- Indirect expropriation — Foreign Direct Investment — Conduct of proceedings
This chapter addresses expropriation, which is the taking by a government of privately owned property. Such a taking is recognized as within the inherent power of a state over property located in its territory, and where the state expropriates its own citizens’ property, international law is not implicated. Indeed, regardless of whether the property expropriated is in foreign hands, expropriation is not per se wrongful under customary international law or investment treaties unless certain other conditions are present. The law of expropriation is concerned with the way states must treat foreign investment; expropriation is, in fact, a subset of the responsibility that a state has for injuries to nationals of another state. Issues of particular interest include the types of property protected from expropriation, either through the terms of a treaty or through customary international law; the boundary between normal government regulation and indirect expropriation; and the valuation of property that has been expropriated.
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