What is the difference between expropriation and confiscation

Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Expropriation is the act of a government claiming privately owned property against the wishes of the owners, ostensibly to be used for the benefit of the overall public.

In the United States, properties are most often expropriated in order to build highways, railroads, airports, or other infrastructure projects. The property owner must be paid for the seizure since the Fifth Amendment to the Constitution states that private property cannot be expropriated "for public use without just compensation.

In the United States, a doctrine known as "eminent domain" provides the legal foundation for expropriation. Under this rationale, the Amendment's statement that property cannot be expropriated without proper compensation implies that property can, in fact, be taken. Governments have the power to take private property for fair-market-value compensation through the doctrine of eminent domain; some fees and interest may be payable to the former owner s. In some jurisdictions, governments are required to extend an offer to purchase the subject property before resorting to the use of eminent domain.

If and when it is expropriated, property is seized through condemnation proceedings, a use of the term that is not to be confused with property that is in disrepair. Owners can challenge the legality of the seizure and settle the matter of fair market value used for compensation.

Another main justification for expropriation comes from the area of public health. It is generally recognized that events that threaten public health, such as toxic environmental contamination of an area, justify the government acting to relocate the affected population in the area, and part of that action may logically entail the government expropriating the property of the relocated residents.

Government expropriation is widely found around the world, generally accompanied by agreement that owners should receive appropriate compensation for the property they lose. The few exceptions to agreement on just compensation are primarily in communist or socialist countries, where a government may expropriate not just land but domestic or foreign businesses that have a presence in the country.

Expropriation raises justifiable concerns ranging from the acceptable reasons for expropriation to the process for recourse and the scope and amount of fair compensation. With regard to compensation, there is debate as to what constitutes fair recompense for owners of expropriated property. In cases spanning five decades, from the s to the s, the U. Supreme Court has repeatedly acknowledged that the definition of "fair market value" can fall short of what sellers may demand and possibly receive in voluntary transactions.

Consequently, in eminent domain cases, the standard is often not the most probable price, but the highest price obtainable in a voluntary sale transaction involving the subject property.

Since the condemnation deprives the owner of the opportunity to take their time to obtain the optimal price the market might yield, the law provides it by defining fair market value as the highest price the property would bring in the open market.

Inconsistency and controversy also prevail over property owners who are compensated for their property, the inconvenience of being required to relocate, and the expense and possible business loss of doing so. These costs are not included in the concept of " fair market value ," but some are compensable in part by statutes , such as the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act Code of Federal Regulations 49 and its state counterparts.

Attorneys' and appraisers' fees the property owner incurs may also be recoverable by statute and, in California and New York, an award of such fees is at the court's discretion under certain conditions. When payment of just compensation is delayed, the owner is entitled to receive interest on the amount of the late payment. A federal Supreme Court decision in the early s—and subsequent reactions to the decision—have shaped the ability of governments to seize property under eminent domain for the sole reason of increasing tax revenue.

Kelo v. City of New London , U. The decision spurred outcry about overly broad expropriation powers and prompted further action at both the state and federal levels.

The Supreme Courts of Ill. Hathcock [] , Ohio Norwood, Ohio v. Horney [] , Okla. There was also federal action, despite relatively few expropriations being carried out by that level of government. On the first anniversary of the Kelo decision, President George W.

Bush issued an executive order stating that eminent domain may not be used by the federal government "for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken. Department of Housing and Urban Development. Sectors such as mining, energy, public utilities, and banking have been targets of such government actions.

Domestication offers to governments a subtle control over the foreign investments. There is a partial ownership transfer and companies are urged to prioritize local production and to retain a large share of the profit within the country.

Domestication can negatively impact the international marketer activities, as well as that of the entire firm. For example, if foreign companies are forced to hire nationals as managers, poor cooperation and communication can result. If domestication was imposed within a short time span, poorly trained and inexperienced local managers would head the firm operations with possible lost of profits. Other government actions-related risks are less dangerous but more common such as boycott, sabotage.

When facing shortage of foreign currency, government, sometimes, attempts to control the movement of capital in and out of the country. Often, exchange controls are levied selectively against certain products or companies. Exchange controls limit importation of goods so that firms might be confronted with difficulties in their regular transactions.

Severe restrictions on import can be a motive for foreign corporate to shut down. Governments may also raise the tax rate applied to foreign investors in order to control them and their capital.

Government may implement a price control system. Such control uses to derive from a sensitive political situation. For example, social pressure may result in a kind of price standardization for particular sectors like food, transportation, fuel, and healthcare.

Political risks like arms conflicts, insurrection may affect all firms in the country equally. For that reason they are called macro political risks.

Unlike, nationalization, strikes, expropriation may affect only a handful and specific firm, they are named micro political risks. Some negative effects of political risks on firm are summarized in the following table.

Table 1. Holistic table summarizing the major political risks and their effects on firms.