TITLE II—RETURN OF VESTED ASSETS SEC. 6. Section 39 of the Trading With the Enemy Act, as amended, is amended by striking subsection (a) thereof, renumbering subsection (b) (67 Stat. 461) as subsection (h), renumbering subsection (c) (72 Stat. 1708) as subsection (i), and in lieu of subsection (a) substituting the following : "SEC. 39. (a) The Foreign Claims Settlement Commission, or such officer or agency as may be prescribed by law, shall return as a matter of grace any property or interest therein of Germany, Japan, or any national of either such country, vested in or transferred to any officer or agency of the United States since December 17, 1941, pursuant to this Act (or any property or interest received in exchange therefor or any payment made to the United States in lieu of the vesting of any property or interest), or the net proceeds thereof, including any dividends, distribution, or other increment paid or allowed thereon subsequent to such vesting or acquisition, subject to the terms and conditions imposed upon the return of any property or interest by subparagraph (4) of subsection (a) of section 32, and subsections (b), (c), (d), (e), (f), (g), and (h) of said section and as amended by tile II of the World War II Claims Settlement Act. Except as provided in the foregoing, no return shall be made pursuant to this section in the case of— “(1) natural persons who on the date of enactment of this Act, or any time thereafter prior to such return have lived, or corporations, partnerships, or associations or other unincorporated bodies having their sole or primary seat, in the Soviet Zone of Occupation of Germany (including the Soviet sector of Berlin and German territory under provisional Polish or Soviet administration), or in Albania, Communist China, Czechoslovakia, Poland, Bulgaria, Hungary, Estonia, Latvia, Lithuania, Rumania, North Korea, or the Union of Soviet Socialist Republics, or in any other nation or area which the Secretary of State advises the Foreign Claims Settlement Commission is dominated or controlled by the foreign government or foreign organization controlling the world Communist movement: Provided, That the property of such persons, corporations, companies, or associations shall be forthwith liquidated by the Office of Alien Property and the proceeds therefrom held in trust by the Secretary of the Treasury for the owner until such time as the Secretary of State shall certify that a return of any such properties will inure to the benefit of the owners thereof or of the United States. "(2) any natural person who has been convicted personally and by name by a court of competent jurisdiction of murder, ill treatment, or deportation for slave labor of prisoners of war, political opponents, hostages, or civilian population in occupied territories, or of murder or ill treatment of military or naval persons, or of plunder or wanton destruction without justified military necessity; or "(3) property which is subject to transfer to the Republic of the Philippines under the Philippine Property Act of 1946, as amended; or "(4) property or funds beneficially owned by the former Governments of Germany and Japan, exclusive of diplomatic and consular property; or "(5) property which the United States is obligated to release to a foreign government or governments under agreements relating to the resolution of intercustodial conflicts involving enemy property heretofore entered into by the United States with a foreign government or governments pursuant to Public Law 857, Eighty-first Congress, until the officer or agency authorized to make such return has received a certificate from the Department of State that consent to such return has been obtained from the foreign government to which the United States is obligated to release the property; or "(6) trademarks, trade names, and those rights or interests arising out of contracts entered into with respect to trademarks or trade names vested by vesting orders 284, as amended; 678, 2354, 4751, 4819, 5592, 5593, 18805, and 18905; or of royalties or other income derived from the property or interests vested under vesting orders 128, 13111, 14349, 17366, and 17953; or of copyrights (including all rights or interests arising out of prevesting contracts) vested by vesting orders 128, 13111, 14349, 17366, and 17952; or of any property or interest vested by vesting order 17952; or the motion picture listed last in exhibit A of vesting order 11803, as amended; or "(7) any royalties or other income received by or accrued in favor of the Alien Property Custodian or the Attorney General as a result of the enforcement and administration of vested rights or interests in patent licensing contracts determined to be violative of any antitrust laws of the United States; or "(8) property which is subject to the provisions of section 202(b) of the International Claims Settlement Act of 1949, as amended. "(b) (1) Whenever any property or interest vested under the Trading With the Enemy Act, as amended, is to be returned to any claimant under any provision of law, and the President determines that foreign ownership of such property or interest is adverse to the national defense interest of the United States, the President may, within one hundred and twenty days after the enactment of this title, direct that the return of such property or interest to any foreign claimant be conditioned upon the disposal thereof to citizens of the United States by such claimant within two years after such return and in such manner and with such safeguards as the President deems necessary to preclude foreign ownership. "(2) Upon the making of any return so conditioned, the United States District Court for the District of Columbia, upon application of the Attorney General, shall enter a judgment or decree of divestiture to such effect, and said court, recognizing the person to whom the property is returned as the owner thereof, shall order said person, if shares of stock representing the voting control of a corporation be the returned property, to nominate three voting trustees of United States citizenship, subject to the approval of such trustees by said court, which voting trustees shall elect a board of directors entirely of United States citizenship, so that there will be secured and safeguarded, until divestiture is complete, the operational, manufacturing, trading, research, and other secrets of such returned property, or of the business or other activity represented thereby or connected therewith, against disclosure to or use by foreign interests; and such judgment or decree shall also provide that if the owner or owners do not so divest themselves within said two-year period, the Attorney General or such officer or agency as is authorized by law shall sell such property forthwith at public auction and remit the proceeds to the Treasury of the United States for disposition in accordance with the provisions of this Act. "(c) Hereafter, in addition to other deductions authorized by this Act to cover expenses, taxes or debt claims, the Foreign Claims Settlement Commission shall retain or recover from any vested property or proceeds returnable pursuant to this section an amount not exceeding five (5) per centum of the value thereof on account of costs of administration. The amount so retained or recovered shall be covered into the Treasury of the United States to the credit of miscellaneous receipts. "(d) Any property or interest returned under this section which has not been liquidated shall be returned in its present state as of the date of enactment of this section, after making deductions authorized by this Act, as amended, except that any person entitled to return to such property shall be permitted to pay the amount of expenses or reserves in lieu of the liquidation of such property to provide funds therefor; and in the cases where any property or interest has been liquidated, the Foreign Claims Settlement Commission shall authorize payments, after making deductions, to the former owners in the following order of priority: "(1) Payment to each former owner of his entire claim where the property or interest had a value of $1,000 or less, and, if possible, simultaneously, payment to all other former owners up to a maximum of $1,000 each; and "(2) Thereafter, annual payments to each remaining former owner of pro rata shares of the entire value of his property or interest in such proportions as may be determined by the Foreign Claims Settlement Commission until all such former owners have been fully paid. "(e) Every person desiring to claim return pursuant to this section, whether as record holding or title owner, or as beneficial or equitable owner of the property or interest immediately prior to its vesting in or transfer to the Alien Property Custodian or the Attorney General, or as legal representative (whether or not appointed by a court in the United States) or successor in interest by inheritance, devise, bequest, assignment or operation of law, of such owner, shall e a notice of claim with the Foreign Claims Settlement Commission within one year from the date of enactment hereof in such form and manner as the Commission may prescribe. "(f) Within three years from the enactment hereof, which period may be extended by agreement between the Foreign Claims Settlement Commission and the claimant or claimants concerned, the Commission shall by order determine the ownership interests of all persons filing notices under subsection (e) of this section, accompanying such order, in appropriate cases, with a notice of intention to make return pursuant to subsection (f) of section 32. If within thirty days of publication of such order no objection thereto is filed by any person eligible to claim return of the property or interest involved, the Commission shall effect return in accordance with its order. If within the thirty day period such an objection is filed, the Commission shall promptly certify the case and the record to the District Court of the United States for the District of Columbia for determination by that Court of the ownership interests of all persons filing notices under subsection (e) of this section, and the Commission shall effect return of the property or proceeds in accordance with the outcome of the proceedings before said Court. Any decision of the District Court shall be subject to review by the Court of Appeals for the District of Columbia, and the Supreme Court, as provided in title 28, United States Code, sections 1291 and 1294. Nothing herein shall be construed to prevent settlements by compromises or agreements among claimants. "(g) If the President finds that the return of copyrights under the claims procedure provided in this section is unduly burdensome he may, by regulation or order, and in accordance with such procedures and with such exceptions as he may determine, divest such copyrights, as a matter of grace, and the persons entitled to such copyrights shall succeed thereto subject to the rights of existing licenses or assignees in respect to such copyrights, claims of copyrights, rights to copyrights, rights to copyright renewals, and rights or interests arising out of prevesting contracts entered into with respect to copyrights. SEC. 7. Immediately following section 39 of the Trading With the Enemy Act, as amended, add a new section to read as follows: "SEC. 40. (a) If, after any property or interest was vested pursuant to this Act, the claim of an owner with respect to such property was assigned or released to or compromised with the United States or the Alien Property Custodian, his successor or successors, no such property or the liquidated proceeds thereof shall be returned pursuant to section 39 unless such owner shall tender to the United States without interest the amount received upon such assignment, compromise or, release. "(b) The return of any invention pursuant to section 39 shall be subject to existing licenses issued by the Alien Property Custodian, his successor or successors. SEC. 8. Section 34 (a) of said Act is amended by striking the last clause preceding the last sentence and inserting in lieu thereof the following: "; those acquired by the Custodian; and those of any person who is a citizen or subject of any nation which was associated with the United States in the prosecution of the war: Provided, That such a nation on or before January 1, 1954, in a like case extended reciprocal rights to citizens of the United States." SEC. 9. Section 34 of said Act is amended by adding at the end thereof a new subsection (j) as follows: "(j) (1) Debt claims in cases where the estimated cost of administration exceeds the fund, property or interest against which a claim or claims may be filed, shall be promptly dismissed: Provided, That any complaint or proceeding for review of such claims pending before any court shall be preserved: And provided further, That nothing contained in this subsection shall be construed to preclude any claimant from asserting any other remedy he may have under any other provision of law. "(2) In order to facilitate the processing and settlement of the remaining debt claims in the administration of this Act, whenever fifty or more claims have been filed with respect to any property or interest now held or hereafter acquired by the Custodian, the schedule required by subsection (f) of this section shall be served by publication in the Federal Register in lieu of service by registered mail on each claimant. MISCELLANEOUS PROVISIONS SEC. 10. (a) Unless otherwise authorized by any other provision of law, all funds received by the United States after the date of enactment of this Act, from (1) the Federal Republic of Germany under article I of the agreement between the United States and the Federal Republic of Germany, dated February 27, 1953, for the settlement of the claim of the United States for postwar economic assistance to Germany, or (2) from Japan in repayment for postWorld War II economic aid or assistance rendered by the United States, shall be available for disposition by the Secretary of the Treasury to the extent necessary to execute the provisions of this Act and the fund thereby created shall be designated the Japanese and Germain Claims Fund. (b) There shall be deducted from the Japanese and German Claims Fund not exceeding 5 per centum of the amount received annually as reimbursement to the Government of the United States for the expenses incurred in the administration of this Act. All amounts so deducted shall be covered into the Treasury of the United States to the credit of miscellaneous receipts. (c) Such Fund shall be devoted equally to (1) the payment of claims authorized by title I of this Act, and (2) the making of returns authorized by the amendments to the Trading With the Enemy Act, as amended, contained in title II of this Act. After the satisfaction of all authorized claims of one such category, so much of the Fund as may be necessary shall be used for the payment of authorized claims of the other such category. (d) All moneys disbursed pursuant to this section shall be disbursed by the Secretary of the Treasury upon certificates issued by the Commission or such officer or agency as may be authorized by law. SEC. 11. The Foreign Claims Settlement Commission is hereby authorized to pay to the Oelbermann Foundation, of Cologne, Germany, the full amount of the award adjudicated in favor of said foundation, payment of which was withheld following the passage of Public Resolution 53, Seventy-third Congress, approved June 7, 1934 (48 Stat. 1267). SEC. 12. Section 32 (h) of the Trading With the Enemy Act, as amended, is amended by inserting therein, immediately after the third paragraph thereof, the following new paragraph: "The Foreign Claims Settlement Commission is hereby authorized to pay, to the organization heretofore designated by the President under the first paragraph of this subsection, the sum of $500,000 in full satisfaction of all claims for returns made under this subsection." SEC. 13. (a) Subject to the provisions of section 39 (b) of the Trading With the Enemy Act, as amended by this Act, all those activities, authorities, rights, privileges, powers, duties, and functions with respect to the return of vested properties under section 9(a) or 39 of the Trading With the Enemy Act, as amended, and the adjudication and settlement of all claims relating to any vested properties, including the adjudication and settlement of the remaining debt claims under section 34 of said Act, which have heretofore been performed by the Office of Alien Property and the Attorney General, shall hereafter be performed by the Foreign Claims Settlement Commission, except those determined by the District Court of the United States for the District of Columbia as aforesaid; and the President shall direct that such personnel, personal property, records and reports needed by the Foreign Claims Settlement Commission to carry out its functions hereunder shall be transferred from the Office of Alien Property or any other official office to the Foreign Claims Settlement Commission; and the Secretary of State is authorized and directed to transfer or otherwise make available to the Commission such records and documents relating to claims or returns authorized by this Act as may be required by the Commission in the administration of its functions under this Act. (b) Subject to the provisions of section 39 (b) of the Trading With the Enemy Act, as amended by this Act, all property vested by the United States pursuant to law and which have not been liquidated shall continue to be administered by the Office of Alien Property or other designee of the President until final adjudication, disposition, or order is made by the Foreign Claims Settlement Commission or the District Court of the United States for the District of Columbia. All liquidated proceeds of vested Japanese and German properties and other income derived therefrom shall, upon the effective date of this Act, be transferred to the Treasury of the United States for inclusion in the Japanese and German Claims Fund and disposition in accordance with the provisions of this Act. Unliquidated properties vested by the United States pursuant to law which are not returned or otherwise disposed of under the provisions of this Act or other law shall be liquidated, or divested as a matter of grace and the persons entitled to such properties shall succeed thereto, under such regulations or orders and in such manner as the President may prescribe to carry out the policies of this Act and the Trading With the Enemy Act, as amended. The proceeds from any such liquidation shall be covered into the Treasury of the United States to the credit of miscellaneous receipts. SEC. 14. No remuneration on account of services rendered on behalf of any claimant in connection with any claim filed with the Commission under the War Claims Act of 1948, as amended, or under the Trading With the Enemy Act, as amended, shall exceed 10 per centum of the total amount paid pursuant to any award certified under the provisions of this Act on account of such claim. Any agreement to the contrary shall be unlawful and void. Whoever, in the United States or elsewhere, demands or receives, on account of services so rendered, any remuneration in excess of the maximum permitted by this section shall be guilty of a misdemeanor, and, upon conviction thereof, shall be fined not more than $5,000 or imprisoned not more than twelve months, or both. SEC. 15. The authority of the Foreign Claims Settlement Commission (1) to certify payments pursuant to title II of the War Claims Act of 1948, as amended by this Act, and (2) to effect returns pursuant to the Trading With the Enemy Act, as amended, shall expire on the date which is within five years after the date of enactment of this Act. Nothing in this Act shall be construed to limit the life of the Commission, or its authority to act with respect to other categories of claims. SEC. 16. If any provision of this Act, or the application thereof to any person or circumstances, shall be held invalid, the remainder of the Act, or the application of such provision to other persons or circumstances, shall not be affected. SEC. 17. The Foreign Claims Settlement Commission shall make an annual report to the President and to the Congress in January of each year for the preceding year together with its recommendations concerning its operations and the administration of the provisions of this Act, and shall publish in said report all of its awards and rejections of claims. JUNE 17, 1959. Hon. JAMES O. EASTLAND, Chairman, Committee on the Judiciary, DEAR SENATOR: This letter presents the views of the Department of Justice on the proposed amendment to a bill (S. 672) to amend the War Claims Act of 1948, as amended, and the Trading With the Enemy Act, as amended, and to provide for the payment of certain American war damage claims and for the return of vested assets or the value thereof. S. 672, as amended, would authorize the payment of compensation to nationals of the United States who have certain categories of war damage claims against Germany and Japan and would effect a general return of German and Japanese assets vested under the Trading With the Enemy Act, or the proceeds of those which have been liquidated, to the prevesting owners or their successors in interest. The war damage claims of Americans authorized for payment by S. 672, as amended, would be those for (1) loss or damage to property resulting from military operations or wartime financial measures in Germany, certain other European countries and certain territory occupied or attacked by Japan; (2) damage to or loss of ships or ship cargoes caused by German or Japanese military action; and (3) loss or damage on account of the death of an American spouse, parent, or child between July 1, 1937, and December 11, 1941, which resulted from a German or Japanese sinking of a ship on which the decedent was a passenger. With a minor exception only persons who were citizens of the United States or owed permanent allegiance to the United States at the time of the claimed loss or damage would be eligible for compensation. Claims would be adjudicated by the Foreign Claims Settlement Commission and awards made by the Commission would be paid by the Treasury Department from a newly created Japanese and German Claims Fund. This fund would be composed of the remaining proceeds of liquidation of assets which have been vested under the Trading With the Enemy Act, all future installments to be paid to the United States by the Federal Republic of Germany pursuant to the 1952 agreement settling the latter's obligation for postwar economic aid and |