It is the purpose of the law of State responsibility to extend the protection of international law to those who travel abroad and to facilitate social and economic ties between States. regardless of its political or economic philosophy, can remain indifferent to mistreatment of its nationals abroad. In an interdependent world the well-being of many countries rests upon an influx of foreign funds and managerial skills, the owners of which must be given effective protection against unjust prosecution or discrimination.

Responding to this need, international law has developed over the last two hundred years standards and procedures designed to protect the life, liberty, and economic security of nationals of one State who live or conduct business activities.in another State. The General Assembly of the United Nations decided in 1953 that “it is desirable for the maintenance and development of peaceful relations between States that the principles of international law governing State responsibility be codified,” and requested the International Law Commission to undertake this codification. The Commission appointed as rapporteur for that subject Dr. F. V. García-Amador, who has submitted to the Commission six excellent reports on various aspects of State responsibility.

1. 1. A State is internationally responsible for an act or omission which, under international law, is wrongful, is attributable to that State, and causes an injury to an alien. A State which is responsible for such an act or omission has a duty to make reparation therefor to the injured alien or an alien claiming through him, or to the State entitled to present a claim on behalf of the individual claimant.

2. 2. (a) An alien is entitled to present an international claim under this Convention only after he has exhausted the local remedies provided by the State against which the claim is made.

   1. (b) A State is entitled to present a claim under this Convention only on behalf of a person who is its national, and only if the local remedies and any special international remedies provided by the State against which the claim is made have been exhausted.

Nationalization of foreign property and deprivation of contractual rights have again achieved prominence through measures in Iran, Egypt, Indonesia, and, more recently, in Cuba. The end of certain regimes often brings with it changes in political and social conditions. And yet recognition of acquired rights is the principal basis of intercourse in economic relations, as recognized by the law of civilized nations. International law, far from being an outgrowth of only Western concepts, is indeed an expression of fundamental principles embodied in long established legal systems throughout the world. Islamic law, for instance, which is of real significance for one sixth of the world population, in the Middle East, Pakistan, Southeast Asia and parts of Africa, clearly embodies the universal maxim of the protection of acquired rights.

An anomalous situation arises where governments desire foreign investments while at the same time rights in property and contractual relations are threatened and even destroyed. The Brazilian Judge Levi Carneiro said in the Anglo-Iranian Oil Co. Case:

On March 30, 1960, the United States and Eumania settled by agreement certain claims of American nationals against Rumania. The agreement provides for the payment by Rumania of a lump sum in discharge of those claims.

In recent years the device of the en bloc or lump-sum settlement of international claims has to some extent replaced the use of the mixed claims commission. Lump-sum settlements between nations are not unique to the 20th century, however, and as early as 1802, the United States paid Great Britain a lump sum of £600,000 ($2,664,000) to settle certain debt claims. In the 19th century also, the United States obtained lump-sum settlements from Prance, Spain, Great Britain, Denmark, Peru, Belgium, Mexico, Brazil and China. Early in the present century mixed claims commissions were used in deciding claims between the United States and Great Britain, war damage claims against Germany, Austria and Hungary, claims between the United States and Mexico, and claims between Panama and the United States. When the work of the United States-Mexican General Claims Commission remained uncompleted after two successive conventions which extended the existence of the Commission, and when practical difficulties beset the United States-Mexican Special Claims Commission, an en-bloc settlement of all claims was the only solution. That settlement signaled disillusionment with mixed claims commissions. Thereafter, the major international claims settlements involving the United States were on a lump-sum basis. The very next settlement was one concluded on October 25, 1934, with Turkey. It provided for the payment of a lump sum of $1,300,000 to settle certain outstanding claims of American citizens against Turkey.

The Senate on March 16, 1961, by a vote of 72 to 18, advised and consented to the ratification of the Convention on the Organization for Economic Cooperation and Development and its three protocols signed at Paris December 14, 1960. The Organization is a consultative forum capable of initiating agreements on the use and development of economic resources, on removing obstacles to trade and current payments, on liberalization of capital movements, on the flow of capital to less developed countries. The 20 signatories are the industrialized states of Europe, Canada and the United States. A vociferous opposition to the convention by interests that erroneously thought it might reduce tariffs was heard by the Senate Committee on Foreign Relations. Whether on that account or because they realized the importance of the convention itself, members of that committee in two executive sessions carefully probed official spokesmen to satisfy themselves that the convention did not affect the powers of the President or Congress. As a consequence, the resolution approving the convention took this unusual form: