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Expropriation
Practical Law Glossary Item 1-502-1997 (Approx. 2 pages)
Glossary
Expropriation
Also known as a taking, an act by a governmental entity that substantially deprives a foreign investor of its ownership, control, or economic benefit in an investment or property located in the governmental entity's jurisdiction. Expropriation may be affected in one act or a series of regulatory actions (referred to as creeping expropriation).
Under international law, a governmental entity can expropriate foreign assets if:
- The regulation affecting the expropriation is non-discriminatory (the regulation or law does not discriminate between foreign and domestic investors or among foreign investors).
- The expropriation is done for a public purpose.
- The governmental entity observes procedural safeguards.
- The governmental entity pays compensation to the investors.
For more information on expropriation, see the following Practice Notes: