Judgment of 23 April 1991

A.

1

The constitutional complaints concern the provision contained in the Treaty of 31 August 1990 between the Federal Republic of Germany and the German Democratic Republic on the Establishment of German Unity (Vertrag zwischen der Bundesrepublik Deutschland und der Deutschen Demokratischen Republik über die Herstellung der Einheit Deutschlands – EV; Federal Law Gazette, Bundesgesetzblatt – BGBl 1990 II p. 889; hereinafter: the Unification Treaty), according to which ‘expropriations carried out under occupation law or on the basis of sovereign acts by occupying powers (1945 to 1949)’ cannot be reversed. The constitutional complaint in proceedings 1 BvR 1174/90 is directed against further provisions of the Unification Treaty. The complainants consider the enforcement of their rights regarding the expropriated objects to be adversely affected by these provisions.

I.

2

1. a) In the course of the negotiations on the accession of the German Democratic Republic to the Federal Republic of Germany, the governments of both German states issued a Joint Declaration on the Settlement of Open Property Issues on 15 June 1990 (Gemeinsame Erklärung der Regierungen der Bundesrepublik Deutschland und der Deutschen Demokratischen Republik vom 15. Juni 1990 zur Regelung offener Vermögensfragen; hereinafter: the Joint Declaration), which, inter alia, states:

(…)

In resolving the pending property issues, both governments assume that a socially acceptable balance between different interests must be achieved. Legal certainty and legal clarity as well as the right to property are principles guiding the governments of the German Democratic Republic and the Federal Republic of Germany in resolving the property issues facing them. Only this way can lasting legal peace be guaranteed in a future Germany.

3

The two German governments agree on the following key principles:

4

1. The expropriations under occupation law or on the basis of sovereign acts by occupying powers (1945 to 1949) cannot be reversed. The governments of the Soviet Union and of the German Democratic Republic see no possibility of revising the measures taken at that time. The Government of the Federal Republic of Germany acknowledges this in view of historical developments. It is of the opinion that a final decision on any state equalisation payments must be reserved for a future unified German parliament.

5

2.-14. (…)

6

The Joint Declaration has become part of the Unification Treaty (Art. 41(1) in conjunction with Appendix III of the Treaty, BGBl 1990 II p. 1237 f.), in the framework of which the German Democratic Republic declared its accession to the Federal Republic of Germany with effect from 3 October 1990 (Accession Decision, Beitrittsbeschluss, Bundestag document, Bundestagsdrucksache – BTDrucks 11/7777). The Unification Treaty contains additional provisions on the key principles of the Joint Declaration. The following treaty provisions are of particular importance for the present proceedings:

7

Article 3

8

Entry into force of the Basic Law

9

Upon the accession taking effect, the Basic Law of the Federal Republic of Germany, as published in the Federal Law Gazette Part III, No. 100-1, last amended by the Act of 21 December 1983 (BGBl I p. 1481) shall enter into force in the Länder of Brandenburg, Mecklenburg-Western Pomerania, Saxony, Saxony-Anhalt and Thuringia and in that part of the Land Berlin where it has not been valid to date, subject to the amendments arising from Article 4, unless otherwise provided in this Treaty.

10

Article 4

11

Amendments to the Basic Law resulting from the accession

The Basic Law for the Federal Republic of Germany shall be amended as follows:

12

1.-3. (…)

13

4. The existing text of Art. 135a shall become its section (1). The following section shall be inserted after section (1):

14

‘(2) Section (1) of this Article shall apply, mutatis mutandis, to liabilities of the German Democratic Republic or its legal entities as well as to liabilities of the Federation or other corporate bodies and institutions established under public law that are connected with the transfer of assets of the German Democratic Republic to the Federation, Länder or municipalities, and to liabilities arising from measures taken by the German Democratic Republic or its legal entities.’

15

5. The following new Article 143 shall be inserted into the Basic Law:

16

‘Article 143

17

(1) The law in the territory specified in Article 3 of the Unification Treaty may derogate from provisions of this Basic Law for a period extending no later than 31 December 1992 insofar and so long as disparate circumstances make full compliance impossible. Derogations may not violate Article 19(2) and must be compatible with the principles specified in Article 79(3).

18

(2) Derogations from Titles II, VIII, VIIIa, IX, X and XI shall be permissible for a period extending to no later than 31 December 1995.

19

(3) Notwithstanding sections 1 and 2 of this Article, Article 41 of the Unification Treaty and the rules for its implementation shall also remain in effect insofar as they provide for the irreversibility of acts interfering with property rights in the territory specified in Article 3 of this Treaty.’

20

6. (…)

21

Article 41

22

Settlement of Property Issues

23

(1) The Joint Declaration of 15 June 1990 on the Settlement of Open Property Issues (Annex III) issued by the Government of the Federal Republic of Germany and the Government of the German Democratic Republic shall form an integral part of this Treaty.

24

(2) In accordance with separate legislative arrangements there shall be no return of property rights to real estate or buildings if the real estate or building concerned is required for urgent investment purposes to be specified in detail, particularly if it is to be used for the establishment of an industrial enterprise and the implementation of this investment decision deserves support from a general economic viewpoint, above all if it creates or safeguards jobs. The investor shall submit a plan showing the major features of their project and shall undertake to implement the plan on this basis. The legislation shall also contain arrangements for compensation of the former owner.

25

(3) The Federal Republic of Germany shall not otherwise enact any legislation contradicting the Joint Declaration referred to in section (1).

26

b) In accordance with No. 3 ff. of the Joint Declaration in conjunction with the Act on the Settlement of Open Property Issues (Gesetz zur Regelung offener Vermögensfragen – VermG; BGBl 1990 II p. 1159 – hereinafter: the Property Act), which is contained in Annex II, Chapter III, Subject B, Part I, no. 5 of the Unification Treaty, expropriations without compensation within the territory specified in Art. 3 of the Unification Treaty, which do not fall under the provisions of No. 1 of the Joint Declaration, shall be governed by the principle that expropriated objects are to be returned unless it is impossible to do so due to the nature of the property or natural persons have acquired ownership or rights of use in rem in good faith in the meantime (§§ 3(1), 4 Property Act). Provided that they have remained ‘comparable’,companies must also be returned, with compensation required for significant changes in the assets or earnings situation (§ 6 Property Act). Where a return in accordance with these provisions is not possible, monetary compensation is to be paid in accordance with § 6(7), §§ 9 f. of the Property Act. Regarding the cases set out in § 4(1) and (2) of the Property Act, such monetary compensation must be specified by law.

27

In accordance with Art. 41(2) of the Unification Treaty in conjunction with the Act on Special Investments in the German Democratic Republic (Gesetz über besondere Investitionen in der Deutschen Demokratischen Republik – DDR-IG; BGBl 1990 II p. 1157), as contained in Annex II, Chapter III, Subject B, Part I, no. 4 of the Unification Treaty, dispositions of formerly expropriated properties and real estate are possible to promote investments. The former owners may claim the proceeds or, if these are significantly lower than the market value, compensation. In the meantime – after the oral hearing – these provisions have been amended by the Act to Remove Obstacles to the Privatisation of Companies and to Promote Investment (Gesetz zur Beseitigung von Hemmnissen bei der Privatisierung von Unternehmen und zur Förderung von Investitionen) of 22 March 1991 (BGBl I p. 766). In order to facilitate investment, the possibilities of receiving compensation have been further restricted, but have, in principle, been retained.

28

c) The legislative bodies have approved the Unification Treaty by way of the Act of 23 September 1990 regarding the Treaty of 31 August 1990 between the Federal Republic of Germany and the German Democratic Republic on the Establishment of German Unity – Unification Treaty Act – and the agreement of 18 September 1990 (Gesetz vom 23. September 1990 zu dem Vertrag vom 31. August 1990 zwischen der Bundesrepublik Deutschland und der Deutschen Demokratischen Republik über die Herstellung der Einheit Deutschlands – Einigungsvertragsgesetz – und der Vereinbarung von 18. September 1990; BGBl II p. 885), which is challenged by the constitutional complaints. According to its Art. 45(1), the Treaty has remained in force as federal law after the accession became effective.

29

2. The foreign policy conditions for the establishment of German unity were created by the so-called Two-Plus-Four Talks between the two German states and the four victorious (and former occupying) Allied Powers, which led to the conclusion of the Treaty of 12 September 1990 on the Final Settlement with Respect to Germany (Vertrag vom 12. September 1990 über die abschließende Regelung in bezug auf Deutschland; BGBl 1990 II p. 1318 ff.). According to Art. 7 of the Treaty, the four powers terminate their rights and responsibilities relating to Berlin and to Germany as a whole. As a result, the united Germany has full sovereignty over its internal and external affairs. At the time of the oral hearing, the Treaty had not yet been ratified by all contracting parties. The Foreign Ministers of the Allied Powers had, however, signed a declaration relating to the Treaty on behalf of their governments, according to which the effectiveness of their rights and responsibilities relating to Berlin and to Germany as a whole were suspended with effect from the time of the unification of Germany until the time of the entry into force of the Treaty (BGBl 1990 II p. 1331). The Treaty has now entered into force (BGBl 1991 II p. 587).

30

In connection with the signing of the Treaty, the Foreign Minister of the Federal Republic of Germany and the acting Foreign Minister of the German Democratic Republic, in a Joint Letter to the Ministers of Foreign Affairs of the four Allied Powers ([...]), confirmed that the governments of both German states had shown in their negotiations for this Treaty that they had enacted the framework set out by No. 1 of the Joint Declaration of 15 June 1990 and in Art. 41(1) and (3) of the Unification Treaty.

II.

31

According to the explanations of the Federal Government regarding the Act on the Settlement of Open Property Issues (BTDrucks 11/7831), the majority of expropriations under occupation law or on the basis of sovereign acts by occupying powers, which are generally not reversed, are expropriations without compensation in the industrial sector in favour of the Länder of the former Soviet-occupied zone or as part of Soviet reparation measures and expropriations in the agricultural sector as part of the so-called democratic Land Reform (Bodenreform). With regard to the legal character of the expropriations, the explanations differentiate between expropriations ‘under occupation law’ or ‘on the basis of sovereign acts by occupying powers’ by determining whether the expropriations were formally based on corresponding orders or instructions of the Soviet Military Administration in Germany (sowjetische Militäradministration in Deutschland – SMAD) or on legal or sovereign acts of the Länder of the former Soviet occupation zone and of municipal authorities of the Soviet sector of Berlin (BTDrucks 11/7831, pp. 1, 3).

32

1. The land reform in the Soviet-occupied zone was based on provisions issued, with largely identical content, in September of 1945 by the Land and provincial administrations established by the Soviet occupying forces ([...]). According to the preamble of the legal framework, its purpose was to fulfil the demands of the working farmers for a fair distribution of land, to liquidate the vast estates of the landed gentry of eastern Germany and to allocate land to those farmers and agricultural workers with little or no land, including those who had moved from the east.

33

a) According to the framework on the land reform – for which the provisions of the Ordinance on the Land Reform (Verordnung über die Bodenreform – BRVO) of the Province of Saxony of 3 September 1945 ([…]) are cited as an example in the following – the property of war criminals and leading and active National Socialists, but also all private large-scale land holdings of more than 100 hectares in size, together with all agricultural assets located on it, was expropriated without compensation (Art. II nos. 2 and 3 Ordinance on the Land Reform). The expropriated property was transferred into a state-owned pool of land (Bodenfond, hereinafter: the land fund) in which the state-owned property was also included (Art. II nos. 1 and 4 Ordinance on the Land Reform). From the land fund, plots of land were given to farmers, agricultural workers, fugitives and resettlers with little or no land. The allocated area of land was not to exceed five hectares and, in cases where the quality of the land was poor, ten hectares (Art. IV nos. 6, 8 and 9 Ordinance on the Land Reform). Parts of the expropriated property remained in public ownership (Art. IV nos. 10 and 14 Ordinance on the Land Reform). For the allocated land, the recipients had to pay a sum equal to the value of one annual harvest (Art. V no. 1 Ordinance on the Land Reform). The newly created agricultural businesses could not be divided, sold, leased or mortgaged, either in whole or in part (Art. VI no. 1 Ordinance on the Land Reform).

34

Commissions at the municipal, district and Land level were responsible for implementing the land reform (Art. IV no. 2 and 3 Ordinance on the Land Reform). The dispossessed owners were usually forced to leave the district in which they had formerly had their property. They often had to leave their farm within a matter of hours and were only allowed to take the bare necessities with them ([...]). There was no legal recourse against the measures ([...]). There was also no legal recourse against the designation as a war criminal or active National Socialist.

35

b) The Federal Minister of Justice stated ([...]) that in the course of the land reform, the following agricultural businesses and land were transferred to the state-owned land fund (later referred to as the publicly-owned land fund) until the end of 1948:

Type of business	Number of businesses	Area in hectares
Total	13 699	3 225 364
Private Property exceeding 100 ha	7 112	2 504 732
Private Property of less than 100 ha	4 278	123 868
State-owned property	1 203	329 123
Public land management companies and institutions	129	18 321
Publicly owned forests	373	161 269
Other property	604	88 051

36

The total area transferred to the land fund comprised approximately one third of the total area of the approximately 9.5 million hectares that made up the agricultural farmland and woodland of the Soviet occupation zone. Around 1.1 million hectares of land from the land fund were transferred into popular ownership (Volkseigentum); the remaining area was distributed in the manner explained above.

37

Subsequently, parts of the distributed land were returned to the land fund for different reasons. In the course of the collectivisation of agriculture, which began in 1952, the remaining farmers were increasingly encouraged to join agricultural production cooperatives ([...]). Joining an agricultural production cooperative did not formally change the ownership rights, but led to restrictions regarding the right of disposal of the property and granted the agricultural production cooperative comprehensive rights of use ([...]). According to information provided by the Federal Minister of Justice, roughly 87 per cent of the total agricultural farmland was farmed by agricultural production cooperatives and 7.5 per cent by publicly owned estates in 1989.

38

c) The Act of the German Democratic Republic on the Rights of Owners of Land Redistributed Under the Land Reform of 6 March 1990 (Gesetz der Deutschen Demokratischen Republik vom 6. März 1990 über die Rechte der Eigentümer von Grundstücken aus der Bodenreform; Law Gazette of the German Democratic Republic, Gesetzblatt der Deutschen Demokratischen Republik – GBl I p. 134) repealed all restrictions on the rights of disposal imposed by the land reform ordinances on those landowners who had been allocated land through the land reform. From then on, property allocated through the land reform was equal to personal property under the Civil Code of the German Democratic Republic (Zivilgesetzbuch der Deutschen Demokratischen Republik). The Civil Code and the Ordinance on Dealings in Land (Verordnung über den Verkehr mit Grundstücken) were declared applicable to the right of posession, use and disposal of property.

39

On 29 June 1990, the Act on the Structural Adaptation of Agriculture to the Social and Ecological Market Economy in the German Democratic Republic (Gesetz über die strukturelle Anpassung der Landwirtschaft an die soziale und ökologische Marktwirtschaft in der Deutschen Demokratischen Republik – LAnpG; hereinafter: the Agricultural Adjustment Act; GBl I p. 642) was enacted. It remained in force in accordance with Art. 9(2) in conjunction with Appendix II, Chapter VI, Subject A, Part II of the Unification Treaty (BGBl 1990 II p. 1204). The Act allows the conversion of cooperative institutions, the conversion of agricultural production cooperatives into registered cooperatives, the dissolution of agricultural production cooperatives and the creation of individual farming and gardening businesses. § 43 of the Agricultural Adjustment Act grants all members of agricultural production cooperatives the right to terminate their membership for the purpose of creating such businesses. According to § 45 of the Agricultural Adjustment Act, the termination of the membership leads to the withdrawing member generally regaining their full rights of disposal of the property and direct ownership of the land they have entered into the cooperative and of their farmstead.

40

The further fate of the publicly owned property was governed by the Privatisation and Reorganisation of Publicly Owned Assets Act of 17 June 1990 (Gesetz zur Privatisierung und Reorganisation des volkseigenen Vermögens vom 17. Juni 1990 – Treuhandgesetz, Trusteeship Act; GBl I p. 300), which remains in force according to Art. 25 of the Unification Treaty. In principle, the publicly owned property is to be privatised unless it is to be transferred to public ownership in the cases set out in the Act (§ 1(1) of the Trusteeship Act). For the privatisation and reorganisation of publicly owned assets in agriculture and forestry, the trusteeship must be set up in a way that reflects the specific circumstances of the sector concerned.

41

According to the Act on the Transfer of Publicly Owned Property, State Forestry Enterprises and Other Publicly Owned Agricultural and Forestry Enterprises into the Ownership of the Länder and Local Authorities of 22 July 1990 (Gesetz über die Übertragung volkseigener Güter, staatlicher Forstwirtschaftsbetriebe und anderer volkseigener Betriebe der Land- und Forstwirtschaft in das Eigentum der Länder und Kommunen; GBl I p. 897), such properties are generally transferred to the ownership of the Länder or the local authorities (§ 1(1), § 4). The Act on the Transfer of Ownership and Lease of Publicly Owned Agricultural Land to Cooperatives, Members of Cooperatives and Other Citizens (Gesetz über die Übertragung des Eigentums und die Verpachtung volkseigener landwirtschaftlich genutzter Grundstücke an Genossenschaften, Genossenschaftsmitglieder und andere Bürger; GBl I p. 899), also enacted on 22 July 1990, governs the sale, lease and other utilisation of publicly owned agricultural and forested land in the possession of cooperatives or individual persons (§ 1 of the Act). This Act remains in force in accordance with Art. 9(2) in conjunction with Appendix II, Chapter VI, Subject B, Part II of the Unification Treaty (BGBl 1990 II p. 1204).

42

2. Expropriations without compensation in the commercial sector were carried out on the basis of orders or instructions of the Soviet Military Administration in Germany.

43

By Order No. 124 of 30 October 1945 ([...]), the Soviet Military Administration in Germany ordered the sequestration of such property located in the Soviet occupation zone, which belonged to

44

a) the German government and its central and local authorities,

45

b) officials of the Nationalsozialistische Deutsche Arbeiterpartei (NSDAP), its leading members and ‘prominent’ followers,

46

c) German military authorities and organisations,

47

d) associations, clubs and organisations which were dissolved or prohibited by the Soviet military command,

48

e) members of the governments and citizens (physical and legal persons) of the countries which participated in the war on the side of Germany and

49

f) persons who were identified by the Soviet military command on special lists or in another way.

50

Pursuant to the instructions issued in this regard ([…]), all real estate and commercial, industrial, agricultural and other enterprises of economic nature, together with all their equipment and their fixed and current assets, were subject to sequestration and temporary administration from 30 October 1945. By Order No. 126 of 31 October 1945 ([...]), the assets of the NSDAP, its bodies and its associated organisations, which were identified in a special list, were confiscated.

51

According to Order No. 97 of the Soviet Military Administration in Germany of 29 March 1946 ([...]), all sequestered and confiscated assets of the National-Socialist state, its central organs and the central organs of its organisations were to be transferred to the German administrative authorities “for their own responsibility”; the remaining confiscated property was to be made available in part – in accordance with special lists – to the provincial self-administration authorities for the needs of the urban and rural self-governing administrations, certain organisations and the part of the population which had been adversely affected by the war. On the basis of a list attached to Order No. 167 of 5 June 1946 ([...]), the assets identified in this list were transferred to the property of the USSR as part of its reparation claims.

52

In the Land Saxony, the expropriations subsequently carried out in the individual Länder and provinces were based on an act that had been adopted by referendum on 30 June 1946 with 77.6 per cent of the votes cast ([...]). In the other Länder and provinces, corresponding ordinances were later passed without referenda ([...]). The legal framework in Brandenburg, Mecklenburg-West Pomerania and Thuringia each referred to an order passed with respect to the expropriated businesses by the Soviet military administration of the respective Land or province. In all cases, the expropriations were carried out for the benefit of the Land or province and without compensation. No judicial review of the measures was available. By Order No. 64 of 17 April 1948 ([...]), the Soviet Military Administration in Germany stated that Order No. 124 had been executed. At the same time, it confirmed the expropriations that had been carried out and determined that the property in popular ownership was inviolable ([...]).

53

The expropriations of businesses in the Soviet sector of Berlin were based on a different legal framework. Similarly, banks, insurance companies, mining businesses and energy suppliers were nationalised ([...]).

54

The expropriation of private businesses did not only affect leading National Socialists. However, even where this was not the case, there was no possibility of judicial review.

55

As the Federal Minister of Justice stated, it follows from the so-called List A, which had been drawn up by the German Economic Commission and was confirmed by the aforementioned Order No. 64, that a total of 9,870 industrial and commercial enterprises, including workshops and stores, in the Soviet-occupied zone had been expropriated. A considerable part of the inventory of these businesses was disassembled and taken to the Soviet Union.

56

The publicly owned businesses, and other legally independent economic entities which resulted from these expropriations, are now governed by the privatisation provisions of the aforementioned Trusteeship Act of 17 June 1990, which remains in force according to Art. 25 of the Unification Treaty.

III.

57

According to the submissions of the complainants, the initial facts of the case are as follows:

58

1. The complainant in proceedings 1 BvR 1170/90 submits that he, together with his cousin, is the heir of his grandfather, who was the owner of a piece of land in Saxony-Anhalt. On this piece of land, the complainant’s grandfather and father, who had died before the complainant's grandfather, had run a fashion and clothing store. On the basis of Order No. 124 of the Soviet Military Administration in Germany of 30 October 1945, the part of the business that had belonged to the complainant’s father, who had been an Obersturmbannführer of the SA, had been expropriated and transferred into popular ownership in 1946. Subsequently, based on a directive regarding Order No. 64 of the Soviet Military Administration in Germany of 17 April 1948, the entire business – including the part that was owned by the grandfather – had been expropriated.

59

2. In proceedings 1 BvR 1174/90, complainants nos. 1 to 10 and no. 12 claim that they have been affected by expropriations in the course of the land reform either as owners of agricultural property in the Soviet-occupied zone or as legal successors of such property owners. Complainants nos. 6 and 10 state that the expropriated property amounted to less than 100 hectares (approximately 96 and 86 hectares respectively). In the other cases, the size of the expropriated property is stated to have been between 104 and 1000 hectares.

60

Complainant no. 11 claims that he is the heir of a former owner of an impregnation plant and sawmill in Brandenburg, which had been seized and subsequently expropriated on the basis of Order No. 124 of the Soviet Military Administration in Germany.

61

3. The complainant in proceedings 1 BvR 1175/90 states that he was the owner of 237 hectares of agricultural property in Saxony-Anhalt, which has been expropriated and transferred into popular ownership in the course of the land reform.

IV.

62

1. With the constitutional complaints in proceedings 1 BvR 1170/90 and 1 BvR 1175/90, whose legal arguments are essentially the same, the complainants request that

63

Art. 1 of the Unification Treaty Act be declared unconstitutional to the extent that it approves the provisions of Art. 4 no. 5 in conjunction with Art. 3 and Art. 41 and Appendix III of the Unification Treaty, according to which expropriations under occupation law or on the basis of sovereign acts by occupying powers within the territory of the Länder of Brandenburg, Mecklenburg-Western Pomerania, Saxony, Saxony-Anhalt and Thuringia and in that part of the Land Berlin in which the Basic Law was not valid to date, cannot be reversed.

64

The complainants claim that Art. 14(1), Art. 19(2), Art. 3(1) and Art. 20(3) of the Basic Law have been violated. They argue as follows:

65

With the entry into force of the act of approval, the legal system expressly recognised as final the expropriations carried out between 1945 and 1949. Thus, the complainants were prevented from asserting claims for restitution against the current legal owners or the state. According to the complainants, this violates their right under Art. 14(1) of the Basic Law. Even though the expropriations of the complainants had taken place prior to the creation of the German Democratic Republic and the Federal Republic of Germany, there had been an expropriable legal position of the complainants at the time of entry into force of the act of approval. The complainants claim that the expropriations were aimed at the establishment of socialism and a complete transformation of the existing social and economic system and had not taken place in the interest of the Soviet occupying forces but rather in the alleged interest of Germans. Since the expropriations were at most an indirect consequence of the war, the situation is not comparable to the exceptional situations assumed by the Federal Constitutional Court with regard to the consequences of war. The complainants assert that this applies in particular in cases like the present one, in which a restitution of the expropriated assets is in fact possible.

66

They further contend that it does not become clear whether the equalisation payment provided for in Appendix III of the Unification Treaty constitutes compensation within the meaning of Art. 14(3) second sentence of the Basic Law. Furthermore, it only constitutes a non-binding statement of intent. The complainants argue that the complete exclusion of both the restitution of ownership and the compensation is incompatible with Art. 19(2) of the Basic Law. The fact that the Constitution-amending legislative organs themselves certify the constitutionality of their actions by inserting Art. 143(3) into the Basic Law violates the principle of the separation of powers.

67

The complainants further assert that the challenged provision violates the general guarantee of the right to equality because it differentiates between expropriations under occupation law and expropriations on the basis of sovereign acts by occupying powers on the one hand and expropriations based on governmental measures of the organs of the German Democratic Republic on the other. According to the complainants, no justification for such differentiation exists.

68

2. In proceedings 1 BvR 1174/90, the complainants claim that Art. 1 of the Unification Treaty Act is unconstitutional to the extent that it approves the following provisions (the designation is reproduced according to the wording of the constitutional complaint):

69

1. Art. 4 no. 4 (amendment of Art. 135a of the Basic Law) in conjunction with Art. 45 of the Unification Treaty (Protocol I 4);

70

2. Art. 4 no. 5 (insertion of Art. 143 of the Basic Law, particularly its section (3)) in conjunction with Art. 45 of the Unification Treaty (Protocol I 4);

71

3. Art. 25 of the Unification Treaty (to the extent that the federal trust agency remains tasked to privatise publicly-owned businesses) in conjunction with the Trusteeship Act of 17 June 1990;

72

4. Art. 41 of the Unification Treaty (Settlement of Property Issues);

73

5. Art. 45 of the Unification Treaty in conjunction with its Appendix II, Chapter VI, Subject B, Part II, 1 (continued application of the Act of the German Democratic Republic of 22 July 1990);

74

6. Art. 45 of the Unification Treaty in conjunction with its Appendix II, Chapter III, Subject B, Part I, 1 (continued application of the Act on Special Investments);

75

7. Art. 45 of the Unification Treaty in conjunction with its Appendix II, Chapter III, Subject B, Part I, 2 (Act on the Settlement of Open Property Issues);

76

8. Supplementary Agreement of 18 September 1990 (Zusatzvereinbarung vom 18.9.1990), to the extent that its No. 6 of Chapter III provides that the Rehabilitation Act of 6 September 1990 (Rehabilitierungsgesetz; GBl No. 60 p. 1459) continues to apply subject to certain conditions.

77

The complainants claim that their fundamental rights under Art. 3(1), Art. 14 and Art. 2(1) in conjunction with Art. 1, Art. 20 and Art. 79(3) of the Basic Law have been violated and argue, insofar as their submissions do not correspond to the ones of the other complainants (see 1. above), as follows:

78

a) The challenged provisions incorporate the communist acts of injustice and arbitrariness of the land reform into the constitutional system of the Federal Republic of Germany as a ‘historical development’ and even seeks to make it constitutional. The complainants claim that in this respect, they give rise to an inherent forfeiture of fundamental rights. The complainants assert that expropriations without compensation carried out in the course of the land reform never constituted concluded factual events. An expropriation can only be considered to be concluded if the appropriation it involves has been completed and the dispossessed individual has been duly compensated. It is not concluded by a mere seizure of the asset. If the purpose of the expropriation cannot be realised or is illegitimate, the expropriation needs to be reversed.

79

According to the complainants, the creation of a socialist society through the destruction of the existing structures was not justified by any kind of benefit, neither in terms of the envisaged goal nor in terms of the chosen means (personal prosecution). The complainants contend that the exclusion of the restitution of the property can also not be justified on the grounds that it is a prerequisite for the conclusion of the Unification Treaty. They claim that it has neither been plausibly asserted nor proven that the negotiating partners on the part of the German Democratic Republic and the Soviet Union had been intransigent in this respect. This is also supported by the fact that the Federal Republic of Germany only took note of the position of the German Democratic Republic and the Soviet Union. Since approximately 70 per cent of the property expropriated in the course of the land reform remains in popular ownership or in the ownership of cooperatives, the vast majority of the property could easily be returned to the former owners. With this in mind, the complainants argue that it is the Federal Republic which has appropriated the land without compensation. The expropriations only served the fight against large-scale land ownership and self-employed farmers. If ownership is instrumentalised as a weapon in this way, the individual becomes an object of state control. Accordingly, the complainants claim, the system of the legalisation of land reform measures in the provisions identified as the subject matter of the complaint in nos. 3, 4, 5 and 6, also violates Art. 14(1) and (3) of the Basic Law.

80

The complainants further contend that even if the exclusion of restitution claims was constitutional, the provision according to which only equalisation payments were to be considered, but no full compensation was to be granted would in any case violate Art. 14(3) of the Basic Law. The term ‘equalisation payments’ clearly refers to the case-law of the Federal Constitutional Court on reparation payments. According to the complainants, however, this case-law is not applicable to the case at hand – neither directly nor indirectly. The reparation measures of the Allied Powers had nothing in common with the land reform in the former Soviet occupation zone. The aforementioned case-law of the Federal Constitutional Court is dominated by the fact that the early post-war period could not immediately be measured against the standards of the Basic Law and that the economic capacity of the Federal Republic had to be taken into account. The complainants assert that the current situation is not comparable. They contend that the German legislator now penalises a development that began in 1945 but was subsequently continued in the 1950s and 1960s. They also state that this by no means places an intolerable burden on the Federal Republic of Germany.

81

b) To the extent that the complainants assert a violation of Art. 3(1) of the Basic Law, the legal provisions identified in nos. 4, 7 and 8, which provide restitution and compensation claims (only) for a certain group, (also) form part of the constitutional complaint. They contend that property owners who had lost their property in the first phase of the collectivisation of agriculture in the former German Democratic Republic (1945 to 1949) had not been granted restitution claims; they would – at best – receive equalisation payments in the future. In contrast, property owners who had lost their property during a later phase of the collectivisation of agriculture, were in all cases granted a compensation claim and could, if certain prerequisites were fulfilled, be granted a restitution claim. This difference is even more striking for owners of commercial enterprises. The complainants argue that no justification exists for this unequal treatment. It could be asked why the persons affected during the first phase, who had suffered disproportionately from violent displacement, had not been treated more favourably than the persons affected during the second phase. This difference in treatment can also not be justified by the creation of a second German state in the autumn of 1949. At least in the period up to the final completion of the collectivisation of agriculture in the former German Democratic Republic, no gradual difference exists in the assignment of Central Germany to Soviet power.

82

c) The complainants further contend that insofar as the Unification Treaty Act attempted to protect fundamental rights from the identified violations by amending the Constitution, such constitutional amendments are unconstitutional. They allege that the land reform measures were unlawful acts which, precisely by being upheld by the Unification Treaty Act, had turned the affected persons into mere objects of state power. Art. 143(3) of the Basic Law, new version, in conjunction with Art. 41(1) and (3) of the Unification Treaty renders ineffective Art. 1(1) of the Basic Law, which belongs to the ‘eternity part’ of Art. 79(3) of the Basic Law.

83

According to the complainants, the amendment of the Constitution contained in Art. 4 no. 4 of the Unification Treaty is also unconstitutional. The unity of the Constitution makes it necessary to interpret the authorisation of Art. 135a(2) of the Basic Law (new version) in the sense that claims for compensation are excluded and only equalisation payments may be granted in the case at hand. The resulting impairments of fundamental rights face the same limitations as Art. 143(3) of the Basic Law.

V.

84

The Federal Government and the Presidents of the Federal Court of Justice (Bundesgerichtshof) and the Federal Administrative Court (Bundesverwaltungsgericht) submitted statements on the constitutional complaints. The Federal Minister of Justice provided information on the actual course of events, which has been taken into account in the facts of the case.

85-92

[…]

93

2. The President of the Federal Court of Justice has communicated statements of the presiding judges of the Third and Fifth Civil Division:

94

[…]

95

The Fifth Civil Division of the Federal Court of Justice commented on the question whether the requisition of a plot of land by the British occupying forces in order to house members of the occupying forces in 1946 and the inactivity of the German authorities regarding the elimination of such a requisition constituted expropriations within the meaning of Art. 14 of the Basic Law. [...]

96

3. The President of the Federal Administrative Court communicated a statement of the Fourth Division deciding on appeals on points of law. [...]

VI.

97

During the oral hearing, the Federal Minister of Justice Dr. Kinkel, the former Minister-President of the German Democratic Republic de Maizière and the State Secretary at the Federal Foreign Office Dr. Kastrup made statements on the course of the negotiations leading up to the Unification Treaty and the Treaty on the Final Settlement with Respect to Germany.

B.

98

The constitutional complaints are admissible.

I.

99

1. The domestic act of approval of an international treaty (Art. 59(1) of the Basic Law) may be challenged with a constitutional complaint if the treaty contains provisions that directly affect the legal sphere of the individual (cf. Decisions of the Federal Constitutional Court, Entscheidungen des Bundesverfassungsgericht – BVerfGE 6, 290 <294 f.>; 40, 141 <156>). The same applies to acts of approval of treaties between the Federal Republic of Germany and the German Democratic Republic, even though the German Democratic Republic was not a foreign country under the Basic Law (cf. BVerfGE 36, 1 <13, 17, 23>).

100

2. According to the statements made by the complainants, they are all affected by the challenged provision, the substance of which must be determined by the Federal Constitutional Court. The aforementioned expropriations are expropriations under occupation law or on the basis of sovereign acts by occupying powers.

101

To the extent that the expropriations are based on a sequestration according to Order No. 124 of the Soviet Military Administration in Germany – as is the case for the complainant in proceedings 1 BvR 1170/90 and for complainant no. 11 in proceedings 1 BvR 1174/90 – they are only in part based on occupation law, because the expropriations were directly imposed by German legislative bodies (cf. A II 2 above). They were, however, based on sovereign acts by occupying powers, as they have been deliberately facilitated by acts of the Soviet occupying forces and were essentially based on their decision. The German authorities would not have had the possibility to obtain access to the assets sequestered by the occupying forces if the occupying forces had not made these objects available to them for this purpose. The decisive influence of the occupying forces is also exemplified by the fact that in its Order No. 64 of 17 April 1948, the Soviet Military Administration in Germany expressly confirmed the expropriations which had been carried out. The character of the expropriation as based on sovereign acts by occupying powers is neither excluded by the fact that German authorities consented to and cooperated on the measures, nor by the fact that the expropriations in question were not carried out for the benefit of the occupying forces. This is different from cases in which the occupying forces avail themselves of reparation payments.

102

If one were to rely solely on the wording, it could be doubtful whether the expropriations carried out in the context of the land reform are governed by the challenged provision. The legal provisions on which the land reform was based were enacted solely by German legislative bodies (cf. A II 1 above). It cannot be ascertained whether and, if so, to what extent the Soviet occupying forces issued instructions on the implementation of the land reform or exerted pressure in this regard. While reports exist that the provisions regarding the land reform were based on a Russian language draft ([...]), this cannot be confirmed with certainty.

103

Nonetheless, because the course of events shows that the measures were not only accepted by the Soviet occupying forces, but rather corresponded to their declared will, the land reform must also be categorised as a measure based on sovereign acts by occupying powers. This is particularly evident from the fact that by order of 22 October 1945 ([…]), the Soviet Military Administration in Germany declared the provision, which had been issued by the provincial and regional administrations it had set up, and to which it had not yet formally granted any legislative authority, to be ‘legally binding’, thereby expressly confirming the provisions on the land reform.

104

The course of the treaty negotiations for the establishment of German unity and the materials available on this subject also prove beyond doubt that the provision in question is to be understood in this sense, in accordance with the intent of the parties to the Unification Treaty and of the Soviet Union, which was involved in the unification process through the Two-Plus-Four Talks. In the oral hearing, Federal Minister Dr. Kinkel and former Minister-President de Maizière, who were both important actors in the treaty negotiations, confirmed that maintaining the ownership structures established by the land reform constituted a key request of the German Democratic Republic. This request was in conformity with the position of the Soviet Union. In the oral hearing, this was confirmed by the statements made by State Secretary Dr. Kastrup and can further be inferred from the statement of the Soviet government published through TASS on 27 April 1990 as well as from the aide-mémoire delivered to the German embassy in Moscow on 28 April 1990.

105

In view of the above, the challenged provision is to be understood in the sense explained by the Federal Government during the legislative process (cf. A II before 1 above). It covers not only those expropriations which were directly initiated by the Soviet occupying forces, but also the expropriations carried out in the course of the land reform. The timeframe (1945 to 1949) included in No. 1 first sentence of the Joint Declaration further shows that it is not decisive for the categorisation of the expropriations in question whether these took place in the early post-war years – as was usually the case; rather, later expropriations without compensation in the period until the formation of the German Democratic Republic which were based on the aforementioned principles were also to be included. This even applies to expropriation measures in which the relevant legal bases have been interpreted excessively or have been applied arbitrarily according to the standards of the rule of law. Even if they were carried out solely and directly by German authorities, they were ultimately based on sovereign acts by occupying powers, because the occupying forces still held supreme sovereignty at that time.

II.

106

The complainants have sufficiently shown to what extent they consider their fundamental rights to be directly affected by the challenged provision (§ 92 of the Federal Constitutional Court Act, Bundesverfassungsgerichtsgesetz – BVerfGG). This also applies insofar as the complainants assert a violation of Art. 14(1) first sentence of the Basic Law. They argue that the expropriation measures under the challenged provisions – even if they did not take place under the Basic Law – constitute an injustice of such magnitude that the public authority of the Federal Republic of Germany, which is bound by the Basic Law, cannot accept it and should not be able to codify it by way of a constitutional amendment. Whether or not this is correct must be determined when assessing the merits of the constitutional complaint.

III.

107

The complainants consider the adverse effect to be the codification of the expropriations. It is a direct part of the challenged provision.

108

[…]

C.

109

The constitutional complaints are unfounded.

I.

110

The constitutional complaint of complainant no. 11 in proceedings 1 BvR 1174/90 must be rejected. While he conclusively asserts to be individually, presently and directly affected by the challenged provision, he failed to sufficiently demonstrate this. If a constitutional complaint challenges legislation and there has therefore been no prior review of whether the complainant is individually, presently and directly affected, the facts that show them being affected must be sufficiently substantiated in the constitutional complaint proceedings (cf. the order in the proceedings concerning the applications for preliminary injunction issued by the Federal Constitutional Court on 11 December 1990 [BVerfGE 83, 162 <169>]). While complainant no. 11 submitted documents regarding the challenged expropriation, he failed to substantiate his assertion that he is the heir of the owner of the business and property who had been expropriated. He also did not submit documents regarding this fact following the notification given by the Court in the aforementioned order. The other complainants have – in part belatedly – sufficiently demonstrated that they are individually, presently and directly affected.

II.

111

The provision contained in Art. 41(1) of the Unification Treaty in conjunction with No. 1 first sentence of the Joint Declaration (Appendix III of the Unification Treaty), which states that expropriations under occupation law or on the basis of sovereign acts by occupying powers (1945 to 1949) cannot be reversed, does not violate the fundamental rights invoked by the complainants. Art. 143(3) of the Basic Law, which was inserted into the Basic Law by Art. 4 no. 5 of the Unification Treaty, expressly declared the challenged provision to be legally valid under constitutional law. A violation of the Constitution – and of the fundamental rights claimed to be violated – could therefore only be found if Art. 143(3) of the Basic Law itself was void.

112

This is not the case.

113

1. Ultimately, there are no serious concerns regarding the formal constitutionality of the provision.

114

a) The Federal Government opted to provide for ‘amendments to the Basic Law resulting from the accession’ in the Unification Treaty, which resulted in the Bundestag only being able to decide on them in the form of an act of approval according to Art. 59(2) of the Basic Law. This procedure was based on the former Art. 23 second sentence of the Basic Law in conjunction with the Basic Law’s reunification clause. It was therefore not objectionable under constitutional law (cf. BVerfGE 82, 316 <320>). Under the given circumstances, the conclusion of the Unification Treaty was the prerequisite for being able to seize the opportunity for German reunification. The competence of the Federal Government to negotiate such a treaty and to include in it amendments to the Basic Law relating to the accession that have proven necessary based on the due appraisal of the course of the negotiations with the German Democratic Republic and the Soviet Union follows from the Federal Government’s constitutional obligation to promote the reunification of Germany (cf. BVerfGE 36, 1 <18>; 77, 137 <149>).

115

Parliamentary rights of the members of the Bundestag did not conflict with this procedure (BVerfGE 82, 316 <320 f.>). The legislative procedure is also not objectionable under other provisions of constitutional law. The fact that the amendments to the Constitution and the consent to the Unification Treaty could only be decided jointly and uniformly was due to the development of the accession negotiations. This linking of the constitutional amendments to the confirmation of the Unification Treaty could not be abandoned without endangering the reunification. Constitutional concerns also do not arise from the fact that the legislative procedure leading up to the Unification Treaty was expedited considerably despite the scope and complexity of the issues involved (regarding the course of the negotiations, cf. BVerfGE 82, 316 <317>). This expedited procedure was occasioned by the legitimate endeavour not to endanger the reunification, which may have been brought about by a mere delay of the ratification.

116

b) The Basic Law may only be amended by a law expressly amending its text (Art. 79(1) first sentence of the Basic Law). In inserting Art. 143(3) of the Basic Law, the legislator amending the Constitution did not contravene this precept.

117

The requirement that the amendment must be apparent from the text of the Basic Law itself has been fulfilled with the insertion of Art. 143(3) into the Basic Law. It does not need to be decided here whether an amendment to the Constitution must in principle indicate in which respect and with regard to which specific provision it amends the Basic Law and what is to apply as constitutional law in the future ([...]). In the present situation, a reference to provisions outside of the Basic Law is permissible. The text to which Art. 143(3) of the Basic Law refers contains neither an amendment of the right to property with an effect in the future nor does it contain expropriation criteria which deviate from Art. 14(3) of the Basic Law. Rather, it constitutes a transitional provision in connection with the extension of the applicability of the Basic Law to the acceding territory, which stipulates to what extent factual circumstances that arose before the accession are to be measured against the Basic Law. Where the nature of the case is such that it concerns specific factual circumstances and relates to the past, it is sufficient for the legislator amending the Constitution to precisely specify in the text of the Constitution the elements that are to remain unaffected in the acceding territory after the Basic Law enters into force. Sufficient provision has been made for this in Art. 143(3) of the Basic Law.

118

c) The challenged provision also does not violate the principle of the separation of powers. There is no need to decide here which requirements typically apply to amendments to the Constitution, specifically whether it is permissible to set aside the Constitution in individual cases with a majority capable of amending the Constitution ([...]). Art. 143(3) of the Basic Law does not retroactively exempt a provision enacted by a legislator bound by the Basic Law from the requirement of compatibility with the Constitution. Rather, the provision reflects the decision of the legislator amending the Constitution that a specific provision which governs a certain defined group of cases that arose before the entry into force of the Basic Law are to be upheld. This transitional provision only clarifies the scope of the entry into force of the Basic Law in the acceding territory for certain factual circumstances which arose in the past. The principle of the separation of powers does not prevent the legislator amending the Constitution from doing so.

119

It is unobjectionable in this context that the wording of the constitutional amendment is not included in the Unification Treaty Act, but only in the text of the Treaty itself, which the Act refers to and which has been published in its entirety in the Federal Law Gazette together with the Act according to its Art. 1 second sentence. In view of the special nature of the accession described above, requiring that the wording of the constitutional amendment be repeated in the ratifying act would constitute an unjustified formality.

120

2. Substantively, Art. 143(3) of the Basic Law – like any amendment to the Constitution – must be measured against the standard of Art. 79(3) of the Basic Law. The wording in Art. 143(3) of the Basic Law – that the codification of the expropriations is made notwithstanding Art. 143(1) and (2) of the Basic Law – cannot be understood to mean that Art. 79(3) of the Basic Law, which is mentioned in Art. 143(1) of the Basic Law, should not be applicable in this respect. In any case, the legislator amending the Constitution would not have been allowed to free itself in this way from the limitations of constitutional amendments laid down in the Basic Law.

121

a) Art. 79(3) of the Basic Law prohibits constitutional amendments that affect the principles enshrined in Arts. 1 and 20 of the Basic Law. This does not just include the guarantee of human dignity laid down in Art. 1(1) of the Basic Law. The commitment to inviolable and inalienable human rights as the basis for every human community, of peace and of justice laid down in Art. 1(2) of the Basic Law also becomes significant in this respect; together with the reference to the following fundamental rights in Art. 1(3) of the Basic Law, their guarantees are in principle not subject to limitation insofar as they are indispensable for maintaining an order that complies with Art. 1(1) and (2) of the Basic Law. Just like the original constitutional legislator (cf. BVerfGE 3, 225 <232>; 23, 98 <106>), the legislator amending the Constitution must also consider the basic postulates of justice. These include the principle of equality before the law and the prohibition of arbitrariness (cf. BVerfGE 1, 208 <233>; 23, 98 <106 f.>). Foundational elements of the rule of law and the principle of the social state, which are enshrined in Art. 20(1) and (3) of the Basic Law, must also be observed. In all of this, Art. 79(3) of the Basic Law only requires that the aforementioned principles are not affected. It does, however, not prevent the legislator amending the Constitution from modifying the manifestation of these principles in positive law for appropriate reasons (cf. BVerfGE 30, 1 <24>).

122

b) The provision in No. 1 first sentence of the Joint Declaration prohibits the treatment of the expropriations as void and, furthermore, excludes the comprehensive elimination of their effects by returning the expropriated objects. The provision does, however, not prohibit monetary equalisation of the impairments based on the value of the assets. Rather, according to No. 1 fourth sentence of the Joint Declaration, the decision on such equalisation payments, the amount of which is not specified, is expressly reserved for the legislator (cf. the order in the proceedings concerning the applications for preliminary injunction of 11 December 1990 [BVerfGE 83, 162 <172 f.>]).

123

The fact that the legislator amending the Constitution has declared the provisions regarding the expropriations to be legally valid under constitutional law does not violate the aforementioned limitations of Art. 79(3) of the Basic Law.

124

aa) Any claims potentially arising from international law notwithstanding, there was no longer any legal position of the affected persons in which the legislator could have interfered with the challenged provision. Any constitutional shortcoming in this respect is therefore excluded from the outset.

125

(1) The question of whether someone is entitled to a certain legal position can only be answered with regard to a specific legal order. As the law stood in the territory of the former Soviet-occupied zone, which later became the German Democratic Republic, such a legal position no longer existed after the expropriations had been executed. The acts of expropriation were aimed at fully and finally depriving the owners of their legal positions. The normative basis of the expropriations was considered to be legal in its entirety by both the occupying forces and by the German state authority in the Soviet-occupied zone and in the subsequently formed German Democratic Republic. Even in cases in which the relevant legal bases were interpreted excessively or applied arbitrarily according to the standards of the rule of law, for example to politically blameless persons, no legal protection was generally available; such expropriations were also treated as final.

126

(2) The expropriations within the territory of the Soviet occupation zone of Germany can, irrespective of whether they were directly initiated by the Soviet occupying forces or whether the German authorities established by these occupying forces were granted a certain leeway for decision-making in this respect, not be attributed to the responsibility of the state authority of the Federal Republic of Germany, which is bound by the Basic Law. The Federal Republic has always felt responsible for all of Germany, as reflected in the preamble of the Basic Law (cf. BVerfGE 36, 1 <16>). However, its authority was not only limited de facto, but also de jure, to the territory of the Federal Republic at that time (Art. 23 first sentence of the Basic Law). Accordingly, the Federal Republic of Germany was not responsible, in the sense of having to answer, for any measures taken by the German state authorities in the Soviet-occupied zone which it considered unlawful or unconstitutional, just as it is not responsible for measures taken by foreign state authorities (regarding the latter, cf. BVerfGE 43, 203 <209>). Furthermore, the majority of the expropriation measures cannot be measured against the Basic Law simply because it had not entered into force at the time the measures were taken.

127

(3) The legal situation in the Western occupied zones and later in the Federal Republic also left the affected persons with no valuable, enforceable legal position.

128

Pursuant to German international expropriation law, the expropriations undertaken by a foreign state, including ‘confiscations’ without compensation, are in principle considered to be valid insofar as this state has remained within the limits of its power. Accordingly, an expropriation takes effect within the territory of the foreign state and covers the property that was subject to the territorial sovereignty of the expropriating state at the time of the expropriation (principle of territoriality) ([...]). In this respect, the acceptance of foreign expropriations is only limited by the reservation in favour of the ordre public (Art. 30 of the Introductory Act to the Civil Code, Einführungsgesetz zum Bürgerlichen Gesetzbuch – EGBGB, former version, in conjunction with Art. 220(1) of the Introductory Act to the Civil Code, new version; Art. 6 of the Introductory Act to the Civil Code, new version), which, however, only applies if and where there is sufficient domestic and contemporary relevance ([...]). Insofar as the expropriation affects assets in the territory of the expropriating state, the lack of compensation for the expropriation or any other flaw inherent in it according to the domestic concept of justice is not in itself sufficient to deny its validity ([...]).

129

There are no constitutional concerns regarding the statutory framework. In this respect, the applicability of the principle of territoriality is based on the interest in an international order ([...]), which also binds the constitutional order of the Federal Republic. Conflicting supranational legal principles cannot be identified. Rather, the principle of territoriality, which governs the validity of expropriations, including confiscations without compensation, in the abovementioned sense, is accepted internationally ([...]). This applies even if, as the complainants assert, the expropriations in question were aimed at transforming the existing social structure into a socialist order from the outset. It is precisely the nature of such a transformation of the social order that no or only little compensation is paid, because otherwise the intended social restructuring would be frustrated. For the acceptance of such a reorganisation in another state, insofar as its effects on the territory of the other state are in question, it is not considered decisive whether it is compatible with the domestic constitutional order of the state assessing the acceptability; this is not only the case under German international expropriation law, but also – at least predominantly – in international legal relations ([...]).

130

bb) Whether principles of international law allow for claims of the individual affected persons against the occupying forces to be considered, to what extent such claims could, where applicable, be directed at a return of the expropriated assets and whether the challenged provision rendered such claims ineffective does not need to be decided here. In any case, such claims would, even without the provision, not have been enforceable and would therefore have been worthless in practice. Even without Art. 143(3) of the Basic Law, the legislator could have agreed to an exclusion of such claims in order to bring about German reunification, which constituted a constitutional goal and a precept of a high order (cf. BVerfGE 41, 126 <166 ff.>).

131

cc) From the perspective of retrospective redress for past injustices, it does also not violate Art. 79(3) of the Basic Law that the expropriated assets do not have to be returned to the former owners or their legal successors in the cases in question. To the extent that expropriations for the benefit of the Soviet occupying forces are concerned and the assets are removed from the sphere of influence of the Federal Republic, this already results from the absence of any possibility to return the assets. But even in cases in which the possibility of restitution in kind did exist, Art. 79(3) of the Basic Law would not prohibit its exclusion.

132

(1) In its decisions regarding the legislation concerning the consequences of war, the Federal Constitutional Court, when examining legislation on the compensation of occupation and reparation damages, decided that the legislator of the Federal Republic is obliged to provide for a domestic equalisation of burdens in this respect in accordance with the order of values of the Basic Law, especially with regard to the principle of the social state expressed in Art. 20(1) of the Basic Law. However, it is not liable for damage resulting from the war in the same way as if the state institutions of the Federal Republic had caused it. Regarding such an equalisation of burdens, the legislator has a wide leeway and may determine the equalisation payments based on what is possible, taking into consideration other burdens and the financial requirements for upcoming tasks (cf. BVerfGE 27, 253 <270, 283 ff.>; 41, 126 <150 ff.> with reference to the case-law on the fulfilment of liabilities of the German Reich, BVerfGE 15, 126 <140 ff.>; further references in BVerfGE 27, 253 <285>). To the extent that they have not already been given effect through the provisions of the Act on the Equalisation of Burdens (Lastenausgleichsgesetz), these principles can be sufficiently satisfied with the equalisation provision contained in No. 1 fourth sentence.

133

(2) However, the legislator, which is bound by the Constitution, may, after the transfer of state authority from a political system based on a different set of values, see fit to compensate for those previous measures of that system which prove to be unacceptable according to the standards of the rule of law by means of providing redress that goes beyond the general equalisation of burdens (cf. BVerfGE 13, 31; 13, 39 <42> on providing redress for injustices committed by the Nazi regime; also cf. BVerfGE 27, 253 <270, 283 ff.> on damages caused by the occupation; BVerfGE 41, 126 <150 ff.> on reparation damages). The provision in the Unification Treaty for expropriations without compensation which are not governed by No. 1 of the Joint Declaration is based on this fundamental principle.

134

Whether the legislator is under a constitutional obligation to introduce a method for redress need not be decided in the present case ([…]); in any case, Art. 79(3) of the Basic Law does not require restitution through the return of the expropriated assets in kind. When setting out the system of redress for past injustices for which another state authority is responsible, the legislator has a particularly wide leeway in general (cf. BVerfGE 13, 39 <43>; 27, 253 <270, 283>; 41, 126 <150, 153>). This also applies to the type of redress.

135

Redress for past injustices in the aforementioned sense can only be rooted in the principles of the rule of law and of the social state. The basic elements of these principles, which the legislator amending the Constitution may not disregard, are in any case not violated if the expropriations in question are not redressed by way of restitution in kind.

136

The constitutional guarantee of private property does not alter this conclusion. Redress does not result from individual fundamental rights. Rather, it finds its basis only in the concept of the rule of law and of the social state. Even if the guarantee of private property was affected, it could not be derived from its core guaranteed by Art. 79(3) of the Basic Law that redress must be provided in the form of restitution in kind ([...]). The challenged provision does not preclude the possibility that, within the framework of the intended equalisation framework, affected persons may also be granted the option of re-acquiring their former property insofar as this is possible in individual cases and in line with the interests involved.

137

(3) Constitutional concerns regarding the exclusion of restitution according to No. 1 of the Joint Declaration do not result from the fact that the return of the expropriated assets is, in principle, intended for those expropriations without compensation which are not governed by the provision (cf. A I 1b above). This is not in breach of the core elements of the right to equality, which are inviolable under Art. 79(3) of the Basic Law. The exclusion of restitution in the challenged provision is sufficiently justified by the fact that the German Democratic Republic and the Soviet Union had insisted on the inclusion of these provisions and that the Federal Government, following its due assessment, had to agree to this condition in order to achieve German reunification.

138

In the oral hearing, Federal Minister Dr. Kinkel, former Minister-President de Maizière and State Secretary Dr. Kastrup confirmed the submissions made by the Federal Government – that during the negotiations of the Unification Treaty and during the Two-plus-Four Talks, without whose successful conclusion German reunification could not have been realised, the exclusion of restitution had been made a precondition both by the German Democratic Republic and by the Soviet Union. Both states had plausibly set out their reasons for this standpoint. The German Democratic Republic was first and foremost interested in not endangering social peace within its territory by questioning the new ownership structures established by the expropriations. As has become apparent in particular from the statements of State Secretary Dr. Kastrup, it was of the utmost importance to the Soviet Union that the measures carried out under its sovereignty as an occupying force, which corresponded to its legal, economic and social policy ideas, were not subsequently placed at the disposal of Germany, which had previously been defeated in the war. Given these circumstances, the Federal Government was entitled to assume that the chance of establishing German unity could not have been realised if this condition had not been accepted. The assessment of what was achievable based on the negotiations, is subject to the independent and due appraisal of the Federal Government and is outside the scope of constitutional review (cf. BVerfGE 40, 141 <178>; 66, 39 <61>).

III.

139

The provision contained in Art. 41(1) of the Unification Treaty in conjunction with No. 1 fourth sentence of the Joint Declaration, which states that the decision regarding whether and what state compensation is made is reserved for the legislator, does also not violate the fundamental rights invoked by the complainants.

140

1. However, the complainants rightly claim that, under the given circumstances, the legislator is not free to decide whether to create an equalisation framework in favour of affected persons. This follows from the principle of equal treatment enshrined in Art. 3(1) of the Basic Law.

141

a) The general guarantee of the right to equality is directly applicable in this respect. While the new Art. 135a(2), which has been inserted into the Basic Law by Art. 4 no. 4 of the Unification Treaty, allows the legislator to determine that liabilities of the German Democratic Republic, and liabilities of the Federation which originate from the transfer of assets of the German Democratic Republic to the Federation, the Länder and municipalities as well as liabilities which are based on measures of the German Democratic Republic and its legal entities, do not need to be met. It is clear from the legislative materials that this constitutional provision was intended to also be of significance for the modalities of compensation to be adopted in connection with the implementation of the Joint Declaration (cf. Denkschrift zum Einigungsvertrag, BTDrucks 11/7760 p. 355 (359)). However, the application of such a constitutional provision does not mean that the legislator is no longer bound by the general guarantee of the right to equality (cf. BVerfGE 15, 126 <145> regarding Art. 134, 135a(1) of the Basic Law).

142

For expropriations without compensation which are not governed by No. 1 first sentence of the Joint Declaration, the legislator enacted a framework for redress which is based on the principle of restitution of the expropriated property (cf. A I 1 b above). This may also be relevant for determining the amount of compensation to be granted instead of a restitution. If the legislator chooses such a solution, it may not exclude any kind of redress for expropriations without compensation carried out under occupation law or on the basis of sovereign acts by occupying powers. The two groups of expropriations may differ in terms of their deficits regarding the rule of law in light of the concept of justice of the legislator bound by the Basic Law. However, these differences cannot justify unequal treatment of the complainants on the scale at issue. Additional aspects that may be taken into consideration to justify the differentiation – for example the greater time span between the expropriations governed by the challenged provision and the fact that the expropriations were largely caused or at least supported by the sovereign power of the occupying forces – are also not capable, under Art. 3(1) of the Basic Law, of justifying the fact that any kind of equalisation payment is excluded for these expropriations, neither on their own nor taken together with the other aspects.

143

b) However, No. 1 fourth sentence of the Joint Declaration does not prevent the legislator from adhering to the constitutional requirements when determining the equalisation payments. Its wording reflects the opinion of the Federal Government at the time of the treaty negotiations. To the extent that it also has a direct legal content, it could only consist of a clarification that the first sentence of the provision does not simultaneously prohibit the introduction of equalisation payments. No. 1 fourth sentence of the Joint Declaration does, however, not address the amount which such compensation payments may have (cf. the order of the Federal Constitutional Court in the proceedings concerning the applications for preliminary injunction of 11 December 1990, [BVerfGE 83, 162 <172 f.>]). The statements regarding the course of the negotiations delivered during the oral hearing have shown that a specific framework for equalisation payments has been demanded neither by the German Democratic Republic nor by the Soviet Union.

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Therefore, No. 1 fourth sentence of the Joint declaration could only give rise to adverse effects if there had been a constitutional requirement to enact the framework for equalisation payments immediately upon the accession of the German Democratic Republic. However, such an obligation cannot be derived from the Constitution.

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2. The complainants claim that No. 1 fourth sentence of the Joint Declaration has violated their fundamental rights, because the reservation of mere equalisation payments excludes full compensation, which is required under constitutional law; this challenge is unfounded. Firstly, as has already been shown, the provision does not include any standards to determine the amount of equalisation payments. Secondly, an obligation to grant full compensation for the expropriations in question in the case at hand cannot be derived from the Basic Law.

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When determining the extent of the redress measures, the legislator may, within the framework of the leeway accorded to it, also consider the financial potential in light of other state tasks. The principles developed for remedying the consequences of war apply accordingly to this case (cf. BVerfGE 38, 128 <133> with reference to BVerfGE 27, 253 <284 f.>). According to these principles, the legislator may take into account the total volume of the damage that needs to be compensated – which is not limited to damage to property. In weighting the damage to property, it should be considered that during the time period in question other legal interests – such as life, health, freedom and career advancement – were also affected (cf. BVerfGE 27, 253 <285>). In addition, the legislator may also take into account the necessity to fulfil the new tasks resulting from the reconstruction in the new Eastern Länder [of the former German Democratic Republic]. When assessing the economic and financial capacity of the state and balancing the individual state tasks, the legislator is accorded a particularly wide margin of appreciation (cf. BVerfGE 13, 39 <43>). In view of the parlous economic situation in the new Eastern Länder, which, according to current estimates, will require subsidies in the hundreds of billions to rectify, there is no (inherent) constitutional obligation to provide redress that would be equivalent in value to restitution. However, the legislator must observe Art. 3(1) of the Basic Law for the entire framework for redress.

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The complainants cannot assert any legal interests from the fact that a part of the expropriated objects are in public ownership. The economic bankruptcy caused by the mismanagement in the former German Democratic Republic, for which the Federal Republic is not responsible, is not eliminated by these assets. The former owners cannot demand preferential treatment in terms of the value of redress granted over other expropriated persons or victims of injustices who have suffered other types of damage simply because their properties happen to be still available. This also applies if they are given the opportunity to repurchase their former property.

IV.

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In light of the above, there is no need to decide here whether Art. 135a(2) of the Basic Law is compatible with Art. 79(3) of the Basic Law. As set out above, the provision does not exempt the legislator from the general guarantee of the right to equality. It does also not prevent the legislator from creating a framework for equalisation payments that is in conformity with the Constitution. Insofar as the provision could continue to adversely affect the complainants, their being affected would not arise directly from the constitutional provision, but only from the – possibly – inadequate statutory provision.

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There is also no need to conduct a constitutional review to the extent that the complainants in proceedings 1 BvR 1174/90 challenged further provisions in their constitutional complaint (cf. A IV 2 above). None of these provisions contain any separate adverse effects that go beyond the primarily challenged provision in No. 1 of the Joint Declaration. As the aforementioned general provision is constitutional, the further challenged provisions do not need to be addressed here. .

V.

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[...]

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This decision was unanimous.