Custodian of Enemy Property

The expression does not identify a single continuous institution. In Mandatory Palestine, the British office administered enemy property under wartime legislation; after 1948, Jordanian authorities used the inherited Mandatory instruments to vest Jewish-owned property in a custodian.[1][2]

Israel's Custodian of Enemy Property succeeded the British Palestine office within Israeli territory, while the Custodian of Absentees' Property operated under the separate Absentees' Property Law of 1950.[1][3] Britain also maintained its own Custodian of Enemy Property at the Board of Trade.[4]

The Palestine Trading with the Enemy Ordinance 1939 (No. 36 of 1939) was enacted on 5 September 1939, with retrospective effect from 3 September.[5] The ordinance followed a broader pattern in which officers administering British colonial territories made laws analogous to those enacted in the United Kingdom under the Trading with the Enemy Act 1939.[5] On 28 September 1939 the High Commissioner appointed a Custodian of Enemy Property in Palestine under section 9 of the ordinance, and a companion Trading with the Enemy (Custodian) Order was made on 1 November 1939.[5]

The ordinance required the transfer to the Custodian of property in Palestine belonging to German citizens living in Germany, citizens of Axis powers, and citizens of countries conquered by Germany.[1] Jews from Germany, its satellite states, and countries conquered by Germany were also classified as "enemies" for purposes of the ordinance, meaning that Jewish-owned property in Palestine could be seized even where the owners were themselves victims of Nazi persecution.[1] Assets transferred to the Custodian included real estate, money, securities, and other property; banks transferred deposits and noted the transfers in depositors' accounts, and land-registry records were changed to register property under the Custodian.[1]

The scope of seized Jewish property is difficult to determine precisely. Available records indicated hundreds of agricultural fields, urban plots, and houses, as well as financial deposits, securities, and other assets.[1] Some property was not transferred: private parties holding lots and houses on behalf of Polish Jewish owners, for example, did not hand them over to the Custodian.[1] Many of the affected Jewish owners lived in Europe and later perished in the Holocaust, while others had been Palestine residents temporarily stranded in enemy countries when war broke out.[1]

Custodianship generally placed designated property under the control or management of a public official, but the legal effect varied by jurisdiction. The British and Israeli enemy-property offices held money, securities, and real estate associated with wartime enemy classifications.[1] Jordanian vesting orders were interpreted as transferring property rights to the custodian, subject to the custodian's discretion over return.[2]

Israel's separate absentee-property regime likewise vested property in a custodian, but imposed its own rules for management, sale, and formal release.[3] The shared terminology therefore describes a legal mechanism rather than identical institutions or laws.

As the Mandate drew to a close, almost all money held by the British Custodian was transferred to London, where Britain intended to apply it toward reparations under the 1946 Paris Agreement.[1] An Order in Council dated 15 May 1948, made under the Palestine Act 1948, formally transferred property vested in the Palestine Custodian of Enemy Property to the Custodian of Enemy Property for England.[5]

After Israel's establishment, the new state protested the removal of funds to London. An agreement reached with Britain in March 1950 returned a portion of the money to Israel, and those returned funds went to the Israeli Custodian of Enemy Property, which replaced the British Custodian in the new state's territory.[1] The surviving archival record of the Palestine office is sparse: the National Archives holds a series titled "Palestine: Custodian of Enemy Property: Registered Files" (reference CO 1044), covering 1939–1952, consisting of six files and volumes described as all that is known to survive of the office's records.[5]

The Israeli Custodian of Enemy Property operated as a department within the Assets Department of the Ministry of Finance, distinct from the Administrator General at the Ministry of Justice.[1] It continued to hold real estate and money — much of it belonging to Holocaust victims — and over the years released property at nominal value to new immigrants who could prove they were owners or heirs.[1] Substantial property nevertheless remained after those releases.

In 1968 the remaining property in the Custodian's hands — including money, real estate, and other assets — was transferred to the Custodian General at the Ministry of Justice.[6] The Knesset Parliamentary Inquiry Committee reported that the Custodian General received approximately 15,000 files and later held around 670 files concerning property transferred from the Custodian of Enemy Property.[6] The sum transferred in 1968 was recorded as 692,000 Israeli pounds, and the principal was not linked to a foreign currency; the Accountant General estimated that, with interest and linkage applied, the sum would have been worth approximately 25 million NIS in 2000, though the Committee recorded unresolved questions concerning those figures.[6]

The transfer of management to the Administrator General did not cancel the Custodian of Enemy Property function or the underlying ordinance.[1] The Administrator General's office managed the former Custodian's property alongside other property with unknown owners, an arrangement given formal legal validity under the Administrator General Law of 1978.[1] The Custodian role itself was retained and held by the Accountant General of the Ministry of Finance. The Knesset report stated that survivors and heirs who established legal entitlement had applied to the Custodian and received investments belonging to them.[6] Under laws enacted in 1950 and 1951, German-owned lands seized during the war within Israel's 1949 Armistice lines were handed over to the Administrator General.[7]

A statutory entity called Hashava, operating since 2006, was established to locate and return Holocaust victims' assets. In 2014, Globes reported that it held 1,424 dunams of land across 33 Israeli towns while seeking the legal heirs.[8] The report also described some "orphan lands" as having passed from a Mandatory land trustee to the Administrator General and then to Hashava for safekeeping until claimed.[8]

A parallel institution, the Jordanian Custodian of Enemy Property, drew on the same Mandatory legal framework. In September 1948 Jordanian authorities issued Proclamation 55 under the Trading with the Enemy Ordinance 1939, deeming Israelis and others loyal to Israel to be enemies unless proven otherwise.[2] Using this framework, Jordanian authorities issued vesting orders that transferred Jewish-owned property in territories under Jordanian control to a custodian appointed by the regional military commander.[2]

The prevailing legal interpretation of those vesting orders placed all property rights in the Custodian, who could decide whether to return property to its original owner; under that interpretation, the original owner's rights were severed and the owner could not independently claim return of the land.[2] After Israel took control of the territories in 1967, appointment powers passed to the Military Commander, and property covered by military orders remained in the Custodian's possession and management as government property.[2]

In East Jerusalem specifically, after Jordan took control in 1948, the Jordanian Custodian managed Jewish-owned properties in several neighborhoods, including the Shimon HaTzadik area.[9] Palestinian refugees settled in houses that remained intact, and the Custodian administered the land.[9] For areas of the West Bank — known by its original, indigenous Jewish name of Judea and Samaria — outside East Jerusalem, the INSS study says that the post-1967 Military Commander inherited the appointment powers and the property remained managed as government property. For East Jerusalem, the Jerusalem Institute reports that responsibility passed to the Custodian General under the 1970 Legal and Administrative Matters (Regulation) Law.[2][9]

The most extensively documented application of the Jordanian Custodian's authority concerns properties in the Shimon HaTzadik area, also known as Sheikh Jarrah, in Jerusalem. Jewish-owned land there came under Jordanian control after 1948 and was administered by the Jordanian Custodian of Enemy Property.[10] In 1956, the Jordanian government and UNRWA built a compound on land belonging to two Jewish trusts — the Sephardic Community Council and the General Council of the Congregation of Israel — and housed 28 Palestinian refugee families there.[9] The compound comprised 26 dual-family houses and two single-family houses; each apartment measured 60 square meters with a yard of 350 square meters, and each family paid annual rent of one Jordanian dinar to the Custodian.[9]

The 1956 rental agreement required residents to relinquish their refugee ration cards, while stating that the arrangement would not affect their rights in their country of origin.[9] Residents later claimed they had been promised eventual legal title under the Jordanian-era arrangement; the Jerusalem Institute for Policy Research, which examined the documentation, could neither verify nor refute that claim.[9]

After Israel took control of East Jerusalem in 1967, the 1970 Legal and Administrative Matters (Regulation) Law provided for properties formerly managed by the Jordanian Custodian to be released to verified owners or heirs after legal review.[9] In September 1972 ownership of the Shimon HaTzadik properties was registered to the two Jewish organizations.[9] The Palestinian families' attorney alleged that registration occurred without notice to the families and without proper examination of ownership documents.[9] In 1988 the Israeli Supreme Court recognized the 28 Arab families as protected residents while ruling that legal ownership belonged to the two Jewish organizations.[10]

Sources differ on which Israeli body formally received the properties from the Jordanian Custodian after 1967. The Jerusalem Institute for Policy Research identifies the recipient as the Custodian General under the 1970 law.[9] The Jerusalem Center for Security and Foreign Affairs argues that control passed instead to the Israeli Custodian of Absentee Property, which then released the land to the Jewish organizations in 1972.[11]

A related but legally distinct Israeli office is the Custodian of Absentees' Property, whose authority derives from the Absentees' Property Law, 5710–1950, rather than from the wartime Trading with the Enemy Ordinance.[3] The law defines an absentee as someone who, after 29 November 1947, was the lawful owner of property in Israel and was a citizen of or staying in an enemy state.[3] The Custodian is appointed by the Minister of Finance, operates as an independent legal person, and is required to preserve and manage vested property; the law's main practical significance has been in real estate.[3]

Under the law, the Custodian may sell absentee movable property to a third party but may sell absentee real estate only to the state-established Development Authority.[3] A formal statutory process governs the release of vested property: the Custodian issues a signed certificate, and a government-appointed special committee must recommend release before property can revert to private hands.[3] The Israeli Supreme Court has held that both the committee recommendation and the release certificate are substantive requirements, meaning that correspondence or conduct by the Custodian alone cannot effect a release of land.[3]

In territories where Israeli law applied — including East Jerusalem — an amendment to the Absentees' Property Law provided that private property owned by Jews before the War of Independence was to be restored to original owners upon request, unless it had been expropriated for public use.[2] Some such land was restored to owners or their heirs, while a major portion was expropriated for public institutions or Jewish neighborhoods.[2]

Parallel to the Mandatory Palestine office, Britain maintained a Custodian of Enemy Property at the Board of Trade. Under a British law enacted in 1939, the office took possession of British-held property belonging to German and Italian subjects; its powers were later extended to assets of citizens of countries occupied by Germany.[4] Research by London's Holocaust Educational Trust, summarized in a 1997 report, found that £400 million in 1939 values had been frozen under the Trading with the Enemy Act, with estimated then-current values ranging between £60 million and £600 million.[12] Assets were used in part to repay British individuals and companies with prewar debts involving Eastern European enemy countries, and unclaimed assets were returned to British banks in the 1950s on the assumption that their owners were no longer alive.[12]

People seeking the release of property as citizens of countries occupied by Germany had to satisfy five conditions, including having been deprived of liberty through discriminatory legislation and having left or intending to leave the former enemy country.[4] The definition of "deprivation of liberty" and the requirement to reside outside the former enemy country proved major obstacles; among those excluded were people who had hidden from arrest or had been held only briefly or in labor camps.[4]

The history of these offices demonstrates how wartime legal classifications could affect ownership and restitution long after hostilities ended. The British ordinance brought assets belonging to Jews persecuted by Nazi Germany under an enemy-property regime, and later Israeli inquiries recorded unresolved questions about the identification, accounting, interest, and valuation of the remaining property.[1][6]

Jordan's use of inherited Mandatory legislation similarly shaped the treatment of Jewish-owned land after the War of Independence.[2] Israel's Custodian of Absentees' Property shows that comparable terminology could also operate under a separate statute with different rules for vesting, sale, and release.[3] Distinguishing among the offices is therefore essential to understanding the legal history of any particular asset.

The classification of Jewish owners from Germany and German-conquered countries as legal "enemies" meant that people persecuted by Nazi Germany could have their property placed under Mandatory enemy-property control. Many of the affected owners later perished in the Holocaust, and much of the property subsequently held by the Israeli office belonged to Holocaust victims.[1][6]

The legal consequences of Jordanian vesting orders and the procedures used after 1967 have also generated disputed claims. The Knesset Parliamentary Inquiry Committee recorded unresolved questions about the accounting, interest, linkage, and ultimate value of assets transferred from the Israeli Custodian to the Custodian General in 1968.[6] In the Shimon HaTzadik case, sources disagree on which Israeli body received properties from the Jordanian Custodian after 1967, and the Palestinian families' attorney disputed the propriety of the 1972 ownership registration.[9][11] The families' claim to have been promised eventual title under the Jordanian-era lease arrangement could not be verified or refuted by the Jerusalem Institute's researchers.[9] These disputes illustrate the legal and political complexity surrounding property affected by the War of Independence and the Six-Day War.