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 9 (September).

BANKING

U.S. Federal Reserve amends Regulation K to bar foreign banks from using U.S. branches to transact through offshore offices in ways that U.S. banks could not do via their foreign branches

The U.S. Federal Reserve has issued a final rule amending Regulation K [see 12 C.F.R. Part 211].  The amendment implements a provision of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 [see Section 7(k)] that amended the International Banking Act of 1978.

The amendment bars foreign banks from using their U.S. branches or agencies to manage types of activities through offshore offices that a U.S. bank could not manage at its foreign or subsidiaries.  It applies to those offshore offices that are "managed or controlled" by a foreign bank's U.S. branches or agencies.

In particular, as for the management of shell branches, the amendment provides that "(1) A state‑licensed branch or agency shall not manage, through an office of the foreign bank which is located outside the United States and is managed or controlled by such state‑licensed branch or agency, any type of activity that a bank organized under the laws of the United States or any State is not permitted to manage at any branch or subsidiary of such bank which is located outside the United States." [Section 211.24]

The amendment also specifies that the types of activities that a branch office may manage through an office located outside the U.S. include the types of activities authorized to a U.S. bank by state or federal charters, regulations, and other U.S. banking laws.

The effective date of the amendment is August 28, 1996.

Citation:  61 Federal Register 39052 (July 26, 1996).

CHOICE OF LAW

In contract action involving a distressed vessel in Venezuela, Second Circuit holds that English law applies to formation of contract based on arbitration clause

The vessel Brazilian Friendship ran aground in the Orinoco River in Venezuela in November 1985 with 64,000 tons of iron ore on board.  International Minerals Resources, a Liberian corporation, its Panamanian subsidiary, and several others (jointly IMR) attempted to buy the distressed vessel.

IMR negotiated with a Venezuelan salvage company, Hydra Offshore, Ltd. (Hydra), for the sale of the vessel, and concluded a Memorandum of Understanding (MOA).  Hydra used an English brokerage firm.  The MOA specified that the parties would arbitrate any disputes in London pursuant to English law.  Three days later, Hydra canceled the MOA.  IMR began an arbitration proceeding in London, seeking specific performance of the contract.  On June 1, 1987, the High court of Justice, Queen's Bench division, enjoined Hydra from selling the vessel to anyone other than IMR.  The next day in Florida, Hydra sold the vessel to Peter Pappas, a Connecticut resident. 

A week later, IMR filed a multi-party and multi-issue case against Pappas and others in New York for tortious interference with contract.  The district court ruled that the defendants could not be held liable for any conduct occurring after the date the MOA was signed.  The jury found against some of the defendants on the issue of tortious interference with contract, but found in favor of the defendants on several other claims.

On appeal, IMR sought a new trial on the liability issue as to two defendants, and on the damages issue as to all defendants.  In particular, IMR challenged (1) the district court's application of New York rather than English law, and (2) the jury instruction that Pappas did not have to obey an injunction issued by an English court.

The U.S. Court of Appeals for the Second Circuit reverses and remands.  Regarding choice of law, the district court had applied New York contract formation law in determining whether a valid contract existed between IMR and Hydra.  The Court of Appeals, however, notes that there is a strong public policy in favor of forum selection and arbitration clauses.  England has enough contacts with the transaction because of the forum selection clause and the activities of Hydra's brokerage firm in London.  It is unclear whether there was a contract before the parties signed the MOA.  Therefore, the issue of whether and when the parties intended to become bound is a factual issue that the trial judge should have sent to the jury.  The Second Circuit has set forth a number of factors to be considered in determining whether the parties intend to be bound absent a writing, including [1] the number of terms agreed upon compared to the total number of terms, [2] the relationship between the parties, and [3] the degree of formality.  On retrial, a jury should decide the factual issues under English contract formation law.

In addition, the district court had the jury focus on the events surrounding the MOA rather than upon the injunction.  The Court explains that "[a]lthough the district judge instructed the jury to consider such events [including the injunction], he expressly instructed the jury to consider them solely in evaluating the defendants' state of mind and not on the question of tortious interference with contract.  Plaintiffs correctly point out that absent this limiting instruction, ... the jury might have reached different liability determinations.  For example, the jury could have found against Pappas on the tortious interference claim if it concluded that he moved the Brazilian Friendship closing to Florida to interfere with plaintiffs' contract to purchase the vessel, i.e., by avoiding the English court's injunction." [6488]

Citation: Int'l Minerals and Resources, S.A. v. Pappas, No. 95-7328 (2d Cir. August 5, 1996).

COMPETITION

EC Commission issues notice on fines imposed on cartels; offers reduced fines to companies wishing to leave illegal cartels

The Commission of the European Communities has issued a notice on the non-imposition or reduction of fines in cartel cases.  The Commission points out that certain companies taking part in such illegal agreements might otherwise wish to terminate their involvement and inform the Commission, but are afraid of having to pay large fines.  This notice explains the circumstances under which such a company may obtain favorable treatment.

The Commission will reduce the amount of a fine, or not impose any fine at all, if the company:

• Informs the Commission of the cartel before the Commission has initiated any investigation.

• Provides all relevant information to the Commission.

• Has not compelled other companies to participate in the cartel.

To take advantage of reduced fines, the company must contact the Directorate-General for Competition.  The Commission will then make a decision whether to reduce the fine or waive it altogether.  Favorable Commission action will not, however, protect a company from civil consequences.

Citation:  Commission notice on the non-imposition or reduction of fines in cartel cases, 1996 Official Journal (C 207) 4, 18 July 1996.

ECONOMIC SANCTIONS

President Clinton signs into law economic sanctions on companies making future investments in Iranian and Libyan petroleum ventures

On August 5, 1996, President Bill Clinton signed legislation imposing sanctions on companies that make future investments in Iranian and Libyan petroleum ventures.  It will not affect companies or individuals currently doing business in those countries.

The U.S. considers Iran and Libya supporters of international terrorism.  The sanctions seek to reduce the funds available to those two countries to support terrorist activities. 

The statute will impose sanctions on foreign companies that provide new investments of more than $40 million for the development of oil and gas resources in Iran or Libya.  It will also penalize foreign companies that violate United Nations prohibitions against trade with Libya involving weapons, certain petroleum equipment, and civil aviation services.

The sanctions include denial of Export-Import Bank assistance, bans on obtaining loans from U.S. banks and denial of U.S. government procurement opportunities.

Citation: Iran and Libya Sanctions Act of 1996, Pub.Law No. 104-172, 110 Stat. 1541 (1996); H.R. 3107, An act to impose sanctions on persons making certain investments ..., 142 Cong. Rec. H8554-03 (July 25, 1996); the Senate amendment is at 142 Cong. Rec. H8125-01 (July 23, 1996).  The text of the bill is also available on the internet site of the Washington Post at [http://www. washingtonpost.com].  [Editorial Note:  U.S. law already bars American companies from doing business with Iran and Libya; the U.S. State Department's includes them on its list of nations that support terrorism.  The European Union has voiced serious concerns about the law, see for example the statement of the EU Ambassador to the United States, European Union News (press release) No. 44/96 (July 23, 1996).]

IMMIGRATION

Third Circuit holds that Refugee Act requires INS to accord full asylum hearing procedures to stowaways seeking asylum

Mircea Marincas, a former Rumanian soldier, reached the U.S. as a stowaway but the INS denied him political asylum.  Under the INA, asylum applicants are entitled to an exclusion hearing.  Under current INS procedures, an asylum applicant receives a hearing before an immigration judge with a full panoply of procedural safeguards.  In contrast, a stowaway seeking asylum merely gets a hearing before an INS employee with limited due process protections.

Marincas appealed from the denial as affirmed by the Board of Immigration Appeals (BIA).  The U.S. Court of Appeals for the Third Circuit reviews whether the Attorney General correctly interpreted the Immigration and Nationality Act (INA) [8 U.S.C. § 1101] and the Refugee Act [Pub.L. 96-212, 94 Stat. 102 (1980)] in promulgating the current asylum procedures. 

The U.S. Court of Appeals for the Third Circuit reverses. It holds, in a Chevron analysis, that the Refugee Act clearly intends that the INS afford to stowaways the same procedures that it provides to all other asylum applicants.  At a minimum, those procedures must include the services of a translator.

Citation:  Marincas v. Lewis, No. 95-5424 (3rd Cir. Aug. 9, 1996).

JUDGMENTS

English Court of Appeal upholds the striking of English suit brought by plaintiff who had fully litigated and lost on same claims in Delaware federal courts

Robert Anthony Clarke was in effect the alter ego of Alexandra Mining (Bermuda) Ltd. (Alexandra).  In May 1987, Alexandra borrowed $5,000,000 from Fennoscandia Bank Ltd. of London (Fennoscandia).  Clarke and Alexandra secured this loan by buying and pledging a number of shares in a company known as DRX.  DRX was a Delaware company with extensive mining interests.  At one point, a dispute arose over the repayment of the loan whereupon Fennoscandia foreclosed upon the DRX shares.  Clarke claimed that in March 1989 an officer of Fennoscandia had orally agreed to extend the due date of the loan.  According to Clarke, Fennoscandia had also improperly disclosed certain confidential information about their loan to third parties.

In October 1989, the Alexandra Claims Trust (Trust) filed suit against Fennoscandia in the Queen's Bench division in London.  (The Trust is not a separate legal entity but a description of Clarke as acting under a trust document.)  The Trust claimed that the foreclosure on the DRX shares was illegal in view of the oral extension for loan repayment and that disclosure of confidential data damaged plaintiff's rights.  (Apparently for lack of funds, plaintiff let the suit languish until it was discontinued in February 1994.)

In April 1990, Clarke as a DRX shareholder sued inter alia DRX and Fennoscandia in a federal court in Delaware alleging a conspiracy to deprive him of his rights.  After pretrial discovery, the case went to a bench trial.  The judge ruled that there had been no oral extension of the loan and no disclosure of confidential information by Fennoscandia.  Nor had there been a conspiracy to oust Clarke as president of DRX.  Clarke's completed his unsuccessful appeals by October 1992.

In February 1994, the Trust filed the present English action against Fennoscandia in Queen's Bench with essentially the same allegations as in the lapsed action. [Meanwhile in May 1994 Clarke brought suit in New York federal court to set aside the adverse Delaware judgment for fraud based on alleged perjury during the trial.  The court transferred the proceeding to Delaware federal court.  The latter (as well as the appellate courts) rejected the claim as vexatious and without merit as of March 1996].  The Court of Queen's Bench concluded that Alexandra (controlled by Clarke) was raising essentially the same issues that the federal courts had determined adversely to plaintiffs.  Declining to try the issue of alleged fraud in the Delaware proceedings, it struck the action as vexatious and an abuse of process. 

The Court of Appeal (Civil Division) dismisses the appeal.  In its view, plaintiff's proffer that he has evidence of fraud in the Delaware proceedings amounted to no more than some bolstering of the credibility of plaintiff's witness.  It fell far short of showing that defense witnesses were dishonest.  Nor did plaintiff put forth a credible argument that the Delaware court had not actually decided the issue of the alleged oral extension of the loan.  Although the Trust brought the present action and Clarke as shareholder had brought the Delaware actions, there is no indication that Clarke as acting as trustee for anyone's interests other than his own.

Citation: Alexandra Claims Trust v. Fennoscandia Bank Ltd., Ct. App. (Civ. Div.), May 17, 1996 (Smith Bernal Transcript).

JUDICIAL ASSISTANCE

Ontario Court of Justice denies American plaintiffs' request to enforce letters rogatory to obtain evidence from defendant's nonparty Canadian auditor in aid of American securities litigation

Those who bought shares of Northern Telecom in the first half of 1993 brought a complex class action for damages in U.S. federal court.  They claimed that NT officers made falsely optimistic public estimates as to how well the company was doing that violated U.S. securities laws.  This made the shares rise during early 1993 and then take a major drop when NT reported large losses in the second quarter of the year. 

Pretrial discovery between the parties has already taken 32 days.  During some of the depositions, NT officials mentioned that they had relied on the advice of their auditors, Deloitte & Touche of Canada (DTC).  Instead of pursuing the inquiry during the U.S. depositions, plaintiffs then obtained letters rogatory from the district court directed to the Ontario Court of Justice for extensive production of work papers and other documents from DTC.  Both DTC and NT opposed the granting of an order enforcing the letters rogatory on the grounds that they amounted to a broad "fishing expedition" against a non-party that Canadian law does not allow.  Plaintiffs, on the other hand, rely on international comity.

After reviewing the factual setting and the Canadian rules and precedents, the Ontario Court declines to exercise its discretion to enforce the letters rogatory.  Although the letters stated that plaintiffs would offer the resulting evidence at trial if admissible, the Court reads the request as one for extensive pretrial discovery of a nonparty.  Parties regularly obtain such discovery under American procedural rules but it is a new and exceptional approach in Ontario.  Admittedly, a 1985 amendment to Section 60 of the Ontario Evidence Act and Rule 60 of the Civil Procedure Rules has authorized discretionary cooperation in foreign requests of this type.  Canadian courts, however, carefully scrutinize such requests to prevent a breach of Canadian sovereignty and to ensure that judicial assistance is necessary to achieve justice.

Where, as here, the requests are so broad as to include much irrelevant material, Ontario courts generally hold they lack power to rewrite the request but must deny the entire request for evidence.  In effect, such sweeping search infringes Canadian sovereignty and unfairly burdens an Ontario company.  Plaintiffs also must show that they were not able get the needed information from any other source than DTC.  Plaintiffs, however, failed to pursue the alleged connections between DTC and NT's optimistic statements during their extensive American discovery.

Citation: Fecht v. Deloitte & Touche, No. RE6267/96 (Ont. Ct. Jst., Gen. Div. 1996).

JURISDICTION

In dispute resulting from employment of a foreign exchange broker in Tokyo, Second Circuit holds that New York federal court lacked personal jurisdiction over U.S. citizen working in Tokyo who never engaged in substantial employment-related activities in New York

The New-York-based foreign exchange brokerage of Cantor Fitzgerald, L.P. hired J. Bart Peaslee, a U.S. citizen, as manager of its yen-based interest-rate-swap department at its Tokyo office.  Peaslee resigned less than a year later, however, because he was unhappy with the terms of employment.  Several employees from Peaslee's department followed Peaslee to Yagi Euro Corporation, also located in Tokyo.  These moves essentially shut Cantor Fitzgerald out of the worldwide market in yen-based interest swaps.

Cantor Fitzgerald sued Peaslee and his new employer in New York federal court for defamation, tortious interference with contract, and other claims.  Though he occasionally visits New York, Peaslee is domiciled and works in Tokyo.  The district court dismissed for lack of personal jurisdiction, and Cantor Fitzgerald appealed.

The U.S. Court of Appeals for the Second Circuit affirms.  The Court agrees, first, that the district court properly decided the personal jurisdiction motion before considering the question of federal subject-matter jurisdiction.

Second, Cantor Fitzgerald claimed that the district court had personal jurisdiction under the New York long-arm statute [N.Y. Civ.Prac.L. & R. § 302] because Peaslee had defamed them while "transacting business" in New York.  The Court disagrees.  Peaslee's visits to New York were not enough to create jurisdiction because Cantor Fitzgerald did not show an "articulable nexus" between the business transacted and the cause of action.

Third, Cantor Fitzgerald argued that any statements Peaslee may have made about his employment with Cantor Fitzgerald "wherever made throughout the world" arise from the transaction of business in New York because that is the headquarters of Cantor Fitzgerald.  The Court sees no merit here.  The plaintiff and defendant negotiated the employment contract in Japan, and Peaslee never carried on weighty business in New York.

Citation: Cantor Fitzgerald, L.P. v. Peaslee, 88 F.3d 152 (2d Cir. 1996).

For diversity jurisdiction purposes, Fifth Circuit rules that district court should look only to American nationality of dual citizen under 28 U.S.C. § 1332(a)

David Coury, a California citizen, sued Alain Prot, a dual citizen of the U.S. and France in a Texas state court for breach of contract.  Prot removed to federal court based on diversity jurisdiction.  The district court awarded Coury $164,500, and Prot challenged the court's subject matter jurisdiction on appeal because he was a dual citizen.

The U.S. Court of Appeals for the Fifth Circuit affirms.  There is an emerging consensus among federal courts that, for purposes of diversity jurisdiction, they should look only to the American nationality of a dual citizen.  In the Court's view, the dual citizen should not able to invoke alienage jurisdiction because that would give him or her an advantage not enjoyed by native-born American citizens. 

Further, an American national cannot sue or be sued in federal court under diversity jurisdiction unless that party is a domiciliary or "citizen" of a particular state of the U.S. under federal common law.  In determining a litigant's domicile, the court must consider a variety of factors, such as where he or she exercises civil and political rights, works, pays taxes, maintains bank accounts, and so forth.  No single factor is determinative. 

Appellate courts review the district court's determination of domicile as a question of fact and will uphold it unless it is clearly erroneous.  In this case, even though Prot was active in both the U.S. and France, the lower court did not clearly err in finding that diversity existed.

Citation:  Coury v. Prot, 88 F.3d 244 (5th Cir. 1996).

NUCLEAR ISSUES

International Court of Justice gives advisory opinion on legality of threat or use of nuclear weapons

On July 8, 1996, the International Court of Justice (ICJ) gave an advisory opinion sought by the General Assembly of the United Nations on the Legality of the Threat or Use of Nuclear Weapons.  The Court held that:

• Neither customary nor conventional international law specifically authorizes the threat or use of nuclear weapons (unanimous).

• Neither customary nor conventional international law comprehensively and universally bans the threat or use of nuclear weapons as such (11 to 3).

• A threat or use of force by means of nuclear weapons that is contrary to Article 2, paragraph 4, of the United Nations Charter and that fails to meet all the requirements of Article 51, is unlawful (unanimous).

• A threat or use of nuclear weapons must comply with international law requirements applicable in armed conflicts (unanimous). 

Generally, the threat or use of nuclear weapons would violate international law, particularly humanitarian law.  For the most part, their destructive effects do not distinguish between civilians and combatants.  The Court is unable to conclude whether or not the threat of use of nuclear weapons would be lawful in an extreme circumstance of self-defense in which the survival of a State is at stake (7 to 7).

On the same day, the ICJ declined to give an advisory opinion at the request of the World Health Organization (WHO) concerning the Legality of the Use by a State of Nuclear Weapons in Armed Conflicts.  The Court explained that, to obtain an advisory opinion, the question must fall within the scope of the requesting agency's activities.  Here, the WHO is asking about the legality of the use of nuclear weapons, not their health and environmental effects, and is therefore outside the WHO's scope of activities.

Citation: International Court of Justice Communiqué, Nos. 96/22 & 96/23, 8 July 1996.  [Excerpts of the U.S. and other nations' statements during the hearings are available on the World Wide Web site of the Washington Post at [http://www.washingtonpost.com]. The advisory opinion is available from the Distribution and Sales Section, Office of the United Nations, CH-1211 Geneva 10, or the Sales Section, United Nations, New York, NY 10017.]

U.S. Nuclear Regulatory Commission (NRC) conforms its regulations to export control guidelines of Nuclear Suppliers Group, allowing exports of nuclear materials to additional countries

The NRC has harmonized its regulations on the export of nuclear equipment and materials [10 C.F.R. Part 110] to the international export control guidelines of the Nuclear Suppliers Group.  They will reflect the nuclear non-proliferation policies of the U.S. Department of State.

The amendments permit U.S. exporters to provide nuclear equipment to additional foreign countries, including Cambodia, Vietnam, Korea, South Africa, Ukraine, and the United Arab Emirates.  The effective date of the amendments is August 7, 1996.

Citation:  61 Federal Register 35600 (July 8, 1996).

PROOF OF FOREIGN LAW

In tax matter, Seventh Circuit holds that district court correctly rejected U.S. taxpayer's interpretation of applicable French corporate law; chides parties for lax presentation of French legal materials

Pittway is a Delaware corporation with a 90%-owned subsidiary in France, Valois S.A. (Valois).  Valois in turn had a German wholly owned subsidiary, Perfect Ventil Valois (PVV).  On May 23, 1984, in compliance with French law, Valois authorized the distribution of PVV stock.  The French Company Code [Law No. 66-537 of July 24, 1966, Article 347] generally requires shareholder approval of all dividends.  Valois distributed the PVV stock to Pittway and the other shareholder in 1984 after a general shareholders' meeting on June 28, 1984.  In 1992, Pittway filed a claim for a tax refund.  It argued that Internal Revenue Code § 311(d) did not apply to the PVV distribution because the company had "declared" the dividend before June 14, 1984, the effective date of the amendment to § 311(d).

The sole issue is whether Valois's distribution of appreciated stock to Pittway fell within the amendment to § 311(d).  This amendment, made by § 54 of the Deficit Reduction Act of 1984 [Pub.Law No. 98-369, 98 Stat. 494] requires a distributing corporation to recognize gain on its distribution of appreciated property at the time of the distribution.  The Internal Revenue Service (IRS) disallowed Pittway's claim, and this action followed.  The district court found for the IRS, and Pittway appealed.

The U.S. Court of Appeals for the Seventh Circuit affirms.  To determine the time of the dividend distribution, the Court looks to the law of the state of incorporation to find when shareholders have a legally enforceable right to the distribution.  In this case, French law applies to the internal corporate affairs of Valois.

To determine the date of a distribution under French law, the Court cites Articles 347 and 347-1 of the Code des Sociétés (Dalloz 7th ed. 1986).  It requires that a general shareholders' meeting must set the amount of the dividend and then order it distributed within nine months.  The Court must determine whether French law provides that a dividend can be final before the general assembly of shareholders has acted pursuant to Article 347. 

The court may determine foreign law based on any relevant material or source, whether or not submitted by the parties and whether or not admissible into evidence [see Fed.R.Civ.P. 44.1].  French law requires shareholder approval of dividends before the dividend distribution.  Therefore, the Court agrees with the IRS that the distribution was not final until a general shareholders' meeting ordered it.  This meeting, however, took place after the effective date of the amendments to § 311(d).

The Court also notes its displeasure with the parties because they failed to provide the French code provisions.  In these times of ever increasing international business activity, the Court warned, parties must be prepared to inform the Court fully on questions of foreign law when they are pertinent to the case.  Ideally, the parties should submit an agreed translation of any applicable legal requirements.

Citation: Pittway Corp. v. United States, 88 F.3d 501 (7th Cir. 1996).

SOVEREIGN IMMUNITY

Eleventh Circuit reverses default judgment against Dominican government company, holding that plaintiff had failed to provide satisfactory evidence as to each element of its claims as required by 28 U.S.C. § 1608(e)

Three corporations, including Compania Interamericana Export-Import, S.A. (jointly IAL) sued the national airline of the Dominican Republic and a corporation wholly owned by the government (jointly Dominicana) for breach of contract.  Dominicana counterclaimed for breach of contract and other claims.  Due to local political unrest, changes in management and financial difficulties, however, Dominicana failed to comply with several discovery requests. 

The district court entered a default judgment against Dominicana for its failure (1) to provide discovery and (2) to obtain counsel.  This appeal resulted.  Dominicana argued that IAL had failed to comply with the requirements of the Foreign Sovereign Immunities Act (FSIA), § 1608(e) governing default judgments against foreign states.

The U.S. Court of Appeals for the Eleventh Circuit agrees with Dominicana, and sets aside the default judgment.  FSIA § 1608(e) precludes entry of a default judgment "unless the claimant establishes his claim or right to relief by evidence satisfactory to the court."  Here, IAL claims to have presented such evidence through affidavits and invoices detailing the amounts owed, as well as the underlying agreement and guarantees.

As the Court notes, however, "[u]nder § 1608(e), in addition to damages, the claimant must 'establish his claim or right to relief,' and must do by 'evidence satisfactory to the court.' ... The record must show that 'the plaintiff provided sufficient evidence in support of its claims' and that the evidence was considered by the court before the default judgment was entered." [951]  Here, the record fails to show that the district court had considered the § 1608(e) requirement before entering the default judgment.

Citation:  Companía Interamericana Export-Import, S.A. v. Companía Dominicana de Aviación, 88 F.3d 948 (11th Cir. 1996).

TARIFFS

European Union amends Common Customs Tariff; temporarily suspends certain tariffs

The Commission of the European Communities has amended the Common Customs Tariff (also referred to as the "combined nomenclature," CN).  The CN includes general rules of interpretation and rules concerning duties, as well as special provisions for goods such as ships, aircraft, and pharmaceutical products.  The amendments will adapt to GATT requirements and to the needs of the new EU Member States: Austria, Finland and Sweden.  The amendments concern, for example:

• The rate of duties for products such as live animals, meat, fish, fats, vegetables, fruits, rice, liquors, tobacco, certain chemicals, and cosmetics.

• The tables of agricultural components (EA), additional duties for sugar (AD S/Z), and additional duties for flour.

• The list of products to which an entry price applies (such as certain vegetables and citrus fruits).

• WTO tariff quotas to be opened by the competent national authorities (for products such as meat, cheese, and cereals).

• Headings or subheadings which include various concessions granted under GATT Article XXIV:6.

In a related matter, the Commission temporarily suspended the autonomous Common Customs Tariff duties for products whose supply is inadequate within the EU.  These include, for example:

• Certain chemicals (such as Menthol, Resorcinol, Furan),  plastics, and technical products.

• Computer equipment (such as hard disk drives and processors).

• Micro chips and electronic circuits.

The changes went into force on July 1, 1996.

Citation: Commission Regulation (EC) No 1035/96 of 8 May 1996 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff, 1996 Official Journal of the European Communities (L 152) 1, 26 June 1996; Council Regulation (EC) No 1255/96 ... temporarily suspending the autonomous Common Customs Tariff duties on certain industrial and agricultural products, 1996 Official Journal of the European Communities (L 158) 1, 29 June 1996.

TRADE

Mexico issues regulation specifying requirements of new Customs Law

A new Mexican regulation specifies the requirements of the recently issued Mexican Customs Law [see 1996 Int'l L. Update 34].  It contains provisions for the regulation of the import/export and transport of goods by air, road, sea, and mail by the Customs Authority (autoridad aduanera).

Among the provisions of the regulation are:

• Airlines that transport passengers internationally must provide the Customs Authorities information with the time, date and number of the flight, as well as its origin and destination (Article 5).

• In case of sea and air transport, goods that were destined to enter Mexico through a certain control point may enter at a different point, for example, if the destination of the goods had to be changed or other justifiable reasons exist (Article 9).

• The captain of a ship that receives goods abroad must present to the Customs Authorities, for example, a manifesto for each of the Mexican harbors to which the goods will be transported, a freight list (including declarations on whether those goods are hazardous), and a list of passengers and personnel on board (Article 13).

• The invoice or the bill of lading determine the value of goods for fiscal purposes (Article 52).

The regulation also contains special provisions regarding the temporary import of unfinished products, if the processing companies have export programs authorized by the Department of Commerce and Industrial Development [Secretaría de Comercio y Fomento Industrial] (Article 148-160).  Finally, the regulation contains special regulations for border areas (Articles 171-178).

The regulation entered into force on June 14, 1996.

Citation: Reglamento de la Ley Aduanera [Regulation to the Customs Law], Diario Oficial de la Federación [Official Gazette], June 6, 1996.

U.S. International Trade Commission revises rules for antidumping and countervailing duty investigations

The U.S. International Trade Commission (ITC) has revised its Rules of Practice and Procedure concerning antidumping and countervailing duty investigations and reviews [19 C.F.R. Parts 201 and 207].  The purpose is to (1) conform the rules to the Uruguay Round Agreements Act (URAA), and to (2) improve the ITC's investigations and reviews.

Among the changes are:

• The ITC will conduct a single, continuous antidumping or countervailing duty investigation.

• Regarding the filing of petitions, petitioners must serve confidential versions of the petition more promptly on interested parties,

• Petitioners must include in the petition, for example, (1) an identification of the proposed domestic like product(s), (2) a list of all U.S. producers of each proposed domestic like product, (3) a list of all U.S. importers of such products, (4) an identification of each product for which the petitioner requests the ITC to seek pricing information, and (5) information regarding sales and lost revenues by each petitioning company.

• An increase in the maximum length of comments during the final phase investigations to 15 pages.

• Regarding business proprietary information (BPI), the ITC may in public submissions provide non-quantitative characterizations of quantitative BPI, unless the submitter of BPI provides good cause for confidential treatment [see § 201.6(a)].

The effective date of the amendments was August 21, 1996.

Citation:  61 Federal Register 37818 (July 22, 1996).

Estonia accedes to Hague Conventions:  Effective February 2, 1996, Estonia has acceded to the Hague convention on the service abroad of judicial and extrajudicial documents in civil or commercial matters (1965) [TIAS 6638, 20 U.S.T. 361], as well as the Hague convention on the taking of evidence abroad in civil or commercial matters (1970) [TIAS 7444, 23 U.S.T. 2555] (with declarations).  Citation: U.S. Department of State Dispatch, Vol. 7, No. 20, page 246.

Commerce Department consolidates regulations for international fisheries in U.S. Exclusive Economic Zone (EEZ) and on high seas:  The Department of Commerce, National Marine Fisheries Service (NMFS), consolidated the scattered regulations in 50 C.F.R. for international fisheries in the EEZ and the high seas into one part.  NMFS also removes the restrictions on part 281 (Restrictions on Tuna Imports) as no longer necessary.  Citation: 61 Federal Register 35548 (July 5, 1996).

U.S. Treasury adapts its regulations to Cuban Liberty and Democratic Solidarity (LIBERTAD) Act:  The U.S. Department of State, Foreign Assets Control Office, has amended the Cuban Assets Control Regulations [31 C.F.R. Part 515] to adapt them to the Cuban LIBERTAD Act of 1996.  The amendment restricts the bank financing of projects involving confiscated property, and makes changes regarding civil penalties consistent with amendments to the Trading with the Enemy Act.  Citation: 61 Federal Register 37385 (July 18, 1996). [Additional information regarding the programs of the Office of Foreign Assets Control is available on the Internet at [http://www.ustreas.gov/treasury/services/fac

/fac.html], or from the 24-hour fax-on-demand service at (202) 622-0077.]

The G-7 summit:  The statements of U.S. Secretary of State Christopher and Treasury Secretary Rubin (June 28, 1996) at the G-7 summit are reprinted in the U.S. Department of State Dispatch.  Other documents from the G-7 summit will be published in a supplement to the Dispatch, and are also available on the internet at [www.state.gov/].  Citation:  U.S. Department of State Dispatch, Vol. 7, No. 28.

Technology Agreement with Japan:  The U.S. and Japan have agreed on an implementing arrangement in the field of basic science and technology, with Annex.  It was signed in Washington on May 3, 1996, and entered into force the same day.  Citation:  U.S. Department of State Dispatch, Vol. 7, No. 28.