PUBLIC INT’L LAW
CLASS TEN
STATE RESPONSIBILITY,
ALIEN PROTECTION &
JURISDICTION
Prof David K. Linnan
USC LAW # 783
10/21/03
JURISDICTION
Jurisdiction as authority to affect legal
interests,
• Legislative jurisdiction= to prescribe
• Judicial jurisdiction= to adjudicate
• Executive jurisdiction= to enforce
JURISDICTION
Traditional bases of jurisdiction
Territorial
Nationality
Protective
Universal
JURISDICTION
Traditional bases of jurisdiction (cont’d)
Territorial
Subjective (e.g., territorial bias traditionally for US
criminal law only applying to act committed locally)
Objective (e.g., acts outside national territory with local
effects such as with economic regulation, for example,
an antitrust conspiracy abroad to affect prices locally)
JURISDICTION
Traditional bases of jurisdiction (cont’d)
Nationality
Active meaning covering actor such as perpetrator under
Continental criminal law codes, or state of incorporation for
juristic person
Passive general meaning vessel/aircraft
Passive personality meaning of victim, most recently for
victims of terrorism
JURISDICTION
Traditional bases of jurisdiction (cont’d)
Protective
Protective jurisdiction is of state interests, with
traditional examples being jurisdiction abroad for
counterfeiting of a state’s currency, or attacks on
diplomatic posts, or treason
JURISDICTION
Traditional bases of jurisdiction (cont’d)
Universality
Universal jurisdiction traditionally extends
to piracy and slavery, more modern issues
re anti-terrorism & crimes against
humanity/human rights
JURISDICTION
PROBLEMS OF JURISDICTION
Legislative, opposed legal prescriptions
before judiciary
Ex:
foreign bank with US branch and
account covered by banking secrecy law
abroad being subpoenaed by US attorney
to reveal accountholder (e.g., US v. Bank
of Nova Scotia, 691 F2d 1384);
reasonableness & balancing, but US
weighting
seems
to
predominate
practically
JURISDICTION
PROBLEMS OF JURISDICTION (CONTD)
Legislative, opposed legal prescriptions at
state level
Ex:
problems
of
multinational
corporations with locally incorporated
subsidiaries, as with competing regulatory
schemes such as transeuropean Russian
pipeline case and gas turbine technology
licensing with US opposing and France
compelling GE licensing in 1970s
JURISDICTION
PROBLEMS OF JURISDICTION (CONTD)
Legislative,
claims
of
too
broad
extraterritorial jurisdiction
Ex:
older issues of broad claims of
US antitrust or securities law under
objective territoriality (eg, US v. Alcoa, 148
F2d 416, plus CFTC unrecognized claims
to govern London-based actions in
commodities),
now
reciprocated
in
worldwide reach of European data
protection laws for multinationals
JURISDICTION
PROBLEMS OF JURISDICTION (CONTD)
Adjudicative, based on consent
Ex:
Status of Forces Agreements
(SOFA) for troops based abroad with
issues of locally tried vs. court-martial
proceedings typically based upon whether
alleged act committed in course of official
duties (eg, Wilson v. Girard, 354 US 524;
subsidiary
issue
of
differing
procedure/lack
of
constitutional
protections in foreign court if tried locally)
JURISDICTION
PROBLEMS OF JURISDICTION (CONTD)
Adjudicative, complaints about universal
jurisdiction reach
Ex:
controversial issues Alien Tort
Claims Act reach attempting to police
multinational conduct worldwide civilly,
recent
issues
re
US
&
Belgian
jurisdictional statute, current dispute re
ICC and extradition of US troops
criminally
JURISDICTION
PROBLEMS OF JURISDICTION (CONTD)
Adjudicative,
complaints
about
US
process reach
Ex:
problems of broad discovery
abuse resulting in anti-discovery laws in
Western Europe criminalizing depositions,
etc. abroad; not completely resolved in
Hague agreements
JURISDICTION
PROBLEMS OF JURISDICTION (CONTD)
Adjudicative, complaints about US actions
violating domestic or int’l law
Ex:
problems of Kerr-Frisbie doctrine
and procuring accused’s presence via
kidnapping as opposed to extradition,
plus claims violating Hague agreements in
interpretation of broad US reach for US
courts
JURISDICTION
PROBLEMS OF JURISDICTION (CONTD)
Adjudicative, complaints about US law violating
local forum policy & foreign enforcement of US
judgments
Ex:
problems of enforcing US judgments
abroad, for example Germany where punitive
damages are against the policy of the forum (eg,
in Germany partially enforceable, but often and
elsewhere not enforceable at all or only if
damages clearly divided in judgment)
LIMITATIONS ON
JURISDICTION
Theories of sovereign immunity
• Traditional
Exchange)
absolute
(Schooner
• Modern restrictive form (Dralle)
SOVEREIGN IMMUNITY
Absolute form
Schooner Exchange v. McFadden (1812)
Claim by US citizens of property in a ship driven into
port by storm and now being a French warship, that
French seizure improper (no prize court)
19th century saw research vessels, etc., but pressure in
20th century with large state-owned merchant fleets
(growing state commercial activity)
20th century Soviet view of immunity still as sovereignty
problem rather than activity based (trade delegations)
SOVEREIGN IMMUNITY
Restrictive form
Dralle v. Republic of Czechslovakia (1950)
German company with branch in Bohemia, registered
owner in Austria of trademarks used in Austria by
German company for products, then Bohemian branch
nationalized and Czechs claimed trademarks excluding
Austrian use
Claims state practice has changed generally with
increasing commercial activity (starting with shipping)
US changed to restrictive theory 1952
SOVEREIGN IMMUNITY
Statutory sovereign immunity laws perhaps broader than
int’l customary law
Eg, US (Foreign Sovereign Immunities Act of 1976) & UK
Issue of definition of commercial act, FSIA by reference
to course of conduct or particular transaction rather
than
purpose
– Hypo: int’l bank loan for infrastructure development & to
buy
airplanes for LDC air force
Common issue of SOE (50% ownership) deemed to be state
DIPLOMATIC & CONSULAR
IMMUNITIES
Theories of diplomatic immunity
Older view, extraterritorial character for
mission &
representative character for
diplomats as embodiment
of
foreign
sovereign
Newer view, functional necessity to
conduct business (eg, Iranian Hostage
Case)
DIPLOMATIC & CONSULAR
IMMUNITIES
Diplomatic versus Consular immunities
Diplomatic absolute to protect from pressure
in political activities
Consular limited to protection within scope of
activities only, as commercial activities only
(but still in criminal context other restraints
such as no arrest
&
detention
pretrial
except for “grave crime” under judicial
authority, exceptions for real property
STATE RESPONSIBILITY &
ALIEN PROTECTION
Modern doctrinal approaches (ILC-progressive-- codification efforts) vs.
Traditional protection of aliens vs.
Human rights law (arguably protecting
nationals at something like alien level)
MODERN STATE
RESPONSIBILITY
What is state responsibility, and why does it sound so strange
to US lawyers?
Doctrinally,
application
heavy
Civil
Law
orientation
and
formal
Different pictures of state responsibility in different legal
systems
– Anglo-American view quasi-tort for compensation
– Continental legal science view quasi-criminal to uphold
immaterial goods
– Attempt via doctrine to replace Security Council System
when frozen, mandatory
response
elements
STATE RESPONSIBILITY
Elements of traditional state responsibility include
Duty
Breach
[culpa]- objective issue
[injury]- compensation issue
Alternate elements play into differing ideas of
state responsibility, concept that violation
recreates a separate new right too
STATE RESPONSIBILITY
Since states act through human beings, human link
to state conduct as attribution problem
Hypo 1:
Ans:
Private US groups soliciting ventures
into Cambodia/Laos/Vietnam to search
for MIAs claimed still to be alive
Probably not covered under ILC draft
articles 8 & 11, see
http://www.un.org/law/ilc/texts/State_responsibility/respo
nsibilityfra.htm
STATE RESPONSIBILITY
Since states act through human beings, human link to state
conduct as attribution problem (cont’d)
Hypo 2:
US veterans groups go to Hanoi to
assist in humanitarian task of returning
remains of KIA airmen, where State
Department may facilitate entry by not
asserting travel bar, or by perhaps
arranging some contacts through the
American interests section of a foreign
embassy such as Switzerland
Ans: More US government assistance, harder
question (ILC articles 8 & 11)
STATE RESPONSIBILITY
Since states act through human beings, human link
to state conduct as attribution problem (cont’d)
Hypo 3:
Foreign ambassador’s briefcase is
caught by drug sniffing dog at airport,
arrest & conviction in state court
follow despite diplomatic immunities
ans:
Attribution through federal system
and between arms of government
STATE RESPONSIBILITY
Hypo 4:
Congress decides to change law
mandated by a treaty with result
that new statute takes
precedence over old treaty
Ans:
Simple violation across
separation of powers despite
consignment of most foreign
affairs to Executive (ILC arts 5 &
6)
STATE RESPONSIBILITY
Hypo 5:
Ans:
As part of Intifada, PLO leader on West
Bank orders execution of “invaders,”
defined as settlers establishing Jewish
enclaves, but assume for sake of
argument the Palestineans get wrong
guy and kill him, so who is liable?
Leader responsible as individual, but
presumably Jordan is not if treated as
country, yet if PLO does succeed in
establishing a Palestinean state on
West Bank, new state would become
liable
STATE RESPONSIBILITY
Subjective versus
responsibility
objective
basis
of
state
Subjective would require intent, so basic issue
whether the rule should normally focus on
behavior (objective) versus intent (subjective)
Issue becomes whether element of negligence
typically involved versus strict liability on
broader rules
STATE RESPONSIBILITY
Requirement of injury as standing issue (Barcelona
Traction)
Recognizes erga omnes concept involving
distinction between those rights in which all
states have an interest, being acts of aggression,
basic human rights, recalling issues like jus
cogens law
Crimes versus delicts character also brings up
STATE RESPONSIBILITY
Reparation doctrinal concept incorporates
Restitution, in kind, designed to reestablish the situation
which would have existed if the wrongful act or omission
had not taken place (preferred )
Indemnity, being monetary damages usually for loss of
profit and confiscated property value to wipe out
consequences of the illegal act
Satisfaction as non-material damages, in modern practice
limited to presentation of official regrets, punishment of
minor local officials and judicial recognition of of the
unlawful act
STATE RESPONSIBILITY
Note that the remedy system in
international law is almost directly
opposed to private law system in
putting specific enforcement choice
first
Perhaps in the nature of state relations
themselves, which are not necessarily
economic
STATE RESPONSIBILITY
Doctrinal categories (borrowed from Civil Law) of
circumstances precluding wrongfulness
Consent, subject to preemptory norm limitations
(eg, no consent to genocide or slavery)
Force majeure and fortuitous event, idea of
material impossibility as when a ship is blown
into restricted waters in a storm
Distress, idea that while compliance is possible,
it would threaten lives
STATE RESPONSIBILITY
Doctrinal categories (borrowed from
Civil
Law)
of
circumstances
precluding wrongfulness (cont)
Necessity as safeguarding essential
state interest threatened by a grave
and imminent parallel (but cannot
overcome jus cogens)
STATE RESPONSIBILITY
Countermeasures and self-help
Reprisals as measures not otherwise legal but justified in
response to a prior breach
– Proportionality
Retorsion as measures generally permissible
without prior breach (suspending diplomatic relations, etc.)
Doctrinal approach is in part to develop through doctrinal
framework limitations on countermeasures
STATE RESPONSIBILITY
Exhaustion of local remedies rule
Considered to be a mixed
substance and procedure rule,
since no int’l violation in theory if
still can be remedied domestically
ALIEN PROTECTION LAW
Underlying theories of diplomatic protection based
on nationality, mostly economic protection in
modern setting but also security
Derivative protection doctrinally, since injury to
national is conceived of as injury to state (so can
be raised only by state and cannot be bargained
away by nationals as with direct compensation as
with Iran Flight 655 incident 1980s)
Scope of duties to foreigners important, since no
absolute guarantee of life or property but rather
guarantee traditionally of int’l standard of
protection & process
ALIEN PROTECTION LAW
Extensive older law fixed in 19th & early 20th century precedents in
various claims tribunal proceedings (eg, US-Mexican claims
tribunal in 1920s following revolution)
Lack of consensus between capital importing and exporting states
especially post WW II on law’s scope and giving foreigners more
protection than locals(in South America, starting Calvo doctrine
on local courts & municipal law, more recently forced licensing
following local use of technology; in Asia & Africa 1960s rejection
of int’l law restraints on expropriation on sovereignty grounds,
followed by New Int’l Economic Order or NIEO late 1960s)
Partially displaced since 1980s with investment treaty protections to
attract foreign private capital (eg, NAFTA)
Parallellism & overlap with human rights (albeit differing original
source, but note no human rights coverage for juristic persons)
ALIEN PROTECTION LAW
OLDER PRECEDENTS
Denial of Procedural Justice
ex:
Chattin Claim (US-Mex Claims Trib 1927) US
railroad conductor arrested on bare statement of
colleague accused of fraud, tried w/o translator
under trad. Mexican inquistorial process w/o
public proceedings, right of confrontation, on
basis of file, etc.; violated int’l standard in lack of
investigation, confrontation, knowledge of
charge, undue delay, treating open hearing as
formality
ALIEN PROTECTION LAW
OLDER PRECEDENTS (CONTD)
Denial of Justice in Failure to Protect/Prosecute
ex:
Laura James Claim (US-Mex Claims Trib
1926) Foreigner murdered w/o police undertaking
serious pursuit of known killer; violated int’l
standard in authorities’ failure to take prompt and
efficient action (looks like dilatory actions, not
wanting to catch perpetrator)
(also Chapman Claim, consul wounded after
threats when Mex govt provided no protection
despite warnings, plus lack of pursuit after
attack)
ALIEN PROTECTION LAW
ECONOMIC INTEREST PROTECTION &
NON-COMMERCIAL RISKS
Older expropriation, newer discriminatory
treatment issues
General idea that states can prohibit
foreigner entry, but once allowed in
cannot take property w/o reasonable
compensation or discriminate against w/o
reason
NON-COMMERCIAL RISKS
WHAT ARE NON-COMMERCIAL RISKS?
Expropriation without adequate compensation
Violation
by
foreign
concession of agreement
governments
of
Foreign exchange restrictions interfering with
profit repatriations
NON-COMERCIAL RISKS
WHAT ARE NON-COMMERCIAL RISKS? (CONTD)
Import restrictions (interfering with parts supply)
General regulatory issues (labor, property use,
etc.)
NON-COMMERCIAL RISKS
WHO CARES ABOUT PRIVATE RISK & WHY?
From private investor viewpoint, higher (moderate)
risk is acceptable but potential return must be
higher
– Excessive risk leads to no investment, for
example, currently problem in Indonesia of
essentially no new investment in mining
industry as result of general uncertainties
plus decentralization
– Portfolio versus direct investment
NON-COMMERCIAL RISKS
WHO CARES ABOUT NON-COMMERCIAL RISK & WHY?
(CONTD)
From viewpoint of states importing capital, development
models have moved away from direct state borrowings to
finance
development to attracting private capital
Hidden ideological
development
issue
of
role
of
state
in
States and state enterprises (agents of development),
Indonesian Const Art 33
NON-COMMERCIAL RISKS
WHO CARES ABOUT NON-COMMERCIAL RISK & WHY? (CONTD,
CAPITAL IMPORTING COUNTRIES)
Non-market limitations on official development assistance
and subsidized lending by multilateral institutions (World
Bank, Asian Development Bank, etc.)
Conditionality (Washington consensus, most recently in
Indonesian water legislation, incorporating economic
views)
Control arguments at multilateral level, payers versus
users, with voting control based on capital
contributions
Arguments about social right (human
“right to development”
rights issues) of
NON-COMMERCIAL RISKS
WHO CARES ABOUT NON-COMMERCIAL RISK & WHY?
(CONTD, CAPITAL IMPORTING COUNTRIES)
Market-based limitations on direct state borrowings
(overindebtedness, creditworthiness problems raising
the cost of capital
Competitiveness problem for products so funded
Problem of financing intermediate “infrastructure” that
is harder to recover direct costs on (eg, education)
NON-COMMERCIAL RISKS
WHO CARES ABOUT NON-COMMERCIAL RISK & WHY?
(CAPITAL EXPORTING COUNTRIES)
From viewpoint of states exporting capital, basic issue of
what is at risk if little or no economic
improvement/development in capital importing states
(current claims re war on terror and lack of development
progress in Islamic world)
Absent viable economies, political unrest
Via state sponsored political risk insurance, protection of
private party citizens’ investment involves capitalexporting state in nominally private (investment) activity
as guarantor
NON-COMMERCIAL RISKS
WHAT IS SPECIAL RISK IN DEALING WITH NONPRIVATE ENTITIES?
State-owned enterprises (SOEs) not only in
developing world and socialist countries, but
Europe too
Issue of framework of laws under control of
business party vs judiciary favoring executive
ex: PLN example in Indonesia with arguments
about arbitration outside country for shelved
power projects (Karya Bodas)
NON-COMMERCIAL RISKS
WHAT ARE PRACTICAL STRATEGIES TO AMELIORATE/LIMIT
RISK?
Traditional law of expropriation and nationalization
Voluntary investment incentive programs, but what if
withdrawn?
Insurance such as US OPIC, German Hermes, Japanese
Import-Export Bank, etc. programs to insure against
expropriation and convertibility risks,
Multilateral
Investment Guaranty Agency (MIGA) of World Bank, some
private insurance
Bilateral treaties (traditionally FCN, now investment,
examples such as NAFTA too)
essentially
having
capital importing states accept capital exporting states’
views re traditional law of expropriation
NON-COMMERCIAL RISKS
HOW DO DIFFERENT STATE GROUPS VIEW EXPROPRIATION
& NATIONALIZATION?
Traditional sovereignty claims, now less important often
with move from primary
industries to manufacturing to
services
(focus on HR as economic views change)
Neocolonialism claims (control of resources as
economy in traditional primary industries)
control of
Ideological issues if no or limited recognition of private
property (but heart of market economy, but social functions
argument on spectrum from US inverse condemnation to
Indonesian Const art 33 arguments)
NON-COMMERCIAL RISKS
WHAT MAY TRIGGER A DUTY TO PAY (FOREIGN) INVESTORS
IN CONNECTION WITH UNLAWFUL INT’L ACT?
Expropriation not meeting compensation standard
–
Problem not with taking, only with not paying
Discriminatory treatment
–
Issues
of
express
discrimination as applied
discrimination
versus
Retaliatory action against aliens for unrelated actions of 3Ps (or their governments)
NON-COMMERCIAL RISKS
WHAT IS THE DISAGREEMENT REGARDING COMPENSATION
STANDARD AND DOES IT MATTER?
Basic substantive law issue is whether to be governed by
international law or municipal law (ex:
Calvo clause)
Hull formula “adequate, prompt & effective”
“Just” compensation later (focus only on interests of
alien, like Hull)
“Appropriate” compensation is floating around,
generally understood to permit consideration
of
interests other than alien’s (states aims in
social
programs, available foreign currency, etc.)
NON-COMMERCIAL RISKS
WHAT IS A TAKING IN VIOLATION OF INT’L LAW?
Currency regulations are not (special character of
money, but insurance convertibility triggers)
Confiscatory taxation, but how much is too
much?
Beyond, parallel to general domestic law of
regulatory takings and how much is too much?
Discriminatory treatment, but issue is always “on
its face” vs. “as applied”