The FCPA and Bribery: We-know-it-when-we-see-it

By: Kelsey Quigley

On October 6, 2014, the United States Supreme Court denied a petition for writ of certiorari that requested review of a case brought under the Foreign Corrupt Practices Act of 1977 (“FCPA”) – the first substantive certiorari petition in the history of the statute.

The FCPA prohibits the “offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value” to a “foreign official,” defined as “any officer or employee of a foreign government or any department, agency, or instrumentality thereof.” In 2011, the United States District Court for the Southern District of Florida convicted two former executives of Miami-based Terra Telecommunications Corp. of various FCPA violations, including the payment of more than $890,000 in bribes to officials at Haiti’s state-owned sole provider of landline telephone services, known as Haiti Teleco. The court sentenced Carlos Rodriguez, Terra’s former vice president, to seven years in prison; Joel Esquenazi, Terra’s former president, received an unprecedented fifteen years in prison – the longest FCPA sentence ever imposed.

The certiorari petition followed the former executives’ unsuccessful appeal to the U.S. Court of Appeals for the Eleventh Circuit, requesting for the very first time in the FCPA’s nearly forty-year history, a review of the legal meaning of “foreign official” under the statute. Specifically, appellants challenged whether officials at state-owned Haiti Teleco were “foreign officials” under the FCPA’s “instrumentality” designation.

In its opinion, the Eleventh Circuit adopted an “instrumentality” interpretation similar to versions utilized by the Department of Justice and the Securities and Exchange Commission, holding that an “instrumentality” is any “entity controlled by the government of a foreign country that performs a function the controlling government treats as its own.” Explaining that this legal designation was necessarily “fact-bound,” the Eleventh Circuit provided potential indicia for the two elements required to designate a foreign government “instrumentality:” government control and government function. First, to determine government control, the Eleventh Circuit articulated, among other potential considerations, a government’s ability to hire and fire the entity’s employees and any government majority interest in the entity’s operations and profits – particularly in the context financial backing. Second, to assess whether the entity performs a function that the foreign government treats “as its own,” the Eleventh Circuit suggested that juries look to “whether the entity has a monopoly over the function it exists to carry out; whether the government subsidizes the costs associated with the entity providing services; whether the entity provides services to the public at large in the foreign country; and whether the public and the government of that foreign country generally perceive the entity to be performing a governmental function.” U.S. v. Esquenazi, 752 F.3d 912 (2014).

In the petition to the Supreme Court, counsel for Esquenazi and Rodriguez primarily challenged the adoption of the Eleventh Circuit’s “unacceptably broad,” “we-know-it-when-we-see-it” interpretation of a government “instrumentality.” Indeed, at its outer limits, the Eleventh Circuit’s definition seemed “illogical.” Theoretically, “a janitor working for U.S. Government subsidized General Motors could qualify as a ‘foreign official’ if General Motors were located overseas.” More, the petition explained that with this interpretation the statute would extend to “doctors, pharmacists, lab technicians and other health professionals who are employed by state-owned facilities.” These hypotheticals, while thought provoking, arguably overlooked the Eleventh Circuit’s practically fact-driven focus for discerning a foreign government’s “instrumentality.” Using the petition’s own example, General Motors may presently be under “government control” (having recently emerged from a government-backed Chapter 11 bankruptcy), but the company does not meet the Eleventh Circuit’s second element, government function. Along with individual shareholders, GM’s largest beneficial owners are both the Canadian and United States governments; the company does not enjoy a monopoly in American or in Canadian automobile sales; and the public does not perceive GM as serving a “governmental function.” Despite this inconsistency, counsel for the convicted former executives convincingly advocated for the adoption of an unambiguous formal definition of “foreign official” under the FCPA, especially as increasingly severe criminal sentences are imposed for FCPA violations.

The petition also contended that, in drafting the FCPA, Congress intended for a narrow interpretation of the term “instrumentality.” For example, the Foreign Sovereign Immunities Act (“FSIA”), passed just one year before the FCPA in 1976, specifically defines an “instrumentality” as any entity with a “majority of whose shares or other ownership interest is owned by a foreign state or political subdivisions.” Though this language likely applied to state-owned and operated Haiti Telecomm, petitioners argued that the absence of this language from the FCPA “warrants construing ‘instrumentality’ as excluding state-owned or state-controlled enterprises that are not political subdivisions and that do not perform core, traditional governmental functions.” Congress could have included the FSIA’s previously established definition in the FCPA, but chose not to: “[i]f Congress desires to go further [in defining an “instrumentality”…] it must speak more clearly than it has.”

Furthermore, in a joint amicus curae brief, free-market advocates Washington Legal Foundation and Independence Institute acknowledged that the definition of “foreign official” is “the single greatest source of confusion regarding the scope of the FCPA,” and thus of great international business interest. Therefore, as the petition noted, “the time is now ripe for this Court to settle the meaning of instrumentality under the FCPA” – as FCPA actions continue to pertain to “individuals who are not traditional government officials,” and before federal appeals courts publish conflicting opinions. It urged that the Supreme Court settle the question, so that valuable international business officials would not “be left to wonder whether the  [United States] [g]overnment will unilaterally declare their conduct criminal.”

Despite these legal questions, the Supreme Court declined to review the case. According to Southern Illinois University School of Law’s Professor Mike Koehler (who also authors the FCPA Professor blog), the Supreme Court likely declined the petition for writ of certiorari because of the lack of a “circuit split” on the issue. So far, only the Eleventh Circuit has ruled on the FCPA’s “foreign official” issue – largely a result of the SEC’s, the DOJ’s, and other enforcement agencies’ increasing use of alternative dispute resolution forums in FCPA cases. With only the Eleventh Circuit’s precedent and in a climate favoring alternative dispute resolution, questions surrounding the FCPA’s treatment of “foreign officials” who do not fit the more traditional definition, will likely go unanswered.

In an official statement that accompanied the conviction of Esquenazi and Rodriguez, Assistant Attorney General Lanny Breuer declared that violating the FCPA “is a serious crime with serious consequences” and that the federal government will “continue to hold accountable individuals and companies who engage in such corruption.” And yet, the Supreme Court persists in declining to review a fundamental tenet of the statute – what constitutes a “foreign official.” As successful FCPA actions become more prevalent, and especially as the subsequent punishments become increasingly severe, resolving the statute’s ambiguities will become critical to the equitable enforcement of international justice.

Kelsey Quigley is a J.D. Candidate at Berkeley Law. She is a student contributor for Travaux.

Napoleon's Court

This Day in International Law – October 17

By: Tania Sweis

October 17, 1779

The Treaty of Campo Formio was signed by Napoleon Bonaparte (France) and Count Ludwig von Cobenzl (Austria) to end the War of the First Coalition. The First Coalition, comprised of Austria, Piedmont-Sardinia, Prussia, Spain (until 1796), Portugal, the United Provinces, and Great Britain, fought to defeat Revolutionary France after France declared war on Austria. The coalition initiated a series of invasions against the premier European power but ultimately failed to triumph. The signing of the Treaty of Campo Formio marked the end of the first phase of the Napoleonic Wars and expanded the French Republic into Austrian territory, significantly reshaping the map of Europe. The Napoleonic Wars continued several years into the 19th century and advanced the concept of a unified Europe. Napoleon harbored a dream of a cohesive European association that would share a currency, civil code, system of measurement and principles of government- concepts that would re-emerge hundreds of years later in the establishment of the European Union.


Tania Sweis is a J.D. Candidate at Berkeley Law. She is a student contributor for Travaux. 

Spray painted image of Guantanamo detainee

The Infinite Guantanamo Debacle

By: Jozefien Van Caeneghem

On 11 January 2002, the first twenty so-called “unlawful enemy combatants” arrived at Guantanamo Bay Naval Base on Cuba. The transfer was the first of many in the “global war on terror”, which President George W. Bush declared after the September 11th, 2001 terrorist attacks in the United States of America. Throughout the years, a total of 779 men from forty-eight different nations have been detained at the base. Guantanamo, associated by many with indefinite and unlawful detention, inhuman and degrading treatment, and torture, has been putting the United States in a bad light since 2002.

Over the years, both nationally and internationally, generals, scholars, and political bodies have raised significant concerns about Guantanamo and have called for the U.S. government to close the facility by releasing the men, transferring them, or charging them and giving them a fair trial before a court honouring the rule of law. Due to the complex nature of the issues surrounding closure, some might forget that the life of many detainees after Guantanamo remains troublesome. The struggle for a return to normalcy and for respect of human rights continues long after detention in Guantanamo.

Broken promises

On 22 January 2009, newly elected President Barack H. Obama followed up on the promise he made during his election campaign and ordered the closure of Guantanamo within the year. At that time, more than 525 men had already been transferred out of Guantanamo for release, further detention, or prosecution. President Obama first struggled, then failed, to reach his tight, self-imposed 22 January 2010 deadline for closure. During the summer of 2010, it became clear that – despite statements made to the contrary – closing Guantanamo faded as a priority for the Obama Administration.  Closure of the prison by the end of Obama’s first Presidential term in 2013 thereby became unlikely.

President Obama reaffirmed his intention to close Guantanamo at the beginning of his second Presidential term, but it was not until his 28 January 2014 State of the Union, that he – for the first time in almost five years – stressed the importance of closing Guantanamo as soon as possible. Now that the United States plans to withdraw from active combat in Afghanistan, there appears to be increased motivation inside the Obama Administration to close Guantanamo. While human rights advocates are cautiously optimistic about this renewed commitment and about the efforts being made, the question is whether closure is even feasible. Many complex issues remain to be solved.

Over the years of Guantanamo’s existence, nine men have died in detention, 621 men have been transferred to a total of fifty-two countries, and 149 men of twenty-two different nationalities remain detained at the prison. The current detainee population consists of three groups. Thirty-two men have or will be prosecuted by the U.S. government for any offenses, including for alleged violations of the law of war. Forty-one men are being held in indefinite preventive detention without trial. Finally, seventy-six men are cleared to leave Guantanamo by the Guantanamo Detainee Review Task Force, but remain detained because it is unsafe to return them to their home country.

European wavering

The slow progress in closing Guantanamo is due to a number of problems. One such problem is the opposition within the United States to allow Guantanamo detainees on American soil, be it for resettlement or for continued detention. The U.S. Congress repeatedly voted against proposals giving the U.S. government the competence and the money for the transfers. Second, after a long phase of little to no progress in trials at the military commissions, the current ongoing military commission must be accelerated. Third, the Obama Administration is finding it difficult to convince other states to accept Guantanamo detainees who cannot be returned to their state of origin because there are substantial grounds for believing they would be tortured, persecuted, or killed upon return. The return of these detainees to their home countries would be in violation of the non-refoulement principle contained in the United Nations Convention Against Torture.

Most transfers executed during the Bush administration were to states of origin, whereas only a limited number of transfers were made to third states. The Bush Administration’s attempts to convince third states to resettle former detainees mostly failed, largely because the Administration kept defending the existence of Guantanamo at the same time. The Obama Administration managed to resettle a considerably higher number of detainees in third states: fifty-three, as compared to eighteen during the Bush Administration. This increase is the result of the change in presidential leadership, the order to close Guantanamo, and both renewed and increased diplomatic efforts.

Despite these efforts, European states remain reluctant to resettle Guantanamo detainees for a variety of reasons. First, many believe that the United States holds primary responsibility for closing Guantanamo and for finding a solution for the remaining detainees. The fact that the U.S. Congress has blocked every effort to bring Guantanamo detainees to the United States does not help. Second, Guantanamo detainees carry a huge stigma: the U.S. government in the past referred repeatedly to these men as “the worst of the worst’’ of all U.S. enemies, even though ninety-two percent of the Guantanamo population was never determined to have committed hostile acts against the United States or its allies. Third, some European states feel they already made a significant effort by accepting third state nationals, while others would have to change their asylum policies to be legally able to allow former Guantanamo detainees onto their territory. Finally, many European states are working hard to tackle their own domestic and international threats of extremism. They also fear the political repercussions if a third state national from Guantanamo they resettled is ever linked to a terrorist attack. Such fear is not entirely unfounded, considering the arrest of a former Guantanamo detainee in Spain last June for recruiting ISIS fighters in the country.

Continuous struggles

The return of their own nationals, as well as the resettlement of third state nationals from Guantanamo, results in a whole range of complex political, operational and legal issues for many European states. With possible security concerns constantly in mind, European states must ensure the physical and legal protection of former Guantanamo detainees in order to enable them to rebuild their lives peacefully in the best possible conditions. As of today, eighty-six Guantanamo detainees have been transferred to twenty-one different European States. Thirty-eight of these men are nationals who returned to their country of origin. The other forty-eight men are third state nationals who have been resettled in a European state. What often goes underreported is that the struggle of some of these men for freedom and full enjoyment of their human rights continues after transfer out of Guantanamo.

There are reports of Russian Guantanamo detainees being ill treated by Russian officials upon return to Russia. Despite diplomatic assurances of humane treatment made between the U.S. and Russian governments in preparation of the transfers, there are reports of intimidation, coercion, and psychological and physical abuse, including the denial of appropriate medical treatment. Most European states question but do not detain the men arriving from Guantanamo. There are exceptions, however. In the United Kingdom, Guantanamo transfers were detained and then released without being charged, while in Belgium, France, Italy, Russia and Spain charges were filed. In certain cases, the charges were dropped (Belgium, Russia) while others led to trial (France, Italy, Russia, Spain). In France, a conviction was overturned because the evidence used was gained during Guantanamo interrogations, which is in violation with the theory of the tainted fruits of the poisonous tree. In Spain, a conviction of a former Guantanamo detainee was overturned because of a violation of the presumption of innocence.

Several European states – including Denmark, Germany, Italy, Russia, Spain, Sweden and the United Kingdom – have been or still are monitoring former detainees upon their return or resettlement, either with or without their knowledge or agreement. Spain emphasized that monitoring protects national safety while protecting the men from reprisals over possible revelations made while in Guantanamo. Both in Sweden and the United Kingdom, police had to intervene after angry citizens threatened and harassed former detainees or their families. Most former detainees enjoy freedom of movement within the territory of the European country they are transferred to. However, some of them cannot travel abroad because they had to turn in or did not receive their ID card or passport. Examples include Denmark, the United Kingdom, and Russia. In Russia, the situation is particularly urgent, since the men cannot receive medical services without their national ID card. Some men who are resettled in Europe are restricted from travelling abroad for several months to several years, depending on their status. This is the case in Albania, Ireland, Portugal, and Spain.

European complicity

Even though European states have no legal obligation to resettle third state nationals, there are several reasons why they should do so anyway. First, European states have always been very critical towards the United States for keeping Guantanamo open. Refusing to help to close Guantanamo negatively impacts their credibility. Second, there is a strong humanitarian responsibility to provide a safe haven for those who remain illegally and wrongfully detained in Guantanamo and who have nowhere else to go. Finally, European states have a moral responsibility to resettle Guantanamo detainees because of their involvement in secret detention and extraordinary rendition practices.

The latter duty should not be taken lightly. On 24 July 2014, the European Court of Human Rights (ECtHR) ruled that Poland violated its international obligations under the European Convention on Human Rights by allowing the secret detention, torture, and extraordinary rendition of a Saudi Arabian national and a stateless Palestinian, both of whom are currently still detained at Guantanamo. This judgment marks the first time the ECtHR ruled on the merits of an application brought by Guantanamo detainees. It might be just the beginning: both men currently have similar applications pending before the ECtHR, namely against Romania and against Lithuania respectively. One can only hope that this summer’s judgment of the ECtHR will encourage other current or former Guantanamo detainees to take similar steps towards finding justice.


 President Obama should hurry if he wants to keep his promise of closing Guantanamo in 2014, considering that the prison currently still holds 149 men whom the Administration cannot simply make magically disappear (again). Whereas the United States keeps looking towards Europe to take on more detainees, a key element that could speed up the process is found much closer to home: the removal of Congress’ restriction on transferring Guantanamo prisoners into the United States. With the United States now preoccupied with the ISIS crisis, closing Guantanamo will likely fade once again as a priority for the Obama Administration. Even if the prison were to close this year, it seems naïve to think that it marks the end of a shameful piece of American legacy. It is often overlooked that the lives of many men – and by extension the lives of their families – remain on hold until long after Guantanamo. In Europe, their Guantanamo past makes it difficult for them to return to normalcy. The first judgment of the ECtHR condemning a European country for its involvement in the whole Guantanamo fiasco can perhaps ease the pain a little for some. On the other hand, with the approaching thirteenth “anniversary” of the prison that never should have been built, it is perhaps all happening just a little too late.

Jozefien Van Caeneghem is a visiting scholar at Berkeley Law, a BAEF Hoover Foundation Brussels Fellow and a PhD candidate at Vrije Universiteit Brussel.

Center of the Milky Way Galaxy (NASA, Chandra, 11/10/09)

This Day in International Law — October 10

By:  Alexander Brock

On October 10, 1967, the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies entered into force.

Also known as the “Outer Space Treaty,” the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies, establishes international space law.  The treaty was signed by the United States, the United Kingdom, and the Soviet Union on January 27, 1967, and today there are 102 countries party to the treaty, with an additional twenty-six who have signed, but not yet ratified.

The treaty comprises additions to the Declaration of Legal Principles Governing the Activities of States in the Exploration and Use of Outer Space, which was adopted by the United Nations General Assembly (UNGA) in 1963.

The treaty includes articles such as a non-proliferation stipulation, in which parties to the treaty agree not to put weapons of mass destruction into orbit around Earth or install them on any planet or other celestial body, along with a ban on any military base or other installation on celestial bodies, including the Moon. The treaty states that space exploration is the “province of mankind,” to be performed for the benefit and in the interests of all countries, and that the use of the Moon and other celestial bodies shall be for “peaceful purposes.”

One interesting recent development concerning the treaty is in the domain of property rights: the Outer Space Treaty, in Article II, states that, “[o]uter space, including the Moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.” However, in early 2014, NASA began accepting applications from private enterprises seeking to mine rare materials from beneath Moon’s surface, such as Helium-3, in a program it calls CATALYST (Lunar Cargo Transportation and Landing by Soft Touchdown). The international reaction to NASA’s move has renewed debate about Article II’s implications for lunar property rights, which many believe are necessary to attract the level of investment required to grow private sector space exploration, mankind’s next step in the final frontier.

Alexander Brock is a J.D. Candidate at Berkeley Law. He is a student contributor for Travaux. 

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Debt, Vultures, and International Law: Argentina’s Mess of a Default

By: Guilherme Duraes

The words “Argentina” and “default” are used in the same sentence more often than anyone would like. Unfortunately, the country defaulted again on its public debt this July, the eighth time in its history. However, what is unique this time is that Argentina has “chosen” to go into default. A US court injunction mandated that Argentina pay some investors it has ignored since 2001, the so-called “vultures.” The decade-long legal battle between Argentina and the “vulture” investors presents important US and international legal issues related to investor protection, sovereign debt restructuring, and national sovereignty.

How did we get here, and who are these vultures anyways?

Economists argue that in the 1990s Argentina borrowed more money in the domestic and international markets than it could afford. In the early 2000s, this budgetary mismanagement, coupled with deeply entrenched protectionist and clientelistic practices, threw the country into one of the most severe economic depressions it has seen. In 2001, the government officially announced that it did not have money to pay its creditors, and declared a default on its debt of about US$95 billion. Following Argentina’s declaration of bankruptcy, riots broke out across the country, people were killed, the president resigned, unemployment skyrocketed in the years following, and millions of middle-class families were thrown into poverty.

In 2005 and 2010, President Néstor Kirchner made two take-it-or-leave-it deals with investors. Through exchange offers, Argentina restructured its debt and replaced the old bonds with new ones that were worth approximately only 30% of the original. While about 92% of investors accepted the offer and the steep discounts, some hedge funds wished to recover full payment, and decided to keep their bonds under the original terms, which gave them the name of “holdouts.” The holdouts have also been dubbed “vultures,” because some of them bought the Argentinian bonds in the secondary market after Argentina had already defaulted and the bonds had lost their value. Argentina claims that these hedge funds merely aim to speculate and take advantage of the country’s economic hardships. In fact, some of these funds specialize in buying bonds from countries in dire circumstances and suing for full payment.

Since the restructuring agreements, Argentina has been paying the investors who accepted the new, discounted bonds, but has not made any payments to the holdouts. Still in the early 2000s, NML Capital, Ltd. and Aurelius Capital Management, LP, two of the holdout hedge funds, took Argentina to court in New York (the bonds are governed under New York law) in order to receive full payment on their bonds.

So why did Argentina go into default this time?

NML Capital, Ltd. v. Republic of Argentina has been in court in New York for over a decade now. NML and Aurelius demand to be paid what is owed to them in full, while Argentina claims that the funds’ actions are tantamount to extortion. In 2012, Judge Thomas Griesa of the Southern District of New York ruled that Argentina could not continue to pay the creditors who adhered to the restructured bonds without paying US$1.3 billion plus interest to NML and Aurelius, which represents the full amount the country has failed to pay since 2001.

However, Argentina is concerned that other holdout funds will start litigation as well if they see that the country was forced to pay NML and Aurelius, which would obliterate the country’s economy. Moreover, the country points to the Rights Upon Future Offers (RUFO) Clause of their bonds, under which bondholders can require Argentina to disburse the same payments to them as it voluntarily disburses to others. According to Argentina, if all the holders of the restructured bonds file suit under the RUFO Clause, the country could be liable for about $150 billion, which is more than four times the country’s foreign-currency reserves. NML argues that, in paying the holdouts due to a court mandate, Argentina would not be disbursing “voluntary” payments, and the RUFO Clause would not be triggered. However, Argentina’s caution is understandable, as there is still uncertainty about how the court would interpret the term “voluntary” in the RUFO Clause.

In June of this year, Judge Griesa ordered all American financial institutions to cease disbursing payments from Argentina to its bondholders until the country pays the holdouts. Argentina deposited $539 million in a Bank of New York Mellon (the trustee for the bonds) account to pay investors by June 30, when payment on the restructured bonds was due. The bank was unable to transfer the funds due to the court injunction and the investors were not paid. Fearing additional demands for payments with which it would not be able to comply, Argentina made the difficult choice not to pay NML and Aurelius, and on July 30, after the grace period expired, the country entered “selective” default.

Argentina attempts to circumvent Judge Griesa’s orders

In order to bypass Judge Griesa’s blockage of the Bank of New York Mellon account, Argentina passed a law that allows holders of the New York-governed bonds to be paid through an Argentinian bank. In fact, the country will completely cease to use Bank of New York Mellon as its trustee and will instead use the state-owned Banco de la Nación. Bondholders will have the option of being paid in Argentina or France, and will be able to swap their bonds for bonds governed by Argentinian law.

On September 29, Judge Griesa ruled that Argentina is in contempt of court. He expressed frustration at the explicit attempts the country has made to circumvent his orders and avoid paying the holdouts. The holdouts requested sanctions on the country of $50,000 per day, but Judge Griesa stated that he would defer on making decisions on sanctions to a future date.

Argentina goes global in its fight against the holdouts

In August, Argentina filed a complaint at the International Court of Justice (ICJ) against the United States, claiming that the U.S. court’s decision to bar the country’s payment to investors violates Argentinian sovereignty. Specifically, Argentina claims that the court’s decision interferes with Argentina’s right and decision to restructure its sovereign debt. Since the U.S. opted out of the ICJ’s compulsory jurisdiction in 1986, when the Court determined that the US involvement in the Nicaraguan war was illegal, the Court can only hear the complaint if the U.S. chooses to submit to its jurisdiction. The United States has not yet officially refused to litigate at the ICJ, but it is highly unlikely that it will submit itself to the Court’s jurisdiction on this matter, especially because this is a contractual dispute rather than a dispute based on a treaty. Investment contracts set forth rights and obligations between the parties, and they often establish the specific jurisdiction for litigation. The bonds here in dispute are governed by New York law and, by contract, should be litigated in New York. Bilateral investment treaties are signed between nation states and establish an international court as the forum for arbitration.

In September, on Argentina’s and Bolivia’s request, the Group of 77 Plus China presented to the United Nations General Assembly a proposal to draft a multilateral legal framework to restructure sovereign debts. The proposal aims to help struggling developing countries restructure their sovereign debt in a fair and sustainable way. At the Assembly, Argentinian Foreign Affairs Minister asserted that “we must prevent more people paying with hunger and misery for the speculation of these sinister gentlemen of opulence: the vulture funds.” The proposal was passed by overwhelming majority: 124 countries voted in favor, 41 abstained, and 11 voted against it, including the United States, the United Kingdom, Japan and Germany. With this resolution, the General Assembly sent out the clear message that debt repayment in struggling countries is an important issue which should be addressed on an international scale. However, though the majority supported the resolution, it is not binding, and countries are not required to help elaborate the framework or abide by it.

The implications of Argentina’s default on international and US law

Judge Griesa’s decision to hold Argentina in contempt of court is virtually unprecedented. It is an established principle of international law that nation-states are immune from judgment at another state’s tribunals. International law also dictates that property belonging to nation states is immune from attachment.

Article 24 of the United Nations Convention on Jurisdictional Immunities of States and Their Property provides that:

(1) Any failure or refusal by a State to comply with an order of a court of another State enjoining it to perform or refrain from performing a specific act or to produce any document or disclose any other information for the purposes of a proceeding shall entail no consequences other than those which may result from such conduct in relation to the merits of the case. In particular, no fine or penalty shall be imposed on the State by reason of such failure or refusal.

Therefore, the extent of Judge Griesa’s power is uncertain, and it is difficult to envision how he could enforce his judgments on Argentina. If attaching property or demanding payments prove difficult enough, imposing non-monetary sanctions on another state, to which the court has alluded, is nearly impossible. Doing so would create a disastrous impasse in foreign relations between the U.S. and Argentina.

In fact, Argentina claims that being held in contempt of a foreign court is an affront to a state’s sovereignty. That is the central argument of a letter that the Argentinian Foreign Affairs Minister wrote to US Secretary of State John Kerry on September 29, ahead of the hearing that ultimately ruled that Argentina is in contempt. Argentina argues that the court’s decision is in violation of international law and urges the US executive branch to interfere in the judiciary’s decision, claiming that a government is responsible for the decisions and omissions of all its organs. It reiterates that it is willing to take the United States to the ICJ for breaching Argentina’s sovereign right to restructure its public debt.

The heart of the matter is that the two countries will remain at an impasse. The United States will not submit to the ICJ’s jurisdiction, and Argentina cannot be forced to pay up. If the United States does end up seizing any property of the Republic of Argentina within the United States or abroad, it runs the risk of causing undesired results from a foreign policy perspective. It could generate uncertainty for other countries and fear that their property could be seized anywhere if a US court so ordered. It could also compel other countries to seize American property within their borders. Moreover, fearing that a couple of US hedge funds could always have the power to push a country into default, other states could choose not to issue bonds under US law anymore, causing capital to leave the country.

On the other hand, if the United States shows that it is not able to enforce its laws on other nation-states, it sends the message to its citizens who invest in the public debt of foreign countries that they cannot trust the power of the law to solve disputes related to those bonds. Investors would feel that they have no protection when pitted against another country. It has been suggested that one way the US Congress could solve this impasse in the future is to require foreign countries to post a collateral when they issue public debt under US law, so as to guarantee that investors are paid.

In Argentina’s case, the best bet is probably to reach a compromise with the US court in order to revert the blockage of payments to the holders of the restructured bonds. Argentina could accomplish this by demonstrating a good-faith effort to negotiate with the holdouts in order to pay them after January of 2015, when the RUFO Clause expires and the country will not have to worry about 93% of bondholders riding on NML’s litigation.

Guilherme Duraes is a J.D. Candidate at Berkeley Law. He is a student contributor for Travaux.

Animal Welfare Protection: U.S. Law in the International Context

By: Laurence Cromp-Lapierre 


On September 13, 2014, I had the opportunity to attend the California Animal Law Symposium, a student-run conference on animal legal issues in California, hosted by University of California, Hastings. Several panels discussed the global trends in legal protection for animal welfare and raised concerns about the enforceability of current regulations. The European Union (EU) leads the world with the most progressive approach toward animal welfare. However, there is a lack of an international standard or treaty that meets the hallmarks of an effective global protection regime, as well as ongoing opposition to robust domestic rules to protect animal welfare in countries like the United States and China. Because this area of the law exposes several flaws both in the United States and other nations, many organizations are now fighting worldwide for the implementation of a better legal framework. This post aims to portray the current legal protections available to animals in the United States and abroad.

The most promising model for animal welfare activists appears to be the EU approach. Europeans have a desire to protect animals, as evidenced by EU laws that minimize unnecessary animal suffering and recognize moral status and inherent value in animals. To grant moral status to animals is to say that how they are treated is morally important and that, as human beings, their interests and welfare deserve moral consideration. For example, following the UNESCO Universal Declaration of Animal Rights, an inter-governmental agreement prohibiting cruelty to animals, the Council of Europe created several animal welfare treaties regulating the treatment of animals and fixing regional standards for their transport. The European Convention for the Protection of Pet Animals governs the treatment of companion animals and acts as a protective measure against any form of suffering and distress. The system implemented in the EU also offers legal protection to farm animals. The European Convention for the Protection of Animals Kept for Farming Purposes acts as the parent legislation to many directives and guarantees a consistent treatment of farm animals throughout the EU. This convention and related directives ban husbandry practices that are common in the United States, such as battery cages for egg-laying hens, veal crates for veal calves, and gestation crates for pregnant sows. The EU has also set much tighter restrictions than the United States on the length, time, and conditions of animal travel. These legal instruments touch on the main issues with respect to the treatment of companion, farm, and research animals. However, the EU could improve its system by increasing the enforcement and level of comprehensiveness of its instruments and by advocating for an international treaty to protect animals.

The United States is far from leading by example on legal protection for animal welfare. Three federal statutes govern animal welfare: the Animal Welfare Act, the Twenty Eight Hour Law of 1877, and the Humane Methods of Slaughter Act.  However, these three statutes exclude all poultry, which make up most of the land animals killed for food. Also, there is no federal law that protects farm animals on the farms where they are raised.

The vast majority of states have adopted additional legislation around animals, and the legal system currently in force indicates that most states perceive animals merely as a kind of property belonging to their owners. Viewed as simple machines, animals’ legal protection is often minimal and enforcement of their limited rights is not a priority. For example, state governments have created farm exemptions, aiming to ensure that the statutes about animal welfare do not apply to farm animals. As a result, it is legally permissible for an individual to intentionally torture or maliciously kill farm animals.

Reform is difficult. Anyone wishing to bring a case to court will likely encounter several difficulties.  U.S. politicians have been inclined to foster the meat and dairy industries’ interests, and meat and dairy producers apply their influence to limit regulation and enforcement. Legislation tends to prioritize keeping the cost of food low to spur consumption above protecting animal welfare. Due to the current economic situation and its importance on policy-making, one could expect little or no improvement to happen in this area of law within the upcoming years.

However, animal welfare activists have gained some traction in the United States in that companion animals have now been recognized as having a moral status. Since, in contrast to farm animals, they are not simply viewed as the property of their owners, they benefit from a greater legal status. In sum, U.S. legislation can still be improved and should at least be upgraded to the EU standards.

Finally, two current practices toward dogs in China and Romania demonstrate that, although there might be a desire to protect companion animals in some parts of the world, such beliefs are not universal. For instance, the lack of legislation in China permits the annual meat festival in YuLin, China, where dog meat is sold. Such an event has financial implications, as it creates income and increases consumption. Allegations were made that some dogs are hung upside down, some are beaten and then left to slowly bleed to death and others are skinned and boiled alive. Those are only a few examples of the inhumane treatment given to the animals at this event. In addition such unacceptable treatment, this shocking festival creates monetary incentives for individuals to steal dogs in order to sell their meat.

Similarly, after the death of a child who was allegedly attacked by stray dogs, the Romanian government has adopted a law allowing the mass killing of tens of thousands of stray dogs in the capital. Those animals are treated cruelly. For instance, they are being brutally caught, kept in crowded unclean wire cages, without sufficient food and medical treatment and then poisoned, drowned and tortured to death. Animal welfare activists and animal rights organizations have since put pressure on the Romanian government to implement a new law, notably by organizing demonstrations throughout the world.

Both instances in China and Romania indicate that an international treaty governing animal welfare could address customary practices that the global community agrees are violations of shared norms. In sum, the situation in respect to animal welfare is alarming. The current standards appear to be either insufficient or not adequately enforced, and so legislators at both the national and international levels must take action.

Laurence Cromp-Lapierre is an LL.M. Candidate at Berkeley Law. She is a student contributor for Travaux. 

This Day In International Law – September 26

By: Guilherme Duraes

On September 26, 2005, international weapons experts announced the full disarmament of the Irish Republican Army (IRA). The international community received the announcement as one of the final, and most important steps toward upholding and implementing the provisions of the Good Friday Agreement (GFA) of 1998.

A majority of Northern Irish parties and the British and Irish national governments had signed the Good Friday Agreement, also known as the Belfast Agreement, on April 10, 1998, to bring a halt to the violence that had devastated the region for decades.

Voters of both Northern Ireland and the Republic of Ireland approved the Agreement, and the Irish government had to amend its Constitution in order to remove the original territorial claim over Northern Ireland. As per the Agreement, Northern Ireland would remain a part of the United Kingdom (UK), with a devolved system of government. Residents of Northern Ireland could choose to claim either British or Irish citizenship, and they would be able to join the Republic of Ireland in the future, contingent upon a referendum in both Northern Ireland and the republic.

The central goal of the Agreement was to establish respect for civil and cultural rights in the region, justice and policing, and decommissioning of weapons. The Agreement also established intergovernmental and civil society organizations between Northern Ireland and the Irish Republic, Northern Ireland and the UK and the Irish Republic and the UK. By 2005, the parties to the Agreement had reached most of their goals, but there were still uncertainties as for the decommissioning of weapons in the island of Ireland. Therefore, the announcement in September 2005 that the IRA no longer held weapons represented a milestone in the peace process, and virtually the final step in implementing the Agreement.

Though the main strands of the Irish Republican Army have now fully disarmed, some paramilitary groups continue to operate under the name of “IRA”. However, these groups did not thwart the peace process and the GFA is seen today as a rather successful international treaty.

Guilherme Duraes is a J.D. Candidate at Berkeley Law. He is a student contributor for Travaux. 

The CrISIS in U.S. Foreign Policy and The Rule of Law

By: Alexander J. Brock

As President Obama prepares to address the United Nations (UN) General Assembly in New York today to help build an international coalition in the fight against the Islamic State in Iraq and Syria (ISIS), he may have some tough questions to answer. As some have been quick to point out, the strikes earlier today on ISIS’s de facto capital, the Syrian city of Raqqa, may very well be a violation of international law of armed conflict and of the UN charter. The lack of a clear legal justification for the administration’s actions in Syria is not an isolated incident. Rather, it is just the latest in a series of legally questionable responses that the administration has made in the Middle East over the last four years. The fact is that the popular uprisings that have swept across the Middle East beginning in late 2010 have revealed an anachronistic foreign policy strategy and legal mechanisms ill-equipped to address the new reality in a region that has undergone fundamental change. Washington’s inability to adapt its approach to the Arab world stems from the lack of an overarching strategic vision for the region and America’s role in it.

Responding to ISIS, the AUMFs, and Self-Defense

The White House has received extensive criticism for its position on the domestic legality of the air strikes against ISIS, which the administration has sought to justify under a 2001 Authorization to Use Military Force (AUMF) that was enacted to enable attacks on al Qaeda for its involvement in the September 11, 2001 terrorist attacks, and also under a 2002 AUMF that authorized the war in Iraq. With these as statutory authority, the administration claims, the President has satisfied the requirements of the War Powers Act and therefore does not need congressional authorization.

Administration officials, however, have stated a number of times in the past that the president had desired to repeal the 2001 AUMF, saying there was a need for discipline so as to avoid being “drawn into more wars we don’t need to fight,” or, “grant[ing] presidents unbound powers more suited for traditional armed conflicts between nation states.” For Obama now to seek the protection offered him by the AUMF is awkward at best, and illegal at worst: the AUMF, according to critics, was clearly not intended to cover groups like ISIS, which formally split with al Qaeda earlier this year. As for the 2002 law that authorized the Iraq war, this position, too, seems at odds with past statements from high-level administration officials: just a few months ago, National Security Advisor Susan Rice wrote in a letter to Speaker of the House John Boehner, “with American troops having completed their withdrawal from Iraq…the Iraq AUMF is no longer used for any U.S. government activities and the Administration fully supports its repeal.” To make matters more confusing, the White House maintains that it continues to support the law’s repeal, despite using it as authority for the offensive.

Another looming problem for President Obama is the possibility that his actions in Syria violate international law.

The strikes against ISIS in Iraq are relatively well-founded: they are being carried out with the consent (and indeed at the request) of the Iraqi central government in Baghdad, and thus constitute an act of collective self-defense, one of the permissible causes for military action under Article 51 of the UN Charter.

In Syria, however, President Bashar al-Assad has made no such request, nor has he given consent for the attacks and, as a result, the United States’ military operations seem to violate the sovereignty of the Syrian state.

In the absence of Assad’s permission or a UN Security Council resolution, the administration has chosen to depict the fight in Syria as an extension of the collective self-defense argument for Iraq, claiming that ISIS fighters have attacked Iraq from safe havens within Syrian territory. It also names the existence of U.S. personnel inside Iraq, and invokes the right to defend the security of those personnel.

The issue is not whether these legal arguments are sound, but rather to show that this step was even necessary. The current legal mechanisms at the administration’s disposal do not reflect the reality on the ground in the Middle East since the popular uprisings of 2010, where the landscape has changed considerably, but rather a different period long ago. To need to resort to the argument of collective self-defense, i.e. that attacks in Syria are actually on behalf of Iraq for its self-defense, in order to launch attacks on what is an obviously dangerous terrorist group, shows that something is lacking in the President’s legal toolkit.

“Making It Up as We Go”

But the most recent crisis in Iraq and Syria is just the latest symptom of a much broader phenomenon in American foreign policy in the Middle East of “making it up as we go.” It was only one year ago that the President sought congressional authorization to carry out strikes against the Assad regime in Syria for its use of chemical weapons, which Obama had deemed a “red line.” The arguments that the administration advanced in support of a military strike were hard to pin down as they changed from day to day. They ranged, on one hand, from the humanitarian and the moral, with Secretary Kerry’s statement that, “the indiscriminate slaughter of civilians…by chemical weapons is a moral obscenity” to, on the other hand, arguments of deterrence, claiming that other dictators would consider using chemical weapons if they saw they could do so with impunity, and then, finally, to the purely punitive, wanting to punish Assad for such a flagrant violation of international norms.

The questions surrounding the legality of a strike on Syria were as numerous as the administration’s justifications for it. In the absence of a resolution from the UN Security Council, which was almost certainly doomed to fail because of Assad-ally Russia’s veto power, the only other acceptable circumstance for military intervention is “national or collective self-defense,” as far as the United Nations is concerned, and the administration never made that argument. Even if it had put collective self-defense forward as the justification, the Syrian rebels would have had to request the intervention and the White House would have had to recognize rebel forces as the legitimate government in Syria—something the administration was certainly not prepared to do. The deterrence argument, too, would only be actionable with a UN Security Council resolution. And the “humanitarian intervention” argument obscured more than it clarified—why was it that a relatively small amount of chemical weapons, used in what appeared to be a limited location in an isolated incident in August 2013 that killed 1,400 people, justified a humanitarian intervention, but the almost 70,000 people who had been killed through conventional warfare as of August 1, 2013, did not?

The administration was ultimately spared further articulation of its legal justification for an attack on Syria for crossing the President’s “red line,” with the diplomatic solution spearheaded by Russia.

Aiding Egypt?

The recent political turmoil in Egypt, too, has revealed the Obama administration’s lack of a cohesive framework for handling regional dynamics. This was brought into sharp relief with the July 3, 2013 coup that ousted President Mohammed Morsi of the Muslim Brotherhood. Under Section 7008 of the FY12 Consolidated Appropriations Act (P.L. 112-74), the United States is prohibited from providing aid to, “…the government of any country whose duly elected head of government is deposed by military coup d’etat or decree…or a coup d’etat or decree in which the military plays a decisive role.” Neither Section 7008, nor any other provision of U.S. law offers a definition of a “coup” or a “coup d’etat.” Indeed, analysts and observers both in the United States and in Egypt had heated debates over whether what happened in Cairo on July 3 was a coup or not. In Egypt, labeling the event as a “coup” indicated one’s political affiliation with the Muslim Brotherhood or its supporters, and those who called it a “popular revolution,” represented some form of the status quo ante from the Mubarak era, and heated debate permeated the popular press across the country. In Washington, too, controversy surrounded the “coup-not-coup” issue, in no small part because of the Obama administration’s choice to call it neither.

Here, though, the Obama administration was confronted with what the law required on the one hand, and with the reality that the new military-led regime in Cairo was sure to be friendlier toward American interests than that of the Muslim Brotherhood on the other hand. To label the military takeover as a coup, and thus suspend aid, would surely be consistent with U.S. support for the emergence of democracy in the Middle East, and yet such a move risked alienating a much-needed potential ally in the region in the form of the new government led by Field Marshal Abdel Fattah al-Sisi. White House officials consistently refused to label what had happened in Egypt a “coup,” despite all the evidence to the contrary, and as a result the aid continued to flow to Cairo even as the new regime performed brutal crackdowns on protesters and other supporters of the Muslim Brotherhood, beating and imprisoning them in blatant violations of human rights. But Washington, perhaps out of desperation for a recognizable government in the Arab world, ignored its own laws and the principles of democracy.

Reflecting on Libya

 Finally, going back to 2011, there was the military intervention in Libya. The justification put forth by the Obama administration was in line with the U.N. Security Council Resolution 1973, which provides for intervention “to protect civilians and civilian populated areas under threat of attack.” However, this humanitarian argument soon morphed into a mission aimed at achieving regime change. But the stated purposes of the intervention, and the arguments justifying that intervention, did not stop there. As Micah Zenko outlined on his blog with the Council on Foreign Relations, there were a number of different objectives and incentives behind joining the NATO-led military intervention in Libya, despite the fact that it was a country of little strategic interest to the United States. There was the thought that it would communicate a message to other dictators in the region about using force to quell peaceful protests; that it would support the Libyan rebels, who had displayed impressive credentials to figures such as Senator John McCain during his visits there; that it would be friendly reciprocity to American allies in Europe who offered assistance with the war in Afghanistan; and finally, it was believed that the operation would be easy to complete in a short amount of time. What began as an operation that sought only to protect Libyan civilians from the brutality of its eccentric leader turned into what was essentially yet another episode of U.S.-sponsored regime change in an Arab country.


The Obama administration has adopted a “crisis management” approach to the Middle East since early 2011. No longer able to form a foreign policy based on reliance on friendly authoritarian rulers in the region to keep the peace and to help manage crises as they arise, Washington finds itself grasping at straws in trying to justify its decisions, leaning on decades-old statutes intended to govern entirely different circumstances, and ignoring both its own legislation and international law when they prove to be inconvenient to the circumstances. This has damaged American credibility in the world. The foreign policy establishment and senior White House officials need to acknowledge that the Middle East as they knew it for the last forty years is no more, and there is an urgent need to design and articulate a clear strategic vision for engaging with the new Middle East if the United States wishes to continue to lead. Without such a vision, the same panicked and mercurial policymaking that has characterized this administration’s decisions in the region will continue for years to come.

Alex Brock is a J.D. Candidate at Berkeley Law.  He is a student contributor for Travaux.

This Day In International Law – September 19th

By: Aaron Murphy

September 19th, 1946

In a speech at the University of Zurich in Switzerland, Sir Winston Churchill lamented Europe’s seemingly eternal “series of frightful nationalistic quarrels” that “wreck the peace and mar the prospects of all mankind.” Sobered by the devastation of the Second World War and desperate to permanently suffocate the sectarian flames that engulfed the continent on such an alarmingly regular basis, Churchill called for large-scale solidarity and greater political cohesion.

“We must build a kind of United States of Europe,” he said.

Churchill’s clarion call planted the seeds for the Council of Europe and presciently wove the prospect of a unified Europe into the future of the continent.  Today, the Council counts forty-seven nations among its members, dedicating itself to the promotion of human rights and the development of legal standards and rule of law initiatives among the countries of Europe.

September 19th, 1959

September 19th of 1959 found Nikita Khruschev barred from entering Disneyland due to “security concerns.” One wonders if the Cold War would have ended much sooner had Khruschev been allowed to frolick through The Most Magical Place On Earth for a solid twenty-four hours. In any case, the mental image of a joyfully intoxicated Soviet Premier floating through the delightful environs of “It’s A Small World” certainly lifts the spirits.

The Right to be Forgotten, Revisted

The recent decision of the Court of Justice of the European Union, in Google Spain SL v. Agencia  Espanola de Proteccion de Datos (“AEPD”), C-131/12 (May 13, 2014), available at www.curia.europa.eu, has received extensive media coverage, with commentators suggesting that the ruling is “ground-breaking,” “astonishing,” and “upsetting.”  Those descriptions may greatly overstate the significance of the ruling, especially for U.S. businesses.

The decision grows out of a complaint by a Spanish citizen against a Spanish newspaper and Google Spain, claiming that a 12-year-old story about his former financial troubles should be removed from the internet and links to the story extinguished.  AEPD, the Spanish data protection authority, denied the request as to the newspaper (which had lawfully published the story), but granted the request as to Google.  The Court of Justice affirmed, on both points.  The decision turns on the conclusion that Google Spain is subject to European Union (“EU”) regulation, and that its service “retrieves, records or organizes” data (within the meaning of the EU Data Protection Directive), such that Google is thus a “controller” of data, subject to regulation under the Directive.  The Directive, moreover, establishes fundamental rights of privacy, including the right to expungement of information that no longer serves its original purpose.

What the decision does not do is establish a broad and unequivocal “right to be forgotten.”  First, the territorial coverage of the ruling is limited.  Because the case involved a Spanish citizen, Spanish newspaper, and Spanish internet operation (a Google subsidiary in Spain), the decision on jurisdiction was relatively easy.  Whether European data protection authorities would seek to extend jurisdiction to other cases with weaker connections to Europe remains for further development.

Second, the Court did not suggest that validly-created news content must ever be altered.  Quite the opposite.  The Spanish newspaper was permitted to display its original story via its website.  The removal of Google links to the story, moreover, does not absolutely prohibit access to the story.  As to future cases, moreover, the Court suggested that a balancing process must apply, in which the interests of internet users may override the interests of data subjects in protection of data concerning their private lives.  Thus, where the data subject plays a role in public life, or other public interests arise, such interests may tend to decrease the data subject’s right to claim protection for sensitive information and the removal of internet links that may not be required.

Finally, the ruling is not self-enforcing.  To obtain similar relief from Google or any other web operator, the data subject must make a request to the company.  The company must evaluate the request (conducting the “balancing” test suggested by the Court), and determine whether relief appears required.  Only if the data subject is unsatisfied with the results, and only if the data subject can convince data protection authorities that the result is improper, might there by additional rulings directing similar relief.  Because data protection authorities vary in their views from country to country the availability of the remedy may also vary greatly.

The Google Spain decision is surprising in at least one regard.  The EU has under consideration revisions to its Data Protection Directive (adopted in 1995).  The general purpose of the revisions is to update the data protection regime, in light of new technologies and practices, and to make more uniform the treatment of data protection across the national systems in Europe.  One feature of the revisions under consideration is recognition of a “right to be forgotten.”  These and other revisions have been the subject of intense political in-fighting, as well as lobbying efforts from foreign companies potentially affected by more stringent regulations.  The recent Snowden/NSA revelations have only added fuel to the controversy.  In that context, the European Court’s decision to wade into a controversial area, which arguably could be better settled through the political process, appears unusually bold.

The stakes are high in this arena.  The Data Directive reform proposal includes significant enforcement procedures, including (potentially) fines of up to five percent of a company’s global turnover for violations of the law.  The proposed revisions also seek to clarify that EU data protection law may apply to any services directed at EU citizens, regardless of where the service controller is located.  Thus, even though most US businesses may conclude that they are not immediately affected by the Google Spain decision, they should pay careful attention to European developments that may affect their operations.

The author is a partner at Park Jensen Bennett LLP, in New York City.  The views expressed are solely those of the author, and should not be attributed to the author’s firm, or its clients.