Creeping expropriation

Creeping expropriation

The act of a government squeezing a project by taxes, regulation, access, or changes in law.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Creeping Expropriation

The continual restriction of private property rights gradually over time by a government. Creeping expropriation involves legislation, regulation, and taxation, which together over time make it difficult for a person or business to own property. Creeping expropriation, where it exists, makes it increasingly difficult to conduct commerce.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
of incidences of "creeping expropriation." In fact, building
Argentina for instance has taken back control of YPF from its Spanish owners, Repsol; TNK-BP's troubles in Russia seem to be never-ending; and there's even creeping expropriation in places such as the UK and Australia, where tax regimes have sharpened with little warning.
Our presence in a deal not only compensates an investor in the case of expropriation, creeping expropriation, war and civil disturbance or breach of contract.
constitutes a creeping expropriation. (228) This has led to suits by
"Exposure to political unrest will only grow as global business continues to expand into new and often hostile territories where the threat of resource nationalism, creeping expropriation and supply chain vulnerability is increasing," said Grahame Millwater, Willis Group president.
The US treaty, for example, protects all kinds of investments and guarantees the investor the better national treatment or MFN (Most Favoured Nation) treatment; international standards apply to expropriation, including creeping expropriation. Article II 3(b) states: "Neither Party shall in any way impair by arbitrary or discriminatory measures the management, operation, maintenance, use, enjoyment, acquisition, expansion or disposal of investments" (this provision can overrule court deliberations).
As described in Section 2, expropriation can take two forms: (1) direct expropriation, in which the government takes part or all of the already installed capital, and (2) creeping expropriation, in which transnational corporations are required to pay bribes or licenses that allow them to produce in the host country.
* Expropriation coverage, where MIGA will protect against 'creeping expropriation', a series of acts that eventually results in outright nationalisation or confiscation.
Today, it tends to be subtle and has come to be known as "creeping expropriation," such as when a government regulatory body changes the rules in the middle of the transaction, resulting in losses for a company.
This so-called "creeping expropriation" is emanating from a variety of more subtle political risks that are occurring in emerging markets from South America to Southeast Asia.
In the absence of a clear, enforceable framework defining ownership, taxation, and regulation, foreign investors face a high risk of expropriation, either by administrative intervention or by "creeping expropriation" through unpredictable changes in laws, regulations, and taxes.