Defending American Property Abroad Act of 2026

The Defending American Property Abroad Act of 2026 establishes a mechanism to protect United States persons from expropriation and nationalization of their property by Western Hemisphere countries that maintain free trade agreements with the United States. The legislation creates a presidential designation system for ports, harbors, and marine terminals that have been seized from U.S. owners, and imposes restrictions on vessels that use these designated facilities from accessing U.S. navigable waters and ports. The bill aims to leverage U.S. maritime jurisdiction as an economic pressure tool to compel foreign governments to either return expropriated property, provide adequate compensation, or otherwise resolve disputes involving American-owned assets. This approach represents a targeted sanctions mechanism that operates through maritime commerce restrictions rather than traditional diplomatic or trade remedies.

The Act amends Section 70022 of Title 46, United States Code, to grant the President authority to designate specific ports, harbors, or marine terminals in Western Hemisphere countries when an agency or official of a government that is a free trade partner has nationalized or expropriated property owned, held, or controlled by a United States person. Once designated, vessels that have entered or operated in these facilities, or transferred cargo at them, are prohibited from entering or operating in U.S. navigable waters or transferring cargo at any U.S. port or place under American jurisdiction. The designation remains in effect until one of four conditions is satisfied: the underlying circumstances justifying designation no longer exist, the foreign country returns the property and terminates seizure measures, the country provides adequate and effective compensation in convertible foreign exchange or other mutually acceptable equivalent reflecting full value as required by international law, or the dispute is otherwise resolved to the President's satisfaction. The statute includes an exception allowing restricted vessels to enter U.S. waters in cases of emergency or when specifically authorized by the vessel owner.

The President bears primary responsibility for implementing this legislation through the designation and de-designation process for affected maritime facilities. The executive branch must monitor expropriation and nationalization actions by Western Hemisphere governments, evaluate whether affected property is owned by United States persons, and determine when facilities meet the criteria for designation. Implementation requires coordination between multiple federal agencies, including the Department of State for diplomatic aspects, the Department of Homeland Security and Coast Guard for maritime enforcement, and potentially the Department of Commerce for trade agreement verification. The Coast Guard will likely serve as the primary enforcement agency, maintaining lists of designated facilities and restricted vessels, conducting inspections, and preventing non-compliant vessels from entering U.S. waters. The legislation does not specify reporting requirements to Congress, appropriations for implementation, or detailed procedural rules for the designation process, leaving substantial discretion to executive branch interpretation and rulemaking.

The primary beneficiaries of this legislation are United States persons who own or control ports, harbors, and marine terminals in Western Hemisphere countries and face expropriation or nationalization by foreign governments. The Act creates economic leverage by threatening to cut off vessels using expropriated facilities from the lucrative U.S. maritime market, potentially imposing significant costs on both the expropriating government and commercial shipping interests. Western Hemisphere countries that seize American-owned maritime infrastructure will face pressure to reverse their actions or provide compensation to avoid disrupting regional shipping patterns. The maritime industry will experience increased compliance burdens as vessel operators must track designated facilities and adjust routing to maintain U.S. market access. Foreign governments may face difficult choices between asserting sovereignty over strategic infrastructure and maintaining normal commercial relations with the United States. The legislation contains no sunset provision, creating a permanent authority that could affect bilateral relations indefinitely. Cost estimates are not provided, but enforcement expenses will include monitoring systems, vessel tracking, and Coast Guard inspection activities.

The constitutional basis for this legislation rests on Congress's authority to regulate foreign commerce under Article I, Section 8, and its power to establish rules for vessels entering U.S. waters and ports. The Act operates within the established framework of Title 46, which governs maritime transportation and security, and builds upon existing presidential authorities to restrict vessel access for national security and foreign policy purposes. The legislation implicates international law principles regarding expropriation, specifically incorporating the requirement that compensation meet international law standards for adequacy and effectiveness. The Act's focus on Western Hemisphere free trade partners creates a nexus with existing trade agreements, potentially raising questions about consistency with treaty obligations under agreements such as USMCA or bilateral free trade agreements. The presidential designation authority involves significant executive discretion with no explicit judicial review provisions, though affected parties could potentially challenge designations under the Administrative Procedure Act. The statute preempts any conflicting state or local laws regarding vessel access to ports, as maritime commerce regulation falls within exclusive federal jurisdiction. The requirement that compensation be in convertible foreign exchange reflects customary international law standards for takings of foreign property.

The legislation raises several constitutional and practical concerns that may generate controversy and litigation. The broad presidential discretion to designate facilities without specified procedural safeguards or judicial review could face due process challenges from affected vessel owners and operators who suffer economic harm without opportunity for meaningful review. The definition of key terms such as "expropriation," "nationalization," and "owned, held, or controlled" remains undefined, creating uncertainty about when designation authority applies and potentially leading to inconsistent application. The requirement that property be "directly or indirectly" controlled by a United States person could extend to complex corporate structures and raise difficult questions about beneficial ownership. Determining "adequate and effective compensation" equivalent to "full value" as required by international law involves subjective valuation disputes that may prove difficult to resolve. The Act may conflict with free trade agreement provisions that guarantee market access or prohibit discriminatory treatment of vessels, potentially exposing the United States to international arbitration or WTO challenges. Implementation challenges include tracking vessel movements through designated facilities, verifying ownership structures of affected property, and coordinating enforcement across multiple agencies. The emergency exception lacks clear criteria, creating potential for inconsistent application. Foreign governments may view this legislation as extraterritorial overreach and respond with retaliatory measures affecting U.S. commercial interests. The absence of compensation for vessel owners who lose U.S. market access due to designation could generate takings claims. The legislation provides no mechanism for resolving disputes about whether expropriation occurred or compensation was adequate, potentially creating prolonged standoffs.