abandoned abroad, the entitlement extends to all the inheritors or one of them indicated by the others. There are no limitations of the inheriting title (statutory or will-defined inheritance – Supreme Court’s resolution of March 27th, 2001 III CZP 3/02).

3. The essence of entitlement to compensation for the lost Bug River property

At first, the entitlement to compensation had the form of granting the ownership right to agricultural or non-agricultural real property. In the 1960s, this right was shaped as the right to have the value of property abandoned by persons repatriated offset against the price or fee for perpetual usufruct of non-state real-property (art. 17 par. 1 of the act on land economy in cities and settlements – Journal of Laws of 1996 No 22 item 159 – uniform text.)

The above-mentioned principle of offset is further developed in art. 3 of the above mentioned act of December 12th, 2003, which provides that:

• In respect of people entitled to have the value of real estate abandoned outside the present-day borders of the Polish state, the sales price of State Treasury real property or fees for perpetual usufruct of such property as well as the sales price of located there buildings, other devices and apartments may be offset with the value of real estate abandoned outside the present borders of the Polish state in the amount equal to 15% of its value with the reservation that the value of the sum shall not exceed 50,000 PLN. The lawmaker who passed the above-mentioned act aimed at respecting the requirements of the Polish Republic’s Constitution of 1997 treated in their entirety and not selectively. Hence, account was taken of both the principle of protecting the ownership right as well as the need to protect the balance of public finances. Consequently, the basis for determining the value of the satisfaction limit is the value of the real estate lost limited to 15% of its value subject to the ceiling of 50 thousand PLN. This way, Bug River entitlement keeps the property value in reasonable proportion to the available pool of property from which it shall be satisfied as it shall be remembered that the source of this satisfaction is State Treasury’s real property, the expected proceeds from which need to be used for the implementation of other national tasks such as e.g. restitution. In the face of constitutional requirements (the principle of the state of the law) and the state of national finances, it is necessary to define precisely and regulate correctly all property claims submitted to the state – including Bug River claims.
• The owners of these properties are entitled to have the value of property abandoned outside the present Polish borders offset if they fulfil jointly the following conditions:
• on September 1st, 1939, they resided on territories referred to in the afore-mentioned republican agreements,
• are Polish citizens,
• had resided permanently in Poland for at least 5 years preceding this act’s coming into force.
• In the event of death of the owner of property abandoned outside the present-day Polish borders, the entitlement to have the value of property offset extends jointly to all the inheritors fulfilling the above conditions or one of them indicated by the other inheritors. The person entitled shall be indicated by submitting a declaration with a notarised signature.
• The entitlement to have the value of property abandoned outside the present-day Polish borders offset affirmed pursuant to separate law provisions and the act of December 12th, 2003 is non-transferable, with the exception of inheritance, as it is not a civil law claim.
• The above entitlement, though, does not extend to persons who pursuant to separate laws including regulations on land administration, agricultural reform or agricultural system and settlement acquired ownership or perpetual usufruct right over State Treasury property as part of benefits provided by bilateral agreements signed with Lithuania, Belarus and Ukraine.
• The right to submit applications for affirmation of the entitlement to have the value of property abandoned outside the present-day borders of the Polish state offset is time-defined and expires after December 31st, 2005.

4. Information of the State Treasury Ministry on works on the implementation of the Constitutional Court’s decision of December 19th, 2002 (K 33/02) regarding Bug River entitlements

With the decision of December 19th, 2002 published in the Journal of Laws No 21 of 2003 item 15 binding since January 8th, 2003, Constitutional Tribunal declared the following regulations unconstitutional:

• Art. 212 par. 1 of the act on real estate administration within the scope in which it rules out the possibility of having the value of property abandoned because of the war started in 1939 offset against the sales price of agricultural properties of State Treasury,
• Art. 213 par. 1 of the act on real estate administration within the scope in which it rules out the applying art. 212 of the act to real estate encompassed within the Stock of Agricultural Property Agency of State Treasury,
• Art. 17 par. 1 of the act on the administration of State Treasury’s agricultural property and change of certain acts,
• Art. 31 par. 4 of the act on managing certain ingredients of assets of State Treasury and Military Property Agency.

Thus, the Constitutional’s Tribunal decision of December 19th, 2002 made the stock of State Treasury’s agricultural property as well as real estate of Military Property Agency available for purposes of Bug River entitlements’ implementation.

Enforcement of the Constitutional’s Tribunal decision offering new possibilities of Bug River entitlements implementation was preceded with the analysis of possible consequences of the Constitutional’s Tribunal decision for planned outflows from the state budget. The Interdepartmental Team for evaluation of regulations related to equivalents for Bug River property established on December 30th, 2002 by the President of the Council of Ministers analysed and evaluated the consequences on the basis of i.a. data on the scale of claims prepared by the Ministry of the Treasury. On April 8th, 2003, the Council of Ministers acquainted itself with the complex information prepared by this Team on the consequences of enforcing Constitutional’s Tribunal decision of December 19th, 2002.

The Council of Ministers approved of the procedure recommended by the Team. On this basis, the Council of Ministers decided that a new initiative needs to be launched demanding the adoption of the new act on offsetting the value of property abandoned outside the present-day Polish borders against the sales price or fees for perpetual usufruct of State Treasury property.

In the result of the analysis of provisions governing so far the entitlement to compensation for Bug River property, it was determined that the currently in force art. 212 of the act on land administration is of selective character and does not provide tools for solving all the problems. Governmental initiative was finally realised in the form of the act adopted by Sejm on December 12th, 2003 and discussed in this information.

5. The procedures of implementing entitlements to compensation for Bug River property

The procedures of implementing Bug River entitlements have changed over the years. At first, the implementation of entitlements resulting from the afore-mentioned decrees and acts was subject to administrative procedure provided for in these acts (bestowment acts.) When in the 1960s, the solution was adopted of offsetting property abandoned abroad, the procedure of affirming the entitlement and offsetting the value was executed in one administrative act enforced by the ten competent organs of local administration. Next, in 1986, the procedure for the implementation of Bug River Entitlement separated the affirmation of the entitlement from its enforcement in the form of acquiring the property from State Treasury in tenders organized first by local administration organs, then by managers of regional offices and finally by starosts.

Pursuant to the act adopted by the Polish Sejm – entitlement is affirmed as follows:

• The entitlement to have the value of property abandoned outside the present-day Polish borders offset is affirmed by the voivod competent with regard to the place of residence of the applicant – the property’s owner and in case of inheritors – with regard to the last place of residence of the property’s owner.
• The entitlement to have the value of property abandoned outside the present-day Polish borders offset is affirmed on the basis of an official description of the property or compensation certificate issued by National Repatriation Office or official documents including court’s documents. In the event of their absence, the entitlement may be affirmed on the basis of documents drawn up before September 1st, 1939 (extracts from land and mortgage registers, notary’s deeds, court’s decisions, or possibly witness testimony – of at least three persons full of age at the moment of the conclusion of agreements with soviet republics who are not close relatives of applicants and who resided in the town/village where the abandoned property was located.
• On the basis of material evidence referred to above, a property valuator determines the market value of abandoned property as of the day of its abandonment and in accordance with prices or replacement costs as of the day of issuing the decision affirming the entitlement to have the value of property abandoned abroad offset.
• A voivod’s decision shall stipulate the persons entitled to have the value of property offset, the value of this property and the hitherto status of the offset entitlement implementation.
• The implementation of Bug River entitlement depends on active interest of the interested person, who needs to participate in tenders for the sale of State Treasury real property.
• Pursuant to the act discussed, implementation of Bug River entitlements is a national task, which needs to be carried out by each organ disbursing State Treasury real property. This means that none of these organs may refuse to implement this entitlement on appropriate terms – hence:
• Art. 7 par.1 regards any actions obstructing or excluding the execution of payment of a price for a disbursed State Treasury real property with the application of Bug River entitlement,
• Art. 7 par. 4 provides an exemption from the payment of a deposit for persons entitled as referred to above on condition of submitting a written statement in which they undertake to pay the amount equal to the value of the deposit in case they evade the signing of the agreement.

• Within two months from the act’s coming into force, that is by March 30th, 2004, starosts shall deliver to voivods certified copies of certificates and decisions issued before that day affirming the entitlement to have the value of property abandoned outside the present-day Polish borders offset.

• The provisions on resumption of proceeding (Section II chapter 12 of Administrative proceeding code excluding art. 146) apply to proceeding ended with the issuance of certificates affirming the entitlement to have the value of abandoned property offset.

• Proceedings in cases for the affirmation of entitlement to have the value of property abandoned outside the present-day Polish borders offset commenced and not ended prior to the day of coming into force of the cited above act shall be continued pursuant to its provisions.

• The act comes into force within 14 days after its publication, that is on January 30th, 2004.

“Bordelanders” (“Zabużanie”) – after the above-mentioned act’s coming into force and in accordance with the previously discussed Tribunal’s decision shall be entitled (up to a certain value and following the procedure provided for in the act) to take advantage of State Treasury real properties encompassed within the Stock of State Treasury’s Agricultural Property Agency, unwooded properties administered by National Forests as well real properties managed by Military Property Agency, they shall be entitled to participate in tenders organized by organs representing the Ministry of the Treasury as pursuant to the new “Bug River” act, art. 53 par. 3 of the act of August 30th, 1996 on commercialisation and privatisation (Journal of Laws of 2002 No 171 item 1397 as amended) is amended as follows:

• “Persons referred to in regulations on offsetting the value of property abandoned outside the present-day Polish borders against the sales price or fees for perpetual usufruct of State Treasury property, shall have the value of abandoned properties confirmed with an appropriate decision or certificate offset up to 15% of these properties’ value with the reservation that this value may not exceed 50,000 PLN when offset against:

The above change allows the entitled persons to participate in public tenders or publicly announced negotiations organized by Regional Offices of the Ministry of the Treasury on conditions stipulated in the mentioned above art. 53 par. 3 of the act on commercialisation and privatisation. As part of the implementation of this law provision as well as art. 212 of the act of August 21st, 1997 on land administration, in the years 2002 – 2004, MT’s Regional Offices sold 8 properties with the implementation of Bug River entitlements.