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19.11.2003
Heikki A Reenpää

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[02] Karjalan palautus

INVESTMENT PROTECTION IN THE CEDED KARELIA

COVER LETTER: INVESTMENT PROTECTION IN THE CEDED KARELIA

Please find enclosed our letter which is related to the so called Finnish Karelia and other territories ceded by the Soviet Union because of the last wars.

The sphere of interest of the wars was a consequence of the articles of the secret additional protocol of the Molotov-Ribbentrop Pact in which Finland was counted as one of the Baltic countries. The losses of the wars were immeasurable for Finland: about 84,000 dead, 200,000 wounded, 420,000 refugees, a shame of condemning the so called war criminals, almost exhausting war indemnities and a spiritually disastarous “Finlandizierung”.

Our letter is focused on a very timely question: which legal measures are able to protect present and future investments in these ceded territories from possible restitution and indemnity claims of the rightful owners.

This letter has been sent to about 320 political decision makers and over 1,700 political and financial opinion leaders in 30 countries.

We hope this letter will arise a wide international discussion of the topic, how the private property questions of the former Finnish Karelia and other former communist countries can be solved by a way which satisfies all the involved parties.

We are very grateful for your answers. We are also grafetful if you and your organization will participate the international discussion related to these issues.

Sincerely yours

ProKarelia

Heikki A Reenpää
Professor, spokesperson

Rauno Meriö
Lieutenant general


INVESTMENT PROTECTION IN THE CEDED KARELIA

Background

With regard to the Northern Dimension projects the European Union’s main goal is to revive economic development in Northwest Russia. Finland as a EU member is actively participating in these undertakings, and additionally carries out so-called neighborhood cooperation and bilateral trade with Russia.

According to Department of State the United States objective can be summed up as the following: “the United States Northern Europe Initiative is a sound framework for future United States involvement in Northern Europe; … the United States should continue to support a wide-ranging strengthening of democratic and civic institutions on a regional basis to provide a foundation for political stability and investment opportunities, including cross-border exchanges, in Northern Europe.”

Thus the activities of both the EU and the USA comprise among other things also the development of the so-called Finnish Karelia. Although the Soviet Union and Finland agreed in the Tartu Peace Treaty 1920 that Karelia, Petsamo and some other territories belong to Finland, Finland, as a consequence of the last wars, had to surrender these territories to the Soviet Union.

The League of the Nations condemned the Soviet Union’s attack on Finland in the Winter War. On December 14th, 1939 the League declared the following: “… by its act, the Union of Soviet Socialist Republics has placed itself outside the League of Nations, follows that the Union of Soviet Socialist Republics is no longer a Member of the League.”

Despite the dissolution of the Soviet Union, its successor, Russia, has not returned the ceded Finnish territories nor has it restituted private property to the Finnish owners.

The current Finnish-Russian borders were agreed in a Molotov-Ribbentrop Pact 23.08.1939 and in its secret protocol, according to which the Baltic countries concept includes also Finland: “Article I. In the event of a territorial and political rearrangement in the areas belonging to the Baltic States (Finland, Estonia, Latvia, Lithuania), the northern boundary of Lithuania shall represent the boundary of the spheres of influence of Germany and U.S.S.R.”

The USA and some other countries have not recognized the new borders, based on the Nazi-Soviet Pact, e.g. the Russian-Finnish borders in the ceded territories.

Are investments in the ceded territories protected?

Whilst the EU and the USA hastily invest and encourage their citizens and companies to invest in the ceded territories, they apparently tend disregard that it is crucial to verify beforehand the juridical status of investors and to ascertain whether these investments are legal and enjoy any protection at all.

Certain questions ought to be considered, such as: what are the legal implications, if e.g. a US company invests in Karelia, and the real legal owner of the land or forest sues the company in a US court? Or was such a risk considered when planning and initiating these investments?

Ownership questions in the ceded territories

Finland was forced twice to evacuate its nationals out of Karelia; the first time in 1940 and the second time in 1944. The Soviet Union occupied the territories and encouraged its own citizens to inhabit these areas. The Soviet Union was able to seize about 1/3 of the ceded territories by force. Russia still secures its occupation by military presence.

The Finnish refugees from Karelia had to leave almost all their immovable and movable property behind. Also irreplaceable cultural sites, such as the old Finnish trade city of Vyborg and Vyborg’s medieval stone castle, had to be abandoned.

The refugees’ properties are still in the hands of the occupants. The refugees cannot safely return to their hometowns. Throughout the whole occupation period the expatriates have not sold or otherwise relinquished their property. Therefore, the ownership of private or common property has not been transferred. Current studies have shown that numerous properties have already been and are still being destroyed.

According to the international human rights, e.g. the Universal Declaration of Human Rights, 1948, Article 17: (1) Everyone has the right to own property alone as well as in association with others. (2) No one shall be arbitrarily deprived of his property.”

The refugees have according to the international laws and agreement a full right to their own land.

Legitimacy of the current borders

The borders of the independent Finland were confirmed in the Tartu Peace Treaty in 1920. Furthermore a Non-Aggression Agreement with the Soviet Union confirmed these borders in 1932. The Paris Peace Treaty in 1947 was an imposed peace, in which the Soviet Union with the aid of its western allies attained territories from Finland and forced Finland to pay tremendously high war reparations.

When interpreting the following decisions, its good to keep in mind that the sphere of interest of the Molotov-Ribbentrop Pact considers Finland as one of the Baltic countries.

The US Department of State states as follows: (www.state.gov/r/pa/ei/bgn/3238.htm): ”Treaties signed in 1947 and 1948 with the Soviet Union included obligations and restraints of Finland vis-a-vis the U.S.S.R. as well as territorial concessions by Finland; both have been abrogated by Finland since the 1991 dissolution of the Soviet Union.”

On 13th January 1983 the European Parliament passed a resolution related to the Baltic countries, which can directly be adapted to the ceded Finnish territories: ”... Condemning the fact that the occupation of these formerly independent and neutral states by the Soviet Union occurred in 1940 pursuant to the Molotov/Ribbentrop Pact, and continues, Whereas the Soviet annexation of the three Baltic states has still not been formally recognized by many European states and the USA, Canada, the United Kingdom, Australia and the Vatican still adhere the concept of Baltic states, … ”

The USA on many occasions has clearly pointed out that it did not recognize and still does not recognize the current borders. The US Senate stresses in the 320/10.10.1998 resolution the following: ” … condemning the Nazi-Soviet Pact of Non-Aggression of August 23, 1939.” … Whereas this illegal and forcible occupation was never recognized by the United States …”

The Senate in June 14, 2000 in its Concurrent Resolution referring to the 1940 incidents affirms: ”… Whereas throughout the occupation, the United States maintained that the acquisition of Baltic territory by force was not permissible under international law and refused to recognize Soviet sovereignty over these lands; .. Whereas on July 15, 1940 President Franklin D. Roosevelt issued Executive Order No. 8484, which froze Baltic assets in the United States to prevent them from falling into Soviet hands; Whereas on July 23, 1940, Acting Secretary of State Sumner Welles issued the first public statement of United States policy of non-recognition of the Soviet takeover of the Baltic countries, condemning that act in the strongest terms; …”

In 1991 the Secretary of State, Mr. James Baker, in Moscow clearly expressed the US’s view in this issue. The British Government and Prime Minister Churchill acknowledged Finland’s right to Karelia.

The Presidents of Russia, Mr. Boris Yeltsin and Mr. Vladimir Putin have condemned the Nazi-Soviet pact as well the injustices Finland suffered.

Senator Hillary Rodham Clinton testified in the US Senate on 16th July 2002 e.g. as follows: ”Hearing: Property Restitution in Central and Eastern Europe… Property restitution for American claimants continues to be an issue that must be taken seriously by governments and citizens of Eastern and Central Europe.”

According to ILOG (Internationale Liga der Opfer der Gewaltherrschaft, International league of victims of abuse of power) common international laws such as the Hague Convention 1907, the Versailles Treaty 1919 and the Kellog-Briand Pact 1928 etc.) condemn the confiscation of private property. Recently, UN recommendations as well international and national resolutions urge former communist countries to return illegally seized properties (e.g. United Nations Human Rights Committee of 19th June 1995; resolutions No. 40/34 (1985) and 1998/43 of the United Nations, No. 1096 of the Parliamentary Assembly of the Council of Europe, No. B4-1493/95 of the European Parliament, No. 19 of the U.S. House of Congress, No. 73 Senate Concurrent Resolution and No. 562 of the U.S. House of Representatives). On the 28th October 1999 EP petition No. 437/99, soliciting the European Union to implement as an act of remembrance and respect of Human Rights restitution laws, was declared admissible by the Committee on Petitions of the European Parliament.

Conclusions

Russia still continues to unlawfully and in open violation of human rights as well as international agreements occupy the ceded Finnish territories.

Companies and private citizens who invest in these territories, risk that the vendor of land, forest or building, is not actually the legal owner of the latter, but a stooge who is selling property for another person. It is also likely that a totally different person, company or government body from the one determined in the contract cashes in the profits.

Our questions

We therefore would be very grateful if you as an official representative of your country would be so kind and answer the following questions:

1. Does your country officially recognize the actual borders determined by the Paris Peace Treaty? If it is possible, would you please send us any official documents expressing your countries views on this matter.

2. To what extent is your country willing to resolve the issue of forced ceded Karelia and other territories and mass confiscation of private property in former communist countries?

3. Which legal measures are able to protect present and future investments in these territories from possible restitution and indemnity claims.

We kindly ask you to send your answer to the below mentioned address. We thank you in advance of your kind assistance.

Sincerely yours


ProKarelia

Heikki A Reenpää
Professor, spokesperson

Rauno Meriö
Lieutenant general


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