Austrian Restitution of Nazi-Era Assets

Last January, Austria joined Germany and the Swiss banks in signing a Holocaust reparations agreement. Relatively little noticed, the Austrian settlement deserves great recognition. Among its distinctive features is that it permits the return of specific items of property, including art works.

After the Anschluss in 1938, the vast bulk of the some $10 billion in assets owned by the 210,000 Austrian Jews was seized, or “Aryanized.” After the war, the reconstituted Austrian government established a restitution commission to oversee restitution of the assets.

These measures were not successful. Many people, despite possible criminal penalties, failed to register seized assets. Conversely, most surviving victims were unaware of their right to reclaim assets, nor could they afford to hire lawyers. The commission often rebuffed the few who did file claims.

The commission developed the legal doctrine of “proper and correct acquisition,” which gave protection to Aryanizers. It is difficult now to document precisely the commission’s unfairness, since most of the records were destroyed.

In August 2000, a lawsuit was filed against the Austrian government. Negotiations followed. In October 2000, the government agreed as an interim measure to make ex gratia payments — without admitting fault — of $7,000 to each Holocaust victim as symbolic compensation for leased apartments, businesses and other property. The total was $150 million.

An overall agreement was reached on Jan. 17. It provided for the Austrian government and private sector to pay $360 million (plus $20 million in interest) into a General Settlement Fund. This would include $150 million for leased apartments and buildings and $210 million for other property, except property dealt with “in rem” — that is, to be restored in kind, including communal property of the Austrian Jewish community. The fund will set aside $25 million for insurance, and Austrian insurance companies agreed to accept the valuations and procedures of the International Commission on Holocaust Era Insurance Claims. The fud will also allocate $8 million for the construction of a facility to compensate for the loss of the Hakoah Sports Association. The agreement also provides for social benefits that are expcted over 10- years to toal $112 million, including funds for nursing care and old-age pensions.

In rem claims will be reviewed by an arbitration panel, which, assisted by the Austrian Historians Commission, will make public recommendations to the government. The government and parliament will expect the panel’s recommendations to be followed.

Applicants first must prove they are formally entitled to the property.This means they have to produce evidence that the property was theirs or their ancestor’s.

But how can you describe a painting that was in Uncle Hans’ apartment 60 years ago? How would you know whether or not there were photos or witnesses to prove the picture was there? Sometimes, only the Gestapo’s files may provide answers. Even if proof can be found, the claimants must identify the current titleholder. When the titleholder is a museum or other institution, further problems are posed.

For a claim “on the merits,” the claim must not have been previously been settled or determined by an Austrian tribunal. Payments from the Reconciliation Fund or the Victim Compensation Fund are not counted. Even where an application to the restitution commission has previously been filed, a claim may be made if an extreme injustice took place. The earlier destruction of records could give this provision an added importance. The maximum for each application is $2 million.

Applicants who cannot fulfill the requirements for claims on the merits may still be able to file an application on grounds of “fairness and equity.” In addition to specific assets, other losses concerning education and profession as well as claims for losses, damages and injury, including compensation for slave and forced labor, may be covered under this procedure. The maximum for each household is $2 million.

In case of restitution in kind or in cases of real estate owned by the Republic of Austria, title must be proven valid in form and substance to the greatest possible extent.

At the signing ceremony, last January, Ernst Sucharipa, the Austrian ambassador to the United States and special envoy for restitution issues, said “No amount of money can undo the tremendous suffering and losses that have been inflicted on our Jewish citizens.”

Gideon Taylor, executive vice president of the conference on Jewish material claims against Germany, said, “It’s the best that can be done under the circumstance.”

Not everyone has concurred. Five weeks after the settlement was signed, another lawsuit was filed, the lawyers claiming that the settlement is too “deeply flawed” to remain unchallenged.

The settlement is, however, a present reality. Those who may be affected by it should be aware of what it says.

Barry A. Fisher is a Los Angeles lawyer, negotiation team member and signatory to the multinational German and Austrian Holocaust Claims Settlements, and Class Counsel in the Swiss Banks Case. Elizabeth Steiner, a prominent lawyer in Vienna, served on the Austrian settlement-negotiations team and is the only Austrian-victims lawyer who is a signatory to the Austrian settlement. Both Fisher and Steiner participate in prosecuting claims under the Austrian agreement.