Foreign Expropriation

Congress and the President versus Foreign Expropriation

Congress has asserted itself in one area of protection of United States property abroad, making provision against uncompensated expropriation of property belonging to United States citizens and corporations. The problem of expropriation of foreign property and the compensation to be paid therefor remains an unsettled area of international law, of increasing importance because of the changes and unsettled conditions following World War II.1 It has been the position of the Executive Branch that just compensation is owed all United States property owners dispossessed in foreign countries and the many pre-World War II disputes were carried on between the President and the Department of State and the nation involved. But commencing with the Marshall Plan in 1948, Congress has enacted programs of guaranties to American investors in specified foreign countries.2 More relevant to discussion here is that Congress has attached to United States foreign assistance programs various amendments requiring the termination of assistance and imposing other economic inducements where uncompensated expropriations have been instituted.3 And when the Supreme Court in 1964 applied the “act of state” doctrine so as not to examine the validity of a taking of property by a foreign government recognized by the United States but to defer to the decision of the foreign government, 4 Congress reacted by attaching another amendment to the foreign assistance act reversing the Court's application of the doctrine, except in certain circumstances, a reversal which was applied on remand of the case.5

Resources

References

This text about Foreign Expropriation is based on “The Constitution of the United States of America: Analysis and Interpretation”, published by the U.S. Government Printing Office.

Notes

[Footnote 1] Cf. Metzger, Property in International Law, 50 VA. L. REV. 594 (1964); Vaughn, Finding the Law of Expropriation: Traditional v. Quantitative Research, 2 TEXAS INTL. L. FORUM 189 (1966).

[Footnote 2] 62 Stat. 143 (1948), as amended, 22 U.S.C. § 2191 et seq. See also 22 U.S.C. § 1621 et seq.

[Footnote 3] 76 Stat. 260 (1962), 22 U.S.C. § 2370(e)(1).

[Footnote 4] Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964).

[Footnote 5] 78 Stat. 1013 (1964), as amended, 22 U.S.C. § 2370(e)(2), applied on remand in Banco Nacional de Cuba v. Farr, 243 F. Supp. 957 (S.D.N.Y. 1965), aff'd 383 F.2d 166 (2d Cir. 1967), cert. denied, 390 U.S. 956 (1968).