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 7 (July).

ARBITRATION

Second Circuit sees no conflict between New York Suable Clause and Bermuda insurance association's "Club Rule" mandating arbitration in London and confirms the arbitration award

In March 1990, an oil barge named "Cibro Savannah" exploded in New York harbor causing an oil spill.  Montauk Oil Transportation Corporation (Montauk) owned the barge which it had insured with Steamship Mutual Underwriting Association (Bermuda).  In February 1990, the Association had issued a slip to Montauk confirming coverage of Montauk's four vessels for one year (1) subject to the Club Rules and (2) subject to an attached "New York Suable Clause."

Club Rule 36 provides that the Association directors shall first handle any dispute arising under the insurance agreement. If a  member is dissatisfied with that decision, the dispute is to go to arbitration in London, subject to the English Arbitration Act. In the typewritten New York Suable Clause, on the other hand, the Association agrees to submit to any civil action over a contract matter brought against it in the U.S. District Court for the Southern District of New York. This is without prejudice, however, to the substantive rights of both sides to the contract which English law shall govern.

The damage resulting from the March 1990 explosion would ordinarily have fallen within the terms of Montauk's policy.  The Association later found out, however, that Montauk had plans to sell its vessels prior to the last contract renewal. Treating this as a nondisclosure material to the risk it bore, the Association indicated it would avoid all the policies on Montauk's vessels.

Montauk then sued the Association in the Southern District of New York, seeking a declaratory judgment of the Association's liability under the contract and for money damages arising out of the oil spill. In August 1990, the Court granted the Association's motion under Club Rule 36 to stay the suit pending arbitration. After the directors had ruled against Montauk, it then sought arbitration in London. In November 1994, the arbitrators also ruled for the Association and awarded $133,106 against Montauk to cover the fees and costs of arbitration.

Montauk appealed but the U.S. Court of Appeals for the Second Circuit affirms. Objecting to the Associations's effort to enforce the award pursuant to the Federal Arbitration Act, Montauk mainly argued that the New York Suable Clause conflicted with and superseded Club Rule 36's compulsory arbitration clause. The Court disagrees. Since access to the courts is needed to enforce arbitration awards, the main effect of this standard Suable Clause is to resolve questions of personal jurisdiction over foreign associations. The fact that this particular Association has no assets in New York from which to enforce an award does not make the clause superfluous or ineffective.

Citation: Montauk Oil Transportation Corp. v. Steamship Mutual Underwriting Association (Bermuda) Ltd., 79 F.3d 295 (2nd Cir. 1996).

AVIATION

In upholding jury finding of willful misconduct by airline in 1987 crash, Sixth Circuit finds that Warsaw Convention poses no barrier to the international travellers' personal injury recovery

On August 16, 1987, Northwest Flight 255 crashed during takeoff from the Detroit Metropolitan Airport.  Some 160 plaintiffs sued Northwest Airlines and McDonnell Douglas, the manufacturer of the airplane.  The jury found Northwest Airlines liable for 100% of the damages.  Among the nine issues on appeal, Northwest Airlines argued that the district court erred by "requiring" it to present evidence of the liability disclaimer on the tickets of the Warsaw Convention [49 Stat. 3000, T.S. No. 876 (1934), 49 U.S.C. App. (1988 ed.)], and by failing to remove that evidence from the jury's consideration.  Specifically, Northwest claimed that the court's instruction allowing the jury to consider "the effect of a series of actions or inactions" improperly permitted the jury to "conglomerate" individual instances or ordinary negligence into a finding of willful misconduct without finding that Northwest committed any single act constituting willful misconduct.

The U.S. Court of Appeals for the Sixth Circuit affirms.  As for the Warsaw Convention, the Court notes that it limits an airline's liability to passengers injured in international travel to $75,000 unless the plaintiff establishes "willful misconduct" on the part of the airline.  No principle of law or logic requires a jury evaluating willful misconduct to focus only on discrete acts without regard to the complete chain of events that led to the accident.

Because the Court upholds the jury finding of willful misconduct, the liability limit in the Warsaw Convention poses no barrier to the international travellers' personal injury recovery and sets no limit to Northwest's liability.

Citation: In re air crash disaster: Polec v. Northwest Airlines, Inc., No. 91-2328 (6th Cir. June 6, 1996).

In case of damage to air cargo, Ninth Circuit holds that errors in air waybill do not relieve claimant from giving timely notice of damage to the carrier

Hitachi Data Systems Corporation (Hitachi) had United Parcel Service (UPS) ship seven crates of computer equipment from California to the Netherlands.  The crates fell off a dolly and were damaged at Amsterdam's Schiphol Airport, and Hitachi brought this action based on the Warsaw Convention which governs damage claims against air carriers. The air waybills for Hitachi's shipment required written notice of damage within 14 days of delivery.  It took Hitachi almost 21 months to give notice to UPS.

Hitachi argued that several errors in the waybill that violated Article 8 of the Warsaw Convention made the 14-day period inapplicable. For example, the waybill listed an incorrect UPS address and omitted a scheduled refueling stop in Newfoundland.  The district court found for UPS, and Hitachi appeals.

The U.S. Court of Appeals for the Ninth Circuit affirms. The two questions on appeal are (1) whether UPS's alleged failure to comply with Article 8 of the Convention allows Hitachi to recover despite the late notice, and (2) even if an Article 8 violation does not normally exempt a claimant from notice requirements, whether its non-compliance may be excused because the incorrect address of UPS on one waybill prevented notice.

Article 9 of the Convention provides that if a carrier accepts goods without an air waybill containing all the particulars required in Article 8, the carrier cannot rely on the provisions of the Convention that exclude or limit its liability.  Courts have recognized, however, that Article 9 and other references that "exclude" or "limit" the carrier's liability only reach provisions such as Articles 20 and 22 [recoverable damages]. The purpose of a provision such as Article 9 is to prevent parties from taking advantage of liability limits when they have not provided shippers with information needed to make an informed decision about the advisability of air carriage under the Convention's limited-liability regime.

No such purpose is served by notice requirements like the 14-day period in the waybills. Their aim is to protect the interests of the carriers themselves by receiving prompt notice of damage claims. The Convention provides no notice period for claims of complete loss or destruction of cargo, because the carrier is presumably aware of the situation. Damage to the cargo, however, may not be apparent to the carrier, and notice must be given. It serves no purpose to absolve recipients of any need to pursue their claims with diligence merely because of irregularities in the waybill, otherwise claims could be brought years after the damage is alleged to have occurred.

Therefore, the Court sees no reason to depart from the uniform interpretation among federal courts: Article 9 of the Convention does not permit a shipper or recipient to avoid the notice requirements of Article 26(2) [limitations period] or as specified in a waybill.

The Court also rejects Hitachi's claim for an equitable exemption because it allegedly lacked a valid address for UPS.  Hitachi had the address for the company that had actually issued the waybill, and there is no evidence that Hitachi indeed attempted to contact UPS.

Citation: Hitachi Data Systems Corp. v. United Parcel Service, Inc., 76 F.3d 276 (9th Cir. 1996).

CHOICE OF LAW

In case involving slip-and-fall in Mexico, Supreme Court of Illinois applies Restatement of Conflicts approach and approves application of Illinois law

In 1983, Joseph McIntyre, Donald Fett and Joseph O'Brien arranged a five-day Acapulco vacation with Diane Esser and two other females, all Illinois domiciliaries.  On the morning after their arrival, Esser allegedly slipped on some unpopped popcorn kernels strewn over the kitchen floor and fell on her back.  After hearing her scream, McIntyre came to her aid.  According to Esser, he apologized for having spilled and left the kernels on the floor the night before.

When Esser got back to Chicago, various physicians treated her for back difficulties which included two spinal fusion operations, one in 1984 and another in 1991.  Esser later filed suit against McIntyre in the Illinois courts.  Over defendant's claim that Mexican law applied, the trial court relied on the law of Illinois.  After an appeal of a defendant's verdict, the intermediate appellate court reversed for improper instructions on defendant's standard of care. 

The Illinois Supreme Court granted defendant's petition for review and affirms, applying Illinois law.  The Court holds that Illinois generally follows the choice-of-law criteria set forth in the Restatement of Conflicts (second), §§ 145 and 6.  Under § 145 dealing with injury suits, the court is to apply the law of the place of injury unless some other jurisdiction has a more significant relationship to the occurrence and to the parties.  The first two criteria of § 145 point to Mexico since it was the place both of the injury and of the conduct causing the injury.  On the other hand, Illinois is the common domicile of plaintiff and defendant.  Finally, the Court concludes that the relationship between the parties centered in Illinois.  It was there that O'Brien, an Illinois resident, invited plaintiff to join the group.  Moreover, defendant had planned the trip with O'Brien and Fett in Illinois.

The Court then analyzes these mixed contacts in light of the general policies listed in Restatement § 6.  The Court first concludes that applying Illinois law will not hinder commercial or touristic interactions between the U.S. and Mexico.

"Second, the interest of the state of Illinois in providing a remedy for an Illinois resident who has been allegedly injured by another Illinois resident outweighs Mexico's interest in limiting tort remedies. ... [Illinois' contrary policy] will be circumvented if Mexican law applies since, under Mexican law, plaintiff has no remedy for her claim against the defendant. ... Although Mexico has an interest in activity occurring at hotels within its borders, this is a wholly private dispute involving only Illinois residents." [169 Ill.2d at 300-301]

Citation: Esser v. McIntyre, 169 Ill.2d 292, 661 N.E.2d 1138 (1996).

EXTRADITION

Supreme Court of Canada dismisses appeal by alleged cocaine trafficker based on claimed "egregious misconduct" by Canadian prosecutor who offered to stay U.S. extradition proceedings if accused would plead guilty to Canadian charges

In November 1991, Canadian authorities charged Mr. Leon, a Canadian citizen, with possessing 8 kilos of cocaine in his Toronto warehouse for the purpose of trafficking.  In August 1993, a New York federal grand jury indicted León on three counts involving totally distinct acts of dealing in cocaine, each carrying a minimum sentence of ten years. 

In October 1993, the U.S. issued an extradition warrant, leading to Leon's arrest as he entered the courtroom to begin his Canadian drug trial.  The trial judge stayed his proceedings and set the extradition matter down for hearing.  At this hearing, Leon's Canadian counsel alleged that the Canadian prosecutor had declared that he would stay the extradition proceedings if Leon agreed to plead guilty to the Canadian charges.  Leon unsuccessfully argued that this amounted to "egregious misconduct" by the Canadian prosecutor that would [presumably] invalidate the extradition.  Leon ultimately brought his case to the highest court.  The Supreme Court of Canada, however, dismisses Leon's appeal.  The Court concludes that what the prosecutor proposed did not amount to misconduct at all.  The record fails to show, for example, that the prosecutor put any pressure upon Leon to plead guilty.  Nor was Leon surprised by the extradition warrant for his attorneys knew of its imminence weeks beforehand and had even consulted with the U.S. prosecutor.  The Canadian prosecutor may well have made the offer with the best of intentions because he knew of the longer sentences that might await Leon in the U.S.

Citation: Leon v. United States, 105 C.C.C.3d 85 (Can. Sup. Ct., April 3, 1996).

In habeas corpus proceeding, First Circuit determines whether 1997 reversion to China constitutes "special circumstances" allowing release on bail of extraditee to Hong Kong

Lui Kin-Hong (Lui), a former officer of the British American Tobacco Co., has allegedly been conspiring to receive millions of dollars in bribes to establish a monopoly in exporting certain cigarettes to the People's Republic of China (PRC) and Taiwan.

Upon the request of the United Kingdom on Hong Kong's behalf, U.S. authorities arrested him in the United States and his extradition to Hong Kong is pending.  Initially, the magistrate judge denied Lui a release on bail.  Lui then petitioned for habeas corpus, and the district court released Lui on conditions.  The district court held that Hong Kong's reversion to the PRC on July 1, 1997, raised complex legal issues that would protract proceedings and thus presented a "special circumstance" overriding the presumption against bail.

The U.S. Court of Appeals for the First Circuit, in a per curiam opinion, reverses and orders that Lui be held pending the resolution of the extradition issue.  There is a presumption against bail in extradition cases and only "special circumstances" justify release on bail.  "Special circumstances" may include a delayed extradition hearing.  Other courts have held that such circumstances may also include the raising of substantial claims against extradition on which the relator has a high probability of success, a serious deterioration in the relator's health, or an unusual delay in the appeals process.

Here, the Court does not consider the possibility of a protracted extradition proceeding because of Hong Kong's reversion a "special circumstance," even though, if petitioner is extradited, it may be for trial in the PRC.  Given the current uncertainty regarding Hong Kong's future foreign relations, and the likelihood that authorities will have decided the extradition request before the reversion, the present situation is not a "special circumstance."  Lui may file a new motion for release on bail if circumstances change in the future.

Citation: United States v. Lui Kin-Hong, 83 F.3d 523 (1st Cir. 1996).

EUROPEAN UNION

European Court of Justice specifies law on EU Member State liability to individuals for breach of EU law

In two decisions published on March 5, 1996, the European Court of Justice (ECJ) has clarified European Union (EU) law on Member State liability to individuals for breach of EU law.  As a result, it appears that the basic EU law on Member State liability has been settled.

The ECJ had first elaborated on the EU law principle of Member State liability in the Francovich and Bonifaci cases [1991 ECR I-5357], which involved a Member State's failure to implement a "directive" into national law.  The first of the recent cases, Brasserie du Pêcheur, was an action brought by a French brewer who had suffered damages as a result of the German beer purity law, which had excluded the brewer from the German beer market for several years.  In 1987, the ECJ held the German beer purity law incompatible with the EC Treaty (Article 30).  Since German law did not provide an individual a remedy for its legislative activity, the brewer resorted to EU law.

In the second recent case, Factortame, several parties sought damages for the restrictions imposed by the United Kingdom Merchant Shipping Act of 1988 that the ECJ struck down in 1991.  Here also national law did not provide a remedy, and the plaintiffs relied on EU law to recover damages.

The ECJ focusses on whether Francovich was applicable to types of breach of EU law other than a Member State's failure to implement a "directive."  The Court holds that the principle of Member State liability "applies in all cases of breach of Community law by a Member State, regardless of the organ of the Member State whose act or omission resulted in the infringement."  Therefore, a Member State cannot escape liability for harm suffered by individuals by relying on its constitutional structure.  Member State liability also sets in where the harm results from acts or omissions of the legislature.  It is an instrument for ensuring the protection of individuals and for the proper implementation of EU law in the Member States.

The ECJ has subsequently applied the principle of Member State liability in The Queen v. H.M. Treasury ex parte British Telecommunications plc (Case C-392/93) and R. v. Ministry of Agriculture, Fisheries and Food, ex part Hedley Thomas (Ireland) Ltd. (Case C-5/94).

Citation: Cases C-46/93 Brasserie du Pêcheur v. Federal Republic of Germany, and C-48/93 The Queen v. Secretary of Transport ex parte: Factortame Ltd. and Others (March 5, 1996).  These decisions will be published in the European Court Reports (ECR).

JUDICIAL ASSISTANCE

Fourth Circuit honors German court's request under Hague Evidence Convention and 28 U.S.C. §1782 to order blood test of U.S. resident for use in German paternity action

At some time prior to 1988, Michael Hochkirch filed an action in the Amtsgericht of Ingolstadt, Germany against Keith Morris, a resident of West Virginia.  Hochkirch sought maintenance payments from Morris as his biological father.

In May 1988, the Amtsgericht sent a letter of request to the U.S. Department of Justice and the U.S. District Court for the Northern District of West Virginia seeking assistance in obtaining a blood sample from Morris.  The German court invoked the Hague Convention on the Taking of Evidence Abroad [T.I.A.S. 7444; 23 U.S.T. 2555; 847 U.N.T.S. 231].  After several years of "procedural wrangling," a federal magistrate held a show-cause hearing in March 1994 and afterwards ordered Morris to comply with the letter of request pursuant to 28 U.S.C. § 1782.  Morris appealed.

The U.S. Court of Appeals for the Fourth Circuit affirms. The Court first rejects Morris' main argument that the lower court had erred in failing to determine whether his blood sample was discoverable as a matter of German law.  It points out that both the Hague Convention and § 1782 have in mind a large measure of judicial cooperation in the obtaining of evidence by local courts for use in foreign proceedings.  The federal courts are divided as to whether to look into the pretrial proof-taking rules in the requesting state when a private litigant is requesting aid. Concerns about efforts to circumvent foreign procedural rules, however, do not apply when, as here, the foreign court itself has asked for the evidence.

Morris also objected because the foreign court had not submitted an affidavit supporting the request for evidence.  The Court sees no merit in this point.  "The statute [§ 1782] does not require an affidavit but only that the taking of evidence comply with the Federal Rules of Civil Procedure. ... Morris has not suggested that providing the blood sample conflicts with the federal rules.  Nor could he; good cause for ordering the blood tests exists under F.R.Civ.P. 35." [592-93]

Morris also argued that the information supplied in the request fell short of the demands of Article 3 of the Convention for background information about the German action.  Thus, its failure to specify whether the paternity action was civil or criminal supposedly created uncertainty as to whether he could assert his Fifth Amendment rights. "Blood tests, however, ordinarily do not raise a Fifth Amendment issue, ... and, at any rate, the paternity suit is civil in nature. Indeed, the Convention ... applies only to civil and commercial cases." [593] [Editors' Note: § 1782 applies in both civil and criminal matters].

Citation: In re Letter of Request from Amtsgericht Ingolstadt, 82 F.3d 590 (4th Cir. 1996). [A recent listing of parties to the Hague Evidence Convention includes: Argentina, Australia, Barbados, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Israel, Italy, Luxembourg, Mexico, Monaco, Netherlands, Norway, Portugal, Singapore, Slovak Republic, Spain, Sweden, Switzerland, United Kingdom, United States].

NAFTA

U.S. Treasury sets rules for determining country of origin under Annex 311 of NAFTA

The U.S. Department of the Treasury has issued a final rule to amend the Customs Regulations [19 C.F.R. Part 12, 102, 134] which established the rules for determining when the country of origin of a product is one of the parties to the North American Free Trade Agreement (NAFTA), as required by Annex 311 of the agreement.

Annex 311 requires that the U.S., Canada and Mexico use "Marking Rules" for determining whether a NAFTA member is the country of origin for purposes of Annex 311 (Country of Origin Marking), Annex 300-B (Textile and Apparel Goods), and Annex 302.2 (Tariff Elimination).

Part 102 provides the rules for determining the country of origin, including rules of interpretation.  As a general matter, the following rules determine the country of origin of imported goods other than textile and apparel products (§ 102.11):

"(a) The country of origin of a good is the country in which:

(1) The good is wholly obtained or produced;

(2) The good is produced exclusively from domestic materials; or

(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in § 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied. [...]"

The rule goes into effect on August 5, 1996.  It applies to goods entered into, or withdrawn from, warehouse for consumption on or after that date.

Citation: 61 Federal Register 28932 (June 6, 1996).

NUCLEAR ISSUES

EU publishes agreement with U.S. dealing with cooperation for peaceful use of nuclear energy

The EC Commission published the Agreement of November 7, 1995, with the United States regarding cooperation in the peaceful uses of nuclear energy [see 1995 Int'l L. Update 8 (December)].  The Agreement outlines the scope of cooperation, which includes nuclear fission research, nuclear safety matters, and thermonuclear fusion.  The parties will exchange equipment, materials and scientific information, and facilitate commercial relations such as investments, joint ventures, and trade in nuclear items.  To facilitate carrying out this Agreement, the parties will establish an "administrative arrangement."

Other parts of the Agreement concern:

 Safeguards such as other treaties and the IAEA agreements,

 Rules for nuclear cycle activities (uranium isotope 235 to be enriched up to 20%, otherwise consultations required),

 Implementation of the Agreement, and

 Consultation and arbitration.

The Annexes include a note on intellectual property rights.  The parties are to treat intellectual property arising from joint research in a Technology Management Plan according to certain principles such as permission for both parties to use such intellectual property royalty-free.

Along with the text of the Agreement, the Commission published the Agreed Minute and a Declaration on non-proliferation policy.

Citation:  Agreement for cooperation in the peaceful uses of nuclear energy between the European Atomic Energy Community and the United States of America, 1996 Official Journal of the European Communities (L 120) 1, 20 May 1996.

TAXATION

Majority of U.S. Supreme Court holds that Export Clause bars U.S. from taxing premiums of insurance on exported goods written by foreign companies

IBM exports its products abroad and often pays premiums to foreign insurance companies to cover losses in transit.  In filing its federal excise taxes for the years 1975-84, IBM failed to report any liability under § 4371 of the tax code.  That section imposes a 4% tax on insurance premiums paid to foreign insurers which are not themselves subject to federal income taxes.  When the IRS assessed a § 4371 tax against IBM, it paid the taxes under protest and eventually sued in the U.S. Court of Federal Claims, claiming that the assessment of this tax violated the Export Clause of the Constitution.  Dealing generally with the powers of Congress, Article I provides in Section 9, Clause 5: "No Tax or Duty shall be laid on Articles exported from any State."

The Claims Court agreed with IBM and the Court of Appeals for the Federal Circuit affirmed.  The U.S. Supreme Court granted certiorari to determine whether it should continue to follow its prior ruling in Thames & Mersey Marine Ins. Co. v. United States, 237 U.S. 19 (1915) (Mersey).  Mersey read the Export Clause to bar taxation of insurance on exported goods because it imposed a burden on their exportation equivalent to a tax on the goods themselves.

In a 6 to 2 ruling (Justice Stevens not taking part), the Court declines to overrule Mersey and, in a majority opinion by Justice Clarence Thomas, strikes down the instant tax as applied to IBM.  The government had argued that the Court's later decisions require the overruling of Mersey because it has become out of date in light of cases dealing with analogous problems under the Export/Import and dormant Commerce Clauses.  The former appears in Article I, Section 10, Clause 2 and declares: "No State shall ... lay any Imposts or Duties on Imports or Exports." 

Justice Thomas first rejects the contention that the Court's relaxation of its earlier strict ban on state taxation of interstate commerce should carry over into its Export Clause jurisprudence.  The law under the dormant Commerce Clause after all rests on a "nontextual negative command" whereas the Export Clause explicitly bars Congress from taxing exports.  Nor has the government invited the Court to reconsider its conclusion in Mersey that a tax on export insurance is functionally equivalent to a tax on exportation.

The government's analogies to the Export/Import Clause cases fail to convince Justice Thomas.  Textually, the term "tax" in the Export Clause is broader than "Imposts or Duties."  Moreover, the broad prohibitory language of the Export Clause belies the government's policy argument that the framers intended that it ban only discriminatory taxes.  In Justice Thomas' view, the framers chose to ease southern fears of northern control of Congress by imposing a total ban.  The fact that § 4371 is nondiscriminatory does not save it.

In dissent, Justice Anthony M. Kennedy, joined by Justice Ruth Bader Ginsburg, read the grant of certiorari as squarely raising the question of whether a tax on export insurance was functionally the same as a tax on "articles" as held in Mersey. At oral argument, the government did not bypass this issue but merely stated its preference for a more easily applied test based on discrimination rather than upon the "needless complexity" of Mersey's line-drawing approach. The latter, for example, requires the IRS to determine when the export process begins and to disentangle the cost of open insurance policies as applied to products moving on the domestic leg of their journey abroad.

Even a failure by the government to press a direct attack on Mersey's rationale, in Justice Kennedy's view, in no way prevents the Court from basing its ruling on unraised considerations that would save the constitutionality of an Act of Congress. 

Finally, the dissenters read the Export Clause as applying only to taxes directly upon the articles exported and not upon incidental services such as insurance.  The majority seems unaware that, only eight years after the constitution was adopted, congress passed a similar tax on export insurance that went unchallenged until its repeal in the Jefferson administration.  In passing § 4371, Congress sought to eliminate a perceived competitive advantage that foreign insurers had over domestic companies, thus, in effect, adjudging that such a tax would not run afoul of the Export Clause.

Citation: United States v. International Business Machines Corp., 116 S.Ct. 1793, 64 U.S.L.W. 4419 (1996).

TECHNICAL STANDARDS

EU publishes list of competent testing authorities for "new approach" directives in all EU Member States

The EU has published a new "List of Notified Bodies" under the "new approach" directives on technical harmonization (including the tasks for which they have been notified).  The more than 500 institutions listed therein test certain products for their compliance with European requirements, and award the "CE" conformity mark.

The European "new approach," limits technical harmonization to the adoption of so‑called "essential requirements" for safety, health or other demands.  Products that meet these "essential requirements" can circulate freely in the EU.

So far, the EU has produced "new approach" directives in the areas of, for example:

Toy Safety

Electromagnetic Compatibility

Machinery

Medical Devices

For example, under the heading "Active Implantable Medical Devices," the National Standards Authority of Ireland is responsible for all active medical implants for quality assurance of products regulated under Directive 90/385/EEC [medical devices] that are distributed in Ireland.  The "Telecommunications Administration Centre" in Helsinki, Finland, is responsible for type-examination of all telecommunications equipment regulated under Directives 91/263/EEC and 93/97/EEC [telecommunications] that is distributed in Finland.

Citation: List of notified bodies designated by the Member States and the EFTA countries (EEA Members) under the new approach Directives, 1996 Official Journal of the European Communities (C 172) 1, 15 June 1996.

TRADE

Eleventh Circuit upholds summary judgment for defendant-carriers in suit by purchaser of plastic bags where bill of lading covering sealed container used qualifying terms and carriers could not verify number of bags in container

In October 1992, Asia Trans Line, Inc. (ATL) agreed to carry one sealed container from Inter-Korea Corporation in Korea to Plastique Tags, Inc. (PTI) in New York.  Inter-Korea stated that the container held 4,437,500 plastic bags.  ATL issued a bill of lading declaring: "'SHIPPER'S LOAD & COUNT' SAID TO CONTAIN: 5,600 boxes/4,437,500 ... plastic bags." ATL contracted with DSR Senator Lines to transport the container.  Senator issued a bill of lading identical to the above. 

After the vessel had delivered the container to New York, Senator released the still sealed container to a trucker who carried it to one of PTI's clients.  When the client broke the seal and took inventory, however, it found that 2,618,500 bags were missing.  Invoking the Carriage of Goods by Sea Act (COGSA), PTI later sued the carriers (but not the shipper) in a Florida federal court.  The court eventually gave summary judgment to the carriers on the theory that PTI could not show it had a valid COGSA claim.  PTI appealed.

The U.S. Court of Appeals for the Eleventh Circuit affirms.  The Court preliminarily notes that the clean bill of lading is an indispensable pillar of international trade and commerce.  It is the acknowledgement by a carrier that it has received the described goods for shipment.  COGSA expressly states that a carrier is not bound to include in the bill of lading a term which he has no reasonable means of checking.

PTI argued that the above bill was prima facie proof that the defendants had received full delivery of the goods.  The Court, however, finds that the instant bills are not clean. "In order for a bill of lading to constitute prima facie proof that the carrier received cargo consistent with the terms of the bill, it must either be without limiting language such as 'shipper's load and count' or it must contain terms that the carrier can verify." [slip op. 4-5] 

 These bills not only contained limiting language but also the carrier had no way to confirm the number of bags in the sealed container.  Since PTI failed to produce any other evidence of good delivery, it cannot prove that the loss took place while the carriers had custody of the container.

Citation: Plastique Tags, Inc. v. Asia Trans Line, Inc., 83 F.3d 1367 (11th Cir. 1996).

New technical standards in Mexico affect labelling of consumer products by requiring more specific details on nature and characteristics

The Mexican Department of Standards has issued several technical standards that will affect sales of U.S. products in Mexico. Most importantly, Standard NOM-050-SCFI-1994 sets forth general labelling requirements for consumer products.  This Standard supersedes several prior notices on this subject that the Mexican Diario Oficial had published. Information about the product must be clear and presented in such a way that the consumer can easily understand its nature and characteristics. The label must indicate, for example, the:

 Name and general description of the product,

 Quantity according to Mexican standards,

 Name and address of the manufacturer or another responsible party, and

 Warnings about possible dangers in the form of instructions and danger symbols on the label.

Further instructions for use, handling or preservation may appear either on the label or in an enclosed booklet.  In such cases, the label must refer to the additional instructions.

The manufacturer must provide the information in Spanish though it may also add other languages.  Any warranties must comply with the Mexican Federal Law on Consumer Protection.  Other standards published together with this one affect, for example, the labelling of food and non-alcoholic drinks.

Citation:  1996 [Mexican] Diario Oficial de la Federación [Official Gazette], Primera Sección, January 24, 1996.

Canada and U.S. enter into agreement to coordinate their systems of anti-trust enforcement:  Attorney-General Janet Reno and F.T.C. Chairman Robert Pitofsky along with their Canadian counterpart have signed an "agreement regarding the application of their respective competition and deceptive marketing practices laws."  As Article 1 explains: "The purpose of this Agreement is to promote cooperation and coordination between the competition authorities of the Parties, to avoid conflicts arising from the application of the Parties' competition laws and to minimize the impact of differences on their respective important interests, and, it addition, to establish a framework for cooperation and coordination with respect to enforcement of deceptive marketing practices laws."

Article II details the circumstances in which each competition authority shall notify the other of suspected antitrust violations, e.g., that occur in both the U.S. and Canada, involve the other party's nationals, may lead to remedies that would control conduct in the other party's territory or involve the seeking of information located in the jurisdiction of the other party. Citation: 35 I.L.M. 309-26 (1996).

European Court of Human Rights upholds free speech rights of German teacher: Disagreeing with the German courts, the ECHR holds that the discharge of a German school teacher because of her political activities on behalf of the German Communist Party (DKP) violated her freedom of expression and associational rights under Articles 10 and 11 respectively of the European Human Rights Convention.  The vote was 10 to 9. Citation: Case of Vogt v. Germany (7/1994/454/535), September 26, 1995, 35 I.L.M. 528 (1996).

Vietnam becomes party to U.S.-related multilateral and bilateral agreements:  Effective September 12, 1995, Vietnam acceded to the Convention on the recognition and enforcement of foreign arbitral awards (the New York Convention) [T.I.A.S. 6997; 21 U.S.T. 2517].  Vietnam also signed a postal money order agreement with the United States that entered into force February 1, 1996. Citation: 35 I.L.M. 523, 525 (1996).

Russian Federation enters into agreements with United States over debt rescheduling:  Effective November 29, 1995, Russia and the U.S. had signed an agreement dealing with the rescheduling of certain debts owed to, or guaranteed by, the U.S. Government. By exchange of notes, the two countries amended this agreement.  It entered into force January 2, 1996. Citation: 35 I.L.M. 524 (1996).

Japan accedes to international convention against racial discrimination:  Effective on December 15, 1995, Japan became the 149th nation to join the international convention on the elimination of all forms of racial discrimination [see 5 I.L.M. 352].  Along with declarations, statements and reservations, the convention had entered into force for the U.S. on November 20, 1994.  Citation: 35 I.L.M. 523 (1996).

U.S-German Social Security Agreement: The Second Administrative Agreement on Social Security between Germany and the United States (1996 Bundesgesetzblatt II, number 11, page 301, March 21, 1996) entered into force on May 1, 1996.  The Second Agreement concerns, for example, the amount of contributions paid per calendar month, the way of computing benefits, retroactive voluntary contributions, and transfer of persons between the two countries. Citation: Bekanntmachung über das Inkrafttreten ..., 1996 Bundesgesetzblatt II, number 27, page 27, 20 June 1996.