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.

1999 International Law Update, Volume 5, Number 7 (July).

ASYLUM

House of Lords finds two Pakistani women entitled to asylum in England because official Pakistani discrimination against women establishes their gender as "particular social group" under U.N. Convention and Protocol on Refugee Status

Islam and Shah were both female citizens of Pakistan but were unknown to each other. They both received violent treatment in that nation after their husbands had falsely accused them of having committed adultery.

Both left their country at different times but ended up in the United Kingdom where they both separately applied for asylum.

In their applications, they alleged that their husbands had driven them out of their marital homes, thus depriving them of male protection. Going back to Pakistan would leave them open to prosecution for their alleged sexual misconduct.

They claimed that they had a well-founded fear of persecution in their homeland. It could take the form of physical and emotional abuse, probable ostracism by the community, and failure of the police to protect them. Moreover, Pakistani Sharia law allowed for the penalty for adultery of death by flogging or stoning.

The Secretary of State for the Home Department turned their applications down. He concluded that the applicants did not belong to a "particular social group" so as to accord them refugee status under Article 1A(2) of the 1951 Convention [189 U.N.T.S. 150] and its 1967 Protocol relating to the Status of Refugees [19 U.S.T. 6223; T.I.A.S. 6577; 606 U.N.T.S. 267].

Various immigration appeals tribunals saw no merit in the claims of Islam and Shah. The Court of Appeal agreed, finding that the two women had no common uniting attribute that existed apart from the persecution they feared.

On further consolidated appeals, the House of Lords reverses in a three to one vote. The majority reads the Convention as requiring that applicants for refugee status show that they were within the "membership of a particular social group" independently of the expected persecution. Therefore, they could not rely upon the anticipated persecution alone as proving the group's existence.

On the other hand, the record shows that Pakistani society and the state itself discriminates against women as a group. The state does not afford women adequate legal protection because it does not believe that women are entitled to the same human rights as men. Thus, the majority concludes that Pakistani women do make up a "particular social group" for Convention purposes.

Two members of the majority alternatively submitted that being suspected of adultery and lacking the protection of the public authorities further proved that, in addition to gender, the characteristics of a particular social group applied to applicants. In either event, Islam and Shah were entitled to receive asylum pursuant to the Convention since they had a well-founded fear of persecution in their homeland.

Citation: Islam v. Secretary of State for the Home Department, [1999] 2 W.L.R. 1015 (House of Lords).

CHILD ABDUCTION

Kansas Supreme Court rules that mother violated Hague Abduction Convention when she spirited her two children from her husband's custody in Israel to United States

Nathan Cornell Sampson ("Nathan") and Veronica Windham Sampson ("Veronica") are both U.S. citizens. In 1989, they married in Israel and had two children there. Veronica moved back to the U.S. in October 1996, leaving the children with her mother in Israel. Nathan remained their sole financial support and regularly visited them on weekends. The following May, Veronica went back to Israel and covertly removed the children to the U.S. without Nathan's consent. Though the dates are conflicting, there was evidence that the parties obtained an Israeli divorce in late 1995 or early 1996. According to the Bill of Divorce, Nathan claims he was to "retain custody of the children."

Nathan filed an action in the Kansas courts under the Hague Convention on the Civil Aspects of International Child Abduction [T.I.A.S 11670; in force for U.S., July 1, 1988] as promptly implemented by the International Child Abduction Remedies Act (ICARA) [42 U.S.C. Section 11601ff (1994)]. He claimed that Veronica had wrongfully removed the children from their habitual residence and sought their return to Israel, also a Convention state.

The Convention requires each party to set up a "Central Authority" to specialize in processing abduction claims and ICARA gives concurrent original jurisdiction of suits invoking the Convention to federal and state courts.

In line with the Preamble of the Convention, Congress concluded that international abduction or the wrongful retention of children harms their well-being. The main Convention objectives are (1) to bring about the prompt return of children abducted or retained in a Contracting State and (2) to make sure that the courts of each Contracting State effectively respect the domestic custody and access law of the other States.

The Kansas court granted Nathan's petition. It ordered Veronica to submit herself and the children, personally, to the Israeli courts within 90 days. Veronica duly noted an appeal from this ruling.

The Kansas Supreme Court affirms. "[I]t is undisputed that respondent returned to Israel and secretly spirited the children out of the country without telling her mother or petitioner, their father. We believe that respondent's conduct in this respect lends support to petitioner's position that he had rights of custody and that respondent knew as much. Had that not been the case, petitioner need not have clandestinely left Israel with the children."

"Therefore, we find that petitioner has met his burden of proving by a preponderance of the evidence that the children habitually resided in Israel and that petitioner had rights of custody at the time the children were removed from their habitual residence. Substantial evidence supports the district court's relevant findings and conclusions." [Slip op. 5-6]

Veronica relied, however, on the statutory defense that Nathan had failed to exercise any rights of custody he may have had. She maintained that her mother was the true custodian and that Nathan's weekend visits were inadequate. The Court disagrees.

"In this case, it is uncontroverted that petitioner regularly visited with the two children during the time respondent lived with the children, as well as while respondent was in the United States without them. Petitioner and the children's grandmother (respondent's mother) both testified that petitioner financially supported the children while their mother was abroad. There was no testimony that respondent sent money back to Israel for their support."

"We therefore hold that, under the Convention, the children habitually resided in Israel; that petitioner had rights of custody; and, that petitioner was exercising those rights at the time the children were removed. As such, the district court was correct in concluding that respondent wrongfully removed the children from Israel, and that respondent must return the children to Israel for further proceedings." [Slip op. 7]

Citation: Sampson v. Sampson, 975 P.2d 1211 (Kan. 1999).

CONSULAR RELATIONS

U.S. Supreme Court denies convicted Canadian murderer's appeal for stay of execution despite alleged prior violations of Vienna Consular Convention

On June 17, 1999, the State of Texas executed Stanley Faulder, a Canadian citizen, for the 1975 murder of an elderly woman. Earlier the same day, the U.S. Supreme Court had denied Faulder's last-minute appeal to delay the execution [119 S.Ct. 2363, 67 U.S.L.W. 3770 (1999)].

Canada, which did away with the death penalty in 1976, strongly protested the execution, claiming that the U.S. had violated the diplomatic protocol established by the Vienna Convention on Consular Relations [21 U.S.T. 77, T.I.A.S. No. 6820] by failing to advise Faulder of his right to contact his local consul. Though Faulder had been on death row since 1977, Canadian authorities claimed to have learned about his case only after he had already spent 15 years in prison.

In 1996, the U.S. Court of Appeals for the Fifth Circuit had held that Texas had not violated the Vienna Convention in a way that required a reversal of Faulder's conviction. See Faulder v. Johnson, 81 F.3d 515 (5th Cir. 1996). The Court relied in part on a 1992 letter from a Texas Assistant Attorney General to a Canadian Embassy representative.

The letter described the contacts between Texas and the Canadian government during Faulder's prosecution, noting that Faulder had expressly stated that he did not want to contact his family in Canada. For these and other reasons the Court found that the violation of the Vienna Convention amounted to harmless error.

The day before the execution, the U.S. Court of Appeals for the Fifth Circuit had denied Faulder's motion to stay his execution and to obtain a temporary restraining order. Based on 28 U.S.C. Section 1350 [Alien Tort Claims Act] and Section 1983, Faulder had alleged a tort claim against Texas officials for breaches of the Consular Convention.

The Court repeated its recent holding that federal courts lack jurisdiction to stay executions under Section 1983, and extended that holding to Faulder's claim under the Alien Tort Claims Act. The next day, the U.S. Supreme Court denied certiorari and Texas went ahead and put Faulder to death.

Citation: Faulder v. Johnson, No. 99-20542 (5th Cir. June 16, 1999); Faulder v. Texas Board of Pardons & Paroles, No. 99-50130 (5th Cir. June 10, 1999); Reuters press release "Texas executes Canadian despite Ottawa's protests" (June 17, 1999).

ECONOMIC SANCTIONS

As further economic sanctions against Yugoslavia, EU freezes Yugoslav funds abroad and bars future investments in Serbia

The European Union (EU) has broadened the sanctions that it recently imposed on the Federal Republic of Yugoslavia because of Yugoslavia's repressive policies and human rights violations (see 1999 Int'l Law Update 51 & 76). To this end, the EU has issued Regulation 1294/1999 to freeze Yugoslav funds and to ban investments in Serbia. Coun­cil Decision 1999/424/CFSP also enlarged the list of Yugoslav individuals who may not enter the EU.

Regulation 1294/1999 aims to increase the pressure on Yugoslavia and Serbia by freezing funds held abroad by their governments and by prohibiting new investments in Serbia (Articles 3 and 4). It supersedes previous Regulations and expands sanctions that are already in place by also freezing assets that (1) may generate funds or other financial re­sources for Yugoslavia and Serbia, or (2) belong to companies and entities owned or controlled by those governments, or (3) belong to individuals acting for, or on behalf of, those governments. There are exemptions from these requirements such as for payments of salaries, insurance premiums, debt service, or if urgent circumstances so require (Articles 7 and 8).

Annex I of the Regulation contains a list of "Persons acting or purporting to act for ... Yugoslavia ... or ... Serbia." The list includes the President, Mr. Milosevic, as well as the members of the government, the members of the Serbian government, and executives of key institutions. This list is virtually identical to the above-mentioned Council Decision 1999/424/CFSP, that bars specified individuals from entry into the EU.

Annex II lists several companies and other entities that are located abroad but that Yugoslavia and Serbia control. Finally, Annex III names competent authorities in the EU Member States to interpret and enforce the sanctions. For example, the list of authorities includes the Danish Agency for Trade and Industry and the Bank of England, Sanctions Emergency Unit.

Citation: Council Regulation ... No 1294/1999 of 15 June 1999 concerning a freeze of funds and a ban on investment in relation to the Federal Republic of Yugoslavia ..., 1999 O.J. of the European Communities (L 153) 63, 19 June 1999; Council Decision ... (1999/424/CFSP), 1999 O.J. of the European Communities (L 163) 86, 29 June 1999.

ECONOMIC SANCTIONS

Resolving several issues of first impression regarding state sanctions on companies doing business with undemocratic foreign nations, First Circuit strikes down "Massachusetts' Burma Law" based on supremacy of federal power in foreign affairs

In 1996, the State of Massachusetts enacted a law to penalize companies that are doing business with Myanmar, referred to as the "Massachusetts Burma Law" [ch. 130, Sections 22G-22M, 40F 1/2 (West Supp. 1998)] [N.B. Current military regime in Burma changed its name to "Myanmar" in 1989]. The Law effectively forced companies to choose between doing business either with Myanmar or with Massachusetts.

According to the legislative history, the statute seeks to promote democracy in Myan­mar by deterring investment by U.S. firms in that country. By early 1998, there were 346 companies on the restricted purchase list. Massachusetts annually spends more than $2 billion in goods and services. At least 19 municipal governments have passed comparable statutes. Several local jurisdictions have enacted similar laws relating to China, Cuba, Nigeria and other nations.

Three months after Massachusetts enacted the Law, the U.S. Congress imposed sanctions on Myanmar through the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1997, Section 570, 110 Stat. 3009-166 to 3009-167.

On April 30, 1998, the National Foreign Trade Council filed its action challenging the Massachusetts Law. In November 1998, the Massachusetts federal court enjoined the enforcement of the law and Massachusetts appealed.

The U.S. Court of Appeals for the First Circuit affirms. The Court finds that the Law unconstitutionally interferes with the foreign affairs powers of the federal government. It also violates the foreign commerce clause. Finally, the federal sanctions against Burma pre-empted state law.

"[T]he Supreme Court has long held that 'power over external affairs is not shared by the States; it is vested in the national government exclusively. ... In The Chinese Exclusion Case, for example, the Court commented that for local interests the several States of the Union exist, but for national purposes, we are but one people, one nation, one power.' ... "

"[W]hen it comes to foreign affairs, the powers of the federal government are not limited: 'the broad statement that the federal government can exercise no powers except those specifically enumerated in the Constitution, and such implied powers as are necessary and proper to carry into effect the enumerated powers, is categorically true only in respect of our internal affairs.'" [Slip op. 22-23]

In Zschernig v. Miller, 389 U.S. 429 (1968), for example, the Supreme Court struck down an Oregon statute that barred non-resident aliens from inheriting property unless certain conditions of reciprocity with their country of residence were satisfied. The Supreme Court opined that the Oregon statute required probate courts to inquire into the actual administration of foreign law, the credibility of foreign diplomatic statements, and other international conjectures.

Though the precise boundaries of Zschernig are unclear, the Court agrees with the district court that the Massachusetts Law is unconstitutional under the interpretations of Zschernig taken by other federal courts.

"The conclusion that the Massachusetts law has more than an incidental or indirect effect on foreign relations is dictated by the combination of factors present here: (1) the design and intent of the law is to affect the affairs of a foreign country; (2) Massachusetts, with its $2 billion in total annual purchasing power by scores of state authorities and agencies, is in a position to effectuate that design and intent and has had an effect; (3) the effects of the law may well be magnified should Massachusetts prove to be a bellwether for other states (and other governments); (4) the law has resulted in serious protests from other countries, ASEAN, and the European Union; and (5) Massachusetts has chosen a course divergent in at least five ways from the federal law, thus raising the prospect of embarrassment for the country." [Slip op. 33]

Citation: Nat'l Foreign Trade Council v. Natsios, No. 98-2304 (1st Cir. June 22, 1999).

ENVIRONMENTAL LAW

Under its turtle protection laws, U.S. has certified that 41 nations are in compliance and thus may resume shrimp exports to U.S.

The U.S. State Department has approved 41 nations so far as meeting U.S. standards for protecting sea turtles and, for those nations, has lifted its ban on exporting shrimp to the U.S.

Section 609 of Pub.L. 101-162 prohibits the import of shrimp harvested in ways that harm sea turtles unless the State Department certifies that the harvesting nation either has a sea turtle protection program comparable to the U.S. or has a fishing environment that does not endanger sea turtles. The protected species of sea turtles are Loggerhead, Kemp's Ridley, Green, Leatherback and Hawksbill.

The chief components of the U.S. turtle conservation program are "sea turtle excluder devices" (TEDs) that prevent the accidental drowning of sea turtles in shrimp trawls. Most recently, the State Department certified Costa Rica, Guyana, Panama, and Suriname as meeting Section 609 requirements.

In a related development, State has issued Revised Guidelines for the Implementation of Section 609. The Guidelines explain the requirements of the U.S. sea turtle protection program and how fisherman should harvest shrimp in order not to harm sea turtles. The Guidelines also explain how State reviews the shrimp harvesting practices and the fishing environments of foreign nations. The certification process is also described.

Citation: U.S. Department of State press statements of May 3, May 19 (Panama and Costa Rica), June 8, 1999 (Guyana), and July 5, 1999 (Suriname)[certification of shrimp exporting countries]; 64 Federal Register 36946 (July 8, 1999) [Revised Guidelines]. [More information on sea turtle protection is available on the website of the NWF Sea Turtles Campaign www.nwf.org/international/trade/turtles].

INJUNCTIONS

U.S. Supreme Court holds that, as in 1789, federal courts today lack equitable power to preliminarily enjoin transfer of assets by Mexican debtor before creditor's judgment

Alliance Bond Fund, Inc. and other investment funds (AMD) bought $75,000,000 worth of unsecured notes (Notes) from Grupo Mexica­no de Desarrollo, S.A. (GMD), a Mexican holding company. Four GMD subsidiaries guaranteed the Notes.

Because of the slump in the Mexican economy and related difficulties arising from a state-sponsored toll road program, GMD was in serious financial trouble by mid-1997. In addition to the Notes, GMD owed other debts of about $450,000,000.

These financial difficulties caused GMD to miss the August 1997 interest payment on the Notes. After negotiations to restructure GMD's debt had foundered, AMD accelerated the principal amount of the Notes and sued GMD for the sums due in U. S. District Court.

Plaintiffs claimed that GMD was in danger of insolvency or was already at that point. Moreover, they alleged that defendant was preferring its Mexican creditors by planning to allot its most valuable assets to them. Since this activity would tend to thwart the collection of any judgment plaintiffs would win, plaintiffs asked the court to issue a preliminary injunction to restrain defendants from conveying the assets.

The district court issued the preliminary injunction pursuant to F.R.Civ.P. 65 and ordered defendants to post a $50,000 bond. Upon defendants' appeal, the U. S. Court of Appeals for the Second Circuit affirmed. [See 143 F.3d 688]

The U.S. Supreme Court granted certiorari and reverses the Second Circuit in a 5 to 4 vote on the injunction issue. The majority concludes that the district court lacked the authority to preliminarily enjoin defendants from disposing of their assets pending the decision of plaintiffs' contract claim for damages. This remedy was historically not within the Chancellor's armory.

According to the majority, the federal courts possess no greater equity powers than the English Court of Chancery did when the U.S. Constitution entered into force and Congress enacted the Judiciary Act of 1789. At that time, the accepted general rule was that an equity court would not interfere with the debtor's use of his property until a court had handed down a judgment fixing the debt.

Nor did the merger of law and equity under the 1938 Federal Rules of Civil Procedure alter this general substantive principle. The procedural rationale of the rule rested in part on the p The substantive purpose was to make sure that the creditor had obtained a legal interest in the debtor's property on which equity could act.

It was not until 1975 that the English Court of Chancery provided for an injunctive remedy before judgment. See Mareva Compania Naviera S. A. v. International Bulkcarriers S. A., 2 Lloyd's Rep. 509 (Eng. Ct. App. 1975). Commentators, however, looked upon the development of the Mareva injunction as a striking deviation from previous practice. Parliament has since confirmed the Mareva injunction by statute. [See Supreme Court Act of 1981, Section 37, 11 Halsbury's Statutes 966, 1001 (4th ed. 1985).]

Finally, the majority stresses that the Court has long taken a cautious approach to the equitable powers of the federal courts. While the parties have ably cited weighty factors both for and against allowing the remedy plaintiffs had obtained in the lower courts, it is Congress and not the Court that should decide the issues.

The four dissenting Justices decline to accept the notion of freezing the powers of equity into their state as of 1789. The jurisprudence of equity has always been flexible as was shown, for example, by the powerful supervisory aspects of enforcing the desegregation rulings.

Since new schemes to defraud creditors are constantly cropping up, equity needs to adapt so that it can usefully aid in the collection of lawful debts. A judge-made recognition in Mareva of equitable power to freeze assets prior to judgment to prevent injustice exemplifies the desirable adaptability of equity jurisprudence. Moreover, to obtain a preliminary injunction of this type demands a strong showing by a plaintiff of a likelihood of success on the merits and the probability of irreparable injury in the absence of equitable action.

On this record, the indebtedness is clear and defendant's plan to satisfy Mexican creditors first might well leave plaintiffs with a worthless judgment. Moreover, there is Rule 65(c)'s requirement that the plaintiff post an adequate bond to protect defendant against harm from an injunction that turns out to be unwarranted and damaging to the party enjoined. In all respects, the dissenters conclude, existing standards for securing a preliminary injunction are enough to ward off injustice to debtors.

Citation: Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 119 S. Ct. 1961, 144 L. Ed. 2d 319 (1999).

INTELLECTUAL PROPERTY

United States has enacted Digital Millennium Copyright Act (DMCA) to implement World Intellectual Property Organization treaties on Copyright, Performances and Phonograms

On October 28, 1998, President Clinton approved the DMCA. This complex legislation has five titles, the first of which is of special international interest. Title I brought U.S. copyright law into line with the World Intellectual Property Organization (WIPO) Copyright Treaty as well as the WIPO Performances and Phonograms Treaty, both adopted in December 1996. DMCA provided a new chapter 12 to Title 17 of the U.S. Code.

Section 1201 will bar the obtaining of access to a work by "circumventing" a technological measure designed to limit access to those authorized by the copyright owner. Under Section 1201(a)(3), this means to "descramble a scrambled work, to decrypt an encrypted work, or otherwise avoid, bypass, remove, deactivate, or impair a technological protection measure." These provisions will take effect on October 28, 2000 to give the Librarian of Congress time to hold a rulemaking procedure to define appropriate exceptions to the ban.

As further protection for the copyright ow­ner, the DMCA also banned, with certain exceptions, the making or making available of technologies, products and services mainly designed to overcome technological measures that control access. These prohibitions took effect immediately.

The Title I exceptions are for "reverse engineering," for law enforcement and intelligence activities, for encryption research, for security testing, for protection of minors, for the safeguarding of personal identification information, for limited use by nonprofit libraries, archives and educational institutions and for certain analog devices (such as pre-recorded movies and videos).

Section 1202 of Title I forbids tampering with "copyright management information" (CMI) such as by intentionally furnishing or disseminating false CMI or by intentionally removing or altering CMI. To come within the DMCA, a person must be conveying CMI in connection with a copyrighted work. Examples of CMI include information that identifies the copyrighted work or a performer of same or, as to an audiovisual work, data that identifies the writer, performer or director.

Anyone who violates Sections 1201 or 1202 may suffer civil liability or criminal penalties pursuant to Sections 1202-1204. An injured party may sue in a federal district court for injunctions, damages, costs and attorney's fees. As appropriate, the court may compel impounding or modification of the devices used in violating the DMCA.

Except for nonprofit libraries, archives, and educational institutions, the DMCA provides for substantial criminal punishments for willfully contravening the DMCA for commercial advantage or private financial profit.

Citation: 12 World Intellectual Property Report 412-15 (Dec. 1998) under bylines of Jonathan Band, Taro Isshiki and Anthony Reese with Morrison & Foerster LLP.

JUDGMENTS

Paris Court of Appeal rules that order of U.S. federal bankruptcy court approving Chapter 11 petition by U.S. debtor was not enforceable decision under French Code of Civil Procedure

In a filing of Chapter 11 bankruptcy in the U. S. District Court for the Southern District of New York by Barney's Inc., an American company, the federal judge approved an order for the cessation of payments on January 11, 1996. Armed with this document, Barney's filed proceedings in the Paris District Court [Tribunal de Grande Instance] in May 1996 against a creditor, the French Company, C.M.C.

It asked the French court to enforce the January order of the U.S. federal bankruptcy court under Article 509 of the New Code of Civil Procedure. Under Article 509, N.C.P.C. "judgments handed down by foreign courts and documents witnessed by foreign officials are enforceable within the territory of the Republic in the manner and in the situations provided for by the law."

The Paris District Court, however, ruled that the procedural act in question did not constitute the exercise of judicial power but merely the rubber-stamping of the debtor's declarations. Barney's appealed to the Paris Court of Appeal [Cour d'Appel] to overturn this judgment.

Barney's contended that, since the bankruptcy court had the power to either accept or reject its submissions, the approval was an exercise of the judicial office by a competent court applying the relevant U.S. law. The order thus amounted to a judicial declaration of Barney's bankruptcy under Article 301 of the U.S. statute. Since it did not offend French public policy, it had the needed characteristics of an internationally enforceable ruling.

The Paris Court of Appeal, however, dismisses the appeal with costs. It first concludes that the U.S. order was not a "decision" within Article 509.

"In the case more particularly, of an instrument issued by a judicial authority, its classification depends on finding out whether the foreign judge did in fact exercise any volition in relation to the relationship submitted to him. An instrument cannot be characterised as a decision unless, after noting the agreement of the parties, or the wishes of one of them, the judge had been able to proceed to the verification of the infringement or respect of a legal rule, thus exercising a control over the issues submitted to him." [Paragraph 9]

Nor was the action of the U.S. Court an enforceable "instrument" under Article 509. Even in the absence of the exercise of decision-making powers, certain documents may become enforceable in France.

This comes about, however, "only when the issuing authority has nevertheless played a certain determinative role in the drafting of the instrument and has not limited itself to registering it, as is the case when, as on the present facts, the judge or the registrar have done nothing more than add their name or signature to the declaration made by the party itself without taking charge of the contents, and when they have not 'accepted' it even in the sense of imposing on it a certain form." [Paragraph 13]

Citation: Barney's Inc. v. C.M.C., S.A., [1999] Int. Lit. Proc. 386 (Court d'Appel, Paris).

SOVEREIGN IMMUNITY

In case where party other than foreign state raises issue of foreign sovereign immunity, Eleventh Circuit holds that federal law governs whe­ther foreign state has waived immunity and that foreign ambassador ordinarily has authority to do so

The plaintiffs in the following case are Ecuadorian commercial shrimp farmers who allegedly suffered losses because certain pesticides applied to banana plantations had killed their shrimp. Del Monte Fresh Produce Company and two other companies (jointly "Del Monte") had supplied the pesticides.

Del Monte filed complaints to implicate the "Programa Nacional de Banano" (PNB), a department within the Ecuadorian Ministry of Agriculture and Livestock, which then removed the cases to federal court. The only basis for federal subject matter jurisdiction was PNB's presence in the U.S. under 28 U.S.C. Section 1330(a) [federal court jurisdiction over foreign states].

With a May 1995 statement, PNB purported to waive its sovereign immunity for purposes of this litigation. In June 1995, the Ecuadorian Ambassador explained that the purpose of the waiver was to facilitate the dismissal of the case based on forum non conveniens. Del Monte, however, submitted letters and affidavits stating that only the Attorney General of Ecuador could act in judicial matters and that the Ecuadorian Constitution bars a waiver of sovereign immunity.

In 1995, the district court found that PNB enjoyed sovereign immunity and remanded to state court for lack of subject matter jurisdiction. The Florida Appeals Court eventually dismissed the case on forum non conveniens grounds. [It appears, however, that Ecuadorian courts thus far have refused to accept jurisdiction over the litigation.] Del Monte now seeks a reversal of the district court's 1995 dismissal of the complaints against PNB and a return of the litigation to federal court.

The U.S. Court of Appeals for the Eleventh Circuit reverses the dismissal of PNB. It also vacates the order remanding the case to the state court, and remands to the district court.

This case presents several novel issues regarding the waiver provisions of the FSIA. Among other things, Del Monte argued that PNB has waived its immunity from suit under the Foreign Sovereign Immunities Act (FSIA) [28 U.S.C. Section 1330, Sections 1602-11]. The Court agrees.

Under FSIA Section 1605(a), a foreign state is not immune from jurisdiction in U.S. courts if it has explicitly or implicitly waived its sovereign immunity. One issue here is whether someone other than the foreign state itself can raise the issue of sovereign immunity.

"As a threshold matter, we conclude that the district court correctly determined that it was required to address the issue of PNB's immunity, despite the fact that Ecuador did not raise the issue. Parties other than a foreign sovereign ordinarily lack standing to raise the defense of sovereign immunity. ... When the court's jurisdiction rests on the presence of the foreign sovereign, however, the court may address the issue independently. ... Because federal jurisdiction depended upon PNB's presence, the fact that plaintiffs, rather than PNB, raised the issue of sovereign immunity did not foreclose the district court's inquiry." [Slip op. 29-30].

The question then becomes whether the 1995 statements by PNB and the Ecuadorian Ambassador amounted to a waiver of sovereign immunity. The FSIA does not clearly state whether federal or state law controls questions regarding the authority of a person to waive a foreign state's sovereign immunity. To achieve a uniform federal standard, the Court applies federal law to the question of whether a person had the authority to waive his state's immunity.

"Our interpretation of the FSIA, the Congressional policies underlying that statute, and other concerns that arise in cases relating to foreign affairs lead us to conclude that when, as here, a duly accredited head of a diplomatic mission (such as an ambassador) files a wai­ver of his or her sovereign's immunity in a judicial proceeding, the court should assume that the sovereign has authorized the waiver absent extraordinary circumstances." [Slip op. 42] The Court concludes that the Ambassador's 1995 waiver of Ecuador's sovereign immunity was complete and effective.

Citation: Aquamar S.A. v. Del Monte Fresh Produce N.A., Inc., No. 95-5198 (11th Cir. June 30, 1999).

TRADE

WTO arbitrators award damages totaling $128,100,000 per year to U.S. and Canada for EU's ban on hormone-treated meat

On July 12, 1999, WTO Arbitrators announced their awards of damages to the U.S. and Canada for the "nullification and impairment" suffered from the continued EU ban against hormone-treated meat. A WTO Appellate Body had held in January 1998 that the EU ban on hormone-treated meat lacked a scientific basis. [See 1998 Int'l Law Update 20].

Because of the continuing EU ban on such products, on May 17, 1999, the U.S. requested the WTO Dispute Settlement Body to authorize it to suspend $202 worth of tariff concessions to the EU. In two separate reports, the Arbitrators awarded the U.S. $116.8 million per year in damages, and Canada C$11.3 million. Accordingly, the Arbitrators decided that the U.S. and Canada may suspend tariff concessions to the EU covering trade up to the damage ceilings.

The arbitrators did not accept the parties' calculation of damages and instead developed their own methodology starting with the question "what would annual prospective US exports of hormone-treated beef and beef products to the EC be if the EC had withdrawn the ban on 13 May 1999?" (Paragraph 38 of the Report).

"To estimate the nullification and impairment caused by the hormone ban we then deduct from that total value the current value of US exports of ... those that have not been treated with hormones. We assume that these 'current exports', adjusted for other factors as explained below, are representative of the exports that will occur in the future with the ban in place. The end result provides us the estimated value of hormone treated ... exports that would enter the EC but for the ban's continuing existence beyond 13 May 1999. ... We use f.o.b. prices to ensure comparability with the customs valuation method of the suspension of concessions proposed by the US." [Paragraphs 43-44].

Meanwhile, the European Commission has amended its decision to suspend imports of U.S. beef and bovine liver until December 15, 1999. Its researchers have found certain synthetic growth hormones in U.S. products as part of the EU risk assessment following the adverse WTO decision.

Finally, the EU has issued a statement that it considers the alleged U.S. damages excessive.

Citation: European Communities — Measures Concerning Meat and Meat Products (Hormones), ... Decision by Arbitrators (WT/DS26/ARB)[U.S.] & (WT/DS48/ARB)(12 July 1999). [Arbitrators' reports are available on WTO website: www.wto.org; European Union Press Release, No. 24/99 (April 28, 1999) & No. 41/99 (June 17, 1999)]; The European Union Press Release No. 47/99 (July 12, 1999; U.S. Trade Representative press release 99-58 (July 12, 1999) [includes fact sheet on the hormone dispute].

TRADE

EU issues new directive on consumer goods sales and product warranties that requires Member States to set up fair and uniform rules to govern such sales

To further protect the consumer, the European Union has issued Directive 1999/44/EC on the sale of consumer goods and associated guarantees. The purpose is to provide "a uniform minimum set of fair rules governing the sale of consumer goods" no matter where in the EU the sale takes place (Preamble para. (2), Article 1). [N.B. When implemented, this Directive will also affect all U.S. companies that export and distribute consumer goods in the European Union].

Under the Directive, the Member States must enact laws that require the seller to deliver consumer goods that conform to the sales contract (Article 2). There will be a rebuttable presumption of conformity with the contract, and the laws will set forth elements relevant to showing lack of conformity.

For example, the presumption will apply under two circumstances. First, it will operate when the goods comply with the description given by the seller and possess the qualities of the goods that the seller had held out to the consumer as a sample or model. Second, it will take effect when the goods are suitable to a particular purpose for which the consumer needs them as long as he made it known to the seller at the time of contracting and the seller accepted it.

Where the goods sold do not conform, the consumer will have specified rights. For example, she may require repair or replacement of the goods free of charge, a refund, or even rescission of the contract (Article 3).

The Directive, however, requires certain time limits on these rights (Article 3). The seller will be liable if the lack of conformity becomes apparent within two years from delivery. In their domestic law, the Member States may require the consumer to notify the seller of the nonconformity within two months of its discovery date.

Guarantees for consumer goods must state that the consumer has legal rights which the guarantee does not affect. The wording must be easy to understand, especially in stating the guarantee's duration and territorial scope.

Finally, the Directive allows Member States to enact their own more stringent requirements in the area of consumer protection covered by this Directive (Preamble para. (24), Article 8). The Member States must transform this Directive into national law by January 1, 2002.

Citation: Directive 1999/44/EC ... on certain aspects of the sale of consumer goods and associated guarantees, 1999 O.J. of the European Communities (L 171) 12, 7 July 1999.

U.S. signs Inter-American Convention on Transparency in Conventional Weapons Acquisition. On June 7, 1999, the U.S. signed the new Inter-American Convention on Transparency in Conventional Weapons Acquisition adopted by the General Assembly of the Organization of American States (OAS). The Convention provides for advance notice of major arms acquisitions covered by the United Nations (UN) Register of Conventional Arms. The U.N. Register is a voluntary annual report by member states on their arms imports, exports and procurement in seven weapons categories (battle tanks, armored combat vehicles, large caliber artillery, combat aircraft, attack helicopters, warships, and missiles and missile launchers). Under the OAS Convention, each party must (1) provide annual reports to the OAS Depositary on its imports and exports of conventional weapons, and (2) notify the Depositary of its acquisitions of conventional weapons within 90 days. Citation: U.S. Department of State press statement of June 7, 1999; Jane's Defence Weekly (July 7, 1999).

U.S. and Canada agree on Pacific Salmon. According to the U.S. Department of State, U.S. and Canadian negotiators have reached an agreement to resolve the dispute over the management of Pacific salmon. The agreement introduces an "abundance-based" harvesting regime to protect salmon stocks. It also sets up two bilateral funds to improve fisheries management and scientific cooperation to which the U.S. will contribute $140 million. Citation: U.S. Department of State press statement of June 3, 1999.

U.S. and Bahrain sign "open skies" agreement. On May 24, 1999, the U.S. and Bahrain signed an "Open Skies" aviation agreement. It permits unrestricted service by airlines between the two countries. This is the 35th "open skies" agreement that the U.S. has signed. Citation: U.S. Department of State press statement of May 24, 1999; Flight International, June 2, 1999, page 14; Aviation Daily, May 26, 1999, page 2.

Japan amends Copyright Law. On June 15, 1999, the Japanese Diet (Parliament) passed an amendment to the Copyright Law. The legal changes include: (1) unauthorized removal of copyright protection means or programs is a criminal offense, (2) rights to show art works and photographs will be provided in ways similar to the screening rights for movies, and (3) background music in hotels and restaurants will become subject to copyright. Citation: Kanpo [Japanese Official Gazette] Heisei 11 [1999], June 23, Special Number 118, page 5. [An English summary of Bill amending Copyright Law is available on website: www.okuyama.com.].

EU and Canada amend their Agreement for Scientific and Technological Cooperation. The EU and Canada have amended their Agreement for Scientific and Technological Cooperation which has been effective since February 27, 1996, by changing the scope of the "areas of cooperation." For the EU, the cooperation includes all research and technological development and demonstration activities covered by Articles 130G(a) [Implementation of research by promoting cooperation among companies, research centers and universities] and 130G(d) [Training and mobility of researchers]. For Canada, the cooperation includes all non-defense science and technology activity funded or performed by Government bodies. The effective date is April 30, 1999. Citation: Council Decision ... 1999/408/EC, 1999 O.J. of the European Communities (L 156) 23, 23 June 1999.

U.S. and Greece sign mutual legal assistance treaty. On May 26, 1999, the U.S. and Greece signed a Treaty on Mutual Legal Assistance in Criminal Matters (MLAT). According to statements to the press by U.S. Secretary of State Madeleine Albright, the main purpose is to facilitate the investigation of terrorism. The Treaty establishes mechanisms for mutually providing evidence, such as by taking testimony. It also deals with other forms of law enforcement in criminal investigations and prosecutions such as executing searches. The U.S. currently has 21 similar MLAT's in force. Citation: U.S. Department of State press statement of May 26, 1999.

U.S. imposes economic sanctions on Afghan Taliban for support of bin Laden. On July 7, 1999, U.S. President Clinton signed an Executive Order to impose sanctions on the Taliban in Afghanistan. The Taliban (also called Taleban or Talibano Islami Tahrik) is the political and military entity that de facto controls Afghanistan. The Executive Order is based on the International Emergency Economic Powers Act [50 U.S.C. 1701], the National Emergencies Act [50 U.S.C. 160], and 3 U.S.C. 301. It blocks all assets of the Taliban and will list key individuals by name (so far, only Mohammed Omar, Amir al-Mumineen Commander of the Faithful, has been listed). U.S. persons must not conduct any transactions involving blocked Taliban assets. The reason given for this action is the Taliban's continued support for Usama bin Laden and his associates (called Al-Qaida) who threaten terrorist acts against the U.S. and who appear to have found a safe haven in Afghanistan. Citation: 64 Federal Register 36750 (July 7, 1999); U.S. Department of State Daily Press Briefing (July 6, 1999).

U.S. and Canada resolve lingering dispute over periodicals. The U.S. and Canada have resolved their dispute over Canada's magazine trade practices and the controversial Bill C-55. A WTO Dispute Settlement Panel had found that certain Canadian requirements breached GATT trading rules. These included Canada's ban on foreign magazines with advertising directed at Canadians, a 1995 special tax on so-called "split-run" magazines, and discriminatory postal rates for imported magazines. See 1997 Int'l Law Update 44. In 1998, the Canadian government introduced Bill C-55 which would have re-introduced similar restrictions. Under the new agreement, however, Canada will allow U.S. magazines sold in Canada to carry 12% of total ad space geared towards Canadians. Within three years, this percentage will grow to 18%. Canada will also allow its advertisers to deduct their advertising in foreign magazines from taxes as business expenses in the same way that they deduct advertising in Canadian publications (see Article 19 of the Canadian Income Tax Act). Citation: U.S. Trade Representative press release 99-46 (May 26, 1999); Financial Times (London), May 27, 1999, page 7.

U.S. and Egypt sign Trade and Investment Framework Agreement. On July 1, 1999, the U.S. and Egypt signed a Trade and Investment Framework Agreement (TIFA), which establishes a joint Council on Trade and Investment chaired by the U.S. Trade Representative and the Egyptian Ministry of Trade and Supply. Through this Council, both countries will discuss trade and investment matters, including agricultural standards, intellectual property rights, customs procedures, service industries, and market access. Citation: U.S. Trade Representative press release 99-55 (July 1, 1999).

Japanese Diet enacts laws related to Japan-U.S. Defense Cooperation. On May 24, 1999, the Japanese Diet (Parliament) passed the so-called "Guidelines Legislation" consisting of three bills relating to the U.S.-Japan Defense Cooperation. The new laws implement the U.S.-Japan Guidelines, and follow a Review by the U.S.-Japan Security Consultative Committee completed in September, 1997. The Guidelines describe U.S.-Japanese military collaboration if a military crisis occurred near Japan, such as cooperation of Japan's Self-Defense Forces with U.S. military forces. The first of the three bills allows the Japanese Self-Defense Force to provide logistic support to the U.S. military. The second bill revises the U.S.-Japan Acquisition and Cross-Servicing Agreement (ACSA) to expand cooperation to include the supply of fuel and necessary goods during crisis times. The third bill amends the Self-Defense Force law to allow not just Japanese airplanes but also Japanese vessels to evacuate Japanese citizens from other countries. Citation: The transcript of press conference held by Press Secretary on May 25, 1999, and Joint Statement, U.S.-Japan Security Consultative Committee, Completion of Review of Guidelines for U.S.-Japan Defense Cooperation (September 23, 1997) are available on website of Ministry of Foreign Affairs of Japan, www.mofa.go.jp; Kyodo News International (New York) report of May 31, 1999.

EU and Canada conclude agreement on competition laws. On June 17, 1999, the EU and Canada concluded an Agreement regarding the application of their competition laws. The purpose of the Agreement is to promote cooperation between the competition authorities of the parties. Each party will inform the other party of enforcement activities that may affect the other party's important interests. The parties will also help each other in enforcement matters. To open up communication channels, the Agreement provides for information exchange and semiannual meetings about competition matters. Annex A lists the EU competent authorities for purposes of this Agreement, such as the "Competition Authority" in Ireland and the "Konkurrensverket" in Sweden. -- Last year, the EU entered into an agreement with the U.S. "on the application of positive comity principles in the enforcement of their competition laws." Citation: 1999 O.J. of European Communities (L 175) 49, 10 July 1999. [See also 1998 Int'l Law Update 62].