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 12 (December).

AVIATION

U.S. concludes pioneering "Open Skies" civil aviation agreement with Jordan

On November 10, 1996, the U.S. and the Hashemite Kingdom of Jordan concluded a civil aviation agreement to fully liberalize air traffic between the two countries.  This is the first "Open Skies" agreement in the Middle East and outside of Europe.  The U.S has concluded several Open Skies agreements with European countries, for example with Austria, Belgium, The Netherlands, and Switzerland [see 1995 Int'l Law Update, December, page 11].

The parties have not yet published the Agreement itself but it derives from a standard "Open Skies" agreement similar to those employed with European countries.  These Open Skies agreements generally provide easy access to airports, and put no limits on the capacity or number of flights.  They also allow for "coach sharing," that is, the ability of one airlines to sell seats on flights of other airlines.

Citation:  U.S. Department of State Press Release (November 12, 1996).  [For more information, call the Department of State at (202) 647-4000, or the office for Aviation Negotiations at (202) 647-8001.]

BANKRUPTCY

Second Circuit rules that English law controls on issue of whether bankrupt Maxwell empire could avoid sizeable pre-filing payments to English and French banks; Court praises joint Anglo-American judicial cooperation

The following case is a spin-off of the swirl of legal events set in motion by the mysterious death of British media tycoon, Robert Maxwell.  Death drove his international corporation (debtor) into bankruptcy both in the English courts and in the federal courts in New York. 

Though debtor had its headquarters and management in the UK, the U.S. was the situs of about 80% of its assets.  Its two main assets were U.S. subsidiaries, MacMillan, Inc. and Official Airlines Guide, Inc.  On December 16, 1991, debtor filed for Chapter 11 bankruptcy protection in New York and for protection under English law the next day in the High Court.  Debtor tried to avoid three transfers of funds carried out within 90 days of its filings.  Two multi-million pound transfers went to British banks while one transferee bank was French (Société Générale).  All three banks had branches abroad including in New York City.  Debtor's credit arrangement with Barclay's and Westminster provided for the application of English law to any disputes.

With a highly praiseworthy degree of mutual cooperation, the American and English courts made every effort to maximize the payment to creditors by selling debtor's subsidiaries as going businesses and through harmonization of their adjudications.  Both courts made every effort to coordinate their differing legal rules and to allow world-wide creditors to file claims in either court.  The English court also rejected Barclay's request for an anti-suit injunction against the American proceedings.  The American courts, however, still had to rule on administrators' effort to avoid the above pre-petition transfers under American law.  Ultimately the district court denied the banks' motions to dismiss these claims for failure to state a claim based on international comity, extraterritoriality and choice-of-law considerations.

The U.S. Court of Appeals for the Second Circuit affirms.  Citing the Supreme Court's classic definition of international comity in Hilton v. Guyot, 159 U.S. 113, 163 (1895), the Court finds that international comity and its impact on the interpretation of bankruptcy law is part of American law.  In the Court's view, it should use modern choice-of-law analysis to determine whether congress could reasonably have intended its statutes to have an extraterritorial reach or to prevail over foreign substantive law. 

Finding a true conflict between relevant rules of English and American law, the Court sees a much closer link between England and the transactions in question.  Debtor is an English corporation that contracted most of its debts in England.  The transfers in question also came from accounts kept in two English banks.  The only significant nexus to the U.S. was the sale of debtor's subsidiaries but, as going concerns, their sale had little or no adverse impact on the local economy.  Finally, the Court praises the pioneering efforts taken by the lower courts to pool resources for the benefit of creditors and to make the international judicial system work with uncharacteristic smoothness.

Citation: In re Maxwell Communication Corporation plc, 93 F.3d 1036 (2d Cir. 1996).

Seventh Circuit affirms U.S. bankruptcy court's injunction that barred American citizen from interfering with affairs of company incorporated in St. Kitts and Nevis, despite prior receivership ordered by Nevis court

The high-flying business of Rimsat, Ltd., a company incorporated in the Federation of Saint Kitts and Nevis, part of the British Commonwealth, was to provide satellite communications to Tonga and other islands in the South Pacific.  Rimsat used Russian satellite equipment, and had its principal place of business in Fort Wayne, Indiana.  Trouble later developed between the managing director and one Carl Hilliard, an American director and shareholder.  Hilliard obtained an injunction from the High Court in Nevis which, inter alia, appointed him receiver with full powers to manage Rimsat.

 

Two weeks later, several of Rimsat's creditors filed a Chapter 11 petition in federal bankruptcy court in Fort Wayne.  The bankruptcy judge enjoined Hilliard from exercising control over Rimsat's property or otherwise interfering with the bankruptcy proceeding.  Taking an appeal, Hilliard argued that the bankruptcy court should have suspended or dismissed all American proceedings in deference to his Federation receivership.

The U.S. Court of Appeals for the Seventh Circuit affirms the bankruptcy court.  The Bankruptcy Code authorizes (but does not command) a suspension or dismissal of proceedings if there "is a pending foreign proceeding." [See § 305(a)(2)(A)].  The Code defines this phrase as a proceeding "in a foreign country in which the debtor's domicile, residence, principal place of business, or principal assets were located at the commencement of such proceeding ..." [See § 101(23)]

"The fact that the stay affected proceedings in a foreign country would be relevant to a motion to lift the automatic stay ..., had one been made (none was).  The movant could argue for relief from the stay on the basis of the doctrine of comity, though the argument ... might not succeed.  But the mere existence of a foreign proceeding affecting the debtor does not, as Hilliard believes, invalidate the stay by giving it an impermissible extraterritorial reach. ... There is no authority for allowing the presumption against the extraterritorial application of U.S. statutes ... to defeat application of the automatic stay to a U.S. citizen to prevent his interfering with a U.S. bankruptcy proceeding in which the debtor is a corporation headquartered in the United States." [3]

Citation: In the Matter of: Rimsat, Ltd., v. Hilliard, 98 F.3d 956 (7th Cir. 1996).

CHILD ABDUCTION

Highest court of Australia rules that, under Hague Convention on Child Abduction, lower court had erred in failing properly to ascertain whether minor children objected to their return to U.S.

In 1983, Wife, born in Australia, married Husband, a U.S. national, in Virginia.  Two children arrived in due course.  On February 17, 1985, Wife took both children with her to Australia to live.  Four days later, a Virginia court awarded Husband temporary custody of the children and ordered that no one remove them from the U.S.  The court indicated that it would determine custody and visitation rights on an expedited calendar upon the children's return to Virginia.  

At the request of the U.S. Central Authority under the 1980 Hague Convention on the Civil Aspects of International Child Abduction, TIAS 11670 (Convention), the New South Wales Central Authority under the Convention applied in local family court for the children's return to the U.S. 

After a hearing, a single judge of the Family Court dismissed the petition in December 1995.  She found that, under the implementing Regulations, the children "objected" to being returned to the U.S.  The full court disagreed with this action, but gave different reasons for so doing.  The Chief Justice would remand to the primary judge to determine whether the court had correctly ascertained the children's objections.  Two other members of the court would have ordered the mother to take the children back to Virginia where the local court could determine proper custody and other issues.  The Central Authority appealed to the High Court.

The High Court orders the case remanded to the single judge for further proceedings.  Preliminarily, the Court notes that the Child Abduction Convention entered into force for Australia in January 1987 and for the U.S. in July 1988.  The Convention applies to any child under 16 who was an habitual resident of a Contracting State immediately before a transnational breach of custody or visitation rights occurs.  In this case, therefore, Wife had wrongfully breached Husband's guardianship and custody rights under Virginia law.  Without themselves determining issues of custody or visitation, the courts of each party, subject to exceptions spelled out in Article 16, should normally order the child returned to its former habitual residence so that its courts can deal with these issues.

In this case, the High Court concludes that the majority of the Full Family Court had misinterpreted its duty under Article 16 and the implementing regulations.  It should have determined (1) whether the children (now 10 and 12) "object" to being sent back to Virginia; (2) whether they are of sufficient maturity to lend weight to their views on the subject and (3) it should have exercised its rational discretion as to whether, under all the circumstances, to order the children returned.  For the rehearing, the Family Court may discretionarily require separate representation of the children.

Citation: De L. v. Director-General, New South Wales, FC 96/032 (Aust. High Court, October 10, 1996).

CHOICE OF LAW

In dispute after sinking of cargo vessel, Second Circuit relies on Lauritzen triad and applies law of place with predominant interests rather than law of flag

In 1989, the "Star of Alexandria" (registered in Gibraltar, a dependency of the United Kingdom) sank in international waters en route from Greece to New Jersey.  It was carrying a load of cement belonging to a New Jersey company.  A Greek company was managing the vessel and had chartered it to Carbotrade S.P.A. of Italy.  The UK Department of Transportation investigated the sinking, and concluded that the vessel had been "overloaded and reduced in structural strength."

Carbotrade first invoked arbitration in London, and later obtained a default judgment against the vessel's owner.  It could not collect on the judgment, however, because the owner had no assets in the UK.

Bureau Veritas (BV), a French classification society, had certified that the ship met international standards. [N.B. A "classification society" sets standards for the quality and integrity of vessels and inspects vessels for compliance].  Carbotrade next brought the instant action against BV in New York federal court for negligently classifying the vessel.  Because of cracks found in the vessel's "wingtanks," Carbotrade argued that BV should not have issued its certificate.

In opposition, BV argued that, under UK law, classification societies do not owe a duty to third parties. [The House of Lords has held that a third party may not sue for negligent misrepresentation in connection with a classification certificate, see Marc Rich & Co. v. Bishop Rock Marine Co., [1995] 3 All E.R. 307, 332 (H.L.)].  The district court applied UK law and gave summary judgment to BV. Alternatively, the court held that, even if BV had owed such a duty to Carbotrade, there was not enough evidence that Carbotrade had relied on BV's certificates.  On appeal, Carbotrade argued that the lower court should have applied Greek law for it would allow a third party to sue a classification society for negligent misrepresentation.

The U.S. Court of Appeals for the Second Circuit vacates and remands.  As to the choice of law on negligent misrepresentation, the Court looks to the "interest analysis" approach fashioned by the U.S. Supreme Court for multistate maritime cases.  See Lauritzen v. Larsen, 345 U.S. 571 (1953), as elaborated in Romero v. Int'l Terminal Operating Co., 358 U.S. 354 (1959), and Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970) ("The Lauritzen triad").  The basic interest factors include (1) the place of the wrongful act (locus delicti), (2) the law of the ship's flag, and (3) the shipowner's domicile.  In this case, the Second Circuit also considers BV's domicile and base of operations.

Applying the above factors, the Court agrees with Carbotrade that Greek law should control.  The "place of the wrongful act" favors Greek law because BV had allegedly issued the certificate in Greece.  The base-of-operations test also suggests the application of Greek law because BV, although a French organization, maintained an office in Greece.  Finally, the "domicile and base of operations of the ship owner" element supports reliance on Greek law because the owner company was a shell for Greek residents.  The Court, however, remands, telling the district court to determine precisely what sort of duty Greek law does impose.

The dissenter would affirm.  Because the ship owner was a Gibraltar corporation, the vessel was subject to UK laws and safety requirements.  The charter agreement between Carbotrade and the ship owner also required arbitration in London.  Moreover, traditional maritime cases give limited weight to the lex loci delicti because the locality of a vessel changes constantly.  Applying Lauritzen, the law of the flag should apply unless some heavy counterweight appears.

Citation:  Carbotrade S.P.A. v. Bureau Veritas, 99 F.3d 86 (2d Cir. 1996).  [See also Maxwell case above under BANKRUPTCY, Cook case below under JURISDICTION]

In asbestos injury suit by mariners against two insurance associations, Second Circuit rules that admiralty law bars recovery against one defendant and insurance contract demands London arbitration of dispute with second under English law

A group of merchant mariners, plaintiffs sought compensation for injuries allegedly received from contact with asbestos on board ships owned by States Steamship Co. (States).  Their first defendant was States but it went into bankruptcy and later ceased to exist.  Plaintiffs next filed a declaratory judgment action against two insurance groups: West of England (West) and American Steamship (American).  In reality, these are two associations of shipping lines who agree to insure the ships of each on behalf of all members of the group. States had belonged to these associations at various times. 

Plaintiffs asked the federal court to declare that they could sue defendants directly despite the presence of a "pay-first clause" in their contract with States.  The district court granted plaintiffs a direct action against West and American.  In its ruling as to American, the lower court fashioned a rule of federal maritime law rather than applying state or English law.  Defendants appealed.

The U.S. Court of Appeals for the Second Circuit reverses the decision as to American.  It then dismisses the ruling involving West without prejudice pending arbitration in England.

With respect to American, the hard question deals with choice of law.  This is a situation where admiralty law intersects with a field that the states have traditionally regulated, i.e. insurance. Following the Supreme Court's analysis in Wilburn Boat Co. v. Fireman's Fund Ins. Co., 348 U.S. 310 (1955), the Court first concludes that there is no clearly established maritime rule that directly governs the question of whether injured sailors can sue their former employer's insurer.  Second, it fashions such a rule in this case.  Unlike Wilburn, which involved a houseboat on an artificial inland lake, this case deals with blue water sailors exposed to asbestos over long years at sea.  Moreover, the outcome will potentially affect many mariners (for whom courts are specially solicitous) in addition to these plaintiffs.   Regretfully, however, the Court reads the "pay-first" clause as clearly vanquishing direct actions against a bankrupt company's insurer.

On the other hand, plaintiffs still have a fighting chance with West.  They seek to stand in the shoes of States as beneficiaries of States' insurance contract with West.  This contract provides not only for indemnity but also for arbitration in London under English law.  English contract law allows direct third-party actions against insurers where the insured is bankrupt.  Finally, the Foreign Arbitral Awards Convention [see Pub.L. No. 91-368, 9 U.S.C. §§ 201-208 (1994)] requires enforcement of arbitration clauses unless circumstances make them void.  It is thus for the London arbitrator, not the American court, to decide in the first instance whether it has jurisdiction over this dispute and, if so, what English maritime customs and procedures it should follow.

Citation: Aasma v. American Steamship Owners Mutual Protection and Indemnity Association, Inc., 95 F.3d 400 (2d Cir. 1996).

CRIMINAL LAW

EU Council sets conditions for authorized interception of  telecommunications by law enforcement agencies

The EU Council has issued a Resolution on the lawful interception of telecommunications.  It outlines the requirements for law enforcement agencies when they seek to monitor telecommunications.  The term "telecommunications" broadly includes any transfer of signs, signals, writing, images, sounds, data or intelligence by a wire, radio, electromagnetic, photoelectronic or photooptical systems.  The Resolution states that law enforcement agencies may not only access the entire transmission, but also associated data such as the number of the party contacted and the actual destination if the connection has been diverted.

The Council expects the Member States to implement these broad requirements, consisting of several pages, into national law in the future.

Citation: Council Resolution ... on the lawful interception of telecommunications, 1996 O.J. of the European Communities (C 329) 1, 4 November 1996.

ECONOMIC SANCTIONS

EU enacts regulation to protect EU companies against Helms-Burton Act, approving "anti-boycott" regulation

The EU Council of Foreign Ministers has approved a regulation to protect European companies from the effect of the Helms-Burton Act [Cuban Liberty and Democratic Solidarity Act (Libertad)] [Note: The Act purports to affect companies outside the U.S. that do business with Cuba].  The regulation aims to protect EU companies and to counteract the effects of the extraterritorial application of the Act.  It bars any person or company from complying with the Act or other legislative instruments that derive from it.  Companies must notify the EU Commission how the listed extraterritorial laws affect their interests.  The EU may grant exemptions if non-compliance might seriously damage the company or the European Union.  The Member States must impose "effective, proportional and dissuasive" penalties on companies that violate the Regulation.  EU courts are not to recognize or enforce the judgment of any foreign court that effectuates those extraterritorial laws.  There are also "clawback" provisions whereby EU companies that have paid out damages under listed extraterritorial measures can get them back from a successful U.S. claimant anywhere in the EU.

Citation:  You may obtain a copy of the draft Regulation from Delegation of the European Commission to the United States, Phone: (202) 862-9500; European Union News Press Release No. 62/96 (October 29, 1996) [Editors' Note:  In the EU, a "regulation" is directly applicable law within the Member States and, unlike a "directive," does not require implementation by national law].

JURISDICTION

British Columbia Supreme Court declines jurisdiction over attorney-client privilege issues that arose in U.S. federal litigation over environmental liabilities of B.C. company's Colorado mining subsidiary

The Colorado law firm of Parcel, Mauro, Hultin & Spaanstra (PMHS) was representing Galactic Resources, Ltd., a British Columbia Company, and Summitville, Inc., a Colorado subsidiary that ran a gold mine in that state.  After Summitville abandoned the mine in 1992, the U.S. government started to look into possible regulatory and criminal violations of U.S. environmental laws.

Summitville filed for bankruptcy in Colorado federal court in late 1992.  When Galactic also sought protection under Canadian insolvency laws in January 1993, the B.C. court appointed Peat Marwick, Thorne. Inc. (Marwick), a Canadian company, as trustee.  A U.S. federal grand jury handed down several indictments against Summitville and several of its officers between mid-1995 and January 1996.

At this point, Marwick had custody of thousands of Galactic documents including some arguably related to PMHS's legal work.  When the U.S. demanded production of these documents, Marwick and several Galactic officers petitioned the B.C. court for directions as to whether a trustee could waive solicitor-client privilege as to these documents.  In December 1995, the U.S. also sought production from PMHS directly in the Colorado federal court.  PMHS denied that it had given any personal legal advice to Galactic officers.  The Canadian plaintiffs also maintained that B.C. law should control the attorney-client privilege question because B.C. citizens owned the privilege. 

While the B.C. proceeding was pending, Marwick got an order from the B.C. court to serve PMHS in Colorado.  The firm responded by asking the B.C. court to set aside the service and to dismiss for lack of jurisdiction.  It argued that the B.C. court lacked jurisdiction over the case or, in the alternative, if there is jurisdiction, the court should decline to exercise it.

A single judge of the British Columbia Supreme Court grants the petition to quash service and to dismiss for lack of jurisdiction.  First, the Court sees only a slight connection between the Colorado litigation and British Columbia interests.  This minimal link also indicates that Colorado privilege law should govern.  Second, the Court finds itself to be a forum non conveniens based on considerations of comity, reciprocity, the proper law applicable and the question of juridical advantage.  As to reciprocity, for example, the Court sees indications that the Colorado federal court would not enforce Canadian court orders in this case.  Finally, the Court determines that, if it took jurisdiction of the matter, it would deprive the proceedings of that measure of justice and fairness that the international community might reasonably expect.  Assuming arguendo that the B.C. Court has jurisdiction, the above elements persuade it to decline its exercise here.

Citation: Cook v. Parcel, Mauro, Hultin & Spaanstra, P.C., 136 D.L.R.4th 414 (B.C.S.C. 1996).

TAXATION

Fifth Circuit holds that IRS cannot reallocate income [under 26 U.S.C. 482 and 61] to foreign affiliates of oil company that sold oil at prices mandated by producer Saudi Arabia

Various entities of Texaco, Inc. produce, refine, transport and market crude oil.  During the period in question, Texaco International Trader, Inc. (Textrad) acted as Texaco's international trading company.  It bought Saudi Arabian crude oil from the government and resold it to affiliates and unrelated customers.  From 1979 through late 1981, Saudi Arabia ordered Texaco and other companies to sell Saudi Arabian crude oil at the "official selling price" which was below the market price.  The lower price, however, did not apply to refined products.  Thus, Textrad's customers were raking in large profits from the sale of refined products.  Unlike its domestic affiliates, Texaco's foreign refining affiliates reported no taxable income in the U.S.

Relying on 26 U.S.C. §§ 482 and 61, the IRS adjusted Textrad's U.S. taxable income upward for the years 1979-81 to reflect those profits.  The U.S. Tax Court held, however, that the IRS could not allocate income to Textrad, and the U.S. Court of Appeals for the Fifth Circuit affirms.

Where the taxpayer lacks the power to control the apportionment of profits, reallocation is inappropriate.  The Saudi Arabian restriction on crude oil prices took away Textrad's power to sell Saudi crude oil to its foreign refining affiliates above the "official selling price."  In Procter & Gamble Co. v. Commissioner, 961 F.2d 1255 (6th Cir. 1992), for example, the court held that a Spanish law prohibiting a foreign affiliate from paying royalties for the use of patents was enough to bar the Commissioner from reallocating income to account for a reasonable royalty.

Because Texaco had no control over the allocation of the income in question, it could not have used its control to evade taxes or to artificially shift its income to its foreign affiliates.

Citation:  Texaco, Inc. v. Commissioner of Internal Revenue, 98 F.3d 825 (5th Cir. 1996).

TELECOMMUNICATIONS

U.S. and Mexico sign satellite telecommunications protocol regarding "direct-to-home" (DTH) video services

On November 8, 1996, the U.S. and Mexico signed a "Protocol Concerning the Transmission and Reception of Signals from Satellites for the Provision of Direct-to-Home Satellite Services in the United States and the United Mexican States."  It sets up the conditions and technical criteria for the use of satellites licensed by the U.S. and Mexico for video services delivered between the two countries.  For example, it minimizes restrictions on program content.  The Protocol should increase distribution outlets for video program providers from both countries and diversify the available programs.

The Protocol is one of several to be negotiated pursuant to the "Agreement Between the Government of the United States of America and the Government of the United Mexican States Concerning the Transmission and Reception of Signals from Satellites for the Provision of Satellite Services to Users in the United States of America and the United Mexican States" of April 28, 1996.  The two countries will negotiate other Protocols on fixed and mobile satellite services in the next few months.

Citation:  U.S. Department of State Press Release (November 12, 1996); Washington Communiqué (November 8, 1996); Explanatory letter of the Federal Communications Commissions (November 8, 1996).  [Readers may obtain the documents from the Department of State, Press Office, Phone: (202) 647-4727].

TRADE

Russia begins regulating barter transactions in foreign trade

On August 19, 1996, the Russian government issued a regulation on barter transaction in foreign trade.  "Barter transactions" are defined as transactions performed in foreign trade activity providing for the exchange of equivalent‑value goods, works, services or results of intellectual activity.

According to the regulation, barter transactions must be done in simple written form as a "bilateral contract of exchange," which should meet the following requirements:

(1) The contract must have a date and a number.

(2) Generally, the contract shall be done in the form of one document.

(3) The contract must set forth, for example, the quantity, quality, and price of goods; dates and conditions of export/import;  schedule of works, services and results of intellectual activity and their date of fulfillment.

The Russian customs authorities are expected to review the contract value of each transaction.  The Government and the Ministry for Foreign Economic Relations will establish a system for officially recording such barter transactions.  Additional regulations that supplement this one will be developed and published in the future.

The effective date of the regulation is November 1, 1996.

Citation: Russian Federation, President's Edict No. 1209, State Regulation of Foreign‑Trade Barter Transactions, 1996 Rossiyskaya Gazeta [Gazette that publishes Russian Federation laws and regulations], 28 August 1996. [Editors' Note:  The share of barter in Russian trade is approximately 7%.  The principal barter partners are China, Germany and Cuba.  The main Russian export item traded in barter is metals.]

China to suspend importation of some U.S. textiles and other goods beginning December 10

According to a news release of the Chinese Embassy, China will temporarily stop importing some U.S. textiles, agricultural products, fruits, and alcoholic beverages.  On November 10, 1996, the Ministry of Foreign Trade and Economic Cooperation (Moftec) and the General Administration on Customs issued the restriction, effective December 10, 1996.  The restriction allegedly responds to U.S. restrictions on Chinese textiles.  China will publish a detailed list of restricted commodities before December 10.

Citation:  Newsletter of the People's Republic of China, No. 21, November 12, 1996.

U.S. and Israel conclude agricultural trade agreement

On November 5, 1996, Charlene Barshefsky, acting U.S. Trade Representative, and Nathan Sharansky, Israel's Minister of Industry and Trade, signed an agricultural trade agreement.  The Agreement sets up three categories for U.S. products exported to Israel: (1) those altogether free from tariff restrictions, (2) those imported free of tariffs within certain quotas (such as beef, poultry and selected fruits and vegetables), and (3) those imported at a preferential rate.  Regarding Israeli products exported to the U.S., Israel will retain all of its special duty-free status according to WTO rules.

Citation: Office of the U.S. Trade Representative Press Release 96-87 (November 4, 1996).

- EU and U.S. initial customs agreement:  On November 7, 1996, the EU and the U.S. initialed an agreement on customs cooperation and mutual assistance in customs matters.  The objectives of the agreement are, for example, to simplify customs procedures, and to exchange information on customs techniques, procedures and computerized systems (Articles 12-20).  The competent authorities will be the Department of Treasury for the U.S., and the Commission for the EU.  The parties will establish a Joint Customs Cooperation Committee to ensure the proper functioning of the Agreement.  Citation: European Union News press release 66/96 (November 7, 1996).  You may obtain a copy of the Agreement as it presently stands from Delegation of the European Commission to the United States, Phone: (202) 862-9500.

- Federal Reserve amends regulation on foreign stocks:  The Board of Governors of the Federal Reserve System has published additions to and deletions from the List of Marginable OTC Stocks (stocks traded over-the-counter subject to margin requirements under Federal Reserve regulations) and the List of Foreign Margin Stocks (foreign equity securities that have met the Board's eligibility criteria under Regulation T).  Citation: 61 Federal Register 55554 (October 28, 1996).

- U.S. and EU transport regulations to adapt to international requirements:  The Department of Transport has published a notice of proposed rulemaking to amend the Hazardous Materials Regulations [49 CFR Parts 171-173, 175, 176, 178].  The purpose is to adapt to changes in the International Maritime Dangerous Goods Code (IMDGC), the International Civil Aviation Organization's Technical Instructions (ICAO Technical Instructions), and the United Nations Recommendations on the Transport of Dangerous Goods (UN Recommendations).  Citation: 61 Federal Register 55364 (October 25, 1996).

In a related matter, the EU has adapted to the European Agreement Concerning the International Carriage of Dangerous Goods by Road (ADR).  Pursuant to Directive 94/55/EC, the EU has published Annexes A and B that concern the transport of dangerous goods by road.  Citation: 1996 O.J. of the European Communities (L 275) 1, 28 October 1996.

- Department of Commerce to control sales of dual-use technology:  The Department of State has issued a rule to remove commercial communication satellites and "hot section" technology from the U.S. Munitions List, and to transfer them to the Department of Commerce's Commerce Control List.  The purpose is to clarify from which agency exporters must obtain export licenses for such technologies.  Hot-section technologies associated with commercial aircraft engines and commercial communication satellites will be controlled by the Commerce Control List.  Citation:  61 Federal Register 56894 (November 5, 1996).

- Latvia and Venezuela designate Central Authorities under Hague Evidence Convention:  The German Federal Gazette has published the competent authority in Latvia for purposes of the Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters (March 18, 1970).  It is the Ministry of Justice, Brivibas Boulevard 34, LV‑1536, Riga, Tel.: 282607, Fax: 285575.  Venezuela designated the Ministerio de Relaciones Exteriores [Ministry of Foreign Affairs] as its competent authority.  Citation: 1996 [German] Bundesgesetzblatt, Number 1.

- Fifth Circuit rules on damage claim for injuries other than from "accidents" under Warsaw Convention:  The U.S. Court of Appeals for the Fifth Circuit affirmed summary judgment in favor of the airline where the  plaintiff injured her leg while trying to get to her seat during a flight where Europe was the ultimate destination.  The Court held that the plaintiff's injury did not result from an "accident" and was thus not compensable under the Convention.  The Court also ruled that the Warsaw Convention provisions regarding personal injury liability of international air carriers for accidents preempt state law causes of action, including claims not arising from accidents.  Citation: Potter v. Delta Air Lines, Inc., 98 F.3d 881 (5th Cir. 1996).

- Reciprocity facilitates EU Trademark for Taiwan:  The EC Commission published a notice that Taiwanese nationals may become proprietors of a European Community Trade Mark (CTM) without proving the prior registration of the trademark in Taiwan.  The Commission determined that Taiwan's law on trademarks affords nationals of EU Member States the same protection as its own nationals.  Thus, it granted Taiwanese national reciprocal treatment.  [Editors' Note:  The CTM permits trademark protection throughout the EU by filing a single application.  The CTM is particularly advantageous to companies operating in several EU Member States.  Among the advantages of a CTM over national trademarks are the lower costs, reduced paperwork, and the broad coverage of the entire EU with a single application. The EU Trade Mark Office (CTMO) is located in Alicante, Spain.]  Citation:  1996 O.J. of the European Communities (C 335) 3, 9 November 1996. -- See also 1996 Int'l Law Update 11.  Council Regulation (EC) No. 40/94 on the Community Trade Mark was published in 1994 O.J. of the European Communities (O.J.) (L 11) 1, 14 January 1994, as amended by Regulation 3288/94, 1995 O.J. (L 349) 83, 31 December 1994.