INTERNATIONAL CLAIMS COMMISSION

WITNESSES

JOSIAH MARVEL, JR., CHAIRMAN

ORLANDO A. SIMMES, EXECUTIVE DIRECTOR

EDWARD B. WILBER, BUDGET OFFICER, DEPARTMENT OF STATE

Mr. ROONEY. The last item for our consideration today is entitled "The International Claims Commission," which appears at page 48 of the committee print, and beginning at page 459 of the justifications. At this point we shall insert pages 459 and 463 of the justifications

in the record.

(The statements referred to follow:)

81707-51- -44

Summary of requirements, fiscal year 1952

Appropriation, 1951, regular act.

Appropriation 1950-51 (Deficiency Appropriation Act 1950, Public Law 583).
Deduct:

Elimination of nonrecurring equipment..
Estimated unobligated balance June 30, 1951..

Base for 1952.

Net difference between 1951 and 1952:

$240,000

-$20, 700
-40,000

-60,700

179,300

Mr. ROONEY. Mr. Marvel, do you have a general statement you wish to make?

Mr. MARVEL. Yes.

Mr. Chairman and members of the committee, I have requested permission to be heard briefly on behalf of the Commission on the budget for the International Claims Commission for the fiscal year ending June 30, 1952, in order that I may clarify in some respects the written submission of the budget estimates. With the permission of the committee, I should like to incorporate my prepared statement in the record of the hearing.

The members of the Commission took their oaths of office on August 28, 1950. The summary of the Commission's requirements

for the fiscal year 1952 was first prepared during September 1950. In the light of experience in the first few months of operations, we believe it is now desirable to amplify the summary presented to your committee.

COSTS OF ADJUDICATION

The statement is made in the summary that the International Claims Settlement Act of 1949 provides that 3 percent shall be deducted from the amount of each payment under awards granted, as reimbursement for the expenses incurred by the United States. But it is also stated that because of the "fund restriction" it will be necessary to so expedite the work of the Commission that its activities may be brought to a successful conclusion in approximately 2 years of full-scale operation.

We feel that these statements require some amplification. The act authorizes the appropriation of such sums as may be necessary to enable the Commission to carry out its functions. While the act provides that there shall be deducted from the amount of each payment made pursuant to an award as reimbursement for the expenses incurred by the United States, an amount equal to 3 percent of such payment, this reimbursable feature of the act is not a specific limitation on the amount which may be appropriated to enable the Commission to carry out its functions.

PERIOD OF OPERATIONS

We will exert every effort to dispose of the claims under the Yugoslav Claims Agreement within 2 years of full-scale operations. However, based on our experience up to the present time, I can state that it is not possible to predict the length of time it will take to adjudicate the claims. Under the terms of the agreement with Yugoslavia the Government of Yugoslavia agreed to furnish upon the request of the Government of the United States such information including certified copies of books, records, or other documents as may be necessary or appropriate to support or refute, in whole or in part, any claims, and will permit the taking of depositions of such witnesses as may be requested by the Government of the United States. To implement these provisions of the agreement, provision has been made by the Commission for a limited field staff in Yugoslavia. That field staff has already started operations. The first employee left in the early part of February for Yugoslavia. The speed with which we secure evidence in Yugoslavia will depend to a large extent upon the degree of cooperation we receive from the Yugoslav authorities and the availability of records. Another factor which enters into the speed with which the claims may be adjudicated is the number of formal hearings which may be required.

CLAIMS PROCEDURE

At the hearings before your committee on the 1951 budget and in the submission for the 1952 budget, it was represented to your committee that the adjudication process would be of two types: Consent and contested. Under the proposed consent process, the adjudicating attorney and the claimant were to appear before an individual commissioner who was to approve and arrange for the proper entry of the

awards. Since the time of submission of the 1952 budget the Commission has issued its Rules of Practice and Procedure. In the course of preparing these rules and after further study of the law, we concluded that a consent order procedure would not be in keeping with the responsibilities of the Commission but that instead a so-called informal procedure be provided for. Under this informal procedure the Solicitor of the Commission may initiate a proceeding for approval of a claim in part or in whole or for the denial of the claim, by submitting an appropriate recommendation to the Commission. Thereafter the Commission arrives at its decision. If the claimant is satisfied with this initial decision of the Commission, no further action is necessary. However, if the claimant is dissatisfied with the amount of the award or if the claim is denied, claimant, under the statute creating the Commission, is entitled to a hearing upon request. If such a request is made or if the Commission sets a claim proceeding for a hearing without an initial decision on the basis of an informal proceeding, evidence is adduced at a formal hearing before the Commission.

PANAMA CLAIMS

Under the terms of the act the Commission is also authorized to settle claims included in the terms of similar claims agreements thereafter concluded with other foreign governments which provide for the settlement and discharge of claims of the Government of the United States and of nationals of the United States against the foreign government, arising out of the nationalization or other taking of property, by the agreement of the Government of the United States to accept from that government a sum in en bloc settlement thereof. Since the preparation of the submission of the 1952 budget in September 1950, a claims convention between this Government and the Government of the Republic of Panama has been ratified. The exchange of ratifications became effective on October 11, 1950, and the first payment to the United States becomes due on April 11, 1951. Claims arising under this convention have since been added to the workload of the Commission. As in the case of claims under the Yugoslav Claims Agreement, 3 percent of any payments under the Panama Claims Convention will be deducted as reimbursement for expenses.

OPERATIONS TO DATE

The Commissioners took office on August 28, 1950. The first order of business was the recruiting of personnel within the framework of the organizational set-up presented to the Congress in prior appropriation estimates. At the same time the Commission drafted the proposed Rules of Practice and Procedure, which were published in the Federal Register on October 27, 1950. In accordance with the requirements of the Administrative Procedure Act claimants, attorneys, and other interested parties were given notice of an opportunity to submit oral arguments and written comments concerning these proposed rules at a public hearing-held on November 20, 1950. As a result of the hearing, certain amendments and changes were made in the proposed Rules of Practice and Procedure, and they were published in final form in the Federal Register of December 7, 1950.

Under the Rules of Practice and Procedure the Commission fixed June 30, 1951, as the limit of time within which claims under the Yugoslav Claims Agreement of 1948 must be filed.

In accordance with the provision of the International Claims Settlement Act of 1949, a letter, dated December 11, 1950, was sent by registered mail to all persons who had previously filed with the State Department an intention of filing a claim under the Yugoslav Claims Agreement. This letter included a notice to the effect that the Commission was organized and transmitted a copy of the Rules of Practice and Procedure of the Commission and a copy of the International Claims Settlement Act of 1949. The Rules of Practice and Procedure include information on the filing of claims, including the time limits for such filing with the Commission. There were 1,122 of such notices sent by the Commission. Additional prospective claimants have come to the attention of the Commission since the original mailings, and similar mailings were made to them.

To March 1, 1951, the Commission had processed and set up 1,338 files containing correspondence and documents of prospective claimants under the act. Some of the registered notices were returned by the Post Office Department due to failure to deliver. Efforts are being made to reduce the number of undelivered notices, thus far reduced to 48.

The material for the Commission's files represents, in the main, an accumulation of correspondence and documents received within the State Department from prospective claimants during the postwar period from 1946 to the present.

Without further documentation and information it is not possible to make a fair estimate of the total amount of prospective claims. As of March 1, 1951, 65 claims had been docketed in accordance with the Rules of Practice and Procedure and are now being processed; the amount claimed is approximately $17,000,000.

The staff of the Commission has been engaged in handling correspondence with claimants and their attorneys, consultation with claimants and attorneys who appear at the Commission offices, studying the Yugoslav laws and decrees relative to the nationalization or other taking of property in Yugoslavia, examining the files of prospective claimants, examining and processing claims received, and corresponding with the field representative in Yugoslavia relative to the gathering of evidence to support or refute a claim.

In the short period of time which has elapsed since the first claims. were docketed pursuant to the regulations of the Commission, it has not been possible to gather the necessary evidence so that any claims might be considered for decision by the Commission.

It is apparent from the above that the earliest possible date for submission of claims was the latter part of calendar year 1950. No decisions can be rendered on claims by the Commission until evidence is accumulated in support of, or in refutation of, claims regardless of the amount of the claim. Prompt disposition of all claims depends in a major way upon the degree of cooperation which the Commission receives from the Yugoslav Government in connection with the gathering of evidence.