Accounting Valuations in Nationalization Settlements
- PDF / 4,017,469 Bytes
- 15 Pages / 420 x 712.8 pts Page_size
- 2 Downloads / 179 Views
Ph.D. in Business Administration from the University of has recently been a visiting Professor at the Escuela de Universidad de Conception, in Conception, Chile. Dr. Lecturer at the University of Southern California.
15
Palgrave Macmillan Journals is collaborating with JSTOR to digitize, preserve, and extend access to Journal of International Business Studies ® www.jstor.org
LEGALBACKGROUND Under generally accepted principles of internationallaw, a nation has the right to nationalizeprivatelyheld propertysituatedwithin its bordersif it is done on a non-discriminatorybasis and for a publicpurpose.However, that nation also hasan obligationto compensatethe ownersof the nationalized property. The United NationsGeneralAssemblyexpressedits position regarding nationalization or expropriation in the "Declaration on Permanent SovereigntyOver Natural Resources," General Assembly Resolution 1803 (XVII) of 14 December1962 which states, in part: 1. The right of peoples and nations to paramount sovereignty over theirnaturalwealthand resourcesmustbe exercised in the interest of their national development and of the wellbeing of the people of the Stateconcerned... 4. Nationalization,expropriationor requisitioningshallbe based on groundsor reasons of public utility, security or the nationalinterestwhich are recognizedas overridingpurely individual or private interests, both domestic and foreign. In such cases, the owner shall be paid appropriatecompensation. in accordance with the rules in force of the State taking such measuresin the exercise of its sovereignty and in accordance with internationallaw. In any case, wherethe question of compensationgives riseto a controversy,the nationaljurisdictionof the State taking such measuresshall be exhausted. However. upon agreement by sovereign States and other parties concerned. settlement of the dispute should be made througharbitrationor internationaladjudication. The United States has consistently maintainedthat an expropriating state must provide"just compensation"for assets taken. A clearstatement of the UnitedStates position was made by Secretaryof State CordellHullin a note sent on July 21, 1938 to the MexicanAmbassadorin Washington: The taking of propertywithout compensationis not expropriation. It is confiscation. It is no less confiscation because there may be an expressed intent to pay at some time in the future. If it were permissiblefor a governmentto take the private property of the citizens of other countriesand pay for it as and when, in the judgmentof that government,its economic circum16
stances and its local legislation may perhapspermit, the safeguards 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 willingnessto pay, andthe ownersthereof would be without recourse. In 1962 the United States adopted the "HickenlooperAmendment," which requiresthe United Statesto suspendforeignaid to any country that takes property of a United S
Data Loading...
