The Foreign Claims Settlement Commission of the United States submits for your review its Annual Report for Calendar Year 1998.

Although the Commission is an independent component within the United States Department of Justice, it is required under the War Claims Act of 1948 and the International Claims Settlement Act of 1949 to submit a separate annual report to Congress.

We appreciate Congress's continued support for the Commission's international claims programs.

David E. Bradley

Chief Counsel

I. THE COMMISSION

A. Introduction
B. Procedure and Administration of Claims Programs

II. CURRENT YEAR'S ACTIVITIES

A. Claims of Holocaust Survivors Against Germany for Persecution by the Nazi Regime -Related Litigation
B. Claims Against Albania

Exhibit I:
Claim of HARIKLIA ZOTO, et al.
Claim No. ALB-178
Decision No. ALB-200
Exhibit II:
Claim of MARIA A. STEVENS et al.
Claim No. ALB-268
Decision No. ALB-299

C. Other Activities

1. Litigation--Iran Claims Program
2. Claims Against Iraq
3. Helms-Burton Act/Claims Against Cuba
4. Prisoner-of-War and Civilian Internee Claims

III. SUMMARY OF PAST PROGRAMS

A. Claims Under the International Claims Settlement Act of 1949

1. Title I

(a) Yugoslavia-First Program
(b) Panama
(c) Poland
(d) Yugoslavia-Second Program
(e) China-Second Program
(f) Ethiopia
(g) Egypt

2. Title II
3. Title III

(a) Bulgaria, Hungary, and Romania-First Programs
(b) Bulgaria and Romania-Second Programs
(c) Hungary-Second Program
(d) Italy-First Program
(e) Italy-Second Program
(f) Soviet Union

4. Title IV
5. Title V

(a) China-First Program
(b) Cuba

6. Title VI
7. Title VII

B. Claims Under the War Claims Act of 1948

1. Title I
2. Title II

C. Claims Under Other Statutory Authority

1. Philippines
2. Lake Ontario
3. Czechoslovakia-Second Program
4. Iran

 

IV. FUTURE PROGRAMS

A. Claims Against Iraq
B. Advisory Program
C. Outlook For 1999

V. INDEX OF COMPLETED PROGRAMS

A. International Claims Settlement Act of 1949
B. War Claims Act of 1948
C. Other Statutory Authority

VI. TABLE OF COMPLETED PROGRAMS

A. International Claims Settlement Act of 1949
B. War Claims Act of 1948

VII. LIST OF CHAIRS AND COMMISSIONERS

A. Introduction

The Foreign Claims Settlement Commission of the United States is an independent quasi-judicial federal agency organized administratively as a component of the U.S. Department of Justice. The Commission's primary mission is to determine the validity and valuation of claims of United States nationals for loss of property in foreign countries, as authorized by Congress or following government-to-government claims settlement agreements. These losses have occurred either as a result of nationalization of property by foreign governments or from damage to and loss of property as a result of military operations during World War II. The Commission also has adjudicated claims of United States military personnel and civilians captured or interned during World War II and the Korean and Vietnam conflicts. In addition, as discussed below, the Commission devoted the first part of 1998 to completion of its Holocaust Survivors Claims Program, addressing claims by U.S. citizens persecuted by the Nazis during World War II.

The Foreign Claims Settlement Commission was created on July 1, 1954, by Reorganization Plan No. 1 of 1954, which abolished the War Claims Commission and the International Claims Commission and transferred their functions to the present Commission. In 1980, the Commission was transferred by Public Law 96-209 to the Department of Justice as a separate agency within the Department.

The Commission consists of a Chair, who serves on a full-time basis, and two Commissioners, who serve on a part-time basis. They are appointed by the President for fixed terms of office, normally of three years' duration, and confirmed by the Senate. In March 1998, Chair Delissa A. Ridgway was confirmed by the Senate to become a judge on the United States Court of International Trade, and on May 28, 1998, she resigned from the Commission to take her place on the Court. As of the end of 1998, the President had not yet nominated a successor Chair, and the Commission's Chief Counsel, David E. Bradley, was serving as acting administrative head of the agency.

The Chair and Commissioners are responsible for the review of claims and the issuance of decisions. The Chair is vested with sole administrative authority within the Commission, while the Department of Justice is responsible for providing administrative support services to the agency. The Commission employs a small staff of legal and administrative personnel.

In most instances, authorizing statutes provide for the deduction of a certain percentage from the claims funds for deposit as miscellaneous receipts in the United States Treasury to defray the administrative expenses of the Commission and the Department of the Treasury in carrying out the programs. The total administrative expenses of the Commission and its predecessors from the beginning of fiscal year 1950 through the end of fiscal year 1998 have amounted to approximately $30 million. Over $32 million has been recouped through the deductions from funds obtained from foreign governments in the same period.

The jurisdiction of the Commission and its two predecessor commissions has encompassed the administration of 42 claims programs in which more than 660,000 claims have been filed and awards granted in excess of $3 billion.

B. Procedure and Administration of Claims Programs

By statute, the decisions of the Commission are final and conclusive on all questions of fact and law and are not subject to review by any other official, department, or agency of the United States, or by any court by mandamus or otherwise. This prohibition against judicial or other review makes it imperative that the Commission establish appropriate administrative and legal procedures to assure claimants a full and fair opportunity to present their claims.

When a claims program is commenced, appropriate claim forms and detailed instructions are forwarded to anyone who requests them or has at any time indicated to the Commission an interest in filing a claim in that program. The Commission also seeks to publicize the program through publication in the Federal Register and releases to the news media, and by notifying relevant organizations and Congressional offices. The deadline for filing claims is established and publicized as well.

When a completed claim form with related exhibits, documents or other evidence is filed, the staff of the Commission undertakes a careful examination and, if necessary, seeks additional information or evidence from the claimant or other sources to enable the claimant to establish the requisite elements of a claim (i.e., United States nationality, ownership, value and the date and circumstances of the asserted loss). The adjudication of a claim is not considered to be an adversarial matter between the Commission and the claimant; the staff of the Commission seeks to do all that is reasonably possible to assist each claimant in establishing a compensable claim. After a claim has been fully developed, it is presented to the Commission for adjudication.

Following a full review of the claim and all supporting material, the Commission issues a written "Proposed Decision." This Proposed Decision is forwarded to the claimant or claimant's counsel who is advised of the right to file objection within a specified period of time, if the claimant is dissatisfied and believes there is ground for a more favorable decision. The claimant may submit, in writing, any additional evidence and argument in support of the objection and may also request an oral hearing before the Commission to present oral evidence and argument in support of the objection. Thereafter, the Commission reconsiders the entire record and renders its determination by the issuance of a written "Final Decision."

If no timely objection is received on a claim, the Proposed Decision is automatically entered as the Commission's Final Decision. However, even after the issuance of a Final Decision, the regulations of the Commission permit the filing of a petition to reopen a claim for further consideration based upon newly discovered evidence. Or, if information comes to the attention of the Commission from sources other than the claimant, the Commission may reopen a claim on its own motion.

In most instances, a time limit within which the Commission must complete adjudication of the claims is established by statute. After the specified date, the Commission no longer has authority to accept additional claims for adjudication or to reconsider any claim which has been determined in that particular program.

Decisions of the Commission set forth the reasons for the action taken and include specific findings of fact and conclusions of law determining each aspect of the claim, to fully apprise claimants of the basis of its decisions. In most programs, the amount of funds available to pay the Commission's awards is limited, often resulting in pro rata payment of awards. The Commission therefore must ensure that the award entered in each claim is fully supported, and based upon the same criteria as all other awards.

Payment of awards to claimants is beyond the scope of the Commission's functions. The Commission's responsibility is discharged upon entry of a Final Decision and certification of any award to the Secretary of the Treasury, who has sole jurisdiction, under specific statutory authority, to make payments out of the funds established for that purpose.

In some instances, Congress authorizes the adjudication of claims before there are funds available to pay awards. In such cases, the Commission adjudicates the claims and certifies its decisions to the Secretary of State or Secretary of the Treasury, or both, as a "pre-adjudication" or "pre-settlement adjudication" of the claims. The Department of State then can use the Commission's decisions as the basis for negotiating a claims settlement agreement with the responsible foreign government at some future date. Under legislation newly enacted in 1998 (Section 2211, Omnibus Consolidated and Emergency Supplemental Appropriations Act,1999, Pub. L. 105-277, amending subsection 4(a) of Title I of the International Claims Settlement Act of 1949, as amended, 22 U.S.C. 1623(a)), the Secretary of State now has ongoing discretionary authority to refer claims to the Commission for pre-adjudication.

A. Claims of Holocaust Survivors Against Germany for Persecution by the Nazi Regime

The Commission resolved the last of the objections filed on claims in its Holocaust Survivors Claims Program in February 1998, and in March it certified the decisions issued in the program to the Secretaries of State and Treasury, in accordance with the claims statute. Following this certification the Department of State began negotiations with the Government of the Federal Republic of Germany to obtain a lump-sum settlement of the claims found compensable in the Commission's program. In December 1998 the United States and Germany succeeded in concluding an agreement in principle on a settlement. As of the end of the year, however, the terms of the settlement had not yet been made public.

As explained in previous reports, the Commission conducted the Holocaust Survivors Claims Program pursuant to a September 1995 agreement between the United States and the Federal Republic of Germany settling the claims of certain individuals who, as United States nationals, suffered "loss of liberty or damage to body or health" through persecution by the German Nazi regime. Agreement Between the Government of the United States of America and the Government of the Federal Republic of Germany Concerning Final Benefits to Certain United States Nationals Who Were Victims of National Socialist Measures of Persecution, September 19, 1995. The texts of both the settlement agreement and the related legislation are reprinted in the 1995 Yearbook. 1995 FCSC Yearbook 11-15.

Related Litigation

On August 10, 1998, one of the claimants in the Holocaust Survivors Claims Program, Jack Miller, whose claim the Commission had denied on the ground that he had previously received compensation from the German Government, filed an action against the Secretary of State in the U.S. District Court for the District of Columbia. (Jack Miller v. Madeleine Albright, Civil Action No. 98-1955). In his complaint he sought a declaratory judgment from the Court stating that, notwithstanding the Commission's denial of his claim, his claim was eligible for inclusion among the claims certified by the Commission as compensable under the agreement. He contended that such a judgment was justified based on the Commission's indication in its decision on his claim that, but for his receipt of previous compensation from Germany through the Conference on Jewish Material Claims (the "Claims Conference"), he would be entitled to compensation under the Agreement for the persecution he had endured in Nazi concentration camps. And he averred that he had applied to the Claims Conference for compensation only under the mistaken belief that he had acquired his United States citizenship by naturalization following his immigration to the United States after World War II, whereas in fact he was retroactively a U.S. citizen by birth abroad to a U.S. parent, by virtue of his mother's birth in the United States, under a 1994 U.S. law deleting a previous provision in the Immigration and Nationality Act discriminating between children born abroad to U.S.-citizen mothers and those born abroad to U.S.-citizen fathers.

In addition, Mr. Miller sought as part of his complaint an injunction to prevent the Department of State from negotiating a lump-sum settlement of the claims that the Commission had found compensable unless his claim was included among those claims. However, in oral argument before the Court, he modified his request for relief, limiting it to a request for an order simply requiring the Department of State to present his claim to the German Government along with those certified by the Commission when the Department commenced the settlement negotiations, leaving it to the German negotiators to accept or reject his case. His contention was that in this way, his mother's claim, which had been found compensable, as well as all the other claims certified as compensable, would not be prejudiced by a delay in the start of the settlement negotiations. And at the same time, he contended that the German Government would thereby be estopped from demanding that he repay the compensation he had received through the Claims Conference, which in retrospect he was ineligible to receive because the U.S. Government had retroactively made him a U.S. citizen by birth.

On October 26, 1998, following briefing and oral argument, the Court (Greene, J.) issued an Opinion and Order in Mr. Miller's favor. Treating the parties' respective motions in the case --plaintiff's for a preliminary injunction and defendant's for dismissal for lack of jurisdiction and for failure to state a claim upon which relief could be granted -- as cross motions for summary judgment, the Court held that it did have jurisdiction and that Mr. Miller had stated a claim upon which relief could be granted. Accordingly, the Court ordered that "the Secretary of State, or her representative, shall espouse [Mr. Miller's] reparations claim by presenting it to the Federal Republic of Germany." Jack Miller, Plaintiff, v. Madeleine Korbel Albright, Defendant, Opinion and Order Filed October 26, 1998 (unreported).

The Secretary of State immediately acted to appeal the District Court's decision to the U.S. Court of Appeals for the District of Columbia, moving for an emergency stay of the District Court's order, or in the alternative, for a summary reversal of its decision. Jack Miller, Appellee v. Madeleine K. Albright, Secretary of State, United States Department of State, Appellant, No. 98-5511. On November 30, 1998, following briefing and oral argument, the Court of Appeals (Williams, Ginsburg, and Rogers, Circuit Judges) granted the Secretary of State's motion for summary reversal. In doing so, the Court stated that "[t]he merits of the parties" positions are so clear as to warrant summary action." In addition, the Court noted that Mr. Miller's complaint "constituted an attempt to collaterally review a decision of the Foreign Claims Settlement Commission, and that decision is not subject to judicial review," and it also stated that "[t]o the extent the district court's order required the Secretary of State to adopt a certain position in negotiations with the Federal Republic of Germany, the order represents an unwarranted usurpation of the executive's conduct of foreign relations." 1998 WL 846653 (D.C.Cir.)(Not reported in Federal Reporter 3d.)

B. Claims Against Albania

At its meeting on February 20, 1998, the Commission voted to resume the adjudication of claims against Albania which it had begun following the March 10, 1995, agreement between the United States and Albania settling United States nationals' property claims in exchange for a $2 million lump-sum payment by Albania to the United States (1995 FCSC Yearbook 17-20), but which it had suspended in 1997 due to the widespread violence that had erupted in Albania early that year. In addition, the Commission agreed to accept objections from claimants that had not been timely filed, granting them the benefit of a presumption that their tardiness in filing was caused in some way by the disruption in mail service between the United States and Albania resulting from the unrest in Albania during 1997. As of the end of 1998, the Commission had issued Proposed Decisions on all of the 325 claims filed in the claims program. In cases where objections or petitions to reopen had been filed, the Commission had issued Final Decisions or Amended Final Decisions in all but five of those claims.

The Exhibits following below are reprints of two significant decisions issued in the claims program during 1998.

In the Matter of the Claim of HARIKLIA ZOTO, et al., Against the Government of Albania

Claim for loss of numerous pieces and items of real and personal property through confiscation by Albanian Communist regime from claimants' father, who before World War II had been a prosperous Albanian-American businessman in Albania. This decision illustrates application of several principles of international claims adjudication, including measures of value and burden of proof.

Oral Hearing held on June 15, 1998.

This claim against the Government of Albania is based upon the alleged confiscation of real and personal property located in Fier.

By Proposed Decision entered on November 18, 1996, the Commission initially denied claimant HARIKLIA ZOTO's claim because there was no evidence that at the time it arose, the owner of the claim, claimant's father, Kostandin Zoto, was a United States citizen. Subsequently, evidence of Kostandin Zoto's United States nationality was submitted. However, because claimant HARIKLIA ZOTO herself did not meet the residency requirement in the Agreed Minute to the Settlement Agreement, the Commission issued an Amended Proposed Decision again denying the claim.

By letter dated February 17, 1997, claimant HARIKLIA ZOTO objected to the Amended Proposed Decision and advised the Commission that her three sisters, Nefsika Zoto, Aleksandra Zoto and Liljana Sali, all United States citizens, had resided in the United States since 1992 and 1993 and that they also objected to the Commission's Amended Proposed Decision. Shortly thereafter, claimant's three sisters contacted the Commission and requested to be considered as co-claimants. Additionally, by letter received at the Commission on July 17, 1997, claimant's other sister, Aneta Ikonomi, also contacted the Commission regarding the claim. Based on these submissions, the Commission now includes NEFSIKA ZOTO, ALEKSANDRA ZOTO, LILJANA SALI and ANETA IKONOMI as co-claimants in this claim.

By letter received at the Commission on March 18, 1997, claimants requested an extension of time in which to submit additional evidence. Because the Commission expected to complete its adjudication of the Albanian claims by April 15, 1997, and because this claim consisted of multiple parts, an oral hearing was scheduled for April 15, 1997, to allow claimants an opportunity to present their objection, supporting evidence and testimony. However, due to delays experienced by the Commission's independent consultant in Albania in completing his investigation of claimants' and other claims, because of the political unrest in the country, the hearing was canceled and further consideration of the claimants' claim was held in abeyance until May 11, 1998, when the Commission advised the claimants in a letter of that date that a new hearing had been scheduled for June 15, 1998.

At the oral hearing, claimants ALEKSANDRA ZOTO, NEFSIKA IKONOMI and LILJANA SALI appeared on their own behalf to explain their multi-part claim. They stated that their father became a United States citizen in 1925 and died in Albania in 1951. At the time of his death, he was survived by his wife, Afrovita Zoto, an Albanian national, and his five daughters, the claimants.

As a preliminary matter and before reaching the merits of the claim, the Commission reiterates that the claimants have established their father's United States citizenship as well as their own. However, as held in the Amended Proposed Decision, claimant HARIKLIA ZOTO did not meet the residency requirement of the Settlement Agreement, and her claim must remain denied. Similarly, claimant ANETA IKONOMI has advised the Commission that she did not commence residing in the United States until early 1997, and therefore also does not meet the residency requirement because there is no evidence that she was living in the United States on April 18, 1995 (the effective date of the Settlement Agreement). Accordingly, ANETA IKONOMI's claim for her share in her father's claim must also be and is hereby denied. As for the remaining claimants, NEFSIKA IKONOMI, ALEKSANDRA ZOTO and LILJANA SALI, the Commission determines, based on the evidence submitted, that each claimant is entitled to claim for a one-sixth share in their father's claim.1

As to the merits of the claim, Claim No. 1 is for damage caused by German occupation forces in October 1944. According to the claimants, a two-story shop and its contents, including building materials and farm equipment, was destroyed. (The shop itself apparently belonged to someone else). Claimants are claiming $3,004,812.00 for this loss. However, because the Commission no longer has the statutory authority to accept claims based on losses suffered during World War II2, this portion of the claim must be and is hereby denied.

Claim No. 2 is for 1,019 Albanian francs held in a bank account in the name of Kostandin Zoto (claimants' father) at the Albanian National Bank, which claimants assert was transferred to the Albanian State Bank on December 31, 1944. In support of Claim No. 2, claimants have submitted a document from the Albanian National Bank which indicates that on December 31, 1944, the monies held in their father's account, equivalent to 1,019 Albanian francs, were deposited in or returned to the Albanian State Bank. At the oral hearing, the claimants testified that the funds in their father's bank account were transferred from the Albanian National Bank and deposited in the Albanian State Bank which by then was the official organ of the new Albanian government that took power in November 1944.

The Commission has reviewed the evidence, both oral and written, pertaining to this portion of the claim and determines that the bank account belonging to Mr. Zoto was effectively confiscated when it was transferred to the Albanian State Bank. Accordingly, each of the eligible claimants is entitled to an award of compensation for her one-sixth share in the claim for the resulting loss, dating from December 31, 1944.

Claimants assert a value of $3,402.00 for the 1,019 Albanian francs. However, the Commission's currency charts show that in 1944 the value of one Albanian franc equalled US $0.328.3 Accordingly, the Commission finds that the funds in the bank account in question had a value at the time of confiscation of $334.23, and that each claimant is entitled to an award of $55.77 for her share in this loss. These awards shall date from the date of confiscation, namely, December 31, 1944.

Claim No. 3 is for gold and silver coins allegedly confiscated from claimants' mother in August 1951. In support of this portion of the claim, claimants have submitted two documents, one dated August 16, 1951, and one dated February 2, 1953, which purport to establish that certain gold and silver coins valued at 125,132 Albanian francs were confiscated from claimants' mother. At the oral hearing, the claimants testified that although the coins were taken while in their mother's possession, the coins in reality belonged to their father who had died in March 1951.

The Commission has carefully reviewed the evidence, both oral and written, pertaining to this portion of the claim, and determines that Report No. 70 dated August 16, 1951 evidences an effective confiscation of gold and silver coins owned by Kostandin Zoto through being placed in the custody of the Albanian State Bank. Accordingly, each of the eligible claimants is entitled to an award of compensation for her one-sixth share in the claim for the resulting loss.

As for valuation, the Commission notes that claimants assert a value of $262,989.00 for this portion of the claim.⁴ However, the Albanian State Bank assigned a value of 125,132 Albanian francs to the coins in question as of February 1953. On the bank statement, one gold napoleon is said to have been equivalent to 326 Albanian francs. At the pre-World War II exchange rate, this would have been equivalent to over $106.00. However, the Commission's currency charts show that before World War II, the napoleon's value was $6.56 ($1.00 was equal to 3.05 francs, and 1 napoleon equaled 20 francs). The currency charts further indicate that in 1946, the franc was revalued at the rate of 5 "old francs" to 1 "new franc," and that after August 1947 5.5 "new francs" equaled $1.00. Accordingly, between 1947 and 1965, 27.5 "old francs" was equal to $1.00. In view of these facts, the Commission must assume, and accordingly finds, that the valuations by the Albanian State Bank were expressed in terms of old Albanian francs. Applying the exchange rate of 27.5 francs to $1.00, the Commission therefore finds that the gold and silver coins in question had a value at the time of confiscation of $4,550.00, and that each claimant is entitled to an award of $758.33 for her share in this loss. These awards shall date from the date of confiscation, namely, August 16, 1951.

Claim No. 4 is for 200 Albanian francs said to have been paid by claimants' father as a "contribution" to a school in January 1946. Claimants assert that this "contribution" was an "extraordinary" tax imposed by the Albanian authorities on individuals who traded with "foreigners" during the years 1939 through 1944. Subsequent to the oral hearing, claimants submitted a copy of an "Official Newspaper" dated January 23, 1945, detailing the nature and amount of the extraordinary tax imposed by the Albanian government as well as a copy of a receipt which shows that Kostandin Zoto paid 200 Albanian francs as a contribution to a "unique school".

The Commission has carefully reviewed these documents and has noted claimants' testimony at the oral hearing regarding the imposition of extraordinary taxes on certain individuals during the years 1939 through 1944. However, on the basis of the evidence submitted, the Commission is not persuaded that the initiation and imposition of such a tax and the payment of 200 Albanian francs by claimants' father amounted to a confiscation by the Albanian government. Accordingly, this portion of the claim must be and is hereby denied.

Claim No. 5 now is said to be a claim only for the two warehouses (titled in the name of Afrovita Zoto) which were allegedly confiscated in 1967. (This claim also overlaps with Claim No. 8 to be discussed below).5 Claimants assert that the warehouses originally belonged to their father, and that in 1981 the two already-confiscated warehouses and a two-story building nearby were demolished and offices built in their place. At the oral hearing, claimants stated that the two warehouses were built by Kostandin Zoto in 1938 at a cost of 1449 gold francs and have asserted a value of $9,642.00 for the two warehouses.6

The Commission has reviewed the documents submitted in support of this claim, consisting of a "Verification" dated August 18, 1993, which states that two warehouses were effectively confiscated by the Albanian government on April 9, 1967, and ultimately demolished in 1981. Based on the totality of the evidence in the record as well as claimants' testimony at the oral hearing, the Commission determines that claimants are entitled to compensation for the resulting loss.

The Commission has reviewed the photographs and estimates submitted by claimants to establish the value of the two warehouse buildings. According to claimants, the warehouses were built in 1938 for a cost 1449 "franga ari," which would have been equivalent to $475.00.7 Claimants have also estimated a value of $9,642.00 but do not indicate the year of this valuation. However, they have submitted no evidence as to the value of the warehouses in 1967 when the warehouses were confiscated.

Based on its own study of the values of various kinds of real property in Albania before and during World War II and thereafter, the Commission finds that the two warehouses, located on approximately 405 square meters of land, had a combined value of $4,000.00 in 1967, the year they were originally confiscated. Accordingly, claimants are each entitled to an award of $666.67 for their interests in the claim for the confiscation and ultimate demolition of the structure of the two warehouses. These awards shall date from April 9, 1967, the original date of confiscation.

Claim No. 6 originally appeared to be a claim for blocked goods, cash confiscated between June and December 1946, and taxes or penalties assessed in 1946 for claimants' father's wartime trading activities during 1939 through 1944. However, at the hearing, claimants stated that their claim now is for that portion of the blocked goods that were detained in their father's two warehouses and which were taken by the Albanian government as needed during 1946. Claimants have submitted evidence from which it can be inferred that during 1946, on several occasions, the Albanian government took for its own use a portion of the goods belonging to Mr. Zoto. The documents entitled "Report" suggest that the "Enterprise" (the Albanian government) acknowledged its debt to claimants' father for a portion of the goods it had impounded. Specifically, in support of this portion of their claim, claimants have submitted documents which indicate that on June 29, 1946, certain goods having a value of 149,812.25 francs were detained by the Albanian government. After subtracting a 40% fee or tax, the government acknowledged that it owed Mr. Zoto the sum of 89,987.35 francs. On October 17, 1946, woolen goods belonging to Kostandin Zoto having a value 3,074.96 francs were placed in State warehouses. The State acknowledged that it owed him the sum of 3,074.96 francs. On October 26, 1946, the State took into its custody certain goods having a value of 8,157.36 francs and it acknowledged that it owed Mr. Zoto the same amount. Similarly, on December 25, 1946, a representative of the State took possession of certain plumbing material and acknowledged that the State owed Mr. Zoto the sum of 880.72 francs.

The Commission has reviewed the evidence submitted in support of this portion of the claim. It finds that the documents entitled "Report" suggest that the "Enterprise" (the Albanian government) acknowledged its debt to claimants' father for a portion of the "blocked goods".8 Because it is unlikely that during 1946 and thereafter, the State would have satisfied its obligation to the claimants' father, the Commission finds claimants entitled to compensation for the resulting loss.9 The Commission calculates the amount owed to claimants' father to have been 102,100.39 francs or $10,210.00, and finds each claimant entitled to an award of $1,701.67 for her share in this loss. These awards shall date from December 25, 1946, the last date that the Albanian government acknowledged its debt.

Claim No. 7 is a claim for money claimants' father may have had in a bank account. Claimants assert that, since 1939, their father regularly had the equivalent of 100,000 gold francs in his bank account. They further state that in December 1944, their father's account showed a balance of only 1,019 Albanian francs. (Claim No. 2, supra). As a result, they claim for the remaining 98,981 Albanian francs that they believe should have been in their father's account. However, the only supporting document submitted consists of a letter dated October 18, 1946, which seems to suggest that Mr. Zoto had paid certain taxes, that he still had money left in his account, and that in 1939, he had had 100,000 gold francs as capital. At the oral hearing, claimants stated that while they suspected that the Albanian government must have taken possession of the content of the bank account, they had no evidence to support their assertion.

Section 531.6(d) of the Commission's regulations provides:

The claimant shall be the moving party, and shall have the burden of proof on all issues involved in the determination of his or her claim.

45 C.F.R. 531.6(d) (1997).

The Commission finds that the claimants have not met the burden of proof in that they have failed to submit supporting evidence to establish that in 1946, their father had 100,000 gold francs in his bank account which was confiscated by the Albanian government. In the absence of such evidence, the Commission must conclude that this portion of claimants' claim is not compensable under the terms of the Settlement Agreement. The claim therefore must be and is hereby denied.

Claim No. 8 is for the confiscation of a two-story residence, two warehouses, and another two-story building consisting of stores and shops on the ground floor and an apartment above the stores. At the oral hearing, claimants acknowledged that the claim for the confiscation of the two warehouses was covered under Claim No. 5. They testified that the family residence, referred to as the "red brick house," was a two-story house, built in 1939, which was confiscated in 1948 and thereafter used by the military.10

The claimants were advised that since the house was being returned to the family, it was unlikely that the Commission could find them entitled to compensation. In response, they rephrased their claim as one for loss of use between 1948 and its return. The Commission explained, however, that in order to recover for loss of use and damage to the house, the family would have to establish that the value of the house in its returned state was less than the value of the house when it was taken in 1948 plus interest until its return.11 The claimants have not done so. Consequently, there is no evidence from which the Commission could determine that the value of the house as released by the Albanian government was less than the value of the house when confiscated, plus interest. Accordingly, there is no basis on which to make an award for this portion of the claim, and it is hereby denied.

As to the other two-story building consisting of both the stores and the apartment, the claimants explained at the oral hearing that the stores were located on the first floor of the two-story building ("the white house"), that the second floor was used as an apartment by the family after confiscation of the red brick house, and that the warehouses were located nearby. Claimants further asserted that until 1967 rent was paid to them for the stores, but that the rental payments ceased when the government confiscated the stores. However, the family continued to live on the second floor until 1981 when the entire building as well as the nearby warehouses were destroyed to make room for a new structure.

Based on the evidence in the record, including claimants' testimony, the Commission determines that the stores located on the first floor of the white house were effectively confiscated in 1967 and actually demolished in 1981. The Commission also finds that the second floor apartment was confiscated on June 25, 1981, pursuant to Decision No. 106 of the same date. Accordingly, claimants are entitled to compensation for the confiscation of the entire building, part of which took place in 1967 and part in 1981.

Decision No. 106 gives various estimates as the value of the building with which the claimants disagreed at the oral hearing. However, they have provided no independent objective evidence as to the value or the purchase price of this building.12 Based on its own study of the values of various kinds of real property in Albania before and during World War II and thereafter, the Commission finds that the stores, located on 190 square meters of land, had a value of $6,000.00 in 1967, the year they were originally confiscated, and that the second-story apartment had a value of $8,000.00 in 1981. Accordingly, each claimant is entitled to awards of $1,000 and $1,333.33 for her share in these losses. The portion of the awards for the stores shall date from April 9, 1967, and the portion of the awards for the apartment shall date from June 25, 1981.

Claim No. 9 is a claim for confiscated farm equipment and parts. At the oral hearing, claimants stated that these items were also confiscated from the family and should have been included as part of Claim No. 6 (blocked goods) but because they represented "different types of goods", the claim was not included with Claim No. 6. In support of their claim, they have submitted an undated inventory of farm equipment, parts and supplies. At the hearing, claimants testified that although the inventory appears to be undated, the inventory is signed by an official of the "state enterprise" which would indicate that the Albanian government took control of the items shortly after it came into power.

Based on claimants' statements and the entirety of the record, the Commission finds that the claimants' father was deprived of the farm equipment and supplies in his possession by the Albanian Communist regime, and that this action constituted an uncompensated expropriation by the Government of Albania. In the absence of a more precise date, the Commission will deem the expropriation to have occurred as of December 25, 1945, when the "Enterprise" last acknowledged its debt to Mr. Zoto.

Claimants have asserted a value for the items of $324,833.00. However, this figure is unsupported and appears to be grossly exaggerated. Based on its own valuation of similar items in 1946, the Commission determines the value to have reasonably amounted to $6,000.00. Accordingly, each claimant is entitled to an award of $1,000 for her share in this loss, dating from December 25, 1946.

Claim No. 10 is asserted for three separate assessments of "unusual" taxes allegedly paid by their father. Claimants again rely on Decision No. 6 of May 3, 1946, which suggests that for his trade activity between 1939 and 1944, their father was assessed 143,000 francs as "extraordinary taxes". According to the claimants, their father was also assessed an additional 270,000 Lek and 500,000 Albanian Lek.13

Claimants testified that when the new Albanian government came into power in December 1944, it calculated the value of all the property owned by Mr. Zoto. Later, the government is said to have enacted into law a series of "unusual taxes and assessments" on "wealthy" people who had conducted trade during the war years. When the government allegedly valued Mr. Zoto's property as of December 31, 1944, the value of the goods in the warehouses was said to have been 348,810 Albanian francs. But because the government included all his other assets in its calculation, it allegedly assessed him for 143,000 Albanian francs. However, claimants did not indicate what the amount should have been.

As previously noted, claimants also contended that in addition to paying the 143,000 Albanian francs as taxes, their father made two additional payments in the amounts of 270,000 Lek and 500,000 Lek. According to the claimants, Mr. Zoto paid more than the required amount of 143,000 francs, namely that he paid an additional 770,000 Lek. They testified that their father paid the required taxes little by little and they contend that these unusual taxes on trading activity during the war years amounted to confiscation.

At the oral hearing, claimants were advised that they had the burden of establishing that the taxes were in fact paid and that the taxes were confiscatory in nature.14 As noted above (see Claim No. 4), subsequent to the oral hearing, claimants submitted a copy of the Albanian law providing for collection of taxes during the war years. The Commission has reviewed the evidence and notes that extraordinary taxes apparently were imposed on war revenues. However, it is not persuaded on the basis of this document that the taxes were confiscatory in nature insofar as the claimants' claim is concerned. Accordingly, this portion of their claim must be and is hereby denied.

Finally, claim No. 11 is a claim for $1,235,409.00 which claimants assert is the amount of their lost business profits and rent from their properties.15

The Commission again advised the claimants that, in order to recover for loss of profits or rent for the various buildings, they would bear the burden of proof in establishing the amount of rental income or profits that they used to receive from those sources. The Commission also again explained that the award of interest as to a particular portion of the claim was, in effect, to compensate for such losses. The claimants have not submitted any evidence from which the Commission could determine the amount of any such rent or profits. There is thus no basis on which to make an award for this portion of the claim, and it accordingly is also denied.

In accordance with applicable principles of international law and its decisions in previous claims programs, the Commission further concludes that each claimant is entitled to interest as part of her award, amounting to 6 percent simple interest per annum from the date of loss to April 18, 1995 (the effective date of the Settlement Agreement). Accordingly, each claimant is entitled to an interest award of 301.8 percent of her award of $55.70, or $168.10; an interest award of 262.1 percent of her award of $758.33, or $1,987.58; an interest award of 168.1 percent of her award of $1,666.67, or $2,801.67; an interest award of 289.9 percent of her award of $2,701.67, or $7,832.14; and an interest award of 82.9 percent of her award of $1,333.33 or $1,105.33, for a total principal award of $6,515.70 and a total interest award of $13,894.82.

The Commission therefore withdraws the denial set forth in its Amended Proposed Decision in this claim and enters the awards set forth below, which will be certified to the Department of Treasury for payment in accordance with sections 5, 7 and 8 of Title I of the ICSA (22 U.S.C. 1624, 1626 and 1627).

Under the terms of the Settlement Agreement, the United States Government has agreed to advise the Albanian authorities of the issuance of the Commission's awards, so as to prevent double recovery in a claim. A copy of this decision therefore will be forwarded to the Albanian Government in due course.

This constitutes the Commission's final determination in this claim.

Claimant NEFSIKA IKONOMI is entitled to an award in the principal amount of Six Thousand Five Hundred Fifteen Dollars and Seventy Cents ($6,515.70), plus interest on $55.70 from December 31, 1944, to April 18, 1995, in the amount of One Hundred Sixty-Eight Dollars and Ten Cents ($168.10); and interest on $758.33 from August 16, 1951, to April 18, 1995, in the amount of One Thousand Nine Hundred Eighty-Seven Dollars and Fifty-Eight Cents ($1,987.58); and interest on $1,666.67 from April 9, 1967, to April 18, 1995, in the amount of Two Thousand Eight Hundred One Dollars and Sixty-Seven Cents ($2,801.67); and interest on $2,701.67 from December 25, 1946, to April 18, 1995, in the amount of Seven Thousand Eight Hundred Thirty-Two Dollars and Fourteen Cents ($7,832.14), and interest on $1,333.33 from June 25, 1981, to April 18, 1995, in the amount of One Thousand One Hundred Five Dollars and Thirty-Three Cents ($1,105.33), for a total interest award of $13,894.82 and a total award of principal and interest in the amount of Twenty Thousand Four Hundred Ten Dollars and Fifty-Two Cents ($20,410.52).

Claimant ALEKSANDRA ZOTO is entitled to an award in the principal amount of Six Thousand Five Hundred Fifteen Dollars and Seventy Cents ($6,515.70), plus interest on $55.70 from December 31, 1944, to April 18, 1995, in the amount of One Hundred Sixty-Eight Dollars and Ten Cents ($168.10); and interest on $758.33 from August 16, 1951, to April 18, 1995, in the amount of One Thousand Nine Hundred Eighty-Seven Dollars and Fifty-Eight Cents ($1,987.58); and interest on $1,666.67 from April 9, 1967, to April 18, 1995, in the amount of Two Thousand Eight Hundred One Dollars and Sixty-Seven Cents ($2,801.67); and interest on $2,701.67 from December 25, 1946, to April 18, 1995, in the amount of Seven Thousand Eight Hundred Thirty-Two Dollars and Fourteen Cents ($7,832.14), and interest on $1,333.33 from June 25, 1981, to April 18, 1995, in the amount of One Thousand One Hundred Five Dollars and Thirty-Three Cents ($1,105.33), for a total interest award of $13,894.82 and a total award of principal and interest in the amount of Twenty Thousand Four Hundred Ten Dollars and Fifty-Two Cents ($20,410.52).

Claimant LILJANA SALI is entitled to an award in the principal amount of Six Thousand Five Hundred Fifteen Dollars and Seventy Cents ($6,515.70), plus interest on $55.70 from December 31, 1944, to April 18, 1995, in the amount of One Hundred Sixty-Eight Dollars and Ten Cents ($168.10); and interest on $758.33 from August 16, 1951, to April 18, 1995, in the amount of One Thousand Nine Hundred Eighty-Seven Dollars and Fifty-Eight Cents ($1,987.58); and interest on $1,666.67 from April 9, 1967, to April 18, 1995, in the amount of Two Thousand Eight Hundred One Dollars and Sixty-Seven Cents ($2,801.67); and interest on $2,701.67 from December 25, 1946, to April 18, 1995, in the amount of Seven Thousand Eight Hundred Thirty-Two Dollars and Fourteen Cents ($7,832.14), and interest on $1,333.33 from June 25, 1981, to April 18, 1995, in the amount of One Thousand One Hundred Five Dollars and Thirty-Three Cents ($1,105.33), for a total interest award of $13,894.82 and a total award of principal and interest in the amount of Twenty Thousand Four Hundred Ten Dollars and Fifty-Two Cents ($20,410.52).

Dated at Washington, DC and DECEMBER 15, 1998 entered as the Final Decision of the Commission.

In the Matter of the Claim of MARIA A. STEVENS, et al., Against the Government of Albania

Claim No. ALB-268 Decision No. ALB-299

Claim for expropriation of parcels of real property in Albanian capital of Tirana. In case of property restored to claimants' possession, basis for an award existed only if claimants demonstrated that value of property at time of return was less than value of property at time of expropriation plus accrued interest (at customary international claims rate of 6 percent simple interest per annum) from date of expropriation to date of return. In this claim, Commission held that claimants did not sustain burden of proof in demonstrating that such basis existed.

Oral Hearing held on April 15, 1997.

This claim against the Government of Albania is based upon the alleged confiscation of real property located in Tirana, Albania.

By Proposed Decision entered on February 24, 1997, the Commission made awards to claimants in the total principal amount of $5,000.00, plus interest from January 1, 1946, as compensation for their inherited interests in their mother's claim for her house in Tirana, which was confiscated by the Albanian government in 1946. However, the Commission denied claimants' claim for the loss of a house and surrounding land owned by their father, finding that the property had been returned to them by the Albanian government. The Commission also denied claimants' claim for 2.75 dynym of land in Tirana, for lack of evidence of ownership.

By letter dated March 19, 1997, claimants objected to the Proposed Decision, to the extent that compensation was denied for the loss of the house and surrounding land owned by their father. Claimants maintained that, while the property has now been returned to them, they are entitled to compensation for the intervening decades in which the house was occupied by others who paid no rent to the family. They further contended that they should be compensated for that part of the original house which was razed to make way for a new apartment building, and for the land on which the apartment building is situated. Finally, they asserted that three garages have been built on the property which are being used to store vehicles. The occupants refuse to pay compensation to claimants for the use of the property, or to vacate the premises. Another individual who occupies a structure and a courtyard on part of the property also refuses to either vacate or pay compensation.

Claimants requested an oral hearing, which was held on April 15, 1997. Claimants MARIA STEVENS and PHILIP STEVENS appeared at the hearing, on their own behalf and on behalf of their siblings.

At the oral hearing, claimants stated that their father purchased the land and built the house at issue, and that their family lived in it until 1939, when they left Albania. According to claimants, relatives then moved into the house, and lived there until 1947, when they were evicted and the government confiscated the house. Claimants testified that an Albanian government official occupied the house from 1947 until 1992, and that rent was paid for a number of years.1

According to the claimants, the Albanian government began demolishing the house in 1991 or 1992. When claimants' relatives discovered that demolition was in progress, they notified the Albanian government that the property belonged to U.S. nationals and could not be demolished without approval. Demolition ceased but, claimants testified, by that time more than one-half of the house had been torn down.2 Claimants' family later repaired what remains of the house and rented it to a businessman. Claimants were unable to assign a value to the property that was confiscated and to that which was returned.

At the close of the hearing, the Commission reminded claimants of their burden to establish the size and value of the piece of land that has not been returned (on which the apartment building stands), as well as the value of the part of the house that was demolished. The Commission further explained that, to establish an entitlement to compensation for loss of use of property which has been returned, a claimant must prove that the fair market value of the property when confiscated, together with interest, exceeds the present value of the property as returned. Finally, the Commission pointed out that, unless claimants can establish responsibility on the part of the Albanian government, their only recourse against "squatters" is to pursue the matter under the domestic laws of Albania.3

By letter dated February 12, 1998, claimants submitted several documents and photographs in support of their claims and asserted two additional claims.4 According to claimants, ROBERT STEVENS discovered on a recent trip to Albania that two-thirds of the house formerly owned by their mother was demolished to make way for the apartment building. Claimants contend they should be compensated for the razed portion of that house, along with the land partitioned off from the property for the construction of the apartment building. They assert a value of $88,284.24 for these new claims.

The Commission now has reviewed the entire record, including the evidence offered at the oral hearing, as well as the recently submitted documents. Based on that review, the Commission is persuaded that approximately 66 square meters of the house that formerly belonged to their father and approximately 230 square meters of the surrounding land confiscated in 1947 and used for construction of the apartment building sometime in 1991 or 1992. The Commission's investigation in Albania determined, and claimants concede, that the remainder of their father's property has been returned to them.

In support of their loss of use argument, claimants rely on the Commission's valuation of their mother's house as of 1946 ($5,000.00) and argue that their father's house was more than three times the size of that house and was located on a much larger lot. Based on the Commission's valuation of their mother's house, claimants argue that their father's house would have been worth at least $25,000.00 in 1947 and that, together with accumulated interest (totaling 295.8 percent), their claim would have been valued at approximately $99,625.00 in 1994. They state that the house and land are now appraised at only $68,229.00, yielding a difference of $31,396.00. They claim that sum as compensation for the loss of use of their father's property.

The Commission is not persuaded that claimants' father's house would have had a value of as much as $25,000.00 in 1947. Claimants' valuation is undercut first by their own comparison of the size of their mother's house with that of their father's. While claimants contend that their father's house was more than three times larger, in fact it was at most double the size of their mother's, and his lot was less than double in size - 803 square meters vs. 500 square meters. Moreover, it is not plausible in any event that a three-room house in Tirana, Albania, would have been worth as much as $25,000.00 in 1947.

Based on the 2,800 franc purchase price of the 803 square meter lot and the generally accepted principle that a house and lot have a combined value of 500 percent of the value of the lot alone, claimants' father's property would have had a pre-war value of approximately 14,000 francs, or about $4,600.00. Allowing for appreciation in property values due to demand for housing after the end of the Nazi occupation of Albania in 1944, the property would at most have had a value of $10,000.00 in 1947. Adding to this figure the interest accrued on the claim for the taking of the property between 1947 and 1994 (282 percent), claimants' awards for the loss of the property in 1947 would total approximately $38,200.00 in principal and interest.

However, as discussed above, claimants' father's property - except for 230 square meters of garden and 66 square meters of land underlying the razed portion of the house - was returned to claimants' family in 1994. Comparing the appraised value of the returned property - $68,229.00 - to the value of the property at the time of taking plus interest - $38,200.00, it is clear that claimants benefited more from regaining ownership of the property in 1994 than they would have from receiving an award to compensate them for the taking of the property in 1947 plus loss of use. Accordingly, claimants' claim for loss of use of their father's property must be denied.

The Commission also holds, however, that claimants are entitled to compensation for the 296 square meters of their father's land which has not been returned to them, and for the demolition of a portion of his house. Based on the 1933 purchase price which claimants' father paid for the 803 square meters of land (2,800 francs), the Commission finds that the 296 square meters at issue had a value of $800.00 when taken in 1947, and that the later-demolished portion of the house had a value of $2,000.00 at that time. For lack of a precise date, the Commission will deem the taking to have occurred as of January 1, 1947. Accordingly, each of the claimants is entitled to an award in the principal amount of $700.00 for his or her inherited share in their father's claim for the unreturned portion of his property, dating from January 1, 1947.

In accordance with applicable principles of international law and its decisions in previous claims programs, the Commission further concludes that claimants are entitled to interest as part of their awards, amounting to 6 percent simple interest per annum from the respective dates of loss to April 18, 1995, the effective date of the Settlement Agreement. Accordingly, each claimant is entitled to an interest award of 295.8 percent of his or her principal award of $1,250.00, or $3,697.50, and an interest award of 289.8 percent of his or her principal award of $700.00, or $2,028.60.

Claimants' new claims remain. Claimants contend that they are entitled to further compensation because two-thirds of their mother's house has been demolished and a portion of the land was taken (in 1991) to make way for the apartment building. However, the Proposed Decision compensated claimants - as their mother's heirs - for the 1946 confiscation of their mother's house, together with approximately 500 square meters of underlying and surrounding land. Once the property was confiscated, claimants' mother by definition was no longer its owner and thus had no further rights to it. Any later activity affecting the property could not affect her or her heirs. Accordingly, under the circumstances, there is no basis on which to change the result reached in the Commission's Proposed Decision on the part of the claim involving claimants' mother's property.

For the reasons set forth above, the Commission withdraws the awards made in its Proposed Decision and enters the awards set forth below, which will be certified to the Department of Treasury for payment in accordance with sections 5, 7 and 8 of Title I of the International Claims Settlement Act of 1949, as amended (22 U.S.C. §§ 1624, 1626 and 1627). In all other respects, the Proposed Decision is affirmed.

Under the terms of the Settlement Agreement, the United States Government has agreed to advise the Albanian authorities of the issuance of the Commission's awards, so as to prevent double recovery in any claim. A copy of this decision therefore will be forwarded to the Albanian government in due course.

This constitutes the Commission's final determination in this claim.

Claimant MARIA A. STEVENS is entitled to an award in the principal amount of One Thousand Nine Hundred Fifty Dollars ($1,950.00), plus interest on $1,250.00 from January 1, 1946, to April 18, 1995, in the amount of Three Thousand Six Hundred Ninety-Seven Dollars and Fifty Cents ($3,697.50), and interest on $700.00 from January 1, 1947 to April 18, 1995, in the amount of Two Thousand Twenty-Eight Dollars and Sixty Cents ($2,028.60), for a total interest award of Five Thousand Seven Hundred Twenty-Six Dollars and Ten Cents ($5,726.10), and a total award of principal and interest of Seven Thousand Six Hundred Seventy-Six Dollars and Ten Cents ($7,676.10).

Claimant ROBERT J. STEVENS is entitled to an award in the principal amount of One Thousand Nine Hundred Fifty Dollars ($1,950.00), plus interest on $1,250.00 from January 1, 1946, to April 18, 1995, in the amount of Three Thousand Six Hundred Ninety-Seven Dollars and Fifty Cents ($3,697.50), and interest on $700.00 from January 1, 1947 to April 18, 1995, in the amount of Two Thousand Twenty-Eight Dollars and Sixty Cents ($2,028.60), for a total interest award of Five Thousand Seven Hundred Twenty-Six Dollars and Ten Cents ($5,726.10), and a total award of principal and interest of Seven Thousand Six Hundred Seventy-Six Dollars and Ten Cents ($7,676.10).

Claimant JANE STEVENS INGLEY is entitled to an award in the principal amount of One Thousand Nine Hundred Fifty Dollars ($1,950.00), plus interest on $1,250.00 from January 1, 1946, to April 18, 1995, in the amount of Three Thousand Six Hundred Ninety-Seven Dollars and Fifty Cents ($3,697.50), and interest on $700.00 from January 1, 1947 to April 18, 1995, in the amount of Two Thousand Twenty-Eight Dollars and Sixty Cents ($2,028.60), for a total interest award of Five Thousand Seven Hundred Twenty-Six Dollars and Ten Cents ($5,726.10), and a total award of principal and interest of Seven Thousand Six Hundred Seventy-Six Dollars and Ten Cents ($7,676.10).

Claimant PHILIP A. STEVENS is entitled to an award in the principal amount of One Thousand Nine Hundred Fifty Dollars ($1,950.00), plus interest on $1,250.00 from January 1, 1946, to April 18, 1995, in the amount of Three Thousand Six Hundred Ninety-Seven Dollars and Fifty Cents ($3,697.50), and interest on $700.00 from January 1, 1947 to April 18, 1995, in the amount of Two Thousand Twenty-Eight Dollars and Sixty Cents ($2,028.60), for a total interest award of Five Thousand Seven Hundred Twenty-Six Dollars and Ten Cents ($5,726.10), and a total award of principal and interest of Seven Thousand Six Hundred Seventy-Six Dollars and Ten Cents ($7,676.10).

Dated at Washington, DC and APRIL 16, 1998 entered as the Final Decision of the Commission.

C. Other Activities

1. Litigation--Iran Claims Program

As discussed in the 1995, 1996, and 1997 Yearbooks, a group of some nineteen claimants (later increased to 22) filed suit in 1995 against the United States in the United States Court of Federal Claims. Plaintiffs alleged that the 1990 Settlement Agreement between the United States and Iran effected a "taking" of their claims without just compensation, in violation of the Fifth Amendment to the Constitution, because the compensation they received did not cover the entire adjudicated value of their claims as determined by the Commission. They argued that the unpaid portion of their awards should be paid to them from taxpayer funds.

Following oral argument in July 1996, the court ruled from the bench, granting summary judgment in favor of the United States. The written opinion, which issued in September 1996, held that under a "regulatory takings" analysis, any loss that the plaintiffs sustained was not the result of a compensable taking by the United States. Walter Abrahim-Youri v. United States, 36 Fed. Cl. 482 (1996). Plaintiffs appealed that decision to the U.S. Court of Appeals for the Federal Circuit, asserting that the lower court erred in applying a "regulatory takings" analysis, rather than a "per se taking" analysis. However, on December 4, 1997, the Court of Appeals issued its decision affirming the judgment of the Court of Federal Claims.

On March 3, 1998, the claimants petitioned the United States Supreme Court for a writ of certiorari, seeking review of the Court of Appeals' decision. However, by Memorandum Order dated June 26, 1998, the Court denied their petition. Clifford F. Gurney, et al. v. United States, ___U.S.___, 118 S.Ct. 2366. They then sought rehearing of the Court's denial of their petition, but their request for rehearing was also denied. Clifford F. Gurney, et al. v. United States, ___U.S.___, 119 S.Ct.14 (August 12, 1998).

2. Claims Against Iraq

In 1998, the Commission continued to work closely with the Office of the Assistant Legal Adviser for International Claims and Investment Disputes at the Department of State, to pursue legislation to authorize the Commission to adjudicate the outstanding claims of U.S. nationals against Iraq. The United Nations Compensation Commission (UNCC) in Geneva, Switzerland, currently has jurisdiction over most claims of U.S. nationals arising on or after August 2, 1990, along with those of other UN member countries. However, there is no forum for other claims -- particularly claims pre-dating Iraq's August 1990 invasion of Kuwait -- which are valued in the billions of dollars. Although bills to authorize the Commission to adjudicate claims of U.S. nationals against Iraq falling outside the UNCC's jurisdiction were again introduced in the Senate and the House of Representatives in 1998, neither chamber took any action on them during the course of the Congressional session.

3. Helms-Burton Act/Claims Against Cuba

The Cuban Liberty and Democratic Solidarity (LIBERTAD) Act (also known as the Helms-Burton Act) includes as Title III a provision authorizing U.S. nationals whose Cuban property was confiscated by the Castro regime to bring federal court actions against foreign entities "trafficking" in those properties. The legislation contemplates that, with limited exceptions, federal court actions against "traffickers" will adopt the valuations determined in awards issued by the Commission in its Cuban Claims Program, conducted from 1965 to 1972. (See Section III, subsection A.5(b), below.) In cases where a plaintiff was not eligible to file a claim in the Commission's Cuban Claims Program (i.e., was not a U.S. national at the time of confiscation), the legislation authorizes the federal courts, beginning in March 1998, to appoint the Commission as Special Master to make determinations on issues such as ownership and valuation of property, for use in court actions.

Invoking his express authority under the statute, however, President Clinton has announced successive suspensions of the right to file Title III actions every six months since the law was enacted, citing the need to seek agreement with U.S. trading partners on policy toward Cuba, and he has indicated that he intends to continue doing so as long as our government continues to make progress in developing that policy. Nevertheless, the Commission continued to receive many requests to examine files from its Cuban Claims Program during 1998. Most of the requests were from attorneys advising foreign investors wishing to avoid involvement with any property in Cuba that is the subject of a certified claim in the program. In addition, representatives from the Department of State examined a number of the files, in connection with the Department's responsibility under Title IV of the Helms-Burton Act, which requires the exclusion from the United States of foreign individuals associated with corporations or other entities "trafficking" in property that is the subject of a certified claim in the Cuban Claims Program.

4. Prisoner-Of-War and Civilian Internee Claims

During 1998, the Commission continued to have jurisdiction under Public Law 91-289 (50 U.S.C. App. 2004 and 2005) to receive and adjudicate claims by United States Armed Forces personnel and civilians, or their survivors, for compensation based on inadequate food rations and inhumane treatment received while held as prisoners of war or internees during the Vietnam conflict. However, no new claims were received during the year. The Commission also continued to serve as a repository of records on United States military veterans and civilians captured or interned during World War II, the Korean conflict, the U.S.S. Pueblo incident, and the Vietnam conflict.

A. Claims Under the International Claims

Settlement Act of 1949

The jurisdiction of the Commission and its predecessor, the International Claims Commission, has encompassed the administration of twenty claims programs under the authority of the seven titles of the International Claims Settlement Act of 1949, as amended. Pub. L. 455, 81st Congress, approved March 10, 1950, 64 Stat. 12 (22 U.S.C. 1621 et seq.) ("the Act"). These programs have involved claims of U.S. nationals for losses in specific foreign countries as a result of the nationalization or other taking of property during specific periods of time by the governments of those countries. These twenty claims programs are briefly summarized below. Citations to the final reports on the programs, as well as relevant statistics, appear in Sections V and VI of this Yearbook.

1. Title I

(a) Yugoslavia - First Program

The provisions of Title I of the Act authorized the International Claims Commission to administer a program to determine claims of nationals of the United States for the nationalization or other taking of property included within the terms of the U.S.-Yugoslav Claims Settlement Agreement of July 19, 1948. That agreement resulted in a fund of $17 million from which payments were made on the awards granted in the claims. The first Yugoslavia Claims Program was completed on December 31, 1954.

(b) Panama

Under section 4(a) of Title I of the Act, the International Claims Commission was authorized to adjudicate claims of nationals of the United States for the nationalization or other taking of property included within the terms of any claims settlement agreement thereafter concluded between the United States and a foreign government (exclusive of governments against which the United States declared the existence of a state of war during World War II). Pursuant to this authorization, the International Claims Commission administered a program to determine U.S. nationals' property claims against the Government of Panama upon the conclusion of a claims settlement agreement between the Governments of the United States and Panama on October 11, 1950. This agreement resulted in a fund of $400,000 for payments on the awards granted in the claims. The Panamanian Claims Program was completed on December 31, 1954.

(c) Poland

On July 16, 1960, the Governments of the United States and Poland concluded a claims settlement agreement under which the Government of Poland agreed to pay the sum of $40 million to the United States over a period of twenty years in full settlement and discharge of certain claims of nationals of the United States. The Commission was authorized to determine the claims covered by this agreement under the original provisions of section 4(a) of Title I of the Act. The Polish Claims Program was completed on March 31, 1966.

(d) Yugoslavia - Second Program

A second claims agreement was concluded between the Governments of the United States and Yugoslavia on November 5, 1964, covering claims against the Government of Yugoslavia which arose subsequent to the 1948 agreement (see subsection 1(a), above) and providing a fund of $3.5 million for payments on awards. The second Yugoslav Claims Program was administered by the Commission under authority of section 4(a) of Title I of the Act, adjudicating the claims filed pursuant to the agreement. The program was completed on July 15, 1969.

(e) China - Second Program

In 1972 the Commission completed the first China Claims Program, in which it adjudicated claims by United States nationals which arose between October 1, 1949 and November 6, 1966. (See subsection 5(a), below.) On May 11, 1979, an agreement was entered with the People's Republic of China settling claims of nationals of the United States arising through the date of that agreement. The Commission thereafter proceeded under section 4(a) of Title I of the Act to adjudicate claims by United States nationals which arose between November 6, 1966 and May 11, 1979. The Commission completed the second China Claims Program on July 31, 1981.

(f) Ethiopia

On December 19, 1985, the United States Government concluded a compensation agreement with the Provisional Military Government of Socialist Ethiopia for the settlement of claims against that government arising as a result of the nationalization, expropriation, or other taking of, or restrictive measures directed against, property rights or interests of United States nationals. The agreement provided for payment to the United States of a total of $7 million as compensation for the claimants, the last installment of which was paid in January 1991.

Exercising its authority under section 4(a) of Title I of the Act, the Commission began adjudication of the claims covered by the settlement agreement on March 31, 1986, and set a program completion date of September 30, 1987. During the course of the program, the Commission issued decisions on a total of 45 claims. It found 27 to be compensable, and made awards amounting to $14,387,510.96 in principal and $10,024,589.00 in interest. Following completion of the program on September 30, 1987, the Commission certified the awards to the Secretary of the Treasury for payment, in accordance with section 5 of the Act.

(g) Egypt

On June 29, 1990, the Commission completed the adjudication of claims against the Government of Egypt, pursuant to its authority under section 4(a) of Title I of the Act. The claims were based on uncompensated "nationalization, expropriation, confiscation and other restrictive measures of or against" U.S. nationals' property between January 1, 1952 and October 27, 1976. Initial decisions on most of the claims had been issued by the Office of the Legal Adviser in the Department of State, following entry into force of the U.S.-Egyptian Claims Settlement Agreement of 1976. TIAS 8446, entered into force October 27, 1976. However, to expedite distribution of the amounts remaining from the original $10 million paid to the United States under the agreement, the Legal Adviser requested, by letter dated May 11, 1989, that the Commission take jurisdiction over the claims and determine the claimants' entitlement to share proportionately in those remaining funds. In most of the claims, this was accomplished by issuance of awards of interest, which had not been included in the awards made by the Department of State.

During the course of the program, the Commission issued decisions on a total of 85 claims, out of which 83 were found to be compensable. In these, it made awards, including principal and interest, in the total amount of $5,189,236.64.

2. Title II

Title II of the Act provided for the vesting and liquidation of enemy assets which had been blocked by the United States during World War II, and for the deposit of the proceeds into separate special funds, according to the respective government ownership of those assets prior to blocking. Pub. L. 285, 84th Congress, approved August 9, 1955, Title II, 69 Stat. 562 (22 U.S.C. 1631). The proceeds were deposited into funds by the Department of the Treasury which were designated the Bulgarian Claims Fund, the Hungarian Claims Fund, and the Romanian Claims Fund, for payments on awards granted by the Commission in claims against those governments under Title III of the Act. (See subsection 3, below.)

3. Title III

(a) Bulgaria, Hungary, and Romania -

First Programs

Title III of the Act authorized the Commission to consider claims of nationals of the United States for losses arising out of war damages, nationalization, compulsory liquidation, or other taking of property prior to August 9, 1955, by the Governments of Bulgaria, Hungary, and Romania. Pub. L. 285, 84th Congress, Title III, approved August 9, 1955, 69 Stat. 570 (22 U.S.C. 1641). The Commission was also authorized to consider claims of nationals of the United States for losses based on the failure of those governments to meet certain debt obligations expressed in the currency of the United States. Payments on the awards granted in these claims were made from the appropriate claims funds created under Title II of the Act. (See subsection 2, above.) The amounts available from these funds for payments were: Bulgarian Claims Fund - $2,676,234.49; Hungarian Claims Fund - $2,235,750.65; and Romanian Claims Fund - $20,164,212.68. The Bulgarian, Hungarian, and Romanian Claims Programs were completed on August 9, 1959.

(b) Bulgaria and Romania - Second

Programs

On July 2, 1963, the United States concluded a formal claims settlement agreement with the Government of Bulgaria. Under that agreement, the Government of Bulgaria paid the sum of $400,000 in settlement of claims of nationals of the United States. This amount was deposited into the Bulgarian Claims Fund to supplement the amount derived from the prior liquidation of Bulgarian assets for payments on awards granted by the Commission in both Bulgarian claims programs. (See subsections 2 and 3(a), above.)

The United States also concluded a formal claims settlement agreement with the Government of Romania on March 30, 1960. That agreement provided for the payment of the sum of $2.5 million in settlement of claims of nationals of the United States. This $2.5 million was deposited into the Romanian Claims Fund to supplement the amount derived from the prior liquidation of Romanian assets for payments on awards granted by the Commission in both Romanian claims programs. (See subsections 2 and 3(a), above.)

An amendment to Title III of the Act authorized the Commission to consider claims against Bulgaria and Romania which arose after the first programs were authorized (see subsection 3(a), above) but prior to the conclusion of the claims settlement agreements with the governments of those countries. Pub. L. 90-421, approved July 24, 1968, 82 Stat. 420 (22 U.S.C. 1641). Those programs could not be administered under the authority of section 4(a) of Title I of the Act, for the United States had declared the existence of a state of war during World War II against those countries. The second Bulgarian and Romanian Claims Programs were completed on December 24, 1971, as required by the statute.

(c) Hungary - Second Program

On March 6, 1973, the United States concluded a formal claims settlement agreement with the Government of Hungary under which that government agreed to pay the sum of $18.9 million in settlement of claims of nationals of the United States. Payments on this amount were deposited into the Hungarian Claims Fund to supplement the amount derived from the prior liquidation of Hungarian assets for payments on awards granted by the Commission in both Hungarian claims programs. (See subsections 2 and 3(a), above.) The final payment was made on June 9, 1980.

As in the second programs for Bulgaria and Romania, the Commission did not have the statutory authority to implement this claims agreement by administering a claims program under section 4(a) of Title I of the Act, for the United States had declared the existence of a state of war against the Government of Hungary during World War II. Under an amendment to Title III of the Act, Congress authorized the Commission to determine claims of nationals of the United States against the Government of Hungary based on nationalization or other taking of property between August 9, 1955, the date on which the first Hungarian Claims Program was approved, and March 6, 1973, the date of the agreement with Hungary. Pub. L. 93-460, approved October 20, 1974, 88 Stat. 1386 (22 U.S.C. 1641). The Commission was also authorized to adjudicate certain claims which should have been filed in the first Hungarian Claims Program, but were not, due to an administrative error which caused notices of that program to be mailed to non-existent addresses. The second Hungarian Claims Program was completed on May 16, 1977.

(d) Italy - First Program

Title III of the Act also authorized the Commission to consider claims of nationals of the United States against Italy for losses resulting from war damages during World War II sustained in areas outside of Italy and territories ceded by Italy under the Treaty of Peace concluded on September 15, 1947. (Claims for losses arising from war damages sustained within Italy and territories ceded by Italy were compensated by Italy under the Treaty of Peace.) By an amendment to Title III, the Commission was authorized to reconsider claims filed by persons who were nationals of the United States on the date of authorization of the claims program, although not nationals of the United States on the date of the losses upon which their claims were based. Pub. L. 85-604, approved August 8, 1958, 72 Stat. 531 (22 U.S.C. 1641). Awards in these claims by the Commission were paid out of the Italian Claims Fund. That fund was established with the sum of $5 million paid to the United States by the Government of Italy, pursuant to a Memorandum of Understanding concluded by the two governments which became effective on August 14, 1947. The Italian Claims Program was completed on August 9, 1959, as required by the statute. Reconsideration of the Italian claims was completed on May 31, 1960.

(e) Italy - Second Program

The second Italian Claims Program was administered pursuant to an amendment to Title III of the Act as, in effect, an extension of the first Italian Claims Program (see subsection 3(d), above). Pub. L. 90-421, approved July 24, 1968, 82 Stat. 420 (22 U.S.C. 1641). The Commission was authorized to consider claims of United States nationals who were eligible to file in the first Italian Claims Program, but who failed to file, as well as claims of United States nationals against Italy which arose in certain areas ceded by Italy under the Treaty of Peace, including the Dodecanese Islands. Excluded from consideration were claims of persons who had previously received compensation in the first Italian Claims Program or under the Treaty of Peace with Italy. Payments on awards granted by the Commission in this program were made from the balance remaining in the Italian Claims Fund following payment of the awards granted in the first Italian Claims Program. This second program was completed on December 24, 1971.

(f) Soviet Union

The Commission administered a Soviet Claims Program pursuant to provisions of Title III of the Act, which authorized the Commission to consider claims of nationals of the United States arising prior to November 16, 1933, against the Soviet Government, and claims of United States nationals based on liens held on property in the United States assigned to the United States Government by the Government of the Union of Soviet Socialist Republics under the Litvinov Assignment of November 16, 1933. This program was completed on August 9, 1959.

Partial payments on awards in these claims were made out of the proceeds derived from liquidation of the assets acquired by the United States under the Litvinov Assignment. The funds so derived totaled $8,658,722.43. The balance of the awards, however, remains unpaid and outstanding, pending conclusion of a final claims settlement agreement between the United States and what are now the republics of the former Soviet Union.

4. Title IV

Czechoslovakia - First Program

Upon enactment of Title IV of the Act, the Commission commenced a program to determine claims of nationals of the United States against the Government of Czechoslovakia based upon losses resulting from the nationalization or other taking of property by that government. Pub. L. 85-604, approved August 8, 1958, 72 Stat. 527 (22 U.S.C. 1642). The funds for payment of awards granted by the Commission in these claims were derived initially in 1952 from the sale of certain Czechoslovakian assets in the United States which amounted to $8,540,768.41. Subsequently, an additional claims fund in the amount of $74,550,000 was obtained through conclusion of a claims settlement agreement with Czechoslovakia in 1982. (For information concerning the Commission's Second Czechoslovakian Claims Program, see subsection C.3, below.)

5. Title V

(a) China - First Program

The first China Claims Program was administered pursuant to an amendment to Title V of the Act. Pub. L. 89-780, approved November 6, 1966, 80 Stat. 1365 (22 U.S.C. 1643). That amendment authorized the Commission to determine claims of nationals of the United States against the Government of the People's Republic of China (PRC) based on: (1) losses resulting from the nationalization, expropriation, intervention, or other taking of, or special measures directed against, property by that government; and (2) the disability or death of nationals of the United States resulting from actions taken by or under the authority of that government. The program covered claims for losses which occurred between October 1, 1949, when the PRC government ascended to power, and November 6, 1966, the date the program was authorized.

When the program was authorized, no funds were available for payment on any losses certified by the Commission in the claims. The statute provided for the determination of the validity and amounts of such claims, and the certification of the Commission's findings to the Secretary of State for use in the future negotiation of a claims settlement agreement with the Government of the People's Republic of China. The first China Claims Program was completed on July 6, 1972.

On May 11, 1979, the Governments of the United States and the People's Republic of China concluded a formal claims agreement settling claims of nationals of the United States which arose between October 1, 1949, and the date of the agreement. Pursuant to the provisions of this agreement, the Government of the People's Republic of China agreed to pay $80.5 million to the United States for deposit in a China Claims Fund established by the Department of the Treasury. Under the agreement, the schedule of payments to the Department of the Treasury provided for an initial payment of $30 million on October 1, 1979 and five annual payments of $10.1 million on October 1 of each year thereafter, beginning in 1980 and ending in 1984. Pursuant to the statutory payment provisions in section 8 of Title I of the Act, payments were made from the China Claims Fund by the Department of the Treasury on the losses certified in this program, and also on the awards certified in the second China Claims Program. (See subsection 1(e) above.)

(b) Cuba

Title V of the Act also authorized the Commission to consider claims of nationals of the United States against the Government of Cuba, based upon: (1) losses resulting from the nationalization, expropriation, intervention, or other taking of, or special measures directed against, property by that government; and (2) the disability or death of nationals of the United States resulting from actions taken by or under the authority of that government. Pub. L. 88-666, approved October 16, 1964, 73 Stat. 1110 (22 U.S.C. 1643). The program covered claims for losses which occurred between January 1, 1959, when the Castro regime took power, and October 16, 1964, the date the program was authorized.

When the program was authorized, there were no funds available for payment on any losses certified by the Commission, and the statute precluded Congress' appropriation of funds for such payments. Rather, the statute provided for the determination of the validity and amounts of such claims, and for the certification of the Commission's findings to the Secretary of State for use in the future negotiation of a claims settlement agreement with the Government of Cuba. The Cuban Claims Program was completed on July 6, 1972.

6. Title VI

German Democratic Republic (East Germany)

Title VI of the Act authorized the Commission to receive and determine claims against the German Democratic Republic (GDR) for losses which arose from the nationalization, expropriation or other taking by that government of property interests of nationals of the United States. Pub. L. 94-542, approved October 18, 1976, 90 Stat. 2509 (22 U.S.C. 1644). When the program was authorized, no funds were available for payment of the awards issued by the Commission. The program was completed on May 16, 1981.

The Department of State subsequently conducted negotiations with the GDR - and, after unification, with the Federal Republic of Germany -- to obtain a claims settlement to provide funds for the payment of awards. Those negotiations culminated in the signing of a settlement agreement on May 13, 1992, in which Germany assented to payment of up to $190 million to settle and discharge the claims against it. Its initial payment was $160 million, with up to an additional $30 million to be paid if needed. The agreement allowed claimants to elect either to accept payment of their Commission awards or to waive their right to payment in order to pursue claims for their properties under German law. See 1992 FCSC Ann. Rep. 87.

In April 1997, the United States and Germany exchanged diplomatic notes reflecting the resolution of all but five of the subject claims, and fixing the "final transfer amount" at $102,010,961.47. The balance of the $160 million initial payment was returned to Germany, with the remaining five cases to be "resolved by mutual agreement."

7. Title VII

Vietnam

On February 25, 1986, the Commission completed a program to determine the validity and amount of claims of United States nationals against the Socialist Republic of Vietnam arising from the nationalization or other taking of property on or after April 29, 1975, when the Government of the Republic of Vietnam (South Vietnam) was overthrown. The program was authorized under Title VII to the Act. Pub. L. 96-606, approved December 28, 1980, 94 Stat. 3534 (22 U.S.C. 1645). The Commission made determinations on 534 claims, granting awards to 192 claimants in the total principal amount of $99,471,983.51. A claims settlement agreement was concluded with the Socialist Republic of Vietnam on January 28, 1995, to provide funds for the payment of these awards.

B. Claims Under The War Claims Act of 1948

1. Title I

Pursuant to Title I of the War Claims Act of 1948 (Pub. L. 896, 80th Congress, approved July 3, 1948, 62 Stat. 1240 (50 U.S.C. App. 2001)), and amendments thereto, the Commission and its predecessor, the War Claims Commission, were authorized to administer ten prisoner-of-war and civilian internee compensation programs and four war damage and loss compensation programs:

(1) Claims of American citizens who were interned or in hiding in specified areas in the Pacific during World War II (Sec. 5(a) of the Act (50 U.S.C. App. 2004(a)));

(2) Claims of members of the Armed Forces of the United States who were imprisoned by the enemy during World War II and who were not fed in accordance with the standards prescribed by the Geneva Convention of July 27, 1929 (Sec. 6(b) of the Act (50 U.S.C. App. 2005(b)));

(3) Claims of religious organizations in the Philippines or their personnel for goods and services furnished to civilian American internees and members of the Armed Forces of the United States who were held as prisoners of war during World War II (Sec. 7(a) of the Act (50 U.S.C. App. 2006(a)));

(4) Claims of members of the Armed Forces of the United States who were mistreated while imprisoned by the enemy during World War II (Sec. 6(d) of the Act (50 U.S.C. App. 2005(d)));

(5) Claims of United States-affiliated religious organizations in the Philippines for damage or destruction of educational, medical and welfare institutions and other connected non-religious facilities during World War II (Sec. 7(b-c) of the Act (50 U.S.C. App. 2006(b-c)));

(6) Claims of civilian American employees of contractors interned by the Japanese forces during World War II (Sec. 5(f) of the Act (50 U.S.C. App. 2004(f)));

(7) Claims of civilian American internees in Korea during the Korean conflict (Sec. 5(g) of the Act (50 U.S.C. App. 2004(g)));

(8) Claims of members of the Armed Forces of the United States captured during the Korean conflict (Sec. 6(e) of the Act (50 U.S.C. App. 2005(e)));

(9) Claims of Americans who were captured and held as prisoners of war while serving in the Allied Forces during World War II (Sec. 15 of the Act (50 U.S.C. App. 2014));

(10) Claims of American merchant seamen interned during World War II (Sec. 16 of the Act (50 U.S.C. App. 2015));

(11) Claims of American citizens and business entities for losses as a result of the sequestration of accounts, deposits and other credits in the Philippines by the Imperial Japanese Government (Sec. 17 of the Act (50 U.S.C. App. 2016));

(12) Claims of non-United States affiliated religious organizations in the Philippines of the same denomination of religious organizations functioning in the United States or their personnel for the value of relief furnished American civilians and prisoners of war and for damage or loss of educational institutions and other connected non-religious facilities during World War II (Sec. 7(h) of the Act (50 U.S.C. App. 2006(h)));

(13) Claims based upon the death or imprisonment of Guamanians by the Japanese forces on Wake Island during World War II (Sec. 5(h) of the Act (50 U.S.C. App. 2004(h))); and

(14) Claims of military and civilian personnel assigned to duty on board the U.S.S. Pueblo who were captured by the military forces of North Korea on January 23, 1968, and thereafter imprisoned by the Government of North Korea (Sec. 6(e) of the Act (50 U.S.C. App. 2005(e))).

2. Title II

Under the authority of Title II of the Act (Pub. L. 87-846, approved October 22, 1962, 76 Stat. 1107 (50 U.S.C. App. 2017)), the Commission administered the General War Claims Program. In this program, the Commission determined claims of nationals of the United States for loss or destruction of, or physical damage to, property located in certain specified areas of Europe and the Pacific and for certain deaths and personal injuries resulting from military operations during World War II. Section 615 of Public Law 94-542, approved October 18, 1976, allowed consideration of protests relating to awards in decisions on these claims issued during the last ten calendar days of the program (May 7-17, 1967).

All of the above programs were completed by the dates specified by Congress in the authorizing statutes. Citations to reports and statistics on the programs are included in Sections V and VI of this Annual Report.

Payments of claims and administrative expenses of all but three of the programs conducted under the War Claims Act were derived from the liquidation of Japanese and German assets under the control of the Attorney General of the United States (which had been blocked and vested in the United States during World War II under the Trading With the Enemy Act), rather than from monies appropriated from the general revenues of the United States. These funds were deposited in the War Claims Fund, a special fund established in the Department of the Treasury for this purpose. The three exceptions mentioned above are the prisoner of war and civilian internee claims programs involving the Korean conflict and the U.S.S. Pueblo incident. Funds for payment of claims and expenses of these programs were appropriated by the Congress.

C. Claims Under Other Statutory Authority

1. Philippines

The Commission was authorized to administer a Philippine Claims Program pursuant to Public Law 87-616, approved August 30, 1962, 72 Stat. 411 (50 U.S.C. App. 1751-1785 note). This statute provided for the recertification of the unpaid balances of awards previously granted by the United States-Philippine War Damage Commission under the Philippine Rehabilitation Act of 1946. This program was completed on December 23, 1964.

2. Lake Ontario

Public Law 87-587, approved August 15, 1962 (76 Stat. 387), gave the Commission the unique assignment of conducting a program to determine the validity and amounts of claims of citizens of the United States for damages caused during 1951 and 1952 by the Government of Canada's construction and maintenance of the Gut Dam in the Saint Lawrence River. The Commission's responsibility was to adjudicate the claims and report its findings and conclusions to the President of the United States for such action as he might deem appropriate. The statute further provided that, if an agreement was concluded between the Governments of the United States and Canada for arbitration or adjudication of these claims, the Commission would discontinue its activities and transfer its records to the Secretary of State.

The program was commenced in November 1962 and extensive research and development of claims was conducted. However, an agreement with Canada was concluded in March 1965 and, as directed by the statute, the Commission immediately discontinued the program and transferred its records to the Department of State.

3. Czechoslovakia - Second Program

In 1962, the Commission completed the first Czechoslovakian Claims Program, in which it adjudicated claims by United States nationals arising between January 1, 1945, and August 8, 1958. (See subsection A.4, above.) On December 29, 1981, Congress enacted the Czechoslovakian Claims Settlement Act of 1981 [Public Law 97-127, 95 Stat. 1675 (22 U.S.C. note prec. 1642)], approving a claims settlement agreement which had been reached between the United States and Czechoslovakia. Under that agreement, the Government of Czechoslovakia paid to the United States a total of $81.5 million in settlement of all claims which had arisen up to the date of the agreement.

The claims statute directed that three funds be created out of the total settlement amount. The first fund, amounting to $74.55 million, was set aside to make further payments on the unpaid balance of awards made in the previous program. A second fund of $5.4 million was set aside to make ex gratia payments to certain claimants whose claims had previously been denied due to their lack of United States citizenship on the date of loss. The Commission was directed to redetermine the claims of those claimants and to find them valid if the owner of the confiscated property had become a United States citizen by February 26, 1948. A third fund in the amount of $1.5 million was set aside to pay claimants who had suffered losses subsequent to August 8, 1958, and the Commission was directed to conduct a program to determine such claims. This program was completed on February 24, 1985.

4. Iran

On May 13, 1990, the United States concluded an agreement with the Government of Iran providing for the lump-sum settlement of claims of United States nationals against Iran of under $250,000 per claim (the "small claims"), which had been pending against Iran at the Iran-U.S. Claims Tribunal ("the Tribunal") at The Hague, Netherlands. Settlement Agreement in Claims of Less Than $250,000, Case No. 86 and Case No. B38 (the "Settlement Agreement"). The claimants had filed these claims through the Department of State following the signing of the Algiers Accords by the United States and Iran on January 19, 1981.

To ensure that the Commission would be able to implement an agreement settling the small claims, Congress had enacted legislation in 1985 giving the Commission standby jurisdiction to adjudicate the claims once an agreement was reached. Pub.L. 99-93, approved August 16, 1985, 99 Stat. 437 (50 U.S.C. 1701 note). That jurisdiction became effective once the Settlement Agreement was approved by the Tribunal, which took place on June 22, 1990. Iran-U.S. Claims Tribunal Award No. 483.

In addition to the unresolved small claims, the agreement covered a block of small claims that the claimants had withdrawn from the Tribunal, a second block that the Tribunal had dismissed for lack of jurisdiction, and a third block that had been filed with the Department of State too late to meet the January 19, 1982 filing deadline at The Hague. Also included were certain claims of the United States based on loans from the U.S. Agency for International Development (AID) to the Imperial Government of Iran. Under the terms of the agreement, Iran assented to the transfer of $105 million to the United States in en bloc settlement of all of these categories of claims.

On June 28, 1990, the Department of State formally transferred responsibility for the small claims to the Commission, as provided in the Settlement Agreement, and began transferring the files pertaining to the claims from The Hague to Washington. In addition, the Department issued a formal determination dividing the settlement fund between the small claims and the AID loan claims, allocating $50 million to the former and $55 million to the latter.

By the close of the Iran Claims Program in February 1995, the Commission issued 1,066 awards to 1,075 claimants totaling $41,570,936.31 in principal and $44,984,859.31 in interest. A total of 578 claims were dismissed, either at the request of claimants or because, despite the Commission's best efforts, the claimants could not be located. The remaining 1,422 claims were denied.

Through investment in Treasury securities, the compensation fund (initially $50 million) had grown to $57,822,758.78 by the end of the claims program. However, since the aggregate total of the principal and interest awards amounted to over $86 million, the Treasury Department was unable to pay the interest awards in full. Instead, interest awards were paid on a pro rata basis, amounting to 34.9602595 percent of each claimant's interest award. By May 1995, the payment process had been substantially completed. The Commission published its final report on the claims program in its 1995 Yearbook. 1995 FCSC Yearbook 5-9. The related litigation in the U.S. Court of Federal Claims and the U.S. Court of Appeals for the Federal Circuit is discussed above. (See Section II, subsection C.1.)

A. Claims Against Iraq

As reported above, neither the Senate nor the House of Representatives took action during 1998 on the legislation introduced in March 1998 to authorize the Commission to adjudicate the claims of U.S. nationals against Iraq that are beyond the jurisdiction of the United Nations Compensation Commission (UNCC). Thus, as the year ended, there was still no forum for the adjudication of those claims. (See Section II, subsection C.2, above.)

B. Advisory Program

Under the Foreign Assistance Act of 1961, as amended by Pub. L. 88-205, approved December 16, 1963, 77 Stat. 386 (22 U.S.C. 2370), (the "Hickenlooper Amendment"), the President is authorized to suspend assistance to the government of any country which on or after January 1, 1962, has nationalized or expropriated the property of United States nationals, taken steps to repudiate or annul contracts with United States nationals, or imposed discriminatory taxation or restrictive conditions having the effect of seizing ownership or control of property of United States nationals, and has failed to take appropriate steps to discharge its obligations under international law.

The Hickenlooper Amendment extends the jurisdiction of the Commission from determination and adjudication of claims to an advisory capacity in the area of foreign expropriations and other seizures of American-owned property. Under the amendment, the Commission is authorized, upon the request of the President, to evaluate expropriated property, determine the full value of any property nationalized, expropriated, seized, or subjected to discriminatory actions, and to render an advisory report to the President within ninety days after such request. Unless authorized by the President, the Commission may not publish its advisory report except to the citizen or entity owning the property at issue.

C. Outlook For 1999

For more than four decades, the Foreign Claims Settlement Commission has served as a source of advice and information within the United States Government on U.S. nationals' claims against foreign countries and, where appropriate, as a forum for the resolution of those claims. In the coming year and beyond, the Commission will continue to stand ready to serve the United States and its nationals, protecting the rights of U.S. citizens abroad and promoting the international rule of law.

WHITNEY GILLILLAND, Chairman, August 6, 1954, to November 15, 1959.

HENRY J. CLAY, August 6, 1954, to August 15, 1958.

PEARL CARTER PACE, August 6, 1954, to March 28, 1961 (became Chair December 1, 1959).

ROBERT L. KUNZIG, August 21, 1958, to January 19, 1961.

THOMAS W.S. DAVIS, December 2, 1959, to March 28, 1961.

EDWARD D. RE, Chairman, March 29, 1961, to February 27, 1968.

LAVERN R. DILWEG, April 14, 1961, to January 2, 1968.

THEODORE JAFFE, March 29, 1961, to October 21, 1971.

LEONARD v. B. SUTTON, Chairman, March 28, 1968, to October 21, 1969.

SIDNEY FREIDBERG, June 24, 1968, to August 24, 1970.

LYLE S. GARLOCK, Chairman, February 25, 1970, to October 31, 1973 (continued to serve on Commission until July 30, 1975).

KIERAN O'DOHERTY, June 22, 1972, to October 21, 1973.

J. RAYMOND BELL, Chairman, November 1, 1973, to October 21, 1977.

WILFRED J. SMITH, August 28, 1974 to October 21, 1979.

ROBERT E. LEE, April 7, 1976 to October 21, 1978.

RICHARD W. YARBOROUGH, Chairman, December 8, 1978, to October 21, 1981.

FRANCIS L. JUNG, June 28, 1980, to December 6, 1981.

RALPH W. EMERSON, December 31, 1980, to August 28, 1981.

FRANK H. CONWAY, August 31, 1981, to November 2, 1994.

J. RAYMOND BELL, Chairman, October 22, 1981, to September 6, 1983.

JOSEPH W. BROWN, December 7, 1981, to March 15, 1988.

BOHDAN A. FUTEY, Chairman, May 3, 1984, to May 27, 1987.

ROBERT J. KABEL, March 15, 1988, to February 1, 1991.

STANLEY J. GLOD, Chairman, August 12, 1988, to September 8, 1992.

BENJAMIN F. MARSH, February 1, 1991, to November 3, 1994.

JAMES H. GROSSMAN, Chairman, September 8, 1992, to November 26, 1993.

DELISSA A. RIDGWAY, Chair, October 13, 1994, to May 28, 1998.

JOHN R. LACEY, November 4, 1994, to present.

RICHARD T. WHITE, November 3, 1994, to present.

1Claimants have submitted a copy of a document entitled "Inheritance Act" dated May 28, 1951, which indicates that their father, Kostandin Zoto, died in Albania on March 4, 1951, that he was survived by his wife, Afrovita, and his five daughters, and that they were all recognized as his heirs.

2That authority expired on January 15, 1965. See 50 U.S.C. App. 2017.

3American International Investment Corp., World Currency Charts, Eighth Edition, 1977.

4Claimants have calculated the coins to have been the equivalent of 2286.863 grams of gold, which they value at $11.50 per gram. However, they have submitted no evidence to support their valuation.

5Originally, the claimants appeared to be claiming for the contents of the warehouses which they had stated contained mostly construction supplies. At the oral hearing, however, they stated that Claim No. 5 was a claim for the "structure of the warehouses" that were demolished in 1981.

6By letter dated June 6, 1998, claimant ALEKSANDRA ZOTO indicated that she wished the Commission to only "review the value of the buildings not the value of the land on which the warehouses were built." At the oral hearing, there was conflicting testimony as to whether the underlying land had been or was being returned. The Commission notes that by letter received at the Commission on July 5, 1996, claimant HARIKLIA ZOTO stated that by court decision in Albania 1017 square meters of land was either being returned to the family or compensation was being paid therefor. This figure would appear to include the 405 square meters of land on which the warehouses formerly stood.

7According to the Commission's currency charts, between 1933 and 1945, 3.05 franc ari were equal to $1.00.

8At the oral hearing, claimants stated that they were claiming only for that portion of the claim for which they had evidence to submit.

9During 1945 to 1946, 10 Albanian francs equaled $1.00.

10Pursuant to a court decision that has already been rendered in Albania, this house and the surrounding land is to be or has already been returned, and the claimants at the oral hearing indicated that they did not wish to claim for it since it was being returned to family members in Albania. Accordingly, the Commission makes no determination as to the merits of this portion of the claim. The Commission is aware that, subsequent to the hearing, the eligible claimants have advised that they wish to proceed with their claim for compensation before the Commission rather than in Albania. However, since the Albanian court has already made its judgment regarding the return of the residence, there is no basis for a favorable determination on that portion of the claim. Claimants' claim for loss of use of the house will be discussed later in this decision.

11The Commission notes that the claimants have submitted repair estimates for the years 1986-1990. Presumably this estimate refers to the work needed to be done on the residence. However, no other estimates have been submitted from which the Commission could determine the value of the house at the time of confiscation or the value of the house when it was returned.

12At the oral hearing, claimants testified that the Albanian government compensated the family in the amount of 1186 lek ($11) and asserted that the building had an approximate value of 700,000 lek (equivalent to $70,000) at the time. They appear to be claiming $120,173.00 and $87,582.00 for their losses, but they have provided no evidence to support these figures.

13At the oral hearing, claimants argued that the assessment apparently was made not just on their father's earnings or income, as it should have been, but that all his real property and cash on hand was also included for a total value of 540,000 francs. Claimants contend that this was not fair or proper and that he should have only had to pay the "extraordinary taxes" based on his income alone.

14Although it appears that Mr. Zoto made two payments (of 47,667 francs and 9,534 francs) in 1946, these payments do not add up to the alleged tax amounting to 143,000 francs.

15This claim is similar to the claim asserted for the loss of use of their residence under Claim No. 8.

1Claimants could not recall when rent payments stopped. However, according to a statement by claimants' cousin, payment of rent of 700 lek per month ceased in 1957.

2According to claimants, the house was to be demolished because the family living in the house had purchased an apartment in the building to be built on the property.

3Claimants' more recent submittals have not addressed the issue of "squatters" on their property. It thus appears that they have elected not to pursue that part of their objection. In any event, they have submitted no evidence to prove that the Albanian government is responsible for the actions of the squatters. Accordingly, that portion of their claim must be denied.

4Claimants hand-delivered these documents to the Commission staff on March 12, 1998.