Communication Received from United Kingdom
Delegation Concerning Enemy Property in
My dear Bunche,
May I refer you to Section 5 – Enemy Property, of paragraph 2 of the note on certain matters which was submitted for the information of the Commission on the 21st January, 1948.
2. I now enclose for the information and consideration of the Commission, a memorandum on German Enemy property and other assets under the control of the Palestine Custodian. As the Commission will observe, the position is, broadly speaking, that as much as possible of the German property in Palestine is being liquidated and will be transferred to the United Kingdom but that it will be physically impossible to liquidate quite a large amount. His Majesty’s Government desires to place this fact on record with the Commission as an indication of the limit which the termination of the Mandate has placed upon British responsibilities in this matter.
3. Apart from the responsibility for accounting for German assets in Palestine, there are other responsibilities towards Allied Countries and under Peace Treaties with former Enemy Governments. These are fully described in the memorandum and His Majesty’s Government consider that they, as well as the responsibility in regard to German assets, should be the concern of the Commission and any successor authority.
4. In conclusion, I would invite the particular attention of the Commission to section V. of the memorandum, from which it will be observed that His Majesty’s Government in the United Kingdom ask:-
(1) For an assurance from the Commission that it recognises the responsibilities in respect of property under the control of the Palestine Custodian of Enemy Property, as described in the memorandum, particularly those which have to be fulfilled through His Majesty’s Government in the United Kingdom towards the Inter-Allied Reparation Agency, and
(2) for an undertaking from the Commission that in any instrument for which the United Nations is responsible under which transfer of Government of Palestine is affected there will be included suitable provisions requiring a successor authority recognise the obligations and responsibilities as described in the memorandum and that those dischargeable towards the Inter-Allied Reparation Agency through His Majesty’s Government will be so discharged,
GERMAN ENEMY PROPERTY, AND OTHER ASSETS
UNDER THE CONTROL OF THE PALESTINE CUSTODIAN
1. It is essential to bring to the notice of the United Nations Commission the nature and extent of the responsibilities and obligations which are borne by the present administration in Palestine in respect of property which has come under the control of the Palestine Custodian of Enemy Property by reason of the exercise of the powers contained in trading with the Enemy legislation in Palestine. These responsibilities and obligations are of a continuing character and carry with them certain international commitments. It is accordingly necessary that the arrangements for the future administration of Palestine on the termination of the mandate should include provisions to ensure recognition and acceptance by any successor authority or authorities of these responsibilities and obligations.
Enemy property under this Ordinance includes inter alia the property of states at war with His Majesty, of persons resident in any area under the sovereignty of or in occupation of a power with whom His Majesty is at war, of businesses controlled by enemies or incorporated in or under the laws of enemies. The Custodian’s control continues until arrangements made at the conclusion of peace are implemented.
3. “Enemy property” over which the Custodian still has control falls into the following main categories:-
(a) Property held in connection with states with whom His Majesty is still at war, i.e. Germany and Japan.
(b) Property held in connection with states with whom His Majesty has concluded treaties of peace. e g, Italy, Bulgaria, Rumania, Hungary, Finland.
(c) Property held in connection with territory formerly occupied by the enemy e.g. France, Holland, Belgium, Norway, Czechoslovakia.
(d) Other property releasable to owners as not accountable as reparations.
4. The assets falling under the above three headings, (a), (b) and (c) consist primarily of immovable property mostly of land. Estimates made by the Custodian of Enemy Property of these properties give a total of approximately £P 20. But reliable estimates of values of property in Palestine at the present time, particularly of land, are impossible and while there is no doubt that the property under custodianship is very considerable in extent and value the foregoing figure should be treated with all reserve. (There are in addition other assets, particularly ecclesiastical property and property belonging to enemy subjects. Most of the ecclesiastical property is expected to be released from custodian control before the termination of the mandate.)
Because of the extraordinary difficulties in estimating values of report in Palestine all the estimates noted in this paper, which are derived from information furnished by the Custodian of Enemy Property, Palestine, should also be accepted with caution.
THE GENERAL BACKGROUND
6. By the decision of the Berlin Conference of July/August, 1945, it was decided that, “the reparation claims of the United States, the United Kingdom and other countries to reparations shall be met... and from appropriate German external assets”. By the provisions of Article 6 of Part I of the Final Act of the Paris Conference on Reparation, “Each Signatory Government shall, under such procedures as it may choose, hold or dispose of German assets within its jurisdiction in manners designed to include their return to German ownership or control and shall charge against its reparation share such assets”. Article 2 of Part IV of the Final Act statement that “The signature of each contracting Government shall be deemed to mean that the effect of the present Agreement extends... to territories under its protection or suzerainty or over which it at present exercises a mandate”. Under Article IF of Part I of the Final Act the Inter-Allied Reparation Agency must charge the reparation account of each Signatory Government for the German assets within that Government’s jurisdiction, and each Signatory Government is required to render a return of the value of such assets as defined under Article 6 of Part I of the Agreement. His Majesty’s Government in the United Kingdom signed the Paris Agreement on the 21st December, 1945, when it exercised a mandate over Palestine. Under the Final Act the share to be allocated to the United Kingdom (including all areas under its jurisdiction) of the total of German external assets, known as Category A, which are found to be available, is 28%. This means in effect that the United Kingdom is entitled to 28% of the total of all German assets in all countries signatory to the Final Act, which includes the United Kingdom, plus any other external assets, e.g. those made available in Neutral Countries, The division of this 28% as between the United Kingdom and all the Colonies including Palestine, is a matter for arrangement between the United Kingdom Government and the Colonial Governments concerned. Certain broad principles of division have already been tentatively decided upon, whereunder the Colonies and Palestine will each receive a proportion of the total United Kingdom receipts from reparations (including external assets) corresponding to the proportion of war damage sustained.
7. The position of accountable German enemy assets in Palestine under the international arrangements described above, and H.M. Government’s responsibility in regard thereto is:
(1) While these assets are within H.M. jurisdiction:-
(ii) H.M. government must ensure that the value of them is included in the United Kingdom returns to the Inter-Allied Reparation Agency;
(iii) the Inter-Allied Reparation Agency is required to charge H.M. Government’s share with the value of these German enemy assets in Palestine.
(3) All German enemy assets in Palestine defined as accountable by the Inter-Allied Reparation Agency are reparations.
8. Had it been possible to liquidate the whole of German enemy assets in Palestine before the termination of the mandate the proceeds could have been transferred to the United Kingdom, and fully accounted for to the Inter-Allied Reparation Agency, and adjustment eventually effected with Palestine to whom transfer would have been made of her share of the Colonial portion of the United Kingdom’s Category A share of 28%. But this has not been possible and German enemy assets accountable to the Inter-Allied Reparation Agency of considerable value will remain unliquidated when United Kingdom’s jurisdiction in Palestine ends. The account for these to the Inter-Allied Reparation Agency has to be made and H.M. Government seek an assurance from the United Nations Commission that this responsibility is recognised as one which the United Nations Commission should take steps to ensure is discharged by it, or any successor authority in Palestine through H.M. Government. H.M. Government would, for its part, be prepared to give an assurance that adjustment in respect of Palestine’s share of the 28% of Category A reparations would be duly effected. In the meantime such liquid proceeds of German enemy assets in Palestine as are available for transfer when the mandate ends will be transferred.
The total value of German enemy assets in Palestine, including liquidated proceeds, accountable as reparations is estimated at £ 5 million. Again for the reasons already stated this estimate must be treated with all reserve. Most of this property will remain in Palestine when the mandate ends.
9. Japanese assets in Palestine. The value and extent of these is negligible. They will, however, be required to be kept in custodianship pending a decision as to their disposal.
11. The total value of assets under this category is estimated at £P 1.6 million.
12. An agreement has been made between the United Kingdom and Italy as to discharge of claims other than those covered by the Peace Treaty in return for release of the assets sizable under Article 70. This agreement has been extended to Palestine. The agreement will not however be fulfilled when the U.K. mandate ends.
13. Under these Peace Treaties there will thus be certain international rights and obligations resting upon any future administration of Palestine in respect of the property mentioned.
15. As to the balance of Allied property in Palestine, of an estimated value of £P 9.5 no agreement has yet been made by His Majesty’s Government with the Allied Government concerned, e.g. Poland, Yugoslavia and China. All of this property will be unreleased from custodianship when the mandate ends.
17. There are also assets of Allied or Neutral persons, who were resident in enemy territory, e.g. Germany or Italy, which should similarly be released to the persons entitled.
(ii) for an undertaking from the United Nations Commission that, in any instrument for which the United Nations is responsible under which transfers Government of Palestine is effected, there will be included suitable provisions requiring a successor authority to recognise, the obligations and responsibilities as described and that those dischargeable towards the Inter-Allied Reparation Agency through His Majesty’s Government will be so discharged.