Special Status Zones in Europe

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SPECIAL STATUS Z ONES IN E UROPE

Legal Memorandum

July 2013


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E XECUTIVE SUMMARY

The purpose of this memorandum is to identify the types of special statuszones that exist in Europe and highlight their different origins, functions, andimplementations. Special status zones in Europe range in structure and level ofautonomy, reflecting each zones unique history of origin. These zones havevarying levels of local functions and success. This memo reviews two types ofspecial status zones: autonomous zones and special economic zones.

Autonomous zones are typically formed for political reasons, seeking toseparate the zone after a conflict, or to prevent future conflicts. The context of theevents involved will largely determine the appropriate autonomous zone to create.In areas where ethnic diversity is not prominent, such as the land Islands, theunifying force of a shared language and culture is often enough for an autonomouszone to survive, provided it is already economically stable. Conversely, when anarea is ethnically diverse, such as the South Tyrol region or the Br ! ko District, thenecessity is much higher for outside actors to either represent the interests of each party and/or mediate the implementation of autonomy. Some autonomous zonesare quite small and unique, such as the city of Bremerhaven in Germany, whichdemonstrates a form of autonomy that operates under a larger federal structurewithin a single state.

Special economic zones are geographic areas within the territory of a statethat operate as a separate customs area, providing benefits to enterprises willing tolocate within the zone. There are many types of special economic zones, allsharing an economic purpose, but largely context-dependent. Developingcountries seeking to establish a dominant industry will have far different goalsfrom a former communist country seeking to revitalize or recreate its economicstructure. Successful special economic zones often benefit from a liberalregulatory scheme and allow autonomous management and operations toencourage sustainable competition (rather than short-term profit as a result of fiscalincentives).

Each special status zone is a product of a specific need and history. Whilecase studies provide helpful illustration of the various forms of autonomy oreconomic development each zone provides, no clear model exists for how a zoneshould be established or structured. These zones are often the product ofnegotiation and compromise between stakeholders and parties.


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Special Status Zones in Europe, July 2013

T ABLE OF C ONTENTS

Statement of Purpose 1

Introduction 1

Autonomous Zones 1

Autonomous Zones in Europe 2 land Islands 2

Achieving Autonomy 3Autonomy in Practice 4

South Tyrol 6 Achieving Autonomy 8Autonomy in Practice 10 Br ! ko District 11Achieving Autonomy 12Autonomy in Practice 13

Bremerhaven 15Autonomy in Practice 16

Lessons Learned 17

Special Economic Zones 17 Incentives for Creating an SEZ 18 Administration and Regulation of SEZs 19 European SEZs 20 Lessons Learned 21

Conclusion 21


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1


Statement of Purpose

The purpose of this memorandum is to identify the types of special statuszones that exist in Europe and highlight their different origins, functions, andimplementations.

Introduction

While special status zones exist in many variations throughout Europe, theyare typically formed for political or economic purposes, and occasionally both.Zones with a political purpose are formed with varying degrees of autonomy and

are often established to relax or sever ties with neighboring states. Zones with aneconomic purpose often exist within the regulatory framework of a state,functioning as a free-market variant of the larger economy. This memorandum provides a sampling of various types of status zones and methodologies.

Autonomous Zones

The creation of autonomous zones can allow powers to be devolved to asection of the population, while maintaining state unity.1 Autonomy is oftensuggested as a solution to ethnic conflict in a region.2 The Council of Europe hasrecognized autonomous zones as a positive solution to internal conflict, particularly if they are viewed as a sub-state arrangement that balances minorityrights and state unity and integrity.3

Autonomy may refer to territorial autonomy, where a population in a particular region is provided governance powers tailored to its geographicconcentration, or cultural autonomy, which emphasizes the exercise of cultural orlinguistic rights.4 In some instances a region may have cultural or historic ties to a particular state, such as the Muslim population in Xinjian, China who have ethnic

1 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 3 (1997).2 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 3 (1997).3 Council of Europe, Parliamentary Assembly, Positive Experiences of Autonomous Regions as a Source ofInspiration for Conflict Resolution in Europe, Resolution 1334, paras. 7, 10 (June 24, 2003), available athttp://assembly.coe.int/ASP/XRef/X2H-DW-XSL.asp?fileid=17120&lang=EN4 Council of Europe, Parliamentary Assembly, Positive Experiences of Autonomous Regions as a Source ofInspiration for Conflict Resolution in Europe, Resolution 1334, para. 11 (June 24, 2003), available athttp://assembly.coe.int/ASP/XRef/X2H-DW-XSL.asp?fileid=17120&lang=EN


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ties to eastern Russia.5 Groups may seek autonomy for a number of reasons,including legal equality, group rights, or self-determination, among others.6

Autonomous Zones in Europe

Autonomous zones in Europe have been formed for various reasons, buttypically they seek to encourage post-conflict societal reconstruction or to promotefinancial independence.7 In the land Islands, the South Tyrol region, and theBr ! ko District the overarching incentive for autonomy is conflict management or prevention, based on historical or perceived tensions. In Bremerhaven theincentives for autonomy are political and financial. These instances demonstratevariations in formation and structure of autonomous zones, along with certaincommonalities.

land Islands

The land Islands are located between Sweden and Finland in the Baltic Seaand are home to 27,500 people.8 Throughout history the Islands were claimed orcaptured multiple times by Sweden, Finland, and Russia.9 The Islands weredemilitarized in 1856 following the Crimean War.10 The Islands were later used byRussian troops during World War I, during which time they were officially part ofthe Finnish Grand Duchy that operated autonomously within the Russian empire.11 Following Finlands declaration of independence in 1917, the land Islandsexpressed the desire to reunite with Sweden.12 The language barrier between the

5 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 4 (1997).6 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 10 (1997).7 The term autonomous is used here to encompass a variety of levels of autonomy, including those that are semi-autonomous.8 Everything you need to know about land, LAND OFFICIAL TRAVEL GUIDE, available at http://www.visitaland.com/en/facts (last visited May 16, 2013).9 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 12 (2011), available athttp://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.10 Farimah Daftary, Insular Autonomy: A Framework for Conflict Settlement? A Comparative Study of Corsica andthe land Islands, EUROPEAN CENTRE FOR MINORITY ISSUES, 13 (2000), available at http://edoc.vifapol.de/opus/volltexte/2009/1889/pdf/working_paper_9.pdf.11 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 13 (2011), available athttp://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.12 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 13 (2011), available athttp://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.


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land Islands, where the predominant language is Swedish, and Finland was onecontributing factor to the quest for reunification, and eventual autonomy.13

Achieving AutonomyThe Islands residents demonstrated their desire to be reattached to Sweden

through a referendum that passed with overwhelming support in December 1917.14 Residents of the land Islands made pleas to the Swedish government.15 At theclose of World War I, Finland refused to release the Islands, but did attempt toreassure residents by granting the Islands broad autonomy.16 Ultimately, Swedenand Finland submitted their dispute to the League of Nations.17 The Council of theLeague of Nations determined that Finland had sovereignty but should guaranteethe autonomy of the Islands, preserving the culture and the Swedish languagespoken by the majority of land Islanders.18

Concerned parties and many European states signed an agreement in 1921 to preserve the demilitarization and neutrality of the Islands, which was ratified byFinland in 1922.19 The treaty and the Councils recommendations wereincorporated into the 1921 land Autonomy Act.20 Finland agreed to guaranteecertain powers and protections, such as Swedish language instruction and aSwedish-influenced curriculum in schools, limitations on the right to acquire real property by anyone not domiciled on the Islands, and authority over the budget forthe Islands.21 The Act has been revised twice once in 1953 and again in 1993,

13 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 70 (1997).14 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 13 (2011), available at http://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.15 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 13 (2011), available athttp://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.16 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 70 (1997).17 land Government, landAn Autonomous Region, Official Government Website (last visited Nov. 5, 2012)available at http://www.aland.ax/.composer/upload//Kortogott_eng_liten.pdf.18 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 15-16 (2011), available athttp://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.19 Ministry for Foreign Affairs of Finland, Technical Delimitation of the Aland Convention, Feb. 3, 2012,available

at http://www.finland.eu/public/download.aspx?ID=110320&GUID={48729127-F827-4F9D-87C3-00F1D8B731E5}; Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands andSouth Tyrol, R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 16 (2011), available at http://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.20 Act on the Autonomy of land (Finland, 1991), available in English at http://www.finlex.fi/en/laki/kaannokset/1991/en1991114421 Act on the Autonomy of land secs. 10, 40, 44 (Finland, 1991), available in English at http://www.finlex.fi/en/laki/kaannokset/1991/en19911144.pdf; Ruth Lapidoth, AUTONOMY: FLEXIBLE SOLUTIONSTO ETHNIC CONFLICTS 70-71 (1997); Heidi Harju-Luukkainen & Kari Nissinen,Good Educational Outcome on land Islands Despite Isolation: Evidence from PISA 2009 Results from Finland , EUROPEAN EDUCATIONAL


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when the current version came into force.22 Notably, the 1953 amendmentformalized the right of domicilerequiring someone to have a residence in theland Islands, to be present for five years without interruption, and to have acertain level of proficiency in the Swedish languagewhile the 1993 amendmentexpanded the economic purview of the Islands.23 In addition, the Finnishgovernment and the land Islands signed the Finnish Autonomy Act in 1951,strengthening the Islands autonomy by requiring the mutual consent of Finlandand the Islands for any amendment that impacts the interests of the Islands.24

Autonomy In PracticeThe land Islands autonomy is now pervasive, and the Islanders maintain

great control over their interests because of the powers given to them as a result ofthe international led solution.25 The land Islands have their own legislature, localgovernment, and governor.26 The Lagtinget, Islands Parliament, exercises budgetary power and may pass legislation related to its internal and regionalaffairs, including education, healthcare, social welfare, industry, and theenvironment.27 Legislation must be submitted for approval by the Finnish president; however presidential veto powers are only permitted when the Lagtingetoperates beyond the scope of its competence or the law has an impact on statesecurity.28 The Islands police force is made up almost entirely of land Islanders,

R ESEARCH ASSOCIATION (Sept. 19, 2012), available at http://www.eera-ecer.de/ecer- programmes/conference/6/contribution/17556/.22 Act on the Autonomy of land (Finland, 1991), available in English at http://www.finlex.fi/en/laki/kaannokset/1991/en19911144; The land Islands, FINLANDS PERMANENTR EPRESENTATION TO THE EUROPEAN U NION, available at http://www.finland.eu/public/default.aspx?nodeid=45373&contentlan=2&culture=en-US (last visited May 14,2013).23 Farimah Daftary, Insular Autonomy: A Framework for Conflict Settlement? A Comparative Study of Corsica andthe land Islands, EUROPEAN CENTRE FOR MINORITY ISSUES 21 (2000), available at http://edoc.vifapol.de/opus/volltexte/2009/1889/pdf/working_paper_9.pdf; Act on the Autonomy of land (Finland,1991).24 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 16 (2011), available athttp://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.25

Susanne Eriksson, The Example of land: Autonomy as a Minority Protector, THIS IS FINLAND, Apr. 2007,available at http://finland.fi/public/default.aspx?contentid=160122&contentlan=2&culture=en-US.26 Farimah Daftary, Insular Autonomy: A Framework for Conflict Settlement? A Comparative Study of Corsica andthe land Islands, EUROPEAN CENTRE FOR MINORITY ISSUES, 16 (2000), available at http://edoc.vifapol.de/opus/volltexte/2009/1889/pdf/working_paper_9.pdf.27 Act on the Autonomy of land secs. 18, 44, 58-59 (Finland, 1991), available in English at http://www.finlex.fi/en/laki/kaannokset/1991/en19911144.28 Farimah Daftary, Insular Autonomy: A Framework for Conflict Settlement? A Comparative Study of Corsica andthe land Islands, EUROPEAN CENTRE FOR MINORITY ISSUES, 17 (2000), available at http://edoc.vifapol.de/opus/volltexte/2009/1889/pdf/working_paper_9.pdf.


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and activities such as voting, running a business, and land ownership areexclusively reserved for land Island citizens.29

Finland maintains control over lands foreign affairs and customs, much ofits criminal and civil laws, and its court system, and land maintains onerepresentative in the Finnish Parliament.30 land Islanders also pay a tax toFinland, though some of the tax revenue is returned to lands budget for theLagtinget to disburse.31

In addition to the multiple governing authorities, there is also an landDelegation, composed of land and Finnish representatives.32 The landDelegation is chaired by the governor and is responsible for carrying outequalization, which is the coordination of the sum of money paid to the state as acost of autonomy, and tax retribution.33

The land Islands have been able to create an international space for itselfas well. For instance, the Islands are represented within the Finnish PermanentMission to the European Union (EU) and also are represented in Finlandsdelegation to the EU Committee of the Regions.34

While the land Islands are often used as an international standard for peaceful, autonomous conflict resolution, they have also benefited from aconfluence of ideal factors that made the land solution possible.35 First, the statesdisputing lands status, Finland and Sweden, were not at war and enjoyed well-established rule of law.36 Second, lands geographical and linguistic boundarieswere clear and its economy strong, allowing it to assert itself without needing to

29 Susanne Eriksson, The Example of land: Autonomy as a Minority Protector, THIS IS FINLAND, Apr. 2007,available at http://finland.fi/public/default.aspx?contentid=160122&contentlan=2&culture=en-US.30 Act on the Autonomy of land sec. 27 (Finland, 1991), available in English at http://www.finlex.fi/en/laki/kaannokset/1991/en19911144; Election Act sec. 6 (Finland, 1998),available in Englishat http://www.legislationline.org/documents/action/popup/id/5672.31 Act on the Autonomy of land sec. 49 (Finland, 1991), available in English at http://www.finlex.fi/en/laki/kaannokset/1991/en19911144.32 Act on the Autonomy of land sec. 55 (Finland, 1991), available in English at http://www.finlex.fi/en/laki/kaannokset/1991/en19911144.33 Act on the Autonomy of land sec. 45, 55, 56 (Finland, 1991), available in English at http://www.finlex.fi/en/laki/kaannokset/1991/en19911144.34 Farimah Daftary, Insular Autonomy: A Framework for Conflict Settlement? A Comparative Study of Corsica andthe land Islands, EUROPEAN CENTRE FOR MINORITY ISSUES, 17 (2000), available at http://edoc.vifapol.de/opus/volltexte/2009/1889/pdf/working_paper_9.pdf.35 Susanne Eriksson, The Example of land: Autonomy as a Minority Protector, THIS IS FINLAND, Apr. 2007,available at http://finland.fi/public/default.aspx?contentid=160122&contentlan=2&culture=en-US.36 Susanne Eriksson, The Example of land: Autonomy as a Minority Protector, THIS IS FINLAND, Apr. 2007,available at http://finland.fi/public/default.aspx?contentid=160122&contentlan=2&culture=en-US.


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fully depend on Sweden or Finland.37 Third, the land Islanders shared a commoncultural heritage and local customs that created a strong enough bond to gainoverwhelming support for its referendum on self-government.38 Ultimately, theresidents are now content with autonomy, and both the Islands and the Finnishgovernment have presented the autonomous region as a success.39 Having theinvolved parties declare their satisfaction with the solution, after many years ofsuccessful implementation, bodes well for the land Islands role as aninternational standard.40

South Tyrol

South Tyrol is an area of land within the boundaries of Italy on the Italy-Austria border.41 Unlike the land Islands, the residents of South Tyrol wereethnically divided between Italian and German speaking peoples, and the area wasoften marked by violent conflict.42 Prior to World War I, South Tyrol was part ofthe Austro-Hungarian Empire, with 86 percent of the population made up ofGerman-speakers.43 After Italy entered the war, the Allied powers rewarded its participation by pledging South Tyrol and the larger adjoining territory ofTrentino,44 which has an Italian-speaking majority, to Italy.45 Italy moved to annexSouth Tyrol, as it provided access to the Brenner Pass, a strategic mountain pass

37 Susanne Eriksson, The Example of land: Autonomy as a Minority Protector, THIS IS FINLAND, Apr. 2007,available at http://finland.fi/public/default.aspx?contentid=160122&contentlan=2&culture=en-US.38landAn Autonomous Region, LAND ISLANDS GOVERNMENT, available athttp://www.aland.ax/.composer/upload//Kortogott_eng_liten.pdf (last visited May 15, 2013).39 Farimah Daftary, Insular Autonomy: A Framework for Conflict Settlement? A Comparative Study of Corsica andthe land Islands, EUROPEAN CENTRE FOR MINORITY ISSUES, 21 (2000), available at http://edoc.vifapol.de/opus/volltexte/2009/1889/pdf/working_paper_9.pdf.40 Susanne Eriksson, The Example of land: Autonomy as a Minority Protector, THIS IS FINLAND, Apr. 2007,available at http://finland.fi/public/default.aspx?contentid=160122&contentlan=2&culture=en-US.41 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 100 (1997).42 Stefan Wolf, Complex Autonomy Arrangements in Western Europe: A Comparative Analysis of RegionalConsociationalism in Brussels, Northern Ireland and South Tyrol, in Autonomy, SELF GOVERNANCE ANDCONFLICTR ESOLUTION: I NNOVATIVE APPROACHES TOI NSITUTIONALDESIGN INDIVIDEDSOCIETIES 117, 124 (Marc Weller &Stefan Wolff, eds., 2005).43

Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 1 (May, 2001),available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.44 The region, which includes Trentino and South Tyrol, is referred to in Italian asTrentino-Alto Adige/Sdtirol .Trentino and South Tyrol are each provinces within this region. In some writings, Trentino is referred to as Trento,which is the capital city of Trentino. However, in order to achieve consistency, this memorandum refers to the province as Trentino, as opposed to Trento.45 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 19 (2011), available athttp://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.


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through the Alps.46 At the time, Italy claimed that South Tyrol and the Trentinoterritory were a single geographical unit, and that this unit should become part ofItaly because the combined territories had a majority Italian-speaking population.47

Prior to World War II Mussolini denationalized South Tyrol and enforcedmassive Italian immigration to counter the prevalence of German-speaking peoples.48 Creating an industrial zone in South Tyrol to attract Italian workers,Mussolinis efforts eventually increased the South Tyrol Italian population to 25 percent.49 German culture and language were suppressed, and Italian was made theofficial language.50 German signage was removed, German court proceedings prohibited, and those who did not speak Italian were not able to participate in politics or in much of the workforce.51 Adolf Hitler supported Italian possession ofSouth Tyrol, and the region remained in Italys control during Hitlers rise to power.52 Mussolini and Hitler gave the German-speaking South Tyrol populationthe option to leave or accept complete assimilation, a choice that resulted in thedeparture of some 75,000 German-speaking people.53

The impact of the population engineering efforts before and during WorldWar II was vast and pervasive. The prohibition on using German in an officialcapacity relegated it to an oral tradition learned in the home, and effectivelydestroyed a generation of German-speaking community leaders and intellectuals in

46 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 19 (2011), available athttp://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.47 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 1-2 (May, 2001), available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.48 Stefan Wolf, Complex Autonomy Arrangements in Western Europe: A Comparative Analysis of RegionalConsociationalism in Brussels, Northern Ireland and South Tyrol, in Autonomy, SELF GOVERNANCE ANDCONFLICTR ESOLUTION: I NNOVATIVE APPROACHES TOI NSTITUTIONALDESIGN INDIVIDEDSOCIETIES 117, 124 (Marc Weller &Stefan Wolff, eds., 2005).49 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 3 (May, 2001),available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.50 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 20 (2011), available athttp://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.51 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 101 (1997); Antony Alcock,The SouthTyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 2 (May, 2001),available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.52 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 20 (2011), available athttp://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.53 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 3 (May, 2001),available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.


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the South Tyrol area.54 Making Italian the official language caused a socio-economic disparity between largely rural German-speaking persons and largelyItalian-speaking city dwellers.55

Following Mussolinis fall, South Tyrol fell under Nazi control in mid-1943until the end of the war.56 While Austria and the German-speaking South Tyrolese pushed for the region to be returned to Austria, Italy objected to the move, in partmotivated by the regions hydroelectric resources.57 As a reconciliation measure,Austria eventually signed an autonomy agreement with Italy over South Tyrol.58

Achieving AutonomySouth Tyrols autonomy began to emerge after World War II in the 1946

Paris Agreement, if only slightly.59 Austrian and Italian representatives signed thetreaty, preserving the cultural and linguistic rights of South Tyrol and Trentinowithin one autonomous region.60 Austria was designated as the protector of theGerman speakers interests, which were a minority after Mussolinis enforcedItalian immigration, thereby giving the Italian and German speaking populations anoutside overseer throughout the implementation process.61 The treaty was madeunchangeable except by concurrence of all interested parties: Italy, Austria, andthe German-language minorities.62

Under the 1947 Treaty of Peace, which incorporated the Paris Agreement,German language protections were provided for, including education instruction in

54 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 4 (May, 2001),available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.55 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 3 (May, 2001),available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.56 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 101 (1997).57 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 101 (1997); Antony Alcock,The SouthTyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 4 (May, 2001),available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.58 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 101 (1997).59 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 20 (2011), available at http://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.60 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 20 (2011), available at http://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.61 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 22 (May, 2001), available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.62 Karl Rainer, The Autonomous Province of Bozen/Bolzano-South Tyrol,in MINORITYGOVERNANCE INEUROPE 92(Kinga Gal, ed., 2002).


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German and modified curricula for primarily German-speaking schools, the rightto return to the use of German surnames, as well as the establishment of legislativeand executive regional governments.63 However, this agreement would prove to beinsufficient to satisfy both sides. An Italian implementing statute was criticized bythe German-speaking South Tyrolese, who believed the statute fell short of theguarantees provided for in the agreement and claimed that the consultation process provided in the Paris Agreement was not fulfilled.64 In addition, the German-speaking South Tyrolese were unhappy with Italian efforts to join South Tyrol withTrentino, as it was seen as an effort to create an Italian majority in the region andlimit the power of the South Tyrol German-speaking population.65 Inequality forGerman-speaking South Tyrolese was the hallmark of this period, characterizedlargely by the slow pace of re-integrating a policy of bilingualism into public life,which would not become official until 1959.66 Violent protests, bombings, andcalls for autonomy throughout the next decade eventually put the South Tyrolquestion on the agenda of the United Nations General Assembly, and the partieswere urged to settle the conflict bilaterally.67

Increasing violence directed at Italy during the 1950s and 1960s promptedthe Italian government to establish a multi-ethnic commission to investigate theSouth Tyrol question.68 Austria, Italy, and members of the leading South Tyrol political party eventually agreed to a revised Autonomy Statute in 1972.69 Thenew statute officially adopted the name South Tyrol and gave South Tyrol andTrentino individual legislative powers as provinces of Italy, combined into one

63 Ruth Lapidoth, AUTONOMY: FLEXIBLE SOLUTIONS TO ETHNIC CONFLICTS 102 (1997); Katrin Pircher, UlrikeHuber & Herbert Taschler,The German Language in Education in South Tyrol (Italy), MERCATOR -EDUCATION 13-14, 16 (2002),available at http://www.mercator-research.eu/fileadmin/mercator/dossiers_pdf/german_in_italy.pdf.64 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 102 (1997).65 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 20 (2011), available athttp://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.66 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 7-8 (May, 2001), available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.67

Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 102 (1997).68 Emma Lantscher, History of the South Tyrol Conflict and Its Settlement , in TOLERANCETHROUGH LAW: SELFGOVERNANCE ANDGROUP R IGHTS IN SOUTH TYROL 3, 12 (Jens Woelk, Francesco Palermo, Joseph Marko, eds.2008).69 Maria Ackrn, Successful Examples of Minority Governance: The Cases of the land Islands and South Tyrol,R EPORT FROM THE LAND ISLANDS PEACE I NSTITUTE, 21 (2011), available athttp://www.peace.ax/images/stories/publications/rapport_1-2011_webb.pdf.


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autonomous region.70 The statute created the region of Trentino-Alto-Adige, andthe Trento and Bolzano, or South Tyrol, provinces.71

Autonomy In PracticeThe regional parliament is divided into two constituencies of Trentino and

South Tyrol provinces. South Tyrols government and its portion of the regional parliament are proportionally divided by ethnicity, and any majority in parliamentis prohibited from creating a government if it is composed of only one ethnicgroup.72 Ethnic proportionality was accompanied by efforts to gradually createlinguistic equality in all areas of life, as the German-speaking South Tyrolese sawlanguage as a crucial connection to their nearly depleted culture.73

Given the desire to preserve language identity, calls to create integratedschools with multilingual instruction were highly contentious.74 The SouthTyrolese rejected such proposals, instead wishing to have children educated intheir mother tongue.75 Under the Autonomy Act, parents were given the right tochoose the preferred language of instruction.76 Moreover, subsequent legislation in1996 provided the autonomous provinces the discretion over certain aspects ofeducation, such as the ability to regulate teachers salary, fill teaching positions,develop schools, determine the hours and subjects taught, and alter the curriculaand exam structure.77 The German language is similarly preserved in other areas,including court and administrative dealings.78

70 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 9-11 (May, 2001), available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.71 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 104 (1997).72 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 11-12 (May, 2001), available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.73 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 13 (May, 2001), available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.74 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the

Autonomous Province of Bozen/Bolzano, 17 (May, 2001), available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.75 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 17 (May, 2001), available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.76 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 107 (1997).77 Katrin Pircher, Ulrike Huber & Herbert Taschler,The German Language in Education in South Tyrol (Italy),MERCATOR -EDUCATION 6 (2002), available at http://www.mercator-research.eu/fileadmin/mercator/dossiers_pdf/german_in_italy.pdf.78 Ruth Lapidoth, AUTONOMY: FLEXIBLESOLUTIONS TOETHNICCONFLICTS 107 (1997).


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economic issues that impact the various ethnic groups with the ability to proposechanges as necessary.88

Br ! ko District

Following the dissolution of the former Yugoslavia, the Dayton PeaceAccords established Bosnia and Herzegovina (BiH) as a state divided into twoentities: the Federation of Bosnia and Herzegovina (FBiH) and the RepublikaSrpska (RS).89 Br ! ko is located at the meeting point of the borders of Croatia,Serbia, and BiH, and saw fierce battles and ethnic cleansing during the war,changing its demographic composition from 20 percent Serb to 99 percent Serband destroying 40 percent of its residences.90 Due to the symbolic value that bothBiH entities attach to Br ! ko, as well as its strategic location, fertile farmland, andwater access, the parties could not agree at Dayton on which entity would possessBr ! ko, so the Dayton Accords provided that the entities would settle Br ! kos statuslater through binding arbitration.91

Achieving AutonomyThe first of three decisions of the Arbitral Tribunal in 1997 determined that

the Br ! ko area would remain under the shared control of the entities, with aninternational supervisor overseeing reconstruction objectives for the area.92 Theinternational supervisor was given the power to enact orders that superseded locallaws when such laws were against the object and purpose of the Dayton Accords.93 Br ! ko demonstrates a situation where external executive authority was exercisedover a post-conflict scenario, creating a period of enforced reform that somemembers of the international community saw as an experiment in reform

88 Antony Alcock, The South Tyrol Autonomy: A Short Introduction, Unpublished Paper Provided by the Autonomous Province of Bozen/Bolzano, 18 (May, 2001), available at http://www.provinz.bz.it/en/downloads/South-Tyrol-Autonomy.pdf.89 History and Mandate of the ORH North/Br ! ko, OFFICE OF THEHIGH R EPRESENTATIVER EGIONALOFFICE, BRCKO,Aug. 28, 2001, available at http://www.ohr.int/ohr-offices/brcko/history/default.asp?content_id=5531.90 Henry Clark, Br ! ko District: An Example of Progress in the Basic Reforms in Bosnia and Herzegovina, WILSON

CENTER , para. 2 (Feb. 4, 2004),available at http://www.wilsoncenter.org/publication/293-Br ! ko-district-example- progress-the-basic-reforms-bosnia-and-herzegovina.91 Valery Perry, Shepherding Sovereignty? Slow Democratization in Bosnia and Herzegovina, 10 BC JOURNAL OFI NTERNATIONALAFFAIRS 75, 82 (2007).92 Republika Srpska v. Federation of Bosnia and Herzegovina, Arbitral Tribunal for Dispute Over Inter-EntityBoundary in Brcko Area, para. 93 (1997), available at http://www.ohr.int/ohr-offices/brcko/default.asp?content_id=5327.93 Republika Srpska v. Federation of Bosnia and Herzegovina, Arbitral Tribunal for Dispute Over Inter-EntityBoundary in Brcko Area, Para. 104(b)(1) (1997), available at http://www.ohr.int/ohr-offices/brcko/default.asp?content_id=5327.


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implementation.94 The Tribunals second decision in 1998 confirmed the need forcontinued international supervision efforts to bring Br ! ko to a point of stability,and gave the international supervisor additional powers to implement the DaytonAccords, including the power to dismiss local officials.95

In 1999 the Arbitral Tribunal issued its last award, settling the final status ofthe Br ! ko District as an area held in condominium by both entities, thoughexisting outside of the administrative and legal entity structures.96 This rulingmeant that Br ! ko would be an autonomous district, while also subject to thecommon institutions of the sovereign state of BiH.97 Under the ruling, all authorityof both the FBiH and the RS was permanently suspended within Br ! ko.98

Autonomy in PracticeAs required by the arbitration awards, the Br ! ko Districts international

supervisor used his/her increased authority to establish an ethnically diverseDistrict Assembly to work towards the implementation of the Dayton Accords.99 Working with a transitional government in this fashion allowed for comprehensiveand efficient societal reforms on many levels.100 For instance, revisions to theBr ! ko legal system created an independent, multiethnic judiciary, whileintroducing criminal and civil codes. A multi-ethnic police force was establishedand certified by the U.N. Mission, and became widely respected in public opinion polls.101 Similarly, popular educational reforms implemented a more balanced, less

94 Valery Perry, At Cross Purposes? Democratization and Peace Implementation Strategies in Bosnia and Herzegovinas Frozen Conflict , 10.1 HUMANR IGHTSR EVIEW 35, 43 (2009)95 Federation of Bosnia and Herzegovina v. Republika Srpska, Supplemental Award, Arbitral Tribunal for DisputeOver Inter-Entity Boundary in Brcko Area, para. 24 (1998),available at http://www.ohr.int/ohr-offices/brcko/default.asp?content_id=5345.96 Federation of Bosnia and Herzegovina v. Republika Srpska, Final Award, Arbitral Tribunal for Dispute OverInter-Entity Boundary in Brcko Area, para. 11 (1999), available at http://www.ohr.int/ohr-offices/brcko/arbitration/default.asp?content_id=42738.97 Valery Perry, Democratic Ends, (UN)Democratic Means? Reflections on Democratization Strategies in Br ! ko andin Bosnia-Herzegovina, in BOSNIAN SECURITY AFTERDAYTON: NEW PERSPECTIVES, 51, 56 (Michael Innes, ed.,2006).98 Peter Farrand, Lessons from Br ! ko: Necessary Components for Future Internationally Supervised Territories, 15EMORY I NTERNATIONALLAW R EVIEW 529, 548 (2001).99 Valery Perry, Democratic Ends, (Un)Democratic Means? Reflections on Democratization Strategies in Br ! ko andin Bosnia-Herzegovina, in BOSNIAN SECURITY AFTERDAYTON: NEW PERSPECTIVES, 51, 57 (Michael Innes, ed.,2006).100 Valery Perry, Democratic Ends, (UN)Democratic Means? Reflections on Democratization Strategies in Br ! koand in Bosnia-Herzegovina, in BOSNIANSECURITY AFTERDAYTON: NEW PERSPECTIVES, 51, 59 (Michael Innes, ed.,2006).101 Henry Clark, Br ! ko District: An Example of Progress in the Basic Reforms in Bosnia and Herzegovina, WILSONCENTER (Feb. 4, 2004),available at http://www.wilsoncenter.org/publication/293-Br ! ko-district-example-progress-the-basic-reforms-bosnia-and-herzegovina.


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biased curriculum.102 The integrated schools of Br ! ko were also the first in BiH.103 The supervisors power to oversee local elections, including the power to alterresults or remove officials if necessary to ensure compliance with the multi-ethnicobjectives of the Dayton Accords, was a contributing factor to establishing alasting multi-ethnic government structure.104

The adoption of the District Statute, which officially instituted a three- branch government, including the District Assembly, mayor, and judiciary, wasanother step towards complete autonomy for Br ! ko.105 The District Statute and theabove-mentioned reforms set a foundation for a period of economic success,establishing business-friendly, anti-corruption policies that attracted foreigninvestment.106 The economic successes in this early period were bolstered by thedecision to allow Br ! ko to have its own tax and customs revenues, and eventuallyallotting it a portion of BiHs VAT income.107 The reforms also attracted refugees back to the area, and created an environment conducive to more moderate perspectives on ethic identity than are found elsewhere in BiH.108

Br ! kos initial reform efforts notably took hold easier than in BiHs entitieswhere local political parties were given a stronger presence in reformationefforts.109 Nationalist politics that could interfere with the establishment ofinstitutions were prevented from doing so, and residents were instead encouragedto guide these institutions prior to holding elections in the District.110 For this tohappen, security was a prerequisite, as demonstrated by the success of Br ! kos

102 Valery Perry, Democratic Ends, (UN)Democratic Means? Reflections on Democratization Strategies in Br ! koand in Bosnia-Herzegovina, in BOSNIANSECURITY AFTERDAYTON: NEW PERSPECTIVES, 51, 60-61 (Michael Innes,ed., 2006).103 Valery Perry, At Cross Purposes? Democratization and Peace Implementation Strategies in Bosnia and Herzegovinas Frozen Conflict , 10.1 HUMANR IGHTSR EVIEW 35, 43 (2009)104 Peter Farrand, Lessons from Br ! ko: Necessary Components for Future Internationally Supervised Territories, 15EMORY I NTERNATIONALLAW R EVIEW 529, 550-55 (2001).105 Statute of the Br ! ko District of Bosnia and Herzegovinaarts 23-41, 46-57, 62-69 (1999),available at http://www.ohr.int/ohr-offices/Br ! ko/default.asp?content_id=5367106 Henry Clark, Br ! ko District: An Example of Progress in the Basic Reforms in Bosnia and Herzegovina, WILSONCENTER (Feb. 4, 2004),available at http://www.wilsoncenter.org/publication/293-Br ! ko-district-example-progress-the-basic-reforms-bosnia-and-herzegovina.107

International Crisis Group, Br ! ko Unsupervised , 4 (December 8, 2011), available athttp://www.crisisgroup.org/~/media/Files/europe/balkans/bosnia-herzegovina/B66%20Br ! ko%20Unsupervised.pdf.108 Florian Bieber, Local Institutional Engineering: A Tale of Two Cities, Mostar and Br ! ko, 12 I NTERNATIONALPEACEKEEPING 420, 430 (2005).109 Valery Perry, Democratic Ends, (UN)Democratic Means? Reflections on Democratization Strategies in Br ! koand in Bosnia-Herzegovina, inBOSNIANSECURITY AFTERDAYTON: NEW PERSPECTIVES, 51, 60-61 (Michael Innes,ed., 2006).110 Henry Clark, Br ! ko District: An Example of Progress in the Basic Reforms in Bosnia and Herzegovina, WILSONCENTER (Feb. 4, 2004), available at http://www.wilsoncenter.org/publication/293-Br ! ko-district-example-progress-the-basic-reforms-bosnia-and-herzegovina.


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multi-ethnic police force, which allowed the reconstruction of religious buildingsthat might have been prone to opposition without a significant deterrent.111 Judicial and legal reforms strengthened the rule of law and laid the foundation ofeconomic and government reforms. Increased rule of law as a result of judicialreform attracted foreign investment.112 The presence of neutral civilian oversighthelped to ensure that the terms of the Dayton Accords and the Arbitral Tribunaldecisions were implemented in the agreed upon format and integrated intoconstitutional reforms.113 At a state level, Br ! ko was the subject of the only BiHconstitutional amendment to date, giving Br ! ko the same access and protections ofthe BiH Constitutional Court as the FBiH and the RS already had, essentially providing domestic safeguards for Br ! kos status.114

Nonetheless, the early success of Br ! ko has not easily endured. After sevenyears without district-wide elections, 2004s elections brought political stalematethat has become a regular occurrence.115 Corruption at all levels and disputes between ethnically aligned political factions are ever-present obstacles inmaintaining an equal, functioning autonomy.116 Many have lamented Br ! kos 4-4-2 rule, an ethnic quota for government posts that some say has become thestandard for all jobs and disbursement of funds.117 Disagreements over thedistribution of funds have stalled local development, while the end of preferentialeconomic treatment for the District and increased corruption has dried up muchforeign investment.118 Br ! ko will likely be pressed to address these issuesinternally, as the most recent Br ! ko international supervisor announced thesuspension of his supervisory role as of August 31, 2012, retaining his powersunder the Arbitral Awards, but deferring to District officials unless absolutely

111 Henry Clark, Br ! ko District: An Example of Progress in the Basic Reforms in Bosnia and Herzegovina, WILSONCENTER (Feb. 4, 2004), available at http://www.wilsoncenter.org/publication/293-Br ! ko-district-example-progress-the-basic-reforms-bosnia-and-herzegovina.112 Henry Clark, Br ! ko District: An Example of Progress in the Basic Reforms in Bosnia and Herzegovina, WILSONCENTER (Feb. 4, 2004), available at http://www.wilsoncenter.org/publication/293-Br ! ko-district-example-progress-the-basic-reforms-bosnia-and-herzegovina.113 Peter Farrand, Lessons from Br ! ko: Necessary Components for Future Internationally Supervised Territories, 15EMORY I NTERNATIONALLAW R EVIEW 529, 535 (2001)114

International Crisis Group, Br ! ko Unsupervised , 8 (December 8, 2011), available at http://www.crisisgroup.org/~/media/Files/europe/balkans/bosnia-herzegovina/B66%20Br ! ko%20Unsupervised.pdf.115 Valery Perry, Shepherding Sovereignty? Slow Democratization in Bosnia and Herzegovina, 10 BC JOURNAL OFI NTERNATIONALAFFAIRS 75, 82-83 (2007).116 International Crisis Group, Br ! ko Unsupervised , 5-6 (December 8, 2011), available at http://www.crisisgroup.org/~/media/Files/europe/balkans/bosnia-herzegovina/B66%20Br ! ko%20Unsupervised.pdf.117 International Crisis Group, Br ! ko Unsupervised , 6 (December 8, 2011), available at http://www.crisisgroup.org/~/media/Files/europe/balkans/bosnia-herzegovina/B66%20Br ! ko%20Unsupervised.pdf.118 International Crisis Group, Br ! ko Unsupervised , 7 (December 8, 2011), available at http://www.crisisgroup.org/~/media/Files/europe/balkans/bosnia-herzegovina/B66%20Br ! ko%20Unsupervised.pdf.


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necessary.119 Recent developments in Br ! ko concerning District residentcitizenship, voting rights, and the assignment of personal identification numberssuggest that more issues related to the rights and obligations of BiH citizens livingin this special status District could increasingly be brought to public attention.

Bremerhaven

Bremerhaven is a city in the German city-state of Bremen, which exists as asort of financial and administrative anomaly.120 Bremerhaven and Bremen Citytogether compose the Bremen Land (state), or Free Hanseatic City of Bremen,which is the smallest state in Germany.121 The city of Bremen is located on theWeser River, which used to provide it with access to sea-borne trading.122 Whenthe Weser began to fill with silt, Bremen bought the land that became the city ofBremerhaven on the North Sea in 1827 to maintain a coastal presence, andtherefore preserve its trading power.123

Bremerhaven boasts the largest container handling port in Europe.124 It isalso home to one of the larger fish processing industries in Europe, despite theabsence of a formerly prosperous fishing fleet in its port.125 Bremerhavens port isthe main driver of its economy, though the economic downturn in Europeregistered a 20 percent decrease in container handling in 2009.126 Bremerhaven became one of the main points of emigration to the United States, and a keyGerman base in World War II.127 The cities of Bremen and Bremerhaven later

119 Press Release, Br ! ko Supervisor Roderick Moore Suspends Functions, Office of the High Representative(August 31, 2012). available at http://www.ohr.int/ohr-dept/presso/pressr/default.asp?content_id=47427120 Strange Bremen: Freedom Doesnt Come Cheap, ECONOMIST, May 19, 2011, available at http://www.economist.com/node/18713878.121 Jutta Kramer, Local Government and City States in Germany, in THE PLACE ANDR OLE OFLOCALGOVERNMENTIN FEDERAL SYSTEMS 83, 90 (Nico Steytler, ed. 2005), available at http://www.kasyp.net/fileadmin/kasyp_files/Documents/reused/Loc_Pol__KAs.pdf#page=89.122 Strange Bremen: Freedom Doesnt Come Cheap, ECONOMIST, May 19, 2011, available at http://www.economist.com/node/18713878.123

Strange Bremen: Freedom Doesnt Come Cheap, ECONOMIST, May 19, 2011, available at http://www.economist.com/node/18713878.124 The Free Hanseatic City of Bremen, BUNDESRAT, available at http://www.bundesrat.de/nn_11646/EN/organisation-en/laender-en/hb-en/hb-en-node.html?__nnn=true.125 European Commission, Assessment of the status, development and diversification of fisheries-dependentcommunities: Bremerhaven Case Study Report , 3 (2010).126 European Commission, Assessment of the status, development and diversification of fisheries-dependentcommunities: Bremerhaven Case Study Report , 20 (2010).127 European Commission, Assessment of the status, development and diversification of fisheries-dependentcommunities: Bremerhaven Case Study Report , 1 (2010).


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separated, but rejoined after the war in 1947 to form a state with a jointconstitution.128

Autonomy in PracticeBremerhaven, with a population of 112,109 in 2012,129 is the only city in

Germany to maintain its own constitution, though it recognizes Bremens possession of the Bremerhaven port area.130 A city council and mayor runBremerhaven.131 As a sub-unit of the Bremen state, Bremerhaven is distinct fromBremen City, which is directly overseen by the state.132 Along with its ownconstitution, Bremerhaven is governed by its own set of laws, rather than thetraditional by-laws of a city.133

Bremerhaven is represented in the Bremen state parliament (Brferschaft),134 sending its own, locally elected parliamentarians to promote its interests.135 It alsoautonomously manages its schools and police, and operates outside of the reach ofstate spending sanctions, allowing it to incur debt and pursue its own investment projects, which have included offshore energy and a sports arena.136

Lessons Learned

Autonomous zones in Europe have developed due to a number of differentreasons, including political interests, financial interests, ethnic differences, or as aresult of lingering tensions deriving from a conflict. In each instance, a state or an

128 The Free Hanseatic City of Bremen, BUNDESRAT, available at http://www.bundesrat.de/nn_11646/EN/organisation-en/laender-en/hb-en/hb-en-node.html?__nnn=true.129 Population Size and Population Movement , BREMEN NATIONAL STATISTICAL OFFICE, available in German athttp://www.statistik-bremen.de/aktuelle_statistiken/01b.htm.130 Strange Bremen: Freedom Doesnt Come Cheap, ECONOMIST, May 19, 2011, available at http://www.economist.com/node/18713878.131 Jutta Kramer, Local Government and City States in Germany, in THE PLACE ANDR OLE OFLOCALGOVERNMENTIN FEDERAL SYSTEMS 83, 90 (Nico Steytler, ed. 2005), available at http://www.kasyp.net/fileadmin/kasyp_files/Documents/reused/Loc_Pol__KAs.pdf#page=89.132 Jutta Kramer, Local Government and City States in Germany, in THE PLACE ANDR OLE OFLOCALGOVERNMENTIN FEDERAL SYSTEMS 83, 91 (Nico Steytler, ed. 2005), available at http://www.kasyp.net/fileadmin/kasyp_files/Documents/reused/Loc_Pol__KAs.pdf#page=89.133 Jutta Kramer, Local Government and City States in Germany, in THE PLACE ANDR OLE OFLOCALGOVERNMENTIN FEDERAL SYSTEMS 83, 90-91 (Nico Steytler, ed. 2005), available at http://www.kasyp.net/fileadmin/kasyp_files/Documents/reused/Loc_Pol__KAs.pdf#page=89.134 Parliament, BREMISCHE BRGERSCHAFT, available at http://www.bremische- buergerschaft.de/index.php?id=6&L=1 (last visited May 16, 2013).135 Strange Bremen: Freedom Doesnt Come Cheap, ECONOMIST, May 19, 2011, available at http://www.economist.com/node/18713878.136 Strange Bremen: Freedom Doesnt Come Cheap, ECONOMIST, May 19, 2011, available at http://www.economist.com/node/18713878.


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international agreement has created an autonomous zone unique to the particularcircumstances.

The most successful autonomous zones have devolved much power to theautonomous zone itself. For instance, in both the land Islands and Bremerhaven,the autonomous zones are provided political representation in whatever state orlegislature that has ultimate authority over that zone. Additionally, tensions inSouth Tyrol began to ease after Italy provided more autonomy to the SouthTyrolese to dictate things like the parameters of the education system. Thesesituations have allowed one state to peacefully have authority over an autonomouszone, while still preserving the cultural and ethnic integrity of the people withinthose zones.

Special Economic Zones (SEZs)

International financial organizations137 use the term special economic zones(SEZs) to refer to geographic areas under singular management that operate asseparate customs areas within a host state, providing economic and financial benefits to enterprises willing to locate within that zone.138

Within this definition are many variations, depending on the objective of thestate that creates the SEZ and the industries the state seeks to attract. A free tradezone is an enclosed area often located in ports of entry throughout the world thatseeks to support international trade generally by providing facilities forwarehousing, distribution, and re-export operations.139 An export processingzone, in its traditional form, is an area designated for export-orientedmanufacturing facilities that is often fenced off from the local economy, though itmay take a hybrid form by encompassing areas for non-export and export-focusedindustries.140 A freeport is a broadly defined zone that combines internal,commercial activities with export-focused activities, even accommodating tourism,137 Such as the International Finance Corporation, the World Bank, the Multilateral Investment Guarantee Agency,and the Multi-Donor Investment Climate Advisory Service of the World Bank Group.138 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 9(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf.139 Megan Murray, What Are Special Economic Zones?, THE U NIVERSITY OFIOWA CENTER FORI NTERNATIONALFINANCE AND DEVELOPMENT, Feb. 9, 2010, available at http://blogs.law.uiowa.edu/ebook/faqs/what-are-special-economic-zones.140 Michael Engman, Osamu Onodera, and Enrico Pinali, Export Processing Zones: Past and Future Role in Tradeand Development , ORGANIZATION FORECONOMICCO-OPERATION ANDDEVELOPMENT(OECD), 10 (May 23, 2007),available at http://www.oecd-ilibrary.org/docserver/download/fulltext/5l4bd48h62q4.pdf?expires=1349561482&id=id&accname=guest&checksum=9E5AC05078A66735D3C80E119DAA5EF0


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retail, and residential areas.141 Another special status is an enterprise zone,which is an area of urban renewal that focuses on the domestic market, providingtax incentives and grants within a developed area in distress.142 While SEZs havethe potential to promote policy reform throughout a state, this reform is limited toeconomic policy, as opposed to political or electoral policy, both of which are notaffected by the development of an SEZ.143

Incentives for Creating an SEZ

SEZs are created for different reasons depending on the scenario, buttypically have one or more of the following goals: to attract foreign investment, tomitigate wide-spread unemployment, to act as a component of a larger economicreform plan, or to experiment with new policies for broader implementation at alater date.144

Developing states have different incentives for creating an SEZ than adeveloped state, and therefore the form each chooses will likely vary. Developingstates typically seek to present a competitive option for investment by reducingcosts of entry and operation, typically providing import/export duty exemptions,reduced customs barriers, tax incentives, and relaxed foreign exchange systems.145 Developed states, on the other hand, often create SEZs to aid in economic reform by attracting new exports while maintaining existing border protections, to reduceunemployment, to experiment with new financial and employment policies, or toattract foreign investment.146

Administration and Regulation of SEZs

141 Michael Engman, Osamu Onodera, and Enrico Pinali, Export Processing Zones: Past and Future Role in Tradeand Development, OECD, 15 (May 23, 2007).142 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 9(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf.143 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 4(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf. 144 Thomas Farole, Gokhan Akinci, SPECIAL ECONOMICZONES: PROGRESS, EMERGINGCHALLENGES, AND FUTUREDIRECTIONS3 (2011).145 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 9(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf.146 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 9(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf.


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SEZs operate under the supervision, regulatory scheme, and enablinglegislation of the government in which they exist, with funding for developmentcoming from public and/or private sources.147 Privately developed zones havedemonstrated increased chances of success to date, typically depending on a clearlegal and regulatory framework to set forth the rights, obligations, and parametersfor its interaction with the government.148 However, this is not to say that privateSEZs are the appropriate option in all circumstances, as many public-sector zoneshave successfully achieved development goals.149 Whether public or private,successful SEZs typically benefit from a regulatory structure that allows for simpleand streamlined investment, work permits, licenses, and customs operations.150 Insome cases the private sector will provide much more than just a regulatoryframework, however, even setting up infrastructure and services such as on-sitecustoms officials.151

The public or private overseeing entity that controls staffing, funding, policies, and partnerships will often operate autonomously, separating itself fromthe SEZs development or operation activities to avoid conflicts of interest andfrom the central government to avoid political influence.152 Separation betweenthe government and the overseeing entity allows the commercial purpose of theSEZ to thrive and encourages competition as a sustainable driving force, ratherthan relaying solely on the temporary fiscal incentives that initiated the SEZ.153

European SEZs

With the exception of eight free trade zones in Germany and in certainSpanish and Portuguese territories, Western European SEZs must comply withEuropean Union regulations (internal market and state aid rules), which, inter alia,

147 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 9(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf.148 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 9(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf.149 Thomas Farole, Gokhan Akinci, SPECIAL ECONOMICZONES: PROGRESS, EMERGINGCHALLENGES, AND FUTURE

DIRECTIONS 10 (2011).150 OECD, Towards Best Practice Guidelines for the Development of Economic Zones, 1, 14, Nov. 23, 2009,available at http://www.oecd.org/mena/investment/44866585.pdf.151 Thomas Farole, Gokhan Akinci, SPECIAL ECONOMICZONES: PROGRESS, EMERGINGCHALLENGES, AND FUTUREDIRECTIONS 10 (2011).152 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 9(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf.153 Thomas Farole, Gokhan Akinci, SPECIAL ECONOMICZONES: PROGRESS, EMERGINGCHALLENGES, AND FUTUREDIRECTIONS 11 (2011).


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restrict manufacturing in favor of packing and warehousing operations.154 Many ofthe Western European zones are located in ports or customs areas and are therefore publicly controlled rather than private.155 For example, the Shannon Free Zone inIreland, an export processing zone, remains an important point of access toEuropean markets.156 Additionally, France has successfully implemented a modelfor urban free zones, targeting distressed urban areas in an effort to revitalizethem by attracting certain businesses with tax and social security exemptions.157

In Central and Eastern Europe, public and private zones have thrived,trading with partners inside and outside of Europe.158 The early success is partlydue to the initial absence of the European Union regulatory structure in many ofthese states.159 For instance, Poland was able to have success with its many SEZs,typically taking the form of export processing zones and free trade zones, which itestablished by renewing existing infrastructure, such as a discontinued nuclearsite.160 Currently, the Kostrzy" sko-Slubicka SEZ is still able to provide corporateincome tax exemptions for entrepreneurs to either defray initial investment costs161 or employment costs162 after establishing business activities.163 Today in Poland,when a potential investor seeks to invest in one of Polands SEZs, Poland hasstreamlined the process to involve selecting a location, obtaining a permit,declaring intent to spend at least EUR 100,000, and generating income.164

154 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 9(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf.155 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 9(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf.156 Shannon Development, An Economic Overview of Irelands Shannon Region, Feb. 2012, available at http://www.shannonireland.com/media/Media,11785,en.pdf.157 Urban Free Zones (ZFU) in Greater Lyon, THE GREATER LYON BUSINESS WEBSITE, available at http://www.business.greaterlyon.com/urban-free-zones-zfu-lyon-business-location-france.50.0.html?&L=1.158 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 9(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf.159 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 9(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf.160 Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development , FIAS, 9(April 2008), available at https://www.wbginvestmentclimate.org/uploads/SEZs - Performance, Lessons Learnedand Implications for Zone Development.pdf.161 Investment costs include, for instance, land purchase, building construction, equipment purchase.162 Employment costs include, for instance, payroll for the first 2 years.163 Offer: Tax Exemptions, K OSTRZYN-SLUBICE SPECIAL ECONOMIC ZONE, available at http://www.kssse.pl/en/offer/tax_exemptions.html (last visited May 7, 2013).164 KPMG in Poland, A Guide to Special Economic Zones in Poland , 21 (2009), available at http://www.paiz.gov.pl/files/?id_plik=10800.


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Lessons Learned

SEZs come in a variety of types, such as free trade zones, export processingzones, freeports, and enterprise zones. While the purpose of an SEZ is to promoteeconomic development, each state typically configures the SEZ to meet the uniquechallenges of that state.

Conclusion

While the combined experiences of states with special status zones mayserve as illustrative examples, there is no single formula for setting up a specialstatus zone. Any assessment of the effectiveness of each zone is closely tied to thesituation it is addressing, whether a post-conflict area, or an area simply in need ofeconomic growth. In some scenarios, autonomous zones are formed without theassistance of the international community. In others the necessity of incorporatingthe competing interests of ethnic groups and regional powers often requires aneutral third party to step in.

Similarly, special economic zones form around the unique economic goalsand the level of economic development of each host government. While acommon thread of free-market policies runs throughout, decisions on public or private funding, hybrid or traditional zone composition, and methods ofadministration will vary greatly according to the subjective needs of the hostgovernment.