After World War II both West Germany and East Germany were obliged to pay war reparations to the Allied governments, according to the Potsdam Conference. Other Axis nations were obliged to pay war reparations according to the Paris Peace Treaties, 1947. Austria was not included in any of these treaties.

In the years following World War II, large numbers of German civilians and captured soldiers were forced into labor by the Allied forces. The topic of using Germans as forced labor for reparations was first broached at the Tehran conference in 1943, where Soviet premier Joseph Stalin demanded 4,000,000 German workers.