War reparations

In the first decade of the 20th century, the company Georg Schicht Works based in Aussig – currently known as Ústí nad Labem in the northern part of the Czech Republic – producing soap and related products, flourished as one of the biggest enterprises of the Austrian-Hungarian Empire. As a consequence of the decline of the Empire, culminating in World War I, the company of Georg Schicht lost 75% of its market outlet and went through a difficult period. In 1927-1930, the Schicht Company merged with the Anglo-Dutch multinational company Unilever. Members of the Schicht family took up leading positions within the board of Unilever and concentrated their Unilever-assets in a holding company in Zurich, Switzerland, under the name of “Limmat”. A daughter company of Limmat, the trading company “Ampra” was based in Amsterdam, the Netherlands, and was entrusted with the asset-management on behalf of the Schicht family.

The immediate aftermath of World War II was a devastating turning point in the history of the Schichts family; one of the financially most powerful Eastern European families of their time. With the notable exception of George Schicht (1884-1961) who lived in London and was of British nationality, most members of the Schicht family, including his brother Heinrich (1880-1959) and his cousin Franz, were considered to be German “enemy citizens” and removed from all other positions within Unilever in 1945. As Sudeten-Germans, Heinrich and many other Schichts were expelled from Aussig during the year 1945-1946, leaving all possessions behind. Subsequently, the former Schicht – meanwhile Unilever – factories were nationalised by the Czechoslovakian government.

The dispossession of the Schichts, however, was not only an Eastern European affair. At the very same time, their substantial assets, concentrated in Limmat and Ampra, were blocked as “enemy property” by the Western Allies, with the reluctant collaboration of the Swiss Government. In 1950, the Netherlands and Switzerland reached an inter-custodial agreement on the liquidation of Ampra and Limmat. The Dutch, considering Sudeten Germans as enemy citizens, even if the international definition of German enemy citizens was much narrower, finally confiscated 24% of the value of the assets of Ampra and Limmat (including 4% on behalf of the Swiss), to the benefit of the Dutch State and without paying compensation to the original stakeholders. This agreement was carried out in concord with the board of Limmat, presided by Heinrich Schicht, who was living in Switzerland in difficult circumstances. However, the partial loss of their assets caused dismay among most other family members and led to a rupture between Heinrich and most of his kin, including his brother George.

This paper analyses the decline of the Schichts in more detail, with special reference to the vicissitudes of the enemy property legislation of the Netherlands and Switzerland in their relations with Western Allies in the years 1945-1956. Leading question is to what extent this case can be taken as an insightful example of significant changes in the concept of private ownership and property in this period across Europe. Did the enemy property legislation in the Netherlands and in Switzerland influence notions of trust connected to practices of private ownership of economic elites? Did the post-war vertical relation between state and (enemy) citizen somehow changed the horizontal relationships in which practices of private ownership in (this part of) Europe had been traditionally embedded?

El contexto de la economía de entreguerras (1919-1939) estuvo protagonizado por el pago de las reparaciones de guerra que los países vencedores de la I Guerra Mundial impusieron a los vencidos, dichas reparaciones fueron especialmente determinantes para la futura evolución de Alemania, su economía era incapaz de hacer frente a dichos pagos, tal como advirtiera John Maynard Keynes, es por ello que el gobierno de Estados Unidos se vio obligado a conceder una serie de préstamos al gobierno de Berlín, conocidos como Plan Young, precedido por el Plan Dawes, para que los germanos pudieran hacer frente al pago de las deudas. Esta financiación fue rechazada por algunos sectores de la sociedad alemana que consideraban una humillación las reparaciones de guerra y que intentaron activar el mecanismo constitucional del referéndum para rechazar el mencionado crédito.


The context of the interwar economy (1919-1939) was characterized by the payment of the war reparations that the victors of the First World War imposed on the vanquished, these reparations were especially determining for the future evolution of Germany because german  economy was unable to return the payments, as John Maynard Keynes warned, that is why the United States government was forced to grant a series of loans to Berlin government, known as Plan Young, preceded by the Dawes Plan, with this new context, Germans could face the payment of the debts. This financing was rejected by some sectors of German society that considered the reparations of war a humiliation and they tried to activate the constitutional mechanism of the referendum to reject the mentioned credit.

War reparations involve the transfer of legal rights, goods, property and, typically, money from one State to another in response to the injury caused by the use of armed force. While often considered a sub-category of reparations obligations existing under the classical theory of internationally wrongful acts and State responsibility law, the practice of claiming and paying war reparations in fact dates back to ancient times and presents several specific features.

Current paper is a research on the very special case of 1991 Gulf crisis and following process through which UN imposed a structured and institutionalised compensation payment mechanism, on a war reparation logical basis. What makes the Iraqi case so special is an unprecedented UN involvement and surveillance regarding transitional justice as well as political motivation of international actors, that use this system to control the Iraqi economy and influence its military, political and economical potential.