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.

2002 International Law Update, Volume 8, Number 9 (September)

ALIEN TORT CLAIMS ACT

Ninth Circuit rules that ATCA covers most claims in suit against U.S. company by villagers from Myanmar alleging they had suffered atrocities at hands of Myanmar Military aided and abetted by U.S. company during construction of gas pipeline. Citation: Doe I v. Unocal Corp., 2002 WL 31063976 (9th Cir. September 18, 2002).

COMPETITION

In antitrust action by Central American airlines against four U.S. airlines and IATA, Third Circuit upholds jurisdictional dismissal because plaintiffs failed to allege “direct and substantial effect” on U.S. commerce which FTAIA demands where alleged misconduct took place exclusively outside U.S. Citation: Turicentro, S.A. v. American Airlines, Inc., 2002 WL 31008819 (3rd Cir. September 9, 2002).

CREDITORS’ RIGHTS

In an insolvency proceeding involving unsecured American judgment creditors who were not party to company voluntary arrangement (CVA) made by English creditors, English Court of Appeal (Civil Division) dismisses appeal by American creditors from pari passu arrangement with CVA creditors because it would be more beneficial to Americans than winding up corporation. Citation: Smith et al. v. Greenberg et al., [2002] All E. R. (D) 36 (approved judgment) (Ct. App., Civ. Div. August 8, 2002).

EUROPEAN COMMUNITY LAW

In reference from English tribunal, ECJ interprets EC Treaty and implementing Regulations in light of European Human Rights Convention to allow divorced American wife of French EU citizen to remain in U.K. with her minor children where ex-husband still works to avoid disrupting children’s U.K. education. Citation: Baumbast v. Secretary of State for the Home Department, Case C-413/99, Celex No. 699JO413 (Sept. 17, 2002).

INTERNATIONAL SALE OF GOODS

Fourth Circuit upholds ruling under U.N. Convention on the International Sale of Goods and Maryland private international law principles, that Maryland fabric maker breached express warranty to German drapery manufacturer that maker’s lining fabric was suitable for printing patterns

Rockland Industries, Inc., is a Maryland corporation that makes lining fabric for drapery. In the early 1990s, it was turning out a type of opaque fabric called “Trevira Blackout FR” (Trevira). Rockland made Trevira to qualify under European flame resistance standards and aimed the fabric at European Markets.

Schmitz-Werke GmbH & Co. (Schmitz) is a German company that makes, prints and markets finished decorative fabrics in Germany and elsewhere. In negotiations between them, Rockland told Schmitz that Trevira was an especially good base for transfer printing. For transfer printing, Schmitz uses P.D., another German company.

After a small initial shipment of Trevira seemed to work out satisfactorily, Schmitz received a shipment of 15,000 meters of Trevira by ocean freight in mid-August 1994. Problems arose with printing the fabric but Rockland persuaded Schmitz to go on printing on the theory that the lower quality portions of the Trevira could successfully take patterns better than solid colors. In November 1994, Schmitz ordered 60,000 meters of Trevira.

In March 1995, a testing company reported that it had run into problems with the Trevira fabric. By the following month, the percentage of printed Trevira categorized as “seconds” (lower-grade material) lay between 15% and 20%. During the second half of 1995, Schmitz returned about 8,000 meters of Trevira. After negotiations between Schmitz and Rockland fell apart, Schmitz sued Rockland in the Maryland federal court in December 1997. It alleged that Rockland had breached a warranty under the United Nations Convention on the International Sale of Goods (CISG), 15 U.S.C.App., by supplying defective drapery fabric. Both sides agreed that the CISG applies to the dispute.

After a bench trial, the district court ruled that Rockland had breached an express warranty of fitness for a particular purpose (transfer printing) under Article 35(2)(b) of the CISG. 15 U.S.C. App. Art. 35(2)(b). The court awarded damages in dollars and converted those dollars to Deutsche Marks using the exchange rate as of the time Schmitz had discovered the defects. Rockland appealed. In a per curiam opinion, the U.S. Court of Appeals for the Fourth Circuit affirms.

The Court first outlines the general function of the CISG. “When two nations are signatories to the CISG, the treaty governs contracts for the sale of goods between parties whose places of business are in those two nations, unless the contract contains a choice of law clause. See CISG, 15 U.S.C.App., Art. 1(1)(a). [Cite]”

“Courts interpreting the CISG should look to the language of the CISG and to the general principles on which the Convention is based. The CISG [Art. 7(1)] directs that ‘its interpretation be informed by its ‘international character and ... the need to promote uniformity in its application and the observance of good faith in international trade.’ Case law interpreting provisions of Article 2 of the Uniform Commercial Code that are similar to provisions in the CISG can also be helpful in interpreting the convention.” [Slip op. 3]

Since Rockland claimed that the law of Maryland also governs this case, the Court briefly addresses the choice-of-law issue. “The CISG provides that private international law is the default law to apply to a question governed by the Convention that is not settled under its own terms. CISG, 15 U.S.C App., Art. 7(2). The parties agree that private international law would apply the choice of law rules of the forum state (Maryland), which in this case would choose to apply the law of the contracting state. [Cite] However, a court should only reach private international law if the CISG's text, interpreted in conformity with the general principles on which the CISG is based, does not settle the issue at hand.” [Id.]

Under Article 35(2)(b) goods are unfit unless they “are fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract, except where the circumstances show that the buyer did not rely, or that it was unreasonable for him to rely, on the seller's skill and judgment.”

Rockland contended that Schmitz had not put on any proof, e.g., by expert testimony, that would identify the precise defect in the Trevira fabric. According to the Court, the text of the CISG is silent on this point.

Maryland law does not say that a plaintiff in a products liability case always has to produce expert testimony as to the exact nature of the alleged defect. Here, the Court agrees with Schmitz that it had met its true burden. “There was significant evidence regarding P.D.’s transfer printing process presented at trial (including expert testimony), and the court's finding that the P.D. printing process was ordinary and competent is not clearly erroneous.”

“The district court found that Rockland expressly warranted its fabric to be fit for transfer printing, that the fabric was transfer printed in a normal and competent way, and that the resulting printed fabric was unsatisfactory.” [Slip op. 4] The inference of defectiveness was not beyond the ken of the average layperson.

Rockland also maintained that Schmitz cannot prevail on such a warranty because it did not in fact rely upon Rockland’s advice as demanded by CISG Article 35(2)(b). The Court, however, disagrees.

“The district court explicitly found that Schmitz relied on the statements of Rockland's representative that the Trevira fabric was particularly well suited for transfer printing. The court also found that Schmitz continued to print the fabric with the express consent of Rockland after it discovered and reported problems with the fabric.” [Id.]

Rockland’s final protest was that the district court had erred in using the exchange rate of Dollars to Marks as of the date Schmitz learned of the problems with the Trevira fabric. “In contrast, the general rule is that the exchange rate as of the date of the award should be used. See Restatement (Second) of Conflict of Laws Section 144 (1971) [Cite] Some courts [such as New York], however, use the exchange rate on the day of breach. [Cite]”

“The CISG is silent on this issue, and it is proper for courts to resort to private international law in such situations. [Cite] As discussed above, the parties agree that private international law would apply the choice of law rules of the forum, Maryland, and that since Maryland's choice of law rules apply the law of the place of contract, Maryland substantive law should apply. ...”

“But unfortunately there does not appear to be any Maryland law on this topic. ... And, ... it is not clear that either position more fairly compensates an injured party or does so under the discrete facts here. Under these particular circumstances, the district court's decision to use the exchange rate as of the date of breach was not an abuse of discretion and we decline to disturb it.” [Slip op. 5]

Citation: Schmitz-Werke, GmbH & Co. v. Rockland Industries, Inc., 37 Fed. Appx. 687, 2002 WL 1357095 (4th Cir. June 21, 2002) (unpub’d).[Editorial Note: Three things that this Court did are puzzling: (1) it complained of a shortage of U.S. case law construing the CISG; (2) it then cited an “unpublished” CISG case; and (3) it declined to publish its own instructive CISG opinion.]

SOVEREIGN IMMUNITY

In personal injury suit by extraditee against Germany, Canadian Supreme Court rejects U.S.’s contentions as intervenor that distinction between acta jure imperii and acta jure gestionis applies to personal injury exception in Canadian State Immunity Act of 1985

In May 1999, a German court issued a warrant for the arrest of Karlheinz Schreiber, a citizen and resident of Canada, for tax evasion and other crimes. Invoking the Extradition Treaty between Canada and Germany, Can. T.S. 1979, No. 18, Germany then asked the Canadian government to provisionally arrest Schreiber as a first step in extraditing him for prosecution in Germany. Canada did so and after he had spent eight days in jail, a court released him on bail.

Six months later, Schreiber filed a million-dollar suit against Germany in the Ontario Superior Court of Justice, asking for personal injury damages caused by his arrest and detention in Canada. The complaint alleged breaches of duties of care, abuse of public office, bad faith and breach of the plaintiff's rights under the Canadian Charter of Rights and Freedoms. Germany responded by moving to dismiss the action based on its claim of sovereign immunity under the Canadian State Immunity Act of 1985.

The trial court granted the motion and the Ontario Court of Appeal unanimously dismissed plaintiff’s appeal. Plaintiff next appealed to the Supreme Court of Canada and the United States was allowed to intervene. The highest Court dismisses the appeal.

Preliminarily, the Court notes that, in general, states have absorbed the principle of sovereign immunity into their internal legal system in two ways. The first is to hold that domestic courts do not exercise jurisdiction in suits brought against foreign states. Secondly, states have provided foreign nations with a privilege based on comity to appear as plaintiffs in their domestic courts.

Although a number of exceptions have emerged over the years, the basic principle of sovereign immunity endures as a significant part of the international legal order. Enactment of the State Immunity Act of 1985, for the most part, received the international law of sovereign immunity into the Canadian legal order.

Pursuant to Section 4 of the Act, a foreign state loses its general immunity if it has filed the proceedings in question. That is not this case. While Germany did bring the extradition proceeding, it did not file the present tort action in which it has claimed immunity from suit. It would breach accepted notions of comity and mutual respect between nations to rule that a state which has asked Canada to extradite a fugitive for prosecution abroad, has thereby forfeited its sovereign immunity in a civil action against it linked to the extradition request.

Nor can it be said that the “personal injury” exception under Section 6(a) of the Act deprives Germany of its immunity. Based on a harmonization of the English and (the more restrictive) French texts, the term applies (1) to physical injuries and (2) to mental distress and emotional upsets but only to the extent that they have a nexus to a physical injury. Under the criteria of Section 6(a), plaintiff has not alleged facts showing that he suffered physical harm caused by his otherwise lawful confinement for eight days in response to Germany’s treaty request. Moreover, a right to compensation for injury to mental integrity is not a peremptory norm of international law able to trump sovereign immunity.

As intervenor, the United States raised an argument not addressed by either party. With respect to all of the exceptions listed by the Act, it urged that Canadian courts should apply the time-honored distinction between acta jure imperii and acta jure gestionis. Thus it reads the entire Act as mainly a codification and specification of these common law differentiations.

Responding to the U.S. contentions, plaintiff urged that Section 5 is the only part of the Act that applies the jure imperii vs. jure gestionis dichotomy. This provision uses these principles in recognizing an exception when the sovereign takes part in “commercial” activity in the marketplace. On the other hand, Section 6(a) creates a new exception for death or personal injury caused by the foreign state without embodying the ancient distinctions.

The Court ultimately rejects the U.S. assertions. “First, the wording of Section 6(a) clearly states that this exception applies to all torts committed by a foreign state which cause death or personal injury. This express wording seems consistent with the evidence presented before the Standing Senate Committee on Legal and Constitutional Affairs, ... where [it was] explained that:

‘... [D]ealing with the distinction between acts jure imperii and acts jure gestionis, these terms, which are really only the functional equivalent of sovereign acts and commercial acts, in themselves are not free from difficulty. We felt that rather than relying on perhaps outdated Latin terminology, focusing on commercial activity and talking about the nature of the activity would make it much easier for the courts to adapt this kind of test and bring it within the role which they perform to a day‑to‑day‑basis.’”

“One of the problems inherent in the purpose test, and carried through in the concept of acts jure imperii is the whole notion that a state always acts, in one sense at least, in a sovereign capacity. It cannot act in any other capacity.”

“Secondly, in my view, [Canadian precedent cited by the U.S.] is inconclusive on this issue. In that reference, the Court considered only Section 5 of the Act (the “commercial activity” section), which does indeed codify the restrictive theory of immunity but does not deal directly with any other of the exceptions under the Act.”

“Furthermore, most of the international law authorities cited by the parties appear to accept that the personal injury exception does not distinguish between jure imperii and jure gestionis acts. See for example, Art. 11 of the European Convention on State Immunity.” [Slip op. 33-35]

The Court also points to policy considerations. “In addition, the interpretation advanced by the United States would deprive the victims of the worst breaches of basic rights of any possibility of redress in national courts. Given the recent trends in the development of international humanitarian law enlarging this possibility in cases of international crime, as evidenced in the case before the House of Lords, Regina v. Metropolitan Stipendiary Magistrate, Ex parte Pinochet Ugarte (No. 3), [1999] 2 W.L.R. 827, a result [that] would jeopardize at least in Canada a potentially important progress in the protection of the rights of the person.” [Slip op. 36-37]

Citation: Schreiber v. Canada (Attorney General), File No.: 28543, 2002 S.C.C. 62 (Sup. Ct. Can. September. 12).

SOVEREIGN IMMUNITY

In action to enforce English money judgment in U.S. against Republic of Congo, and judgment creditor’s attempt to garnishee tax and royalty payments that Congo receives from Texas oil companies, Fifth Circuit holds that only when Congo uses its U.S. assets for commercial activity in U.S. does FSIA allow execution against them

A predecessor of the Connecticut Bank of Commerce (Bank) lent the Republic of Congo $6.5 million. In the loan agreement, the Congo waived its sovereign immunity from suit and from attachment or execution on its assets. The Congo later defaulted on the loan, and the Bank obtained a judgment against the Congo from an English court for the outstanding principal and interest.

The Bank then sued in a New York state court to enforce the judgment. The Congo failed to appear, and the Bank got a default judgment. Under the Foreign Sovereign Immunities Act (FSIA) [28 U.S.C. Sections 1602 - 1611], foreign states are generally immune from execution against their property to satisfy an adverse judgment (see 28 U.S.C. Section 1609).

One of the exceptions, however, provides that if a foreign sovereign waives its immunity from execution, U.S. courts may execute against “property in the United States ... used for a commercial activity in the United States.” (See 28 U.S.C. Section 1610(a)(1)). Section 1610(c) does not authorize summary executions but instead requires that a court decide whether the assets in question fall within one of the statutory exceptions. The New York court gave the Bank “permission” to execute against the Congo’s property wherever it may be found and whatever may be the use of such property.

The Bank then registered the New York judgment in a Texas state court. Without a further court order, the Bank got a writ of garnishment that barred a group of Texas oil companies from paying any further royalties to the Congo. The Congo and the garnishees removed the action to a federal district court in Texas and moved to dismiss. The district court held that res judicata did not prevent it from reconsidering defendants’ amenability to garnishment. The court later found that the royalty and tax payments that the garnishees owed to the Congo did not “arise from” a commercial activity in the United States. It thus dissolved the writs of garnishment and dismissed the action. The Bank noted an appeal. The U.S. Court of Appeals for the Fifth Circuit vacates and remands.

The Court first notes that the Full Faith and Credit Statute (28 U.S.C. Section 1738) does not bar a judicial re-assessment of whether the debts owed by the garnishees to the Congo are subject to garnishment under the FSIA.

In the Court’s view, the New York court’s rulings on garnishment were not necessary to the judgment entered by that court. Under New York law, the pleadings define the scope of a default judgment and therefore the scope of res judicata. The only pleading before the New York court was the Bank’s request to have the court convert an English money judgment into a New York money judgment.

The Court then turns to the merits of the case. The FSIA allows for execution on a foreign state’s assets which it is using in the U.S. for a commercial activity; how it generated these assets is not a controlling issue. It does not matter, for example, whether the state had acquired the assets with its tax revenues or with other government funds.

On August 29, 2002, the Court granted the Bank’s petition for a panel rehearing in part. Its amended opinion further explains the circumstances under which foreign state assets are “used for” commercial activity.

“The FSIA deals separately with immunity from jurisdiction (Section 1605) and immunity from execution (Section 1610). ... Section 1605(a)(2), concerning immunity from jurisdiction, ... uses the phrase ‘in connection with’ a commercial activity. It allows a plaintiff to pierce a foreign state’s immunity for suits based on acts that have any connection with a commercial activity in the United States (or with a commercial activity elsewhere that causes a direct effect in the United States). This phrase, ‘in connection with,’ means something like ‘related to’ or ‘integral to.’ ...”

“[In] Section 1610(a), concerning immunity from execution, ... Congress used the more specific phrase ‘used for a commercial activity.’” [Slip op. 5-6] The Court also notes that the U.K.’s State Immunity Act of 1978 has a provision that closely parallels the FSIA’s language, i.e., immunity from execution under the Act does not exist as to “property which is for the time being in use or intended for use for commercial purposes, see id., c. 33, Section 3.”

The Fifth Circuit prefers to interpret statutes according to their plain meaning. “In ordinary usage, we would not say that someone uses the revenue or income of a transaction for that transaction. The Bank uses a number of phrases to describe the relationship of the royalty and tax obligations to the allegedly domestic commercial activity: the obligations are ‘contemplated by’ the activity, they are ‘necessary to’ or ‘integral to’ the activity, they are ‘related to’ the activity.”

“All of these relationships plainly differ from the relationship demanded by the statute: a ‘used for’ relationship. Accordingly, we remand to the district court to determine how the Congo uses its royalty and tax obligations.” [Slip op. 19]

If it turns out that the Congo does not “use” the royalty and tax obligations to support any “commercial” activity in the United States, the district court should dissolve the writs of garnishment and dismiss the action.

Citation: Connecticut Bank of Commerce v. Republic of Congo, 299 F.3d 378(5th Cir. 2002), as amended, 2002 WL 1980414 (5th Cir. August 29, 2002).

SOVEREIGN IMMUNITY

In ATCA litigation, Ninth Circuit holds that FSIA commercial activity exception as to jurisdiction does not require that conduct of foreign state agencies “in connection with” commercial activity must exercise only those powers that a private citizen possesses

[For the background facts in this case, see “Alien Tort Claims Act” above.] The Court also decides whether there is subject matter jurisdiction over the Myanmar Military and the Myanmar Oil company which launched the Yadana Pipeline Project. Under the Foreign Sovereign Immunities Act of 1976 (FSIA) [28 U.S.C. Sections 1330, 1602], the district court has jurisdiction over a civil action against a foreign state such as Myanmar (including its subdivisions and agencies) only if one of the FSIA exceptions applies.

Under 28 U.S.C. Section 1605(a)(2), for example, there are exceptions from sovereign immunity as to “an act performed in the United States in connection with a commercial activity of the foreign state elsewhere” or as to “an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.”

Under the first subdivision, a foreign state loses immunity if an act performed in the U.S. is an element of the plaintiff’s claim against it. Here, the plaintiffs’ allegations against the Military and the Oil company rest solely upon acts done by these state organizations within Myanmar. Any acts Unocal allegedly carried on in the U.S. (such as investment decisions and money transfers) are not elements of these claims.

Neither does the second subdivision apply. “The Supreme Court has held that ‘a state engages in commercial activity ... where it exercises only those powers that can also be exercised by private citizens, as distinct from those powers peculiar to sovereigns.’ Saudi Arabia v. Nelson, 507 U.S. 349, 360 (1993), ... The District Court noted that ‘[the Myanmar Military] and [Myanmar Oil] engaged in commerce in the same manner as a private citizen might do when they allegedly entered into the ... gas pipeline project.’ ...”

“... [N]either Nelson, nor other case law, nor the legislative history of Section 1605(a)(2), suggest that a foreign state’s conduct ‘in connection with a commercial activity’ must itself be a commercial activity to fall within [the second] exception ... . In other words, there is no support for the proposition that the foreign state’s conduct ‘in connection with a commercial activity’ must be an ‘exercise [of] only those powers that can also be exercised by private citizens’ to fall within [the second] exception in Section 1605(a)(2). ...”

“Rather, as the Supreme Court observed in Nelson, ‘Congress manifestly understood there to be a difference between a suit ‘based upon’ commercial activity and one ‘based upon’ acts performed ‘in connection with’ such activity.’” [Slip op. 66-68]

The district court’s misinterpretation turns out to be harmless error, however, because it also decided that the alleged human rights violations did not have a direct effect in the U.S. The Court of Appeals, therefore, affirms the dismissal of all claims against these two defendants.

Citation: Doe I v. Unocal Corp., 2002 WL 31063976 (9th Cir. September 18, 2002).

TRADEMARKS

In ACPA suit by German automobile manufacturer over defendants’ misuse of its name in their internet domain names, Fifth Circuit rules (1) that trademark law does not entitle plaintiff to possess infringing domain names and (2) that in rem jurisdiction for cybersquatting cases turns on conditions existing at start of action

Porsche Cars North America, Inc., a subsidiary of the German automobile maker, brought the following in rem action against Porsche.net and 127 others in a Virginia district court. It claimed that all of the listed internet domain names, e.g., porschedealer.com, porschagirls.com, and porscheowners.com, not only violated its rights under the Anticybersquatting Consumer Protection Act (ACPA) (15 U.S.C. Section 1125(d)(1)) but also diluted its trademark. Relying on in rem jurisdiction, Porsche sought judicial confirmation of its rights to those domain names.

Many defendants did not put up a defense so the district court entered default judgments against them. Porsche voluntarily dropped its claims against several others. In the end, only five domain names remained in the action, two of them owned by a British citizen, and three of them owned by a resident of Georgia.

The district court ruled that the British registrant’s internet domain names did not violate Porsche’s rights under the ACPA. It also held that none of the defendants had diluted Porsche’s trademark in violation of 15 U.S.C. Section 1125(c). Porsche appealed.

The U.S. Court of Appeals for the Fourth Circuit affirms the dismissal of the trademark dilution claim. The Court, however, vacates and remands the district court’s order dismissing the “anticybersquatting” claims against the British domain names.

The ACPA authorizes in rem jurisdiction over a domain name if personal jurisdiction over the registrant of the domain is unavailable. Three days before the scheduled trial in Virginia, the British domain names notified the court that their registrant had decided to submit to personal jurisdiction in California. The British domain names argued, and the district court agreed, that the existence of in personam jurisdiction precludes an in rem action no matter where the in personam jurisdiction arose.

The appellate Court, however, disagrees with this conclusion. “We recognize at the outset that the structure of the ACPA undoubtedly expresses Congress’s preference for in personam suits: the holder of a trademark must convince the court that in personam jurisdiction over a person is unavailable before an ACPA in rem action may proceed. See 15 U.S.C.A. Section 1125(d)(2)(A). ...”

“The statute simply does not require, however, that those conditions continue throughout the litigation. If it did, in rem jurisdiction could be lost even long after a court has made the requisite statutory finding permitting in rem jurisdiction under the ACPA, no matter how late in personam jurisdiction arose. To put it simply, we can find nothing, either in case law or in the ACPA itself, to support such a conclusion.” [Slip op. 12]

The Court also rejects the argument of the British defendants that in rem jurisdiction is analogous to non-waivable subject matter jurisdiction. Furthermore, even if the Court were to buy this analogy, it can find no support for the notion that the conditions that create subject-matter jurisdiction have to persist throughout the life of a case. For example, a federal court need only determine the existence of diversity jurisdiction as of the time the action is filed.

Finally, the Court rejects Porsche’s claim that the court should award it the possession of the disputed internet domain names under trademark law. A trademark-dilution action under 15 U.S.C. Section 1125(c) and 28 U.S.C. Section 1655 may entitle a plaintiff to an injunction barring a diluter from continuing to use the plaintiff’s trademark. Nothing in Section 1125(c) alone, however, empowers an offended plaintiff to take possession of the offending materials.

Citation: Porsche Cars North America, Inc. v. Porsche.net et al., 302 F.3d 248 (4th Cir. 2002).

China tightens controls over its missile exports. Effective August 25, 2002, China has issued “Regulations on Export Control of Missiles and Missile-related Items and Technologies” to further strengthen its non-proliferation policies. Attached to the Regulations is a “Control List” of affected items. In essence, the Regulations provide for a mandatory licensing system for exports of missile technology. The Chinese Ministry of Foreign Trade and Economic Cooperation (MOFTEC), which controls all exports from China, announced that it will strictly enforce the new Regulations. The press statement also noted that the Foreign Trade Law of 1994 already restricts the export of goods and technologies that are harmful to national security or public interests. Between 1994 and now, China has put out several regulations to control the exports of potentially dangerous goods, such as chemicals, nuclear technology, and military products. Citation: Newsletter, Embassy of the People’s Republic of China (Washington, D.C.), Special issue August 25, 2002; “China tightens control on missile exports,” ChinaOnline report of August 27, 2002.

U.S. chides East Timor human rights prosecutors. On August 14 and 15, Indonesia’s Ad Hoc Human Rights Tribunal for East Timor handed down its first verdicts. It acquitted six of seven defendants of committing gross human rights violations. Philip T. Reeker, Deputy Spokesman for the U.S. State Department announced its disappointment that prosecutors in these cases had failed to make full use of the voluminous evidence which the United Nations and others had made available to them. In Secretary of State Powell’s opinion, the establishment of the Ad Hoc Tribunal constituted an intrepid step toward punishing those guilty of past outrages. It also sent up a warning flag to those tempted to carry out new human rights violations in the region. The recent verdicts are subject to appeals. Citation: Press Statement (Revised) by Philip T. Reeker, Deputy State Department Spokesman, Washington, D.C., August 19, 2002. [For all press statements, see http://www.state.gov/r/pa/prs/ps/].

Japanese court rejects WWII biological warfare claims. A three-judge Japanese court has turned down claims for compensation filed by 180 Chinese citizens. They alleged that they were victims of Japan’s biological warfare “Unit 731" which operated in China during the early 1940s. Their suit against the Japanese government asked for an apology and damages of $84,000 for each plaintiff. The court for the first time has conceded that Japan had carried on biological warfare during World War II. Nevertheless, it interpreted international law to say that individuals have no right to sue a state for compensation. In sessions held over a five-year period, witnesses testified, inter alia, that Japanese military scientists had killed about 3,000 persons using cultivations of plague and cholera. They told, for example, how Japanese planes had scattered a mixture of fleas and wheat grain over villagers in eastern China in 1940 and 1941. Outbreaks of bubonic plague had soon resulted, killing hundreds of villagers. One witness admitted not only helping the scientists to cultivate plague, cholera and anthrax but also aiding surgeons to cut many victims open while they were still alive. Apparently with the consent of American occupation forces, the Japanese government covered up the role of Unit 731 after the war and no one was charged for taking part in these activities. Citation: British Broadcasting Corporation at “http://www.bbcnews.com” Tuesday, August 27, 2002 [byline of Charles Scanlon].

Highest Philippine court questions legality of U.S. troops’ presence. In a suit by two attorneys, the Philippine Supreme Court has given the presidential palace and the Defense Department ten days to justify the legality of having up to 650 U.S. troops in the country to help out in training local military to deal with rebel extremists. The Abu Sayyaf group, for instance, has made kidnapping for ransom its chief ongoing activity, although its stated long term goal is to set up an Islamic state. According to the U.S., this group has links to Osama Bin Laden. The two attorneys argued that the Philippine constitution forbids the presence of foreign troops on Philippine soil in the absence of a formal treaty. Citation: British Broadcasting Corporation News, Tuesday, 5 February, 2002, 15:18 GMT.