Coll 6/35 'Hejaz-Nejd. Ownership of property by foreigners.' [‎10v] (20/259)

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slight alterations of form only in the regulations now in question. This relaxation
was that a foreign Moslem could acquire property for the sole purpose of
converting it simultaneously into a Wakf, hut only a Wakf, for the perpetual
benefit of Moslems in the Hejaz.
3. What was really new in the regulations was the provision rcgai ding
persons who had acquired their property as Ottoman subjects but who had become
aliens vis-a-vis Saudi Arabia. Such persons were required to sell their property^
to a Saudi subject or to convert it into Wakf, as above, within one year and
were deprived, by an obscurely worded article, of the right of disposal in the
meantime. It was provided that the period might be prolonged on application
to the Government, subject to the payment of a tax of 15 per cent, per annum
of the income from the property during any extended period allowed. Foreigners
inheriting property were similarly required to sell it to a Saudi or convert into
Wakf.
4. The basic principle that foreigners may not acquire real property in the
Hejaz was incorporated in an Ottoman Law of 1867, the famous “ Law of Sefer,"
which conferred on foreigners the right to hold real property in the Ottoman
Empire, except in the Hejaz, subject to their Governments adhering to an instru
ment known as the Protocol of Sefer. The principle has more than once in the
recent past been reasserted by the Saudi authorities. In itself it cannot be
contested on any ground of international law or special treaty enabling British
subjects to acquire real property in the Hejaz. Nevertheless two classes of question
arise, as follows :—
(a) In practice many British subjects and protected persons were in the past
allowed to acquire property qua Moslems. Can they now be deprived
of rights which they acquired by tolerance under previous regimes ?
(5) Many persons who were Ottoman subjects and had therefore a clear
legal right to acquire property are now subjects of States other than
Saudi Arabia which have emerged from the ruin of the Ottoman
Empire. Can they now be compelled to part with their property?
And, if not protected in any other way, are they protected by article 33
of the Treaty of Lausanne?
5. Arising out of earlier correspondence regarding the regulations, I drew
the further attention of His Majesty’s Government to the questions at (a) and (b)
above in a despatch No. 3 of the 6th January. Shortly after I had done so, the
Saudi Government issued a communique dated the 18th January, which was by
way of remedying the grievances created by the regulations of last October,
which it purported not to amend but to interpret. The main points in this
communique were as follows :—
(a) The regulations rested on a basis of Islamic principle applicable only to
the Hejaz, not to other parts of Saudi Arabia.
ip) The Government were considering possible legislation to enable foreigners
to hold Government (“ Miri ”) property “by way of long lease and
other proper Sharia means.”
(c) The Government did not wish to take retroactive measures against
persons, now aliens, who, as Ottoman subjects, had acquired property
under the Turkish regime or persons who had acquired it under the
Hashimite regime. U had therefore given them the right of applyin 0,
for an extension of the period of one year.
6. This communique has not placated the interested foreign missions, least
of all perhaps the Iraqi Legation, which apart from its general interest, is
specially interested in the case of the properties owned by members of the
Hashimite family. Certain xestiictions on the exercise of their rights by members
of that family were removed in 1933 and it is now suggested that the regulations
of last October may undo the effect of that removal of restrictions.
7. I discussed the whole subject unofficially with Fuad Bev Hamza on the
6th February. He admitted that the article in the regulations which deprives
owners of the right of disposal of their properties pending sale or conversion
into Wakf was badly worded and said that it did not mean that they could not
let their property. He said that the provision of the communiqud mentioned
at {c) in paragraph 5 above was intended to be promissory, i.e., that if applications
were made for an extension of time they would be granted, and granted for an