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

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

2000 International Law Update, Volume 6, Number 6 (June).

AVIATION

Second Circuit holds that, when South Korea adhered to Hague Protocol but not to Original Warsaw Convention while United States joined only Original Convention, there was no subsisting treaty between them under which federal suit over loss of air cargo could arise

In 1995, Asiana Airlines, a South Korean corporation, entered into an agreement with Samsung Electronics Co. Ltd., also of South Korea. The deal was that Asiana would ship seventeen parcels of computer chips from Seoul to its subsidiary, Samsung Semiconductor, in San Francisco on Asiana air waybill No. 988-0497-2951 (Waybill) for Asiana Flight 214 on August 10, 1995, apparently a non-stop flight.

When Asiana actually got the shipment, however, it had run out of room on Flight 214. Asiana "solved" the problem by sending it out, without notice to Samsung, on Flight 202 to Los Angeles and by trucking it to San Francisco. The shipment arrived, however, missing two parcels containing $583,000 worth of chips. Chubb & Sons, Inc., the cargo insurer, paid Samsung Semiconductor the full amount of the loss.

As subrogee of Samsung, Chubb sued Asiana in New York federal court to recover the amounts it had paid out. Both sides moved for partial summary judgment on the issue of whether Asiana could invoke Article 22(2) of the Original Warsaw convention (OWC). Article 22(2) limits an international air carrier's liability to $20.00 per kilogram of lost cargo, here $706.00. Chubb replied by pointing out that Asiana had not complied with Article 8(c) of the OWC in that the Waybill failed to list Los Angeles as an agreed upon stopping-place.

While the OWC waybill issue was still sub judice, Asiana got leave to file a supplemental motion challenging the court's subject matter jurisdiction under 28 U.S.C. Section 1331. Asiana contended that the U.S. and South Korea were not in an OWC treaty relation. It noted that the U.S. belonged only to the OWC. Korea on the other hand had adhered only to the Hague Protocol, being a party only to the amended version or "Truncated" Warsaw Convention (TWC).

Spurning the jurisdictional attack, the district court held that the two countries were parties to the articles common to both the OWC and the Hague Protocol, i.e. the TWC, which did not include Article 8(c) on the mandatory contents of waybills. This reading would limit Asiana's liability to $706.00. Reviewing the jurisdiction question under the Interlocutory Appeals Act, 28 U.S.C. Section 1292(b), the U.S. Court of Appeals for the Second Circuit reverses and remands.

The Court first points out that, after the President had ratified the OWC, it went into force for the U.S. on October 29, 1934. As a boost to the then-fledgling air industry, Article 22 limited international air carriers' liability to $8,300 per passenger and $20 per kilogram of goods or baggage. Article 8 of the OWC created an exception to the limitations if the air waybill failed to contain certain "particulars" such as the agreed upon stopping points.

As the air industry prospered, the limitations became unpopular. A 1955 conference produced the Hague Protocol which, inter alia, doubled the passenger limitation to $16,600 and removed most of the exceptions to this limitation. Deeming the increase in the per-passenger limitation inadequate, the U.S. did not ratify the Hague Protocol. Though South Korea did adhere to the Protocol, it did not separately join the OWC.

The various Warsaw agreements kick in only if the place of departure and the place of destination lie within the territories of two High Contracting Parties to the same one of these substantive treaties. Under this situation, this case would "arise under" the particular treaty so as to create federal question jurisdiction under Section 1331.

Although the U.S. has never ratified the Vienna Convention on the Law of Treaties [May 23, 1969, 1155 U.N.T.S. 331], the U.S. has stated that it looks upon the Convention as, in large part, an authoritative codification of the customary international law of treaties. Here, the parties agree that the Vienna Convention articles that directly pertain to this litigation reflect customary international law as it was in 1967 when South Korea adhered to the Hague Protocol. They differ, however, as to their meaning.

Unfortunately, the Court notes, Article 40(5) of the Vienna Convention is ambiguous as to whether or not a nation becomes a party to the original treaty merely by adhering to an amending agreement. The Court of Appeals agrees with Asiana's interpretation.

"Those States that adhered to the Hague Protocol specifically adhered to the Warsaw Convention as amended at the Hague, not the Original Warsaw Convention. See id. at art. XXIII(2), 478 U.N.T.S. at 387 ('Adherence to this Protocol by any State which is not a Party to the Convention shall have the effect of adherence to the Convention as amended by this Protocol.'). Thus, when South Korea adhered to the Hague Protocol, it indicated its intention not to be bound to the Original Warsaw Convention. Although it could have adhered separately to the Original Warsaw Convention, South Korea never exercised that option. South Korea is not therefore in a treaty relationship with the United States pursuant to the Original Warsaw Convention." [Slip Op. 7].This Court finds further support for its position in another Vienna Convention provision. "Article 17(1) of the Vienna Convention supports this conclusion that the United States is not in treaty relations with any State that adhered to only a portion of the Original Warsaw Convention. Article 17(1) states that 'the consent of a state to be bound by part of a treaty is effective only if the treaty so permits or the other contracting States so agree.' Vienna Convention, supra, art. 17(1), 1155 U.N.T.S. at 336. (Cit.)"

"The Original Warsaw Convention does not provide for partial adherence and the United States has not consented to partial adherence by any State, including South Korea. Under Article 17(1) of the Vienna Convention then, partial adherence by South Korea to the Original Warsaw Convention has no effect vis‑a‑vis the United States, and did not create treaty relations between the United States and South Korea." [Slip op. 9]

In addition, U.S. constitutional considerations undermine the lower court's reasoning. "The creation of a Truncated Warsaw Convention is also a violation of the doctrine of the Separation of Powers. The treaty‑making powers are vested in the executive and legislative branches of the United States Government, and not in the judicial branch. See U.S. Const. Art. II, Section 2, cl. 2 ('[The President] shall have the Power, by and with the Advice and Consent of the Senate, to make Treaties....'). Thus, 'to alter, amend, or add to any treaty, by inserting any clause, whether small or great, important or trivial, would be, on our part, an usurpation of power, and not an exercise of judicial functions. It would be to make, and not to construe a treaty.' In re The Amiable Isabella, 19 U.S. (6 Wheat) 1, 71 (1821)." [Slip op. 10] Upon remand, the district court is free to consider any other basis for federal jurisdiction it may be able to unearth.

[Editorial Note: Driven by a U.S. threat to denounce the OWC, private international air carriers entered into the Montreal Intercarrier Agreement of 1966 to, inter alia, increase the potential liability per-passenger to $75,000. This "special contract" did not amend the OWC nor did it deal with cargo liability. It was not until September 1998 that the U.S. ratified Montreal Protocol No. 4 to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air Signed at Warsaw on 12 October 1929 as amended by the Protocol done at the Hague on 28 September 1955, Sept. 25, 1975. Under treaty law, however, this would have no retroactive effect on the 1995 contract involved in this litigation.]

Citation: Chubb & Son, Inc. v. Asiana Airlines, No. 99-7617 (2nd Cir. June 8, 2000).

BANKRUPTCY

Applying Arizona law in U.S. bankruptcy proceeding, Ninth Circuit approves enforcement of English judgment that awarded litigation costs and attorneys' fees against bankrupt

This case involves the bankruptcy of Dr. Jawad Hashim, his wife, and his two sons. Hashim was the first President and Director General of the "Arab Monetary Fund" (AMF), an international organization similar to the International Monetary Fund (IMF). In addition, Hashim also served as planning minister under Saddam Hussein. In 1982 or 1983, Hashim defected to Canada and Saddam Hussein allegedly froze the family's Iraqi assets.

When the AMF audited its accounts, it charged Hashim and others with "massive misappropriation and embezzlement." In December 1988, the AMF sued Hashim and his family in Canada and England. The Chancery Division of the English High Court of Justice ordered Hashim to repay approximately $50 million plus $80 million in interest. The court also held the Hashims liable to the AMF for its litigation costs including attorneys' fees. In August 1999, the English court set the cost award at approximately $960,000.

The Hashims moved to Arizona after the English litigation and petitioned the federal court there for Chapter 7 bankruptcy protection. AMF filed a proof of claim in June 1995, requesting "in excess of $10,000,000" to satisfy the English court's award of costs. In 1996, the U.S. Bankruptcy Court disallowed the AMF claim in the Hashim bankruptcies, stating that the amount of the award was so disproportionate to AMF's successful claims that it was "repugnant to American jurisprudence." [See Restatement (Third) of Foreign Relations Law, Section 482(2)(d) (1987) (a court need not recognize a foreign judgment if that judgment is repugnant to U.S. public policy)]. The U.S. Court of Appeals for the Ninth Circuit, however, reverses the bankruptcy court's order and remands.

The law of the state where the bankruptcy is pending governs the validity of a creditor's claim against the bankruptcy estate. The Arizona courts generally follow the Restatement (Second) of Conflict of Laws, Section 98, a which meets the conditions specified in Comment c will be given the same degree of recognition as a sister State judgment ... so far as the immediate parties ... are concerned." (Section 98, comment f (1971)). The Hashims lived in England and owned substantial property there. In the Court's view, they are improperly trying to evade a judgment from a jurisdiction to which they had voluntarily submitted.

"We must decline, absent grave procedural irregularities or allegations of fraud, to impugn the lawfulness of the judgments of that judicial system from which our own descended. ... This imperative is hardly attenuated when questioned only by parties who, like the Debtors, heretofore regarded the English judicial system with such esteem that they voluntarily invested and resided in its exclusive jurisdiction. It is plain that Arizona law would not support the bankruptcy court's order denying comity to the English court's award of costs even if the award were to amount to $10 million. In any event, the award actually is less than one tenth of that sum, and the bankruptcy court's order simply cannot stand." [Slip op. 10-11]

Citation: In re Jawad Mahmoud Hashim, No. 98-17128 (9th Cir. May 30, 2000).

ECONOMIC SANCTIONS

U.S. Supreme Court holds that subsequent federal enactment on sanctions against repressive regime in Burma preempts Massachusetts statute barring state entities from buying goods or services from companies that do business with Burma

Massachusetts enacted a statute in 1996 (An Act Regulating State Contracts with Companies Doing Business with or in Burma (Myanmar)," 1996 Mass. Acts 239, ch. 130) (the state Act). With some exceptions, it prevented state entities from buying goods or services from U.S. or foreign companies doing business with Burma/Myanmar mainly because of its poor human rights record. Several months later, Congress also legislated in the field, directing mandatory and conditional sanctions upon Burma. (Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1997, Section 570, 110 Stat. 3009‑166 to 3009‑167) (the federal Act).

The National Foreign Trade Council (NFTC) had over thirty member companies claiming to have been adversely impacted by the state Act and haled Massachusetts into federal court. The NFTC alleged that the state Act contravened the U.S. Constitution by encroaching upon the federal foreign affairs power, and by breaching the Foreign Commerce Clause. In addition, it contended that the later federal Act preempted the state Act.

Agreeing with the NFTC, the district court permanently enjoined the enforcement of the state Act and the First Circuit affirmed [see 181 F.3d 88]. The U.S. Supreme Court granted certiorari and affirms.

In general terms, the Court first points out that state law must yield to an Act of Congress either if Congress intends to take over the field or to the degree the state law conflicts with the federal enactment. The preemption doctrine should apply if the Court finds that a private party could not comply with both the federal and state law and that the state statute hinders Congress from carrying out its goals and purposes. In this case, the state Act impedes the will of Congress by subverting the provisions of at least three federal enactments.

In the first place, the state Act hinders the federal Act's delegation of discretion to the President to regulate and fine-tune the economic sanctions the Act sets up.

"Within the sphere defined by Congress, then, the statute has placed the President in a position with as much discretion to exercise economic leverage against Burma, with an eye toward national security, as our law will admit. And it is just this plenitude of Executive authority that we think controls the issue of preemption here. The President has been given this authority not merely to make a political statement but to achieve a political result, and the fullness of his authority shows the importance in the congressional mind of reaching that result. It is simply implausible that Congress would have gone to such lengths to empower the President if it had been willing to compromise his effectiveness by deference to every provision of state statute or local ordinance that might, if enforced, blunt the consequences of discretionary Presidential action." [Slip op. 7]

In addition the state Act obstructs Congress's plan to limit economic pressure on the Burmese Government to a specific flexible range. "It [the state Act] restricts all contracts between the State and companies doing business in Burma, (cit.) except when purchasing medical supplies and other essentials (or when short of comparable bids), (cit.). It is specific in targeting contracts to provide financial services, (cit.) and general goods and services, (cit.) to the Government of Burma, and thus prohibits contracts between the State and United States persons for goods, services, or technology, even though those transactions are explicitly exempted from the ambit of new investment prohibition when the President exercises his discretionary authority to impose sanctions under the federal Act." [Slip op. 8]

In addition, the state Act reaches much farther than the federal scheme. "The Massachusetts law directly and indirectly imposes costs on all companies that do any business in Burma, (cit.) save for those reporting news or providing international telecommunications goods or services, or medical supplies, (cits.) It sanctions companies promoting the importation of natural resources controlled by the government of Burma, or having any operations or affiliates in Burma. (cit.) The state Act thus penalizes companies with pre‑existing affiliates or investments, all of which lie beyond the reach of the federal act's restrictions on 'new investment' in Burmese economic development. (cits.) The state Act, moreover, imposes restrictions on foreign companies as well as domestic, whereas the federal Act limits its reach to United States persons." [Id.]

Last of all, the state Act clashes with the President's authority to speak for the United States with a single voice among the community of nations to bring about a workable multilateral Burma strategy. "First, in response to the passage of the state Act, a number of this country's allies and trading partners filed formal protests with the National Government, (cit.) including an official Note Verbale from the EU to the Department of State protesting the state Act. EU officials have warned that the state Act 'could have a damaging effect on bilateral EU‑US relations.'" [Slip op. 10]

"Second, the EU and Japan have gone a step further in lodging formal complaints against the United States in the World Trade Organization (WTO), claiming that the state Act violates certain provisions of the Agreement on Government Procurement, (cit.) and the consequence has been to embroil the National Government for some time now in international dispute proceedings under the auspices of the WTO." [Id.]

"Third, the Executive has consistently represented that the state Act has complicated its dealings with foreign sovereigns and proven an impediment to accomplishing objectives assigned it by Congress. Assistant Secretary of State Larson, for example, has directly addressed the mandate of the federal Burma law in saying that the imposition of unilateral state sanctions under the state Act 'complicates efforts to build coalitions with our allies' to promote democracy and human rights in Burma. ...This evidence in combination is more than sufficient to show that the state Act stands as an obstacle in addressing the congressional obligation to devise a comprehensive, multilateral strategy." [Slip op. 10-11]

Finally, the Court rejects the State's argument that Congress's failure to expressly preempt the state Act evidences an implicit consent to its validity. "A failure to provide for preemption expressly may reflect nothing more than the settled character of implied preemption doctrine that courts will dependably apply, and in any event, the existence of conflict cognizable under the Supremacy Clause does not depend on express congressional recognition that federal and state law may conflict, (cit.). The State's inference of congressional intent is unwarranted here, therefore, simply because the silence of Congress is ambiguous." [Slip op. 12]

Joining only in the Court's judgment, two justices file a concurring opinion. It mainly objects to what it calls the majority's extensive and unnecessary use of legislative history to show that the federal Act means what it's operative language says on its face.

"I consider that to be not just wasteful (it was not preordained, after all, that this was to be a 25‑page essay) but harmful, since it tells future litigants that, even when a statute is clear on its face, and its effects clear upon the record, statements from the legislative history may help (and presumably harm) the case. If so, they must be researched and discussed by counsel‑‑which makes appellate litigation considerably more time consuming, and hence considerably more expensive, than it need be. This to my mind outweighs the arguable good that may come of such persistent irrelevancy, at least when it is indulged in the margins: that it may encourage readers to ignore our footnotes." [Slip op. 14]

Citation: Crosby v. National Foreign Trade Council, No. 99-474 (U.S. June 19, 2000).

EXTRADITION

In reviewing Hong Kong extradition request, Second Circuit holds that Hong Kong fits definition of "foreign government" and therefore Court should consider U.S.-Hong Kong extradition agreement as "treaty"

In the U.S., a federal statute [18 U.S.C. Sections 3181-3196] provides for U.S. extradition law and procedure. From 1977 to June 30, 1997, the U.S.-Great Britain Extradition Treaty governed the international aspects of extradition between the U.S. and Hong Kong. Looking towards China's resumption of control over Hong Kong, the U.S. and Hong Kong concluded the U.S.-Hong Kong Extradition Agreement (HKEA) in 1996. In his transmittal letter to the U.S. Senate, the President noted that the agreement was a "treaty" for purposes of U.S. law.

In 1998, authorities arrested John Cheung in Connecticut pursuant to a Hong Kong extradition request. The Hong Kong government had charged Cheung with criminal fraud in the operation of his consumer retail stores in Hong Kong during mid-1994. Cheung had allegedly bought computer products worth HK$ 2 million from wholesalers and then had absconded with his family without making the installment payments.

Section 3184 confers extradition jurisdiction on federal courts only pursuant to "treaties" with "foreign governments." The Magistrate Judge held that Hong Kong was in fact a "foreign government" under the statute, thus making the HKEA valid and enforceable.

Cheung next petitioned for a writ of habeas corpus. The district court equated "foreign government" with "foreign country," ruling that the U. S. could not extradite Cheung to Hong Kong, a "subsovereign" of China. The court therefore granted Cheung's petition and ordered his discharge from custody.

The U.S. government sought appellate review. The U.S. Court of Appeals for the Second Circuit reverses, remanding the case with directions to vacate the grant of habeas corpus and to enter a certification of extraditability as well as an order of commitment.

Under the U.S. Constitution, only the Executive Branch has the authority to recognize a foreign government. Therefore, the Court lacks the independent power to decide whether the Hong Kong government is legitimate. Instead, the Court focuses on whether the term "foreign government" in Section 3184 encompasses "subsovereigns."

The statute in this case is ambiguous. The statutory purpose and the legislative history of the federal extradition statute and of the HKEA, however, indicate that the term "foreign government" may include subsovereign authorities. Otherwise the U.S. could not perform its obligations under the Agreement.

"The Supremacy Clause declares the Constitution, federal law, and treaties to be 'the supreme Law of the Land.' U.S. Const. Art. VI, cl. 2. It is well established that under the Supremacy Clause a self-executing treaty — one that operates of itself without the aid of legislation — is to be regarded in the courts as equivalent to an act of the legislature. ... This Agreement is self-executing. See Letter of Transmittal, S. Treaty Doc. No. 105-3, at III ('As a treaty, this Agreement will not require implementing legislation') ... Thus, contrary to the position of the district court and the petitioner, the Constitution not only allows, but in fact requires, the courts to treat the Agreement as equal to the federal extradition statute, with the goal of harmonizing the two where possible." [Slip op. 38-40]

Citation: Cheung v. United States, No. 99-2526 (2d Cir. May 23, 2000).

IMMIGRATION

Eleventh Circuit holds that, under Chevron doctrine, Immigration and Naturalization Service did not abuse its discretion in dismissing asylum application by six-year-old Cuban boy made against wishes of Cuban parent

In Cuba, plaintiff Elian Gonzalez was born in December 1993 to Juan Miguel and Elizabeth Gonzalez who separated when plaintiff was three. Elizabeth kept custody of plaintiff although Juan Miguel had regular and meaningful contacts with him. On November 22, 1999, Elizabeth left Cuba to take plaintiff to the U.S. along with twelve other Cuban nationals. But when strong winds and rough seas capsized their small boat off the coast of Florida, eleven of the passengers died, including plaintiff's mother.

Plaintiff survived by clinging to an inner tube for two days. Florida fishermen rescued plaintiff at sea and took him for treatment at a Miami hospital. At the instance of Miami resident and great-uncle, Lazaro Gonzalez, INS officials put off plaintiff's immigration inspection and paroled him into Lazaro's custody and care.

Aided by a Miami attorney, Lazaro filed two applications for asylum on plaintiff's behalf and plaintiff signed a third request himself. The applications alleged that the Castro government had persecuted many members of plaintiff's family for opposing the communist government, e.g., by imprisoning two of plaintiff's great-uncles for their political activity. Moreover, if the U.S. sent plaintiff back to Cuba, the complaint alleged that the government would exploit him as a "propaganda tool" and would involuntarily indoctrinate him in communist dogma.

When an INS official interviewed Juan Miguel at his Cuban home, the latter spurned any claim for asylum by his six-year-old and demanded plaintiff's immediate return to his custody. INS officials in Miami next met with Lazaro and several lawyers. Lazaro continued to maintain that the Cuban government was coercing Juan Miguel to demand plaintiff's return to Cuba. An INS official again talked to Juan Miguel in Cuba and concluded that he genuinely and freely wanted plaintiff to come back to Cuba.

In January 2000, the INS Commissioner turned down plaintiff's applications for asylum as legally void for lack of plaintiff's capacity to file his own applications against the wishes of his father. Acting by and through Lazaro as next friend, plaintiff sued in federal court to compel the INS to rule on the merits of his applications. The district court, however, summarily dismissed the complaint and plaintiff appealed. Preliminarily, the Circuit Court enjoined Elian's removal from the U.S. pending the appeal [see 2000 International Law Update 59].

Plaintiff contended that the lower court had violated due process and erred in not appointing a guardian ad litem for Elian. Rejecting these two points without extended discussion, the appellate court focuses on the dismissal of plaintiffs claim under 8 U.S.C. Section 1158 which provides in part that "[a]ny alien...may apply for asylum." In plaintiff's view, the statute includes himself despite his young age.

The INS replied by contending that Section 1158 does not speak to the issue of a six-year-old's capacity to file an application for asylum against the wishes of the child's parent. In such instances, the INS was free to fashion a policy that Juan Miguel be the one to decide whether to seek asylum for plaintiff and thus to regard plaintiff's and Lazaro's application(s) as legally void. The U.S. Court of Appeals for the Eleventh Circuit affirms the lower court.

The basic issue is plaintiff's capacity to file his or her own independent asylum claim under the circumstances of this case. "The important legal question in this case, therefore, is not whether Plaintiff may apply for asylum; that a six‑year‑old is eligible to apply for asylum is clear. The ultimate inquiry, instead, is whether a six‑year‑old child has applied for asylum within the meaning of the statute when he, or a non‑parental relative on his behalf, signs and submits a purported application against the express wishes of the child's parent." [Slip op. 5].

So much for what Section 1158 does say; the problem is how to deal with what Congress did not say. "The statute does not set out procedures for the proper filing of an asylum application. Furthermore, the statute does not identify the necessary contents of a valid asylum application. In short, although the statute requires the existence of some application procedure so that aliens may apply for asylum, section 1158 says nothing about the particulars of that procedure." [Id.]

Noting that the courts cannot properly reexamine the wisdom of an agency-promulgated policy to fill the gaps left by Congress, this Court outlines the discretionary policy choice the INS made in this case. The INS decided that six-year-old children lack the capacity to personally submit an asylum application without the representation of an adult. In the absence of special circumstances, the child's parent is the only proper adult to assume this role, even though the parent resides abroad. Especially in light of the statutory hiatus, it cannot be said that these positions by the INS are unreasonable.

Finally, "[T]hat the parent lives in a communist‑totalitarian state (such as Cuba), in and of itself, does not constitute a special circumstance requiring the selection of a non‑parental representative. Our duty is to decide whether this policy might be a reasonable one in the light of the statutory scheme. See Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)." [Slip op. 6]

The Court does, however, express some misgivings. "We recognize that, in some instances, the INS policy of deferring to parents ‑‑ especially those residing outside of this country ‑‑ might hinder some six‑year‑olds with non‑frivolous asylum claims and prevent them from invoking their statutory right to seek asylum. But, considering the well‑established principles of judicial deference to executive agencies, we cannot disturb the INS policy in this case just because it might be imperfect. (Cits.) And we cannot invalidate the policy ‑‑ one with international‑relations implications ‑‑ selected by the INS merely because we personally might have chosen another." [Slip op. 7].

Finally, the Court applies the above principles to the facts of this case. "No one should doubt that, if Plaintiff returns to Cuba, he will be without the degree of liberty that people enjoy in the United States. Also, we admit that re‑education, communist indoctrination, and political manipulation of Plaintiff for propaganda purposes, upon a return to Cuba, are not beyond the realm of possibility. Nonetheless, we cannot say that the INS's assessment of Plaintiff's asylum claim ‑‑ that it probably lacked merit -- was arbitrary. To make a meritorious asylum claim, an asylum applicant must show that he has a 'well‑ founded fear of persecution' in his native land. (Cit.) Congress largely has left the task of defining with precision the phrase 'well‑ founded fear of persecution' to the INS. (Cits.)

"Plaintiff points to no earlier INS adjudications or judicial decisions where a person, in circumstances similar to Plaintiff's, was found to have established a 'well‑founded fear of persecution.' Political conditions 'which affect the populace as a whole or in large part are generally insufficient to establish [persecution].' (Cit.) We cannot say that the INS had to treat education and indoctrination as synonymous with 'persecution.' (Cits.) Not all exceptional treatment is persecution." [Slip op. 9-10]

In sum, the INS did not abuse its considerable discretion in this matter.

Citation: Gonzalez v. Reno, No. 00-11424 (11th Cir. June 1, 2000).

TRADE

U.S. Congress enacts African Growth and Opportunity Act to grant U.S. trade benefits to Sub-Saharan countries of Africa

The U.S. House of Representatives (voting 309-110) and the Senate (voting 77-19) have passed the African Growth and Opportunity Act (H.R. 434) (AGOA), and President Clinton signed it into law on May 18, 2000. (The Act is part of the Trade and Development Act of 2000 which also provides trade benefits to the Caribbean Basin, Albania, and Kyrgyzstan). The AGOA seeks to promote a positive trading partnership between the U.S. and the 48 listed nations of Sub-Sarahan Africa.

In particular, the Act will "authorize a new trade and investment policy for Sub-Saharan Africa, expand trade benefits to the countries in the Caribbean Basin, renew the generalized system of preferences, and reauthorize the trade adjustment assistance programs." (Preamble) It is part of a broader initiative to support the integration of African countries into the multilateral trading system, such as the Economic Growth and Opportunity in Africa (Partnership Initiative) announced in 1997.

The AGOA emphasizes free markets and self-sufficiency. The listed sub-Saharan African countries that meet human rights and economic liberalization standards, as determined by the President, become eligible for economic programs and other support (Section 104). In particular, the Act directs the President:

(1) To convene annual high-level meetings between the U.S. government and governments of Sub-Saharan countries to foster close economic relations, and to establish a U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum as an encouragement for setting up joint ventures between large and small businesses (Section 5).

(2) To develop a plan for a U.S.-Sub-Saharan Africa Free Trade Area and to have the U.S. enter into trade agreements with specific countries (Section 116).

(3) To Create an Office of the Assistant United States Trade Representative for African Affairs (Section 117), and

(4) To direct the Secretary of Commerce to ensure the stationing of at least 20 full-time U.S. and Foreign Commercial Service employees in at least 10 different Sub-Saharan countries (Section 125).

[Editorial Note: In a related matter, President Clinton has released a Report to Congress on Trade and Development Policy Toward Africa. This Report is the latest in a series of five annual reports outlining the Government's trade and development strategy toward Sub-Saharan Africa. It describes the Government's initiatives to increase trade and investment with those countries, and emphasizes its commitment to the AGOA.]

Citation: Pub. L. No. 106-200 (May 18, 2000); 114 Stat. 251. [For previous history of bill, see 145 Cong. Rec. S 13776 (November 3, 1999); U.S. Trade Representative press release 99-92 (November 3, 1999). [For additional information on Act and closely related matters, see African Studies website of University of Pennsylvania "www.sas.upenn.edu"; U.S. Trade Representative press release 00-07 (January 27, 2000) Press release 00-33 on President Clinton's Report on Africa (May 4, 2000) (Endorses Africa/CBI Trade Bill) & 00-36 (May 11, 2000) (Lauds final passage of bill)].

TRANSPORTATION

In litigation over lost shipment of Nike athletic shoes from Indonesia, Ninth Circuit holds that Carmack Amendment applies on U.S. leg of international shipment under single bill of lading and that damages include "lost markup" value, not just replacement cost

The Burlington Northern and Santa Fe Railway Company (Burlington) lost a container of Nike shoes it was conveying from Los Angeles, California, to Nike's distribution center in Memphis, Tennessee. This shipment was part of a single "through" bill of lading between Neptune Orient Lines, Ltd. (Neptune) and Nike, Inc. The bill did not contain any declaration of value. Nike changes its shoe models so often that replacements for the same shoes are sometimes not available. After paying Nike the market value of the shipment or $182,892.08, Neptune sued Burlington for reimbursement.

In its motion for summary judgment, Neptune sought to recover the fair market value of the lost shoes. Burlington disagreed and argued that Neptune was only entitled to their replacement cost, that is, $94,567.13. The district court gave summary judgment to Neptune and Burlington appealed. The U.S. Court of Appeals for the Ninth Circuit affirms.

The Carmack Amendment (49 U.S.C. Section 11706) determines carrier liability for "transportation in the United States between a place in ... the United States and a place in a foreign country." (49 U.S.C. Section 10501(1)(F)). The Ninth Circuit had interpreted an earlier version of that provision to apply to separate inland bills of lading for shipments to or from overseas ports. The statute encompasses the inland leg of an overseas shipment conducted under a single "through" bill of lading (as is the case here) to the extent that the shipment was not subject to the Carriage of Goods by Sea Act (COGSA) (see 46 U.S.C. Sections 1300 & 1301(e), 1303(2)) (carrier liable once goods are loaded onto ship until discharged).

The Court agrees with Neptune that the "lost markup" is part of the actual loss. The "market value at destination" is the proper measure of the actual loss where the shipment is lost or destroyed. On the other hand, replacement cost is an appropriate measure of damages where the injured party could mitigate the loss by replacing the goods. Since Nike was unable to replace the lost shipment, it is therefore entitled to the entirety of its actual loss, that is, the market price at destination.

Citation: Neptune Orient Lines, Ltd. v. Burlington Northern and Santa Fe Railway Co., No. 98-17387 (9th Cir. May 24, 2000).

WORLD TRADE ORGANIZATION

WTO Appellate Body upholds Panel findings in U.S.-EU dispute over UK carbon steel on which U.S. had imposed countervailing duties

A WTO Dispute Settlement Panel ruled for the European Union (EU) in December 1999 in its dispute with the U.S. over countervailing duties imposed on steel originating in the Uni­ted Kingdom (UK). Affected were certain hot-rolled lead and bismuth carbon steel products (leaded bars). See 2000 Int'l Law Update 30.

In 1993, the U.S. Department of Commerce had established a subsidy rate of 12.69 % on steel imports from United Engineering Steels Ltd. (UES). The state-owned British Steel Corporation (BSC) had set up UES in 1986 but British Steel plc (BSplc) had taken over BSC's assets in 1988. The UK Government had then privatized BSplc in 1988, selling its shares at fair market value.

UES became an affiliate of BSplc in 1995 and changed its name to British Steel Engineering Steels (BSES). BSplc had received government subsidies before privatization, but received no subsidies afterwards. The U.S. imposed countervailing duties in March 1993 for the subsidies that BSC had received in the years 1977/78 - 1985/86 before privatization. The U.S. rationale was that a portion of the prior subsidies "traveled with" the state-owned company's assets.

The U.S. appealed the Panel Report. The WTO Appellate Body, however, essentially upholds the Panel. It finds, in particular, that the Panel: (1) had applied the proper standard of review under Article 11 of the DSU; (2) had correctly found that the U.S. Department of Commerce should have ascertained whether a "benefit" did in fact accrue to UES and BSplc/BSES following the ownership changes; and (3) had properly found that in this case the "financial contributions" made to BSC had resulted in no "benefit" to UES or BSplc/BSES.

Citation: United States - Imposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products originating in United Kingdom (WT/DS138/AB/R) (10 May 2000). [Appellate Body Report is available on WTO website "www.wto.org".]

WORLD TRADE ORGANIZATION

Reaffirming findings of previous WTO Panel Report in U.S.-EU controversy over U.S. Anti-Dumping Act of 1916, WTO Panel finds, in U.S.-Japan dispute, that Act violates GATT Anti-Dumping Agreement

A Dispute Settlement Panel of the World Trade Organization (WTO) had issued a report in March 2000 in the U.S.-EU dispute regarding the U.S. Anti-Dumping Act of 1916 [39 Stat. 756, 15 U.S.C. Sections 71-74] (hereinafter "Act"). The Panel had found that the Act not only violated GATT 1994 and the WTO Anti-Dumping Agreement, but also nullified and impaired benefits to the EU.

On May 29, 2000, a WTO Panel circulated a Report in a similar case, the U.S.-Japan challenge of the Anti-Dumping Act of 1916. Although Japan had brought this complaint, the EU and India had taken part as third parties and had submitted arguments to the Panel.

The 1916 Act bans international price discrimination where (a) an importer sells a foreign-made product within the U.S. at a price that is "substantially less" than the price at which the same product sells in the country of the foreign producer, and (b) the importer carries on this price discrimination "commonly and systematically."

In the Panel's view, the Act fails to comply with WTO trading rules in several ways. By providing for treble damages, fines or imprisonment — instead of anti-dumping duties — the Act violates Article VI:2 of GATT 1994 and Article 18.1 of the Anti-Dumping Agreement. In failing to set up procedures as outlined in Article VI of GATT 1994 and the Anti-Dumping Agreement, the Act does not comply with Article VI:1 of GATT 1994 as well as Articles 1, 4.1, 5.1, 5.2, 5.4 and 18.1 of the Anti-Dumping Agreement. These breaches amount to a violation of Article XVI: 4 of the Agreement Establishing the WTO and Article 18.4 of the Anti-Dumping Agreement.

Finally, these U.S. breaches have nullified or impaired benefits that should accrue to Japan under the WTO regime. The Panel recommends that the U.S. repeal the Act to bring itself in conformity with its WTO obligations.

Citation: United States - Anti-Dumping Act of 1916 (WT/DS162/R) (29 May 2000). [Report is available on WTO website "www.wto.org"].

EU again modifies Yugoslavia sanctions. With Regulation 826/2000, the EU has once again modified its Yugoslavia sanctions. The Regulation basically lists anew all undesirable Yugoslav individuals and those who act on behalf of Yugoslavia and Serbia, including President Slobodan Milosevic, and freezes their funds located in the EU. Subsequently, the EU again revised the list of undesirable individuals. — The EU has also once again amended the list of Decision 1999/319/CFSP and Common Position 1999/318/CFSP of non-admissible persons from Yugoslavia and Serbia. — Also, the EU has changed the list of national competent authorities that coordinate the Yugoslavia sanctions in each EU Member State. — Finally, the EU has modified the list of EU companies owned by Yugoslavia, which was originally issued with Regulation 1294/1999. It deletes a few companies from the list and adds additional ones in Austria, France and Germany through which the Yugoslavia Government is operating. Citation: 2000 O.J. of European Communities (L 101) 3, 26 April 2000 (non-admissible persons list amended & freeze of funds); (L 122) 7, 24 May 2000 & (L 134) 1, 7 June 2000 (non-admissible persons list again amended); (L 124) 42, 25 May 2000 (list of national competent authorities); and (L 129) 15, 30 May 2000 (list of foreign companies through which Yugoslavia operates).

Breach of translation Article invalidates service under Hague Convention. A German construction company sued a Danish individual in the German Courts to collect a payment due. The process served in Denmark, however, was in German. Although the defendant did file several papers in court, the German court entered a default judgment against him. The plaintiff then sued to execute on the judgment in the Danish courts. There defendant objected that plaintiff had not served him with a certified Danish translation of the summons as required by the Hague Convention on the Service Abroad of Judicial and Extra-Judicial Documents of 1965. The court of first instance refused to enforce the German judgment The Danish Supreme Court affirms, giving no weight to the fact that defendant apparently had notice enough to file some papers in the German proceeding. Citation: Wohnungsbaugesellschaft mbH v. Flyvholm, [2000] Int. Lit. Proc. 265 (case summary).

EU renews sanctions imposed on Burma/Myanmar. With Council Common Position 2000/346/CFSP, the EU has extended sanctions it imposed on Myanmar (Burma). The previous sanctions were scheduled to expire on April 29, 2000. Therefore, the new Common Position extends and strengthens the sanctions because of the continuing violations of human rights in that country. It includes a list of Myanmar government officers to be denied entry into the EU and freezes their EU funds. It also suspends high-level government visits to that country. — In a related matter, the Council issued Regulation 1081/2000 that (1) bans the sale, supply and export of equipment to Myanmar that may be used for internal repression, such as leg irons, water cannons, and explosives, and (2) freezes the funds of certain government-affiliated persons. Citation: Common Position 2000/346/CFSP & Council Decision 2000/348/CFSP, 2000 O.J. of European Communities (L 122) 1 & 29, 24 May 2000.

U.S. and Turkey sign Open Skies aviation agreement. On May 2, 2000, the U.S. Secretary of State and the Turkish Foreign Minister signed the Open Skies air transport agreement recently concluded by U.S. and Turkish negotiators. The agreement provides for full liberalization of all-cargo and charter services, as well as options for improved passenger services that are being phased in over a three-year transition period. Citation: U.S. Department of State Press Statement (May 2, 2000).

U.S. preparing sanctions for EU failure to implement WTO reports in Beef Hormones and Bananas cases. The U.S. Trade Representative (USTR) has announced procedures for modifying the lists of European products subject to increased tariffs as a consequence of the EU failure to comply with WTO rulings in the "Beef Hormones" and "Bananas" cases. WTO dispute settlement panels found in both cases that the EU was violating trading rules by impeding the import of beef raised with growth hormones and Central American bananas. The USTR is now seeking comments regarding the scope and level of punitive tariffs to be imposed on EU products. Under Section 301 of the Trade Act of 1974, the USTR may take action when another WTO Member fails to implement the recommendations of a WTO dispute settlement panel. The modifications to the product lists result from Section 407 of the Trade and Development Act of 2000 (entered into force on May 18, 2000), which amended Section 301 by requiring the USTR to periodically review such actions. Citation: U.S. Trade Representative press release 00-41 (May 26, 2000).

FAA prohibits U.S. flight operations in Ethiopian airspace because of Ethiopia-Eritrea hostilities. The U.S. Federal Aviation Administration (FAA) has prohibited flights within the territory and airspace of Ethiopia by U.S. carriers to ensure safety of U.S. airplanes while there is ongoing hostilities between Ethiopia and Eritrea. The effective date of the prohibition is May 12, 2000. Citation: 65 Federal Register 31214 (May 16, 2000).

Russian Supreme Court upholds acquittal of Aleksandr Nikitin. In October 1995, the FSB [the Russian successor to the Soviet KGB] began to look into Aleksandr Nikitin's reports to Norway's Bellona Foundation. The FSB claimed that the reports on the environmental hazards posed by Russia's aging nuclear navy had unlawfully revealed secrets of state. Nikitin defended on the ground that he had carefully documented his reports by citing publicly available sources. In December 1999, the St. Petersburg City Court acquitted Mr. Nikitin of all charges. In its appeal to the Russian Supreme Court, the prosecution asked the Court to remand the case either to the City Court for evaluation by another judge or to the FSB for it to remedy the poor quality of the original investigation. On April 17, 2000, however, the Court affirms the lower court and declines to remand, calling the request "inconsistent and unacceptable." This ruling presumably ends Mr. Nikitin's four-years of criminal litigation. Citation: Reported at website of American Association for Advancement of Science: "www.aaas.org". [See also Bellona Foundation's website: "www.bellona.org"]; 52 Current Digest of Post-Soviet Press No. 18, Page 10 (May 31, 2000).

U.S. Department of Commerce designates official logo for dolphin-safe tuna products. Pursuant to the Dolphin Protection Consumer Information Act (DPCIA) [16 U.S.C. 1385], as amended by the International Dolphin Conservation Program Act (IDCPA), the U.S. Department of Commerce has designated a mark to label tuna products as "dolphin safe." It shows a blue dolphin on a white background with the words "U.S. Department of Commerce Dolphin Safe." A full color version of the official mark is available on the website "http://swr.ucsd.edu/dsl.htm". Citation: 65 Federal Register 34408 (May 30, 2000).

EU issues guidance to combat internet child pornography. The EU Council has issued a Decision to counter child pornography on the internet. The Decision orders the European Member States to prevent and combat the production, possession and distribution of such materials. It suggests that the Member States establish special police units for the investigation of child pornography and work with private industry to introduce appropriate counter-measures. Citation: Council Decision 2000/375/JHA, 2000 O.J. of the European Communities (L 138) 1, 9 June 2000.