Ugly expropriation laws only investors can love

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I read this article and dug a little further and was shocked at what I learned.
New Property Expropriation Act + Who is creating the act

Two fundamentals of society, which government should do everything it can to protect are rule of law and the sanctity of ownership of private property. Bad laws, specifically bad property expropriation laws destroy the sanctity of private property. The Croatian government is creating laws which do not benefit the people and is about to destroy the sanctity of private land property ownership in Croatia.

How do you steal land legally?

Part 1. Make a set of laws that define almost any project as a strategic project
- Strategic Investment Act - English analysis - Law in Croatian

Part 2. Create an expropriation law which empowers the government to take property.

The Croatian government passed the first part last year. The Strategic Investment Act was probably very well received as Croatia is in an economic mess. Any investment is good for the economy.

This year the government is working on the Expropriations Act - which has not been made public and there is no public input. It appears that the Expropriations Act is being developed in secret. Why?

As a result of these two acts, Croatian private land property owners have virtually no right to protection of ownership of their private land property.

Under the Strategic Investment Act any project worth at least €20 million, or meets any of 12 vague criteria, can be deemed as strategic and with the new expropriation act the government will be able to take land from private owners and give the land to private developers. Some of the 12 criteria being that the project:
  • employs a larger number of people
  • fulfils international contractual obligations
  • fulfils EU policy obligations.

Question: What expropriation should be used for?

Answer: Expropriation should be used only for national infrastructure or projects devoted to public or civic use.

  • Land should not be taken from private owners and given to private commercial projects.
  • If a private developer wants to develop a project that private developer should negotiate with property owners and purchase the property privately!
  • Let the private developer negotiate a fair price with the private owner - if the private owner wants to sell.

If I was to develop expropriation laws, I would do it as follows:
  • Expropriation is only for public or civic projects
  • Expropriation must be approved by a vote of all landowners within 250-500 meters of expropriation location
  • Value of land must be assessed by an independent third party to assess real market value
  • Value of land will have a premium given to it as the land owner is being asked to sell

The biggest loss to the landowner who has land expropriated is that the owner does not benefit from increases in land value as a result of the development project. Consider this:
  • Prior to the project land value might be about €1 per m2.
  • In a generous payment for expropriated land the landowner is given €2 per m2
  • After development adjacent lands could have a market value of €3 per m2 after the project

Imagine how much lands adjacent to large commercial or tourist projects will appreciate.
Imagine how rich bureaucrats with insider information can get.

Red Flag

If you think the privatizations of the 1990s were bad - wait till you see what will happen from this set of laws! The privatizations put companies of value into the hands of "the connected" - this set of laws will put lands of value into the hands of the connected. The politically connected will get richer without regard to the average person.

If there is anything that needs to be stopped it is this expropriation law!

Ask yourselves why the government did this in a very devious way
in two parts separated by almost a year.

What else worries me about this "Strategic Investment Act" + "Expropriation Law" license to steal is that,
  • as I already said there is no public debate,
  • but most importantly the opposition party in the Croatian Parliament appears to have not informed the people nor do they appear to be working to stop this legislation which is not in the interest of the people.

Croatian government

Zakon o strateškim investicijama ubrzat će procedure i olakšati investicije
Izvješće Odbora za pravsuđe o Prijedlogu zakona o izvlaštenju i određivanju naknade, prvo čitanje, P. Z. br. 598

In the Croatian press

Ministar Miljenić će preuzeti kontrolu svih strateških investicija
Sabor raspravljao o zakonu o izvlaštenju: Hoće li moćnici i dalje otimati građanima koji su dotakli
Ministarstvo pravosuđa: izvlaštenje samo u iznimnim slučajevima
ČUDAN SVAT ORSAT MILJENIĆ: Sorošev stipendist, lažljivac i fiktivni Dubrovčanin

How expropriation is handled elsewhere:

Expropriation Act
Expropriating Land: A Balancing Act

United States
U.S. Code § 2370a - Expropriation of United States property
American Constitution - Fifth Amendment, Taking Clause

Wikipedia - Eminent domain
ExpertLaw - Eminent Domain
Željko Zidarić


  1. Željko Zidarić avatar
    In the United States "Eminent Domain" is the American version of Expropriations.

    Eminent Domain was defined in the US Constitution in the Fifth Amendment. Private real property was protected quite well until 2005 when the U.S. Supreme Court ruled in Kelo v. City of New London that the city of New London could take nonblighted private property by eminent domain for the purpose of increasing municipal revenue.

    After the Supreme Court ruling, states started to pass legislation protecting people rights to their property and curbing the power of eminent domain.

    Forty-two states have enacted legislation or passed ballot measures during 2005 - 2011 in response to the Kelo decision. The laws and ballot measures generally fall into the following categories:
    • Restricting the use of eminent domain for economic development, enhancing tax revenue or transferring private property to another private entity (or primarily for those purposes).
    • Defining what constitutes public use.
    • Establishing additional criteria for designating blighted areas subject to eminent domain.
    • Strengthening public notice, public hearing and landowner negotiation criteria, and requiring local government approval before condemning property.
    • Requiring compensaton at greater than fair market value.

    Eminent domain: Whose land is it anyway?
    Eminent Domain Overview
  2. Željko Zidarić avatar
    The Croatian Constitution

    Article 48 gives property rights

    • The right of ownership shall be guaranteed.
    • Ownership shall imply obligations. Holders of the right of ownership and its users shall contribute to the general welfare.
    • A foreign person may exercise the right of ownership under the conditions specified by law.
    • The right of inheritance shall be guaranteed.

    Article 50 easily takes away property rights.

    • In the interest of the Republic of Croatia, ownership may be restricted or rescinded by law, subject to indemnification equal to the market value of the pertinent property.
    • Free enterprise and property rights may be exceptionally restricted by law for the purposes of protecting the interests and security of the Republic of Croatia, nature and the human environment and human health.

    Article 50 is very vague and all encompassing.

    Also curios is the statement "Ownership shall imply obligations. Holders of the right of ownership and its users shall contribute to the general welfare. "

    What sort of obligation does a property holder have to contribute to the general welfare and what specifically is the general welfare?

    Croatian Constitution - in Croatian

  3. Željko Zidarić avatar
    It appears that the Croatian Constitution was modelled on the German Constitution.

    But notice the huge difference between Croatian and German

    Article 14 [Property, inheritance, expropriation]

    (1) Property and the right of inheritance shall be guaranteed. Their content and limits shall be defined by the laws.

    (2) Property entails obligations. Its use shall also serve the public good.

    (3) Expropriation shall only be permissible for the public good. It may only be ordered by or pursuant to a law that determines the nature and extent of compensation. Such compensation shall be determined by establishing an equitable balance between the public interest and the interests of those affected. In case of dispute respecting the amount of compensation, recourse may be had to the ordinary courts.
  4. Željko Zidarić avatar

    How would I protect property rights in a constitution?

    I am not a lawyer - but you can get the idea.
    I give precedence to the individual over the state.

    Property Rights

    Concept of Property

    Three types of property exist; real, tangible and intangible.

    Ownership of lands and waters (real property) within the boundaries of national territory is vested originally in the Nation, which has had and has, the right to transmit title thereof to private persons, thereby constituting private (real) property.

    Ownership of tangible and intangible property is vested originally in the person that created the property.

    Rights of the Owner

    All persons have the right to ownership and enjoyment of private property. The right to sell, transfer and inherit all types of property is guaranteed.

    The government will not interfere with usage of private property that does not harm other persons. Property owners have ownership of the products of their property.

    The state will protect the property rights of all persons. The state will protect against, but not limited to, depriving of enjoyment, damage, infringement, trespass or theft of private property by other persons and private or public entities.

    Restrictions by the Commons

    Ownership of real property, in exceptional circumstances, may revert to the nation, through a lawful process of expropriation, only for use by the nation for the common good.

    The government may appropriate real or tangible property on a temporary basis in the case of national emergency if the property directly aids in ending the emergency. At the end of the emergency the property reverts back to the pre-emergency owner.

    Property owners will be compensated fairly, without delay, either in equitable real property or at fair market market value plus a 33% premium for the services or ownership of their property - at the discretion of the property owner. Property owners will be reimbursed for costs associated with damages and relocation.

    Usage of property may be exceptionally restricted by law for the purposes of protecting the interests and security of the nation, the natural environment and human health.

  5. Željko Zidarić avatar
    The draft law has been submitted to the Croatian Parliament
    - view here in Croatian


    Article 2

    Property may be expropriated, if other specific law does not say otherwise, when it is necessary for the construction of buildings or works in the interest of Croatia and when it is appraised that the use of the property, which is proposed to be expropriated, will have greater benefits than those that are achieved using this property in the current manner.

    The property within the meaning of paragraph 1 of this Article shall be expropriated for carrying out works or construction of economic infrastructure (transport, electronic communication, water management, energy), cemeteries and other communal infrastructure, health, education, cultural and sports facilities, industrial, energy, transport and electronic communications facilities, buildings for the Croatian judiciary, army and police, exploration and exploitation of minerals and other resources.

    The property within the meaning of paragraph 1 of this article may be expropriated and when it is necessary for construction of other buildings and performing other work in the interest of Croatian or when it is necessary for the realization of strategic projects and construction of strategic facilities.