1 92 Stat. 213 (1978). For the legislative history of Public Law 95-268, see Extension and Revision of Overseas Private Investment Corporation Programs: Hearings and Markup Before the Subcomm. on International Economic Policy and Trade of the House Comm. on International Relations, 95th Cong., 1st Sess. (1977) [hereinafter cited as House Hearings]; OPIC Authorization: Hearings Before the Subcomm. on Foreign Assistance of the Senate Comm. on Foreign Relations, 95th Cong., 1st Sess. (1977) [hereinafter cited as Senate Hearings]; H.R. Rep. No. 95-670, 95th Cong., 1st Sess. (1977); S. Rep. No. 95-505, 95th Cong., 1st Sess. (1977); H.R. Conf. Rep. NO. 95- 1043, 95th Cong., 2nd Sess. (1978).

2 See generally, T. Meron, Investment Insurance In International Law 111— 18 (1976).

3 ld. at 118.

4 See id. at 116-17.

5 Senate Hearings 7 (Testimony by C. Fred Bergsten, Assistant Secretary for International Affairs, Department of the Treasury).

6 Id. at 9.

7 Id. at 11. See also Lillich, Requiem for Hickenlooper, 69 AJIL 97 (1975).

8 Overseas Private Investment Corporation: Hearings Before the Subcomm. on Foreign Economic Policy of the House Comm. on Foreign Affairs, 93d Cong., 1st Sess. 286 (1973) (Statement of Bradford Mills, President, OPIC).

9 Multinational Corporations and United States Foreign Policy: Hearings Before the Subcomm. on Multinational Corporations of the Senate Comm. on Foreign Relations, 93d Cong., 1st Sess. 414, 417 (1973) (Statement of Herbert Salzman, Acting President, OPIC). See also Salzman, How to Reduce and Manage Political Risks of Investment in Less Developed Countries, in GLOBAL COMPANIES 85 (G. W. Ball ed., 1975).

10 Senate Hearings 154 (Statement of Rutherford M. Poats, Acting President, OPIC). On investment dispute avoidance and investment dispute resolution, see also House Hearings 420-28, App. 13 (by Steven Franklin, legislative counsel, OPIC); T. Meron, supra note 2, at 96-98; Gilbert, infra note 19; H.R. Rep. NO. 95-670, at 6-8.

11 Senate Hearings 16-18 (Statement of Rutherford M. Poats). OPIC explained that the limited participation in OIIG of private insurers is due, inter alia, to their unfamiliarity with political risk insurance, and to “its non-actuarial character.” Senate Hearings 28-29.

12 id. at 29.

13 House Hearings 94-95 (Statement of Rutherford M. Poats). According to Poats, OPIC was discussing with the European Economic Community the possibility of pooling investment insurance risks on mineral projects. Id. at 95. Some harmonizing of terms of investment insurance and policy coordination has taken place as a result of discussions among Berne Union members. Regarding the Berne Union, see T. MEHON, supra note 2, at 47-48. See also Investment Insurance Systems (1978), a mimeographed paper distributed by the Berne Union.

14 S. Rep. NO. 95-505 at 6-7; Senate Hearings 162-64.

15 S. Rep. NO. 95-505 at 7. See also A. Lowenfeld, INTERNATIONAL PBIVATE INVESTMENT 103 (1976). Under the recently revised system, premium base rates have been established for different industries. They can be increased or decreased by up to one-third, depending on the risk profile of the project. OPIC INVESTMENT INSURANCE HANDBOOK 11-12 (June 1978). On investment insurance premiums of other developed states, see Extension of the Overseas Private Investment Corporation: Markup and Hearings Before the House Comm. on International Relations, 95th Cong., 1st & 2nd Sess. 46-50 (1978).

16 See Multinational Corporations and United States Foreign Policy, supra note 9, at 263.

17 House Hearings 216.

18 For a number of recent examples of such countries, see Senate Hearings 113-14. On the problems involved in such exclusions and in the preparation of OPIC Country Lists, see T. MEHON, supra note 2, at 76-79.

19 See generally, T. Mehon, supra note 2, at 100-10; Gilbert, Expropriations and the Overseas Private Investment Corporation, 9 L. & Pol'y Int'l Bus. 515 (1977); Adams, The Emerging Law of Dispute Settlement under the United States Investment Insurance Program, 3 L. & Pol'y Int'l Bus. 101 (1971); Hunt, Valuation Experience of Government Investment Insurance Operations in 3 The Valuation of Nationalized Property in International Law 69 (R. Lillich ed., 1975); A. Lowenfeld, supra note 15, at 140-43.

20 Senate Hearings 26.

21 S. Rep. NO. 95-505, at 43. This fear of involvement may be related historically to the criticism advanced against large multinational corporations and against OPIC's exposure to large claims by such corporations. The strong sensitivity among U.S. legislators to the possibility that government-to-government Confrontation may arise from government-insured private investment has been caused also by claims that the United States has been too deeply involved in the internal economic affairs of certain host countries. Moreover, the danger of Confrontation with host countries is increased because of the double requirement for the issuance of OPIC investment insurance, namely, that bilateral investment guaranty agreements be concluded with the host countries and that OPIC be assured the right to be subrogated for the insured investor. See T. MERON, supra note 2, at 76-77. The insistence of OPIC on such conditions continues to give rise to difficulties in South America, where a number of states have adopted a negative attitude to the OPIC requirement for subrogation rights and to international arbitration of investment disputes. OPIC investment insurance is consequently not available in certain South American states. See House Hearings 93-94. Certain other developed states with programs of foreign investment insurance do not insist on such conditions and follow a more flexible policy. Extension of the Overseas Private Investment Corporation Markup and Hearings, supra note 15, at 47; T. MERON, supra note 2, at 40-41. It has been observed that in certain cases, if a claim cannot be settled directly by the investor through talks or arbitration with the host government, then the issue might be too sensitive for the formal appearance of the investor's government as subrogee. Id. at 41. It may be of interest to mention that in Canada assurance of subrogation was eliminated from the legal prerequisites for the issuance of insurance. Id. at 127-28. Contractual arrangements applicable in countries such as the United Kingdom facilitate the task of the governmental investment insurance agency to keep the investor out front and to avoid a direct Confrontation between that agency and the host government. Id. at 138. A recent Note by the UNCTAD Secretariat has observed that investment guarantee agreements or agreements permitting the insuring government to take over the claim by subrogation “are by no means universal, and some authorities have stated that they do not feel that subrogation rights would possess any real value in critical cases.” UN Doc. TD/B/AC.27/R.4 at 10 (1978). On subrogation and the role of OPIC in the settlement of investment disputes, see T. MERON, supra note 2, at 90-100.

22 S. Rep. NO. 95-505, at 43.

23 Regarding the definition of “small business,” see H.R. Conf. Rep. NO. 95-1043 at 9; S. Rep. NO. 95-505 at 25.

24 See Senate Hearings 92-93; H.R. Conf. Rep. NO. 95-1043 at 8.

25 S. Rep. NO. 95-505 at 43—44. Previous OPIC legislation was not as far-reaching. It provided that OPIC was to decline to issue contracts of insurance for an investment if it determined that such an investment was likely to cause the investor significantly to reduce the number of employees in the United States through Replacement of his U.S. production with production from such investment which involved substantially the same product for substantially the same market as his U.S. production (“runaway industries“).

26 See Statement by the AFL-CIO on H.R. 7854 in House Hearings 353-59, App. 9.

27 See OPIC Response to AFL-CIO Statement on H.R. 7854, in House Hearings 370-72, App. 10. See also the statement of Senator Javits that the beneficial effect of OPIC on the development of foreign markets also helps U.S. exports and employment. Senate Hearings 70.

28 According to the sponsor of the provision, “export” means export to the United States. H.R. Conf. Rep. NO. 95-1043 at 11.

29 43 Fed. Reg. 36,064 (1978).