State Responsibility
Responsibility to Non-National
It is a general principle of international law that a state which injures a foreign national is responsible to that national’s state but not to the national for the harm done. In order to establish state responsibility for an injury to a non-national, there must be conduct comprising an action or omission which is attributable to the State under international law. It must constitute a breach of an international obligation of the state. The state responsibility exists in international law context only.
A state is only responsible for actions that are attributable or imputable to it. Acts are attributable to the State where they are done by their officials within their apparent authority.
This includes actual authority or acts done outside actual authority where the state has provided the means to do the act. Therefore states may be responsible even where the actions are contrary to express directions or even contrary to the law of the state concerned.
Terrorism
Terrorism is the sustained use of clandestine violence for political purposes. It typically comprises bombings, murder, kidnapping, threats or a combination. In some cases, terrorism has directly supported by states and may even involve direct state action. In the past has been shown that Algeria, Iran, Iraq, Libya, South Yemen, Syria, the former Eastern Bloc states assisted directly in terrorism.
State terrorism may also include clandestine acts against the state\’s own population. This has been shown to have taken place in Nazi Germany, Argentina in the mid-1970s.
International efforts to counter terrorism have led to the adoption of the Tokyo Convention 1963, and the Montréal Convention 1971 on the hijacking and sabotage of civil aircraft. The 1973 Convention on crimes against diplomats, the 1979 Convention on hostage-taking and the 1988 Convention on the suppression of unlawful acts against the safety of maritime navigation.
The above Conventions provide for international crimes that are punishable by states irrespective of the nationality of the perpetrator, victim or locality of the offence.
States may be pressured into rendering terrorist suspects to international justice by the United Nations. Sanctions were imposed against Libya in order to compel it to turn over alleged terrorists allegedly responsible for the Lockerbie bombing. The states are not generally made directly responsible for terrorist acts.
State Liability
It appears that states are responsible for injuries and damage irrespective of fault. The state or its officials etc. must be shown to have caused the injury.
Some states maintain the position that the national standards of care suffice. That is to say that it is sufficient that non-nationals be treated no less favourably or worse than their own nationals.
The issue has arisen in the context of expropriation and nationalisation, particularly without compensation. In practice, international financial pressure and practical concerns in relation to foreign direct investment have meant that states have been reluctant to apply this standard.
The US has granted federal courts authority to hear cases against foreign states and their officials. Private persons may undertake suits for personal injuries and deaths against foreign state and their officials for personal injuries and death arising from state-sponsored terrorist action.
Standards of Care
The international standard of care provides that a country which has admitted non-nationals must treat them in a civilised manner. Aliens must not be treated in bad faith, subject to wilful neglect of duty or insufficiency of governmental action so short of international standards that every reasonable and impartial person would recognise its insufficiency.
Delinquencies of this nature may be crimes or torts. Where they breach international peace, deny people the right to self-determination or fail to safeguard human life or dignity, e.g. slavery, genocide and apartheid, they may be categorised as crimes.
Other breaches may be categorised as torts/civil wrongs. This would most commonly happen in the event of expropriation or nationalisation of aliens’ or foreign businesses’ property. Similarly, denial of justice is a tort.
Breaches
States have a right to expropriate under domestic law. However, it must be done for legitimate public purposes and states must pay prompt, adequate and effective compensation. The expropriation must not be discriminatory, in bad faith, or politically motivated. Compensation must be adequate.
A denial of justice contrary to international law arises when there is a denial, unwanted delay or obstruction of access to courts. It also applies in respect of gross deficiency in the administration of judicial or remedial processes, failure to provide guarantees that are generally considered indispensable to the proper administration of justice or manifestly unfair judgments. An error of a  national court which does not produce manifest injustice is not a denial of justice.
State Complaint
A state may only bring a complaint on behalf of its nationals. In the case of dual nationals, either state may generally complain. A state with the master nationality, one with the greater links, may complain against another.
A state may refuse to bring a complaint on behalf of its national. It may settle it or abandon it without the national\’s consent. The international courts have held that clauses in agreements whereby nationals agree not to ask their home state to intervene are invalid.
The subject of a complaint must be a real and bona fide connection with the complainant state. The individual, company or firm must first exhaust all its local remedies within the foreign state. Failure to do so is an objection to a claim in an international tribunal.
If no adequate remedy is available, if it is waived by treaty, if the injury is done directly to a state or if the defendant state has delayed excessively in granting a remedy, the requirement does not apply.
Objections
A state may be barred from taking a claim by waiting too long, delaying too long or if the complainant has dirty hands. Where for example, wrongs were done to a business which was engaged in a wrongful activity, the complaint was denied. Relief may be by way of satisfaction, damages, or restitution in kind.
States may raise objections to complaints on a number of bases. If the plaintiff does not have standing, that is to say, he is not qualified to appear before the court, he may not proceed. In most international tribunals such as the International Court of Justice, only states may take complaints.
Export Insurance
Insurance may be available to cover certain risks in international trade. In some cases, private insurers will not cover risks in certain countries because they are high. Many governments provide state-sponsored insurance agencies providing export insurance against risks in high-risk countries.
The United States Overseas Private Investment Corporation insures against political-type risks such as expropriation and political violence. Expropriation has been relatively unusual in the last 30 years. Outright expropriation is less common than gradual expropriation by a series of cumulative effects.
Developing countries are aware of the risk that expropriation may discourage future investment. However, they are now less likely to resort to outright expropriation than in the 1960s and 70s but may resort to steps having equivalent effects.
The US agency covers acts or a series of acts for which the state is responsible, which are illegal under domestic or international law and which have a substantially adverse effect on the enterprise or the investor’s rights under the enterprise.
The US agency offers assurance that guarantees investors will be able to convert local currency into dollars. A risk in developing countries may be currency controls and their tightening of currency controls.
Political violence may be due to wars, civil strife, or terrorism. The premiums are higher for countries with greater political risk.