175. Memorandum From the President’s Assistant for International Economic Affairs (Flanigan)1

MEMORANDUM FOR

  • The Secretary of State
  • The Secretary of the Treasury
  • The Secretary of Defense
  • The Secretary of Commerce

SUBJECT

  • Policy Implementation on Expropriation Questions

NSDM 136, NSDM 148, and the President’s January 19, 1972 public policy statement concerning Economic Assistance and Investment Security in Developing Nations require establishment under the [Page 450]Council on International Economic Policy of a special interagency coordinating mechanism on expropriation questions.

Accordingly, a CIEP interagency staff coordinating group, to include representatives of the Departments of State, Treasury, Defense, and Commerce is established. The Secretary of State should designate a senior officer, who will also be responsible to the Executive Director of the CIEP to chair the group.2 Provision should be made by the Chairman for NSC and CIEP staff participation, as well as of other agencies on appropriate occasions.

The functions of the group will be:

  • —to keep under continuing review all potential and active expropriation cases; compiling relevant facts and analyses, to include information concerning economic benefits subject to potential U.S. action;
  • —to make a finding in each case for purposes of policy implementation that an expropriation affecting a significant U.S. interest has, or has not, occurred; and, if so, whether reasonable provision has been made for prompt, adequate, and effective compensation;
  • —to recommend courses of action for the United States Government, consistent with the President’s January 19 expropriation policy statement, and
  • —to coordinate policy implementation.

The group, upon request of any member, is expeditiously to deal, within its terms of reference, with any alleged expropriation problems.

In case of interagency disagreement, the Chairman—if urgent efforts to resolve the issue fail—will promptly submit a report to the CIEP Executive Director setting forth the issue or issues, the conflicting views, the options proposed, and a reasoned statement of advantages and disadvantages of each course of action under consideration. Each Department may, at its option, request the Executive Director to review a case to attempt to resolve the issue or, if necessary, to submit it for Presidential decision.

The provisions of this memorandum 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.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 219, CIEP. Confidential. A copy was sent to Kissinger.
  2. In a March 20 memorandum, Executive Secretary Eliot informed Flanigan that Secretary Rogers had designated Assistant Secretary Willis Armstrong to chair the Interagency Group with Deputy Assistant Secretary Sidney Weintraub as his alternate. The Office of Investment Affairs would provide staff support for the Group. (National Archives, RG 59, Central Files 1970-73, E 1 US)