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.

1996 International Law Update, Volume 2, Number 3 (March).

ALIEN TORT CLAIMS

Eleventh Circuit holds that Alien Tort Claims Act (ATCA) provides both federal jurisdiction and private right of action for Ethiopian citizen tortured in Ethiopia

In September 1990, Hirute Abebe-Jira, her sister and Edgegayehu Taye sued Kelbassa Negewo under the ATCA (28 U.S.C. § 1350), alleging that Negewo, a leading official of Addis Ababa, had tortured them several times in an Ethiopian prison during the dictatorship of the mid-1970s. After the three plaintiffs had fled Ethiopia, Taye happened to run into Negewo in 1989 in an Atlanta hotel where both were working. The district court found that Negewo had personally taken part in torturing plaintiffs, and awarded each of them $500,000 in compensatory and punitive damages. Negewo appealed, challenging subject matter jurisdiction and raising the political question doctrine.

The U.S. Court of Appeals for the Eleventh Circuit affirms. On its face, Section 1350 requires the district to hear claims "by an alien for a tort only, committed in violation of the law of nations" (emphasis by Court). The "committed in violation" language indicates to the Court that Congress did not intend to require an alien plaintiff to invoke a separate enabling statute as a precondition to relief. Moreover, the legislative history of the Torture Victim Protection Act of 1991 [Pub.L. No. 102-256, 106 Stat. 73] recognized that the Statute confers both a forum and a private right of action upon aliens alleging a violation of customary international law. Federal courts may fashion domestic common law remedies for these violations.

The Court also rejects the "political question" objection. Not every case that touches upon foreign relations lies beyond judicial cognizance. The Court had previously held that the political question doctrine did not bar a tort action against Nicaraguan contra leaders.

Citation: Abebe-Jira v. Negewo, 72 F.3d 844 (11th Cir. 1996).

BANKING

In litigation related to the BCCI bank scandals, D.C. Circuit holds that federal courts should treat the Organization of American States (OAS) like any other bank depositor

On July 1, 1991, the OAS deposited a $10,000 draft in an OAS account in a Barbados branch of BCCI. On July 18, OAS directed its bank to stop payment on the draft but it was too late to recover the funds under Federal Reserve regulations. On January 24, 1992, BCCI pleaded guilty to RICO violations and the district court issued an order of forfeiture against BCCI. After it had unsuccessfully asserted an interest in the forfeited property, OAS appealed.

The U.S. Court of Appeals for the D.C. Circuit affirms. Under the holding in United States v. BCCI Holdings (Luxembourg), S.A., 46 F.3d 1185 (D.C. Cir. 1995), as a depositor, the OAS is merely a general creditor of the bank in the amount of $10,000. Since the OAS has neither secured a judgment against the debtor nor perfected a lien against a particular item, it has no interest in particular forfeited assets under 18 U.S.C. § 1963(l)(2),(6).

The OAS Charter (which applies to the U.S.) and the International Organizations Immunities Act (22 U.S.C. § 288), of course, does grant the OAS special privileges and immunities. These, however, do not affect the OAS's interest in the forfeited property. The forfeiture did not "confiscate" OAS's property and did not impair its $10,000 claim against BCCI.

Citation: United States v. BCCI Holdings (Luxembourg), S.A., 73 F.3d 403 (D.C. Cir. 1996).

Federal Deposit Insurance Corporation (FDIC) amends regulation on reporting of known or suspected criminal activities to curb money laundering and other criminal activity

The FDIC has amended 12 C.F.R. part 353 on Suspicious Activity Reports (SARs) dealing with the reporting of known or suspected criminal activities by insured state nonmember banks. The SAR instructions require a bank to file a report on transactions involving $5,000 or more when the bank knows or suspects that they involve money laundering, or evasion of regulations, or the bank has no reasonable explanation for the transactions.

The rule streamlines the requirements by providing that a state nonmember bank can file a new SAR with the FDIC and federal enforcement authorities by sending a single SAR to the Treasury Department's Financial Crimes Enforcement Network. 

There is international consensus that SARs deter and reduce money laundering. The SAR requirements of the regulation comply with the recommendations of multinational organizations, including the OAS, the Financial Action Task Force of the G-7 nations, as well as the EC through its Directive on preventing money laundering through financial institutions.

Citation: 61 Federal Register 6095 (February 16, 1996).

CHOICE OF LAW

In complex suit involving Maxwell family empire, English Court of Appeal (Civil Division) rules preliminarily that New York law governs status of defendants as good faith purchasers of shares in New York corporation

MacMillan, Inc., a Delaware corporation, is a wholly owned subsidiary of Maxwell Communications Corporation plc (MCC), a company partly owned by the late Robert Maxwell and his family. A wholly owned subsidiary of MacMillan, Berlitz International Corporation (BIC), a New York corporation, had originally listed MacMillan as the registered owner of its shares but MacMillan later transferred the BIC shares to a Bishopsgate Investment Trust (BIT), privately controlled by the Maxwell family, a member of which brought the shares to London. MacMillan, however, was supposed to retain control over the shares.

After the Maxwells used many of MacMillan's shares to secure their multimillion dollar loans, MacMillan sued BIT and several other defendants in the English courts for the return, or the fair market value, of several million shares of BIT based essentially on claims of constructive trust and restitution. The main defendants were Shearson Lehman Holding Ltd., Swiss Volksbank and Credit Suisse (trio). Each of the trio in complex and somewhat different circumstances had obtained portions of the BIC shares as security for various large loans to companies privately controlled by the Maxwell family. About one-third of BIC shares were on deposit in London and the rest were in the Deposit Trust Corporation (DTC) system in New York.

After the mysterious disappearance of Robert Maxwell at sea in November 1991, the trio eventually became registered owners of the shares through what the trial court found to have been a breach of trust by BIT. Rejecting MacMillan's argument that any unjust enrichment had taken place in England and that England had the closest relationship to the transactions, the trial court applied the law of New York as the lex loci actus. After a nine-month trial, the court gave judgment to defendants. MacMillan took an appeal.

In extensive separate judgments on the preliminary question of choice of law, three judges of the English Court of Appeal (Civil Division) agree on the application of New York law but on somewhat different bases. The first judgment points out that the focal point of the case was the defendants' claim of status as bona fide purchasers for value without notice of the breach. Under the New York version of the U.C.C., the securities were "certificated shares."  More restrictively than English law, New York law provides that good faith purchasers receive something more than constructive notice of an adverse claim as of the time of physical delivery of the shares without regard to registration. This judgment holds that, as the situs of the shares and the place of incorporation, New York law should apply. Stability provides the advantage here because the buyer of shares cannot manipulate the applicable law to gain priority over other buyers.

The second judgment generally agrees with these points but appears to add that being also the lex loci actus significantly reinforces the choice of New York law. The third judgment finds that using the lex loci actus is not as sound a criterion as the law of the place of incorporation and thus agrees essentially with judgment number one.

Citation: MacMillan, Inc. v. Bishopsgate Investment Trust plc, 139 SJ LB 225, The Times (Ct. of App., Civ. Div., 7 November 1995).

CRIMINAL PROCEDURE

Canadian Supreme Court holds that failure of U.S. authorities, who gave accused satisfactory Miranda warnings under American law, to readvise accused when questioning turned to more serious offense in compliance with Canadian Charter of Rights did not require exclusion of her inculpatory statement in Canada

While Stephen Hagerman was in Canadian custody awaiting extradition to the United States, Ms. Harrer, his girlfriend, helped him to escape. Harrer later found herself in the U.S. where a federal marshal and an immigration official interviewed her in Cleveland. After giving her Miranda warnings, they questioned her about her possibly illegal presence in the U.S. and, at a later interview, about Hagerman's whereabouts. When confronted by information supplied by Canadian authorities, Harrer finally admitted that she had helped Hagerman in his escape. When she got back to Canada, the government charged her with aiding in Hagerman's escape. She persuaded the trial court that the failure of U.S. authorities to readvise her of her right to counsel when the interview shifted from issues of immigration to issues of involvement in a felony violated the Canadian Charter of Rights and made her statements inadmissible. The government successfully appealed her acquittal but Harrer secured further review.

The Supreme Court of Canada dismisses her appeal as lacking in merit. In the view of seven judges, the Charter would ordinarily preclude use of Harrer's statement because it would violate her right to counsel under the terms of § 10(b). The Charter, however, imposes duties directly only on government officials of Canada, its provinces and territories. Absent a showing that the U.S. authorities who obtained Harrer's statement were questioning her on behalf of Canadian officials, Article 10(b) of the Charter does not directly control the admissibility of her statement.

The question remains whether admitting the statements would deprive Harrer of a fair trial under the Charter or under basic principles of Canadian justice. The Court concludes that it would not. Although the single set of Miranda warnings did not meet the more rigorous Canadian requirements, the fact that police did give warnings is relevant in assessing the overall fairness of admitting the statement.

Two concurring judges go further and argue that the Canadian Charter cannot apply to non-Canadian officials acting outside of Canadian territory. Obtaining a statement under American procedure, which applies to a Canadian in the United States, does not bar admissibility thereof in Canadian courts if there is no fundamental unfairness. For Canadian courts to try to insist on extraterritorial compliance with its Charter would violate accepted principles of international reciprocity and would make prosecution of international offenses difficult if not impossible.

Citation: Harrer v. The Queen, 101 C.C.C.3d 193 (Can. Sup. Ct. 1995).

DIPLOMATIC IMMUNITY

Vienna Convention on Diplomatic Relations bars civil suit under American labor laws brought against Jordanian diplomat by domestic servant according to Fourth Circuit

Faris Mufti was the First Secretary (and later Counsellor) of the Jordanian Embassy in Washington, DC. Corazon Tabion, a Philippine national, was Mufti's domestic servant. After two years of working for the Muftis, Tabion sued Mufti under the Fair Labor Standards Act complaining of her low pay and long hours. Mufti, however, claimed immunity under Article 31(1)(c) of the Vienna Convention on Diplomatic Relations of 1961 [23 U.S.T. 3227, T.I.A.S. No. 7502]. The section provides for civil immunity except for "an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving state outside his official functions."  The district court found that the phrase "commercial activity" did not cover the Muftis' employment relationship with Tabion. Tabion appealed.

The U.S. Court of Appeals for the Fourth Circuit affirms. The Convention does not define "commercial activity," and the Court has not found any published judicial opinion construing the phrase. The Department of State, however, filed a statement of interest in this case, opining that the term "commercial activity" relates to the pursuit of trade or business activity. It does not encompass contractual relationships for goods and services incidental to the daily life of the diplomat and his or her family in the receiving State. The Court concludes that the signatories to the Convention did not intend that day-to-day living services such as dry-cleaning or domestic help would lie "outside a diplomat's official functions."  Because they are incidental to daily life, diplomats are immune from civil suits involving disputes arising out of such services.

Citation: Tabion v. Mufti, 73 F.3d 535 (4th Cir. 1996). [The U.S. ratified the Vienna Convention on November 13, 1972 and it became applicable within the U.S. by passage of the Diplomatic Relations Act (22 U.S.C. §§ 251-59), which repealed earlier laws governing diplomatic immunity. About 173 countries, including Jordan, are parties to the treaty].

INTERNATIONAL COURT

OF JUSTICE

In absence of Indonesia as party, ICJ declines to exercise jurisdiction over proceedings brought by Portugal against Australia over latter's treaty with Indonesia as to resources of continental shelf adjacent to Territory of East Timor

After several centuries of Portuguese colonial rule over the Territory of East Timor, Indonesian forces physically occupied it in 1975. The United Nations, however, has rejected Indonesian claims over East Timor and officially recognizes Portugal as the "administering power" in that land. Australia has opposed Indonesia's action but has acknowledged the latter's de facto control over East Timor. In 1989, Australia and Indonesia entered into a treaty to create a "Zone of Cooperation" as to the continental shelf in the waters between East Timor and Australia called the "Timor Gap."  The following year, Australia enacted implementing legislation.

In February 1991, Portugal filed proceedings against Australia in the International Court of Justice. It asked the Court to rule that Australia's dealings with Indonesia and its refusals to negotiate with Portugal have impaired not only Portugal's rights as administering power but also the rights of the people of East Timor to self-determination and to sovereign control over the resources of the adjacent continental shelf.

On June 30, 1995, the Court ruled, 14 to 2, that it cannot exercise the jurisdiction the two parties have conferred upon it. To do this would require the Court to determine the lawfulness of Indonesia's takeover of East Timor and its exercise of treaty-making power in its regard in absence of that third state as a party consenting to the jurisdiction of the Court.

The Court did take note, however, for the two parties, that the Territory of East Timor is still a non-self-governing territory under Chapter XI of the U.N. Charter and that its peoples have the right to self-determination as a right erga omnes.

Citation: East Timor (Portugal v. Australia), Judgment, 1995 I.C.J.Rep. 90, 34 I.L.M. 1583-91 (1995).

JUDICIAL ASSISTANCE

Eleventh Circuit holds deposition of English witness in England admissible against accused in light of presence of defense counsel during deposition, defendant's ability to listen to testimony and consult with counsel via telephone, and similarity of procedures

Reinhard Mueller was the director of Omni Equities, Inc., and became the shareholder trustee when the Board of Directors of the company decided to liquidate it. One of the shareholders, The Depository Trust Company, failed to receive a liquidating dividend, and brought suit against Omni and Mueller. Convicted of tax evasion and bank fraud, Mueller appealed his conviction, inter alia, because the district court admitted the deposition of a witness taken in England.

The U.S. Court of Appeals for the Eleventh Circuit affirms. The witness, David Brailsford, was the Chief Examiner of the UK Department of Trade and Industry, Company Investigations Division. Brailsford had investigated the activities of Omni's London-based securities dealer, Walter L. Jacob & Co. Brailsford resided in the London area and was unavailable at trial.

The Court explains that the district court properly admitted the deposition. Foreign depositions are disfavored in criminal cases. Depositions, however, are authorized under Fed.R.Crim.Pro. 15 when they are necessary to achieve justice and may be carried out consistently with the defendant's constitutional rights.

"In this case, the deposition took place in London. Defense counsel was present and cross-examined the witness. Defendant listened to the testimony on the telephone and was able to consult with his lawyer as the deposition proceeded. Unlike some depositions taken in some foreign countries, ... the procedures here followed those used in the United States. There were no language barriers and defendant was able to participate and advise his counsel. Foreign depositions have been approved in similar instances, ... and even in cases where the proceeding was in a foreign language and conducted by a judicial officer rather than counsel." [1071-1072]

Citation: United States v. Mueller, No. 94-3617 (11th Cir. February 14, 1996).

JURISDICTION

Though it upholds sovereign immunity as to one defendant, D.C. Circuit (1) reverses dismissal for lack of personal jurisdiction over second defendant so as to allow plaintiff to take discovery of jurisdictional facts, and (2) reverses forum non conveniens dismissal for defendants' failure to show that Jordanian courts will entertain plaintiff's claims

From 1982 to 1989, Hassan El-Fadl, a Lebanese, worked under a long-term contract in Amman, Jordan, for Petra International Banking Corporation (PIBC); PIBC is a D.C. subsidiary of Petra Bank, a privately owned Jordanian bank. After the Central Bank of Jordan (CBJ) uncovered financial improprieties at Petra Bank and placed it in receivership, it fired El-Fadl through a letter from Michel Marto, CBJ's Deputy Governor. Jordanian authorities also arrested and tortured El-Fadl but ultimately exonerated him.

El-Fadl sued CBJ, Marto, Petra Bank and PIBC in federal court to recover damages for wrongful discharge. The district court dismissed the complaint as to all defendants. It found that it lacked subject matter jurisdiction under the FSIA over the CBJ defendants. Denying El-Fadl's request for discovery of jurisdictional facts, it also found that it lacked personal jurisdiction over Petra Bank under D.C. long-arm statutes. Finally, although El-Fadl had presented evidence that Jordanian law would bar his actions against the banks in Jordan, the court granted PIBC's motion to dismiss on forum non conveniens grounds.

The U.S. Court of Appeals for the District of Columbia Circuit first affirms the lower court's dismissal of CBJ and Marto under the FSIA. CBJ is clearly the instrumentality of a foreign state and plaintiff failed to show that Marto was acting in any way other than as its agent when he sent the letter of dismissal to plaintiff.

The Court, however, reverses the dismissal in favor of Petra Bank and remands to let El-Fadl obtain discovery from Petra as to jurisdictional facts. The Court finds that "[plaintiff's] allegations, although they fall short of a prima facie case that Petra Bank was 'doing business' in the District of Columbia, are not 'conclusory' since El-Fadl has alleged specific transactions. His theory that Petra Bank may have had further, as yet unknown, connections to the District is not implausible. ... A plaintiff faced with a motion to dismiss for lack of personal jurisdiction is entitled to reasonable discovery, lest the defendant defeat the jurisdiction of a federal court by withholding information on its contacts with the forum." [15]

The Court also reverses the forum non conveniens dismissal of the claims against Petra Bank and PIBC because, as movants, they failed to meet their burden of proof that Jordan was an adequate alternative forum. The Court notes that a foreign forum is not inadequate merely because its substantive law may be less favorable to plaintiff. But in the rare case where the foreign forum would deny him access to its judicial system, however, dismissal based on the forum non conveniens doctrine would be inappropriate. Defendants' rebuttal to plaintiff's material on Jordanian law had many gaps and was unresponsive.

Finally, the Court notes that, if doubts about the availability of an alternative forum remain due to the difficulties of determining Jordanian law, the district court should not dismiss under the forum non conveniens doctrine without conditioning the dismissal on the defendants' submission to jurisdiction in Jordan and on the Jordanian courts' acceptance of the case.

Citation: El-Fadl v. Central Bank of Jordan, No. 94-7212 (D.C. Cir. February 6, 1996).

SALES OF GOODS

In successful breach of contract suit by Italian maker of air conditioners against American supplier of compressors, Second Circuit substantially affirms liability and damages pursuant to Convention on International Sales of Goods (CISG)

In January 1988, Rotorex Corporation of New York agreed to sell 10,800 compressors to Delchi Carrier SpA (Delchi), an Italian manufacturer of "Ariele" portable air conditioners, for the March to August marketing season. After Delchi paid for the first shipment, it concluded that most of the compressors had a lower cooling capacity and higher power consumption than the sample Delchi had agreed to buy. Rotorex declined to replace the items with qualifying compressors, leading Delchi to sue Rotorex for damages in a New York federal court. Since the contract was silent as to choice of law and since the U.S. and Italy were CISG signatories, Delchi relied upon the substantive sales provisions of CISG. The district court gave summary judgment to Delchi on liability. After discovery on damages and a bench trial, the court awarded Delchi $1,785,772. Rotorex appealed and Delchi cross-appealed as to the amount of damages.

The U.S. Court of Appeals for the Second Circuit first affirms the summary judgment on liability. Based on admissions by Rotorex agents and other evidence, the Court sees a "fundamental breach" of contract as defined in CISG Art. 25. That is, any reasonable person could have foreseen that shipping non-conforming goods denied Delchi what it had a right to expect under the contract.

As to damages, the Court affirms the overall award but reverses the denial of two of Delchi's claims and remands for further proceedings on one of them. CISG Art. 74 expressly allows recovery for "loss of [reasonably foreseeable] profit." Since shipment of nonconforming compressors would foreseeably cause Delchi to lose sales of Ariele units in the 1988 season, the Court upholds this element of damages. Since the CISG is silent on the point, the Court cites U.C.C. § 2-715 as supporting the award for fixed costs and depreciation as injuries distinct from lost profits.

On the cross-appeal, the Court also sees error in the trial judge's denial of Delchi's claims for shipping and customs expenses on the returned items, and for the cost of obsolete materials and tools that Delchi had bought for use with the Rotorex compressors. Rotorex's breach did foreseeably cause Delchi to make these incidental expenditures, though they were not part of "lost profits." Whether Delchi's labor costs during a four-day idle period at the factory were variable or fixed costs, however, are factual issues upon which the lower court is to make findings on remand.

Citation: Delchi Carrier SpA, v. Rotorex Corporation, 71 F.3d 1024 (2nd Cir. 1995).

SOVEREIGN IMMUNITY

Fifth Circuit holds that suit alleging failure to warn and negligent product design and/or manufacture by Finnish government company fell within FSIA's "commercial activities" exception

A paper machine crushed Charles Aldy and Charley Malone to death at a paper mill in Hodge, Louisiana. Under the FSIA and Louisiana tort law, decedents' survivors brought product liability actions against Valmet Paper Machinery, an entity of the Finnish government, and against other defendants. They alleged Valmet's failure to warn along with design and manufacturing defects. Valmet unsuccessfully moved to dismiss under the FSIA for lack of subject matter jurisdiction and because the plaintiffs failed to identify specific defects in the design or manufacture. Valmet appealed the district court's denial of its summary judgment motion.

The U.S. Court of Appeals for the Fifth Circuit affirms, ruling that the plaintiffs' claim of negligent product design fell within the third clause of the FSIA's "commercial activities" exception to immunity. It provides that there is no immunity where the action is based "[1] upon an act outside the territory of the United States [2] in connection with a commercial activity of the foreign state elsewhere and [3] that act causes a direct effect in the United States." 28 U.S.C. § 1605(a)(2). Noting that Valmet admits that it commercially manufactures paper machines in Finland, the Court explains that the first two elements link the plaintiff's cause of action to the commercial acts of the foreign sovereign.

The Court also rejects Valmet's argument that the plaintiffs failed to show a direct causal nexus between Valmet's commercial activity and the plaintiffs' injuries. An effect is "direct" if it follows as an immediate consequence of the defendant's activity. Plaintiffs' allegations that the workers' deaths immediately resulted from Valmet's negligent design and manufacture were enough, in the Court's view. Nor can Valmet escape federal jurisdiction by arguing that the "commercial activities" exception does not include failure to warn claims. An omission is an act, and plaintiffs' suits are based upon an omission (the failure to warn) that occurred outside the U.S. but caused a direct effect within it.

Citation: Aldy v. Valmet Paper Machinery, 74 F.3d 72 (5th Cir. 1996).

TAXATION

District Court enforces Formal Document Requests (FDR's) from IRS to American company linked to family of foreign firms as consistent with U.S. obligations to Sweden under 1940 bilateral tax convention

Chris-Marine (USA)[CMUS] is a Florida corporation with its headquarters in Jacksonville that repairs large marine diesel engines in the U.S. and elsewhere. In the Fall of 1992, the IRS routinely assigned a Revenue Agent (agent) to investigate CMUS's tax returns for 1990-92. The agent learned, inter alia, that Chris-Marine International Ltd., which is incorporated in the Cayman Islands, a well-known tax haven, owned 100% of CMUS's voting stock. She also found many links between CMUS and about seventeen other potentially related foreign entities, many of them bearing the "Chris-Marine" prefix such as Chris-Marine AB. After normal information requests proved fruitless, the agent issued two FDR's pursuant to 26 U.S.C. § 982(c)(1).

In June 1993, a Swedish revenue agent named Persson opened a tax audit of Chris-Marine AB. IRS agents later met with Swedish agents in Florida to discuss what types of information they would exchange under the 1940 Sweden-U.S. Tax Convention [54 Stat. 1759, T.S. No. 958]. In October, Persson recommended criminal tax prosecution of Chris-Marine AB in Sweden and authorities executed a search warrant of its premises. Meanwhile, without contacting Swedish authorities, the IRS agent referred the CMUS matter to its criminal division in January 1994 and the IRS suspended the civil investigation. CMUS then filed a petition against the United States in federal court to quash the FDRs.

The U.S. District Court for the Middle District of Florida denies the petition and issues an order compelling compliance by CMUS. The Court points out that FDRs are limited "discovery devices" to obtain foreign-based documentation relevant to civil tax liability. Failure to produce the documents without adequate cause makes them inadmissible in future civil tax proceedings.

The Court found that these FDRs met all statutory requirements. Plaintiff also failed to show that the IRS was acting solely to gather information for the Swedish criminal investigation. "The fact that [the FDRs] are also relevant to a Swedish investigation, and properly obtainable under the treaty, does not convert the IRS investigation into an exercise in bad faith. The status of the Swedish investigation of related but distinct entities or individuals has no impact on the propriety of the issuance of the FDRs." [1453]  The Court also refuses to ban disclosure of the FDR documents to Swedish authorities because CMUS has not shown that the IRS intends to violate the treaty.

Citation: Chris-Marine USA, Inc. v. United States, 892 F. Supp. 1437 (M.D.Fla. 1995).

TERRORISM

U.S. Department of Treasury issues Terrorism Sanctions Regulations in support of Middle East peace process

The U.S. Department of Treasury has issued a final rule to amend 31 C.F.R. Part 595. The purpose of the Terrorism Sanctions Regulations is to implement the President's declaration of national emergency and the imposition of sanctions against certain persons whose acts of violence aim to disrupt the Middle East peace process.

On January 24, 1995, the President had issued Executive Order 12947 regarding terrorism that interferes with the Middle East peace process, invoking inter alia the International Emergency Economic Powers Act (50 U.S.C. § 1701-1706). The Order blocks all property and interests in property of twelve allegedly terrorist organizations, as well as of persons designated by the Secretary of State or the Secretary of the Treasury.  Such persons are called "specially designated terrorists" (SDTs).

The Order blocks all property or interests in property of SDTs located in the U.S. or in the possession of U.S. persons or entities (including their overseas branches).  The Order also prohibits any transaction or dealing by U.S. persons in SDT property, including the making or receiving of any contribution of funds, goods, or services for the benefit of an SDT.

Citation: 61 Federal Register 3805 (February 2, 1996).

TRADE

Effective in April 1996, Mexico issues new law relating to transborder trade and customs matters

On December 15, 1995, Mexico issued a new law on transborder trade and customs (Ley Aduanera). This Law, together with the General Import Tax Law (Ley de los Impuestos Generales de Importación) and other applicable laws and regulations, controls the import and export of goods and acts related to them. It applies to anybody who is involved in importing and exporting goods, including owners, custodians, processors and transporters of such goods (Article 1). The Law enters into force on April 1, 1996. The Law, for example:

 Defines the competent authorities for the administration of transborder trade (autoridades aduaneras) (Article 3).

 Requires the operators and administrators of harbors, airports, and train stations to make facilities available to customs officials and to cover expenses (Article 4).

 Provides that airlines must furnish the competent authorities with lists of passengers on international flights (Article 7).

 Requires the marking of transports of dangerous goods with international danger symbols (for example with the symbols for "flammable" or "explosive") (Article 20(V)).

 Specifies the required documents such as bills of lading and certificates of conformity (Capítulo III).

 Provides for applicable taxes and tariffs (Sección Segunda and other parts of the Law).

 Includes special provisions for international trade (Articles 130-134).

Citation: Ley Aduanera, issued on December 15, 1995, Diario Oficial de la Federación [Official Gazette], Volume DVII, number 12, part 2 [available only in Spanish].

Japan and the United States conclude a complex set of agreements designed to open up the Japanese market in autos and auto parts to foreign manufacturers

After two years of intensive negotiations, the United States and Japan concluded a complex and detailed Automotive Agreement on August 23, 1995. Among other issues, it addresses access of foreign auto producers to the Japanese dealership network, Japanese acceptance of American and European safety and pollution standards as equivalent to its own, and the provision of financial incentives to Japanese dealers to import and market foreign autos and auto parts. Private automobile companies and trade associations in Japan such as the Japan Automobile Manufacturers' Association (JAMA) also issued statements announcing plans to increase the importation of foreign auto parts and to file periodical progress reports.

 Another goal is to improve reporting on objective economic data as to how foreign cars and parts are faring in the Japanese market including government import figures not previously available. The parties are to apply qualitative criteria to the efforts by Japanese car makers to promote open and competitive distribution systems, to the efforts of foreign manufacturers to offer more competitive products and to actions taken in the private sector to make sure that the Japanese Anti-Monopoly Act is obeyed.

Measures will also be taken to deregulate the Japanese aftermarket for auto replacement parts. The Agreement seeks to overcome three main regulatory barriers. The first goal is to ease the effect of the "critical parts" law and regulations requiring the use of official garages and inspections when mechanics must replace such a part. Second, there is a commitment to relax the "shaken" regulation that demands inspections of repair work at government certified garages (many of which are located at local dealerships) and to designate 8,000 additional garages for inspections. Finally, the Agreement requires Japan to do away with the requirement of official inspections when anyone modifies a car so as to add even slightly to any vehicle's dimensions.

The Agreement as a whole is to operate until the end of the year 2000. At that point, Japan and the United States are to discuss whether they need to continue the above measures.

Citation: Japan-United States: Automotive Agreement and Supporting Documents, 34 I.L.M. 1482-1541 (1995).

Copyrights: On July 25, 1995, Ukraine acceded to the revised and amended 1886 Berne convention for the protection of literary and artistic works and Moldova did so as of August 1, 1995. The Convention had entered into force for the U.S. on March 1, 1989. Citation: 34 I.L.M. 1712 (1995).

Use of injurious conventional weapons:  The 1980 Geneva convention on prohibitions or restrictions on the use of certain conventional weapons which may be deemed to be excessively injurious or to have indiscriminate effects entered into force on December 2, 1983 [see 19 I.L.M. 1529 (1980)]. The U.S. has acceded to Protocol II to this convention as of September 24, 1995. The Protocol deals with bans or restrictions on the use of mines, booby-traps and other similar devices. Citation: Senate Treaty Doc. 103-25; 47 U.S. Dep't of State Dispatch 863; 34 I.L.M. 1712 (1995); 1996 German Bundesgesetzblatt II, number 3, page 103, 26 January 1996.

EU-Canadian fisheries dispute:  The EU officially approved the agreement with Canada to resolve their fisheries dispute (see 1995 ILU, October, page 5; 1996 ILU 24), and published an "agreed minute" and a proposal for improving fisheries control and enforcement. The agreement entered into force on 21 December 1995. Citation: 1995 Official Journal of the European Communities (L 327) 35, 30 December 1995; 1996 Official Journal of the European Communities (L 26) 28, 2 February 1996.

EU-U.S./Canada Trade under GATT:  The EU and the U.S. have concluded an agreement under GATT Article XXIV:6 to reduce EU tariffs on agricultural items, as well as semiconductors and integrated circuits. The U.S. and Canada had initiated proceedings in the World Trade Organization (WTO) regarding the EU import regime for cereals and rice. As part of the agreement, the U.S. will withdraw its request for a WTO dispute settlement panel. Citation: 1995 Official Journal of the European Communities (L 334) 25, 38, 30 December 1995.

International Grains Agreement:  The EU acceded to the Grains Trade Convention and the Food Aid Convention, constituting the International Grains Agreement, 1995. This updates the International Wheat Agreement, 1986. The purpose is to promote international trade in grains, and to provide grain to developing countries. The U.S. is a party to the new Agreement. Citation: Council Decision ... concerning the approval by the European Community of the Grains Trade Convention and the Food Aids Convention, 1996 Official Journal of the European Communities (L 21) 47, 27 January 1996.

Banking Competition: The FDIC has amended its regulations concerning domestic retail deposit activities by state-licensed branches of foreign banks (12 C.F.R. Part 346).  The final rule changes FDIC's regulations to restrict the amount and types of initial deposits of less than $100,000 which an uninsured state-licensed branch of a foreign bank can accept.  The rule is intended to provide equal competitive opportunities to foreign and domestic banks. Citation: 61 Federal Register 5671 (February 14, 1996).

American Society of International Law:  The Society will hold its annual meeting in Washington, D.C. March 27-30 at the ANA Hotel. Persons interested in attending should call the Society at (202) 939-6000 for further information.

International Criminal Law Seminar:  The International Bar Association, in coordination with the ABA and NACDL, is conducting a seminar on Borderless Crimes and Criminal Organizations in Dublin, Ireland, 24-27 May 1996. The speakers are government officials and practicing attorneys, including U.S. Attorney General Janet Reno. For information, contact the International Bar Association, 271 Regent Street, London W1R 7PA, England, Phone: (44)(171) 629-1206, FAX: (44)(171) 409-0456.