ALCA FTAA ZLEA - Investment: Expropriation - Honduras/United States

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Investment Agreements in the Western Hemisphere: A Compendium

Treaty Between Honduras and United States
1 July 1995

Subject: V. Expropriation

A. Definition

1. Covered Expropriatory Measures Expropriation or nationalization (directly or indirectly through measures tantamount to expropriation or nationalization). (Article III (1)).

B. Conditions

1. Public Purpose and Non-Discrimination
Yes. (Article III (1)).

2. Due Process of Law and Judicial Review
Yes. (Article III (1)). The BIT does not include an independent requirement that expropriation s be subject to judicial review. However, it has been argued that the international standard of due process includes such a requirement.

3. Other
Expropriation has to be made in accordance with the general principles of treatment provided for in Article II (3). (Article III (1)). See supra.

4. Compensation: Standard; Form and Time of Payment
"Prompt, adequate and effective compensation" Compensation shall: . be equivalent to the fair market value of the investment, determined according to different methods of calculation as appropriate in each specific case. The calculation of compensation shall not reflect any change in value occurring because the expropriatory action had become known before the date of expropriation. There are additional norms for the determination of the fair market value when this value is denominated in a currency that is freely usable and when it is not. . be made without delay; . be fully realizable and freely transferable; . include commercially reasonable interests from the date of expropriation until the date of payment. (Article III (1) (2) (3) (4)).


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