2006 International Law Update, Volume 12, Number 12 (December)

2006 International Law Update, Volume 12, Number 12 (December)

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

CHOICE OF LAW

In civil action over alleged rape that occurred in Brazil involving New York residents, New York Appellate Court finds that New York law applicable because New York has a stronger interest in regulating the conduct of its residents and such application of law would not threaten the policies underlying Brazil’s law

In 2002, K.T. (Plaintiff), a female New York resident, attended a New Year’s Eve party on an island off the coast of Brazil. There she met Damon Dash, a well-known music entrepreneur and hip hop music producer in New York. According to news reports, Dash drives a $400,000 car and owns 1,300 pairs of sneakers.

Plaintiff alleges that Defendant made several sexual advances which she rejected. She left the party around 4.30 a.m. and returned to a guest house where she passed out. Plaintiff brought action in state court upon her return to New York, contending that Dash raped her while she was unconscious, and seeking money damages. Defendant moved to dismiss based on forum non conveniens, or for a ruling that Brazilian substantive law apply to this action. The court denied the forum non conveniens motion and refused to rule on the choice of law issue. Defendant appealed.

The New York Supreme Court, Appellate Division, affirms with modifications.

First, the Court reviews the issue of forum non conveniens. It notes that both parties, as well as many witnesses, live and work in New York. This case involves a personal interaction between New York residents that occurred in a foreign locale. The Brazilian law enforcement and hospital personnel did not gain any first-hand knowledge of the events but only heard Plaintiff’s statements. Their records have been translated and made part of this record. It is unlikely that they have knowledge beyond their written reports. Considering the Defendant’s financial resources, it should not be a problem to transport any relevant witnesses from Brazil to New York. Therefore, Defendant did not carry his burden of proof to warrant dismissal based on forum non conveniens.

The Court then turns to the choice of law issue. With Babcock v. Jackson, 12 N.Y.2d. 473, 477 (1963), New York adopted a flexible approach in this regard, giving “controlling effect to the law of the jurisdiction which, because of its relationship or contact with the occurrence or the parties, has the greatest concern with the specific issue raised in the litigation. 12 N.Y.2d at 481.”

“The first step in choice of law analysis is determining whether an actual conflict exists between the jurisdictions involved (see Matter of Allstate Ins. Co. [Stolarz], 81 NY2d 219, 223 [1993]). Once an actual conflict is established, the court must turn to consideration of which jurisdiction, ‘because of its relationship or contact with the occurrence or the parties, has the greatest concern with the specific issue raised in the litigation’ (Babcock v Jackson, supra), an analysis often called ‘interest analysis’ (see Cooney v Osgood Mach., 81 NY2d 66, 72 [1993]). The framework of this analysis raises two inquiries: ‘(1) what are the significant contacts and in which jurisdiction are they located; and (2) whether the purpose of the law is to regulate conduct or allocate loss’ (see Padula v Lilarn Props. Corp., 84 NY2d 519, 521 [1994] ... If the purpose of the competing laws is to allocate loss and the parties are both New Yorkers, ‘there is often little reason to apply another jurisdiction’s loss allocation rules’ (see Cooney v Osgood Mach., 81 NY2d at 73); if their purpose is to regulate conduct, ‘the law of the jurisdiction where the tort occurred will generally apply because that jurisdiction has the greatest interest in regulating behavior within its borders’ ...” [Slip op. 4]

Here, to show an actual conflict between Brazilian and New York law, Defendant presented an affidavit from a Brazilian attorney, asserting that Plaintiff would have a cause of action in Brazil and may actually receive money damages. Brazilian law would require Plaintiff to prove that her honor or image was damaged by the assault.

This affidavit does not establish a sufficient conflict of laws. Even if there were a real conflict, it is New York law that should apply. Under the interest analysis, only New York has significant contacts with both parties. The parties essentially have no contacts with Brazil except for a few vacation days. As for loss allocation, where both parties are New Yorkers, there is no compelling reason to apply the foreign jurisdiction’s law. The Court’s analysis framework is as follows:

“The law of intentional assault applicable here ... includes components of loss allocation as well as of conduct regulation. However, it is not useful in this instance to embark upon what must necessarily be an arbitrary weighing process to decide whether such a rule should be deemed ‘primarily’ conduct-regulating or loss-allocating ... Even where a law is conduct-regulating, we do not blindly follow the lex loci rule. Rather, we must still decide whether the foreign jurisdiction has the greater interest in addressing the alleged conduct. [...]”

“However, in other types of situations the analysis is less one-sided, and the competing concerns of the two jurisdictions must be considered. When we consider the question of whether the alleged facts establish a tortious and compensable assault by one individual against another, it is apparent that there are other interests at stake besides Brazil’s interest in enforcing its standards for the conduct of citizens and non-citizens within its border. New York has a strong interest in seeing that its aggrieved citizens obtain redress for wrongs committed upon them by other citizens of New York, regardless of where the act took place.”

“The discussion in [Schultz v. Boy Scouts of Am., Inc., 65 NY2d 189, 197 (1985)], is helpful for framing our analysis here, although the case is not directly analogous to this one and the ruling is not controlling. .... The Schultz Court explained:”

“‘[k]ey, however, was New York’s interest in requiring a tort-feasor to compensate his guest for injuries caused by his negligence. That concern would have been completely thwarted if [the foreign jurisdiction’s] laws were applied to the action, whereas the application of New York’s law would not threaten the policy underlying [the foreign jurisdiction’s] statute ...’” [...]

“Accordingly, it is useful in our analysis to consider whether the application of the law of Brazil would thwart or threaten an important policy underlying New York’s law, or, on the other hand, whether the application of New York law would frustrate any policies underlying Brazil’s applicable rule of law.” [Slip op. 7-8]

Defendant argues that Brazil has a strong interest in regulating conduct within its borders. The present litigation, however, does not protect anybody in Brazil. In fact, the outcome of this litigation will have no impact upon Brazil or its citizens. Conversely, if Brazil’s law applies, requiring victims of sexual assault to show that their “honor” or “image” was damaged, it could thwart New York’s strong interest in compensating its resident for sexual assault perpetrated by another resident. Thus, the general rule that the law of the jurisdiction where the tort occurred should apply does not lend itself to this case. New York’s interest in addressing the misconduct is stronger than Brazil’s. Consequently, New York law must govern this action.

Citation: K.T. v. Dash, No. 9245 (N.Y. App. Div. December 14, 2006).

COUNTERVAILING DUTIES

In reviewing whether improperly collected countervailing duties can be set off during a later period of review by U.S. Department of Commerce, Federal Circuit offers comprehensive overview of countervailing duty law and concludes that it is reasonable that setoffs cannot be granted during later review period

In the following opinion, the U.S. Court of Appeals for the Federal Circuit provides a comprehensive overview of the current U.S. countervailing duty laws and the division of authority between the two agencies in charge, the U.S. Department of Commerce (“Commerce”), and the U.S. Customs and Border Protection (“Customs”).

After an investigation, Commerce determined in 1992 that Norsk Hydro Canada, Inc. (NHC) received grants from the governments of Canada and Quebec that were countervailable subsidies of its magnesium products. See 57 Federal Register 30,946 (July 13, 1992). Since then, Canadian magnesium products have been subjected to countervailing duties in the U.S., which are reviewed annually.

Customs collected duties on NHC’s 1997 magnesium and magnesium alloy imports at improperly high rates. Instead of collecting at the proper 2.02 percent rate, Customs collected between 3 percent and 7 percent. NHC did not protest until Commerce reviewed the countervailable subsidy in 2001. Commerce denied a setoff of the overcharge against the duties due. NHC appealed to the Court of International Trade, which remanded to Commerce with instructions to permit the setoff. Commerce did the setoff under protest, and when the matter again came before the Court of International Trade, it again found for NHC. Commerce appealed.

The U.S. Court of Appeals for the Federal Circuit reverses.

At the outset, the Court comprehensively outlines the current countervailing duty law:

“If the production of goods abroad is subsidized by a foreign government, the goods can be subject to a countervailing duty (‘CVD’) when imported ... to the United States. 19 U.S.C. Section 1671. In general, the goal of these duties is to protect American firms from unfair competition by setting off the amount of certain export subsidies foreign firms selling goods in the United States receive from their government. The Secretary of Commerce administers the countervailing duty laws. Id. Section 1677(1). Two showings must be made before a CVD can be imposed: (i) that a government subsidy was received, and, (ii) that the subsidy resulted in, or threatens, material injury to American industry. Id. Section 1671(a). These two determinations are made by separate bodies. The International Trade Commission determines whether material injury to American industry has occurred, while Commerce determines whether a subsidy was received. ... Subsidies from certain nations may trigger a CVD even in the absence of a material injury determination. Id. Section 1671(c) (‘In the case of any article of merchandise imported from a country which is not a Subsidies Agreement country, no determination by the Commission under section 1671b(a) . . . or 1671d(b) of this title shall be required.’).”

“A countervailing duty investigation may be initiated at the request of an interested party or on Commerce’s own motion. Id. Section 1671a. In the course of such an investigation, Commerce under 19 U.S.C. Section 1671b(b) makes a preliminary determination concerning whether a foreign government provided a countervailable subsidy, and the International Trade Commission under 19 U.S.C. Section 1671b(a) makes a preliminary determination concerning whether the foreign subsidy resulted in, or threatens, material injury to American industry. If the preliminary investigation discloses that a foreign subsidy was provided, Commerce must suspend liquidation of duties, id. Section 1671b(d)(2), and must require the importer to furnish cash deposits as security for duties that may be due pending a final determination of the amount of a CVD. Id. Section 1671b(d)(1)(B). Once Commerce makes a final determination that a countervailing subsidy was provided by a foreign government, id. Section 1671d(a), and once the International Trade Commission has reached a final determination that U.S. industry was materially injured as a result, id. Section 1671d(b), Commerce then issues an order setting the countervailing duty, which is typically expressed ad valorem -- that is, as a percentage of the value of the imported goods. Id. Sections 1671d(c)(2), 1671e.”

“The countervailing duty imposed by Commerce must equal the ‘net countervailable subsidy,’ 19 U.S.C. Section 1671(a), which is calculated by subtracting certain enumerated fees and setoffs from the amount of the subsidy provided by the foreign government. 19 U.S.C. Section 1677(6). ... Countervailable subsidies may be divided further into ‘recurring’ and ‘non-recurring’ benefits. When an importer receives a non-recurring benefit, as occurred here, the benefit must be amortized over the ‘average useful life’ of the subsidy. 19 C.F.R. Section 351.524(b)(1)-(d).”

“Although countervailing duties must be ‘equal to’ countervailing subsidies, the two concepts are not functionally interchangeable. ... The procedures for determining the amount of a countervailable subsidy are different from those for collecting the countervailing duty; indeed, as noted, the two tasks are undertaken by two different entities, Commerce and Customs. More importantly for our purposes, the procedures for contesting an erroneous subsidy calculation are different from those for contesting an erroneous duty assessment. Compare 19 U.S.C. Section 1675 (Commerce administrative review of subsidy determination) with id. Section 1514(a)(5) (Customs protest for liquidation error). The procedure for contesting a Customs assessment or liquidation essentially involves lodging a timely protest with Customs, the disposition of which is reviewable in the Court of International Trade ... By contrast, the procedure for contesting an erroneous subsidy or CVD determination by Commerce requires an objecting party to raise the objection during an administrative review of the CVD order. More specifically, Commerce must, upon request, undertake an annual administrative review of any issued CVD order. 19 U.S.C. Section 1675(a)(1). During the administrative proceeding, Commerce must ‘review and determine the amount of any net countervailable subsidy,’ which is the basis for a CVD determination, id. Section 1675(a)(1)(A), and it is during this review that parties may raise objections, present evidence, and submit written arguments relating to the countervailable subsidy determination, including submission of written arguments. See19 C.F.R. Sections 351.221, 351.301, 351.309. In this respect, during its annual review, Commerce typically restricts its consideration to entries made during the one year period of review (or ‘POR’). 19 C.F.R. Section 351.213(e)(2)(I). Judicial review of the results of these administrative proceedings is available in the Court of International Trade, 28 U.S.C. Section 1581(c); 19 U.S.C. Section 1516a(2), with appeal to this Court. 28 U.S.C. Section 1295(a)(5).” [Slip op. 2-4]

The Court then turns to the decision of the Court of International Trade that Commerce had both the power and the obligation to make the requested setoffs. The standard of review is that Commerce’s determinations of fact must be sustained unless they are unsupported by substantial evidence in the record. Its legal conclusions must be sustained unless not in accordance with law. 1516a(b)(1)(B)(I).

First, NHC argues that countervailing duties are “imposed” when “assessed” and that they are “assessed” when liquidated. In the context of countervailing duties, the imposition and assessment or liquidation of duties are distinct events. An assessment error as to one entry does not cause an imposition error as to a future entry or period of review (POR), unless Commerce is required by law to take account of errors from prior PORs.

Second, the Court must resolve whether Commerce is legally required to consider entries outside the POR to implement the statutory mandate that countervailing duties should equal countervailable subsidies. If Commerce’s review based on Section 1675(a) is limited to 2001 issues, then Commerce correctly concluded that there cannot be a setoff.

Section 1675 does not state the length of a POR, and Commerce has interpreted it to mean that only entries received during the one-period under review can be considered. The pertinent regulation, 19 C.F.R. Section 351.213(e)(2)(I), provides that in general administrative review covers entries during the most recently completed calendar year.

Under Chevron v. Natural Res. Def. Council, 467 U.S. 837, 842-43 (1984), Commerce is entitled to deference in its interpretation of Section 1675 unless Congress has expressed a contrary view, or the interpretation is unreasonable. Here, Congress has not expressed any view, so the Court must address the reasonableness of Commerce’s interpretation.

“We are persuaded that Commerce’s interpretation is reasonable, indeed invited by the statute. This is so because the statute contemplates annual reviews, and hence limiting Section 1675 review to entries made during the POR in issue reasonably serves important goals of finality and efficiency. Given that Commerce undertakes annual reviews, it would be duplicative and wasteful for later reviews to revisit matters subject to review in prior PORs. Revisiting issues that were resolved in prior review proceedings would impair the finality of any one annual review, potentially prolonging a CVD dispute far beyond the year to which it relates. The same potential exists with respect to issues relating to entries from a prior year that were not raised for Commerce review during the appropriate POR. With respect to these issues there is also the risk that, owing to the passage of time, relevant evidence might be lost. The reasonableness of Commerce’s interpretation finds further support in the reported decisions, which while not directly on point, are nonetheless persuasive. These decisions upheld as reasonable Commerce’s decision to confine its review to entries made during the POR by permitting discretionary recision of administrative reviews where no entries were made during the POR. ... For these reasons, we believe Commerce’s construction of Section 1675 is reasonable.” [Slip op. 15]

Therefore, Commerce’s refusal to consider the 1997 entries during the 2001 POR is a permissible interpretation of Section 1675. The setoff issued by Commerce at the direction of the Court of International Trade is vacated.

Citation: Norsk Hydro Canada, Inc. v. United States, No. 06-1044 (Fed. Cir. December 14, 2006).

ENVIRONMENTAL LAW

District of Columbia Circuit holds that the Migratory Bird Treaty Act does not prohibit the hunting of non-native bird species; Court considers canon that ambiguous statute should not be construed in a way to abrogate a treaty; concurrence distinguishes non-self-executing treaties

The U.S. has concluded several international conventions with Canada and Mexico to protect migratory birds. In 1918, the U.S. first implemented these conventions with the Migratory Bird Treaty Act (MBTA). 16 U.S.C. Sections 703-712. It makes it unlawful to hunt or kill migratory birds “included in the terms of the conventions.” 16 U.S.C. Section 703(a). Congress subsequently amended the Migratory Bird Treaty Act for it to apply “only to migratory bird species that are native to the United States or its territories.” 16 U.S.C. Section 703(b)(1).

The bird at issue in this case is the mute swan, which is not native to the U.S. It is probably a European species that was introduced in the U.S. for ornamental purposes. Before the amendment, the mute swan was covered by the MBTA, but the amendment arguably eliminated that protection.

In the Spring of 2005, the Maryland Department of Natural Resources informed the Humane Society that it would begin killing mute swans in the Chesapeake Bay because they endangered the ecosystem. The Fund for Animals, Inc., an affiliate of the Humane Society, and three individuals brought action, claiming that the mute swan is still protected under the MBTA. The district court held that the mute swan is no longer protected.

The U.S. Court of Appeals for the District of Columbia finds that the mute swan is not protected based on the plain meaning of the statute.

Here, the parties agree that the mute swan is not a native migratory bird species. The Plaintiff claim that the amended statute conflicts with the conventions, and ambiguous statutes should not be interpreted to abrogate a treaty (meaning the conventions’ protection of the mute swan). The Court disagrees. This canon only applies to ambiguous statutes, and this statute is not ambiguous.

“The Constitution establishes that statutes enacted by Congress with the concurrence of the President (or over his veto) have no less weight than treaties made by the President with the advice and consent of two-thirds of the Senate. See U.S. CONST. art. II, Section 2, cl. 2; U.S. CONST. art. VI, cl. 2 ... Consistent with this doctrine, the Supreme Court has long recognized that a later-enacted statute trumps an earlier-enacted treaty to the extent the two conflict. This is known as the last-in-time rule. See Whitney v. Robertson, 124 U.S. 190, 194 (1888) (if self-executing treaty and statute ‘are inconsistent, the one last in date will control the other’) ... At the same time, the Supreme Court also has stated that an ambiguous statute should be construed where fairly possible not to abrogate a treaty. See Trans World Airlines, Inc. v. Franklin Mint Corp., 466 U.S. 243, 252 (1984) ... The combination of the last-in-time rule and the canon against abrogation has produced a straightforward practice: Courts apply a statute according to its terms even if the statute conflicts with a prior treaty (the last-in-time rule), but where fairly possible, courts tend to construe an ambiguous statute not to conflict with a prior treaty (the canon against abrogation).”

“The canon against construing ambiguous statutes to abrogate prior treaties does not help plaintiffs here, however, because the amended Migratory Bird Treaty Act is unambiguous, as we concluded above. To accept plaintiffs’ argument with respect to the canon, we would have to distort the plain meaning of a statute in an attempt to make it consistent with a prior treaty. The Supreme Court has not extended the canon that far, and for good reason: Distorting statutory language simply to avoid conflicts with treaties would elevate treaties above statutes in contravention of the Constitution.”

“The Migratory Bird Treaty Act implements the migratory bird conventions. The Migratory Bird Treaty Reform Act amends that earlier statute and makes clear that mute swans are not protected by the Act. The canon against interpreting a statute to abrogate a treaty does not apply because the amended statute is plain. ...” [Slip op. 9]

Thus, the amended MBTA permits the hunting or killing of non-native migratory birds such as the mute swan.

The concurring Judge opines that the canon of construction should not apply in cases that involve non-self-executing treaties such as the migratory bird conventions. The migratory bird conventions are plainly non-self-executing (meaning that they must still be implemented into national law). The canon against interpreting ambiguous statutes to abrogate treaties applies to self-executing treaties (those that operate without the aid of any legislative provision). Therefore, the canon does not apply to the MBTA.

Citation: Fund for Animals, Inc. v. Kempthorne, No. 05-5352 (D.C. Cir. December 15, 2006).

ESPIONAGE

Seventh Circuit holds that Foreign Intelligence Surveillance Act permits use of wiretap evidence obtained in international investigation for domestic criminal prosecution

Ning Wen, a naturalized U.S. citizen born in China, his wife and other associates allegedly operated a profitable business selling computer chips and circuit boards to China. The sale of such products is legal in the U.S., but export to China would require a license. Wen and his associates allegedly falsified shipping documents to circumvent the licensing requirements. The technology at issue purportedly served the Chinese military to develop weapons and missiles, as well as radar and communication devices. Interestingly, Wen also seems to have been an FBI informant since 1989 when he worked at the Chinese Consulate in Los Angeles.

Wen was charged with violating export control laws by allegedly providing militarily useful technology to the People’s Republic of China without the necessary licenses. See 50 U.S.C. Section 1705(b).

Wen was found guilty and he appealed, claiming that the district court should have suppressed wiretap evidence. The wiretap at issue had been installed pursuant to the Foreign Intelligence Surveillance Act (FISA), 50 U.S.C. Section 1801. The district court reviewed the wiretap evidence in camera, considered it justified, and denied Wen’s motion to suppress.

The U.S. Court of Appeals for the Seventh Circuit affirms.

FISA applies to interceptions for the purpose of foreign intelligence. It was amended in 2001 by the USA PATRIOT Act, making it applicable to interceptions that have international intelligence as a “significant purpose.” 50 U.S.C. Section 1804(a)(7)(B). The Foreign Intelligence Surveillance Court of Review has interpreted the statute to permit domestic use of intercepted evidence as long as there is a “significant” international objective. See Sealed Case, 310 F.3d 717 (F.I.S.Ct. Rev. 2002).

Wen argues that evidence gathered pursuant to FISA cannot be used for domestic criminal investigations or prosecutions once the international investigation has “fizzled out.”

“The principal problem with Wen’s argument is that the exclusionary rule is used to enforce the Constitution, not statutes or regulations. ... So unless there is a constitutional problem in domestic use of evidence seized as part of an international investigation, there is no basis for suppression.” [...]

“Probable cause to believe that a foreign agent is communicating with his controllers outside our borders makes an interception reasonable. If, while conducting this surveillance, agents discover evidence of a domestic crime, they may use it to prosecute for that offense. That the agents may have known that they were likely to hear evidence of domestic crime does not make the interception less reasonable than if there were ignorant of this possibility. ... In Horton v. California, 496 U.S. 128 (1990), the Court held that evidence in plain view may be seized without a warrant even though the police expected to find it. Likewise evidence of a domestic crime, acquired during an intercept that is reasonable because it concerns traffic between a foreign state and one of its agents in the United States, may be used in a domestic prosecution whether or not the agents expected to learn about the domestic offense. It is enough that the intercept be adequately justified without regard to the possibility that evidence of domestic offenses will turn up. Interception of Wen’s conversations was adequately justified under FISA’s terms, so there is no constitutional obstacle to using evidence of any domestic crimes he committed.” [Slip op. 2-4]

Citation: United States v. Wen, No. 06-1385 (7th Cir. December 14, 2006); U.S. Department of Commerce, Bureau of Industry and Security, In the Matter of: WEN ENTERPRISES, Order Temporarily Denying Export Privileges (January 21, 2005).

REFUGEES

House of Lords rules that intact female applicant from Sierra Leone is entitled to refugee status in U. K. under Refugee Convention since she belongs to particular social group at risk of involuntary Female Genital Mutilation if she returns to her native country

The question before the House of Lords is whether the [second] Appellant, Ms. Fornah (FC), falls within the familiar definition of “refugee” in Article 1A(2) of the 1951 Convention Relating to the Status of Refugees and the 1967 Protocol thereto. It is accepted that the Appellant does have a well-founded fear of being persecuted if she were to be returned to her home country of Sierra Leone.

The Appellant is outside the country of her nationality and is unable or, owing to her fear of female genital mutilation (FGM), unwilling to avail herself of the protection of her country. The controlling legal issue under the Convention is whether the Appellant’s well-founded fear is of being persecuted “for reasons of ... membership of a particular social group”.

The Secretary of State’s acceptance that Article 3 of the European Convention on Human Rights and Fundamental Freedoms precludes the return of the Appellant to her home country somewhat reduces the practical importance of this issue to the Appellant. But the Secretary of State contends, and the Court of Appeal has held, that such treatment, although persecutory, would not be “for reasons of ... membership of a particular social group” and therefore the Appellant falls outside the Convention definition of “refugee.” The correct understanding of this expression is also a question of practical importance since the Appellant would enjoy stronger protection if recognized as a refugee.

The Appellant was born in Sierra Leone in May 1987. She arrived in the United Kingdom in March 2003, aged 15, and claimed asylum. The basis of her claim was that, if returned to Sierra Leone, she would be at risk of subjection to FGM.

In 1998, the Appellant and her mother were living in her father’s family village to escape the civil war. There she overheard discussions about her undergoing FGM as part of her initiation into womanhood. In order to avoid this she ran away. A band of rebels captured her and its leader repeatedly raped her causing her to become pregnant. An uncle arranged her departure from Sierra Leone to the United Kingdom. She resisted return on the ground that, if returned, she would have nowhere to live but her father’s village. There she feared that the villagers would force her to submit to FGM.

FGM is performed on the overwhelming majority of girls in Sierra Leone. The various types of operation, usually performed by nonmedical persons under crude and unsanitary conditions, cause excruciating pain. It can give rise to serious long-term ill-effects, physical and mental, and it is sometimes fatal. Older women who belong to various secret societies, carry out the operation.

The culture looks upon FGM as a rite of passage from childhood to full womanhood, symbolized by admission of the initiate to these secret societies. Because of its totemic significance, some women welcome the practice and almost all accept it. Society as a whole in Sierra Leone generally goes along with the practice and the authorities do little to curb or eliminate it.

The practice of FGM powerfully reinforces and expresses the inferior status of women in Sierra Leonean society. The evidence is that, despite constitutional guarantees against discrimination, the rights of married women, particularly those married under customary and Islamic laws, are limited. Their position is comparable to that of a minor child. Under customary law, for example, a wife is obliged always to obey her husband; she can refuse sexual intercourse with him only in limited circumstances. She is also subject to chastisement at his hands.

A long series of international instruments, declarations, resolutions, pronouncements and recommendations has condemned FGM as cruel, discriminatory and degrading. A recent Report of the U. N. Special Rapporteur on violence against women (E/CN.4/2002/83, January 31, 2002, Introduction, ¶ 6) declares: “Nevertheless, many of the practices enumerated in the next section are unconscionable and challenge the very concept of universal human rights. Many of them involve ‘severe pain and suffering’ and may be considered ‘torture like.’ Other interests such as property and marital rights are inherently unequal and blatantly challenge the international imperatives towards equality.”

“The right to be free from torture is considered by many scholars to be jus cogens, a norm of international law that cannot be derogated from by nation States. So fundamental is the right to be free from torture that, along with the right to be free from genocide, it is seen as a norm that binds all nation States, whether or not they have signed any international convention or document. Therefore those cultural practices that involve ‘severe pain and suffering’ for the woman or the girl child, those that do not respect the physical integrity of the female body, must receive maximum international scrutiny and agitation.”

“It is imperative that practices such as [FGM], honour killings, [Suttee] or any other form of cultural practice that brutalizes the female body receive international attention, and international leverage should be used to ensure that these practices are curtailed and eliminated as quickly as possible.” Some countries, such as the U. K., enforce these international norms by banning FGM under pain of severe criminal sanctions.

By letter dated April 24, 2003, the Secretary of State granted the Appellant limited leave to enter the U. K. He rejected her claim to asylum, however, because (so far as now relevant) he did not consider that girls who were at risk of FGM formed a “social group” within the terms of the Refugee Convention. The Appellant obtained review by an Adjudicator. In his Determination of issues on October 6, 2003, the Adjudicator found that her fear was based on a Convention reason.

On the Secretary of State’s appeal, however, the Immigration Appeal Tribunal reversed this decision on August 5, 2004. The Tribunal was not convinced that it could properly look upon the social group identified by the Adjudicator, “that of young, single Sierra Leonean women”, or that identified by counsel, “young Sierra Leonean women”, as a particular social group within the meaning of the Refugee Convention. The Court of Appeal, over three dissents, upheld this decision: [2005] E.W.C.A. Civ. 680, [2005] 1 W.L.R. 3773.

The House of Lords granted review of this case along with a companion case arising out of different facts. The Secretary of State (while not condoning the practice of FGM) supports the Court of Appeal. The U. N. High Commissioner for Refugees got leave to intervene in the House and strongly backed the Appellant’s appeal.

The lead opinion first quotes the governing texts. “Article 1A(2) of the Refugee Convention as amended defines a ‘refugee’... as any person who ‘owing to well-founded fear of being persecuted for reasons of [1] race, [2] religion, [3] nationality, [4] membership of a particular social group or [5] political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; ...’”

The opinion then continues. “It is well-established that the Convention must be interpreted in accordance with its broad humanitarian objective and having regard to the principles, expressed in the preamble, that human beings should enjoy fundamental rights and freedoms without discrimination and that refugees should enjoy the widest possible exercise of these rights and freedoms.”

“Since the Convention is an international instrument which no supra-national court has the ultimate authority to interpret, the construction put upon it by other states, while not determinative [Cite], is of importance, and in case of doubt Articles 31-33 of the Vienna Convention on the Law of Treaties (1980) (Cmnd 7964) may be invoked to aid the process of interpretation.”

“But the starting point of the construction exercise must be the text of the Refugee Convention itself, because it expresses what the parties to it have agreed. [Cite]. Central to the definition of refugee are the five specified grounds, the Convention reasons as they are often called, on which alone a claim to recognition as a refugee may be founded under the Convention. Treatment, however persecutory or abhorrent, will not found such a claim unless inflicted (or to be inflicted) for one or other of these five Convention grounds. Thus the question [here] is whether the persecution feared by Appellant will be for reasons of her membership of a particular social group.” [¶ 10].

“Certain important points of principle relevant to these appeals are to be derived from the opinions of the House. First, the Convention is concerned, not with all cases of persecution but with persecution which is based on discrimination, the making of distinctions which principles of fundamental human rights regard as inconsistent with the right of every human being. Secondly, to identify a social group one must first identify the society of which it forms part; a particular social group may be recognisable as such in one country but not in another. Thirdly, a social group need not be cohesive to be recognized as such. Fourthly, applying Applicant A v. Minister for Immigration and Ethnic Affairs (1997) 190 C.L.R. 225, 263, there can only be a particular social group if it exists independently of the persecution to which it is subject.” [¶ 13].

“[In prior rulings] the House cited and relied strongly on In re Acosta (1985) 19 I.& N. 211, a relatively early American decision given by the Board of Immigration Appeals. Construing ‘membership of a particular social group’ ejusdem generis with the other grounds of persecution recognized by the Convention, the Board held the expression to refer to a group of persons all of whom share a common characteristic, which may be one the members cannot change or may be one that they should not be required to change because it is fundamental to their individual identities or consciences.”

“The Supreme Court of Canada relied on and elaborated this approach in Attorney-General of Canada v. Ward [1993] 2 S.C.R. 689, 738-739, and La Forest J reverted to it in his dissent in Chan v Canada (Minister of Employment and Immigration) [1995] 3 S.C.R. 593, 642-644. The trend of authority in New Zealand has been generally in accord with Acosta and Ward: T. A. Aleinikoff*, ‘Protected characteristics and social perceptions: an analysis of the meaning of ‘membership of a particular social group’ U.N.H.C.R.’s Global Consultations on International Protection, ed. Feller, Turk and Nicholson (2003), pp 263, 280.” [¶ 14].

“The text of Article 1A(2) of the Convention makes plain that a person is entitled to claim recognition as a refugee only where the persecutory treatment of which the claimant has a well-founded fear is causally linked with the Convention ground on which the claimant relies. The ground on which the claimant relies need not be the only, or even the primary, reason for the apprehended persecution. It is enough that the ground relied on is an effective reason.”

“The persecutory treatment need not be motivated by enmity, malignity or animus on the part of the persecutor, whose professed or apparent motives may or may not be the real reason for the persecution. What matters is the real reason. In deciding whether the causal link is established, a simple ‘but for’ test of causation is inappropriate: the Convention calls for a more sophisticated approach, appropriate to the context and taking account of all the facts and circumstances relevant to the particular case.” [¶ 17].

“It is common ground in this appeal that FGM constitutes treatment which would amount to persecution within the meaning of the Convention and that if the Appellant was, as she contends, a member of a particular social group, the persecution of her would be for reasons of her membership of that group. Thus the very limited issue between the parties is whether the Appellant was a member of a particular social group, however defined. The parties’ agreement that fear of FGM may found a successful claim to recognition as a refugee (if for reasons of membership of a particular social group) obviates the need to analyse a mass of material which would otherwise be relevant. But in truth the parties’ agreement on this point is all but inevitable, for a number of reasons.” [¶ 25].

“First, claims based on fear of FGM have been recognized or upheld in courts all round the world. Such decisions have been made in England and Wales (Yake v. Secretary of State for the Home Department, 19 January 2000, unreported; P and M v. Secretary of State for the Home Department [2004] E.W.C.A. Civ. 1640 [2005] Imm. A.R. 84], the United States (In re Kasinga (1996) 21 I. & N. Dec. 357, Abankwah v Immigration and Naturalization Service, 185 F.3d 18 (2d Cir. 1999), Mohammed v. Gonzales, 400 F. 3d 785 (9th Cir. 2005)), Australia [cite], Austria [cite], and Canada [cite]; see Compendium of Decisions, Immigration and Refugee Board, February 2003, pp 31-35).”

“Secondly, such agreement is consistent with clearly expressed opinions of the U.N.H.C.R. Representative of its consistent view in a memorandum of May 10, 1994 on [FGM] which in ¶ 7 says: ‘On this basis, we must conclude that FGM, which causes severe pain as well as permanent physical harm, amounts to a violation of human rights, including the rights of the child, and can be regarded as persecution. The toleration of these acts by the authorities, or the unwillingness of the authorities to provide protection against them, amounts to official acquiescence. Therefore, a woman can be considered as a refugee if she or her daughters or dependents fear being compelled to undergo FGM against their will; or, she fears persecution for refusing to undergo or to allow her daughters to undergo the practice.’” [¶ 26].

“Thirdly, this agreement is consistent with the view taken by the European Parliament, which on 20 September 2001 adopted a resolution (A5-0285/2001) expressing the hope that the European institutions and member states should recognise the right to asylum of women and girls at risk of being subjected to FGM and calling for the U.N. General Assembly to give priority to the topic ‘access to asylum procedures for women at risk of female genital mutilation.’”

“Fourthly, the agreement is consistent with guidelines issued by national authorities, including those of Canada [cite], [and] Australia [cite]. A similar approach has been officially taken in this country. ...”

“Fifthly and more generally, the parties’ agreement [on this point] is wholly consistent with the humanitarian objectives of the Convention and reflects the international abhorrence of FGM ...” [¶ 26].

“... [W]ith the support of the U.N.H.C.R., the Appellant submitted that ‘women in Sierra Leone’ was the particular social group of which the Appellant was a member. This is a submission to be appraised in the context of Sierra Leonean society as revealed by the undisputed evidence, and without resort to extraneous generalisation. On that evidence, I think it clear that women in Sierra Leone are a group of persons sharing a common characteristic which, without a fundamental change in social mores, is unchangeable, namely a position of social inferiority as compared with men. They are perceived by society as inferior. That is true of all women, those who accept, or willingly embrace, their inferior position and those who do not.”

“It is nothing to the point that FGM in Sierra Leone is carried out by women: such was usually the case in Cameroon (GZ, above) and sometimes in Nigeria (RRT N97/19046, above), but this did not defeat the applicant’s asylum claim. Most vicious initiatory rituals are in fact perpetuated by those who were themselves subject to the ritual as initiates and see no reason why others should not share their experience. Nor is it pertinent that a practice is widely practised and accepted, a contention considered and rejected in Mohammed v. Gonzales, above.”

“The contrast with male circumcision is obvious: where performed for ritualistic rather than health reasons, male circumcision may be seen as symbolising the dominance of the male. ... FGM is an extreme expression of the discrimination to which all women in Sierra Leone are subject, as much those who have already undergone the process as those who have not. I find no difficulty in recognising women in Sierra Leone as a particular social group for purposes of article 1A(2).”

“If, however, that wider social group were thought to fall outside the established jurisprudence, a view I do not share, I would accept the alternative and less favoured definition advanced by the Appellant and the U.N.H.C.R. of the particular social group to which the Appellant belonged: intact women in Sierra Leone. ... [I]n my opinion it meets the Convention tests. There is a common characteristic of intactness. There is a perception of these women by society as a distinct group. And it is not a group defined by persecution: it would be a recognisable group even if FGM were entirely voluntary, not performed by force or as a result of social pressure.” [¶ 31].

“Since, in this case, there is no issue on causation, I would (in full agreement with my noble and learned friend Baroness Hale of Richmond) allow the Appellant’s appeal on her preferred basis, set aside the orders of the Court of Appeal and the Immigration Appeal Tribunal and restore the order of the Adjudicator.” [¶ 32].

Citation: Fornah (FC) v. Secretary of State for the Home Department, 2006 WL 2929319 (HL), [2006] 3 W.L.R. 733, [2006] U.K.H.L. 46 (October 18). [*T. A. Aleinikoff is presently serving as Dean of the Georgetown University Law Center.]

SOVEREIGN IMMUNITY

English Court of Appeal (Civil Division) dismisses appeal by Republic of Lithuania based on state immunity on grounds that Republic had entered into agreement with private company to look for oil in Lithuania which contained an arbitration clause that waived its right to claim immunity

Svenska Petroleum Exploration AB (Claimant) is a Swedish company engaged in exploring for and extracting Lithuanian oil. It entered into a joint venture agreement (the JVA) with the Republic of Lithuania (Def. X) and with AB Geonafta (Def. Y). Until it was privatized on June 16, 2000, the latter was an organization owned and controlled by the state of Lithuania but which enjoyed a separate legal personality. Article 9 of the JVA set forth an arbitration clause and Art 35 of the JVA declared that both defendants waived their rights to sovereign immunity.

A dispute between the parties came up as to the right to exploit particular fields and the matter went to arbitration in Denmark. At the arbitration, Def. X argued that it was not a party to the Article 9 arbitration agreement. The arbitrators rejected that argument in an interim award. The panel also ruled in favor of the Claimant on the substantive issue, awarding it US$12,579,000 in a final award. Later on, the Claimant obtained permission to enforce the award in the English courts under Section 101 of the Arbitration Act of 1966. Def. X conceded service of the claim form seeking to enforce the award. It applied, however, to have it and the enforcement order set aside, arguing that the claim raised issues of state immunity. The English court dismissed the Claimant’s motion to strike Def. X’s application.

At the hearing of Def. X’s application, inter alia, the following issues arose: (1) whether Def. X had waived its immunity in Art. 35 of the JVA, and whether this was a freestanding waiver so as to amount to submission to the jurisdiction of the English court pursuant to Section 2a of the State Immunity Act of 1978, if there was no agreement to arbitrate under Art. 9 of the JVA; (2) whether the enforcement proceedings in relation to the arbitration agreement were ‘proceedings relating to a commercial transaction’ so as to come within the exception to immunity in Section 3b of the 1978 Act; and, finally (3) whether Section 9c of the 1978 Act (which provided that immunity did not apply to proceedings in the courts of the U. K. where a state had agreed in writing to submit a dispute to arbitration), applied (a) to enforcement proceedings generally, and (b) specifically to the enforcement of a foreign arbitral award.

The Commercial Court judge below rejected the Art. 35 argument. She held (1) that, although the agreement itself did involve a “commercial transaction” within the meaning of Section 3 and one to which Def. X was a party, the present application did not involve proceedings relating to that transaction. She also ruled (2) that the first award did finally determine the jurisdiction issue in favor of the Claimant, (3) that Def. X had agreed to submit the dispute to ICC arbitration in Denmark, and (4) that the application to enforce the second award involved proceedings relating to the arbitration within the meaning of Section 9 of the 1978 Act.

Both Defendants X and Y appealed. The U. K. Court of Appeal (Civil Division), however, dismisses their appeal.

Def. X had agreed to submit disputes with the claimant to arbitration under the ICC rules in accordance with the provisions of Art. 9 of the agreement, and the first award had finally disposed of the issue as far as the parties were concerned. Lithuanian law considers an arbitration clause as an “autonomous” agreement. This means an agreement which gave rise to rights and obligations that existed independently of the contract within which it was found, and an agreement to arbitrate under the ICC rules conferred on the arbitrators the power to decide whether they had jurisdiction in any given case. In the instant case, by agreeing to ICC arbitration, the parties had conferred on the arbitrators jurisdiction to determine that question and were therefore bound by their award.

“[One] case to which [Def. X drew] our attention ... was Bridas SAPIC v. Government of Turkmenistan No. 04-20842 (5th Cir. April 21, 2006) [See 2006 International Law Update 84] ... which arose out of [a] joint venture agreement between Bridas and Turkmenneft for oil exploration and production, ... in Turkmenistan. That agreement also contained an ICC arbitration clause and, when a dispute arose, Bridas sought to refer it to arbitration, seeking to make the Government a party as well as Turkmenneft.”

“The Government maintained that it had not signed the joint venture agreement and was therefore not a party to the arbitration clause, but on this occasion, the arbitrators by a majority held that they had jurisdiction to determine Bridas’ claim for damages on the grounds that the Government had not taken any steps to extricate itself from the proceedings and the fact that the agreement contained many undertakings which only the Government could fulfil. In due course the tribunal made an award of damages in favor of Bridas for repudiation of the joint venture agreement.”

“In proceedings to enforce the award in the United States, the Government [of Turkmenistan] once again raised the question of the tribunal’s jurisdiction. The matter eventually came before the ... Fifth Circuit which held that the Government was not a party to the arbitration agreement. It was not described as a party to the agreement and had not signed it and thus did not fall within the terms of the arbitration clause. The Court could not discern an intention to bind the Government to the terms of the agreement and thus to arbitrate the dispute. Once again, therefore, there are significant differences from the present case.” [¶¶ 79-80].

Another question involved the adequacy of the Claimant’s opportunity to present its own evidence on the nature and impact of Danish law. “In our view [Claimant] was at fault in failing to obtain permission from Cresswell J. to adduce expert evidence of Danish law at the hearing before Gloster J. It is necessary to obtain permission to call expert evidence of any kind and it is desirable for the court, on the application for permission, to consider whether the evidence which the applicant proposes to rely on is likely to assist the court and, if so, how it can most helpfully be adduced.”

“If that had been done in this case, any apparent differences between the experts’ views appearing from their earlier reports could have been considered and the judge might have directed that they be called for cross-examination. However, by the time the matter was raised before Gloster J. the opportunity for that had long gone. She had to decide what should be done in the circumstances as they presented themselves to her.” [¶ 100]

In any event, the Court is able to discern from the record that Danish law does not set a specific period of time within which to note an appeal from an arbitration ruling. Instead it takes into account the length of lapsed time in deciding whether, by an unreasonable delay, the losing party had, in effect, intended to waive its appellate rights and had accepted the adverse award. “Not only had there been a substantial lapse of time since the publication of the first award without any attempt to challenge it, but the Government had formally resolved in February 2004 not to challenge the second award, which depended for its validity on the correctness of the first award, and had formally communicated that decision to [the Claimant].” [¶ 102].

“[Def. X] also submitted that Section 9 is impliedly limited to awards made within the territory of the United Kingdom, but the section itself contains no such restriction and it is unlikely that Parliament intended to limit it in that way having enacted, only a few years earlier, the Arbitration Act 1975 which was designed to give effect to the New York Convention on the Recognition and Enforcement of Arbitral Awards, [21 U.S.T. 2517; T.I.A.S. 6997; 330 U.N.T.S. 3, entered into force June 7, 1959]. [¶ 120].

“[Def. X also] drew our attention to three [first instance] decisions in the United States on the Foreign Sovereign Immunities Act (28 U.S.C. Section 1603(b)). [Cites]. We hope we do not appear disrespectful to [Def. X’s] argument if we say that we did not obtain any assistance from these cases. The State Immunity Act 1978, which is the legislation with which we are concerned in this case, was enacted to give effect to the European Convention on State Immunity, but it departed from the Convention in certain respects, particularly in Section 9.”

“We have the benefit of access to the text of the Convention as well as to the Parliamentary materials relating to the passage of the Bill insofar as it is permissible to look at them. In those circumstances, isolated observations of a general nature in [trial court] decisions of foreign courts on their own domestic legislation can at best be of very limited assistance.” [¶ 122].

The Claimant’s application for leave to enforce the second award also fell within Section 9(1) of the 1978 Act, and Def. X was therefore unable to claim immunity with respect to it. The first award established that Def. X had agreed in writing to refer disputes to arbitration and was therefore enough to bring the case within Section 9. There was no basis for construing Section 9 (particularly when viewed in the context of the provisions of Section 13 dealing with execution) as excluding proceedings relating to the enforcement of a foreign arbitral award. Arbitration was a consensual procedure and the principle underlying Section 9 was that, if a state had agreed to submit to arbitration, it had made itself amenable to such process as might be necessary to effectuate the award.

Citation: Svenska Petroleum Exploration AB v. The Republic of Lithuania, [2006] E.W.C.A. Civ. 1529; [2006] All E.R. (D) 156 (Nov. 13) (Approved judgment).

TERRORISM

European Court of Justice holds that EU Council should not have frozen funds of the People’s Mujahidin of Iran for lack of a fair hearing; decision affects ability to freeze assets of suspected terrorist organizations

On December 12, 2006, the Court of First Instance of the European Court of Justice held in the case of Organisation des Modjahedines du peuple d’Iran v. Council of the European Union that the Council improperly ordered the freezing of Plaintiff’s funds.

The Organisation des Modjahedines du peuple d’Iran (People’s Mujahidin of Iran) (OMPI) was established in 1965 to purportedly introduce democracy in Iran. It has an armed branch operating in Iran, but reportedly renounced all military activity in June 2001.

The basis for the freeze was a 2001 United Nations Security Council resolution requiring Member States to combat terrorism and its financing by freezing terrorist funds. The European Union implemented that resolution through a common position and a regulation (Common Position 2001/931/CFSP, 2001 O.J. (L 344) 93; Council Regulation No. 2580/2001, 2001 O.J. (L 344) 70). Through Council decisions, there is a list of affected entities and individuals, including OMPI. OMPI brought action before the European Court of Justice, seeking to be removed from the list.

The Court of First Instance of the European Court of Justice finds that certain fundamental rights and safeguards, such as the right to a fair hearing, the obligation to state reasons for a decision, and the right of effective judicial protection, apply to a Community decision to freeze funds.

Here, the Security Council let the various Member State organizations decide which organizations and individuals should be affected. This involves the exercise of the Community’s own powers. Under such circumstances, the Council must consider the fundamental rights guaranteed within the Community.

The Court distinguishes, however, the present case from the cases related to Osama bin Laden and Al-Qaeda, as well as the Taleban, which are Yusuf and Kadi (21 September 2005), and Ayadi and Hassan (12 July 2006). There, the Council had merely transposed United Nations Security Council Resolutions. The Community institutions did not have any discretion as to what entities and individuals should be affected.

The Court then defines the scope of rights under these circumstances, as well as the restrictions that may be imposed when the Community freezes funds. The right to a fair hearing does not require that the affected entities and persons be heard by the Council when the initial decision to freeze their funds is made.

“119. The right of the party concerned to a fair hearing must be effectively safeguarded in the first place as part of the national procedure which led to the adoption, by the competent national authority, of the decision referred to in Article 1(4) of Common Position 2001/931. It is essentially in that national context that the party concerned must be placed in a position in which he can effectively make known his view of the matters on which the decision is based, subject to possible restrictions on the right to a fair hearing which are legally justified in national law, particularly on grounds of public policy, public security or the maintenance of international relations (see, to that effect, Eur. Court H.R., Tinnelly & Sons Ltd and Others and McElduff and Others v United Kingdom, judgment of 10 July 1998, Reports of Judgments and Decisions, 1998-IV, Section 78).”

“120. Next, the right of the party concerned to a fair hearing must be effectively safeguarded in the Community procedure culminating in the adoption, by the Council, of the decision to include or maintain it on the disputed list, in accordance with Article 2(3) of Regulation No 2580/2001. As a rule, in that area, the party concerned need only be afforded the opportunity effectively to make known his views on the legal conditions of application of the Community measure in question, namely, where it is an initial decision to freeze funds, whether there is specific information or material in the file which shows that a decision meeting the definition laid down in Article 1(4) of Common Position 2001/931 was taken in respect of him by a competent national authority and, where it is a subsequent decision to freeze funds, the justification for maintaining the party concerned in the disputed list.”

Furthermore, unless there are overriding security concerns, the affected parties must be informed what information or material was used for making the decision. The affected parties must have an opportunity to explain their point of view.

“139. The statement of reasons must ... in principle be notified to the person concerned at the same time as the act adversely affecting him. A failure to state the reasons cannot be remedied by the fact that the person concerned learns the reasons for the act during the proceedings before the Community Courts (Case 195/80 Michel v Parliament [1981] ECR 2861, paragraph 22, and Dansk Rorindustri and Others v Commission, paragraph 138 above, paragraph 463). The possibility of regularising the total absence of a statement of reasons after an action has been started might prejudice the right to a fair hearing because the applicant would have only the reply in which to set out his pleas contesting the reasons which he would not know until after he had lodged his application. The principle of equality of the parties before the Community Courts would accordingly be affected (Case T-132/03 Casini v Commission [2005] ECR II-0000, paragraph 33, and Napoli Buzzanca v Commission, paragraph 138 above, paragraph 62).”

“140. If the party concerned is not afforded the opportunity to be heard before the adoption of an initial decision to freeze funds, compliance with the obligation to state reasons is all the more important because it constitutes the sole safeguard enabling the party concerned, especially after the adoption of that decision, to make effective use of the legal remedies available to it to challenge the lawfulness of that decision (Case T-237/00 Reynolds v Parliament [2005] ECR II-0000, paragraph 95; see also, to that effect, Joined Cases T-371/94 and T-394/04 British Airways and British Midland Airways v Commission [1998] ECR II-2405, paragraph 64).”

The Court then applies these principles to the case at bar. The relevant rules for freezing funds do not provide for a hearing or any notification of the material that was used in making the decision. OMPI was not informed of what prompted the decision, and did not have an opportunity to present its point of view.

Therefore, the freezing of OMPI’s funds lacks a sufficient statement of reasons and was decided without a fair hearing. Thus, the Court cannot review the lawfulness of the freezing at this point. Consequently, the freezing of OMPI’s funds is annulled.

Citation: European Court of Justice, Court of First Instance (Second Chamber), Organisation des Modjahedines du peuple d’Iran v. Council of the European Union, Judgment in Case T-228/02 (12 December 2006); European Court of Justice Press Release No. 97/06 (12 December 2006). The judgment is available on the Court’s website curia.europa.eu.

TERRORISM

German High Court affirms guilt of El Motassadeq who had advance knowledge of the September 11, 2001 attacks

The German High Court [Bundesgerichtshof] has largely affirmed the criminal conviction of Mounir El Motassadeq, a friend of Mohamed Atta, one of the attackers of September 11, 2001. El Motassadeq, a Moroccan citizen, was linked to the Hamburg-based terror cell of the September 11 attackers. He was trained in Afghanistan, but considered unsuitable to be one of the attackers.

A Hamburg trial court convicted El Motassadeq in 2003 of membership in a terror cell and being an accessory to the murder of 3066 victims of September 11. The German High Court overturned the conviction in 2004 for lack of evidence. U.S. authorities had refused to release classified information from suspected accomplices Ramzi Binalshibh and Khalid Sheikh Mohammed (who are in U.S. custody) that could have provided exculpatory information. During El Motassadeq’s retrial in 2005, U.S. authorities provided summaries of statements by the suspects. The Hamburg trial court found El Motassadeq guilty of membership in the terror cell but not of abetting the murder of all September 11 victims since he likely did not know of the dimensions of the planned attack.

The Federal Solicitor General [Generalbundesanwalt] appealed. The German High Court [Bundesgerichtshof] now modifies the conviction. El Motassadeq is guilty (1) as a member of a terror cell, and (2) an accessory to the murder of 246 people who were inside the destroyed airplanes.

First, El Motassadeq cannot be considered an active participant in the murders, but he was certainly an accessory. Under Section 27 of the Criminal Code (Strafgesetzbuch, StGB), one is guilty as an accessory to a crime [Gehilfe] if one assists another in committing a criminal act. El Motassadeq knew that the terrorists were planning to hijack planes, and it does not matter that he did not know the exact time or targets. He assisted in concealing the terrorists’ true intentions by transferring money for them, as well as paying their tuition and rent. El Motassadeq is guilty because he intentionally assisted the terrorists, even though he did not expect them to kill as many people as they eventually did.

El Motassadeq did commit his actions intentionally [Gehilfenvorsatz]. The Hamburg Court found that he knew that four members were trained as pilots to cause U.S. airplanes to crash. His participation was for the purpose of killing people, and he willingly accepted the number of victims.

It does not appear from the evidence adduced so far, however, that El Motassadeq can be found guilty as a participant in the killing of the people at the World Trade Center and the Pentagon. Thus, the High Court modifies the verdict so that only a remand for sentencing is necessary. The sentencing court should consider the effects caused by El Motassadeq as well as the dimension of the attack that El Motassadeq may not have known about.

The German High Court therefore remands the case for sentencing only.

Citation: German High Court [Bundesgerichtshof], 3 StR 139/06; Bundesgerichtshof press release Number 163/2006. The Court decision is available on the website juris.bundesgerichtshof.de.

WAR

German High Court denies compensation to victims of NATO attack on bridge of Varvarin based on international law and German law

On May 30, 1999, NATO F-16 warplanes attacked a bridge crossing the Velika Morava river in Varvarin in central Serbia. Because of a holiday, many people were nearby, at least of ten of whom were reportedly killed in the attack. NATO declared the bridge to be a legitimate military target and refused to release the nationality of the attacking planes.

Germany was one of the NATO countries involved in the Kosovo conflict, though no German airplanes were directly involved in the attack at issue. The involvement of German airplanes in support of the attack is in dispute. A total of 35 Serbian victims and their respective estates brought action in Germany, seeking compensation for the attack.

The Plaintiffs argue that the attack violates humanitarian international law as well as the German liability law for official acts [Amtshaftungsgesetz]. Further, the Plaintiffs allege that Germany should have used its veto within NATO to prevent an attack on that bridge. Finally, German forces allegedly supported the attack by observing and protecting the air space.

The German trial court [Landgericht], as well as the State Supreme Court Cologne [Oberlandesgericht Koln], dismissed the case. The Plaintiffs appealed to the German High Court [Bundesgerichtshof].

The German High Court affirms. The Plaintiffs’ compensation claims based on international law must be rejected because any compensation and reparations would be payable to the Nation at issue, not individuals. The German High Court had confirmed this in the prior Distomo decision, and finds it confirmed in Section 91 of the June 8, 1977 Protocol Additional to the Geneva Conventions of 12 August 1949, relating to the Protection of Victims of International Armed Conflicts. Thus, the Court does not address to what extent Germany would be liable for a violation of international law based on its mere participation in NATO operations.

Neither does the German law on liability for official acts [Section 839 of the Civil Code (BGB) in connection with Article 34 of the Basic Law (GG)] provide for compensation in this case. The Court does not find any violations of humanitarian international law for the protection of civilians by German soldiers or German government institutions. German airforce did not directly participate in the attack. Furthermore, there is no indication that any German government agency was aware of the planned attack. Pursuant to NATO’s “need to know” principle, the NATO member states only receive the information necessary for their own participation in particular operations.

There is no basis for liability even if German officials had participated in adding the bridge to the NATO list of targets. Military institutions have certain, necessary discretion in the conduct of their operations that is not subject to judicial review. Courts can only get involved if an action becomes wholly unreasonable or violations of international law are apparent. A bridge can be a legitimate military target in an armed conflict, and if NATO included it in its list of potential targets, the Court must presume that it is compliant with international law.

Therefore, the German High Court affirms the dismissal of the Serbian Plaintiffs’ case.

Citation: Bundesgerichtshof [German High Court], Urteil vom 2. November 2006, III ZR 190/05; Bundesgerichtshof Mitteilung der Pressestelle Nr. 151/2006; the decision is available on the Court’s website juris.bundesgerichtshof.de; BBC News of May 30, 1999, published at 22.47 GMT, available at news.bbc.co.uk.

European Court of Justice finds that trademark “Bud” does not infringe on the German trademark “Bit.” The U.S. company Anheuser-Busch applied for European Community trademarks for its “BUD” beer and the pertaining labels. The German company “Bitburger Brauerei” that brews the “BIT” beer opposed the applications. It has trademarks registered in Germany for “Bit” and its slogan “Bitte ein Bit” (“A Bit, please”). Bitburger’s objections were rejected. The Board of Appeal of the Office for Harmonisation of the Internal Market (OHIM) upheld the rejection of Bitburger’s oppositions to the trademark. There is no likelihood of confusion between Anheuser-Busch’s trademarks and the earlier German trademarks. The sounds of “Bit” and “Bud” and the respective trade dresses are sufficiently distinct so as to not confuse consumers. The Court dismisses the actions and orders Bitburger to pay the costs. Citation: European Court of Justice, Judgment of the Court of First Instance in Case T-350/04 (19 October 2006); 2006 O.J. (C 310) 14, 16 December 2006; ECJ press release Number 91/06. The judgment is also available on the website curia.europa.eu.

United States ratifies anticorruption convention. On November 29, the United States became a party to the United Nations Convention Against Corruption (UNCAC). It is the first comprehensive anticorruption Treaty to apply on a global scale. The parties to U.N.C.A.C. commit themselves (1) to criminalize core corrupt conduct, (2) to take a wide variety of measures to prevent the occurrence of corruption at the outset, (3) to cooperate internationally on a law enforcement level, and (4) to effectuate measures that will promote international cooperation in asset recovery cases. The Convention itself entered into force on December 14, 2005. Counting the U.S., it now has thirty parties and 140 signatories. In a related matter, the U.S. President released a National Strategy to Internationalize Efforts to Combat Kleptocracy. The latter term describes a government by officials whose chief goal is to achieve status or personal wealth at the expense of the people they govern. The State Department and other agencies are already working with G-8 and other partners to strengthen political will and to promote law enforcement action against bribery and public corruption. Citation: Media Note #2006/1076, U.S. State Department, Washington, D.C., Wednesday, November 29, 2006 at 3:06pm & Remarks of Elizabeth Verville, Acting Deputy Assistant Secretary for International Narcotics and Law Enforcement Affairs of December 10, 2006. Further information on UNCAC is available on the website www.unodc.org.

European Union levies substantial fines on members of synthetic rubber cartel. On November 29, the European Commission fined four rubber companies US$ 682 million for fixing the price of synthetic rubber. The companies are Shell, ENI, Dow and Unipetrol. This is the second-largest fine imposed by the EU on a cartel. According to the Commission, the cartel was fixing prices and sharing customers on butadiene and emulsion styrene butadiene rubber between 1996 and 2002. Shell and ENI received higher fines as second offenders. On the other hand, the Commission granted immunity to Bayer AG for “blowing the whistle” on the cartel’s activities to EU competition regulators. Citation: The Associated Press (via FindLaw), Brussels, Belgium, Wednesday, November 29, 2006 at 12:09:20Z; European Commission press release IP/06/1647 (November 29, 2006).

Russia and United States get five-year extension under Chemical Weapons convention. On December 12, the New York Times reported that an oversight organization under the Paris Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction [entered into force, April 29, 1997] agreed to extend the ten-year deadline within which the United States and Russia would destroy their stockpiles of chemical weapons for five more years or until the end of April 2012. The committee presumably recognized that such destruction takes much longer than expected. The U.S. State Department’s, Treaties and other International Agreements in Force for the United States, dated January 1, 2005, listed 168 nations as parties to the Convention. Citation: The New York Times (and Associated Press), International Section, World Briefing, Tuesday, December 12, 2006 on page A12; Organisation for the Prohibition of Chemical Weapons press release of 11 December 2006 “Annual Chemical Weapons Convention Conference Concludes ...”