Compensation for the Nationalization of American-Owned Property in Bulgaria, Hungary and Rumania, 1 N.Y.L
Total Page:16
File Type:pdf, Size:1020Kb
NYLS Law Review Vols. 22-63 (1976-2019) Volume 1 Issue 1 NEW YORK LAW FORUM, vol 1, 1955 Article 25 January 1955 COMPENSATION FOR THE NATIONALIZATION OF AMERICAN- OWNED PROPERTY IN BULGARIA, HUNGARY AND RUMANIA NICHOLAS UJLAKI Follow this and additional works at: https://digitalcommons.nyls.edu/nyls_law_review Part of the Law Commons Recommended Citation NICHOLAS UJLAKI, COMPENSATION FOR THE NATIONALIZATION OF AMERICAN-OWNED PROPERTY IN BULGARIA, HUNGARY AND RUMANIA, 1 N.Y.L. SCH. L. REV. (1955). This Article is brought to you for free and open access by DigitalCommons@NYLS. It has been accepted for inclusion in NYLS Law Review by an authorized editor of DigitalCommons@NYLS. NEW YORK LAW FORUM VOLUMM I SEPTEMBER, 1955 NUMER 3 COMPENSATION FOR THE NATIONALIZATION OF AMERICAN-OWNED PROPERTY IN BULGARIA, HUNGARY AND RUMANIA NICHOLAS UJLAKI I. INTRODUCTION THE recently enacted Amendments to the International Claims Settlement Act of 1949' provide, among other things, a method of compensating American nationals, at least partially, for the national- ization or other taking of their property in Bulgaria, Hungary and Rumania. These Amendments establish a claims program for the benefit of American nationals, not only for the partial compensation of national- ization claims against the Governments of Bulgaria, Hungary and Rumania, but also for (1) war damage, and pre-war governmental debt (bond) claims against the said three Governments; (2) claims against the Government of Italy arising out of the war and not other- wise provided for in the Italian peace treaty; and (3) claims against Russian nationals secured by liens on certain assets prior to the NICHOLAS UJLAxi is a member of the Alumni Advisory Board of the NEW YORK LAW FORUm. 1 An Act to amend the International Claims Settlement Act of 1949, as amended, and for other purposes. 69 STAT. 562. Chapter 645-Publ. L. No. 285 (H.R. 6382) 84th Cong., 1st Sess. (1955). 1955 U.S. CODE CONG. & AD. NEws, No. 14, 3912-3928 (August 20, 1955) The draft legislation was introduced in the House of Representatives as H.R. 6382 on May 19, 1955, and passed the House on June 23, 1955. Hearings before the Senate Committee on Foreign Relations began on July 8, 1955, and were concluded on July 14, 1955. The Committee, after approving certain changes in the bill, voted without ob- jection, to report it favorably to the Senate on July 19, 1955. Cf. Foreign Claims Settle- ment Commission; Report of the Committee on Foreign Relations on H.R. 6382 Cal- endar No. 1063, 84th Cong., 1st Sess., Sen. Rep. No. 1050 (hereafter: Report). The bill passed the Senate on July 20, 1955, the Conference Report passed on July 27, 1955 and the Act was approved on August 9, 1955. For legislative history see: 1955 U.S. CODE CONG. & AD. NEWS, No. 14, 4189-4203 (August 20, 1955). 266 NEW YORK LAW FORUM [VoL. 1 Litvinov Assignment, and other claims arising prior to November 16, 1933, against the Soviet Government Settlement of such claims out of assets available to the Government of the United States is long overdue, and legislation to the same effect was under consideration for a rather long period of time.3 In connection with claims against Bulgaria, Hungary and Ru- mania the law authorizes the vesting and liquidation of currently blocked assets of the Governments of said countries, and of their nationals, other than natural persons. The background of these pro- visions is, that: "in the peace treaties of September 15, 1947 the Governments of Bulgaria, Hungary and Rumania undertook to re- store American owned property in their respective countries or else provide compensation to the extent of two-thirds of the war damage suffered by it. These undertakings have not been honored. Nor have American owners been compensated for property which was national- ized or otherwise taken subsequent to the date of the peace treaties.4 Other obligations to American nationals likewise remain unsatisfied. Under the terms of the peace treaties (Art. 29 of the treaty with Hungary is typical) 5 it was provided that assets in the United States belonging to the three Governments or their nationals might be seized 2 Cf. Title MI; also Report (see note 1, supra) 1-2. 3 See among others the following bills to amend the International Claims Settle- ment Act of 1949, as amended, and for other purposes: S. 3698 (83rd Cong., 2d Sess., introduced in the Senate on July 1, 1954) ; S. 1310 (84th Cong., 1st Sess., introduced in the Senate on March 4, 1954); see also: Foreign Claims Settlement Commission, Hear- ings before the Committee on Foreign Affairs, House of Representatives, 84th Cong., 1st Sess., on draft legislation to amend the International Claims Settlement Act of 1949, as amended, and for other purposes, held between March 22 and April 22, 1955, Wash- ington, 1955), (hereafter: Hearings). 4 Within approximately one year following the peace treaties each of the countries involved undertook comprehensive nationalization programs, as a result of which virtu- ally all private property was nationalized or otherwise taken. See: "Section by section analysis of proposed bill to amend the International Claims Settlement Act of 1949," section 217, Hearings, note 3 supra, at 219. The more important laws upon which the nationalizations were based were enacted between 1947 and 1952. Cf. note 13, infra. 5 The following provision in the treaty with Hungary (Article 29) is repeated in the treaties with Bulgaria and Rumania: "1. Each of the Allied and Associated Powers shall have the right to seize, retain, liquidate or take any other action with respect to all property, rights and interests which at the coming into force of the present Treaty are within its territory and belong to Hungary or to Hungarian nationals, and to apply such property or the proceeds thereof to such purposes as it may desire, within the limits of its claims and those of its nationals against Hungary or Hungarian nationals, including debts, other than claims fully satisfied under other articles of the present Treaty. All Hungarian property, or the proceeds thereof, in excess of the amount of such claims, shall be returned." Cf. MAuRr, Private Property, Rights and Interests in the Paris Peace Treaties, 29 Bgrrsn Y. B. INT'L LAw 273-300 (1947). 1955] NATIONALIZATION OF AMERICAN PROPERTY and liquidated, and the proceeds used for such purposes as the United States might desire 'within the limits of its claims and those of its nationals, including debts, other than claims fully satisfied under other Articles of the present Treaty'."6 It appears that while the use of said assets to compensate war damage and certain unsatisfied pre- war obligations is expressly within the peace treaties, the utilization of such assets to compensate American owners for property national- ized or otherwise taken subsequent to the date of the peace treaties is the result of an extended interpretation of the treaty provisions.7 Said extension, even if somewhat retaliatory in its character, is entirely in accordance with the well established principle of American law, that no government is entitled to take "private property for whatever reason without provision for prompt, adequate and effective payment therefore"." The expropriation of property without just compensation is confiscation.9 The fact that American owners have not been com- 6 Report (see note 1, supra), 2. 7 "While under the provisions of the treaties these proceeds could be devoted to whatever purposes the United States Government believed desirable, the Department of State concluded that it was fit and appropriate to utilize the proceeds for the satis- faction of the American claims. In this way some measure of compensation will be given to American claimants who have been urging the State Department to assist them and who under present circumstances have no expectation of satisfaction of their claims from any other source." Statement of Mr. Barbour, Hearings (note 3, supra) 60. 8 Secretary of State Hull's note of August 22, 1938 in connection with the Mexican expropriations, 19 Dep't State Press Release 51 (1938); 32 Ami. J. INT'L L. 191, 193 (Supp. 1938). See also II HACxwORTH, DIGEST oF INTERNAiEoNAL LAw 655-664 (Washington, 1942). In the same matter the Secretary's note of July 21, 1938 (III HACxWORTH, p. 656) states: "If it were permissible for a government to take the private property of the citi- zens of other countries and pay for it as and when, in the judgment of that govern- ment, its economic circumstances and its local legislation may perhaps permit, the safe- guards which the constitutions of most countries and established international law have sought to provide would be illusory. Governments would be free to take property far beyond their ability or willingness to pay, and the owners thereof would be without recourse. We cannot question the right of a foreign government to treat its own nationals in this fashion if it so desires.. This is a matter of domestic concern. But we cannot admit that a foreign government may take the property of American nationals in dis- regard of the rule of compensation under international law. Nor can we admit that any government unilaterally and through its municipal legislation can, as in the instant case, nullify this universally accepted principle of international law, based as it is on reason, equity and justice." 0 The nationalization and expropriation laws recently enacted by the satellite states (see note 12, infra) either contain a provision for compensation or state that future legislation will provide for compensation, and, on the face of it, in most cases, there is no confiscation. The statutes speak of nationalization or expropriation and do not seem to differ in that respect from the corresponding law of the Western countries.