Chapter 1. Property of Communists, Enemies of the People and the State

Article 1

If objects and rights have been seized in favor of a state on the basis of the law on the confiscation of communist property of 26 May 33 (RGBl I, page 293) or of the law on the confiscation of property of enemies of the people and the state of 14 July 1933 (RGBl I, page 479) before the law became effective, the state shall not be responsible for the claims which have arisen against the former owner of the seized property or rights.

Article 2

1. Rights, which are still existing at the time this law becomes effective and apply to confiscated objects, are deemed expired with the seizure. The same is true in the case of guarantees on property which has been confiscated.

2. Section 1 is not being applied if the seized objects have already been sold by the state before this law became effective.

Article 3

1. Corporations are not responsible for liabilities from the time before the confiscation, if all the shares have been transferred by confiscation to the property of a state, unless the liabilities were recovered by the sequestration decreed for the preparation of the seizure.

2. The existing rights of third persons in the property of such corporations will be considered as expired.

Article 4

Legal personalities, corporations, or legally incompetent associations, whose property has been confiscated, are considered as dissolved by the seizure. A liquidation does not take place.

Article 5

Claims against the owners of property mentioned in Article 4 shall be deemed expired through confiscation of the property. The same applies to individual members or partners of associations. The affidavits and other liabilities existing in order to insure the safeguarding and guarantees of such claims are also deemed expired.

Article 6

1. If someone suffered financial loss through sequestration or seizure of objects and rights on account of the laws mentioned in Article 1, or through their effect, an indemnification from the means of the state in whose favor the confiscation or seizure took place can be granted. In the sense of this regulation, no one has suffered loss who was affected by the sequestration or seizure directly.

2. A person shall not be granted compensation on the basis and with the acquisition of this right, which expired with this law, if he has intentionally or carelessly promoted:

1. Communist aspirations.

2. Marxist or other movements which have been declared as hostile to the people and state by the Minister of the Interior.

It is not an intentional promotion of aspirations as designated in No. 2, if the victim stood under the control or direction of the state.

3. An indemnification can also be granted in the cases of (2) No. 2, i.e. if the victim is needy in the sense of Article 13(2) or if the predominant viewpoints of the public interest speak for the granting of indemnification.

Article 7

1. Indemnification will only be granted if the victim makes a petition before 31 March 1938.

2. The petition has to be. sent in writing to the competent authority (Article 9), with reference to the cause of the offense.

Article 8

1. The determination of the indemnification takes place in a determination procedure and before determining authorities.

2. The Reich Minister of the Interior can decree that no determining procedures shall take place for certain properties or in certain districts. If such a regulation is issued by the Reich Minister of the Interior, the regulations of this section with the exception of Articles 1, 4 and 5 are not to be applied for the property of the district.

Article 9

1. The determining authority in Prussia and Bavaria is the president of the government (in Berlin the police president), in Saxony the Kreishauptmann, and in the other states the highest authority of the state.

2. The Reich Minister of the Interior may decide that a common determining authority will be formed for several administrative districts.

Article 10

1. The determining authority for the district in which the sequestered or seized property, whose indemnification has been proposed, used to be, is locally responsible.

2. The highest authority of the state or the Reich Minister of the Interior appoints the determining authority, if the property was located in the district of several determining authorities and if several determining authorities of the same state are involved.

3. The Reich Minister of the Interior is entitled to appoint exclusively one or more determining authorities for certain kinds of confiscated or seized objects and rights.

Article 11

1. The petition to grant indemnification shall be refused, if it has not been made within the time determined in Article 7, section 1. The determining authority is obliged to admit the petition, if the victim proves that he himself or his legal representative or his proxy failed to make the petition within the appointed period through no fault of their own and inasmuch as it will be repeated within two months after clearing the obstacle. Petitions cannot be made any more after 31 March 1939.

2. If the petition to grant indemnification is received by a determining authority, which is locally not responsible (Article 10), it will fall within the appointed time.

Article 12

1. The total amount of indemnifications, which shall be granted because of sequestration or seizure of property of a certain owner of property, is limited by the extent of this property. Each economic unit will be considered property in the sense of the first sentence, if the confiscated property of a person includes several economic units of the kind designated in Article 2 of the Reichsbewertunsgesetz [Law for the evaluation of property] of 16 Oct 1934 (RGBl I, page 1035). For the classification according to economic units, a determined purpose in the period before the confiscation is of no importance.

2. In order to estimate the extent of property according to Section 1, its selling value is decisive.

Article 13

1. In determining the indemnifications, the creditors should be treated in the succession as is provided for their satisfaction in the bankruptcy order.

2. This principle is to be disregarded, if reasons of fairness require to do so; particularly these victims are to get privileged treatment whose livelihood or economic progress is endangered or require an indemnification in order to fulfill their duties of livelihood on the basis of the law.

Article 14

1. The determining authority fixes the amount of money to be paid as indemnification. It can determine installments and the time of payments. Inasmuch as there is no other clause in the decision of the determining authority, the amount of money is payable to him within one month after the decision has been delivered to the victim.

2. The determining authority may rule that an indemnification will be effected by Reich or state-owned mortgage-deeds or by transferring an object, or that claim of indemnification due to the victim on account of the decision of the determining authority will be secured by arranging a lien on land.

3. The state can propose, until the decision of the determining authority has been relayed to the victim, what, in the amount of the indemnification which is being granted for an expired lien on land (Article 2, 6), a new lien on land will be entered into the land-register in its place. The determining authority has to respect such a move except in the case that this would be particularly unfair toward the victim. The new lien on land has to be entered into the land-register under the same conditions as the expired one insofar as the determining authority does not issue different instructions; the rate of interest may be reduced by the determining authority to five percent.

Article 15

1. The victim is entitled to appeal to the determining authority of the Reich against the decision of the determining authority. (Article 16)

2. The appeal must be delivered in writing to the determining authority or to the determining authority of the Reich, within two weeks after the decision has been forwarded and it must be substantiated. Article 11, Section 1 will be applied respectively.

3. The determining authority may submit its decision to the determining authority of the Reich for scrutiny. Its presentation to the determining authority of the Reich has the effect of an appeal.

Article 16

1. The determining authority of the Reich will be linked to the Reich Minister of the Interior.

2. The determining authority of the Reich consists of chambers. Each chamber is composed of five members including the chairman, three of whom must have the ability to perform the functions of the judge or of higher administrative offices, two members will be suggested by the Deputy of the Fuehrer.

3. The chairman and the members will be appointed by the Reich Minister of the Interior.

Article 17

1. The decisions of the determining authorities are to be delivered to the victim.

2. The decision of the determining authority of the Reich is final.