RESTRICTED
WORLD TRADE WT/ACC/ALB/17
25September 1996
ORGANIZATION(96-3790)
Original: English
ACCESSION OFALBANIA
Communication from Albania
Thefollowing information onthebasic legalframework forprivatisation inagriculture has
beenreceived from theMinistry ofIndustry Transport andTrade oftheRepublic ofAlbania.
_______________
Basic Legal Framework forPrivatisation inAgriculture
AframeworkforlandprivatisationinAlbaniawasestablishedbyLawNo.7501of19July1991
"Land Law" ,andLawNo.7512 of10August 1992 "OntheSanctioning andProtection ofPrivate
Property, Free Initiative andIndependent Private Activities, andPrivatisation" which declares
agriculture opened toprivate activity.
OnthebasisofLawNo.7501, agricultural landcanbegranted "asproperty oforfortheuse
of"Albanian legalornatural persons, freeofcharge (Article 3)."Families which havebeenmembers
ofanagricultural cooperative havetheright tosecede andoperate ontheirown, becoming owners
oftheagricultural landprovided tothem..." (Article 5).Forthepurposes ofassigning landinownership
orusufruct tophysical orjuridical persons, prior land ownership, itssizeandboundaries
pre-collectivisation isnotrecognised (Article 8).Agricultural landmayonlybeusedforagricultural
purposes (Article 11).Failure toexploit landforagricultural purposes formore thanoneyearmay
leadtowithdrawal oftheright ofuse(Article 15). Agricultural landcanbeinherited according to
inheritance dispositions tobeprovided (Article 25).Land cannot bebought orsold(Article 2)while
"foreign juridical orphysical persons canrentlandtobuild on"(Article 4).
Decision No.266of08August 1991"OntheDistribution oftheAgricultural Cooperatives
Assets" provided forthedistribution oftheproperty andliquidation oftheAgriculture Production
cooperatives (APC 's)andsetouttheprocedures forthedivision ofassets andofanyremaining capital
belonging tothese latter. Onthese basis, "thedistribution ofthemoney equivalents andproducts are
notmade untilevery debtispaid" (paragraph 6a)and,moreover, "ifthecooperative isnotcapable
ofpaying backitsdebts, these debts should becharged toitsmembers inproportion tothelandthey
havereceived (paragraph 6c).
More detailed direction ondistribution offarmland andorchards areprovided inDecision
No.255of08August 1991 "OntheCriteria fortheDistribution oftheAgricultural Land" .On
thebasis ofthisdecision, ex-cooperative landistobedistributed proportionally toeachfamily ona
percapita basis andaccording tothetotalareaoflandavailable inthecooperative. Incooperatives
composed ofseveral villages, thelandisfirsttobebroken upamong thevillage onthepercapita size
basis. Rural residents whoarepermanently working thenon-agriculture sector areonlyeligible to
inuselandequivalent tohalfthesizeallocated tocooperative members. Agricultural landwithin village
residential boundaries isalsoassigned in-use. TheDecision defines thecriteria forthedistributionWT/ACC/ALB/17
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oftheirrigated andnotirrigated landaccording todefined conversion coefficients. Orchards and
vineyards aretobedistributed according criteria which regulate thedistribution ofthearable land.
Aseries ofother decisions anddirectives which supplemented theLand Lawinclude:
- Decision No.229of23July1991 onlivestock distribution;
- Decision No.230of23July 1991 onthe"Creation ofLand Commissions";
- Decision No.256of2August 1991onRegulations fortheRegistration, Changes andTransfers
inState Lands andCadastral Changes;
- Decision No.377of11October 1991onthedismantling oftheMachinery andTractor Stations
andthecreation offirms foragricultural machinery; and
- Decision No.378and379of11October 1991 on,respectively, regulation andreorganising
animal husbandry andveterinary services etc.
Upon"DecisionNo.452of17October1992"RestructuringtheAgriculturalEnterprise(State
Farms)" ,thegovernment went onwithprivatising ex-State Farms '(SFs) land. InSFscreated by
merging several cooperatives together, landwastobedistributed onthebasis ofLawNo.7501 and
Decision No.255regulating theprivatisation ofcooperatives 'land. InSFswhich landwasbenefited
through stateinvestments inreclamation, drainage orexpropriation oflarge estates, former workers
gotusufruct rights buttheState retained ownership onland.1
InApril 1993, twolawsrelating tothecompensation offormer landowners werepassed. Law
No.7698of1April 1993andLawNo.7699of21April 1993. Thefirstprovided fortherestitution
ofnon-agricultural landtoformer owners. Forproperties thathadalready beenprivatised, inparticular
retail outlets andhousing, thelawestablished forlandowners toreceive rentpaidforbytheowners
oftheformer.
LawNo.7699 of21April 1993 "OntheFinancial Compensation ofFormer Owners of
Agricultural Land" recognises former property rights onagricultural landforfinancial compensation
purposes only. Allex-owners aretobecompensated forproperties based onthepre-1945 cadastre
(Article 1).Former owners andtheirheirs, whohavealready received landonthebasisofLaw7501,
areonlyeligible tothedifference between landintheirpossession pre-1945 andareaassigned toin
thelastdistribution (Article 6).Theupper limitoffinancial compensation should innocaseexceed
theequivalent amount paidfor43.5hectares ofland(Article 8/3).
Former owners areentitled to"full" compensation foronly upto15hectares ofland
(Article 8/1); forparcels ofbetween 1100 to15hectares, compensation istobepaidona
decreasing-scale basis (Article 8/2a, b);foranyclaimed areaofover1100 hectares, no
additional compensation willbepaid(Article 8/2c).
Compensation istobepaidbyvouchers fullyguaranteed bytheState, freely transferable and
bondable forcashoratfacevalue infuture sales ofState-owned enterprises. Vouchers aretobe
redeemed through sales ofState property within the31December 1999. After thisdeadline, fora
5yearperiod, theState could compensate theremaining inLei(Article 10). AState Council for
Compensation andDistrict Offices todealwiththepractical sideofdistributing thecompensation was
tobesetup(Article 13).
1Inmostofthecases, beneficiaries weregiven outaformal "in-use" certificate which gavethem
theright tousethelandforandindefinite period without charge. Elsewhere theywere granted
possession ofthelandwithout suchacertificate (Stanfield &Jazo, 1995).WT/ACC/ALB/17
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LawNo.7836"OnthePrice oftheAgricultural landforCompensation Purposes" defined
theprice ofthelandtobeusedforcompensation andalsoprocedures, rulesanddeadlines forformer
owners toclaim theirproperties forcompensation.
Also, related tothis,thedecision oftheGovernment torestitute theoldseaside andtouristic
siteproperties toformer landowners, wasafollow upontheGovernment programme forcompensating
eligible owners. Although itdoesnotspecify which segment ofex-landowners iseligible forsuch
compensation, itisobvious thatformer agricultural landholders aretargeted tobenefit from such
provisions given thaturban ex-owners arealready restituted backtheirproperties or,else,physically
compensated.
Ontheotherhand, although thereform wasbeing implemented rapidly, anumber ofundesirable
effects suchaswildprivatisation, returns tooldboundaries, landrefusal, failure ofjoint-ventures in
agriculture, ruralmigration, administrative slowness, fragmentation, uncertainty overproperty rights
etc.,emerged withtheimplementation ofmeasures backed upwiththeabove-described legaloutput.
Infact,thelegislation response totheproblems emerged atthisstage wasverydynamic. Itbasically
focused oneliminating theadministrative constraints forspeeding uptheagriculture restructuring,
reducing uncertainty and,quite recently, onproviding fullproperty rights andsecurity oftenure and
transactions. Important improvements oftheoriginal Land Law were introduced withitsfirst
amendment,LawNo.7775of07June1995"OnSomeAmendmentstoLawNo.7501of19July1991
onLand" .Thisstipulates that"owners oftheagricultural landarefreetoleaseouttheirplotstoany
localorforeign natural andlegalpersons" (Article 3/a). Itdefines theprocedures anddeadlines for
accepting orrefusing thetitletolanddistributed onthebasisofLawNo.7501beyond which accepting
orrefusing thetitletolanddistributed onthebasis ofLawNo.7501 beyond which landreverses to
theState. Article 8provides stronger grounds foradministrative andlegalmeasures tobetaken in
caseofillegal andcapturing anddevastations. Details ofsuchactions arealsoprovided therewith.
LawNo.7855of29July1994"OnSome Amendments totheLawNo.7501of19July1991
onLand" recognised thenecessity tospeed uptheprocess iflanddistribution which wassubstantially
slowed down duetoadministrative apathy. Itattempts toredefine inmore detail some ofthe
administrative procedures forthecompletion oftherelevant documentation while alsoproviding for
administrative measures tobetaken against whose whodonotactaccordingly.
Toaccelerate theprocess inSFs,onJune121993, theGovernment approved Decision No.275
"OntheTemporary Financial Support fortheFamilies ofState Farm Workers inthePrivatisation
Process" .
Meanwhile, potential solutions tothesizable problem oflandrefusal2have, also,beensought
andassessed inorder tomake therefused landattractive forprivatisation. Suchproblems areaddressed
anddealtwithinthemost recent Lawapproved byParliament (December 1995) whose focus isin
providing alegalbasisforfuture administration ofsuchproperties. Accordingly, "refused agricultural
landdefined assuchbyArticle 1herewith is,after 31March 1996, considered State-owned and
administered bytheDirectorate General ofForestry andPastures under theMinistry ofAgriculture
andFood..." (Article 2).Moreover, thedistrict Directorates ofForestry Services incollaboration
withLand Distribution Commissions havetheauthority to,oncetheprocess ofcompensating the
2MAF data(July 1994) revelthatsome 104385hectares oflandhavebeenrefused bythewould-be
owners mainly because ofbeing marginal, distance from home, personal disputes intheprocess of
redistribution, lackofenthusiasm infarming etc.(Llazar Korra, 1994). Thebulkoftherefused land
is,however, rejected because ofpoorquality andlackofaccess toreliable irrigation water (about
100000hectares according toStanfield, 1995).WT/ACC/ALB/17
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ex-owners ofagriculture landiscomplete: (i)selloutsuchlandtonatural orlegalpersons and/or
(ii)lease ittolocal andforeign natural orlegal persons according topre-defined ratesandcriteria
(Article 4).Noreference is,however, made toanyregulatory provisions forthedefining ofsuch
criteria. Article 5specifies thatanyoftheabove transactions much takeplace complying withthe
Civil Code andLawNo.7843 of13July1994 "OnImmovable Property Registration" .
Thefirststepstoputinplacethepre-requisites ofalandmarket started withtheimplementation
oftheLand Market Action Planbased onDecision No.81of26February 1993 "OntheCreation
oftheCoordinating Group fortheSystem ofLand Ownership Registration" andtheDecision No.505
of26October 1993regarding theaction planforthesystem ofimmovable property registration. This
wasfollowed bytwoother pieces oflegislation enacted in1994, providing forthetaxation ofland
(Law No.7805 ofMarch 1994) ,andforthecreation ofanimmovable Property Registration System
(Law No.7843 of13July1994) .
Theemergence ofalandmarket foragricultural landbased onLawNo.7983of27July1994
"OntheBuying andSelling ofAgricultural Land, Meadows andPastures" ,although notoperational
asyet3,isexpected tocontribute totheremoval ofthefragmentation constraints andtotheestablishment
ofaviable market based agricultural sector inthelongrun.Much willdepend, however, onthespeed
oftheregistration process andtheability offarmers toadopt tothenewsituation. Most recently, new
important stops havebeentaken toencourage realestate transactions bypromoting thecreation ofan
efficient andfunctioning market forsuchtransactions totakeplace. Inparticular, thepassage ofa
recent billpermitting thewithout charge transfer ofrights onfarmlandfrom"in-use" to"in-ownership"
should encourage theconsolidation ofagricultural landholdings away from present fragmentation.
Suchactexcludes fromthisgeneral casethe:(i)agricultural landwithin theyellow line,(ii)agricultural
which, based onDecision No.452of17October 1992"For theRestructuring oftheState Farms" ,
hasbeenassigned inusetothespecialist oftheex-SFs (paragraph 2.5ofsuchdecision, (iii)agricultural
landinpriority areas fortourism development; (iv)illegally captured landorlandobtained through
transfers forwhich nolegal bases forexists; (v)landusedbyfamilies ofindividual withaccrued
financial liabilities tobanks and/or other creditors; (vi)landcontracted byjoint-ventures unless such
acontract isterminated.
3Article 3ofLawNo.7983inhibits transfers ofownership untiltheregistration process iscomplete,
which isimportant forcapturing thetenure security andinvestment benefits ofafunctioning registration
system (Stanfield, 1995). Moreover, theregistration process hasnot,sofar,beeninstitutionalised.