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Jun 2005 Journal

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The General Settlement Fund: waiting for an end to litigation

More than four years since the General Settlement Fund was created following the signing of the Washington Agreement - a bilateral accord between the US and Austria - not a single payment has been made from the indemnification programme established to pay compensation for a comprehensive range of Jewish-owned asset expropriation and Nazi persecution following the Anschluss of March 1938.

In negotiating the Washington Agreement, Austria insisted on including a clause that the distribution of payments from the $210m fund could proceed only when any outstanding lawsuits being pursued in the US were either dismissed or withdrawn. One long-running lawsuit in a US court brought by Austrian survivors claims real estate and other possessions seized while the Nazi Reich controlled Austria between 1938 and 1945.

The Washington Agreement also enshrines the system of processing claims by the General Settlement Fund that was agreed by the US Government and a number of Holocaust victims' organisations. As distinct from other Holocaust-era compensation measures worldwide, the General Settlement Fund is unique both in the number of categories that are compensated for and in the individual calculation of the losses.

By the claims submission deadline of 28 May 2003, the General Settlement Fund had received 19,400 applications, with the average applicant claiming for losses and damages sustained by three or four victims of the Nazis. On average, each of these victims had sustained between two and five single losses, totalling an estimated 120,000 to 240,000 claims that are currently being researched and individually calculated.

At the time of going to press, more than 7,000 applications containing some 85,000 individual claims have been researched. Of the approximate 25,000 claims for individual losses, decisions on around 2,000 applications have been prepared. Where claimants were unable to provide detailed information on their families' lost assets, the evidence to substantiate claims has been sought in Austrian archives.

Since General Settlement Fund awards are calculated on a pro rata basis, before payments can be made it is necessary to process all 19,400 applications and to establish the total amount being claimed. This process is in sharp contrast with other compensation measures, such as the Swiss bank account awards, which provide for a single category or a lump sum payment based on claimants' actual bank balances. To implement this complex system, the staff of the General Settlement Fund has been increased and the premises of their offices extended.

The Fund's decision-taking body, the independent Claims Committee, consists of one member appointed by the United States, Professor Vivian Curran, one member appointed by the Republic of Austria, Dr Kurt Hofmann, and, representing the UK, the Chairman, Sir Franklin Berman.

Payments from the General Settlement Fund are the final element in Austria's Holocaust compensation programme. Also provided for in the Washington Agreement were lump sum ex-gratia awards of $7,000 (from a $150m fund), which were distributed in 2002 and to which top-up awards of €1,000 are now being made. An extension of social security legislation forms the third pillar of the Agreement, allowing any Austrian Nazi victim born before 13 March 1938 to claim a pension together with improvements in the provision of care monies (Pflegegeld) to survivors with the greatest medical needs.

As the Claims Office knows very well from the enquiries it receives on this matter every day, it is of the greatest concern that a way be found as soon as possible of ending this logjam so that the process of making due payments to claimants can finally go ahead.

This article was written with the assistance of Ms Hannah Lessing, General Secretary of the National Fund for Victims of Nazism in Austria.
Michael Newman

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