Foreign Relations of the United States, 1946, Council of Foreign Ministers, Volume II

C.F.M. Files: Lot M–88: Box 2065: Deputies Documents

Report by the Committee of Economic Experts on Italy³¹

secret
C.F.M. (D) (46) 138

Paris, 5 June, 1946.

Peace Treaty With Italy

Restitution

Part I.	Agreed provisions.
Part II.	Subjects for which the Committee agreed that provisions were necessary in the treaty, but on which agreement was not reached.
Part III.	Proposed provisions on which the Committee did not reach agreement regarding the necessity of inclusion in the treaty.

Note.—Although throughout this Report paragraphs are numbered consecutively in each part, this is done for convenience of reference and in no way indicates the final order of articles in the Treaty.

Part I. Agreed Provisions

1. “Italy accepts the principle of the United Nations Declaration of 5th January, 1943 and will return property removed from United Nations’ territory.

2. “The Italian Government undertakes to return the property referred to in the present article in good order and in this connection to bear all costs in Italy relating to labour, materials, and transport.

3. “The Italian Government shall take the necessary measures to effect the return of property covered by this article held in any third country by persons subject to Italian jurisdiction.

4. “Claims for the restitution of property shall be presented to the Italian Government by the government of the country from whose territory the property was removed, it being understood that rolling stock shall be regarded as having been removed from the territory to which it originally belonged. The period during which such claims may be presented shall be six months from the date of coming into force of the present treaty.

5. “The Italian Government will co-operate with the United Nations in, and will provide at its own expense all necessary facilities for, the search for and restitution of property liable to restitution under the present Article.”

Part II. Subjects for Which the Committee Agreed That Provisions Were Necessary in the Treaty, but on Which Agreement Was Not Reached

1. Subject to the reservations expressed below, the following text was agreed:

“The obligation to make restitution applies to all identifiable property at present in Italy which was removed by force by any of the Axis Powers from the territory of any of the United Nations.”

a. The French, U.K., and U.S. representatives would not be prepared to agree to this text unless it is clear that removals resulting from intimidation or coercion, as well as those resulting from physical violence or taking, should be within the scope of restitution. Accordingly, these representatives consider that the words “or duress” should be inserted after the word “force” in the above paragraph.

The U.S. representative expressed his willingness, as an alternative, to add an annex to the article on restitution defining “force” in the manner agreed by the Co-ordinating Committee of the Allied Control Authority for Germany.

b. The French representative can only accept subject to the reservation that a provision on burden of proof as set out in Part III be included in the Article.

c. The French, U.K., and U.S. representatives consider that the following words should be added at the end of the above paragraph: “irrespective of any subsequent transaction by which the present holder of any such property has secured possession.”

The U.S. representative does not consider that claims for restitution should be barred by contentions that persons within the Axis country in which the property is presently located acquired property without knowledge of the original looting and refers to the language of the first sentence of paragraph 4 of C.F.M. (D) (46) 70.³³

2. No agreement having been reached as to the method of settling disputes arising from the restitution of loot, each representative expressed his views as follows:

a. France. The French representative considered that such disputes should be settled by Mixed Commissions consisting of three members, one appointed by the United Nations, a second by Italy and a third by agreement, or failing agreement, by the President of the International Court of Justice. These Commissions should be responsible for enforcing the provisions laid down in this Article. Nevertheless, he was ready to agree to some other form of arbitration machinery agreed by the Committee.

b. U.S.S.R. The Soviet representative proposes the adoption of the following text:

“Disputes which may arise in the execution of the present Article of the Treaty shall be settled by a Conciliation Commission composed of representatives of the government of the United Nations’ concerned and representatives of the Italian Government on a basis of parity. If, within a period of three months, the Conciliation Commission has not been able to settle the dispute through diplomatic channels, or shall agree on some other method of settling the dispute (arbitration procedure, appeal to the International Court of the United Nations, etc.).”

c. U.K. The United Kingdom representative considers that claims for the restitution of property if not determined within one year of their submission shall be referred to a Mixed Arbitral Tribunal of the kind referred to in C.F.M. (46) 38;³³ in his view it is essential that Arbitration machinery binding on all parties, and giving a final decision should be provided for settling disputes.

d. U.S.A. The U.S. representative is of the opinion that there should be an Allied agency to deal with the Italian Government in restitution matters and has stated that the treaty commission proposed by the U.S. Delegation would be such an agency. The U.S. representative is also of the opinion that provision should be made for the claimant governments, if dissatisfied with the action of the treaty commission, and the treaty commission, at its discretion, to refer cases to a Mixed Arbitral Tribunal for final decisions binding on both the claimant governments and the Italian Government.^* The reasons the U.S. representative supports reference of disputed cases to such a tribunal are given at Part II, no. 3 paragraph (d) of the Committee’s report regarding United Nations Property in Italy.

Part III: Proposed Provisions on Which the Committee Did Not Reach Agreement Regarding the Necessity of Inclusion in the Treaty

1. The French representative proposed the inclusion of a provision on burden of proof in respect of the proposal under Part II, para 1, and considers the text proposed by the U.S. representative as satisfactory.

The Soviet representative considers that in the conciliation procedure there is no necessity for predetermining on what party the burden of proof shall be laid.

The U.K. representative agrees with the U.S. text.

The U.S. representative does not object to a provision on burden of proof and has stated he would accept a provision reading as follows:

“The burden of identifying the property and of proving the original ownership shall rest on the claimant government, and the burden of proving that the property was not removed by force or duress shall rest on the Italian Government”.

2. The U.K. representative considers (notwithstanding anything in para 4 of part I) that restitution of ships should be made to the government of the territory in which they were registered or of which they had the right to fly a flag, whether or not formerly registered in that territory.

3. The French representative proposed the inclusion of a paragraph providing for a compensation in lire for expenses incurred outside of Italy by owners of property located in Italy for the return of their property.

Restitution of Gold

Article proposed by the United States Delegation

“The Italian Government accepts the obligation to restore to the Government of the United Nation concerned all monetary gold looted by or wrongfully removed to Italy or to transfer to the Government of the United Nation concerned an amount of gold equal in weight and fineness to that looted or wrongfully removed. This obligation is recognised by the Italian Government to exist irrespective of any transfers or removals of gold from Italy to any other Axis Power or a neutral country.

“Claims based on this Article shall be made to the Italian Government by the United Nation Government concerned within six months after the entry into force of this Treaty. If such claims are not met by the Italian Government within three months after they are presented, the United Nation Government concerned shall submit the case to a Mixed Arbitral Tribunal. The decision of the Mixed Arbitral Tribunal shall be final.”

The French and U.K. representatives agreed with this proposal.

The Soviet representative agreed with the proposal except as to the arbitration procedure and proposed to use the conciliation procedure he proposed for the article of restitution.

The U.S. representative considers that the United States Government cannot properly discharge its custodianship of gold captured by United States forces, against which there may be restitution claims, unless the treaty provides a procedure for final settlement of disputed claims. Reference of disputes of this character to the Mixed Arbitral Tribunal is the procedure he deems appropriate, and he reserves his position on the inclusion in the Treaty of the first paragraph of the foregoing text in view of the lack of agreement on the second paragraph.

31. At their 69th Meeting, June 10, 1946, the Deputies considered this Report, approving Part I, but failing to reach agreement on Parts II and III. This Report was subsequently included as Appendix II to the Draft Peace Treaty with Italy, C.F.M.(D) (46) 177, in which form it was considered by the Council of Foreign Ministers at its 22nd Meeting, June 19, and its 26th Meeting, June 25; see the United States Delegation Records of those meetings, pp. 538 and 617.
33. Not printed.
33. Not printed.
34. The U.S. proposals are contained in C.F.M. (46) 70 and in article 67 of the U.S. draft treaty with Italy, C.F.M.(D) (46) 165. [Footnote in the source text. The documents under reference are not printed.]