ALCA FTAA ZLEA - InvestmentInvestment: Expropriation - Ecuador/United States

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Investment Agreements in the Western Hemisphere: A Compendium

Treaty Between Ecuador and United States
27 August 1994

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) (2)). Review can be made by the appropriate judicial or administrative authorities of the expropriating host Party.

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 expropriated investment immediately before the expropriatory action was taken or became known, whichever is earlier; . be calculated in a freely usable currency on the basis of the prevailing market rate of exchange at that time; . include interests at a commercially reasonable rate from the date of expropriation; . be made without delay; . be fully realizable and freely transferable. (Article III (1)).


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