War reparations are compensation payments made after a war by the vanquished to the victors.
They are intended to cover damage or injury inflicted during a war. Generally, the term war reparations refers to money or goods changing hands, but not to the annexation of land.
Making the defeated party pay a war indemnity is a common practice with a long history.
In Ancient history, the imposition of reparations on a defeated enemy was often the beginning of forcing that enemy to pay a regular tribute.
Rome imposed large indemnities on Carthage after the First (Treaty of Lutatius) and Second Punic Wars.
Some war reparations induced changes in monetary policy. For example, the French payment following the Franco-Prussian war played a major role in Germany’s decision to adopt the gold standard; the 230 million silver taels in reparations imposed on defeated China after the First Sino-Japanese War led Japan to a similar decision.
There have been attempts to codify reparations both in the Statutes of the International Criminal Court and the UN Basic Principles on the Right to a Remedy and Reparation for Victims, and some scholars have argued that individuals should have a right to seek compensation for wrongs they sustained during warfare through tort law.
Following the Treaty of Paris (1815), defeated France was ordered to pay 700 million francs in indemnities. France was also to pay additional money to cover the cost of providing additional defensive fortifications to be built by neighbouring Coalition countries. In proportion to its GDP, it is the most expensive war reparation ever paid by a country.
After the Franco-Prussian War, according to conditions of Treaty of Frankfurt (10 May 1871), France was obliged to pay a war indemnity of 5 billion gold francs in 5 years. The indemnity was proportioned, according to population, to be the exact equivalent to the indemnity imposed by Napoleon on Prussia in 1807. German troops remained in parts of France until the last instalment of the indemnity was paid in September 1873, ahead of schedule.
Greco-Turkish War of 1897
Following the Greco-Turkish War (1897), defeated Greece was forced to pay a large war indemnity to Turkey (£4 million). Greece, which was already in default, was compelled to permit oversight of its public finances by an international financial commission.
World War I
Russians agreed to pay reparations to the Central Powers when Russia exited the war in the Treaty of Brest-Litovsk (which was repudiated by the Bolshevik government eight months later). Bulgaria paid reparations of 2.25 billion gold francs (90 million pounds) to the Entente, according to the Treaty of Neuilly.
Germany agreed to pay reparations of 132 billion gold marks to the Triple Entente in the Treaty of Versailles, which were then cancelled in 1932 with Germany only having paid a part of the sum. This still left Germany with debts it had incurred in order to finance the reparations, and these were revised by the Agreement on German External Debts in 1953. After another pause pending the reunification of Germany, the last instalment of these debt repayments was paid on 03 October 2010.
World War II Germany
During World War II, Nazi Germany extracted payments from occupied countries and compelled loans. In addition, countries were obliged to provide resources, and forced labour.
After World War II, according to the Potsdam conference held between 17 July and 02 August 1945, Germany was to pay the Allies US$23 billion mainly in machinery and manufacturing plants. Reparations to the Soviet Union stopped in 1953. Large numbers of factories were dismantled or destroyed. Dismantling in the west stopped in 1950.
Beginning before the German surrender and continuing for the next two years, the United States pursued a vigorous program of harvesting all technological and scientific know-how as well as all patents and many leading scientists in Germany (known as Operation Paperclip). Historian John Gimbel, in his book Science Technology and Reparations: Exploitation and Plunder in Postwar Germany, states that the “intellectual reparations” (referring to German scientists) taken by the Allies amounted to close to $10 billion. German reparations were partly to be in the form of forced labour. By 1947, approximately 4,000,000 German POWs and civilians were used as forced labour (under various headings, such as “reparations labour” or “enforced labour”) in Europe, Canada and the United States after the end of the Second World War.
World War II Italy
According to the Treaty of Peace with Italy, 1947, Italy agreed to pay reparations of about US$125 million to Yugoslavia, US$105 million to Greece, US$100 million to the Soviet Union, US$25 million to Ethiopia, and US$5 million to Albania.
Other World War II Reparations
Finland could only negotiate an interim peace deal with Soviet Union by agreeing to extensive reparations, and was eventually the only country to pay settled war reparations in full. The total amount of reparations rose to 500 million US dollars, at the value of the dollar in 1953. Hungary agreed to pay reparations of US$200 million to the Soviet Union, and US$100 million apiece to Czechoslovakia and Yugoslavia. Romania agreed to pay reparations of US$300 million to the Soviet Union. Romanian economists estimated that by February 1947 the Romanian economy had suffered further losses due to returning seized goods (US$320 million), restoring properties to the United Nations and their nationals (US$200 million), renouncing German debts (US$200 million), irregular requisitioning (US$150 million) and maintenance of the Soviet Army unit on its territory (US$75 million). Romania paid $5.6 million in 1945 and, in the assessment of Digi 24, it was coerced to pay through SovRom $2 billion. Bulgaria agreed to pay reparations of $50 million to Greece and $25 million to Yugoslavia. According to the articles of these treaties, the value of US$ was prescribed as 35 US dollars to one troy ounce of pure gold.
The Treaty of Shimonoseki, signed on 17 April 1895, obliged China to pay an indemnity of 200 million silver taels (¥3.61 billion) to Japan; and to open the ports of Shashi, Chongqing, Suzhou and Hangzhou to Japanese trade.
World War II Japan
According to Article 14 of the Treaty of Peace with Japan (1951): “Japan should pay reparations to the Allied Powers for the damage and suffering caused by it during the war. Japan will promptly enter into negotiations with Allied Powers”. War reparations made pursuant to the San Francisco Peace Treaty with Japan (1951) include: reparations amounting to US$550 million (198 billion yen 1956) were made to the Philippines, and US$39 million (14.04 billion yen 1959) to South Vietnam; payment to the International Committee of the Red Cross to compensate prisoners of war (POW) of 4.5 million pounds sterling (4.54109 billion yen) was made; and Japan relinquished all overseas assets, approximately US$23.681 billion (379.499 billion yen).
The United States signed the peace treaty with 49 nations in 1952 and concluded 54 bilateral agreements that included those with Burma (US$20 million 1954, 1963), South Korea (US$300 million 1965), Indonesia (US$223.08 million 1958), the Philippines (US$525 million/52.94 billion yen 1967), Malaysia (25 million Malaysian dollars/2.94 billion yen 1967), Thailand (5.4 billion yen 1955), Micronesia (1969), Laos (1958), Cambodia (1959), Mongolia (1977), Spain ($5.5 million 1957), Switzerland, the Netherlands ($10 million 1956), Sweden and Denmark. Payments of reparations started in 1955, lasted for 23 years and ended in 1977. For countries that renounced any reparations from Japan, it agreed to pay an indemnity and/or grants in accordance with bilateral agreements. In the Joint Communiqué of the Government of Japan and the Government of the People’s Republic of China (1972), the People’s Republic of China renounced its demand for war reparations from Japan. In the Soviet-Japanese Joint Declaration of 1956, the Soviet Union waived its rights to reparations from Japan, and both Japan and the Soviet Union waived all reparations claims arising from war. Additionally, Ceylon (now Sri Lanka), under President J.R. Jayewardene, declined war reparations from Japan.
Iraq War Reparations
After the Gulf War, Iraq accepted United Nations Security Council Resolution 687, which declared Iraq’s financial liability for damage caused in its invasion of Kuwait. The United Nations Compensation Commission (UNCC) was established, and US$350 billion in claims were filed by governments, corporations, and individuals. UNCC accepted and awarded compensation claims for $52.4 billion to approximately 1.5 million successful claimants; as of July 2019, $48.7 billion has been paid and only $3.7 billion was left to be paid to Kuwait on behalf of the Kuwait Petroleum Corporation. The UNCC says that its prioritisation of claims by natural people, ahead of claims by governments and entities or corporations (legal persons), “marked a significant step in the evolution of international claims practice.” Funds for these payments were to come from a 30% share of Iraq’s oil revenues from the oil for food programme.