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OFAC’s Settlement with Commerzbank AG: Coerced Voluntary Settlements of the Competitively Disadvantaged

Published on March 20, 2015        Author: 

Nine months after the Office of Foreign Asset Control’s largest ever settlement with French BNP Paribas (see my previous post), OFAC is striking again. On March 11, OFAC settled for the first time with a German financial institution, Commerzbank AG, for alleged violations of the U.S. sanctions regulations. Commerzbank is the thirteenth foreign financial institution (and eleventh European one) to settle with U.S. authorities (see e.g. OFAC’s Selected Settlement Agreements) for processing electronic funds on behalf of its Cuban, Iranian, Burmese and Sudanese customers, among others. (Settlement Agreement [26-30]). In exchange for Commerzbank’s agreement to pay OFAC $258 million (less than a third of what BNPP agreed to pay OFAC alone), OFAC pardoned the bank of all civil liability in government-initiated cases for its alleged wrongful conduct, thought to have started in 2002. (See Settlement Agreement [39]).

The total amount paid to all relevant U.S. authorities (United States Department of Justice, New York County District Attorney’s Office, Federal Reserve Boards of Governors and the Department of Financial Services of the State of New York) is $1.45 billion. This post considers only OFAC’s actions toward Commerzbank and calls into question OFAC’s jurisdiction to enforce its sanctions regulations and penalties abroad.

Allegations against Commerzbank

Commerzbank allegedly violated the U.S. sanctions regulations by routing non-transparent payment messages for states, entities and individuals subject to U.S. sanctions through the U.S. financial system between 2002 and 2010. By removing or omitting references to U.S.-designated entities from SWIFT’s MT103 and MT202 payment messages, Commerzbank also allegedly caused U.S. financial institutions to violate U.S. law. (Settlement Agreement [3-5, 1-9, 11, 20]). The first question we must ask is why Commerzbank, a German entity, would have to follow U.S. sanctions regulations?

OFAC’s main argument is that the alleged wrongful transactions went through the U.S. financial system, and, therefore, under the territoriality principle, U.S. law applies. Without repeating myself (see my previous post), I would like to stress that Commerzbank, incorporated in Germany and initiating its transactions in Germany, has a much stronger jurisdictional link to German than to U.S. law. In the settlement, OFAC acknowledges that Commerzbank agrees to OFAC’s requests only to the extent permitted by local law. (Settlement Agreement [44]). Read the rest of this entry…

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An Old Question in a New Context: Do States Have to Comply with Human Rights When Countering the Phenomenon of Foreign Fighters?

Published on March 19, 2015        Author: 

The phenomenon of foreign fighters involves, as described by the OHCHR, “individuals who leave their country of origin or habitual residence, motivated primarily by ideology or religion, and become involved in violence as part of an insurgency or non-State armed group (even though they may also be motivated by payment)”. Preventing and responding to this phenomenon involves a multitude of potential initiatives at international, regional and national levels. A review of the Security Council’s principal resolution on foreign fighters, Resolution 2178 (2014), discloses several binding decisions as well as recommendations in what the Security Council described as a ‘comprehensive’ response to the factors underlying foreign fighters (see preambular para 13). State prevention and responses to foreign fighters have the potential to impact on the international human rights obligations of States and we are already seeing robust State responses, including in the case of the United Kingdom’s recent enactment of the Counter-Terrorism and Security Act 2015 and earlier amendments to the British Nationality Act 1981 to allow for the deprivation of citizenship.

I want to emphasise here that the question of human rights compliance in countering the phenomenon of foreign fighters does not involve new or untested issues. I draw attention to seven points:

1.  Implementation by States of recommendations and obligations under SC Res 2178 has the potential to impact on a broad range of civil, cultural, economic, political and social rights

The main objectives of SC Res 2178 are to inhibit the travel of foreign fighters, stem the recruitment to terrorism, disrupt financial support to or by foreign fighters, prevent radicalisation, counter violent extremism and incitement to terrorism, and facilitate reintegration and rehabilitation (see operative paragraphs 2-19).

Action in response will, or at least may, engage several human rights obligations of States. Concerning measures to inhibit the travel of foreign fighters, this may include: the freedom of movement; the right to return to one’s country of nationality; the freedom of entry into a State, particularly as this may affect refugee and asylum law; the deprivation of citizenship; the rights to family and private life and to employment and culture, as this affects individuals who may be prevented from entering a territory of habitual residence in which their family resides; the right to privacy, including as this affects the collection, storage or use of information in border control activities; the prohibition against discrimination, including as this affects profiling activities of border control officials; detention, as this affects the prohibition against unlawful or arbitrary detention; and rendition to States in which there is a risk of human rights violations being perpetrated against the individual. Read the rest of this entry…

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Breaking the Washington Consensus?  The Rise of ‘Alternative’ Development Banks

Published on March 18, 2015        Author: 

The United Kingdom scuttled much of its trans-Atlantic partnership with the United States this week, when it became the first G7 country to join the China-led Asian Infrastructure Investment Bank (AIIB) over US objections.  European countries France, Germany, and Italy followed suit, with Australia and South Korea now re-evaluating their positions to consider joining the USD $50 billion capitalized AIIB. Japan is holding firm on its alliance with the United States in refusing to join the AIIB.  United States National Security Council spokesperson Patrick Ventrell declared that “any new multilateral institution should incorporate the high standards of the World Bank and the regional development banks…we have concerns about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards.” As I write from my temporary office here at the Centre for Asian Legal Studies (CALS) at the National University of Singapore Faculty of Law, commentaries proliferate on this debacle and the alleged waning geopolitical influence of the United States, most recently from Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy, who declares all these events “a sign of American decline”.  It is not the first indictment on America’s lessening hegemonic grip in the face of China as a rising power. Joseph Weiler’s magisterial Keynote at the 2014 ESIL conference showed how the conflation of politics, cultural cleavages, economics, and moral authority essentially presaged the end of Pax Americana.   More detail to these themes also resonate from a recent 2014 edited book by political science and international relations scholars Vinod Aggarwal and Sara Newland, showing how both the United States and the European Union have deployed various strategies of engagement, cooperation, and confrontation with the rise of China.

Whichever brush we use to describe the decision of key US allies such as the UK and Europe to join the AIIB (e.g. defection from US alliances, or strategic policies towards engagement with China as a rising power), the more interesting international legal phenomenon here is the impact of the rise of the AIIB (and other rival new development banks in the future) on the decades of dominance of the Washington Consensus in international development finance law.  Will the rise of ‘alternative’ development banks such as the AIIB break the stranglehold of the Washington Consensus on international development lending? And if so, what will the AIIB replace it with?  Would the AIIB and new ‘alternative’ development banks necessarily spell sea changes in ensuring compliance with international environmental and social norms and treaty standards throughout international development projects in developing countries?  While the AIIB has been hailed as a needed balance to American dominance in international development lending, China has also been quite opaque thus far on the actual contours of the AIIB’s governance and the terms of its international development lending policies.  And it is precisely this nebulousness that the US appears to interpret as a slide towards the lowest denominator in social inclusion, and the protection of environmental and social safeguards in international development lending.  Never mind that the World Bank is doing its own soul-searching and internal review on this score as well by calling for a long overdue review of its environmental and social safeguards policies, with World Bank President Jim Yong Kim recently warning of the surge of forced resettlement from Bank projects.

The rise of new ‘alternative’ development banks such as the AIIB and the contemplated BRICS bank creates an opening not just to dilute the powerful (almost monopolistic) reach of the United States on international development finance policies, but also to engage all international finance powerhouses – established or emerging – in reforms over global standard-setting in the international development finance ‘soft’ and ‘hard’ law. For over sixty years since the post-war global reconstruction period and in tandem with the evolution of the modern UN Charter era, Washington Consensus policies have dominated reform prescriptions for developing country borrowers.  These policies focus on ten points as the core focus of lending by international financial institutions that heavily depend on US capital (the trio of the World Bank, the International Monetary Fund, and the US Treasury): Read the rest of this entry…

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Announcements: Hague Academy Course on ICL; Int’l Law Conference (Ottawa); Summer Courses on Human Rights, European Law (Florence); Summer Courses on ICL, Transitional Justice, Children’s Rights, Women, Peace and Security (Leiden); Call for Submissions on Theoretical Approaches to Int’l Law; EJIL:Live!

Published on March 17, 2015        Author: 

We’ve been experiencing technical difficulties, so here are last week’s announcements, a few days late:

1.  New Hague Academy Advanced Course on International Criminal Law (24 August to 4 September 2015). The Hague Academy of International Law and the Grotius Centre have launched a new Advanced Course on International Criminal Law (ICL) which will be held at the Peace Palace from 24 August to 4 September 2015, with the support of the Ministry of Foreign Affairs of the Netherlands.  The course will combine study of general themes of ICL with a special focus on Gender Justice which has received fresh attention with the new ICC policy on Sexual and Gender Based Crimes and the UK-led Initiative on Prevention of Sexual Violence. The course places particular emphasis on a critical evaluation of persistent challenges and emerging responses to sexual and gender based violence. Faculty in the 2015 session includes inter alia ICC Prosecutor Fatou Bensouda, ICTY Chief Prosecutor Serge Brammertz, Professor M. Cherif Bassiouni, Judge Theodor Meron, Brigid Inder (ICC Special Gender Adviser), Patricia Sellers (ICC Special Adviser on Prosecution Strategies), Dr Kelly Askin, Ms Maxine Marcus, Professor Kai Ambos, Professor William Schabas and Professor Larissa van den Herik. The course is coordinated by Professor Carsten Stahn, Programme Director of the Grotius Centre (The Hague). It is geared at practitioners who seek to enlarge their vision or discover a new field of practice and scholars seeking to gain expertise in the application of concepts and norms. Further information on the programme and application process is available here.

2.  The Canadian Council on International Law announces its annual conference, International Law: Coherence or Chaos?, to be held 5-7 November 2015 in Ottawa, Canada. More information here.

3.  The Academy of European Law summer courses at the European University Institute, Florence. The Academy of European Law summer courses in Human Rights Law and European Union law, given by leading authorities from the worlds of practice and academia, provide high-level programmes for researchers and legal practitioners. This year’s Human Rights Law Course will be held on 15 – 26 June. It comprises a General Course on ‘The Future of Human Rights Fact-finding’ by Philip Alston (New York University Law School) and a series of specialized courses on the topic of ‘The Futures of Human Rights’ by leading scholars. The Law of the European Union Course will be held on 29 June – 10 July. It features a General Course on ‘What’s Left of the Law of Integration?’ by Julio Baquero Cruz (Member of the Legal Service of the European Commission) and a series of specialized courses on the topic of  ‘Harmonization in a Changing Legal Context’ by leading scholars and practitioners in the Law of the European Union. Read the rest of this entry…

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Comments on the British Intelligence and Security Committee Report

Published on March 16, 2015        Author: 

Cross-posted on Lawfare.

Last week the Intelligence and Security Committee (ISC) of the UK Parliament published its much-anticipated report entitled ‘Privacy and Security: A modern and transparent legal framework.’ The Report followed an extended inquiry into UK agencies’ surveillance practices prompted by the Snowden revelations; while it concludes that the agencies have generally acted within the prescribed legal limits, it also calls for a total overhaul of the UK legislation governing electronic surveillance, which it finds to be fragmented, overly complex and confusing. For helpful overviews of the Report’s main conclusions and recommendations, see Shaheed Fatima and Ruchi Parekh on Just Security, and James Ball in The Guardian.

The ISC’s exoneration of GCHQ et al. was hardly surprising – libertarians and privacy activists have derided its members as having long gone native and being nothing more than a bunch of apologists for the intelligence agencies whom they are supposed to oversee. Liberty’s ShamiChakrabarti thus commented that ‘the ISC has repeatedly shown itself as a simple mouthpiece for the spooks – so clueless and ineffective that it’s only thanks to Edward Snowden that it had the slightest clue of the agencies’ antics,’ while The Guardian’s editorial page a tad more delicately called it the ‘watchdog that rarely barks,’ the ‘slumbering scrutineer’ and a body that ‘searches out nothing.’ So there.

Whatever the intentions behind the Report, and despite the (at times comical) level of redactions in its public version, it is still a useful document. At a minimum, it provides a reasonably clear analytical overview of the legal framework currently regulating the surveillance activities of the British intelligence agencies, as well as the relevant procedures, and provides a helpful comparison point for those looking at the same set of problems in a different system, for instance in the United States or Germany. In this post I will comment critically on some aspects of the Report that I think are especially interesting and deserving of further consideration.

Read the rest of this entry…

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House of Cards and International Law

Published on March 11, 2015        Author: 

I just finished watching season 3 of Netflix’s House of Cards, starring Kevin Spacey and Robin Wright as your modern-day Lord and Lady Macbeth. I love watching great bad guys, and season 3 did not disappoint, even if I thought it wasn’t as good as the previous ones. (warning: some minor spoilers follow). Interestingly, one major plotline had a strong international legal element. To wit, although President Underwood had been superb in his climb to ultimate power, his domestic and foreign policies range from the remotely plausible to the utterly preposterous. One such idea is a half-baked and never really explained peace plan for Israel and Palestine which involves the deployment of international peacekeepers in the Jordan Valley.

This obviously involves much toing and froing in the UN Security Council, and to do that effectively President Underwood appoints his wife as US Ambassador to the UN (despite the fact that she has zero foreign policy experience, causing her confirmation to be denied by the Senate, which leads the President to give her a recess appointment – seriously). This policy is opposed on and off by Russia, leading to quite a bit of direct negotiations between President Underwood and his Russian counterpart, Viktor Petrov (a Vladimir Putin impersonator played infernally well by Lars Mikkelsen). We even have a spectacularly implausible state dinner for Petrov at the White House, to which Underwood’s people inexplicably invite three members of the Pussy Riot band (actually playing themselves!). As you can imagine, things don’t end well.

Amusingly, in order to overcome the Russian veto in the Security Council, President Underwood and his better half decide to invoke the Uniting for Peace Resolution.  I certainly did not see that old chestnut coming, and I’m also pretty sure that this is the first time the words ‘Uniting for Peace Resolution’ were uttered in a major Hollywood production. Honestly, all I now need is for Kevin Spacey to do a menacing soliloquy distinguishing between the jus ad bellum and the jus in bello and my life will be complete.

So that was fun. Dear readers, any other hot movies/series out there with international law-related plots? Feel free to display your nerddom in the comments.

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Announcements: EJIL:Live!; Venice Human Rights Academy; Munich Int’l Law Course; Conference on Charlie Hebdo Attacks (Paris); Conference on EU Law & Public Int’l Law (London)

Published on March 7, 2015        Author: 

1.  In case you missed it, a new episode of EJIL: Live!, the Journal’s official podcast, is now available online. In this episode EJIL’s Editor-in-Chief, Prof. Joseph Weiler interviews Oisin Suttle of the University of Sheffield. They engage in an in-depth discussion of Suttle’s article, “Equality in Global Commerce: Towards a Political Theory of International Economic Law”, which appears in Vol. 25, Issue 4. The interview was recorded at the European University Institute in Florence, Italy.

2.  The faculty includes Albie Sachs (distinguished opening lecture), Will Kymlicka  (general course), Armin v. Bogdandy, Andreas Føllesdal, Marc Weller and Marlene Wind. The Venice Academy of Human Rights 2015, in co-operation with PluriCourts – Centre of Excellence for the Study of the Legitimate Roles of the Judiciary in the Global Order, will look at international, regional and transnational integration processes from an institutional, policy, dogmatic and interdisciplinary perspective. The discussion addresses promises and challenges to communities of various actors, including citizens, peoples, minorities, but also communities of international and regional organisations, courts and private bodies. The course aims at academics, practitioners, PhD/JSD and master students. Applications are accepted until 3 May 2015 with an early-bird discount until 15 March 2015.

3.  The Munich Advanced Course in International Law (MACIL) is a summer school held at Ludwig Maximilian University Munich (Germany) and dedicated to questions of Public International Law. Its next session, entitled ‘International Law Beyond the State: Towards a New Role for Individuals and other Non-State Actors’, will take place in August 2015. Read the rest of this entry…

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The Case of Russia’s Detention of Ukrainian Military Pilot Savchenko under IHL

Published on March 3, 2015        Author: 

There has been much debate in recent weeks over whether international humanitarian law (IHL) authorizes internment in non-international armed conflicts (NIACs) (see posts here, here and here). Both sides have presented convincing arguments but without applying them to concrete situations. In this regard, Russia’s ongoing detention of Ukrainian Air Force officer Nadia Savchenko provides a timely case study. As detailed below, the detention of certain categories of people raises questions during both NIACs and international armed conflicts (IACs), depending on who the detaining authorities are.

Lieutenant Savchenko was allegedly captured in full uniform in Eastern Ukraine on or about June 18, 2014 by the armed forces of the Luhansk People’s Republic during active hostilities. Several days later, the separatists transferred her to Russian special forces, who in turn transported her to Russia. Russia, however, claims that Savchenko crossed the border voluntarily and was detained as an undocumented refugee. In any case, on July 9, 2014, Russian authorities announced that Savchenko was detained in a civilian detention center in Voronezh, Russia, facing charges of directing mortar fire that killed two Russian journalists during an attack on a separatist checkpoint outside of Luhansk. Currently, Savchenko is kept in a detention facility in Moscow, facing an additional charge of trespass.

Savchenko, who is on a hunger strike to protest the charges, has filed a complaint before the European Court of Human Rights alleging that her detention violates her rights to liberty (Article 5) and a fair trial (Article 6) as enshrined in the European Convention on Human Rights. The ECtHR gave Savchenko’s initial application priority, but on February 10 refused to grant Savchenko’s Rule 39 request for interim measures compelling Russia to immediately release the prisoner. The court instead asked Savchenko to end her hunger strike and Russia to provide more facts concerning her detention. Read the rest of this entry…

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Announcements: EJIL:Live!; CfP International Law Weekend (NYC); CfA Scholarship Oxford Masters in Int’l Human Rights Law; BIICL Grotius Lecture (London); CfP on Protection of Cultural Heritage

Published on February 28, 2015        Author: 

1.  In case you missed it, a new episode of EJIL: Live!, the Journal’s official podcast, is now available online. In this episode EJIL’s Editor-in-Chief, Prof. Joseph Weiler interviews Oisin Suttle of the University of Sheffield. They engage in an in-depth discussion of Suttle’s article, “Equality in Global Commerce: Towards a Political Theory of International Economic Law”, which appears in Vol. 25, Issue 4. The interview was recorded at the European University Institute in Florence, Italy.

2.  Call for Proposals, International Law Weekend 2015 (ILW 2015) – the premier international law event of the fall season  – is scheduled for November 5-7, 2015, in New York City.  The event is sponsored by the American Branch of the International Law Association (ABILA) and the International Law Students Association (ILSA). The theme for 2015 is Global Problems, Legal Solutions: Challenges for Contemporary International Lawyers. ILW 2015 will explore the many roles that international law plays in addressing global challenges. The aim is to provide an opportunity for discussion and debate about the ways in which international law provides fundamental tools and mechanisms to address emerging global issues. ILW 2015 will offer engaging panels on current problems and innovative solutions in both public and private international law.  Panel proposals may concern any aspect of contemporary international law and practice including, but not limited to, international arbitration, international environmental law, national security, cyber law, use of force, human rights and humanitarian law, international organizations, international criminal law, international intellectual property, the law of the sea and outer space, transnational commercial and trade law. We expect the audience to include practitioners, academics, UN diplomats, business leaders, federal and state government officials, NGO leaders, writers, journalists, and interested citizens. We plan to have a broad array of both public international law and private international law topics. The ILW Organizing Committee invites proposals to be submitted online on or before Friday, March 20, 2015 via the ILW Panel Proposal Submission Form located here. ILW 2015 is scheduled to be held at 42 West 44th Street on Thursday evening, November 5, and at Fordham Law School at Lincoln Center on November 6 – 7, 2015. For questions regarding ILW 2015, please contact conferences {at} ilsa(.)org.  The 2015 ILW Program Committee Members are Chiara Giorgetti (University of Richmond Law School), Jeremy Sharpe (Office of the Legal Adviser, U.S. Department of State), David Stewart (President ABILA, Georgetown University Law Center), Santiago Villalpando (Office of Legal Affairs, United Nations), and Tessa Walker (ILSA).

3.  Following an application to the Commonwealth Scholarship Commission, Oxford University is pleased to report that funding has been secured for ten scholarships for candidates from selected developing African and South Asian Commonwealth countries to study for the part-time Master’s in International Human Rights Law starting September 2015.  Admissions are now open and will close at noon on 17 April 2015.  For full details, including eligibility criteria and how to apply, please visit here.

4.  The British Institute of International and Comparative Law announces the Annual Grotius Lecture, Squaring the Circle? Fighting Terrorism whilst Respecting Fundamental Rights, 26 March 2015, 17:30-18:30. This year’s Lecture will be presented by Eleanor Sharpston QC, Advocate General at the Court of Justice of the European Union. For more details and to register, visit here.

5.  Call for Papers ‘Terrorism, Non-International Armed Conflicts & the Protection of Cultural Heritage’. Santander Art and Culture Law Review is pleased to invite contributions to its second issue of 2015 which will deal with the role of international law in the protection of cultural heritage in the event of non-international conflicts and terrorism. Emerging as well as young scholars and practitioners are encouraged to contribute. The deadline for submission of manuscripts is June 30, 2015. Decision letters will be provided to author(s) by August 15, 2015. More information here.

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The Palestinian Authority Jury Award: Implications on Liability of Non-States and Damages for Psychological Harm

Published on February 26, 2015        Author: 

The recent jury verdict in the U.S. federal court finding that the Palestinian Authority should pay $655.5 million in damages to American victims of terrorism during the second Intifada has important legal and political ramifications. This post will focus on two questions raised by the verdict. First, on what basis can non-states be obligated to compensate civilians for casualties inflicted by another non-state actor? Second, might we begin to see more courts willing to award damages for psychological harm caused by terrorism?

Regarding the first issue, the verdict leaves open the question whether holding the Palestinian Authority accountable for the deeds of non-state actors implies that the Palestinian Authority should be viewed as a state. Until now, in a number of judgments, U.S. courts have found only that states, and not non-state entities such as freedom movements that possess some characteristics of a state, may bear accountability for material support to non-state actors. However, the verdict could be interpreted as an extension of this jurisprudential line.

Such an interpretation counters arguments by some scholars that the Palestinian Authority might be treated like other non-state actors such as multinational companies. Some legal academics have argued that courts hearing the case on appeal might consider such an analogy. On this view, the Supreme Court’s Daimler AG judgment could serve as a guiding torch. In the Daimler AG case, the US Supreme Court ruled that Daimler AG, a company in Germany, could not be sued in California based on the continuous and substantial business activities in California of Daimler’s US subsidiary, Mercedes-Benz USA. Read the rest of this entry…

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