The case concerns the Commission's alleged failure to verify the ownership status of a building situated in the northern part of Cyprus and used by the beneficiary of an EU grant for cultural activities. After a thorough investigation, the Ombudsman concluded that the Commission's practice of seeking the owner's consent only in respect of projects aimed at constructing or substantially altering a property was justified. She closed the case with a finding of no maladministration.

The background to the complaint

1. The complainant is the owner of a building in the northern part of Nicosia (Cyprus). Following the occupation of Northern Cyprus by Turkish troops in 1974, the building was occupied and used by the municipality of Turkish Nicosia. In 2009, the municipality carried out renovation and building works and temporarily transferred the use of the building to the European Mediterranean Art Association (the 'EMAA'), a Turkish Cypriot NGO. Subsequently, the building began to be used as an activity centre and was renamed "EMAA Capital Art Centre".

2. The EMAA was the beneficiary of a European Commission grant which was intended to finance bi-communal activities, in the context of the financial support granted for the purpose of encouraging the economic development of the Turkish Cypriot community[1]. The project aimed to introduce contemporary art applications and techniques to adults and young people of Greek Cypriot and Turkish Cypriot communities. It was implemented in cooperation with the Cyprus Chamber of Fine Arts[2].

3. In April 2011, the complainant visited the building and noticed an exterior wall sign informing the public that the Centre began to operate within the framework of an EU grant programme[3]. Adjacent to that sign was another wall sign which stated as follows: "This building was established in 2009 within the cooperation of the Nicosia Turkish Municipality and the European Mediterranean Art Association, with the leadership of the Mayor of the Nicosia Turkish Municipality, … and with the common agreement of the Nicosia Municipality Council Members to be used for art activities".

4. Since he was under the impression that the construction works were carried out with EU funds, the complainant wrote to the Head of the EU representation in Cyprus on several occasions, informing her that he was the lawful owner of the building and seeking clarifications[4].

5. The Commission (DG Enlargement) wrote to the complainant several times. It explained to him that no alteration or renovation works in respect of the building had been financed by the Commission. It also explained that the grant aimed to finance bi-communal artistic activities, that the EU funding focused on human resources and equipment needed for the project's implementation, and that the Activity Centre was set up by the beneficiary (EMAA) as a meeting place for participants of the workshops. It acknowledged that the sign outside the building might have led to a misunderstanding as to the purpose of the EU financial support and informed him that it had requested the beneficiary to display the information in a suitable location elsewhere in the building. The Commission also noted that since the grant did not finance any works in respect of the property, there was no need for the Commission to verify the ownership status of the building used by the beneficiary for its activities. A meeting between the complainant and the Commission took place in July 2011.

6. Since he was dissatisfied with the Commission's replies, the complainant complained to the European Ombudsman.

The inquiry

7. The Ombudsman opened an inquiry into the complaint and identified the following allegation and claims:

Allegation:

The Commission failed to verify the ownership status of a building used by the beneficiary of an EU grant for its activities and acted in a manner which was in breach of the complainant's property rights.

Claims:

1) The Commission should stop any funding towards EMAA and claim back any amount already received.

2) The Commission should establish more detailed rules regarding the issue of granting aid in the northern part of Cyprus in order to avoid similar problems in the future.

8. In the course of the inquiry, the Ombudsman received the opinion of the Commission on the complaint and the comments of the complainant on the Commission's opinion.

Alleged failure to respect the complainant's property rights and related claims

Arguments presented to the Ombudsman

9. The complainant argued that, by awarding the grant to the EMAA without verifying the ownership status of the building used by it, the Commission infringed his property rights. Moreover, once informed about that infringement, the Commission took no measures or steps to put an end to it. In his view, the Commission should establish a procedure to clarify the ownership status of a property prior to giving any financial assistance to any legal or natural person in the northern part of Cyprus.

10. The Commission noted that the property issues raised by the complainant are linked to the still unresolved Cyprus problem. It stated that it is not in a position to undo the existing property rights violations, as this is an issue to be solved in a comprehensive political settlement negotiated under the auspices of the United Nations. The Commission also argued that the EU-funded action in question, which aimed to contribute to the dialogue between the two communities through artistic activities, did not infringe the property rights of the complainant, "as it did not change the situation regarding his property in which he found himself following the 1974 events".

11. Furthermore, the Commission noted that it is fully aware of its obligation stemming from Article 7 of the Aid Regulation, and acts accordingly. It explained that it systematically verifies the ownership status of a given land or building if EU funding aims at constructing or substantially altering a building or a facility. In cases where EU-funded actions do not alter the property, checks are not carried out, since these activities cannot affect the status of the property in any way. The Commission added that it submits any draft financing decision which might affect property rights to the Committee referred to in the Aid Regulation two months before the financing decision is taken in order to allow the Member States to convey to the Commission any information on possible infringements of property rights[5].

12. In relation to the complainant's claims, the Commission noted that the EMAA implemented the project in accordance with the terms of the Aid Regulation and the clauses and conditions of the contract concluded with the Commission. Since no irregularity was identified, there was no legal ground to claim back any amount already received by the beneficiary.

13. In his observations, the complainant argued that the fact that his property rights have been continuously breached since 1974 does not give the Commission the right to provide financial aid to those who use his property illegally. He also argued that the fact that the Commission only refrains from providing financial support in case of construction or renovation works is abusive and unjustified. In his view, the right to property is not limited to a prohibition to carry out such works and other alterations in the property in question, but extends to the right of free use and peaceful enjoyment of that property. By adopting such a restrictive notion of property, the Commission disregards the case-law of the European Court of Human Rights and the Court of Justice of the European Union.

The Ombudsman's assessment

14. The Ombudsman acknowledges that the Commission was called upon to implement the objectives set out in the Aid Regulation in a difficult political context, particularly with regard to property rights. As the Court of Auditors declared in its special report on European Union Assistance to the Turkish Cypriot Community, "an estimated 78 % of privately owned land in the northern part of Cyprus legally belongs to Greek Cypriots"[6]. While the Ombudsman cannot disregard this context, she points out that it is not her role to express her views on the sensitive and complex issue of property rights in Northern Cyprus. Her task is to establish whether, in the present case, the Commission breached the complainant's rights by failing to verify the ownership status of the building used by the EMAA.

15. At the outset, the Ombudsman notes that it is not disputed that the complainant is the lawful owner of the building in question, and that he is deprived of all means of using his property. Nor is it disputed that this deprivation resulted from the events of 1974 and the occupation of the northern part of the island[7]. The Commission cannot, therefore, be held responsible for the complainant's inability to exercise his right to the peaceful enjoyment of his property.

16. The EMAA has used the building in question since 2009. According to the complainant, by financing the EMAA's activities, most of which took place within the building he owned, the Commission tolerated its unauthorised use and did not respect his property rights. In order to reply to this question, the Ombudsman needs to examine, first, whether the Commission was under an obligation to protect the complainant's right to property and/or to avoid any action that could be in breach of such right.

17. Article 7 of the Aid Regulation provides that the Commission "shall ensure that in the implementation of actions financed under this Regulation the rights of natural or legal persons including the rights to possessions and property shall be respected". In the Ombudsman's view, the obligation to respect the property rights of those concerned cannot be interpreted in such an extensive manner as to impose on the Commission an obligation to restore the complainant's property rights. As the Commission rightly pointed out in its opinion, it is not in a position to undo the existing property rights breaches.

18. It also follows from the wording of Article 7 that this provision does not make any distinction between the types of actions financed under the Aid Regulation. It is therefore reasonable to suggest that all such actions should respect property rights, whether they concern infrastructure investments or other projects. That being said, since the provision does not specify the means and procedure by which the Commission is required to ensure respect for the property rights of those concerned, the Commission enjoys discretion in deciding how to comply with Article 7 of the Aid Regulation. However, its discretion is not unlimited, and the Commission should be able to justify objectively how it exercises its discretion and why it chooses a particular course of action instead of another.

19. In the present case, the Commission took the view that, in order to fulfil its obligations under Article 7 of the Aid Regulation, it should verify the property status and seek the owner's consent only in case of infrastructure investments or construction or renovation works which substantially alter a given property. It appears that the rationale behind this decision is that such investment projects physically alter the property and necessarily affect its status. Other projects which include the financing of socio-cultural activities, such as the activity in the present case, do not affect the existing status of the property as such, and therefore, the ownership status is not verified by the Commission.

20. The complainant interpreted the Commission's approach to mean that only physical alterations to a property constitute breaches of the right to property. The Ombudsman cannot, however, share the complainant's view. The Commission never argued that the right to property only includes protection against physical alterations and excludes protection against unauthorised use. On the contrary, in its opinion on the complaint, the Commission acknowledged the existing violations of property rights in Cyprus due to the deprivation of use following the Turkish occupation of the northern part of Cyprus in 1974. In the Ombudsman's understanding, what the Commission did was to explain its scope of action in complying with Article 7 of the Aid Regulation in relation to projects entailing alterations to a property.

21. In light of the wording of Article 7 of the Aid Regulation, and the need for the Commission to (i) respect the property rights of those concerned and (ii) act in accordance with the relevant case-law of the European Court of Human Rights on the subject, the Ombudsman does not consider the Commission's position to have been unreasonable or unjustified. In fact, not all the actions financed under the Aid Regulation have the same impact on property rights and they therefore do not all call for the same type of measures. In the Ombudsman's view, in case of alterations or any other kind of material modification of an individual's property, the very essence of ownership is directly affected. In such cases, where it is clear that the status of the property is modified, the Commission should always obtain the owner's consent before providing any funds. Conversely, the mere fact of financing an activity, such as the one carried out in the present case by a local NGO, which takes place inside an individual's property does not as such affect the ownership status of that property. Nor does it entail irrevocable changes to the corresponding property rights. Taking into consideration the very difficult situation in which the Commission operates in order to carry out the tasks entrusted to it by the Aid Regulation, the Ombudsman considers it acceptable that in cases such as the present one, the Commission takes the view that it is not required to seek the owner's prior consent in the absence of any construction, renovation or alteration works in respect of the property in question.

22. The Ombudsman concludes, therefore, that by financing activities taking place within the complainant's property, the Commission did not disregard the latter's property rights.

23. The complainant claimed that the Commission should stop any funding towards the EMAA and recover any amount already paid. In this respect, the Ombudsman notes that the Commission could only claim back the amounts paid to the EMAA if the latter were in breach of the applicable legislation or the terms of the grant contract. Since it does not result from the present inquiry that any such breaches occurred, this claim cannot succeed.

24. The complainant also claimed that the Commission should establish more detailed rules regarding the issue of granting aid in the northern part of Cyprus. In the Ombudsman's view, the Aid Regulation gives the Commission a sufficiently clear framework within which to operate. The Commission has established its practices and procedures and has informed the complainant of them on various occasions, both orally and in writing. What the complainant seeks to challenge in the present case is not the existence or the quality of the rules but their interpretation and implementation by the Commission. However, as stated in the preceding paragraphs, the Commission's position not to verify the ownership status of a property if no construction or renovation works are involved is justified and does not contravene Article 7 of the Aid Regulation. The complainant's second claim should therefore also fail.

Conclusion

On the basis of the inquiry into this complaint, the Ombudsman closes it with the following conclusion:

There has been no maladministration.

The complainant and the Commission will be informed of this decision.

 

Emily O'Reilly

Done in Strasbourg on 25 April 2014

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[1] On 27 February 2006, the EU approved Council Regulation (EC) No 389/2006 (the 'Aid Regulation') for the benefit of the Turkish Cypriot community. The Aid Regulation aimed at putting an end to the isolation of this community and at facilitating the reunification of the island. The Commission (DG Enlargement) was responsible for implementing the programme over five years. See Council Regulation (EC) No 389/2006 of 27 February 2006 establishing an instrument of financial support for encouraging the economic development of the Turkish Cypriot community and amending Council Regulation (EC) No 2667/2000 on the European Agency for Reconstruction, OJ 2006 L 65, p. 5.

[2] The implementation period of the project ended on 16 February 2012.

[3] "The Centre was designed and has begun operating within the framework of an European Union grant programme aimed at developing the Turkish Cypriot civil society and bringing the two Cypriot societies closer. The project called EMAA Activity Centre will continue for two years (2010-2012) and involve contemporary art courses organised by EMAA in cooperation with its partner EKATE and aimed at improving the relationships between the two societies through art".

[4] In parallel, the complainant brought the issue to the attention of the European Parliament. In August 2011, a Cypriot MEP submitted a written question to the Commission in this respect. In October 2011, the Commission replied that the EU never financed any renovation or alteration works in respect of the building in question and that in implementing the Aid Programme for the Turkish Cypriot community, the Commission strictly respects the property rights of private owners in line with the relevant Regulation.

[5] See Articles 3(2) and 7(2) of the Aid Regulation.

[6] http://eca.europa.eu/portal/pls/portal/docs/1/15542739.PDF

[7] In this respect, the European Court of Human Rights was called upon to rule on numerous cases regarding property rights violations in the northern part of Cyprus. See, inter alia, Loizidou v Turkey (Just Satisfaction), Application No. 15318/89, 28 July 1998.