On May 25th 2007, the Korean government made the proposed text of Korea and the U.S Free Trade agreement available to the public. The Kor-the U.S Free Trade Agreement will be expected to expand bilateral trade and investment ties and create new econom...
On May 25th 2007, the Korean government made the proposed text of Korea and the U.S Free Trade agreement available to the public. The Kor-the U.S Free Trade Agreement will be expected to expand bilateral trade and investment ties and create new economic opportunities for people in both countries. Article 11.6 of the proposed Agreement provides that Neither Party may expropriate or nationalize a covered investment either directly or indirectly through measures equivalent to the expropriation or nationalization(expropriation), except:(a) for a public purpose; (b) in a non-discriminatory manner; (c) on payment of prompt, adequate, and effective compensation; and (d) in accordance with due process of law and Articel 11.5.1 through 11.5.3. The main purpose of this provision is to protect the other people's investment from government's too far reached police power. The indirect expropriation can be trace back to the regulatory takings at Pennsylvania Coal Co. v. Mahon(1922). The U.S Supreme Court has developed the regulatory taking at 1978년 Penn Central Transportation Co. v. New York(1978), Nollan v. California Coastal Commision(1987), Lucas v. South Carolina Coastal Council(1992), and Dolan v. City of Tigard(1994). The Court takes ad-hoc balancing test to determine the government's regulation as regulatory takings. It is needed to consider the character of the government action, the impact of the regulation on the landowner, the interference with property owner's distinct investmentbacked expectations, the existence of essential nexus, and whether the regulation singles out the landowner for the Tribunal to determine the indirect expropriation. It is needed a careful analysis to estimate the influence of indirect expropriation provision on the Korean government's regulatory power in the future.