Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

171. Memorandum From Secretary of State Rogers to President Nixon¹

Washington, January 14, 1972.

SUBJECT

• Expropriation Policy

A statement of U.S. policy on expropriation, which has been worked out in an interagency group under Pete Peterson’s direction, will shortly be forwarded to you.² A proposed National Security Decision Memorandum on our policy in the international financial institutions with respect to this subject is also before you or will shortly be so and will be incorporated into the statement.

I wish to convey my views on three points that remain to be resolved:

1. Who Should Issue the Proposed Statement of Policy.

In order to achieve the maximum impact I recommend that you issue the statement. However because expropriation is such a sensitive subject with the less-developed countries generally, particularly the Latin American countries, you may decide that you would rather not issue it in your name.

I am of the opinion that, if you decide not to issue the statement, it should be issued by the Secretary of State in order to emphasize the fact that our policy on expropriation is to be an important part and parcel of U.S. foreign policy.

2. Policy in the International Financial Institutions.

The proposed expropriation statement contains a presumption set forth in National Security Decision Memorandum 136³ to the effect that we will not accord new bilateral economic benefits to expropriating countries unless we specifically determine in the national interest to do otherwise. The question as to whether we should adopt a parallel policy with respect to multilateral assistance, i.e., how we will vote on loans in these international institutions, such as the Inter-American Development Bank, is before you. I recommend that we do adopt a parallel policy.

I believe we should make a presumption on our votes in the international institutions on proposed loans to expropriating countries similar to the presumption we will make on bilateral assistance. However, because of the strong foreign policy impact of a refusal in the international institutions to support loans to particular countries, it is essential that each case be carefully considered by State and Treasury. Therefore I believe that any instructions to our Executive Directors of these institutions in this regard be coordinated by State and Treasury and resolved by the President in the unlikely event of a disagreement.

3. Interagency Mechanism to Deal with Expropriation Cases.

Because of the foreign policy impact, I believe that operational responsibility for dealing with expropriation matters as they arise should be in the Operations Group of the Council on International Economic Policy as presently constituted.

William P. Rogers

1. Source: National Archives, RG 59, S/S Files: Lot 83 D 305, NSDM 148. Confidential. Drafted by Samuels and rewritten by Rogers.
2. See Document 172.
3. Document 169.