Doc. No. 25 (E).
Memorandum on the Clauses of the Draft Peace Treaty Concerning Italian Property in the Territory of the United Nations (Art. 69)
Article 69
A. According to Article 69, each of the Allied and Associated Powers shall have the right to seize, retain or liquidate all property, rights and interests within its territory which on the date of the coming into force of the Treaty belong to Italy or Italian nationals, including property subject to control by reason of the state of war and with the exception of certain categories specially mentioned.
The Italian Government has already called the attention of the United Nations Governments to the consequences of the adoption of a measure of this nature. The Italian nationals, who would lose the property in question, acquired it after long years of hard work. Persons who are in no way responsible for the policy of the Fascist regime, and who contributed considerably to the economic development of the countries they were living in, would thus be deprived of all their property. Obviously no amount in lire, paid to them in Italy, could compensate them for the loss of positions they had acquired through their work and sacrifice in many years. On the other hand the compensation that the Italian Treasury would have to pay to persons thus deprived of their property would impose an extremely heavy burden on the Italian budget.
The loss of Italian property abroad would compromise beyond repair the situation of certain Italian enterprises having interests abroad and would thus most seriously affect Italy’s domestic economic situation.
Another no less serious consequence is the following: despite the best intentions, despite the fall in the Italians’ standard of life, despite outside help, Italy cannot hope to absorb all the man-power at her disposal. Consequently she must count on the possibility of a new increase of emigration (which used to counterbalance the effects of over-population most effectively before being restricted for political reasons by the fascist regime) as soon as general conditions make it possible. The requirements of reconstruction and industrial development [Page 201] in various foreign countries lead one to hope that Italian manpower may be utilised abroad on a large scale to the advantage of world economy. But emigration would meet with serious obstacles, also of a psychological nature, if, when Italy is once more admitted to the international community, Italians owning property abroad were to see the results of their work suddenly annulled.
It should be remarked, moreover, that this clause does not exist in the Treaty with Finland and its inclusion in the Treaties with Rumania, Hungary and Bulgaria is still under discussion.
Consequently the Italian Delegation must insist on Article 69 being suppressed or at least restricted to the property, rights and interests of the Italian State other than those used for consular or diplomatic purposes.
B. Should the suppression not be possible, this Article would have to be differently worded so that the clause is only applied in cases where credits actually exist and only within such limits as are strictly necessary for satisfying the claims of the Allied or Associated Powers, respecting at the same time the principles of justice and legality. The provision of Article 69 merely mentions that Italian property, rights and interests will be liquidated in accordance with the laws of the Allied or Associated Power concerned, but does not establish the procedure to be followed in determining the amount of the credit of each Allied or Associated Power and of its nationals. On the contrary this Article seems to leave such evaluation to the creditor Powers, in contrast to all generally recognised juridical principles.
Furthermore, no procedure is established for determining the value of property, rights and interests that each of the Allied or Associated Powers contemplates liquidating to pay its credit.
The clause under discussion seems to exclude also the possibility for Italy to pay her debts by other means in order to avoid the liquidation foreseen by the Treaty. This would mean ignoring the right that all legislations generally recognise to debtors of meeting their obligations by any appropriate means of payment in order to avoid the seizure of their property by their creditors.
As this clause restricts the right of ownership in the most exceptional manner and is in contrast with the general principle according to which each person must answer with his property for his obligations and only for them, it is essential to modify the proposed system so that the Allied and Associated Powers shall have the right to seize Italian property until their claims and those of their nationals are satisfied, but shall not have the right to liquidate it unless it is impossible for them to obtain the payment of their credits otherwise.
[Page 202]Furthermore if it really becomes necessary to liquidate this property, its liabilities should be taken into account as well as the personal debts of the owners in the country where the property is located. It is moreover requested that, to the owners of the liquidated property, the right be granted to buy back their property by paying the price of liquidation.
C. Paragraph 4 of the Article under discussion stipulates that the Allied and Associated Powers are under no obligation to return to the Italian Government or Italian nationals industrial, literary or artistic property rights or to include such property rights in determining the amounts which may be retained for satisfying the claims advanced by each of the Allied Powers against the Italian Government or Italian nationals.
The Government of each of the Allied and Associated Powers would, moreover, have the right to impose such limitations, conditions and restrictions as may be deemed necessary by the said Power, on rights and interests with respect to industrial, literary and artistic property acquired by the Italian Government or Italian nationals prior to the coming into force of the Peace Treaty with the Power concerned. In this way even rights and interests acquired after the Armistice would be subject to this provision.
The Italian Government, while recalling its remarks on the clauses concerning industrial, literary and artistic property (Annex 6), wishes to stress the fact that copyrights and patents are of a special character which, in spite of differences in the various legislations as for their nature, always entail pecuniary remuneration. Less severe conditions should therefore be made as regard these rights than for other property, rights and interests. On the contrary, the provision in question deals with these rights still more severely. Consequently it is felt that this provision should be suppressed, though reserving to Annex 6 the settlement of the rights and interests of industrial, literary and artistic property. Provision should be made for these rights and interests not to be included among those to be retained or liquidated.
D. Paragraph 5, letter (c) provides that the clause in Article 69 does not apply to the property, rights and interests of natural persons of Italian nationality “permitted to reside …”
In order to avoid any misunderstanding it should be specified that this provision also refers to the property of Italians “permitted to reside on September 3, 1939 …”.
E. For obvious reasons of humanity and justice it should be agreed that the property considered in paragraph 1 of Article 69 does not include wages, pensions and indemnities for the expiration of labour contracts due to Italian nationals by public or private juridical persons or by natural persons and which have not yet been paid owing [Page 203] to the state of war. The aforesaid sums are really maintenance allowances and, in most cases, will be used to meet the obligations contracted for subsistence during the period in which said sums were not paid.
F. Paragraph 5, letter f, proposes that the property of corporations or associations having “siège social” in ceded territories or in the Free Territory of Trieste be exempted from the provisions of the Article in question provided that they are not owned or controlled by persons in Italy.
It should be remarked that this limitation would create an arbitrage [arbitrary?] distinction between certain corporations or associations of the same nationality and would, quite apart from its harshness, give rise to a number of difficulties as to how it should be applied.
Moreover, according to most legislations, it is the siège social that determines the nationality of corporations and insurance companies. Furthermore the fact that a corporation has its siège social in ceded territories or in the territories of Allied or Associated Powers can only be of advantage to the economic situation of these corporations and to the prosperity of these territories.
The right of Allied or Associated Powers to seize, retain or liquidate property, rights and interests owned by the Italian Government or by Italian nationals should not be applied to rolling stock belonging to the Italian Government or to Italian nationals which, on the date of the coming into force of the Treaty, may happen, for any motive, to be in the territory of Allied or Associated Powers. This amendment is necessary in order not to jeopardize such trade exchanges as have already been resumed between Italy and other European countries, with the agreement of the Allied and Associated Powers. Obviously neither the State railways nor private owners of such rolling-stock would allow it outside Italy if it were liable to seizure.