FOREIGN CLAIMS SETTLEMENT COMMISSION OF THE UNITED STATES
U.S. DEPARTMENT OF JUSTICE
2002 ANNUAL REPORT
600 E Street, N.W., Suite 6002
Washington, DC 20579
Telephone (202) 616-6975
FAX (202) 616-6993
Mauricio J. Tamargo, Chairman
Jeremy H. Gonzalez Ibrahim, Commissioner
- - -
David E. Bradley, Chief Counsel
Jaleh F. Barrett, Deputy Chief Counsel
This Report may be cited as:
2002 FCSC Ann. Rep.
This Report is available on-line at:
LETTER OF TRANSMITTAL
To the President of the Senate and the Speaker of the House of Representatives of the 108th Congress
The Foreign Claims Settlement Commission of the United States submits for your review its Annual Report for Calendar Year 2002.
The Commission is an independent component within the United States Department of Justice; however, it is required under the War Claims Act of 1948 and the International Claims Settlement Act of 1949 to submit its own separate annual report to Congress.
We appreciate Congress's continued support for the Commission's international claims programs.
Mauricio J. Tamargo
TABLE OF CONTENTS
- Procedure and Administration of Claims Programs
- CURRENT YEAR'S ACTIVITIES
- Claims Against Iraq
- Pending Claims Computer Database Project
- Helms-Burton Act/Claims Against Cuba
- Prisoner-of-War and Civilian Internee Claims
- SUMMARY OF PAST PROGRAMS
- Claims Under the International Claims Settlement Act of 1949
- Title I
- Yugoslavia-First Program
- Yugoslavia-Second Program
- China-Second Program
- Title II 15
- Vesting of Assets of Bulgaria, Hungary, and Rumania
- Title III
- Bulgaria, Hungary, and Rumania-First Programs.
- Bulgaria and Rumania-Second Programs
- Hungary-Second Program
- Italy-First Program
- Italy-Second Program
- Soviet Union
- Title IV 20
- Czechoslovakia (First Program)
- Title V
- China-First Program
- Title VI 22
- German Democratic Republic
- Title VII
- Claims Under the War Claims Act of 1948
- Title I
- Title II
- Claims Under Other Statutory Authority
- Lake Ontario
- Czechoslovakia-Second Program
- Holocaust Survivors Claims Program
- FUTURE PROGRAMS
- Claims Against Iraq
- Advisory Program
- INDEX OF COMPLETED PROGRAMS
- International Claims Settlement Act of 1949
- Claims Act of 1948
- Other Statutory Authority
- TABLE OF COMPLETED PROGRAMS
- International Claims Settlement Act of 1949
- Claims Act of 1948
- LIST OF CHAIRMEN AND COMMISSIONERS
SECTION I: THE COMMISSION
The Foreign Claims Settlement Commission of the United States is an independent quasi-judicial federal agency organized administratively as a component of the U.S. Department of Justice. The Commission's primary mission is to determine the validity and valuation of claims of United States nationals for loss of property in foreign countries, as authorized by Congress or following government-to-government claims settlement agreements. These losses have occurred either as a result of nationalization of property by foreign governments or from damage to and loss of property as a result of military operations during World War II. The Commission also has adjudicated claims of United States military personnel and civilians captured or interned during World War II and the Korean and Vietnam conflicts. In addition, between 1996 and 1998 the Commission adjudicated claims of U.S. citizens persecuted by Nazi Germany during World War II.
The Foreign Claims Settlement Commission came into being on July 1, 1954, under Reorganization Plan No. 1 of 1954, which abolished the War Claims Commission and the International Claims Commission and transferred their functions to the present Commission. In 1980, the Commission was transferred by Public Law 96-209 to the Department of Justice as a separate agency within the Department.
The Commission consists of a Chairman, who serves on a full-time basis, and two Commissioners, who serve on a part-time basis. They are appointed by the President for fixed terms of office, normally of three years' duration, and confirmed by the Senate. On February 6, 2002, Mauricio J. Tamargo took his oath of office as Commission Chairman, having been nominated to the position by President Bush in May 2001. Because of increased responsibilities in his private-sector work, Commissioner Richard T. White resigned from his position as part-time Commission member on September 21, 2002. Consequently, as of the end of the year, both of the part-time Commissioner positions were vacant. However, as the year ended the nomination of Mr. Jeremy H.Gonzalez Ibrahim for one of the part-time Commissioner positions was awaiting consideration by the Senate, and he was subsequently confirmed for the position on March 27, 2003.
The Chairman and Commissioners are responsible for the review of claims and the issuance of decisions. The Chairman is vested with sole administrative authority within the Commission, while the Department of Justice is responsible for providing administrative support services to the agency. The Commission employs a small staff of legal and administrative personnel.
In most instances, authorizing statutes provide for the deduction of a certain percentage from the claims funds for deposit as miscellaneous receipts in the United States Treasury to defray the administrative expenses of the Commission and the Department of the Treasury in carrying out the programs. Over $40 million has been recouped through the deductions from the various settlement funds that the United States has obtained from foreign governments during the years of the Commission's existence.
The jurisdiction of the Commission and its two predecessor commissions has encompassed the administration of 44 claims programs in which more than 660,000 claims have been filed and awards granted in excess of $3 billion.
B. Procedure and Administration of Claims Programs
By statute, the decisions of the Commission are final and conclusive on all questions of fact and law and are not subject to review by any other official, department, or agency of the United States, or by any court by mandamus or otherwise. This prohibition against judicial or other review makes it imperative that the Commission adhere to appropriate administrative and legal procedures to assure claimants a full and fair opportunity to present their claims.
When a claims program is commenced, appropriate claim forms and detailed instructions are forwarded to anyone who requests them or has at any time indicated to the Commission an interest in filing a claim in that program. The Commission also seeks to publicize the program through publication in the Federal Register and releases to the news media, and by notifying relevant organizations and congressional offices. The deadline for filing claims is established and publicized as well.
Once a completed claim form, along with related exhibits, documents or other evidence, has been received, the staff of the Commission undertakes a careful examination and, if necessary, seeks additional information or evidence from the claimant or other sources to enable the claimant to establish the requisite elements of a claim (i.e., United States nationality, ownership, value and the date and circumstances of the asserted loss). The adjudication of a claim is not considered to be an adversarial matter between the Commission and the claimant; the Commission's staff members endeavor to do all they reasonably can to assist each claimant in establishing a compensable claim. After a claim has been fully developed, it is presented to the Commission for adjudication.
Following a full review of the claim and all supporting material, the Commission issues a written "Proposed Decision." This Proposed Decision is forwarded to the claimant or claimant's counsel who is advised of the right to file objection within a specified period of time, if the claimant is dissatisfied and believes there is ground for a more favorable decision. The claimant may submit, in writing, any additional evidence and argument in support of the objection and may also request an oral hearing before the Commission to present oral evidence and argument in support of the objection. Thereafter, the Commission reconsiders the entire record and renders its determination by the issuance of a written "Final Decision."
If no timely objection is received on a claim, the Proposed Decision is automatically entered as the Commission's Final Decision. However, even after the issuance of a Final Decision, the regulations of the Commission permit the filing of a petition to reopen a claim for further consideration based upon newly discovered evidence. Or, if information comes to the attention of the Commission from sources other than the claimant, the Commission may reopen a claim on its own motion.
In most instances, a time limit within which the Commission must complete adjudication of the claims is established by statute. After the specified date, the Commission no longer has authority to accept additional claims for adjudication or to reconsider any claim which has been determined in that particular program.
The decisions of the Commission set forth the reasons for the action taken and include specific findings of fact and conclusions of law determining each aspect of the claim, to fully apprise claimants of the basis of its decisions. In most programs, the amount of funds available to pay the Commission's awards is limited, often resulting in pro rata payment of awards. The Commission therefore must ensure that the award entered in each claim is fully supported, and based upon the same criteria as all other awards.
The payment of awards to claimants is beyond the scope of the Commission's functions. The Commission's responsibility is discharged upon entry of a Final Decision and certification of any award to the Secretary of the Treasury, who has sole jurisdiction, under specific statutory authority, to make payments out of the funds established for that purpose.
In some instances, Congress authorizes the adjudication of claims before there are funds available to pay awards. In such cases, the Commission adjudicates the claims and certifies its decisions to the Secretary of State or Secretary of the Treasury, or both, as a "pre-adjudication" or "pre-settlement adjudication" of the claims. The Department of State then can use the Commission's decisions as the basis for negotiating a claims settlement agreement with the responsible foreign government at some future date. Under legislation newly enacted in 1998 (Section 2211, Omnibus Consolidated and Emergency Supplemental Appropriations Act,1999, Pub. L. 105-277, amending subsection 4(a) of Title I of the International Claims Settlement Act of 1949, as amended, 22 U.S.C. 1623(a)), the Secretary of State now has ongoing discretionary authority to refer claims to the Commission for pre-adjudication.
SECTION II: CURRENT YEAR'S ACTIVITIES
A. Claims Against Iraq
In 2002 the Commission continued to receive inquiries from members of the public as to whether it was going to begin a program for formal adjudication of the classes of claims against Iraq that fall outside the jurisdiction of the United Nations Compensation Commission (UNCC). The UNCC, located in Geneva, Switzerland, currently has jurisdiction over most claims of U.S. nationals against Iraq. These other claims primarily consist of a variety of claims pre-dating Iraq's August 1990 invasion of Kuwait. Although two bills that would have authorized the Commission to adjudicate these claims (H.R. 1632 and H.R. 4573) had been introduced in the House of Representatives, neither was taken up for action before Congress's adjournment.
B. Pending Claims Computer Database Project
As discussed in other sections of this report, the claims adjudicated by the Commission in two of its programs - the Cuban program and the Soviet program - still await final settlement under government-to-government agreements. The Soviet program was completed in 1959 and the Cuban program was finished in 1972. Some of the information relating to the claims against Cuba was compiled and summarized in a simple early computer database, but only the printouts from that database still exist. In the case of the Soviet program, only the claimant name index was computerized.
Although a settlement agreement with Cuba or Russia could still be years away, the Commission concluded that it would nonetheless be advisable to place the information from the respective claims programs in readily accessible computer databases, so that the data could be easily retrieved and reviewed. Once the project is completed, the Commission plans to furnish a copy of these pending claims database files to the Department of State, to have on hand when claims settlement negotiations are eventually begun. In addition, the data will be available to members of the public who may be interested in conducting research on the claims programs.
A further reason for developing these databases was to advance the Commission's compliance with the E-Government Act of 2002, which mandates agencies to modernize their information technology architecture so they can interact more successfully with citizens and other government departments and agencies. In accordance with the E-Government Act and the President's Management Agenda, the Commission outsourced the creation of these computer databases and transferred all of the information from the pending claims into them. Through implementation of this market-based, results-oriented strategy, information flow will be accelerated, enhancing the Commission's ability to communicate with claimants and other government entities. Furthermore, the creation of these pending claims databases will allow the Commission to develop e-government strategies for future claims programs.
C. Helms-Burton Act/Claims Against Cuba
The Cuban Liberty and Democratic Solidarity (LIBERTAD) Act (also known as the Helms-Burton Act) includes as Title III a provision authorizing U.S. nationals whose Cuban property was confiscated by the Castro regime to bring federal court actions against foreign entities "trafficking" in those properties. The legislation contemplates that, with limited exceptions, the courts hearing these cases will adopt the valuations determined in awards issued by the Commission in its Cuban Claims Program, conducted from 1965 to 1972. (See Section III, subsection A.5(b), below.) In cases where a plaintiff was not eligible to file a claim in the Commission's Cuban Claims Program (i.e., was not a U.S. national at the time of confiscation), the legislation authorized the United States District Courts, beginning in March 1998, to appoint the Commission as Special Master to make determinations on issues such as ownership and valuation of property, for use in court actions.
Invoking his authority under the statute, however, President Bush suspended the right to file Title III actions in January and July 2002, citing the continuing need to seek agreement with U.S. trading partners on policy toward Cuba. Nevertheless, during 2002 the Commission continued to receive requests to examine files from its Cuban Claims Program. Some of the requests were from attorneys advising foreign investors wishing to avoid involvement with any property in Cuba that is the subject of a certified claim in the program. In addition, representatives from the Department of State continued to examine files in connection with the Department's responsibility under Title IV of the Helms-Burton Act, which requires the exclusion from the United States of foreign individuals associated with corporations or other entities "trafficking" in property that is the subject of a certified claim in the Cuban Claims Program.
D. Prisoner-Of-War and Civilian Internee Claims
During 2002 the Commission continued to have jurisdiction under Public Law 91-289 (50 U.S.C. App. 2004 and 2005) to receive and adjudicate claims by United States Armed Forces personnel and civilians, or their survivors, for compensation based on inadequate food rations and inhumane treatment received while held as prisoners of war or internees during the Vietnam conflict. However, no new claims were received during the year. The Commission also continued to serve as a repository of records on United States military veterans and civilians captured or interned during World War II, the Korean conflict, the U.S.S. Pueblo incident, and the Vietnam conflict.
SECTION III: SUMMARY OF PAST PROGRAMS
A. Claims Under the International Claims Settlement Act of 1949
The jurisdiction of the Commission and its predecessor, the International Claims Commission, has encompassed the administration of 22 claims programs under the authority of the seven titles of the International Claims Settlement Act of 1949, as amended. Pub. L. 455, 81st Congress, approved March 10, 1950, 64 Stat. 12 (22 U.S.C. 1621 et seq.) ("the Act"). These programs have involved claims of U.S. nationals for losses in specific foreign countries as a result of the nationalization or other taking of property during specific periods of time by the governments of those countries. These 22 claims programs are briefly summarized below. Statistics and other relevant information on the programs appear in Sections V and VI of this report.
1. Title I
(a) Yugoslavia - First Program
The provisions of Title I of the Act authorized the International Claims Commission to administer a program to determine claims of nationals of the United States for the nationalization or other taking of property included within the terms of the U.S.-Yugoslav Claims Settlement Agreement of July 19, 1948. That agreement resulted in a fund of $17 million from which payments were made on the awards granted in the claims. The first Yugoslavia Claims Program was completed on December 31, 1954.
Under section 4(a) of Title I of the Act, the International Claims Commission was authorized to adjudicate claims of nationals of the United States for the nationalization or other taking of property included within the terms of any claims settlement agreement thereafter concluded between the United States and a foreign government (exclusive of governments against which the United States declared the existence of a state of war during World War II). Pursuant to this authorization, the International Claims Commission administered a program to determine U.S. nationals' property claims against the Government of Panama upon the conclusion of a claims settlement agreement between the Governments of the United States and Panama on October 11, 1950. This agreement resulted in a fund of $400,000 for payments on the awards granted in the claims. The Panamanian Claims Program was completed on December 31, 1954.
On July 16, 1960, the Governments of the United States and Poland entered into a claims settlement agreement under which the Government of Poland agreed to pay the sum of $40 million to the United States over a period of twenty years in full settlement and discharge of claims of nationals of the United States arising between May 8, 1945, and the date the agreement was concluded. The Commission was authorized to adjudicate the claims covered by this agreement under the original provisions of section 4(a) of Title I of the Act. The Polish Claims Program was completed on March 31, 1966.
(d) Yugoslavia - Second Program
A second claims agreement was concluded between the Governments of the United States and Yugoslavia on November 5, 1964, covering claims against the Government of Yugoslavia which arose subsequent to the 1948 agreement (see subsection 1(a), above) and providing a fund of $3.5 million for payments on awards. The second Yugoslav Claims Program was administered by the Commission under authority of section 4(a) of Title I of the Act, adjudicating the claims filed pursuant to the agreement. The program was completed on July 15, 1969.
(e) China - Second Program
In 1972 the Commission completed the first China Claims Program, in which it adjudicated claims of United States nationals which arose between October 1, 1949 and November 6, 1966. (See subsection 5(a), below.) On May 11, 1979, an agreement was entered into with the People's Republic of China settling claims of nationals of the United States arising through the date of that agreement. The Commission thereafter proceeded under section 4(a) of Title I of the Act to adjudicate claims by United States nationals which arose between November 6, 1966 and May 11, 1979. The Commission completed the second China Claims Program on July 31, 1981.
On December 19, 1985, the United States Government concluded a compensation agreement with the Provisional Military Government of Socialist Ethiopia for the settlement of claims against that government arising as a result of the nationalization, expropriation, or other taking of, or restrictive measures directed against, property rights or interests of United States nationals. The agreement provided for payment to the United States of a total of $7 million as compensation for the claimants, the last installment of which was paid in January 1991.
Exercising its authority under section 4(a) of Title I of the Act, the Commission began adjudication of the claims covered by the settlement agreement on March 31, 1986, and set a program completion date of September 30, 1987. During the course of the program, the Commission issued decisions on a total of 45 claims. It found 27 to be compensable, and made awards amounting to $14,387,510.96 in principal and $10,024,589.00 in interest. Following completion of the program on September 30, 1987, the Commission certified the awards to the Secretary of the Treasury for payment, in accordance with section 5 of the Act.
On June 29, 1990, the Commission completed the adjudication of claims against the Government of Egypt, pursuant to its authority under section 4(a) of Title I of the Act. The claims were based on uncompensated "nationalization, expropriation, confiscation and other restrictive measures of or against" U.S. nationals' property between January 1, 1952 and October 27, 1976. Initial decisions on most of the claims had been issued by the Office of the Legal Adviser in the Department of State, following entry into force of the U.S.-Egyptian Claims Settlement Agreement of 1976. (TIAS 8446, entered into force October 27, 1976.) However, to expedite distribution of the amounts remaining from the original $10 million paid to the United States under the agreement, the Legal Adviser requested, by letter dated May 11, 1989, that the Commission take jurisdiction over the claims and determine the claimants' entitlement to share proportionately in those remaining funds. In most of the claims, this was accomplished by issuance of awards of interest, which had not been included in the awards made by the Department of State.
During the course of the program, the Commission issued decisions on a total of 85 claims, out of which 83 were found to be compensable. In these, it made awards, including principal and interest, in the total amount of $5,189,236.64.
On March 10, 1995, representatives of the United States and Albanian governments signed an agreement providing for settlement of United States nationals' property claims against Albania in exchange for a lump-sum payment by Albania to the United States of $2 million. Agreement Between the Government of the United Statesof America and the Government of the Republic of Albania on the Settlement of Certain Outstanding Claims. The agreement was approved by the Albanian Parliament and took effect on April 18, 1995. The claims had arisen following the establishment of the Albanian Communist regime of Enver Hoxha after the end of World War II. The Commission received a total of 326 claims and of these it found 90 to be compensable. The aggregate total of the awards granted in the program, including principal and interest, came to $1,162,017.96.
2. Title II
Title II of the Act provided for the vesting and liquidation of enemy assets which had been blocked by the United States during World War II, and for the deposit of the proceeds into separate special funds, according to the respective government ownership of those assets prior to blocking. Pub. L. 285, 84th Congress, approved August 9, 1955, Title II, 69 Stat. 562 (22 U.S.C. 1631). The proceeds were deposited into funds by the Department of the Treasury which were designated the Bulgarian Claims Fund, the Hungarian Claims Fund, and the Rumanian Claims Fund, for payments on awards granted by the Commission in claims against those governments under Title III of the Act. (See subsection 3, below.)
3. Title III
(a) Bulgaria, Hungary, and Rumania -First Programs
Title III of the Act authorized the Commission to consider claims of nationals of the United States for losses arising out of war damages, nationalization, compulsory liquidation, or other taking of property prior to August 9, 1955, by the Governments of Bulgaria, Hungary, and Rumania. Pub. L. 285, 84th Congress, Title III, approved August 9, 1955, 69 Stat. 570 (22 U.S.C. 1641). The Commission was also authorized to consider claims of nationals of the United States for losses based on the failure of those governments to meet certain debt obligations expressed in the currency of the United States. Payments on the awards granted in these claims were made from the appropriate claims funds created under Title II of the Act. (See subsection 2, above.) The amounts available from these funds for payments were: Bulgarian Claims Fund - $2,676,234.49; Hungarian Claims Fund - $2,235,750.65; and Rumanian Claims Fund - $20,164,212.68. The Bulgarian, Hungarian, and Rumanian Claims Programs were completed on August 9, 1959.
(b) Bulgaria and Rumania - Second Programs
On July 2, 1963, the United States concluded a formal claims settlement agreement with the Government of Bulgaria. Under that agreement, the Government of Bulgaria paid the sum of $400,000 in settlement of claims of nationals of the United States. This amount was deposited into the Bulgarian Claims Fund to supplement the amount derived from the prior liquidation of Bulgarian assets for payments on awards granted by the Commission in both Bulgarian claims programs. (See subsections 2 and 3(a), above.)
On March 30, 1960, the United States concluded a formal claims settlement agreement with the Government of Rumania. That agreement provided for the payment of the sum of $2.5 million in settlement of claims of nationals of the United States. This $2.5 million was deposited into the Rumanian Claims Fund to supplement the amount derived from the prior liquidation of Rumanian assets for payments on awards granted by the Commission in both Rumanian claims programs. (See subsections 2 and 3(a), above.)
An amendment to Title III of the Act authorized the Commission to consider claims against Bulgaria and Rumania which arose after the first programs were authorized (see subsection 3(a), above) but prior to the conclusion of the claims settlement agreements with the governments of those countries. Pub. L. 90-421, approved July 24, 1968, 82 Stat. 420 (22 U.S.C. 1641). Those programs could not be administered under the authority of section 4(a) of Title I of the Act, for the United States had declared the existence of a state of war during World War II against those countries. The second Bulgarian and Rumanian Claims Programs were completed on December 24, 1971, as required by the statute.
(c) Hungary - Second Program
On March 6, 1973, the United States concluded a formal claims settlement agreement with the Government of Hungary under which that government agreed to pay the sum of $18.9 million, to be paid in installments, in settlement of claims of nationals of the United States. These payments were deposited into the Hungarian Claims Fund to supplement the amount derived from the prior liquidation of Hungarian assets for payments on awards granted by the Commission in both Hungarian claims programs. (See subsections 2 and 3(a), above.) The final installment payment was made on June 9, 1980.
As in the second programs for Bulgaria and Rumania, the Commission did not have the statutory authority to implement this claims agreement by administering a claims program under section 4(a) of Title I of the Act, for the United States had declared the existence of a state of war against the Government of Hungary during World War II. Under an amendment to Title III of the Act, Congress authorized the Commission to determine claims of nationals of the United States against the Government of Hungary based on nationalization or other taking of property between August 9, 1955, the date on which the first Hungarian Claims Program was approved, and March 6, 1973, the date of the agreement with Hungary. Pub. L. 93-460, approved October 20, 1974, 88 Stat. 1386 (22 U.S.C. 1641). The Commission was also authorized to adjudicate certain claims which should have been filed in the first Hungarian Claims Program, but were not, due to an administrative error which caused notices of that program to be mailed to non-existent addresses. The second Hungarian Claims Program was completed on May 16, 1977.
(d) Italy - First Program
Title III of the Act also authorized the Commission to consider claims of nationals of the United States against Italy for losses resulting from war damages during World War II sustained in areas outside of Italy and outside of the territories ceded by Italy under the Treaty of Peace concluded on September 15, 1947. (Claims for losses arising from war damages sustained within Italy and within the territories ceded by Italy were compensated by Italy under the Treaty of Peace.) By an amendment to Title III, the Commission was authorized to reconsider claims filed by persons who were nationals of the United States on the date of authorization of the claims program, although not nationals of the United States on the date of the losses upon which their claims were based. Pub. L. 85-604, approved August 8, 1958, 72 Stat. 531 (22 U.S.C. 1641). Awards in these claims by the Commission were paid out of the Italian Claims Fund. That fund was established with the sum of $5 million paid to the United States by the Government of Italy, pursuant to a Memorandum of Understanding concluded by the two governments which became effective on August 14, 1947. The Italian Claims Program was completed on August 9, 1959, as required by the statute. Reconsideration of the Italian claims was completed on May 31, 1960.
(e) Italy - Second Program
The second Italian Claims Program was administered pursuant to an amendment to Title III of the Act as, in effect, an extension of the first Italian Claims Program (see subsection 3(d), above). Pub. L. 90-421, approved July 24, 1968, 82 Stat. 420 (22 U.S.C. 1641). The Commission was authorized to consider claims of United States nationals who were eligible to file in the first Italian Claims Program, but who failed to file, as well as claims of United States nationals against Italy which arose in certain areas ceded by Italy under the Treaty of Peace, including the Dodecanese Islands. Excluded from consideration were claims of persons who had previously received compensation in the first Italian Claims Program or under the Treaty of Peace with Italy. Payments on awards granted by the Commission in this program were made from the balance remaining in the Italian Claims Fund following payment of the awards granted in the first Italian Claims Program. This second program was completed on December 24, 1971.
(f) Soviet Union
Between 1956 and 1959, the Commission also administered a Soviet Claims Program pursuant to provisions of Title III of the Act. Those provisions authorized the Commission to consider claims of nationals of the United States arising prior to November 16, 1933, against the Soviet Government, and claims of United States nationals based on liens held on property in the United States assigned to the United States Government by the Government of the Union of Soviet Socialist Republics under the Litvinov Assignment of November 16, 1933. This program was completed on August 9, 1959.
Partial payments on awards in these claims were made out of the proceeds derived from liquidation of the assets acquired by the United States under the Litvinov Assignment. The funds so derived totaled $8,658,722.43. The balance of the awards, however, remains unpaid and outstanding, pending conclusion of a final claims settlement agreement between the United States and what are now the republics of the former Soviet Union.
4. Title IV
Czechoslovakia - First Program
Upon enactment of Title IV of the Act, the Commission commenced a program to determine claims of nationals of the United States against the Government of Czechoslovakia based upon losses resulting from the nationalization or other taking of property by that government. Pub. L. 85-604, approved August 8, 1958, 72 Stat. 527 (22 U.S.C. 1642). The funds for payment of awards granted by the Commission in these claims were derived initially in 1952 from the sale of certain Czechoslovakian assets in the United States which amounted to $8,540,768.41. Subsequently, an additional claims fund in the amount of $74,550,000 was obtained through conclusion of a claims settlement agreement with Czechoslovakia in 1982. (For information concerning the Commission's Second Czechoslovakian Claims Program, see subsection C.3, below.)
5. Title V
(a) China - First Program
The first China Claims Program was administered pursuant to an amendment to Title V of the Act. Pub. L. 89-780, approved November 6, 1966, 80 Stat. 1365 (22 U.S.C. 1643). That amendment authorized the Commission to determine claims of nationals of the United States against the Government of the People's Republic of China (PRC) based on: (1) losses resulting from the nationalization, expropriation, intervention, or other taking of, or special measures directed against, property by that government; and (2) the disability or death of nationals of the United States resulting from actions taken by or under the authority of that government. The program covered claims for losses which occurred between October 1, 1949, when the PRC government ascended to power, and November 6, 1966, the date the program was authorized.
When the program was authorized, no funds were available with which to make payment on the claims. The statute provided only for the determination of the validity and amounts of such claims, and the certification of the Commission's findings to the Secretary of State for use in the future negotiation of a claims settlement agreement with the Government of the People's Republic of China. The first China Claims Program was completed on July 6, 1972.
Subsequently, on May 11, 1979, the Governments of the United States and the People's Republic of China concluded a formal claims agreement settling claims of nationals of the United States which arose between October 1, 1949, and the date of the agreement. Pursuant to the provisions of this agreement, the Government of the People's Republic of China agreed to pay $80.5 million to the United States for deposit in a China Claims Fund established by the Department of the Treasury. Under the agreement, the schedule of payments to the Department of the Treasury provided for an initial payment of $30 million on October 1, 1979 and five annual payments of $10.1 million on October 1 of each year thereafter, beginning in 1980 and ending in 1984. Pursuant to the statutory payment provisions in section 8 of Title I of the Act, payments were made from the China Claims Fund by the Department of the Treasury on the losses certified in this program, and also on the awards certified in the second China Claims Program. (See subsection 1(e) above.)
Title V of the Act also authorized the Commission to consider claims of nationals of the United States against the Government of Cuba, based upon: (1) losses resulting from the nationalization, expropriation, intervention, or other taking of, or special measures directed against, property by that government; and (2) the disability or death of nationals of the United States resulting from actions taken by or under the authority of that government. Pub. L. 88-666, approved October 16, 1964, 73 Stat. 1110 (22 U.S.C. 1643). The program covered claims for losses which occurred between January 1, 1959, when the Castro regime took power, and October 16, 1964, the date the program was authorized.
When the program was authorized, there were no funds available with which to make payment on the claims, and the statute precluded Congress' appropriation of funds for such payments. In this case as well, the statute provided only for the determination of the validity and amounts of such claims, and for the certification of the Commission's findings to the Secretary of State for use in the future negotiation of a claims settlement agreement with the Government of Cuba. The Cuban Claims Program was completed on July 6, 1972.
6. Title VI
German Democratic Republic (East Germany)
Title VI of the Act authorized the Commission to receive and determine claims against the German Democratic Republic (GDR) for losses which arose from the nationalization, expropriation or other taking by that government of property interests of nationals of the United States. Pub. L. 94-542, approved October 18, 1976, 90 Stat. 2509 (22 U.S.C. 1644). When the program was authorized, no funds were available for payment of the awards issued by the Commission. The program was completed on May 16, 1981.
The Department of State subsequently conducted negotiations with the GDR -- and, after unification, with the Federal Republic of Germany -- to obtain a claims settlement providing funds for payment of the Commission's awards. Those negotiations culminated in the signing of a settlement agreement on May 13, 1992, in which Germany assented to payment of up to $190 million to settle and discharge the claims against it. Its initial payment was $160 million, with up to an additional $30 million to be paid if needed. The agreement allowed claimants to elect either to accept payment of their Commission awards or to waive their right to payment in order to pursue claims for their properties under German law. See 1992 FCSC Ann. Rep. 87.
In April 1997, the United States and Germany exchanged diplomatic notes reflecting the resolution of all but five of the subject claims, and fixing the "final transfer amount" at $102,010,961.47. The balance of the $160 million initial payment was returned to Germany, with the remaining five cases to be "resolved by mutual agreement."
7. Title VII
On February 25, 1986, the Commission completed a program to determine the validity and amount of claims of United States nationals against the Socialist Republic of Vietnam arising from the nationalization or other taking of property on or after April 29, 1975, when the Government of the Republic of Vietnam (South Vietnam) was overthrown. The program was authorized under Title VII of the Act. Pub. L. 96-606, approved December 28, 1980, 94 Stat. 3534 (22 U.S.C. 1645). The Commission made determinations on 534 claims, granting awards to 192 claimants in the total principal amount of $99,471,983.51. A claims settlement agreement was concluded with the Socialist Republic of Vietnam on January 28, 1995, which provided funds in the total amount of $203,504,248.00 for payment of the principal amount of the awards plus interest at the effective rate of approximately 4.8 percent simple interest per annum running from the dates the respective claims arose to the date of the agreement.
B. Claims Under The War Claims Act of 1948
1. Title I
Pursuant to Title I of the War Claims Act of 1948 (Pub. L. 896, 80th Congress, approved July 3, 1948, 62 Stat. 1240 (50 U.S.C. App. 2001)), and amendments thereto, the Commission and its predecessor, the War Claims Commission, were authorized to administer ten prisoner-of-war and civilian internee compensation programs and four war damage and loss compensation programs:
(1) Claims of American citizens who were interned or in hiding in specified areas in the Pacific during World War II (Sec. 5(a) of the Act (50 U.S.C. App. 2004(a)));
(2) Claims of members of the Armed Forces of the United States who were imprisoned by the enemy during World War II and who were not fed in accordance with the standards prescribed by the Geneva Convention of July 27, 1929 (Sec. 6(b) of the Act (50 U.S.C. App. 2005(b)));
(3) Claims of religious organizations in the Philippines or their personnel for goods and services furnished to civilian American internees and members of the Armed Forces of the United States who were held as prisoners of war during World War II (Sec. 7(a) of the Act (50 U.S.C. App. 2006(a)));
(4) Claims of members of the Armed Forces of the United States who were mistreated while imprisoned by the enemy during World War II (Sec. 6(d) of the Act (50 U.S.C. App. 2005(d)));
(5) Claims of United States-affiliated religious organizations in the Philippines for damage or destruction of educational, medical and welfare institutions and other connected non-religious facilities during World War II (Sec. 7(b-c) of the Act (50 U.S.C. App. 2006(b-c)));
(6) Claims of civilian American employees of contractors interned by the Japanese forces during World War II (Sec. 5(f) of the Act (50 U.S.C. App. 2004(f)));
(7) Claims of civilian American internees in Korea during the Korean conflict (Sec. 5(g) of the Act (50 U.S.C. App. 2004(g)));
(8) Claims of members of the Armed Forces of the United States captured during the Korean conflict (Sec. 6(e) of the Act (50 U.S.C. App. 2005(e)));
(9) Claims of Americans who were captured and held as prisoners of war while serving in the Allied Forces during World War II (Sec. 15 of the Act (50 U.S.C. App. 2014));
(10) Claims of American merchant seamen interned during World War II (Sec. 16 of the Act (50 U.S.C. App. 2015));
(11) Claims of American citizens and business entities for losses as a result of the sequestration of accounts, deposits and other credits in the Philippines by the Imperial Japanese Government (Sec. 17 of the Act (50 U.S.C. App. 2016));
(12) Claims of non-United States affiliated religious organizations in the Philippines of the same denomination of religious organizations functioning in the United States or their personnel for the value of relief furnished American civilians and prisoners of war and for damage or loss of educational institutions and other connected non-religious facilities during World War II (Sec. 7(h) of the Act (50 U.S.C. App. 2006(h));
(13) Claims based upon the death or imprisonment of Guamanians by the Japanese forces on Wake Island during World War II (Sec. 5(h) of the Act (50 U.S.C. App. 2004(h)); and
(14) Claims of military and civilian personnel assigned to duty on board the U.S.S. Pueblo who were captured by the military forces of North Korea on January 23, 1968, and thereafter imprisoned by the Government of North Korea (Sec. 6(e) of the Act (50 U.S.C. App. 2005(e)).
2. Title II
Under the authority of Title II of the Act (Pub. L. 87-846, approved October 22, 1962, 76 Stat. 1107 (50 U.S.C. App. 2017)), the Commission administered the General War Claims Program. In this program, the Commission determined claims of nationals of the United States for loss or destruction of, or physical damage to, property located in certain specified areas of Europe and the Pacific and for certain deaths and personal injuries resulting from military operations during World War II. Section 615 of Public Law 94-542, approved October 18, 1976, allowed consideration of protests relating to awards in decisions on these claims issued during the last ten calendar days of the program (May 7-17, 1967).
* * * * * * * *
All of the above programs were completed by the dates specified by Congress in the authorizing statutes. Citations to reports and statistics on the programs are included in Sections V and VI of this Annual Report.
Funds for the payment of claims and administrative expenses in all but three of the programs conducted under the War Claims Act were derived from the liquidation of Japanese and German assets under the control of the Attorney General of the United States (which had been blocked and vested in the United States during World War II under the Trading With the Enemy Act), rather than from monies appropriated from the general revenues of the United States. These funds were deposited in the War Claims Fund, a special fund established in the Department of the Treasury for this purpose. The three exceptions mentioned above were the programs for compensation of prisoner-of-war and civilian internee claims arising from the Korean conflict and from the U.S.S. Pueblo incident. Funds for payment of claims and expenses of these programs were appropriated by the Congress.
C. Claims Under Other Statutory Authority
The Commission was authorized to administer a Philippine Claims Program pursuant to Public Law 87-616, approved August 30, 1962, 72 Stat. 411 (50 U.S.C. App. 1751-1785 note). This statute provided for the recertification of the unpaid balances of awards previously granted by the United States-Philippine War Damage Commission under the Philippine Rehabilitation Act of 1946. This program was completed on December 23, 1964.
2. Lake Ontario
Public Law 87-587, approved August 15, 1962 (76 Stat. 387), gave the Commission the unique assignment of conducting a program to determine the validity and amounts of claims of citizens of the United States for damages caused during 1951 and 1952 by the Government of Canada's construction and maintenance of the Gut Dam in the Saint Lawrence River. The Commission's responsibility was to adjudicate the claims and report its findings and conclusions to the President of the United States for such action as he might deem appropriate. The statute further provided that, if an agreement was concluded between the Governments of the United States and Canada for arbitration or adjudication of these claims, the Commission would discontinue its activities and transfer its records to the Secretary of State.
The program was commenced in November 1962 and extensive research and development of claims was conducted. However, an agreement with Canada was concluded in March 1965 and, as directed by the statute, the Commission immediately discontinued the program and transferred its records to the Department of State.
3. Czechoslovakia - Second Program
In 1962, the Commission completed the first Czechoslovakian Claims Program, in which it adjudicated claims by United States nationals arising between January 1, 1945, and August 8, 1958. (See subsection A.4, above.) On December 29, 1981, Congress enacted the Czechoslovakian Claims Settlement Act of 1981 (Public Law 97-127, 95 Stat. 1675 (22 U.S.C. note prec. 1642)), approving a claims settlement agreement which had been reached between the United States and Czechoslovakia. Under that agreement, the Government of Czechoslovakia paid to the United States a total of $81.5 million in settlement of all claims which had arisen up to the date of the agreement.
The claims statute directed that three funds be created out of the total settlement amount. The first fund, amounting to $74.55 million, was set aside to make further payments on the unpaid balance of awards made in the previous program. A second fund of $5.4 million was set aside to make ex gratia payments to certain claimants whose claims had previously been denied due to their lack of United States citizenship on the date of loss. The Commission was directed to redetermine the claims of those claimants and to find them valid if the owner of the confiscated property had become a United States citizen by February 26, 1948. A third fund in the amount of $1.5 million was set aside to pay claimants who had suffered losses subsequent to August 8, 1958, and the Commission was directed to conduct a program to determine such claims. This program was completed on February 24, 1985.
On May 13, 1990, the United States concluded an agreement with the Government of Iran providing for the lump-sum settlement of claims of United States nationals against Iran of under $250,000 per claim (the "small claims"), which had been pending against Iran at the Iran-U.S. Claims Tribunal ("the Tribunal") at The Hague, Netherlands. Settlement Agreement in Claims of Less Than $250,000, Case No. 86 and Case No. B38 (the "Settlement Agreement"). The claimants had filed these claims through the Department of State following the signing of the Algiers Accords by the United States and Iran on January 19, 1981.
To ensure that the Commission would be able to implement an agreement settling the small claims, Congress had enacted legislation in 1985 giving the Commission standby jurisdiction to adjudicate the claims once an agreement was reached. Pub.L. 99-93, approved August 16, 1985, 99 Stat. 437 (50 U.S.C. 1701 note). That jurisdiction became effective once the Settlement Agreement was approved by the Tribunal, which took place on June 22, 1990. Iran-U.S. Claims Tribunal Award No. 483.
In addition to the unresolved small claims, the agreement covered a block of small claims that the claimants had withdrawn from the Tribunal, a second block that the Tribunal had dismissed for lack of jurisdiction, and a third block that had been filed with the Department of State too late to meet the January 19, 1982, filing deadline at The Hague. Also included were certain claims of the United States based on loans from the U.S. Agency for International Development (AID) to the Imperial Government of Iran. Under the terms of the agreement, Iran assented to the transfer of $105 million to the United States in en bloc settlement of all of these categories of claims.
On June 28, 1990, the Department of State formally transferred responsibility for the small claims to the Commission, as provided in the Settlement Agreement, and began transferring the files pertaining to the claims from The Hague to Washington. In addition, the Department issued a formal determination dividing the settlement fund between the small claims and the AID loan claims, allocating $50 million to the former and $55 million to the latter.
By the close of the Iran Claims Program in February 1995, the Commission had issued 1,066 awards totaling $41,570,936.31 in principal and $44,984,859.31 in interest. A total of 578 claims were dismissed, either at the request of claimants or because, despite the Commission's best efforts, the claimants could not be located. The remaining 1,422 claims were denied.
Through investment in Treasury securities, the compensation fund (initially $50 million) had grown to $57,822,758.78 by the end of the claims program. However, since the aggregate total of the principal and interest awards amounted to over $86 million, the interest awards were paid on a pro rata basis, amounting to 34.9602595 percent of each claimant's interest award. By May 1995, the payment process had been substantially completed. The Commission published its final report on the claims program in its 1995 Yearbook. 1995 FCSC Yearbook 5-9.
5. Holocaust Survivors Claims Program
The Commission conducted the Holocaust Survivors Claims Program pursuant to a September 1995 agreement between the United States and the Federal Republic of Germany settling the claims of certain individuals who, as United States nationals, suffered "loss of liberty or damage to body or health" through persecution by the German Nazi regime. Agreement Between the Government of the United States of America and the Government of the Federal Republic of Germany Concerning Final Benefits to Certain United States Nationals Who Were Victims of National Socialist Measures of Persecution, September 19, 1995. The Commission was granted authority to implement the agreement and conduct the program on January 26, 1996, upon enactment of Public Law 105-99 (22 U.S.C. 1644 note).
The Commission began receiving claims in the spring of 1996 and in 1997 it issued a Proposed Decision and a Final Decision setting forth its findings and conclusions on the scope of the program; these are reprinted in its 1997 Yearbook. By September 19, 1997, the Commission had issued individual Proposed Decisions on all of the claims received in the program, and by the end of February 1998 it had issued Final Decisions on all of the objections to those Proposed Decisions. In March 1998, the Commission then certified the decisions issued in the program to the Secretaries of State and Treasury, in accordance with the claims statute. Following this certification the Department of State began negotiations with the Government of the Federal Republic of Germany to obtain a lump-sum settlement of the claims found compensable in the Commission's program. In December 1998 the United States and Germany succeeded in concluding an agreement in principle on a settlement. The agreement was subsequently implemented via an exchange of diplomatic notes and made public on January 25, 1999. These notes were reprinted in the Commission's 1999 Annual Report (1999 Ann. Rep. 8).
The agreement provided for a lump-sum payment by Germany to the United States of 34.5 million Deutsche Marks (approximately $18.5 million), to be made as soon as funds in that amount were appropriated by the German Parliament. The actual transfer of the funds subsequently took place on June 7, 1999, and the Department of the Treasury immediately began the process of disbursing award payments to the eligible claimants. Under the terms of both the Commission's jurisdictional statute and the terms of the U.S.-German diplomatic exchanges, the identities of individual claimants, the number of claims received and awarded, and the amounts of the individual awards may not be publicly disclosed. Accordingly, this program is not included in the index and tables that appear in Sections V and VI of this report.
SECTION IV: FUTURE PROGRAMS
A. Claims Against Iraq
As reported above, no appreciable progress was made during 2002 to set up a program for the Foreign Claims Settlement Commission's adjudication of claims of U.S. nationals against Iraq. Thus, as the year ended, there was still no forum for the resolution of the claims against Iraq that fall outside the jurisdiction of the United Nations Compensation Commission. The FCSC continues to maintain the database containing the names and addresses of individuals and corporations with potential claims against Iraq which it initiated in 1996, and it remains prepared to conduct an Iraq claims adjudication program immediately upon its receipt of authority to do so.
B. Advisory Program
Under the Foreign Assistance Act of 1961, as amended by Pub. L. 88-205, approved December 16, 1963, 77 Stat. 386 (22 U.S.C. 2370), (the "Hickenlooper Amendment"), the President is authorized to suspend assistance to the government of any country which on or after January 1, 1962, has nationalized or expropriated the property of United States nationals, taken steps to repudiate or annul contracts with United States nationals, or imposed discriminatory taxation or restrictive conditions having the effect of seizing ownership or control of property of United States nationals, and has failed to take appropriate steps to discharge its obligations under international law.
The Hickenlooper Amendment extends the jurisdiction of the Commission from determination and adjudication of claims to an advisory capacity in the area of foreign expropriations and other seizures of American-owned property. Under the amendment, the Commission is authorized, upon the request of the President, to evaluate expropriated property, determine the full value of any property nationalized, expropriated, seized, or subjected to discriminatory actions, and to render an advisory report to the President within ninety days after such request. Unless authorized by the President, the Commission may not publish its advisory report except to the citizen or entity owning the property at issue.
SECTIONS V & VI:
INDEX OF COMPLETED PROGRAMS
TABLE OF COMPLETED PROGRAMS
SECTION VII: LIST OF CHAIRMEN AND COMMISSIONERS
WHITNEY GILLILLAND, Chairman, August 6, 1954, to November 15, 1959.
HENRY J. CLAY, August 6, 1954, to August 15, 1958.
PEARL CARTER PACE, August 6, 1954, to November 30, 1959; Chair, December 1, 1959, to March 28, 1961.
ROBERT L. KUNZIG, August 21, 1958, to January 19, 1961.
THOMAS W.S. DAVIS, December 2, 1959, to March 28, 1961.
EDWARD D. RE, Chairman, March 29, 1961, to February 27, 1968.
LAVERN R. DILWEG, April 14, 1961, to January 2, 1968.
THEODORE JAFFE, March 29, 1961, to October 21, 1971.
LEONARD v. B. SUTTON, Chairman, March 28, 1968, to October 21, 1969.
SIDNEY FREIDBERG, June 24, 1968, to August 24, 1970.
LYLE S. GARLOCK, Chairman, February 25, 1970, to October 31, 1973; continued as Commissioner until July 30, 1975.
KIERAN O'DOHERTY, June 22, 1972, to October 21, 1973.
J. RAYMOND BELL, Chairman, November 1, 1973, to October 21, 1977.
WILFRED J. SMITH, August 28, 1974 to October 21, 1979.
ROBERT E. LEE, April 7, 1976 to October 21, 1978.
RICHARD W. YARBOROUGH, Chairman, December 8, 1978, to October 21, 1981.
FRANCIS L. JUNG, June 28, 1980, to December 6, 1981.
RALPH W. EMERSON, December 31, 1980, to August 28, 1981.
FRANK H. CONWAY, August 31, 1981, to November 2, 1994.
J. RAYMOND BELL, Chairman, October 22, 1981, to September 6, 1983.
JOSEPH W. BROWN, December 7, 1981, to March 15, 1988.
BOHDAN A. FUTEY, Chairman, May 3, 1984, to May 27, 1987.
ROBERT J. KABEL, March 15, 1988, to February 1, 1991.
STANLEY J. GLOD, Chairman, August 12, 1988, to September 8, 1992.
BENJAMIN F. MARSH, February 1, 1991, to November 3, 1994.
JAMES H. GROSSMAN, Chairman, September 8, 1992, to November 26, 1993.
DELISSA A. RIDGWAY, Chair, October 13, 1994, to May 28, 1998.
JOHN R. LACEY, November 4, 1994, to December 31, 2000; Chairman, February 15, 2001, to December 20, 2001.
LARAMIE F. MCNAMARA, January 12, 2001, to December 20, 2001.
MAURICIO J. TAMARGO, Chairman, February 6, 2002, to present.
RICHARD T. WHITE, November 3, 1994, to September 21, 2002.
JEREMY H. GONZALEZ IBRAHIM, March 27, 2003, to present.