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Yugoslavia is Opening its Doors to Foreign Acquisition of Real Property: Alien Ownership of Immovables in Yugoslavia After the New Foreign Investment Act 1988 and Recent Amendments to the Basic Property Relations Act 1980

Published online by Cambridge University Press:  21 May 2009

Maja Stanivuković
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Extract

Immovables, being part of the State territory and serving as the basis of many activities, possess great economic, political and strategic importance in every country. Consequently, governments are often unfavourable towards the possibility of aliens appearing as owners of immovable property situated on their territory. In Yugoslavia as well, until quite recently, the rights of aliens in this domain were extremely limited, which was reflected in the inclusion of this country in the group of countries cited in comparative studies as being rare representatives of the system of complete prohibition on the acquisition of immovables by aliens. The mounting criticism of the over-protective rules led to an unexpectedly broad liberalization in this field.

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Articles
Information
Netherlands International Law Review , Volume 38 , Issue 1 , May 1991 , pp. 42 - 55
Copyright
Copyright © T.M.C. Asser Press 1991

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References

1. For example, in the comparative study by the Centre for International Legal Studies in Salzburg entitled Legal Aspects of Alien Acquisition of Real Property, edited by Campbell, Dennis (1980)Google Scholar, Yugoslavia was mentioned, together with the Soviet Union, as the only country which maintains an absolute prohibition on foreign ownership of real property.

2. ‘Službeni list SFRJ’ (Official Gazette of the SFRY) nos. 6/80 and 36/90; Arts. 82, 82a, 82b, 82v and 83 (hereinafter referred to as the BPRA).

3. Art. 201 of the 1974 Constitution, as amended in 1981 and 1988, reads as follows: ‘Aliens in Yugoslavia have human rights provided by the Constitution and other rights and duties determined by law and international treaties’.

4. ‘Službeni list SFRJ’ (Official Gazette of the SFRY) no. 77/88 of December 1988, translation published in 28ILM (1989) p. 1543.

5. ‘Službeni list SFRJ’ (Official Gazette of the SFRY) no. 36/90 of June 29,1990.

6. ‘Službeni list SFRJ - dodatak’ (Official Gazette of the SFRY - Supplement) no. 8/55; 1955 ABGB 224.

7. Art. 29, para. 2 of the aforementioned Agreement.

8. Varady, T., Medjunarodno privatno pravo (1990) p. 120Google Scholar

9. Amendments to the Constitution of 1974, ‘Službeni list SFRJ’ (Official Gazette of the SFRY) no. 70 of 11 26, 1988Google Scholar.

10. Yugoslavia has established diplomatic reciprocity concerning the acquisition of immovable property by inheritance with the following countries: Albania (1926), Austria (1954), Belgium and Luxembourg (1928), Bulgaria (1956), Czechoslovakia (1964), France (1929), the GDR (1966), Greece (1927), the Netherlands (1930), Hungary (1968), Japan (1953), Mongolia (1981), Poland (1960), Romania (1960), Spain (1929), Sweden (1937), the United Kingdom (1927), the United States (1881) and the USSR (1962).

11. That is, the reciprocity established by internal legislative acts of the respective countries, or through the practice of their courts and other authorities.

12. Glasnik Advokatske komore Vojvodine (1974) no. 10, p. 37.

13. Stojanović, D. and Pop-Georgijev, D., Komentar Zakona o osnovnim svojinskopravnim odnosima (1980) p. 179Google Scholar.

14. Until recently, this was the predominant form of ownership in Yugoslavia, with specific characteristics, the most important of which is the absence of a distinct holder of the right of ownership. The concept of social property is closely connected with Yugoslavia's self-management system.

15. Convention on Consular Relations and Establishment (Konencija konsularna i o nastanjivanju izmedju Kraljevine SHS i Republike Francuske) of January 30, 1929, ‘Službene novine’ (Official Gazette) no. 112/29; 1929 FRJO 1805.

16. Art. 4 para. 2 of this Treaty states: ‘The Companies mentioned in Article 2 shall have the right to acquire or to rent all property, movable or immovable, necessary for their proper activities’.

17. The USA, Albania, Belgium, Luxembourg, Czechoslovakia, the Netherlands, Japan, Romania, Spain, Great Britain and Australia.

18. This is the legal term for business entities, belonging to the legal terminology of the former Law of Associated Labour of 1976 which is now being replaced by a number of laws, the most important of which is the Law of Enterprises of December 1988.

19. Zakon o ulaganju sredstava stranih lica u domaće OUR, ‘Službeni list SFRJ’ (Official Gazette of the SFRY) nos. 18/78, 64/84 and 38/86Google Scholar.

20. Varadi, , op. cit. n. 8, p. 311Google Scholar.

21. See, generally, Sajko, K., ‘Državna pripadnost poduzeća, Pravna misao (1970) no. 3–4Google Scholar.

22. Pursuant to Art. 3 of the PILA. Thus, e. g., Art. 17 of the Foreign Exchange Law contains a different definition of an alien: ‘For the purposes of this Law, domestic persons shall be understood to mean: enterprises, their forms of association … other legal entities, civil legal persons having their place of business in Yugoslavia and natural persons residing in Yugoslavia’ (Art. 17 para. 1). ‘For the purposes of this law, a foreign person shall be understood to mean a legal and natural person, with the exception of those referred to in section 1 of this Article’ (Art. 17 para. 4). ‘Službeni list SFRJ’ nos. 66/85, 13/86. 71/86, 2/87, 3/88, 59/88 and 85/89 – translation taken from the Federal Executive Council – Secretariat for Information, ‘Programme of Economic Reform and Measures for its Implementation in 1990’, Jugoslovenski pregled (1990), which contains translations of all major legislative acts of Yugoslav Economic Reform passed in 1989.

23. ‘Službeni list SFRJ’ (Official Gazette of the SFRY) no. 70/88.

24. See Barbić, J., ‘Tipologija jugoslavenskih poduzeća’, 28 Privreda i pravo (1989) no. 1–2, pp. 3–28Google Scholar.

25. Ibid.

26. The Land Act of 1987; The Minister of Finance Ordinance on the acquisition of immovables by aliens, no. 37/1988 dated November 5, 1988; the Foreign Investment in Hungary Act, no. 24 (published in Magyar közlöny 69/88), in force since January 1, 1989).

27. Act XII of 1989 on the Transformation of Economic Organizations and Economic Associations; Act VH of 1990 on the State Property Agency and the Treatment and Utilization of Property Belonging to the Agency; and Act VIII of 1990 on the Protection of Property Entrusted to State Enterprises.

28. Ustawa z 24 marca 1920 r. o nabywaniu nieruchomosci przez cudzoziemcow (The Acquisition of Property by Aliens Act), Dziennik Ustaw, no. 24 (1983) section 202.

29. See, Jadach, C., ‘Ownership and Investment in Poland’, 18 Cornell ILJ (1985) p. 63Google Scholar ; Slupinski, Z.M, ‘The New Polish Joint Venture Law’, 3 Transnational Lawyer (1990) no. 1, p. 16Google Scholar.

30. Law on Economic Activity with Foreign Parties (Ustawa of dzialalnosci gospodarczej z udzialem podmiotow zagarancznych), Dziennik Ustaw, no. 41 (December 1988), English translation published in 28ILM (1989) p. 1518, amended in Dziennik Ustaw no. 74 (December 28,1989).

31. Slupinski, , loc. cit. n. 29, pp. 26–27Google Scholar.

32. The law was enacted on July 13, 1990 and published in Dziennik Ustaw no. 51 (1990) p.298, and 29 ILM (1990) p. 1226.

33. Ukaz br. 56, Drzaven Vestnik, no. 4/1989 (January 13,1989) with corrections in no. 16/1989.

34. See, Gašo, K., ‘Jugoslovensko pozitivno zakonodavstvo o mogućnosti sticanja prava svojine na nepokretnim stvarima na svojoj teritoriji — analiza jugoslovenskog zakonskog rešenja’, Pravni život (1989) pp. 12, 153–160, 157Google Scholar.

35. Art. 38 of The Aliens Circulation and Residence Act (hereinafter: ACRA), ‘Službeni list SFRJ’ (Official Gazette of the SFRY) 56/1980 of October 3,1980.

36. Art. 39 para. 1 ACRA.

37. Art. 39 para 2 ACRA.

38. Art. 30 para. 3 ACRA.

39. Art. 40 ACRA.

40. Art. 42 ACRA.

41. In addition to the previous investment schemes in some of the specifically Yugoslav forms of organization of economic life, giving only contractual but not ownership rights to alien investors, which were not excluded by the 1988 Act, new forms of foreign investment in which the foreign investor participates as the owner, have been introduced. Thus a foreign investor may invest in, or establish a mixed company (in the form of a limited company, joint-stock company, limited partnership, and unlimited company), may invest in a private enterprise or shop, a contractual enterprise (a form of incorporation, specific to the Yugoslav system), bank or other financial organization, cooperative, insurance company, or he may establish his own, wholly owned enterprise; the foreign investor may also obtain concessions for the exploitation of renewable or nonrenewable natural resources or public properties and may enter into a BOT (build, operate, transfer) arrangement with the appropriate Yugoslav authorities.

42. In accordance with the Foreign Trade Act of 1989 (‘Službeni list SFRJ’ no. 63/89 of October 13, 1989) and the Ordinance of the more detailed conditions for the opening and operating of the branch offices of alien companies in Yugoslavia (‘Službeni list SFRJ’ no. 75/89 of November 27, 1989).

43. Pursuant to Art. 2 of the abovementioned Ordinance.

44. Amendment XXIII subsection 1 para. 1

45. ‘Službeni list SFRJ’ no. 84/89, amended in ‘Službeni list SFRJ’ no. 46/90 of August 10, 1990.