U.S. Department of the Treasury

(Archived Content)

FROM THE OFFICE OF PUBLIC AFFAIRS

We have just concluded another plenary round of negotiations between the Austrian government and companies on one side, and victims' representatives on the other, concerning Aryanized property. I am pleased to report that we achieved significant progress today.

Ambassador Sucharipa, Austria's Special Envoy for Property, and Ambassador Winkler, put forth an important and multifaceted proposal to address gaps and deficiencies in past Austrian restitution programs and resolve all remaining Nazi-era property and Aryanization issues. As you may recall, the victims' representatives put forward a reasonable proposal at our meeting in Vienna on November 30. As I indicated in Vienna in my statement, the victims' representatives have made a strong case that there were gaps and deficiencies in prior Austrian restitution laws. Austria, in its written proposal, acknowledges its moral responsibility. Let me cite again the facts brought to light at our earlier negotiating rounds, many of which the Austrian negotiators have confirmed:

• The 1938 Austrian business register valued Jewish businesses at RM 321 million (130 million 1938 U.S. dollars). About one half of the total value of these businesses were liquidated by the Nazi regime prior to World War II.
• Prior restitution laws provided no compensation for liquidated businesses, or those destroyed during Aryanization. This is a very clear gap.
• There were even more such businesses liquidated that were not registered. Those were of smaller value.

In addition, the victims' representatives offered compelling evidence that following the War, victims of the Nazi era and their heirs faced obstacles to seek restitution of their property, particularly real estate. The facts they presented included the following:

• Victims often had to reimburse the Aryanizer for the latter's purchase price, even though proceeds of sale had been placed in blocked accounts never accessible to the seller.
• Amounts paid (RM 328 Million) in Flight and Discriminatory Taxes were often not deducted from purchase prices.
• Claimants often therefore could not afford to reimburse new owners; some decided not even to file and/or accepted very unfavorable settlements.

The Austrian side did not dispute a number of these assertions, although it is clear that there will never be full agreement on many points of history.

Today, the Austrian side responded with the following proposal:

The Austrians agreed to provide $150 million in new money to the proposed General Settlement Fund that will be established to provide compensation for Nazi-era property losses. In addition, the Austrian side indicated today that it is prepared to make an additional contribution above that $150 million if necessary to achieve a prompt settlement of property issues. The $150 million, plus an additional unspecified amount that still has to be negotiated, would be in addition to the $150 million advance payment promised in October by the Austrian Government to cover claims for losses of apartments and small business businesses leases, household property, and personal valuables and effects. This brings the total of the proposed General Settlement Fund to $300 million.

Regarding the $150 million advance payment, Chancellor Schuessel assured me yesterday that the Austrian lower house will complete its work by January 31st, and shortly thereafter the upper house will do so as well. Hannah Lessing of the National Fund said that payments could begin in March.

Further, the Austrian side indicated a willingness to improve social benefits for survivors of National Socialism - benefits that are estimated to have a value of more than $65 million over the next 10 years.

The Austrian side also agreed to consider, on a case-by-case basis, in rem property restitution if the property is currently in public hands. This proposal would permit the return of Jewish communal property, or compensation if the return of the property is not practical or possible.

Finally, the Austrian side would also make its best efforts to address the issue of the return of works of art from Austrian companies and Austrian public entities not covered by the Federal Law.

In making his presentation, Ambassador Sucharipa asked the participants to view his proposal in the broader context of steps Austria has taken in recent years to provide benefits and compensation to Holocaust survivors.

I would like to pause here and add a special note of thanks to Dr. Pichler for his efforts with the Austrian private sector.

While we have made significant progress today, much work still remains to be done: We need to determine the X or the unspecified amount beyond the $150 million in new money. The victims' representatives must first study and respond formally to today's Austrian proposal. There are a number of details that still need to be addressed. However, we are closer to agreement than we were before and both sides have shown flexibility. We agreed to meet on January 10/11 (changed subsequently to Jan 9-10) in Vienna and January 16/17 in Washington to see if we can resolve these issues.

One of the most important issues that will need to be resolved is insurance. Unfortunately, we could not address this issue today because Austrian insurance companies have not been part of this process. It will be critical to the success of this process to ensure that insurance claims are resolved in a manner that accords with the principles of the International Commission on Holocaust Era Claims.

Let me pause here to summarize for you the elements of the proposal before us:

1. Labor Agreement $370-$400 mn

2. Business & Apart. Leases, other $150 mn

3. Agreement on New Money $150 mn plus

4. Liberalization of Social Benefits $ 65 mn
For Holocaust Survivors

5. In rem return of property now held by
the public sector and a process for
Communal Property (amount to be determined)

As I noted, before January 10, we need to concretize this process on addressing in rem property restitution and communal property issues.

Before turning the podium over to Ambassador Sucharipa, let me make a few general comments:

We are now at a critical stage of this process. I have devoted enormous effort to the quest for common ground so that victims and their heirs could receive a measure of dignified justice. I have also been involved in this process so that Austria and its companies can achieve legal peace for Austrian companies. This legal peace must be achieved on a basis that (1) creates a suitable potential remedy for Nazi era property and Aryanization claims against Austria and Austrian companies and (2) addresses suitably Austria's own objectives of facing moral and financial responsibility. Unless we succeed, the victims themselves, their heirs, and Austria will lose a unique opportunity, and the enemies of reconciliation will rejoice.

In the last several years, Austria has begun to face its moral responsibility and take a number of actions in this regard. These actions have accelerated since Chancellor Scheussel has taken office. The final step in Austria's assumption of its moral responsibility must be to do everything possible to achieve an agreement on the remaining property issues.

Perhaps this is now a good time for me to stop and turn the floor over to Ambasssador Sucharipa. He may also wish to list the various steps Austria has taken in recent years, as well as comment on today's Austrian proposal.

Before I do so, let me reiterate that for this process to succeed, it is critical that Austria find in the next few weeks a meaningful mechanism for returning publicly-held and communal property, as well as address insurance claims.