Minority foundations in Turkey: From past to future (1)
by
ORHAN KEMAL CENGİZ

History of minority foundations

A foundation is a legal entity through which a certain amount of capital or immovable property is allocated for charitable purposes. Foundations are found in many countries and under different legal systems. Foundations have quite a long history in Turkey. When I use the term “minority foundations,” I refer to those which were set up for religious minorities in Turkey. Minority foundations were originally set up through the imperial decrees of the Ottoman sultans called “fermans.”

In 1936, 13 years after the establishment of the new Turkish Republic, Turkey adopted a new Law on Foundations. As a result of this law, a great many Islamic foundations lost their autonomy and came under the governance of the General Directorate of Foundations. This law was aimed at controlling Muslim foundations that were regarded as a threat to the secular regime. Minority foundations were also targeted.

This law also demanded that the trustees of foundations declare the sources of their income and their budgets. All minority foundations made these declarations in 1936. These were the so-called “1936 Declarations,” which were to have a huge impact on foundations.

In 1938 the Law on Foundations was amended and the provision on the administration of foundations was changed. The clause reading that “the foundations shall be governed by their elected bodies” was omitted from the law. From then on, foundations were directed by government officials instead of by councils they had selected themselves.

During World War II minorities experienced a big shock in the form of the controversial Wealth Tax (Varlık Vergisi). Faced with a severe economic crisis, the Turkish government imposed huge taxes on its non-Muslim citizens during World War II.

In 1949 the Law of Foundations was changed again. Foundations regained their former status in relation to their administration and could be governed by their elected councils again.

Turning point: 1974

As I mentioned earlier, in 1936 all foundations were required to declare their sources of income. The minority foundations that received most of their income from rents declared the real estate they possessed at the time.

Starting from the late 1960s, the Turkish state developed a new approach towards the matter of minority foundations' acquisition of new properties. At first some bureaucratic obstacles were created. For example, governors started to not issue the necessary documents that the minority foundations needed in order to register new real estate with the Land Registry.

However, the biggest blow came from the Supreme Court of Appeals in 1974, when it decided that the declarations made by the minority foundations in 1936 were in fact charters. Therefore, unless it was clearly indicated in such a declaration that the foundation could acquire new possessions, acquisitions made after the declaration had no legal validity and thus “illegally possessed” properties would have to be returned to their former owners.

Court cases to this extent were filed by the General Directorate of Foundations. Objections by the minority foundations about the ability of this directorate to become a party to these cases, with the argument that it had no “legal interest” in bringing such cases before a court, were rejected by the Supreme Court of Appeals. The court stated that “legal interest” was not important because these cases involved “public order.”

If we scrutinize the reasoning of the decision of the Supreme Court of Appeals, there are more controversial remarks and arguments.

The decision of the court, dated May 8, 1974, reads as follows:

“It appears that the acquisition of real estate by corporate bodies composed of non-Turkish people was forbidden. This is because corporate bodies are stronger than individuals and it is clear that the state may face various dangers if there is no restriction on them obtaining real estate.”

These were the remarks of the Supreme Court of Appeals in the case of the Balıklı Rum Hastanesi Foundation, whose members were Turkish citizens of Greek ethnic origin.

This is the infamous decision of the Supreme Court of Appeals which created the so called “1936 Declaration problem.” Two things were derived from this judgment: One was that the best interests of the state were above everything, including the supremacy of law. The second was that our highest court regarded Turkish citizens as foreigners and as a danger to the Turkish state.

I believe these are the crucial elements to understanding this problem. In Turkey, the “Lausanne minorities,” although they are Turkish citizens, have always been regarded foreigners and traitors.

Seeing them as foreigners is not unique to the Supreme Court of Appeals. I would like to give you a funny example: In 1988 the Cabinet issued a regulation called “Protection against sabotage.” Under Article 5 of this regulation, groups who might attempt sabotage were enumerated. One of these groups was “indigenous foreigners” (yerli yabancılar). These indigenous foreigners were Turkish citizens of Greek and Armenian origin.

As a result of the controversial decision of the Supreme Court of Appeals, minority foundations lost thousands upon thousands of pieces of real estate after 1974. They were taken, one by one, through cases filed by the Directorate General of Foundations and the Treasury.

Law 4771

In 2002, in the context of the process of harmonizing Turkish law with EU law, some amendments were made to the Law of Foundations and minority foundations were allowed to acquire real estate with the permission of the Cabinet.

On Oct. 10, 2002 a bylaw was issued to guide the implementation of this newly amended law. Through this bylaw the scope of the law was restricted.

According to Article 6 of the bylaw, a commission would be set up to evaluate minority foundations' requests to acquire new properties. The bylaw stipulated that this commission would decide whether the foundation concerned really needed the real estate it wanted to acquire. If the commission finds the demand appropriate, the file is sent to the Directorate of Foundations. Then, if the Directorate of Foundations finds the demand appropriate, the file is sent to the Cabinet. In this way, various filters were set up which made it impossible to obtain new property.

Furthermore, in Article 9 of this bylaw there was a strange statement saying that Turkey shall reserve the rights derived from Article 45 of the Lausanne Treaty. Basically, this article was about the principal of reciprocity.

On Oct. 11, 2002 the Directorate of Foundations issued a circular which created more difficulties. We saw a new criterion in Article 10 of this circular which did not exist in the bylaw. Article 10 says that when assessing the need of the foundation for the property concerned, the population of the congregation residing in the municipality where the real estate is to be acquired shall be taken into consideration in the evaluation process.

Law 4778

This law (Law 4771), the bylaw and the circular were criticized by academics and lawyers. The new Justice and Development Party (AK Party) government made amendments in the Law of Foundations again, in January 2003, in the context of the harmonization laws (Law 4778).

According to this amendment, minority foundations could acquire new properties with the permission of the Directorate of Foundations. Thus the bureaucracy had been reduced; as I mentioned earlier, the previous law required the permission of the Cabinet.

Despite these new laws, minority foundations' property problems have not been solved. I will try to explain subsequent developments in the second piece.