Nationalizations and Expropriations of U.S. Direct Private Foreign Investment:

Problems and Issues

ID-77-9: Published: May 20, 1977. Publicly Released: May 20, 1977.

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The wave of nationalizations and expropriations of private foreign investments since World War II by the established, as well as the recently created, countries of the developing world has generated serious concern in the capital-exporting countries.

Expropriations and nationalizations of U.S. direct private foreign investments have increased dramatically since World War II because of the adoption of communism or socialism as the basis of some national governments, especially in Eastern Europe, and the desires of developing nations to acquire a firmer grip on their own economic destinies. It has been virtually impossible to obtain meaningful, complete figures on the value of expropriated or nationalized U.S. private investments. Prospects for the success of efforts by several governments and organizations to protect private foreign investments against expropriation and nationalizations by developing countries are inconclusive, mainly because of the objections of those countries. Some capital-exporting countries are not willing to join in any unified effort that would appear to confront the developing worlds, on which they depend for raw materials and as markets for their exports.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of State should initiate a broad-based effort to negotiate friendship, commerce, and navigation treaties, emphasizing protection of private foreign investments, with developing countries where the potential for U.S. private investment exists.

    Agency Affected:


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