2003 International Law Update, Volume 9, Number 11 (November)

2003 International Law Update, Volume 9, Number 11 (November)

Legal Analyses published by Mike Meier, Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com.  

CHILD ABDUCTION

European Court of Human Rights holds that Austrian courts’ improper reliance on their own delayed enforcement of U.S. husband’s rights under Hague Convention to return of daughter wrongfully abducted to Austria by its mother violated European Convention on Human Rights

Mr. Sylvester (husband or H) was born in 1953 and is a U.S. citizen living in Michigan. After his marriage to an Austrian citizen (wife or W), Carina Maria (CM), his daughter, entered the world in 1994. W has dual U.S. and Austrian nationality and now lives in Graz, a city in southeastern Austria.

While CM was still an infant, W took her out of the U.S. to live with her in Austria without getting H’s consent. H petitioned the Austrian courts to order CM’s return to the U.S. under the 1980 Hague Convention on the Civil Aspects of International Child Abduction [T.I.A.S. 11670] to which both the U.S. and Austria are parties. In December 1995, an Austrian court granted his application and the appellate court dismissed W’s appeals.

The following April, a Michigan court granted H a divorce from W by default and awarded him sole custody of CM. H then succeeded in obtaining an enforcement of the return order from the Graz District Court. Despite a search of W’s house, however, the enforcement officials could not find CM.

Meanwhile, in August 1996, W persuaded the Graz Regional Civil Court to set aside the enforcement order and to remand the case to the District Court. The regional court ordered the lower court to determine whether CM’s relationship to H had significantly altered since the time of the original order. H appealed the remand order but the Austrian Supreme Court affirmed the regional court’s ruling.

On the merits, the Austrian courts concluded that CM’s situation had substantially changed, that CM’s well-being was foremost, and that her removal from W would likely cause CM serious psychological injury. During June 1997, officials allowed H several hours of supervised visitation with CM. Six months later, the Austrian courts awarded W the sole custody of CM.

H and CM next applied to the European Court of Human Rights in Strasbourg. They contended that the failure of the Austrian courts to enforce the final return order under the Hague Abduction Convention breached their rights under the European Convention on Human Rights [ECHR] -- mainly under Article 8. They sought just satisfaction pursuant to Article 41.

The pertinent language from Convention Article 8 is: “1. Everyone has the right to respect for his private and family life, ... 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well‑being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.”

Article 41 of the ECHR Convention provides: “If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”

The Court then applies these directives. “... [I]t must be determined whether there has been a failure to respect the applicants’ family life. The Court reiterates that the essential object of Art. 8 is to protect the individual against arbitrary action by the public authorities. There may in addition be positive obligations inherent in an effective ‘respect’ for family life. ... In both contexts regard must be had to the fair balance that has to be struck between the competing interests of the individual and of the community as a whole; and in both contexts the State enjoys a certain margin of appreciation.” [¶ 55]

“More generally, a Contracting State’s positive obligations under Art. 8 include a parent’s right to the taking of measures with a view to his or her being reunited with his or her child and an obligation on the national authorities to take such action. However, the national authorities’ obligation to take such measures is not absolute, since the reunion of a parent with a child who has lived for some time with the other parent may not be able to take place immediately and may require preparatory measures to be taken.”

“Any obligation to apply coercion in this area must be limited since the interests as well as the rights and freedoms of all concerned must be taken into account, and more particularly the best interests of the child and his or her rights under Art. 8 of the [ECHR] Convention. Where contacts with the parent might appear to threaten those interests or interfere with those rights, it is for the national authorities to strike a fair balance between them.” [¶ 58]

“In cases of this kind the adequacy of a measure is to be judged by the swiftness of its implementation, as the passage of time can have irremediable consequences for relations between the child and the parent who does not live with him or her. In proceedings under the Hague [Abduction] Convention this is all the more so, as Art. 11 of the Hague Convention requires the judicial or administrative authorities concerned to act expeditiously in proceedings for the return of children and any inaction lasting more than six weeks may give rise to a request for a statement of reasons for the delay.” [¶ 60]

The Court then points out that the Austrian court rulings of August and October 1996 cited the lapse of time and the resulting estrangement between H and CM. “The Court observes that ... there is no explanation for the delay of more than two months which occurred before the file was returned from the Supreme Court to the Graz District Court on May 7, 1996. Moreover, such a delay has to be viewed as an important one ... ” [¶ 67]

The Court sees no need for it to decide whether W’s 1996 appeal technically prevented the Austrian Government from taking further enforcement actions. “... [I]t is for each Contracting State to equip itself with adequate and effective means to ensure compliance with its positive obligations under Art. 8 of the [ECHR] Convention. At the very least, the courts were under a particular duty to give an expeditious decision on the appeal in question. Nevertheless, it took three‑and‑a‑half months for the Graz Regional Civil Court to decide, on August 29, 1996, to quash the enforcement order of May 8 and to refer the case back to the District Court.” [¶ 68]

“The District Court’s decision, which was upheld by the Graz Regional Court and, on September 9, 1997, by the Supreme Court, shows that the case was ultimately decided [based on] the time that had elapsed. Without overlooking the difficulties created by the resistance of [CM’s] mother, the Court finds, nevertheless, that the lapse of time was, to a large extent, caused by the authorities’ own handling of the case. ... [E]ffective respect for family life requires that future relations between parent and child not be determined by the mere effluxion of time.”[¶ 69]

“The Court notes in particular that, following the first unsuccessful enforcement attempt of May 10, 1996, [W] apparently changed her whereabouts with the aim of defying the execution of the return order. However, the authorities did not take any steps to locate [W] with a view to facilitating contact with [H].”

“On the contrary, it transpires from the correspondence exchanged from May to December 1996 between the Austrian Ministry of Justice and the United States Department of State that, in the Austrian authorities’ view, it fell to [H’s] counsel to take all necessary steps to obtain the enforcement of the return order. ... [Nevertheless] an applicant’s omission cannot absolve the authorities from their obligations in the matter of execution, since it is they who exercise public authority.”

In its concluding paragraphs, the Court declares: “Having regard to the foregoing, the Court [unanimously] concludes that the Austrian authorities failed to take, without delay, all the measures that could reasonably be expected to enforce the return order, and thereby breached the applicants’ right to respect for their family life, as guaranteed by [ECHR] Art. 8.” [¶ 72]

The Court also holds that the Austrian Government must pay H euro 20,000 in respect of non‑pecuniary damage [emotional distress] and euro 22,682.61 in respect of costs and expenses within three months from the date of final judgment.

In a Joint Partly Dissenting Opinion, three judges take issue with the majority’s denial of monetary damages to CM. The majority declares that “The finding of a violation provides sufficient just satisfaction for any non‑pecuniary damage she may have suffered as a result of the non‑enforcement of the return order.” [437]

The dissenters strongly disagree. “Although a finding of a violation may in certain cases take on a symbolic value, in the present instance it amounts to reparation at its most frugal. Personally, we do not share the view that, owing to its tender age, the child has not suffered or may not in the future suffer any non‑pecuniary damage (such as stress or anxiety) of its own, warranting an award of compensation for the violation of Art. 8 of the [ECHR] Convention. ...” [437-38]

One of the dissenters also takes aim at H’s small damage award. “I consider the amounts granted in favour of the applicant as mean and beggarly. I believe that the compensation awarded conspicuously fails the test of proportionality between the harm inflicted and the redress afforded.” [439]

For one thing, the delays by the Austrian courts caused H to lose his U.S. job because of his frequent need to shuttle back and forth across the ocean.“The liquidation of euro 20,000 to the applicant as moral damages for pain and suffering, I consider paltry and uncaring. To a person who has had the core of his existence irretrievably gutted by the violation of fundamental rights, ... to a victim of atrocity born of the distressed use of the law against him, the majority responded with the award of what, in my view, amounts to an almost offensive trifle.”

“That is hardly the most eloquent idiom to underscore how hallowed the sanctity of fundamental rights is in the eyes of the Court. If neutralising the [Hague] Convention comes so cheap, States may well find it foolish not to have a brave try.” [439-40]

Citation: Sylvester v. Austria, [2003] 37 E.H.R.R. 17, [2003]2 F.C.R. 128, [2003] 2 F.L.R. 210, [2003] Fam. Law 638 (April 24).

TORTS

In libel action against “Vanity Fair” magazine, French plaintiff, fugitive from U.S. prison term, fails to persuade English Court of Appeals, Civil Division, that lower court had correctly granted his request to testify by video from France which does not extradite its own citizens

The defendant, Conde Nast Publications Ltd., edits and publishes “Vanity Fair” magazine in New York. It also circulates a small number of issues in England and France. The July 2002 issue featured an article about the famous movie director, Roman Polanski, the plaintiff, who had dual Polish and French nationality and lived in France. In August 1969, the Manson gang had murdered Sharon Tate, his wife.

In 1977, at the age of 43, the plaintiff had pleaded guilty in a California court to sexual intercourse with a 13‑year old girl. The following year he had fled the U.S. before having been sentenced and has remained a fugitive.

During a New York stopover on his way from London to California for Ms. Tate’s burial, Vanity Fair reported that plaintiff had walked into a New York restaurant and had sat at a friend’s table close up to a strikingly beautiful Swedish girl he had never met before. The article quoted an observer as having declared: “Fascinated by his [seductive] performance, I watched as he slid his hand inside her thigh and began a long honeyed spiel which ended with the promise ‘I will make another Sharon Tate of you.’” Plaintiff denies that anything of the sort ever happened.

Plaintiff brought a libel suit against the magazine in an English court which set the case down for a jury trial. Wishing to testify from Paris, plaintiff then moved for an order pursuant to Civil Procedure Rule 32.3. It provides that “The court may allow a witness to give evidence through a video [conference] link [VCF] or by other means.” Plaintiff explained that he was afraid to give live evidence in a London court lest British authorities extradite him to the United States.

The first instance judge ruled that the circumstances very heavily weighed in favor of authorizing the VCF. He declared that he had heard nothing that would warrant denying plaintiff his access to justice in proceedings where he is trying to exonerate himself with respect to a defamatory publication within the court’s jurisdiction. The defendant publisher appealed.

Before the appellate Court, the defendant argued that the trial judge failed to honor the principle that it would impugn the administration of justice if a convicted criminal could litigate his reputation in England while abusing the court’s procedures to escape the judicial results of his admitted criminal conduct in the U.S. In opposition, the plaintiff contended that to refuse him the chance to tell his story by VCF would contravene his rights to a fair hearing under Article 6 of the European Convention on Human Rights (ECHR). The Court of Appeal (Civil Division) disagrees and unanimously allows the appeal.

The Court first points out that there can be no cut-and-dried rule under the circumstances of a case like this. The English courts have to evaluate each case on its own facts.

In this litigation, the Court lists the main subsidiary questions. The first is: what is the nature of the offense for which the witness risks arrest and has he already been convicted of it? The second would be: what is the nature of any civil claim in which the witness sought to give his evidence by VCF and is there any nexus between the civil claim and the prior crime?

The third issue is: what is the witness’ position in the proceedings? (The court would more willingly make a VCF order in favor of a defendant than a plaintiff, and more willingly still in favor of a third-party witness.) The fourth issue is: how important is the claim to the witness and what are the chances of litigating it elsewhere? Finally, what would be the likely disadvantages of VCF testimony compared to live evidence in the particular case?

The lead opinion explains its rationale as follows. “Having regard to all the circumstances of the present case I have reached the clear conclusion that it was wrong to make a VCF order here. ... This [plaintiff] is a fugitive offender, convicted of a serious offence for which he has yet to be sentenced. Anxious though he may be to nail what he says is the lie about his having sought (34 years ago) to exploit his tragically deceased wife’s name, such a libel action is, ... a ‘volunteer action’ (or ‘action for choice’) and, moreover, one which could more appropriately have been brought in the United States where the principal publication took place or in France where the [plaintiff] lives.”

“He is invoking this court’s jurisdiction for his own benefit, not defending a claim brought against him. He should not be permitted to litigate on special terms. No libel action has ever yet been fought in this country in the claimant’s absence ... This is not the appropriate case for that unique distinction. Clearly the court’s general policy should be to discourage litigants from escaping the normal processes of the law, rather than to facilitate this. The order made below to my mind overlooks and undermines that policy. If a [VCF] order is properly to be made in favor of this [plaintiff], then it is difficult to imagine a case when it would not be.” [¶ 47]

Such a conclusion does not contravene the plaintiff’s Article 6 rights under the ECHR. In the first place he chose the judiciary of the U.K., a jurisdiction in which he had only briefly stopped during his original flight from the U.S. to France which (like many other nations) does not extradite its own citizens.

Secondly, the reversal does not deny him access to the court below. He could, and in his own lawsuit, should attend, to give his evidence before the jury in the usual way. It was both legitimate and proportionate to make his right of access conditional upon such attendance.

A concurring opinion adds its view as to whether plaintiff has put forth adequate reasons to ask for the privilege of physically absenting himself from the trial of the suit he had filed. “The first reason advanced by the [plaintiff] is that if he enters the U.K. to give evidence, he stands the risk of arrest and deportation to the U.S.A. where he would be sentenced for a crime of which he has been convicted on his own plea of guilt.”

“If the offence to which he has pleaded guilty had been committed in the U.K. and he had fled overseas to avoid his sentence, his refusal to return on the basis that he would be arrested and sent to the Crown Court for sentence could not be possibly advanced as a sufficient reason for departing from the normal rule.”

“[Plaintiff] would be seeking an indulgence from the High Court where he was seeking the just resolution of his claim, solely because he would not submit to the justice of the Crown Court from which he had fled to avoid his punishment. Given the serious nature and type of the offence of which the [plaintiff] has been convicted on his own plea of guilt and from which he has so far evaded the justice of the courts of the United States, I can see no reason, taking into account all the circumstances set out in the judgments of my Lords, to distinguish the present case from such a case.” [¶ 61]

Citation: Polanski v. Conde Nast Publications Ltd., [2003] E.W.C.A. Civ. 1573, [2003] All E.R. (D) 139 (Ct. App. Civ. Div. November 11).

EXTRADITION

Although criminal was extradited to U.S. from Colombia based on extradition treaty with diplomatic assurance that Government would recommend term of years rather than life imprisonment, Second Circuit upholds sentence of life imprisonment

In October 2000, Columbia extradited Alex Restrepo to the U.S. He had allegedly taken part in several robberies. At a Bronx, New York, robbery in August 1999, a person was murdered. Evidence pointed to Restrepo as involved in that robbery. He regularly drove a black Ford Explorer. The next day, police stopped such a vehicle. They found that Restrepo’s wife was driving it and also seized a magazine loaded with .45 caliber bullets.

The U.S. issued Diplomatic Note No. 1060, assuring Colombia that “the death penalty would not be sought or imposed in this case.” With Diplomatic Note No. 1206, the U.S. later stated that “should Mr. Restrepo be convicted of the offenses for which extradition has been granted, the United States ... will not seek a penalty of life imprisonment ...”

“The Government of the United States also assures the Government of Colombia that, should the competent United States judicial authority nevertheless impose a sentence of life imprisonment against Mr. Restrepo, the United States executive authority will take appropriate action to formally request that the court commute such sentence to a term of years.”

Colombia extradited Restrepo based on four counts of a twelve-count indictment for racketeering-related charges. A New York federal court convicted Restrepo of racketeering and related charges, and sentenced him to life imprisonment. He appealed, arguing that the sentence violated the above diplomatic notes. The U.S. Court of Appeals for the Second Circuit, in a per curiam opinion, affirms.

Restrepo argued that, according to the international principle of speciality, the requesting nation may not try an extradited defendant for a crime not enumerated in the applicable extradition treaty. International comity also requires a country seeking extradition to adhere to any limitations which the surrendering country placed on the prosecution.

As for the diplomatic assurances, the Court of Appeals does not read them as absolute. “The note expressly contemplates the possibility that a sentencing court might impose a term of life imprisonment and assured Colombia that, if that occurred, the executive authority of the United States would seek to have the sentence commuted to a term of years.”

“As contemplated by Diplomatic Note No. 1206, the United States, through the U.S. Attorney for the Southern District of New York, requested that the District Court sentence Restrepo to a term of years. The Court, following 18 U.S.C. Section 1959(a)(1) and the applicable Sentencing Guidelines, imposed a life sentence. Contrary to Restrepo’s contention, the government fulfilled the commitment it made in Diplomatic Note No. 1206, and the Court was not obligated under that note to sentence Restrepo to a term of years.” [Slip op. 4-5]

The Court of Appeals, however, disagrees with the district court’s interpretation of the Diplomatic Note which suggested that, as an independent branch of government, it could ignore the extradition treaty. “The Judiciary is unquestionably independent of the Executive. However, the cauldron of circumstances in which extradition agreements are born implicate the foreign relations of the United States. In sentencing a defendant extradited to this country in accordance with a diplomatic agreement between the Executive branch and the extraditing nation, a district court delicately must balance its discretionary sentencing decision with the principles of international comity in which the rule of speciality sounds.”

“Courts should accord deferential consideration to the limitations imposed by an extraditing nation in [a reciprocal] effort to protect United States citizens in prosecutions abroad. ... Moreover, in evaluating the exact limitations set by the extraditing nation, courts should not elevate legalistic formalism over substance. To do otherwise would strip comity of its meaning.”

“In sum, courts should temper their discretion in sentencing an extradited defendant with deference to the substantive assurances made by the United States to an extraditing nation. If anything, such deference may well allow the United States to secure the future extradition of other individuals because foreign nations would observe that the limitations they negotiated with the Executive branch in respect to the prosecution of their extradited citizens are being honored.”

“This is not a surrender of the independence of the Judiciary to the Executive branch. To the contrary, it is the classical deference courts afford to the political branches in matters of foreign policy.” [Slip op. 5-7]

Citation: United States v. Baez, 2003 WL 22682305 (2nd Cir. Nov. 14).

INTERNATIONAL COURT OF JUSTICE

International Court of Justice decides that, although U.S. naval attacks in 1987/1988 on Iranian oil platforms were not measures necessary to protect essential U.S. security interests, Iran is not entitled to reparations

Iran brought this case in November 1992, claiming that the U.S. had illegally attacked and destroyed offshore oil production facilities in October 1987 and April 1988 which the National Iranian Oil Company owned and commercially operated. These attacks allegedly violated the 1955 Treaty of Amity, Economic Relations, and Consular Rights between the United States of America and Iran [8 U.S.T. 899; T.I.A.S. 3853; 284 U.N.T.S. 93] (the 1955 Treaty) by impeding the freedom of commerce between the parties.

The U.S. submitted a counter-claim. It alleged that Iran had previously breached the 1955 Treaty by attacking vessels in the Gulf and by other actions that thwarted commerce and navigation between the U.S. and Iran. This hostile behavior justified military action by the U.S.

Article XX, paragraph (d) of the Treaty, provides that it shall not preclude the parties from taking measures “... necessary to protect its essential security interests, as interpreted in light of international law.” The ICJ finds that the U.S. was only entitled to use force if its actions were in self defense.

Between 1984 and 1988, Iraq began attacking vessels in the Persian Gulf, particularly tankers carrying Iranian oil. The U.S. blames Iran for those attacks; Iran claims that Iraq is responsible. Two incidents in particular sparked the U.S. actions. The first was a missile attack on the Kuwaiti tanker Sea Isle City (reflagged to the U.S.) on October 16, 1987, near Kuwait harbor. In the second event, the U.S.S. Samuel B. Roberts, a naval vessel, struck a mine in international waters near Bahrain on April 14, 1988.

In the Court’s view, however, the evidence fails to show that an armed attack on the U.S. had taken place. Even if the Court were to treat the missile attack on the Sea Isle City cumulatively with the allegedly similar attacks on other vessels (reserving the question of Iranian responsibility), they do not add up to an armed attack on the U.S. Nor does the mining that damaged the Roberts.

Even if there had been such an armed attack, any U.S. defensive actions had to be necessary and proportional to the attack against it. The mine struck by the Roberts did not sink the vessel and did not cause loss of life. Thus, it was neither necessary nor proportionate for the U.S. to respond to it by attacking Iranian oil platforms.

In the 1955 Treaty, Article X, paragraph 1, declares that “Between the territories of the two High Contracting Parties there shall be freedom of commerce and navigation.” The Court then points out that Iraq’s previous attacks on Reshadat and Resalat had put them out of action. Therefore, the U.S. strikes did not hinder the freedom of commerce between the two countries.

Additionally, the April 1988 targets on Salman and Nasr in no way hurt the freedom of commerce between the two countries. In fact, U.S. Executive Order of October 29, 1987 had already suspended all trade in crude oil between the two countries. As a result, the U.S. did not breach its duties to Iran under the 1955 Treaty and does not owe Iran any reparations.

As for the U.S. counter-claim, the ICJ determines that none of the vessels allegedly damaged by Iranian attacks was engaged in commerce or navigation between the two countries. Nor did the Iranian actions make the entire Persian Gulf unsafe for commercial shipping between the two countries. Therefore, the U.S. is not entitled to reparations.

Citation: Oil Platforms (Islamic Republic of Iran v. United States of America), Decision of International Court of Justice of 6 November 2003 (2003/2); International Court of Justice Press Release 2003/38; documents are available on ICJ website “www.icj-cij.org.”

MARITIME SAFETY

U.S. Department of Homeland Security issues measures to bolster maritime safety, including security for vessels, shore facilities and continental shelf operations

The U.S. Coast Guard (USCG) division of the Department of Homeland Security has issued several rules to improve shipping safety as part of the National Maritime Security Initiatives. The rules implement with changes the interim rules published July 1, 2003, that relate to the Maritime Transportation Security Act of 2002 [Pub.L. 107-295]

Here are some of the general requirements. First, the Area Maritime Security Rule (33 C.F.R. Part 103), establishes USCG Captains of the Ports as Federal Maritime Security Coordinators, and requires the development of Area Maritime Security Plans and Area Maritime Security Committees.

Secondly, the Vessel Security Rule (46 C.F.R. Parts 2, 31, 71, 91, 115, 126 and 176) requires all vessels calling on U.S. ports to comply with certain security measures. For instance, each ship must (1) appoint security officers, (2) draw up security plans, and (3) comply with Maritime Security Levels.

Thirdly, the Facility Security Rule (33 C.F.R. Part 105) requires certain security measures for U.S. port facilities. For example, their owners have to name security officers, develop security plans, and comply with Maritime Security Levels.

Fourth, the Outer Continental Shelf Facility Security Rule (33 C.F.R. Part 106) lays out mandatory security measures for operations such as mobile offshore drilling units and certain fixed and floating facilities on the Outer Continental Shelf other than deepwater ports. The owners of such facilities have to designate security officers, develop security plans, and comply with Maritime Security Levels.

Finally, the Automatic Identification Rule (33 C.F.R. Parts 26, 161, 164 and 165) puts into effect the Automatic Identification System (AIS) carriage requirements of the Maritime Transportation Security Act of 2002 and the International Maritime Organization requirement adopted under the 1974 International Convention for the Safety of Life at Sea (SOLAS) [32 U.S.T. 47; T.I.A.S. 9700].

Citation: 68 Federal Register 60448 (October 22, 2003) [Implementation of National Maritime Security Initiatives] & 60472 [Area Maritime Security] & 60483 [Vessel Security] & 60515 [Facility Security] & 60545 [Outer Continental Shelf Facilities] & 60559 [Automatic Identification System].

TAXATION

Pursuant to U.S. - Canada Tax Convention, I.R.S. sends variety of data to Canadian tax agency in confidence; where Canadian writer on taxation asked for statistics on volume of mutual aid that goes on, Canada’s Federal Court of Appeal distinguishes between statistics and underlying information and provisionally allows plaintiff considerable access to some, but not to all, statistics sought

In the Canada-United States Convention with respect to Taxes on Income and Capital, [T.I.A.S. 11087; 1469 U.N.T.S. 189, Can. T.S. 1984/15.1 (1984); 2030 U.N.T.S. 236, 276 (1995, 1997)] (the Convention), the two nations agreed to aid each other in collecting their respective taxes where there are cross-border features.

David M. Sherman (plaintiff) is a tax consultant and author. In February 1999, the plaintiff asked the Canadian government to provide him with statistical information showing the extent to which the Canada Customs and Revenue Agency (CCRA) and the U.S. Internal Revenue Service (IRS) had sought each other’s assistance pursuant to Convention Article XXVIA during specified time periods.

These are plaintiff’s specific inquiries. “(1). Since this provision came into force in 1995, how many requests have been made by [the CCRA] to the IRS? How many requests have been made by the IRS to [CCRA]? (2). What were the total dollars involved in collection assistance requested by [CCRA] of the IRS? By the IRS of [CCRA]? (3). What percentage of the requests have been accepted for action by the IRS? By [CCRA]? (4). What percentage of the requests acted on have resulted in successful action by the IRS? By [CCRA]? (5). What percentage of the dollars requested have been collected by the IRS and remitted to [CCRA]? Collected by [CCRA] and remitted to the IRS? (6). Can I get breakdowns of each of the above numbers by year (1995, 1996, 1997, 1998)?” [¶ 4]

The Minister of National Revenue (MNR or defendant), however, declined to reveal the requested information. The MNR argued that the IRS had provided underlying data to Canada in confidence. He relied on Section 13(1)(a) of the Canadian Access to Information Act, R.S.C. 1985, c. A‑1 (AIA), which requires government institutions to avoid disclosing information obtained in confidence from a foreign state.

Mr. Sherman unsuccessfully complained to the AIA Commissioner. The plaintiff then sought review in the Federal Court, Trial Division. He alleged that the CCRA had not collected the statistical data itself from the IRS. Instead, what he wants consists merely of CCRA’s compilation of statistics about the collection assistance that Canada had given to, and received from, the U.S. Moreover, the petition at issue would in no way pry into individual taxpayer files or records.

In a ruling limited to the interpretation of AIA Section 13(1)(a), the trial judge disagreed, and dismissed plaintiff’s petition for review. The plaintiff appealed. The Federal Court of Appeal unanimously rules for the plaintiff in significant part.

In the appellate Court’s view, a basic question is whether the MNR, in the context of this Convention, may reveal the very fact of the existence of information obtained in confidence from the IRS as well as the volume, in terms of statistical numbers, of such information without, of course, revealing the contents of the information itself.

“Taken to its limits, [the] conclusion that statistics derived from confidential information are an integral part of that information could and would mean that all statistics about taxation laws and, indeed, government operations to enforce these laws could be withheld. This conclusion, as appears from its wording, carries implications way beyond the scope of application of Section 13(1)(a) of the Act and the scope of application of this mutual tax assistance Convention.” [¶ 23]

The Court first warns that this reading of Section 13(1)(a) does not preclude a refusal to disclose pursuant to other mandatory or discretionary exemptions under the Act which are not now before the Court. It then explains. “In my view, for the statistics generated by the [MNR] to fall within the parameters of Section 13(1)(a), these statistics have to reveal ... the contents of the information.”

“Statistical information prepared by the [MNR] which reveals, for example, that 50 requests for assistance relating to the Excise Tax Act and 105 such requests regarding the Income Tax Act were made by the IRS is not disclosure of information itself obtained in confidence from an institution of a foreign government which triggers the application of Section 13(1)(a) and satisfies the meaning of information referred to therein.” [¶ 24]

Finally, the Court applies its reading of Section 13(a)(1) to each question set forth above. “In his question no. 6, ... the plaintiff requested the yearly breakdown of the statistics covering the subject matter of his five previous questions. We were told by counsel for the [defendant] and the plaintiff accepts the [defendant’s] answer to his question, that no breakdown by year exists. This disposes of question no. 6.”

“Pursuant to question no. 1, the plaintiff seeks access to information regarding the number of requests for assistance made by CCRA to the IRS and by the IRS to CCRA. The record containing information coming from Canada which reveals the number of requests made by CCRA to the IRS is not exempt from disclosure under Section 13(1)(a) of the Act. Nor is the record which contains information as to the number of requests made by the IRS to CCRA when such information comes from Canada, even though the statistic is derived from information obtained in confidence from the IRS.”

“Question no. 2 relates to the total amount of dollars involved in the various requests made for collection assistance. I believe that each amount of money mentioned in each specific request made by the IRS to CCRA is information relating to a taxpayer obtained in confidence by CCRA from an institution of a foreign country. In this sense, it is information under the Convention in a way that statistics about the number of requests is not.”

“So, in my respectful view, is the aggregate of these amounts. While it is true that each amount loses its individuality when aggregated together, I do not think this reasoning applies to the issue of confidentiality. The individual amounts, so to speak, aggregate rather than lose their confidentiality. Therefore, this aspect of the plaintiff's request falls under the exemption from disclosure pursuant to Section 13(1)(a) of the Act. However, no such exemption under these provisions applies to the total amount of dollars involved in the requests made by CCRA to the IRS.”

“Questions no. 3 and 4 have their focus on action and success. They ensue logically from question no. (1). The plaintiff wants to know the percentage of requests accepted for action and the rate of success. I believe the reasoning applied in answering question no. (1) governs the answer to these two questions and that the conclusion is the same as the one arrived at in question (1). These percentages are not exempt from disclosure.”

“Through question no. (5), the [plaintiff] seeks to obtain information about the percentage of dollars collected and remitted by CCRA and the IRS. As for question no. (2), the amount of money collected on behalf of and remitted to the IRS is exempt from disclosure. To disclose the percentage collected is to reveal the aggregate of the dollars claimed by the IRS, an information that was obtained by CCRA in confidence from a Contracting State.”

“However, notwithstanding that the aggregate of dollars claimed by CCRA falls outside the ambit of the exemption rule, the statistic in terms of percentage and amount of moneys collected and remitted by the IRS is confidential information within the meaning of Section 13(1)(a). The statistic is Canadian information about U.S. information, but the nature of the Canadian information is such that it is actually the U.S. information itself obtained in confidence from the IRS.” [¶¶ 35-39]

“I have come to these conclusions regarding the [plaintiff’s] request for access without examining the records. I do not know what form the information sought by the [plaintiff] takes in the record. The record may contain voluminous information exempt from disclosure, and it may be that the information requested cannot be severed from the confidential information therein, thereby making lawful disclosure impossible.” [¶ 41]

“In these circumstances, I believe the better, if not the only sensible, course of action open is to send the matter back to the Trial Division of this Court for an examination of the requested records [which neither party had placed in the appellate record] and a redetermination of the plaintiff’s request in accordance with the findings of this Court on the scope of Section 13(1)(a) of the Act and clause 1 of Article XXVII of the Convention.”

“Should the judge on redetermination, after examination of the material, conclude that part of the [plaintiff’s] request for disclosure is not subject to the mandatory exemption under the Act, he should then proceed to assess the [defendant’s] claimed discretionary exemptions under ¶¶ 16(1)(b) and ( c) of the Act.” [¶ 43]

Citation: Sherman v. Minister of National Revenue, 25 C.P.R. (4th) 32 (Fed. Ct. App. May 6, 2003).

WORLD TRADE ORGANIZATION

WTO Appellate Body largely upholds Panel report disapproving U.S. 2002 steel safeguard measures

The European Communities had asked the WTO to review the U.S. safeguard measures of March 20, 2002 on ten groupings of steel imports imposing tariff of up to 30%. The WTO convened the Panel in “United States - Definitive Safeguard Measures on Imports of Certain Steel Products” in June 2002. Less than two weeks later, the EU imposed additional duties on various U.S. products in Council Regulation No. 1031/2002. See 2003 International Law Update 117.

The Panel subsequently joined the complaints of Japan, Korea, China, Norway, Switzerland, New Zealand, and Brazil to the dispute. The complaining parties alleged violations of Articles 2, 3, 4, 5, 7, 8, 9 and 12 of the Agreement on Safeguards, Articles I, II, X, XIII, and XIX of GATT 1994, as well as Article XVI of the WTO Agreement.

The Panel issued its Report in July 2003, concluding that all 10 safeguard measures at issue were inconsistent with the Agreement on Safeguards and GATT 1994. In substance, the Panel found that the application of U.S. safeguards to certain steel products were inconsistent with the Agreement on Safeguards because the U.S. failed to provide a reasoned and adequate explanation for its findings of “increased imports” and “causal link,” as well as for its alleged “parallelism” between the products for which the safeguard measures had been established and the products which were actually subjected to safeguard measures. In August 2003, the U.S. submitted its notice of appeal. See 2003 International Law Update 111.

The Appellate Body, inter alia, upholds the Panel’s conclusion that the application of all safeguard measures at issue does not square with the requirements of Article XIX:1(a) of GATT 1994 and Article 3.1 of the Agreement on Safeguards. It explained that “the United States failed to provide a reasoned and adequate explanation demonstrating that ‘unforeseen developments’ had resulted in increased imports causing serious injury to the relevant domestic producers.”

The appellate tribunal also upholds the Panel’s conclusion that the application of safeguard measures to imports of carbon flat-rolled steel (CFRS), stainless steel rod and hot-rolled bar is incompatible with Articles 2.1 and 3.1 of the Agreement on Safeguards. Here, too, the tribunal believed that the U.S. failed to provide a “reasoned and adequate” accounting of the facts underlying its determinations.

The reviewing body further agrees with the Panel’s conclusion that applying all the safeguard measures at issue conflicted with Articles 2.1 and 4.2 of the Agreement on Safeguards. Here, the U.S. failed to comply with the requirement of “parallelism” between the products for which the conditions on safeguard measures had been established, and the products that were subject to the safeguard measures.

On the other hand, the Appellate Body overrules the Panel’s conclusion that the application of the safeguard measures to tin mill products and stainless steel wire is inconsistent with Articles 2.1 and 3.1 of the Agreement on Safeguards because of the alleged U.S. failure to provide a reasoned explanation.

The Body finds it unnecessary to decide whether the U.S. determination of “increased imports” for these products is consistent with Articles 2.1 and 3.1 of the Agreement on Safeguards. Similarly, the Appellate Body reverses the Panel on the need of reviewing the U.S. determination of a “causal link” for these products under Articles 2.1, 4.2(b), and 3.1 of the Agreement on Safeguards.

The Appellate Body, therefore, recommends that the U.S. bring its inconsistent safeguard measures into conformity with GATT 1994.

Citation: United States - Definitive Safeguard Measures on Imports of Certain Steel Products (AB-2003-3, WT/DS248/AB/R, as well as DS249, DS251, DS252, DS253, DS254, DS258, DS259) (10 November 2003); EU Press Release DP: IP/03/1003 of July 11, 2003. [Appellate Body Report is available on WTO website at “www.wto.org.”]

Montreal Convention on international air travel goes into effect. On November 4, 2003, the 1999 Convention for the Unification of Certain Rules for International Carriage by Air, also known as the “Montreal Convention,” entered into force. As of now, 32 nations (including the U.S.) are parties. Updating the prior Convention marks a major step forward in modernizing international passenger and cargo liability law. For example, the new agreement does away with former restrictions on the amount of damage recovery for the death of, or injury to, international air passengers. Moreover, it will almost always enable U.S. nationals and permanent residents to sue an international air carrier in the American courts. In addition, it retains most of the cargo provisions of the 1999 Montreal Protocol No. 4 which had modernized the Warsaw Convention’s [Convention for the Unification of certain Rules Relating to International Transportation by Air, October 12, 1929, 49 Stat. 3000, 3020-21, T.S. No. 876, 137 L.N.T.S. 11] obsolete rules for documenting air cargo. Finally, it clarifies the joint liabilities of marketing and operating carriers in “code‑share” arrangements, into which many international air carriers now enter. Citation: Media Note #2003/1119, Office of Spokesman, U.S. Dept. of State, Washington, D.C., Wednesday, November 4, 2003.

U.S. modifies sanctions on UNITA and Iraq. The U.S. has made several changes to the sanctions regimes on the National Union for the Total Independence of Angola (UNITA) and Iraq. The U.S. has issued a final rule lifting the embargo on the UNITA and partially lifting the denial policy against Iraq (22 C.F.R. Part 126). It amends the International Traffic in Arms Regulations (ITAR) by removing Angola from the list of restricted countries. Previously, Angola was subject to an arms embargo by virtue of United Nations Security Council Resolution (UNSCR) 864 (September 15, 1993), which the U.S. had implemented by Executive Order 12865. Later, UNSCR 1448 (December 9, 2002) lifted that embargo. Executive Order 13298 reflects the UNSCR. The U.S. will continue reviewing, on a case-by-case basis, all license applications and other requests to export or transfer defense articles and services. The same rule also partially lifts the denial policy regarding Iraq and delists Iraq as a country that supports international terrorism. The U.S. has also amended the Special Federal Aviation Regulation (SFAR) No. 77 [no operations of U.S. carriers in Iraqi airspace]. It will allow limited overflights of Iraq, subject to Iraqi permission and 14 C.F.R. Part 91. Citation: 68 Fed. Reg. 65633 (Nov. 21, 2003) [UNITA embargo and Iraq denial policy], and 65382 (Nov. 19, 2003) [Iraqi overflights].

China signs long-term agreement to buy jet aircraft and engines from U.S. companies. In Washington on Wednesday, November 12, the Boeing Company and the aircraft engine division of General Electric Co. entered into agreements with the Chinese government to sell up to $1.7 billion worth of aircraft and engines to five Chinese airlines over the next three years. The deals involve, inter alia, the sale of 30 Boeing 737s. As of last September, Boeing has provided China’s fleet with 440 planes. China also contracted to have GE supply jet engines to fill its growing regional jet needs. According to GE, its agreement could involve up to $3 billion over the next two decades. Citation: Reuters News Service, Washington, D.C., November 12, 2003, filed 5:10 p.m. ET (New York Times byline).

EU issues Common Position on international non-proliferation agreements. The Council of the European Union has issued Common Position 2003/805/CFSP on the universalization and reinforcement of multilateral agreements in the field of non-proliferation of weapons of mass destruction and means of delivery. The purpose is to “serve as a yardstick in the negotiation of EU positions in international forums” (see preamble). The Common Position will promote the universal ratification of, and adherence to, international agreements such as the Nuclear Non-Proliferation Treaty and Safeguards Agreements (NPT) [21 U.S.T. 483; T.I.A.S. 6839; 729 U.N.T.S. 161] and The Hague Code of Conduct against Ballistic Missile Proliferation (to which the U.S. is a subscriber, see John R. Bolton, Under Secretary for Arms Control and International Security, Remarks at the Launching Conference for the International Code of Conduct Against Ballistic Missile Proliferation, The Hague, The Netherlands, November 25, 2002, available at http://www.state.gov/t/us/rm/15488.htm). The EU will improve verification mechanisms, and take specific steps to help carry out specified international agreements such as the NPT and the Hague Code. Citation: 2003 O.J. of European Union (L 302) 34, 20 November 2003.

EU amends Liberia sanctions to allow weapons for U. N. Mission. The European Union (EU) has issued two measures that change its sanctions on Liberia. Council Regulation No 1891/2003 allows for technical training or assistance in weapons matters solely for the support and use by the U. N. Mission in Liberia (UNMIL). Common Position 2003/771/CFSP authorizes (1) the supply of arms and related material to UNMIL and (2) the furnishing of non-lethal military equipment for humanitarian or protective uses. EU Member States must review deliveries on a case-by-case basis. Citation: 2003 O.J. of European Union (L 278) 31 & 50, 29 October 2003.

U.S. normalizes trade relations with Serbia and Montenegro. The U.S. has certified that Serbia and Montenegro meet the criteria of Public Law 102-420 for the Restoration of Normal Trade Relations (NTR). NTR status will take effect 30 days after certification. The U.S. had revoked the NTR status in 1992 because of human rights abuses by the Milosevic regime in Bosnia and Herzegovina by the Army of the Republika Srpska and Serb paramilitary forces. Citation: U.S. Department of State Press Statement 2003/1117 (November 3, 2003).

EU implements Madrid Rules for international trademarks. Council Decision 2003/793/EC approves the accession of the EU to the Protocol relating to the Madrid Agreement Concerning the International Registration of Marks, [Treaty Doc. 106-41; 1987 U.S.T. Lexis 243 (27 June 1989)]. It authorizes the Council President to deposit the instrument of accession with the Director-General of the World Property Organization (WIPO). The EU Commission is authorized to represent the EU at the meetings of the Madrid Union Assembly held under WIPO auspices. The same issue of the Official Journal contains the Protocol. – By Council Regulation No 1992/2003, the EU accedes to the Protocol. It implements rules for the international registration of marks into EU trademark registration requirements, and sets forth the requirements for international applications. The U.S. has implemented the Madrid Protocol with rules published in September 2003. See 2003 International Law Update 158. Citation: 2003 O.J. of European Union (L 296) 1 & 20 (14 November 2003).

U.N. Resolution promotes women’s Role in national politics. On November 6, 2003, a consensus in the U.N. General Assembly’s Third Committee adopted the U.S.‑sponsored resolution on Women and Political Participation. Supported by 110 co-sponsors, the resolution strongly urges that women should take an active part in the political life of their countries including running for, and holding, public office. The resolution also calls upon all governments to make sure that women have equal access to education and to get rid of laws and regulations that discriminate against them. Finally, governments and non-governmental organizations are encouraged to persuade political parties to improve the qualifications of potential women candidates by training them in leadership skills. Citation: U.S. Department of State Press Statement by Richard Boucher, Spokesman; Washington, D. C., Friday, November 7, 2003.

Australia freezes assets of Hamas leaders and charities. On November 21, 2003, Australia designated six senior leaders of the militant Palestinian Hamas group as terrorists. It also froze the assets of five charitable organizations which it said are helping to finance Hamas’ activities. The Australian government adopts the same course as the U.S. did last August. President Bush had said on August 22 that he was taking the action because Hamas had admitted responsibility for the Aug. 19 suicide attack on a packed bus in Jerusalem that killed 20 people, including six children. The six Hamas leaders are Sheik Ahmed Yassin (Gaza); Imad Khalil Al‑Alami (Syria); Usama Hamdan (Lebanon); Khalid Mishaal (Syria); Musa Abu Marzouk (Syria), and Abdel Aziz Rantisi (Gaza). The listed charities included the Committee for Charity and Aid for the Palestinians (France); the Association for Palestinian Aid (Switzerland); the Palestinian Relief and Development Fund, or Interpal (Britain); the Palestinian Association (Austria), and the Sanbil Association for Relief and Development (Lebanon). It is a crime for anyone to hold, own or deal in assets pertaining to the listed men and the groups or to assist them in any way. Violations carry prison terms of up to 25 years. The Australian Minister said that his country was obliged to freeze the assets of terrorists and related organizations or persons pursuant to U.N. Security Council Resolution 1373. Citation: The Associated Press (online), Canberra, Australia, November 11, 2003; 11:25:41 GMT.