Expropriation - A Sequel

UNCTAD Series on Issues in International Investment Agreements II

image of Expropriation - A Sequel
In this publication, Section I defines the concepts of direct and indirect expropriation and reviews the variety of measures that can constitute an expropriation. Section II focuses on the core issue of establishing an indirect expropriation: the recent treaty practice on defining indirect expropriation as well as arbitral practice. Section III discusses the differences between compensation for a lawful expropriation and reparation for unlawful expropriations, as well as the question of valuation of investments. Section IV offers options which policy makers and negotiators may wish to consider.



Categories of expropriation, requisite elements and conditions of lawfulness

Through IIAs, States have established a guarantee for foreign investors against the expropriation of their investments without compensation. Today virtually all bilateral investment treaties (BITs) contain an expropriation provision. Customary international law also contains rules on the expropriation of foreignowned property and continues to supplement IIAs on those issues where the latter leave gaps or require interpretation.


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