What is Expropriation?

Expropriation is a legal term used to describe the government taking control of private assets or property ostensibly for public use. In many countries, an expropriation occurs and private assets are dispossessed without any payment to them. This is illegal in the United States as the 5th Amendment to the Constitution states that private property cannot be expropriated for public use without just compensation.

How does Expropriation Work?

Expropriation is often compared to eminent domain in United States. The the 5th Amendment of US Constitution provides for the doctrine of eminent domain. The US Government uses this power to expropriate assets to build highways, airports, and other projects for public utility.  

The 5th amendment states that the Government cannot take away property, assets or business without paying just compensation. There is general agreement internationally that private property owners should be paid compensation in case of expropriation. Unfortunately, the practice is not identical across the world. 

Communist or socialist countries may not only expropriate land or property but it may take away domestic business and foreign business operations in the territory. For example, when the communist leader of Cuba came to power in 1959, he had expropriated many oil refineries operating in Cuba that were owned by United States. 

In 1952, the president of USA (Harry Truman) expropriated more than 88 steel production companies. The expropriation was ultimately overturned by the U.S. Supreme Court.