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

173. National Security Decision Memorandum 148¹

Washington, January 18, 1972.

TO

• The Secretary of State
• The Secretary of Treasury

SUBJECT

• Expropriation Policy in the Multilateral Development Institutions

The President has reviewed the response to NSDM 131² and the views expressed during the Senior Review Group meeting on August 4, 1971,³ concerning U.S. policy in multilateral development institutions in case of expropriations. The President has decided that:

• —The Secretary of Treasury should use the influence of the United States with the management of the World Bank to induce the Bank to effectively apply its stated policy on compensation and to seek to persuade other institutions to adopt a similar policy on withholding assistance to countries not taking reasonable steps to meet compensation obligations in cases of expropriation.
• —In each case of an expropriation of a significant U.S. interest there will be the presumption that, unless and until it is determined that the expropriating country is taking reasonable steps to provide compensation or that there are major factors requiring us to do otherwise, the United States will attempt to have new loans deferred in the multilateral institutions and if a vote is necessary will abstain or vote negatively.

The provisions of this directive do not imply any change in the procedures established by Executive Order 11269 pertaining to the National Advisory Council on International Monetary and Financial Policies.⁴

Henry A. Kissinger

1. Source: National Archives, RG 59, S/S Files: Lot 83 D 305, NSDM 148. Confidential. Copies were sent to the Secretaries of Defense and Commerce, the Director of Central Intelligence, the Director of the Office of Management and Budget, and the Assistant to the President for International Economic Affairs.
2. A January 19 memorandum from NSC Staff Secretary Davis to the recipients of NSDM 148 informed them the reference to NSDM 131 in the first line should read NSSM 131. (Ibid.)
3. See Documents 158 and 161–163.
4. Dated February 14, 1966. The Executive Order provided the authorities for the NAC to give guidance on voting in the IFIs, Eximbank lending, and other matters related to international lending policy.