The following conditions should be met and satisfied before the process of expropriation happens:-
The seizure of the privately owned properties must be for general public benefits.
The seizure of the property must be just and non-discriminatory.
Fair compensation must be given to the owners of privately owned property.
The international norms of business relationships with foreign properties and individuals must be adhered to by the government.
The process of expropriation includes the below steps:-
Condemnation – Expropriation of privately owned properties by the government is also called condemnation. This process is permissible by most of the countryâ€™s constitution. The government bodies at the federal, state, and municipal levels are given the rights of certain important government bodies by the U.S. Constitution. By paying adequate compensation to the owners of private property, the government acquires the ownership title of the property.
Appraisal – The government must assess the property’s current market worth before it may be expropriated. This shall allow them to estimate the amount of compensation to be paid to the owners of private property. This process is known as an appraisal and shall be carried out by third parties to the property.
Offer – Once the government appraises the current market value of the property expropriated, they offer to pay compensation to the previous owners of private property.
Negotiation – The owners of private property can approach the court of law if in case they feel the amount of compensation is unfair or are dissatisfied with the reason for expropriation.
Types of Expropriation
There are two types of expropriation.
Direct Expropriation – In the process of expropriation, if the title of the property is legally transferred to the government, it is called Direct Expropriation. The owners of the property have to give their assets and any returns that they might have been anticipated from their investment in the property. The government shall possess title ownership of the property along with the rights to use the property commercially. Hence, the owners of private property must be paid with compensation that is corresponding to the true, current market value of the investment.
Indirect Expropriation – In the process of expropriation, the title of the property is legally not transferred to the government. The title is still retained by the owner of the property, but they forgo the right to earn any income and returns from the investment on the property. This is called indirect expropriation. The government shall not completely seize the property from the owner. The government shall have the right to retain the income coming from commercializing the property. This process is considered lawful though compensation is not paid by the government. This is because, in most cases, indirect expropriation is not considered expropriation.
Difference between the kinds of expropriation
The below example shall clearly explain the difference between the kinds of expropriation. Investor Ben is a citizen of Country A. He owns property in Country B.
Direct Expropriation – The government of Country B seizes the property from Ben with an intention to extend the railroad. The current market compensation is paid for the land appraised by the government of Country B to Ben. Ben losses the ownership of the property as it is taken over by the government. Indirect Expropriation – The government of Country B issues a regulation to extend the railroad on the property of Ben. Ben cannot enjoy the earnings as the public uses the railroad. Ben does not lose the ownership of the property, and it is not taken over by the government. Since the government has commercialized the property, they shall retain the earning from the investment on the property. No expropriation – When Ben himself works to extend the railroads in Country B, there is no expropriation in this case. Ben can enjoy the benefits from investment in the property. The ownership of the property is with Ben.
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