The purpose of this note is to consider an appropriate limitation on the use of the “Act of State Doctrine,” particularly in the light of Judge Dimock’s decision in Banco National de Cuba v. Sabbatino, 193 F. Supp. 375 (D.C., S.D.N.Y., 1961).

After World War II many Eastern European governments began programs of nationalization in which they took virtually all the private property of foreigners. Under the conditions prevailing it was quite obvious that American nationals would not be able to obtain compensation for the properties taken through local remedies. It thus became necessary for the Department of State to commence negotiations with these various governments with the object of obtaining some compensation for the properties so taken. Very little headway was made in such negotiations and the only practical device available was the economic counter-measure of blocking the assets of those foreign governments which were located in the United States. Such blocked assets could be appropriated (“vested”) where the property involved could be classified as “enemy” property. However, the blocking was purely a delaying tactic where the foreign government was not an “enemy” during World War II.