AMITY UNIVERSITY

PROJECT ONLINE
RESEARCH

TOPIC-KINDS OF
EXPROPRIATION

SUBMITTED TO SHREYA
SARKAR
SUBMITTED BY ADEEBA
FAHEEM
(BA.LLB)
SEC-B
SEMESTER-2

ENROLLMENT NO.-6281

What does 'Expropriation' mean

Expropriation is the act of a

government in taking privately
owned property, ostensibly to be
used for purposes designed to
benefit the overall public. In the
United States, what is referred to as
"eminent domain" provides the legal
foundation for expropriation. The
Fifth Amendment to the Constitution
states that private property cannot be
expropriated "for public use
without just compensation."
BREAKING DOWN
'Expropriation
The primary debate regarding the
concept of eminent domain in the
United States is not about
compensation, but about the fact the
government can take possession of
private property without the consent,
and in fact directly against the
wishes, of the property owner.
There is commonly accepted
international agreement that private
property owners should receive
appropriate compensation for their
property in an instance of government
expropriation. The few exceptions to
agreement on this notion are primarily in
communist or socialist countries, where
it is also sometimes the case the
government expropriates not just land
but domestic businesses or foreign
businesses that have a presence in the
country. For example, when the
communist government of Fidel Castro
came to power in Cuba in 1959, the
government expropriated a number of
oil refineries and other businesses
owned by U.S. corporations. In the
United States, a 1952 expropriation of
88 steel production facilities by
President Truman, one of the few
attempts by the U.S. government to
expropriate a business operation, was
eventually struck down by the U.S.
Supreme Court

The Rationale for

Expropriation
The primary uses of private property
expropriated by the exercise
of eminent domain in the United
States are for the construction of
public utilities, highways, railroads,
airports or other infrastructure
projects. U.S. courts have accepted
the doctrine of eminent domain as a
power of the government by
suggesting it is implied by the Fifth
Amendment clause stating that
private property cannot be taken
without compensation. Stating that
property cannot be taken without
proper compensation implies that
property can, in fact, be taken.
The other main justification for
expropriation comes from the area of
public health. It is generally
recognized that events that threaten
public health, such as toxic
environmental contamination of an
area, justify the government acting to
relocate the affected population in the
area, and part of that action may
logically entail the government
expropriating the property of the
relocated resident
Major Concerns Regarding
Expropriation
Major concerns related to
government expropriation are the rule
of law, questions of due process and
the issue of compensation. It is
important that laws specifically
delineate a government's rights to
expropriate property and there are
adequate due process channels
available for citizens to appeal a
proposed expropriation. In regard to
compensation, there is debate on the
question of whether property owners
should be compensated not only for
their property but for the
inconvenience of being required to
relocate. Expropriation actions
initiated by regulatory agencies have
led to increasing debate on limiting
governmental powers of
expropriation.
The process
of expropriation "occurs when a
public agency (for example, the
provincial government and its
agencies, regional districts,
municipalities, school boards, post-
secondary institutions and utilities)
takes private property for a purpose
deemed to be in the public
interest". Unlike eminent domain,
expropriation may also refer to the
taking of private property by
a private entity authorized by a
government to take property in
certain situations.
The term appears as "expropriation
of expropriators (ruling classes)"
in Marxist theory, and also as the
slogan "Loot the looters!" which was
very popular during the
Russian October Revolution.The
term is also used to
describe nationalization campaigns
by communist states, such
as dekulakization and collectivization
in the USSR.
One example of expropriation
occurred between the United
States and Mexico in 1938 when the
Mexican president Lzaro
Crdenas signed an order that
expropriated almost all of the foreign
oil companies operating in Mexico.
This initially turned out to have great
negative consequences on the
Mexican economy when their oil
exports were boycotted by major oil
companies, decreasing exports
dramatically,but later on the
economic benefits of this move
became apparent, with the new
national oil company PEMEX being
an important contributor to
the Mexican Miracle, and other
countries soon followed with oil
nationalisation carried out in much
of Latin America and the developing
world.
Due to political risks that are involved
when countries engage in
international business it is important
to understand the expropriation risks
and laws within each of the countries
that business is conducted in order to
understand your risks as an investor
in that country.

KINDS OF
EXPROPATION
Regarding scope
Nationalisation: Industry- or
sector-wide taking of property
associated with transfer to state
 Expropriation: Taking of
specific property or asset
transferred to state or other
economic actors
Regarding formal effects
direct expropriation: Forced and
formal transfer of legal title
and/or physical seizure of property
indirect expropriation:
deprivation of investment
without formal transfer of title or
physical dispossession
Direct expropriation
Historical development Key
issue of investment protection in
20th century
Diminished practical importance
since 1980s Today: New
expropriations as reaction to
financial and banking crises or in
context of re-nationalisation of
key natural resources
Assessment
Requirement of compensation
for direct taking of property
generally accepted standard of
international law
reflects principles of good
governance and rule of law
normally not an undue
restriction of governmental
regulatory power or discretion
 But: Restriction on sovereignty
over natural resources
Indirect expropriation
Historical development
accepted in some early 20th
century cases as part of customary
international law
practical relevance rose in 1990s
indirect expropriation included in
most BITs
Today: Next to fair and equitable
treatment and national treatment
violations most common claim in
investor-state dispute settlement
cases
Assessment
 contours and relationship with
regulatory autonomy remain same.
 BIBLIOGRAPHY

Mexican Expropiation of
foreign oil. US Departmant of
state office of the historian.
Orlando Figes, A people
tragedy : Russian Revolution
1996
What is expropiation British
Columbia Expropriation
compensation board.n
Retrieved 8 October 2012.