public int’l law class ten state · pdf filestate responsibility, alien protection &...

PUBLIC INT’L LAWCLASS TEN

STATE RESPONSIBILITY, ALIEN PROTECTION &

JURISDICTIONProf David K. Linnan

USC LAW # 783 10/21/03

JURISDICTIONJurisdiction as authority to affect legal

interests,

• Legislative jurisdiction= to prescribe

• Judicial jurisdiction= to adjudicate

• Executive jurisdiction= to enforce

JURISDICTIONTraditional bases of jurisdiction

Territorial

Nationality

Protective

Universal

JURISDICTIONTraditional bases of jurisdiction (cont’d)

Territorial

Subjective (e.g., territorial bias traditionally for US criminal law only applying to act committed locally)

Objective (e.g., acts outside national territory with local effects such as with economic regulation, for example, an antitrust conspiracy abroad to affect prices locally)


Nationality

Active meaning covering actor such as perpetrator under Continental criminal law codes, or state of incorporation for juristic person

Passive general meaning vessel/aircraft

Passive personality meaning of victim, most recently for victims of terrorism


Protective

Protective jurisdiction is of state interests, with traditional examples being jurisdiction abroad for counterfeiting of a state’s currency, or attacks on diplomatic posts, or treason

JURISDICTION

Traditional bases of jurisdiction (cont’d)

Universality

Universal jurisdiction traditionally extends to piracy and slavery, more modern issues re anti-terrorism & crimes against humanity/human rights

JURISDICTIONPROBLEMS OF JURISDICTION

Legislative, opposed legal prescriptions before judiciary

Ex: foreign bank with US branch and account covered by banking secrecy law abroad being subpoenaed by US attorney to reveal accountholder (e.g., US v. Bank of Nova Scotia, 691 F2d 1384); reasonableness & balancing, but US weighting seems to predominate practically

JURISDICTIONPROBLEMS OF JURISDICTION (CONTD)

Legislative, opposed legal prescriptions at state level

Ex: problems of multinational corporations with locally incorporated subsidiaries, as with competing regulatory schemes such as transeuropean Russian pipeline case and gas turbine technology licensing with US opposing and France compelling GE licensing in 1970s


Legislative, claims of too broad extraterritorial jurisdiction

Ex: older issues of broad claims of US antitrust or securities law under objective territoriality (eg, US v. Alcoa, 148 F2d 416, plus CFTC unrecognized claims to govern London-based actions in commodities), now reciprocated in worldwide reach of European data protection laws for multinationals


Adjudicative, based on consent

Ex: Status of Forces Agreements (SOFA) for troops based abroad with issues of locally tried vs. court-martial proceedings typically based upon whether alleged act committed in course of official duties (eg, Wilson v. Girard, 354 US 524; subsidiary issue of differing procedure/lack of constitutional protections in foreign court if tried locally)


Adjudicative, complaints about universal jurisdiction reach

Ex: controversial issues Alien Tort Claims Act reach attempting to police multinational conduct worldwide civilly, recent issues re US & Belgian jurisdictional statute, current dispute re ICC and extradition of US troops criminally


Adjudicative, complaints about US process reach

Ex: problems of broad discovery abuse resulting in anti-discovery laws in Western Europe criminalizing depositions, etc. abroad; not completely resolved in Hague agreements


Adjudicative, complaints about US actions violating domestic or int’l law

Ex: problems of Kerr-Frisbie doctrine and procuring accused’s presence via kidnapping as opposed to extradition, plus claims violating Hague agreements in interpretation of broad US reach for US courts


Adjudicative, complaints about US law violating local forum policy & foreign enforcement of US judgments

Ex: problems of enforcing US judgments abroad, for example Germany where punitive damages are against the policy of the forum (eg, in Germany partially enforceable, but often and elsewhere not enforceable at all or only if damages clearly divided in judgment)

LIMITATIONS ON JURISDICTION

Theories of sovereign immunity

• Traditional absolute (Schooner Exchange)

• Modern restrictive form (Dralle)

SOVEREIGN IMMUNITYAbsolute form

Schooner Exchange v. McFadden (1812)Claim by US citizens of property in a ship driven into port by storm and now being a French warship, that French seizure improper (no prize court)

19th century saw research vessels, etc., but pressure in 20th century with large state-owned merchant fleets (growing state commercial activity)

20th century Soviet view of immunity still as sovereignty problem rather than activity based (trade delegations)

SOVEREIGN IMMUNITYRestrictive form

Dralle v. Republic of Czechslovakia (1950)German company with branch in Bohemia, registered owner in Austria of trademarks used in Austria by German company for products, then Bohemian branch nationalized and Czechs claimed trademarks excluding Austrian use

Claims state practice has changed generally with increasing commercial activity (starting with shipping)

US changed to restrictive theory 1952

SOVEREIGN IMMUNITYStatutory sovereign immunity laws perhaps broader than

int’l customary law

Eg, US (Foreign Sovereign Immunities Act of 1976) & UK

Issue of definition of commercial act, FSIA by reference to course of conduct or particular transaction rather than purpose

– Hypo: int’l bank loan for infrastructure development & to buy airplanes for LDC air force

Common issue of SOE (50% ownership) deemed to be state

DIPLOMATIC & CONSULAR IMMUNITIES

Theories of diplomatic immunity

Older view, extraterritorial character for mission & representative character for diplomats as embodiment of foreign sovereign

Newer view, functional necessity to conduct business (eg, Iranian Hostage Case)

DIPLOMATIC & CONSULAR IMMUNITIES

Diplomatic versus Consular immunities

Diplomatic absolute to protect from pressure in political activities

Consular limited to protection within scope of activities only, as commercial activities only (but still in criminal context other restraints such as no arrest & detention pretrial except for “grave crime” under judicial authority, exceptions for real property

STATE RESPONSIBILITY & ALIEN PROTECTION

Modern doctrinal approaches (ILC--progressive-- codification efforts) vs.

Traditional protection of aliens vs.

Human rights law (arguably protecting nationals at something like alien level)

MODERN STATE RESPONSIBILITY

What is state responsibility, and why does it sound so strange to US lawyers?

Doctrinally, heavy Civil Law orientation and formal application

Different pictures of state responsibility in different legal systems– Anglo-American view quasi-tort for compensation– Continental legal science view quasi-criminal to uphold

immaterial goods– Attempt via doctrine to replace Security Council System

when frozen, mandatory response elements

STATE RESPONSIBILITYElements of traditional state responsibility include

DutyBreach[culpa]- objective issue[injury]- compensation issue

Alternate elements play into differing ideas of state responsibility, concept that violation recreates a separate new right too

STATE RESPONSIBILITYSince states act through human beings, human link

to state conduct as attribution problem

Hypo 1: Private US groups soliciting ventures into Cambodia/Laos/Vietnam to search for MIAs claimed still to be alive

Ans: Probably not covered under ILC draftarticles 8 & 11, see

http://www.un.org/law/ilc/texts/State_responsibility/responsibilityfra.htm

STATE RESPONSIBILITYSince states act through human beings, human link to state

conduct as attribution problem (cont’d)

Hypo 2: US veterans groups go to Hanoi to assist in humanitarian task of returning remains of KIA airmen, where State Department may facilitate entry by not asserting travel bar, or by perhaps arranging some contacts through the American interests section of a foreign embassy such as Switzerland

Ans: More US government assistance, harder question (ILC articles 8 & 11)

STATE RESPONSIBILITYSince states act through human beings, human link

to state conduct as attribution problem (cont’d)

Hypo 3: Foreign ambassador’s briefcase is caught by drug sniffing dog at airport, arrest & conviction in state court follow despite diplomatic immunities

ans: Attribution through federal system and between arms of government

STATE RESPONSIBILITYHypo 4: Congress decides to change law

mandated by a treaty with result that new statute takes precedence over old treaty

Ans: Simple violation across separation of powers despite consignment of most foreign affairs to Executive (ILC arts 5 & 6)

STATE RESPONSIBILITYHypo 5: As part of Intifada, PLO leader on West

Bank orders execution of “invaders,” defined as settlers establishing Jewish enclaves, but assume for sake of argument the Palestineans get wrong guy and kill him, so who is liable?

Ans: Leader responsible as individual, but presumably Jordan is not if treated as country, yet if PLO does succeed in establishing a Palestinean state on West Bank, new state would become liable

STATE RESPONSIBILITYSubjective versus objective basis of state

responsibility

Subjective would require intent, so basic issue whether the rule should normally focus on behavior (objective) versus intent (subjective)

Issue becomes whether element of negligence typically involved versus strict liability on broader rules

STATE RESPONSIBILITYRequirement of injury as standing issue (Barcelona

Traction)

Recognizes erga omnes concept involving distinction between those rights in which all states have an interest, being acts of aggression, basic human rights, recalling issues like jus cogens law

Crimes versus delicts character also brings up

STATE RESPONSIBILITYReparation doctrinal concept incorporates

Restitution, in kind, designed to reestablish the situation which would have existed if the wrongful act or omission had not taken place (preferred )

Indemnity, being monetary damages usually for loss of profit and confiscated property value to wipe out consequences of the illegal act

Satisfaction as non-material damages, in modern practice limited to presentation of official regrets, punishment of minor local officials and judicial recognition of of the unlawful act

STATE RESPONSIBILITY

Note that the remedy system in international law is almost directly opposed to private law system in putting specific enforcement choice first

Perhaps in the nature of state relations themselves, which are not necessarily economic

STATE RESPONSIBILITYDoctrinal categories (borrowed from Civil Law) of

circumstances precluding wrongfulness

Consent, subject to preemptory norm limitations (eg, no consent to genocide or slavery)

Force majeure and fortuitous event, idea of material impossibility as when a ship is blown into restricted waters in a storm

Distress, idea that while compliance is possible, it would threaten lives


Doctrinal categories (borrowed from Civil Law) of circumstances precluding wrongfulness (cont)

Necessity as safeguarding essential state interest threatened by a grave and imminent parallel (but cannot overcome jus cogens)

STATE RESPONSIBILITYCountermeasures and self-help

Reprisals as measures not otherwise legal but justified in response to a prior breach– Proportionality

Retorsion as measures generally permissible without prior breach (suspending diplomatic relations, etc.)

Doctrinal approach is in part to develop through doctrinal framework limitations on countermeasures


Exhaustion of local remedies rule

Considered to be a mixed substance and procedure rule, since no int’l violation in theory if still can be remedied domestically

ALIEN PROTECTION LAWUnderlying theories of diplomatic protection based

on nationality, mostly economic protection in modern setting but also security

Derivative protection doctrinally, since injury to national is conceived of as injury to state (so can be raised only by state and cannot be bargained away by nationals as with direct compensation as with Iran Flight 655 incident 1980s)

Scope of duties to foreigners important, since no absolute guarantee of life or property but rather guarantee traditionally of int’l standard of protection & process

ALIEN PROTECTION LAWExtensive older law fixed in 19th & early 20th century precedents in

various claims tribunal proceedings (eg, US-Mexican claims tribunal in 1920s following revolution)

Lack of consensus between capital importing and exporting statesespecially post WW II on law’s scope and giving foreigners more protection than locals(in South America, starting Calvo doctrine on local courts & municipal law, more recently forced licensing following local use of technology; in Asia & Africa 1960s rejection of int’l law restraints on expropriation on sovereignty grounds,followed by New Int’l Economic Order or NIEO late 1960s)

Partially displaced since 1980s with investment treaty protections to attract foreign private capital (eg, NAFTA)

Parallellism & overlap with human rights (albeit differing original source, but note no human rights coverage for juristic persons)

ALIEN PROTECTION LAWOLDER PRECEDENTSDenial of Procedural Justice

ex: Chattin Claim (US-Mex Claims Trib 1927) US railroad conductor arrested on bare statement of colleague accused of fraud, tried w/o translator under trad. Mexican inquistorial process w/o public proceedings, right of confrontation, on basis of file, etc.; violated int’l standard in lack of investigation, confrontation, knowledge of charge, undue delay, treating open hearing as formality

ALIEN PROTECTION LAWOLDER PRECEDENTS (CONTD)Denial of Justice in Failure to Protect/Prosecute

ex: Laura James Claim (US-Mex Claims Trib1926) Foreigner murdered w/o police undertaking serious pursuit of known killer; violated int’l standard in authorities’ failure to take prompt and efficient action (looks like dilatory actions, not wanting to catch perpetrator)

(also Chapman Claim, consul wounded after threats when Mex govt provided no protection despite warnings, plus lack of pursuit after attack)

ALIEN PROTECTION LAWECONOMIC INTEREST PROTECTION &

NON-COMMERCIAL RISKSOlder expropriation, newer discriminatory

treatment issues

General idea that states can prohibit foreigner entry, but once allowed in cannot take property w/o reasonable compensation or discriminate against w/o reason

NON-COMMERCIAL RISKSWHAT ARE NON-COMMERCIAL RISKS?

Expropriation without adequate compensation

Violation by foreign governments of concession of agreement

Foreign exchange restrictions interfering with profit repatriations

NON-COMERCIAL RISKSWHAT ARE NON-COMMERCIAL RISKS? (CONTD)

Import restrictions (interfering with parts supply)

General regulatory issues (labor, property use, etc.)

NON-COMMERCIAL RISKSWHO CARES ABOUT PRIVATE RISK & WHY?

From private investor viewpoint, higher (moderate) risk is acceptable but potential return must be higher– Excessive risk leads to no investment, for

example, currently problem in Indonesia of essentially no new investment in mining industry as result of general uncertainties plus decentralization

– Portfolio versus direct investment

NON-COMMERCIAL RISKSWHO CARES ABOUT NON-COMMERCIAL RISK & WHY?

(CONTD)

From viewpoint of states importing capital, development models have moved away from direct state borrowings to finance development to attracting private capital

Hidden ideological issue of role of state in development

States and state enterprises (agents of development), Indonesian Const Art 33

NON-COMMERCIAL RISKSWHO CARES ABOUT NON-COMMERCIAL RISK & WHY? (CONTD,

CAPITAL IMPORTING COUNTRIES)

Non-market limitations on official development assistance and subsidized lending by multilateral institutions (World Bank, Asian Development Bank, etc.)

Conditionality (Washington consensus, most recently in Indonesian water legislation, incorporating economic views)

Control arguments at multilateral level, payers versus users, with voting control based on capital contributions

Arguments about social right (human rights issues) of “right to development”


(CONTD, CAPITAL IMPORTING COUNTRIES)

Market-based limitations on direct state borrowings (overindebtedness, creditworthiness problems raising the cost of capital

Competitiveness problem for products so funded

Problem of financing intermediate “infrastructure” that is harder to recover direct costs on (eg, education)


(CAPITAL EXPORTING COUNTRIES)

From viewpoint of states exporting capital, basic issue of what is at risk if little or no economic improvement/development in capital importing states (current claims re war on terror and lack of development progress in Islamic world)

Absent viable economies, political unrest

Via state sponsored political risk insurance, protection of private party citizens’ investment involves capital-exporting state in nominally private (investment) activity as guarantor

NON-COMMERCIAL RISKSWHAT IS SPECIAL RISK IN DEALING WITH NON-

PRIVATE ENTITIES?

State-owned enterprises (SOEs) not only in developing world and socialist countries, but Europe too

Issue of framework of laws under control of business party vs judiciary favoring executive

ex: PLN example in Indonesia with arguments about arbitration outside country for shelved power projects (Karya Bodas)

NON-COMMERCIAL RISKSWHAT ARE PRACTICAL STRATEGIES TO AMELIORATE/LIMIT

RISK?

Traditional law of expropriation and nationalization

Voluntary investment incentive programs, but what if withdrawn?

Insurance such as US OPIC, German Hermes, Japanese Import-Export Bank, etc. programs to insure against expropriation and convertibility risks, Multilateral Investment Guaranty Agency (MIGA) of World Bank, some private insurance

Bilateral treaties (traditionally FCN, now investment, examples such as NAFTA too) essentially having capital importing states accept capital exporting states’ views re traditional law of expropriation

NON-COMMERCIAL RISKSHOW DO DIFFERENT STATE GROUPS VIEW EXPROPRIATION

& NATIONALIZATION?

Traditional sovereignty claims, now less important often with move from primary industries to manufacturing to services (focus on HR as economic views change)

Neocolonialism claims (control of resources as control of economy in traditional primary industries)

Ideological issues if no or limited recognition of private property (but heart of market economy, but social functions argument on spectrum from US inverse condemnation to Indonesian Const art 33 arguments)

NON-COMMERCIAL RISKSWHAT MAY TRIGGER A DUTY TO PAY (FOREIGN)

INVESTORS IN CONNECTION WITH UNLAWFUL INT’L ACT?

Expropriation not meeting compensation standard– Problem not with taking, only with not paying

Discriminatory treatment– Issues of express discrimination versus

discrimination as applied

Retaliatory action against aliens for unrelated actions of 3-Ps (or their governments)

NON-COMMERCIAL RISKSWHAT IS THE DISAGREEMENT REGARDING COMPENSATION

STANDARD AND DOES IT MATTER?

Basic substantive law issue is whether to be governed by international law or municipal law (ex: Calvo clause)

Hull formula “adequate, prompt & effective”

“Just” compensation later (focus only on interests of alien, like Hull)

“Appropriate” compensation is floating around, generally understood to permit consideration of interests other than alien’s (states aims in social programs, available foreign currency, etc.)

NON-COMMERCIAL RISKSWHAT IS A TAKING IN VIOLATION OF INT’L LAW?

Currency regulations are not (special character of money, but insurance convertibility triggers)

Confiscatory taxation, but how much is too much?

Beyond, parallel to general domestic law of regulatory takings and how much is too much?

Discriminatory treatment, but issue is always “on its face” vs. “as applied”

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