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 10 (October).

AVIATION

[See also Brink's Ltd. v. South African Airways under CHOICE OF LAW.]

Second Circuit generally approves $14,000,000 damage award in Pan Am 103 bombing litigation; Ninth Circuit upholds award in case involving Korean Air Lines shootdown by U.S.S.R.

In Pescatore v. Pan American World Airways, Inc., the U.S. Court of Appeals for the Second Circuit upheld an award of $14,014,000 to the wife of a deceased British Petroleum executive who died in the 1988 Pan Am 103 bombing over Lockerbie, Scotland.  The award was for loss of society, services and financial contribution and may be the largest damages award so far in a commercial airline disaster.  The Court's reasoning is based on Zicherman v. Korean Air Lines Co., 116 S.Ct. 629 (1996) [see 1996 Int'l L. Update 15].  Zicherman had held that the Warsaw Convention leaves the specification of what harm is legally cognizable to whatever domestic law the forum's choice-of-law rules make applicable.

In Pescatore, the Second Circuit holds that choice-of-law rules applied by New York and by the federal courts in federal question cases require that Ohio's substantive law governs damages -- not federal maritime law.  Ohio is plaintiff's domicile and residence.  The Court remands, however, for the lower court to reconsider the issue of prejudgment interest under Ohio law.

Saavedra v. Korean Air Lines Co., Ltd., was a case brought by the representative of victims who where killed when Soviet military aircraft shot down Korean Air Lines Flight KE007 over the Sea of Japan in 1983.  Here, the U.S. Court of Appeals for the Ninth Circuit rules that the Death on the High Seas Act (DOHSA) governs and allows only pecuniary damages.  Although directly dealing only with a claim for loss of society, the Court concludes that the Supreme Court's reasoning in Zicherman effectively forecloses any claims under American law for nonpecuniary damages.  This eliminates elements such as compensation for survivors' grief and for victims' pre‑death pain and suffering.  [Editors' Note: The Sixth Circuit has recently come to the same conclusion in Bickel v. Korean Air Lines  Co., Ltd.; see 1996 Int'l L. Update 64].

Citations:  Pescatore v. Pan American World Airways, Inc., No. 95-7637 (2nd Cir. September 9, 1996);  Saavedra v. Korean Air Lines Co., Ltd., 93 F.3d 547 (9th Cir. 1996).

ANTI-SUIT INJUNCTIONS

German State Supreme Court considers British anti-suit injunction as violative of German sovereignty

The German State Supreme Court (Oberlandesgericht) in Düsseldorf (OLG Düsseldorf) has held that an anti-suit injunction issued by a British court in a civil proceeding violates German sovereignty.  The Court therefore refuses to enforce the injunction under Article 13(1) of the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters [20 U.S.T. 361, T.I.A.S. No. 6638, 658 U.N.T.S. 163].

The plaintiff brought suit in the High Court of Justice, Queen's Bench Division, Commercial Court London, against Mr. B.  The purpose of the action was to get a court determination whether their commercial dispute may be decided only by the London Court of International Arbitration.  Pursuant to the Hague Service Convention, the Senior Master of the Supreme Court of Judicature, Royal Courts of Justice, applied for the service of the summons, an "Order of Mr. Justice," and other documents.  The Order was a preliminary anti-suit injunction which, without stating any reasons, barred Mr. B. from further pursuing the case in a German trial court (Landgericht).  The receiving court in Germany, the OLG Düsseldorf, found that the Order infringed German sovereignty and rejected it based on Article 13 of the Hague Convention.  The plaintiff asked for a court decision to permit the service of the documents under the Hague Convention.

The OLG Düsseldorf rejects the plaintiff's request.  The purpose of the anti-suit injunction is to halt the proceeding before the Landgericht and prevent further suits in Germany.  This interferes with German judicial sovereignty because German courts decide themselves, based on procedural laws and international treaties, whether they have jurisdiction or whether another court is competent in the matter.  Foreign courts cannot tell German courts whether or to what extent they may act in a certain controversy.  The Court also rejects the plaintiff's argument that the order is directed at the defendant, not the German courts.  Pursuant to German procedural law, courts need the cooperation of parties in pending proceedings.  The absence of a party may bring the proceedings to a halt.  Therefore, an antisuit injunction actually affects the courts' activities and may be equivalent to directly ordering a German court to halt a proceeding.

Furthermore, a party must be able to present all necessary facts and motions to a German court.  Foreign courts cannot give orders to the parties to German court proceedings regarding the kind or content of the proceedings.  Therefore, such a judicial document will not be forwarded by the German receiving court.  Finally, the Court notes that the ultimate purpose of an anti-suit injunction is to deprive another court of jurisdiction.  Therefore, the German Judiciary itself will decide whether it has competence and jurisdiction on a case-by-case basis.

Citation: OLG Düsseldorf, Beschl. v. 10.1.1996 - 3 VA 11/95, 1996 ZIP 6/96, page 294.

BANKING

U.S. Treasury issues regulations to implement 1996 Antiterrorism Act, barring financial transactions with countries that promote terrorism

On April 24, 1996, President Clinton signed the Antiterrorism and Effective Death Penalty Act of 1996 [Pub.L. 104-132, 110 Stat. 1214-1319].  The Act bars financial transactions with countries that the U.S. has designated as supporting terrorism.  These include Cuba, Iran, Iraq, Libya, North Korea, Sudan, and Syria [see § 321 of the Act]. 

To implement the Act, the U.S. Department of Treasury has recently issued regulations [see 31 C.F.R. Part 596].  Sudan and Syria were not already subject to economic sanctions administered by the Office of Foreign Asset Control.  As to them, the regulations generally ban U.S. persons from receiving donations and from engaging in financial transactions that potentially further terrorist acts in the U.S.

The regulations describe prohibited financial transactions, permitted (licensed) transactions, as well as the record-keeping requirements.  The effective date of the regulations is August 22, 1996.

In a related matter, the U.S. Treasury amended the existing foreign asset control regulations and related regulations concerning Cuba, Iran, Libya, and Iraq [see 31 C.F.R. Parts 500, 515, 535, 550, 560, 575].  The changes cite the Act as an authority for the regulations and criminal penalties.

Citation:  61 Federal Register 43462 (August 23, 1996) [amending 31 C.F.R. part 596]; 61 Federal Register 43459 (August 23, 1996) [amending 31 C.F.R. Parts 500, 515 ...].  [Subscribers may also obtain these documents via the Government's internet site (http://www.fedworld.gov) or the 24-hour fax-on-demand service by calling (202) 622-0077.]

OCC, Federal Reserve and FDIC rules implement Basel Capital Accord amendment that requires banks to measure market risk according to specified parameters

The U.S. Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (FDIC) have issued a joint final rule that amends their respective risk-based capital standards [12 C.F.R. Part 325].  The risk-based capital standard of the three agencies rests on the "International Convergence of Capital Measurement and Capital Standards" developed by the Basel Committee on Banking Supervision and endorsed by the central bank governors of the so-called Group of Ten (G-10) countries [Belgium, Canada, France, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, the UK, and the U.S.].

The joint final rule implements an amendment to this accord.  It requires a measure for market risk to cover all positions in an institution's trading account and foreign exchange, as well as in its commodity positions wherever located.  As a result, any regulated financial institution subject to market risk must measure that risk using its own internal value-at-risk model.

Although the effective date is January 1, 1997, regulated institutions have until January 1, 1998 to comply with these requirements.

Citation:  61 Federal Register 47358 (September 6, 1996).

CHILD ABDUCTION

Although custodial father's move with child from U.S. to Quebec did not violate Act implementing Convention on Civil Aspects of International Child Abduction, Canadian Supreme Court holds that, Quebec courts did not err under Quebec law in ordering child's return to U.S. in mother's custody

In 1987-88 divorce proceedings, the Maryland courts awarded custody of the six-year-old daughter to the father, based in part on evidence that the mother's psychological problems had adversely affected the child.  The mother later obtained the right to supervised access.  In November 1989, the father took the child and moved to Michigan.  Upon the mother's application, the Maryland court approved an inter-party agreement on access but, before the Maryland court entered its order, the father moved with the child to Quebec. 

In 1991, the mother filed a petition for custody in the Quebec courts, invoking the Quebec statute (the Act) that implements the Convention on the Civil Aspects of International Child Abduction [19 ILM 1501, T.I.A.S. No. 11670 (1980)].  After the parties had agreed that the father had violated the Act, the Quebec court awarded the custody to the mother, and, in January 1993, ordered the child's return to Maryland.  The court found that, though sincere, the father had not been able to make the move compatible with the child's mental health and that there was no longer a problem with maternal custody.  After the Court of Appeal dismissed the father's appeal, he took his case to the highest court.

The Supreme Court of Canada also dismisses the appeal.  Preliminarily, it notes that the parties' agreement could not confer jurisdiction upon the trial court when, as here, the implementing Act did not grant it.  When the father moved the child to Quebec, he did not violate the mother's right to custody, a primary concern of the Act, since the mother then had no rights in that respect.  Moreover, the laws of both Quebec and Maryland recognize that the custodial parent has the power to choose the child's place of residence, subject only to the non-custodial parent's right to object that the change is contrary to the child's best interests. [Accord: Convention, Article 5(a)].

The lower court, however, did properly invoke the Quebec Civil Code and Code of Civil Procedure.  Since both the Act and local law make the "best interests of the child" the standard, the lower court did not err in finding that the child was at risk with her father in Quebec.  In light of that finding, the court properly exercised its local jurisdiction over a resident child's custody to order the child's return to the U.S. in the mother's custody.

Citation: D.S. v. V.W., 134 D.L.R.4th 481 (Can. Sup. Ct. May 2, 1996).

CHOICE OF LAW

German State Supreme Court refuses to recognize "corporation" status of Delaware corporation operating exclusively in Germany; holds defendant who operated in corporation's name personally liable under German law

In a recently reported decision of the State Supreme Court (Oberlandesgericht) in Düsseldorf (OLG Düsseldorf), the Court refused to recognize the corporate status of a Delaware corporation in Germany.

The German subsidiary of D + D.F. Inc. (a N.Y. brokerage firm) brought an action in Germany against the Defendant for certain monies due to its headquarters.  The defendant made all business dealings via First O.I. Corporation (First O. Corp.) and was registered as a company officer.  First O. Corp. was incorporated in Delaware in 1991, and registered in the trade registry (Handelsregister) of Düsseldorf in 1992.  First O. Corp. opened a commodities trading account with the D + D.F. headquarters in the United States, which ended with a loss of $53,262.53.  All documents relating to that account specified that New York law applies.

D + D.F. argued that the defendant is personally liable because First O. Corp. does not have any meaningful relationship with the U.S. and is not recognized as a corporation in Germany.  The defendant argued that New York agency law applied, under which he cannot be held personally liable for his acts on behalf of First O. Corp.  The trial court (Landgericht) held for the plaintiff D + D.F., and the defendant appealed.

The German‑U.S. Treaty of Friendship, Commerce and Navigation of October 29, 1954 [FCN Treaty] [7 U.S.T. 1839, T.I.A.S. No. 3593, 273 U.N.T.S. 3943], Article XXV, paragraph 5, second sentence, provides for the mutual recognition of corporations.  In this case, however, only Germany has been identified as First O. Corp's place of business.  No other valid address or telephone number for that company could be found in the U.S. though its letterhead gave a U.S. address.  Thus, the Defendant's personal liability (Durchgriffshaftung) is determined under German law.  Even though the Treaty does not have a provision that companies meet "public order" requirements, such requirements apply in Germany.

The Court refuses to recognize the Delaware incorporation, because the corporation lacks any real and effective relations ("genuine link") with the U.S. State in which it was established and it operates exclusively in Germany.  Rather, it is a "pseudo-foreign corporation."  The improper purpose of the establishment is to use the liberal requirements of Delaware corporate law to conduct business abroad.  A person who acts on behalf of such a company that is not validly incorporated under German law is personally liable (§§ 11 Abs. 2 GmbHG, 41 Abs. 1 Satz 2 AktG).

Citation:  OLG Düsseldorf, 15.12.1994 - 6 U 59/94, 1996 IPRax, Heft 2, page 128; see also the related article "Die Anerkennung US-amerikanischer Gesellschaften in Deutschland" in the same issue of IPRax at page 100. [Editors' Note: German national conflicts law follows the "seat" rule.  However, the "seat" rule does not apply to U.S. companies because of legal status granted under the FCN Treaty. Article XXV provides that "companies constituted under the applicable laws and regulations within the territories of either Party shall be deemed companies thereof and shall have their juridical status recognized within the territories of the other Party."  Under the terms of the Treaty, U.S. corporations may transfer to Germany without the requirement of liquidating and reorganizing under German corporation law.  For a detailed discussion of the status of companies under FCN treaties, see Ebenroth & Dillon, Gaining the Competitive Edge: Access to the European Market Through Bilateral Commercial Treaties and Taxation Strategies, 28 Tex. Int'l L.J. 269 (Spring, 1993).]

In action against South African airline under Warsaw Convention for lost shipment, Second Circuit elaborates "wilful misconduct" concept; under New York choice-of-law rules, South African law applies; waybill may incorporate essential information by reference

In September 1992, Rustenberg Platinum Mines Ltd. (Rustenberg) contracted with state-owned South African Airways (SAA) to carry precious metals from Johannesburg to New York.  Brink Ltd., the consignee of the air waybill, sued for the alleged theft of six boxes of the shipment worth $1,789,012.67 while they were in SAA's custody.

In this case, the Warsaw Convention [Convention for the Unification of Certain Rules Relating to International Transportation by Air of October 12, 1929, 49 Stat. 3000, T.S. 876, reprinted following 49 U.S.C.A. § 1502] provides the cause of action, while the Foreign Sovereign Immunities Act of 1976 (FSIA) [28 U.S.C. §1602ff] provides the basis of federal jurisdiction over SAA.  Though the Convention presumes that the air carrier is liable, Article 25 limits the carrier's liability to about $9.07 per pound unless the plaintiff shows that the carrier's "willful misconduct" caused the loss.  Granting SAA's motion for partial summary judgment, the district court awarded plaintiff $1,522, the limited liability amount under the Warsaw Convention.

The U.S. Court of Appeals for the Second Circuit affirms in part and reverses in part.  Article 25 of the Warsaw Convention provides that the forum court is to determine "willful misconduct" in accordance with its own domestic law.  The next problem, however, is what law to apply in determining "wilful misconduct."

The U.S. Supreme Court noted in Zicherman v. Korean Air Lines Co., Ltd., 116 S.Ct. 629, 635 (1996) [see 1996 Int'l L. Update 16] that the Warsaw Convention does not authorize the creation of an international or federal common law "in derogation of otherwise applicable law."  In the ordinary diversity case, federal courts would apply the law of the forum.  Here, however, an international treaty governs liability between the parties.

"In short, Article 25 of the Warsaw Convention defers to the law of the forum jurisdiction for a determination of what conduct constitutes 'wilful misconduct' by an air carrier.  When a Warsaw Convention action is filed in a United States district court and no federal statute governs, the law of the United States for purposes of Article 25 is the law of the state in which the district court sits.  In applying the law of the forum jurisdiction, federal courts must also apply that state's choice of law rules." [6627-8]

Here, New York conflicts rules lead to the application of South African law.  New York courts seek to apply the law of the jurisdiction with the most significant interest in, or relationship to, a multistate tort dispute.  In contract cases, New York courts now apply a "center of gravity" or "grouping of contacts" approach.  The court may consider a spectrum of significant contacts, including the place of contracting, the places of negotiation and performance, the location of the subject matter, and the domicile or place of business of the contracting parties.  New York courts may also consider the impact of public policy where it is readily identifiable and reflects strong governmental interests.

Even though the court does not decide whether to apply contract choice of law principles or tort choice of law principles, it finds that South Africa is clearly the center of gravity in this case and has the greatest interest in having its law applied to the controversy.  Therefore, the Court remands for a determination of liability under South African law.

Finally, the Court turns to an issue of first impression, whether incorporation by reference satisfies Articles 8 and 9 of the Warsaw Convention that require an air waybill to "contain" certain essential information.  Of the particulars to be contained in an air waybill, ten are essential for maintaining limited liability, including "(c) agreed stopping places" and the "(e) name and address of the first carrier" (which were allegedly missing from the air waybill in this case). 

Courts of other Warsaw signatories and lower federal and state courts have uniformly concluded that incorporation by reference to readily available timetables satisfies Article (c), and the Second Circuit agrees.  An air waybill that refers the shipper to readily available timetables provides sufficient information to notify the shipper of the agreed stopping places and, therefore, of the international or non-international character of the flight.  As for SAA's address in this case, it was the same as the airport of departure.  Article 8(e) does not designate any particular section or words that must be used to relay the required information.  Therefore, the air waybill complied with the Warsaw Convention and provided SAA with limited liability protection.

A companion case decided the same day, The Tai Ping Ins. Co., Ltd. v. Northwest Airlines, involved the loss of airplane parts en route from Chicago to Hong Kong.  The air waybill stated an incorrect departure date.  Without the correct departure date, the shipper could not refer to the timetables to ascertain stopping places.  The Second Circuit notes that an air waybill cannot effectively reveal the agreed stopping places by incorporation of its timetables unless it also includes the information necessary to apply those timetables to the contract of carriage.  Thus, effective incorporation depends on the accuracy of other information in the waybill.  If Northwest chooses both to incorporate the agreed stopping places by reference to its timetables and to alter essential terms of the contract on which the incorporation depends (here: the flight and flight number), then Northwest bears the risk that the incorporation will fail under Article 8(c) of the Warsaw Convention.

Citation: Brink's Ltd. v. South African Airways, No. 95-7872 (2nd Cir. August 8, 1996); The Tai Ping Ins. Co., Ltd. v. Northwest Airlines, No. 95-9278 (2nd Cir. August 8, 1996).

CORPORATIONS

[See the decision of the OLG Düsseldorf, Germany, refusing to recognize a Delaware corporation operating in Germany under CHOICE OF LAW.]

EXTRADITION

In challenge to certification for extradition to Italy, Second Circuit upholds constitutionality of extradition statute

Paolo Lo Duca, an Italian citizen and alleged member of the Sicilian Mafia in New York City, challenged his certification for extradition to Italy on constitutional grounds.  The U.S. Court of Appeals for the Second Circuit considers the extradition statute [18 U.S.C. § 3184 (1994)] constitutional and not in violation of the doctrine of separation of powers, and dismisses Lo Duca's petition for a writ of habeas corpus. 

Extradition officers of the Immigration and Naturalization Service (INS) do not exercise judicial power under Article III of the Constitution, and their adjudication of extradition complaints does not undermine the Judiciary.  The Court notes that the D.C. Circuit had dismissed a similar claim for lack of jurisdiction [see Lobue v. Christopher, No. 95-5293 (D.C. Cir. April 30, 1996); see 1996 Int'l L. Update 54].

Citation:  Lo Duca v. United States, No. 95-2462 (2nd Cir. August 29, 1996).

FOREIGN SOVEREIGN

IMMUNITY

In damages claim by Holocaust survivor, Seventh Circuit finds no exception to sovereign immunity to permit suit against Federal Republic of Germany; Germany's acts to compensate Nazi victims were not "commercial activity"

Irving Wolf was born in Czechoslovakia in 1915 and suffered unspeakable abuse in various German prisons and detention camps during the Nazi regime.  After Wolf became a U.S. citizen, he sought compensation from the restitution funds that Germany had set up.  Various attorneys failed to obtain satisfactory relief on his behalf; Wolf recovered only DM 1,800 [about $1,200].  Finally, in 1993, Wolf brought an action against Germany and The Conference on Jewish Material Claims Against Germany, Inc [an organization representing 24 Jewish organizations worldwide].  The district court found that Germany was immune from suit under the Foreign Sovereign Immunities Act of 1976 [28 U.S.C. §§ 1330, 1602-11], and that the act of state doctrine barred review of the decisions of the German Government.

The U.S. Court of Appeals for the Seventh Circuit affirms.  Wolf first argued that Germany had breached a covenant of good faith and fair dealing which amounts to a tort.  The Court finds the claim barred.  The tort exception to the FSIA [§ 1605(a)(5)] does not apply because the alleged injury must have occurred within the territorial jurisdiction of the U.S. See Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 439 (1989).

The Court also rejects Wolf's argument that the "commercial activity" exception [§ 1605(a)(2)] applies to Germany's activities in setting up the restitution funds.  Germany's actions, however, were not "commercial" within the FSIA.  German regulations and programs to pay reparations to the victims of National Socialism are sovereign acts, not ordinary commercial transactions that private parties might undertake.

Citation:  Wolf v. Federal Republic of Germany, No. 95-3247 (7th Cir. September 5, 1996).

FORUM NON CONVENIENS

After airplane crash in France, Eleventh Circuit affirms dismissal on forum non conveniens grounds because of hardship to defendants and Alabama court

Dr. Dominique Lachiver died in the crash of a private plane he was piloting in France.  His estate brought this product liability and wrongful death action against the manufacturer of the airplane engine, Teledyne Industries, Inc., and J.B. Smith, a Teledyne employee and Alabama citizen.

According to the complaint, Smith had certified the allegedly defective engine as "airworthy."  The Federal Aviation Administration (FAA) had appointed Smith as the "designated manufacturing inspection representative" (DMIR).  He was thus authorized to perform FAA inspection and certification functions.  After the case was removed to federal court, the defendants moved to dismiss for forum non conveniens.  The district court granted dismissal subject to certain conditions.  For example, the defendants had to submit to the jurisdiction of the French courts and waive any statute of limitations or jurisdictional defense.  This appeal ensued.

The U.S. Court of Appeals for the Eleventh Circuit affirms.  As for the dismissal on forum non conveniens grounds, the Court points out that such a decision is within the district court's discretion when trial in the plaintiff's chosen forum would impose a heavy burden on the defendant or the court, and an adequate alternative forum is available.  While a plaintiff's choice of a home forum is entitled to deference, foreign plaintiff's choice receives less weight.  Here, the defendants agreed to an alternative forum in France.

As to the hardship inquiry, several factors indicate that trying the case in Alabama would be unduly burdensome.  Witnesses such as the crash investigators, eyewitnesses, and the aircraft owner are in France.  They are presumably French-speaking, requiring the parties to hire interpreters at trial.  Further, the aircraft wreckage (including the allegedly defective engine) is in France.  Finally, the parties have agreed that French substantive law applies.  Thus, a federal judge in Alabama would have to ascertain and apply French substantive law, and so would the U.S. Court of Appeals if an appeal ensued.

Other factors favoring France include the lack of compulsory process to secure attendance of French witnesses in a U.S. proceeding, and the cost of transporting and maintaining French witnesses who agree to testify.  Finally, the Court refuses to give any weight to factors such as the absence of jury trials and contingency fee arrangements in France.

Citation: Magnin v. Teledyne Continental Motors, 91 F.3d 1424 (11th Cir. 1996).

JUDICIAL ASSISTANCE

Second Circuit affirms 28 U.S.C. § 1782 order to compel disclosure of testimony and documents about U.S. transactions by bankrupt company for use in pending Italian bankruptcy proceeding

Attorney Louis Mangone represented Laborvetro, an Italian company that filed for bankruptcy in 1983 in Milan.  Lancaster Factoring Company Limited, as Laborvetro's agent, applied in New York district court for a subpoena under 28 U.S.C. § 1782 to obtain testimony and documents concerning Laborvetro's financial transactions.  Lancaster's petition explained that the court-appointed trustee had determined that there may be claims against Laborvetro's U.S. representative and Laborvetro's executive officer.  Mangone appealed from the district court's order requiring him to produce the requested evidence.

The U.S. Court of Appeals for the Second Circuit affirms.  Under 28 U.S.C. § 1782, a district court may order a person who resides or is found in the district to give testimony or produce a document or other thing for use in a foreign or international tribunal.  The order may be made upon application of a tribunal or of any "interested person."  Section 1782 requires that the applicant request the evidence for use in "a proceeding." The Second Circuit takes this to mean that the foreign official must be carrying out an adjudicative function.  It has also held that the adjudicative proceeding must be imminent -- very likely to occur very soon.  Here, a proceeding is already pending in the bankruptcy court in Milan.  A bankruptcy proceeding settles the value of the debtor's estate, and falls within the intended scope of § 1782.

Citation:  Lancaster Factoring Co. Ltd. v. Mangone, 90 F.3d 38 (2nd Cir. 1996).

Russian Federation and United States have agreed to render mutual legal assistance in investigation and prosecution of listed types of criminal activity

The United States and the Russian Federation have entered into an agreement on mutual cooperation in criminal law matters, effective February 5, 1996.  As with most modern judicial assistance arrangements, each party is to designate a "central authority" to coordinate directly on requests for assistance.

Under Article 2(2) the agreed-on assistance will extend to "(1) obtaining testimony, statements and materials; (2) providing documents, records and other items; (3) serving documents; (4) locating and identifying persons; (5) executing searches and seizures; (6) taking actions related to immobilization and forfeiture of assets; restitution; collection of fines; and (7) any other assistance not prohibited by the laws of the Requested party."

The Agreement limits assistance to offenses that its Annex describes in general terms.  These include, for example, drug offenses, organized crime, money laundering, violent crimes, control of nuclear weapons, fraud, corruption, sexual exploitation of children and other matters criminalized in international treaties and conventions.  It does not include distinctively military offenses and pertains only to matters that constitute an offense under the laws of the requested party. 

The Agreement also deals with language problems and spells out the required information the requesting state must supply.  Each party consents to take measures preserving confidentiality of requests, subject only to a contrary agreement or to laws mandating disclosure for certain purposes.

The agreement does not preclude the giving of aid pursuant to other international agreements or the laws of the parties.  It does, however, include a commitment to move toward the drafting and ratification of a formal judicial assistance treaty on these subjects.  Upon its effective date, the treaty will supersede the present agreement.

Citation: State Department No. 96-38, KAV No. 4518.  Your may obtain a copy of the Treaty by calling the U.S. State Department Treaty Office at (202) 647-1345.

JURISDICTION

First Circuit affirms denial forum non conveniens motion made by Hong Kong corporation doing business exclusively in Hong Kong; finds that solicitation of business in Massachusetts provides sufficient contacts

In 1993, Sally Nowak drowned in a swimming pool of a Hong Kong hotel while accompanying her husband on a business trip.  Her husband (Nowak) brought a wrongful death action against the hotel owner, Tak How Investments, Ltd. (Tak How), in a Massachusetts state court even though Tak How does business only in Hong Kong.  After removal to federal court, Tak How moved for dismissal for lack of personal jurisdiction and forum non conveniens, which the district court denied.  Believing that a resulting judgment would not be enforceable in Hong Kong, Tak How did not answer the complaint, and the district court entered a default judgment against Tak How for $3,128,168.33.  Tak How appealed the denial of its motions.

The U.S. Court of Appeals for the First Circuit affirms.  Mr. Nowak's employer, Kiddie Products, Inc., does extensive business in Hong Kong, and he usually travelled there twice a year.  Since 1992, several other Kiddie Products employees have stayed exclusively at the same hotel and received a corporate discount.  Also, Tak How had publicized its hotel internationally and sent direct mail solicitations to previous guests residing in Massachusetts.

In a diversity action involving a nonresident defendant, the forum state's long-arm statute ordinarily sets the standards for personal jurisdiction.  The Massachusetts statute [Mass. Gen. Laws Ann. ch 223A, § 3(a) 1985] restricts personal jurisdiction more than the Constitution does.  Therefore, there must be sufficient contacts between the defendant and the forum state to satisfy both the Massachusetts long-arm statute and the Constitution.

Under the Massachusetts statute, the defendant must have transacted business in Massachusetts and the plaintiff's claim must have arisen from the transaction of business by the defendant.  Here, Tak How's solicitation of business in Massachusetts provides sufficient contacts with the forum.  As for the constitutional restraints, personal jurisdiction requires that [1] the claim arise directly out of, or relate to, the defendant's forum-state activities. [2] The defendant's forum-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable. [3] The exercise of jurisdiction must, in light of the Gestalt factors, be reasonable.

Here, Tak How argues that relatedness requires a proximate cause relationship between its Massachusetts contacts and Nowak's cause of action.  The First Circuit accepts the proximate cause standard because it clearly distinguishes between foreseeable and unforeseeable risks of harm.  Strict adherence to a proximate cause standard in all circumstances, however, is unnecessarily restrictive; the Court sees no reason why, in the context of a relationship between a contractual or business association and a subsequent tort, the absence of proximate cause per se should always render the exercise of specific jurisdiction unconstitutional.  When a foreign corporation directly targets residents in an ongoing effort to further a business relationship, and achieves its purpose, it may not necessarily be unreasonable to subject that corporation to forum jurisdiction when the efforts lead to a tortious result.  Such a nexus between the contacts and the cause of action is enough for due process, at least at the relatedness stage.  Even though Tak How's solicitation of Kiddie Products' business and Mrs. Nowak's death does not constitute a proximate cause relationship, it does represent a meaningful link between Tak How's contact and the harm suffered which is sufficiently strong at this early stage of the inquiry.

Further, Tak How's contacts qualify as purposeful availment, and the Gestalt factors (such as the defendant's burden of appearing and the forum state's interest in the dispute) weigh in favor of Massachusetts.  Finally, regarding forum non conveniens, Tak How failed to show oppressiveness to itself or convenience on Nowak's part.  Even though Massachusetts choice-of-law rules require the application of Hong Kong law, this concern is insufficient to overcome the presumption in favor of the plaintiff's chosen forum.

Citation:  Nowak v. Tak How Investments, Ltd., 1996 U.S.L.W. 2145, No. 96-1006 (1st Cir. August 22, 1996).

In dispute involving letter of credit, Eighth Circuit holds that foreign bank's issuance of letter of credit to U.S. party does not by itself create personal jurisdiction over issuing bank

Moog World Trade Corp. agreed to sell automobile parts to a customer in Mexico.  The customer's Mexican bank issued an irrevocable letter of credit naming Moog as beneficiary.  The Missouri confirming bank, however, dishonored the letter of credit.  Moog sued that bank and the Mexican issuing bank.  The district court dismissed Moog's action for lack of personal jurisdiction, and Moog appealed.

The U.S. Court of Appeals for the Eighth Circuit affirms.  After reviewing the function of international letters of credit, the Court rejects Moog's argument that the Mexican bank "made a contract in Missouri" by issuing an irrevocable letter of credit that Moog had "accepted" by presenting a draft for payment.  When the Mexican bank issued its letter of credit, it did not make a contract with Moog, it performed a contract with its Mexican customer.  The identity and location of the beneficiary did not matter to the bank, because it looked to the Mexican customer for the fees and reimbursement of payments.  The bare letter of credit obligation, while contractual in nature, did not amount to the making of a contract in Missouri.  Therefore, the transaction does not fall within the scope of the Missouri long-arm statute. 

Furthermore, based on traditional due process principles, almost all federal courts have held that a bank issuing a commercial letter of credit at its customer's request, payable at the bank's offices, does not by itself create jurisdiction in a distant forum where the beneficiary resides.

In this case, the U.S. seller-beneficiary had several ways to protect its interests: (1) delaying shipment until the bank honored the letter of credit, (2) reclaiming the goods from the carrier after dishonor, or (3) making the letter of credit payable at the counter of a U.S. confirming bank.  When the seller has failed to protect itself in this manner, it is not fair play to subject a foreign bank to the burdens of wrongful dishonor litigation in the U.S.

Citation: Moog World Trade Corp. v. Bancomer, S.A., 90 F.3d 1382 (8th Cir. 1996).

In dispute over reinsurance agreement, Sixth Circuit affirms dismissal of contract action for plaintiff's failure to prove personal jurisdiction over Danish insurance company by preponderance of evidence

Nationwide Insurance Company (Nationwide), based in Ohio, operated an international reinsurance pool, called Property Pool 920.  It provided reinsurance on underlying policies of catastrophic coverage for risks located throughout the U.S, Canada, and the Caribbean Islands.  After negotiations in Monte Carlo, Tryg International, a Danish insurer and reinsurer (Tryg), located in Lyngby, Denmark, joined Pool 920. 

In 1993, Tryg discontinued its Pool 920 obligations, and Nationwide filed a breach of contract and declaratory judgment action against it.  After some discovery as to jurisdictional facts, but without an evidentiary hearing, the district court granted Tryg's motion to dismiss for lack of personal jurisdiction.  Nationwide appealed.

The U.S. Court of Appeals for the Sixth Circuit affirms.  The Sixth Circuit has held that a plaintiff must establish jurisdiction by a preponderance of the evidence where the district court holds an evidentiary hearing on the matter.  Since the court did not hold a hearing, Nationwide claimed that it only had to make out a prima facie case that personal jurisdiction existed.  The Court does not decide that question, however, because Nationwide failed to carry even the lesser burden.  The Court suggests that it is inclined to agree with Nationwide's procedural point.

 Because the Ohio long-arm statute [Ohio Rev. Code § 2307.382] extends to the constitutional limits of the due process clause, the Court only reviews whether the assertion of jurisdiction over Tryg International would violate constitutional due process.

The Court finds no support for general jurisdiction.  Tryg's relationship with Nationwide included a brief reinsurance agreement in 1982, and culminated in Tryg's joinder of Pool 920.  None of the agreements required Tryg to send its representatives to Ohio to conduct any business.  The contacts are sporadic at best.

Nor is there a basis for specific jurisdiction.  The existence of a contract with a citizen of the forum state, standing alone, is not enough to bestow personal jurisdiction over a foreign defendant.  Rather, a court must review prior negotiations, contemplated future consequences, the terms of the contract, and the parties' actual course of dealing to determine whether the defendant purposefully established minimum contacts within the forum.  Here, the Court agrees with Tryg that its remitting of funds to an Ohio account, and its keeping of certain minimum funds in the account as collateral, did not furnish a sound basis for specific jurisdiction.  Nor did it make a difference that Tryg had once sent a representative to negotiate a settlement.  Given that Tryg International did not "purposefully avail" itself of the privilege of action with Ohio, and that it had minimal connections with that state, jurisdiction would be unreasonable.

Citation:  Nationwide Mutual Ins. Co. v. Tryg Int'l Ins. Co., Ltd., 91 F.3d 790 (6th Cir. 1996).

SOVEREIGN IMMUNITY

[See also Brink's Ltd. v. South African Airways under CHOICE OF LAW.]

TAXATION

U.S. taxpayers cannot claim federal income tax refund relating to sale of U.K. residence, First Circuit holds, even though U.S. dollar declined before U.K. mortgage was retired

In 1990, the Quijanos (U.S. taxpayers) sold their residence in the United Kingdom and retired the mortgage.  They had bought the residence in 1986 with a mortgage in pound sterling without using U.S. funds.  In their 1990 joint federal income tax return, they originally reported a $308,811 capital gain based on the exchange rate at date of purchase ($1.49 to 1 pound) to calculate the adjusted cost basis, but using the exchange rate at date of sale ($1.82 to 1 pound) to calculate the sale price.  They later amended their return to claim a $30,610 refund arrived by using the exchange rate at date of sale ($1.82 to 1 pound), which reduced the capital gain to $199,491.  The Internal Revenue Service (IRS) disallowed the amended refund claim.

The U.S. Court of Appeals for the First Circuit affirms.  Under Section 985(a) of the Internal Revenue Code (IRC), income liability determinations are to be made in the "taxpayer's functional currency," which is the U.S. dollar for individual U.S. taxpayers.  Here, the Government agreed that the taxpayers had suffered a loss because the value of the dollar had declined against the pound sterling.  The taxpayers conceded that the mortgage loan transaction was not carried out by a trade or business or entered into for profit [see IRC § 165(c)].  They asked the Court, however, to adopt an integrated transaction approach to allow them to set off their $100,000 mortgage-loan transaction loss against the capital gain realized from the sale of their residence. 

The Court notes, however, that Congress has foreclosed an integrated transaction approach to the acquisition, financed exclusively with foreign currency, that is involved in this case.  "'To the extent provided in the regulations,' .. borrowing under a debt instrument in which the taxpayer is obligated to repay the loan in 'a nonfunctional currency,' [§ 988(c)(1)], will qualify for treatment as part of a 'section 988 hedging transaction' provided the taxpayer (i) entered into the transaction primarily 'to reduce risk of currency fluctuations with respect to property which is held or to be held by the taxpayer,' [§ 988(d)(A)(i)], and (ii) identified the transaction as a section 988 hedging transaction. [§ 988(d)(2)(B)]" [29]

The Tax Reform Act of 1986 provides that the Section 988 rules would be inapplicable to foreign currency gain or loss recognized by a U.S. individual residing outside of the U.S. upon repayment of a foreign currency denominated mortgage on the individual's principal residence.  Exchange gain or loss is separately accounted for, apart from gain or loss attributable to the underlying transaction.

The nonintegrated tax treatment Congress accords the acquisition, sale, and financing of the taxpayers' residence simply renders nondeductible the foreign exchange loss on their foreign-currency denominated mortgage loan.  On the other hand, if the foreign currency increases in value (as against the dollar) by the time the property is sold, the resulting gain in U.S. dollars, the functional currency of the individual U.S. taxpayer, plainly qualifies as realized income and is fully taxable.

Citation:  Quijano v. United States, 93 F.3d 26 (1st Cir. 1996).

Treasury Department issues temporary rules regarding tax treatment of corporate distributions to foreign persons

The U.S. Treasury Department has issued temporary rules to amend the Income Tax Regulations relating to the distribution of stock and securities under Section 355 of the Internal Revenue Code to foreign persons [see 26 C.F.R. Part 1].  The rules modify the "gain recognition agreement" (GRA) exception under which certain corporate distributions of domestic corporations to foreigners are tax-deferred.  The effective date of the temporary regulations is September 13, 1996.  The Treasury Department is preparing final regulations on this issue.

Citation:  61 Federal Register 42165 (August 14, 1996) [temporary regulations]; 61 Federal Register 42217 (August 14, 1996) [proposed rulemaking].

TERRORISM

[See also Government Sanctions Regulations under BANKING].

TRADE

Mexico issues technical standard on the packaging of cosmetic products

Mexico has issued a new technical standard (NOM-141-SSA1-1995) for the packaging and labelling of cosmetics and toiletry articles.  The standard was developed with participation of the Health Department, trade associations, as well as companies such as Procter & Gamble and Colgate-Palmolive.

The standard sets forth the information on ingredients and handling that the labels of such products must contain to be sold in Mexico.  For example, the label must indicate the manufacturer, the amount of the product included, a list of ingredients by quantity in descending order, and safety advice.  Special warning phrases must be included on certain products such as those containing peroxides, hydroquinone, or formaldehyde.  The information must be provided in Spanish but additional languages are permitted.  The standard entered into force on July 10, 1996.

Citation: Proyecto de norma oficial Mexicana NOM-141-SSA1-1995, bienes y servicios, etiquetado para productos de perfumería y belleza preenvasados, 1996 Diario Oficial de la Federación [Official Gazette of Mexico], July 9, 1996.

The United States in the World Trade Organization:  Presently, the U.S. in involved in several significant developments in the WTO:

- The Dispute Settlement Body has adopted the first WTO panel report, as modified by the Appellate Body report, which concerns Venezuela's and Brazil's complaints against U.S. standards for reformulated and conventional gasoline.  The U.S. has announced that it will comply with the panel report and consult with Venezuela and Brazil regarding the implementation of the panel report.

- The Dispute Settlement Body (DSB) has established a panel to examine U.S. complaints about Canada's measures regarding foreign periodicals.  The U.S. challenges Canada's import ban on certain periodicals, as well as allegedly discriminatory excise taxes and postal rates.  The DSB has also established panels to examine (a) the complaints by Ecuador, Guatemala, Honduras, Mexico and the U.S. against the European Communities' regime for the importation, sale and distribution of bananas, and (b) India's complaint against U.S. measures on woven wool shirts and blouses.

- At the May 22 meeting of the Council for Trade in Goods (CTG), the U.S. complained that the EC reclassified certain high-technology products (such as network equipment and personal computers with television capabilities) into a higher tariff category.  The U.S. and EC are planning consultations to resolve the matter.  At the same meeting, several countries and the EC expressed concern over the imminent implementation by the U.S. of a prohibition on imports of wild-harvested shrimps from countries with U.S.-incompatible policies on the protection of sea turtles, pursuant to a recent decision of a U.S. court [see Earth Island Institute v. Christopher, 913 F.Supp 559, 922 F.Supp. 616 (U.S. Court of Int'l Trade 1995 & 1996) (federal officials required to enforce Endangered Species Act on worldwide basis)].

- The Committee on Regional Trade Agreements is planning to review 23 trade agreements, including NAFTA (goods & services) and MERCOSUR. Citation:  WTO Focus, Number 11, June-July 1996.  As of July 26, 1996, the WTO has 123 members.  Many WTO documents are available at the WTO's Internet Web site [http://www.unicc.org/wto].

EC Economic and Social Committee issues opinion on EU-U.S. relations:  The Economic and Social Committee of the European Community adopted an opinion on EU-U.S. relations in which supports the New Transatlantic Agenda.  The opinion addresses political and economic relations, as well as the new transatlantic marketplace (TMP).  Citation:  Opinion of the Economic and Social Committee on the 'Relations between the European Union and the United States,' 1996 Official Journal of the European Communities (C 212) 61, 22 July 1996.

UN General Assembly approves Nuclear Test Ban Treaty:  On September 10, 1996, the General Assembly of the United Nations approved the Comprehensive Nuclear Test Ban Treaty by a 153 to 3 vote [see U.N. documents A/50/L.78, 6 September 196; and Add.1, 10 September 1996].  The countries that voted against the Treaty are India, Bhutan and Libya.  It is not known if and when the Treaty will enter into force because India and Pakistan, who are among the 44 actual or potential nuclear powers, have announced that they would not sign it.  Citation: You may obtain a copy of the Treaty by calling the United Nations Press Office at (212) 963-7160.  Several disarmament treaties are available on the World Wide Web site of the Washington Post at [http://www. washingtonpost.com]. Click on the "screen" symbol saying "For more information." Statements of Secretary Christopher and Russian Foreign Minister Primakov are reprinted in U.S. Department of State Dispatch, Vol. 7, No. 31.

U.S. State Department no longer restricts most of former Yugoslavia and former Soviet States under International Traffic in Arms Regulations:  Effective July 12, 1996, the U.S. Department of State has amended the International Traffic in Arms Regulations [22 C.F.R. Part 126] to reflect that it is no longer the policy of the U.S. to restrict defense articles or services destined for or originating in the states of former Yugoslavia (with the exception of the Federal Republic of Yugoslavia (Serbia and Montenegro).  It includes Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, and Slovenia [61 Federal Register 36625 (July 12, 1996)].  In two subsequent amendments, the Department of State permits these states to export defense articles and services to the Ukraine (effective August 2) [61 Federal Register 41737 (August 12, 1996)], as well as Georgia, Kazakstan, Kyrgyzstan, Moldova, Turkmenistan and Uzbekistan (effective July 17) [61 Federal Register 41499 (August 9, 1996)].  The Department of State will review requests for licenses or approvals on a case-by-case basis.  In a related amendment, the Department of State formally adds Afghanistan to the list of controlled countries because of the ongoing civil war in that country.

ICJ rejects preliminary jurisdictional objections in case of Bosnia and Herzegovina v. Yugoslavia:  In the case concerning the Application of the Genocide Convention, the International Court of Justice (ICJ) found that it has jurisdiction under Article IX of the Convention on the Prevention and Punishment of the Crime of Genocide of 7 December 1948 [78 UNTS 277].  The action was brought in 1993 by Bosnia-Herzegovina against the Federal Republic of Yugoslavia.  In rejecting Yugoslavia's jurisdictional objections, the ICJ notes that the Convention territorially limits the obligation of each State to prevent and punish the crime of genocide.  Also, the Convention does not exclude any form of State responsibility (for example, only for "rulers" or "public officials").  The ICJ will now consider the merits of the case under Article IX of the Genocide Convention.  Citation: ICJ Communiqué, No. 96/25, 11 July 1996.

U.S. signs Inter-American Convention Against Corruption:  On June 2, 1996, Deputy Secretary Talbott signed in Panama City the Inter-American Convention Against Corruption. The Organization of American States (OAS) set up the Convention. Its members are mostly Latin American countries. Citation: U.S. Department of State Dispatch, Vol. 7, No. 24, page 305.

Third and Eleventh Circuits rule on Deportation issues:  In an en banc case, the Eleventh Circuit upholds a prior case, United States v. Chukwura, 5 F.3d 1420 (11th Cir. 1993), cert. denied, 115 S.Ct. 102 (1994), that allowed a district court to unilaterally order deportation as a condition of supervised release pursuant to 18 U.S.C. § 3583(d).  The First, Fourth and Fifth Circuits have held that Section 3583(d) does not permit district courts to order deportation as a condition of supervised release.  Citation: United States v. Oboh, 92 F.3d 1082 (11th Cir. 1996).

In another recent opinion involving deportation, the Third Circuit rejected an alien's constitutional challenge to a provision of the Immigration and Nationality Act (INA) [8 U.S.C. § 1101] Section 1101 authorizes the deportation of aliens whose presence in the U.S. may cause adverse foreign policy consequences [see § 241(a)(4)(C)(i)]  The alien, however, a member of one of Mexico's most influential families, had failed to exhaust administrative remedies.  Only after such exhaustion, may he or she present constitutional challenges. Citation:  Massieu v. Reno, 91 F.3d 416 (3rd Cir. 1996).

U.S. Neo-Nazi convicted in Germany:  In March 1995, authorities arrested Gary Lauck in Denmark and extradited him to Germany for circulating Nazi propaganda and for conspiring with right-wing groups in Germany.  Lauck is a U.S. citizen who regularly distributed Neo-Nazi propaganda from his hometown in Lincoln, Nebraska.  On August 22, 1996, a Hamburg court convicted Lauck of incitement to violence and incitement of racial hatred.  His lawyers had argued that his activities were legal in the U.S. under the First Amendment.  Citation:  The Week in Germany, September 6, 1996; New York Times, August 23, 1996, Section A, page 8.

China and Taiwan issue new transport regulations: The Chinese Ministry of Trade and Economic Cooperation (MOFTEC) has issued several regulations regarding cargo vessels sailing across the Taiwan Straits.  MOFTEC must approve those who engage in cargo transport and will publish lists of approved cargo agents.  The PRC deems Cargo transport by sea between Chinese and Taiwanese ports as "domestic transportation with special management."  The new procedures became effective August 21, 1996.  Citation: Newsletter of the Embassy of the People's Republic of China, No. 17, August 27, 1996.

Coca-Cola to acquire Amalgamated Beverages Great Britain Ltd.: Coca-Cola Enterprises Inc. is proposing to acquire the parent company of the British bottler Coca-Cola & Schweppes Beverages Ltd. by way of purchase of share capital.  The latter would also receive the exclusive right to manufacture, distribute, sell and market Cadbury Schweppes soft drink brands in Great Britain.  The EC Commission is reviewing the proposed transaction.  Citation: 1996 Official Journal of the European Communities (C 241), 4, 5, 20 August 1996.

U.S. Senate approval of Chemical Weapons Convention postponed:  The approval of the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and their Destruction (Chemical Weapons Convention) by the U.S. Senate has been indefinitely postponed for lack of political support (see, for example, 142 Congressional Record S10365-01, Sept. 12, 1996).  The Convention, which was opened for signature on 13 January 1993, regulates the production, processing, and use of chemicals that may be used as chemical warfare agents.  Most of the regulated chemicals are so-called "dual use" chemicals that also have legitimate commercial uses.  For information, contact the Preparatory Commission of the Organisation for the Prohibition of Chemical Weapons (OPCW), Provisional Technical Secretariat, Laan van Meerdervoort 51, 2517 AE The Hague, The Netherlands, Phone: (31)(70) 3761-700, FAX: (31)(70) 3600-944. The Chemical Weapons Convention is reprinted at 32 I.L.M. 800.

EU publishes consultative document for modernizing customs procedures:  The Commission of the European Communities, Directorate-General for Customs and Indirect Taxation, has published a "Report on the operation and future shape of the economic customs procedure for inward processing."  This report, which is based on statistics, national surveys and contracts with trade federations, outlines where present Community rules are either applied unevenly or pose practical problems, and identifies possible solutions.  The purpose of the report is to enable trade federations and national administrations to comment before any legislative measures are taken.  Citation:  The notice is published in 1996 Official Journal of the European Communities (C 194) 6, 5 July 1996.  Subscribers may order the consultative document from: European Commission, Directorate-General Customs and Indirect Taxation, Mr. Michael Lux, Unit XXI/B/6, Rue de la loi 200, B-1049 Brussels, Belgium, FAX: (32)(2) 296-33-06.