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PowerPoint Presentation

The EU-Turkey Statement – Questions on Legality and Efficiency

Introduction

PowerPoint Presentation

The European Union (“EU”) has been facing challenges in recent years related to the large number of people who want to come to Europe. Although the ongoing conflicts in Syria, Iraq, Afghanistan, Somalia, and Eritrea were not new, the influx of people migrating to Europe had peaked in 2015. An overwhelming flow of smuggled migrants and asylum seekers traveled on fragile boats across the Aegean Turkey to the Greek islands[1] aiming for Western Europe. In 2015 alone, more than one million people arrived in the EU, around 885,000 of them through Greece whose asylum and reception system lacked the capacity to register and provide shelter to the migrants.[2] The majority of migrants moved on towards central Europe without proper registration. As a consequence of this migration flow, some Member States tried to limit the number of migrants entering their territory by introducing temporary internal border controls, putting into question the proper functioning of free movement within the Schengen area.[3] While entry conditions were re-applied even in countries that are part of the Schengen area, the arrivals from Turkey to Greece continued resulting in a great number of migrants and refugees stranded in Greece.

Because of its geographical location within the migration routes, the European Union and its Member States pay special attention to cooperation with Turkey. In dealing with this migration crises, existing instruments emerged as inappropriate, and new measures were deemed necessary to replace the irregular migration with organized, safe, and legal channels to Europe.

EU-Turkey statement

In 2015, the European Union and Turkey have negotiated a number of instruments regarding the flow of migrants coming from Turkey to the European Union, including a Joint Action Plan activated on November 29, 2015.[4]  The plan aimed at strengthening cooperation to prevent irregular migration and included financial support from the EU to Turkey.[5] More negotiations followed,[6] and in a press release published on March 18, 2016, the Council of the European Union announced through a joint statement that the EU and Turkey agreed on certain additional points,[7] important issues included[8]:

  • As of March 20, 2016, migrants crossing from Turkey into Greek islands will be returned to Turkey, a measure that was deemed “temporary and extraordinary” but “necessary to end the human suffering and restore public order.”[9]
  • For every Syrian being returned to Turkey, another legally registered Syrian refugee will be resettled from Turkey to the EU, up to a maximum of 72,000 people (so-called “one-for-one deal”[10]).
  • The EU will speed up the disbursement of previously allocated 3 billion euro, and mobilize funding of an additional 3 billion euro until the end of 2018.
  • Turkey will take any necessary measures to prevent new sea or land routes for illegal migration open from Turkey to the EU.
  • The EU will accelerate the fulfilment of visa liberalization for Turkish citizens.

The purpose of these action points was “to break the business model of smugglers and to offer migrants and alternative to putting their lives at risk.”[11] The EU tried to limit the overwhelming flow of smuggled refugees coming from Turkey via the Aegean to the Greek islands resulting in numerous shipwrecks and deaths on sea. The process of implementing the buy Windows 10 Home Key statement was monitored and coordinated by the European Commission. The deal raised many legal and political issues.

Question of legality and the General Court’s decisions

The EU-Turkey statement has been one of the most controversial policy steps taken by the EU and its Member States in recent year.[12] Intergovernmental organizations as well as human rights NGOs have criticized the deal,[13] and especially its legality cheap Windows 10 Pro Key should be questioned.

When examining the legality of the statement, we first have to assess the legal nature of the so-called “statement.”[14] While the name and form alone cannot be decisive, the facts that it is not called “agreement” and that it has a different form than international agreements usually have – it does not contain any signatures for example – indicates that it is not intended to be a binding international agreement. Additionally, it was not concluded following the required procedures of the Treaty on the Functioning of the European Union.[15] It appears that the statement constitutes a simple political commitment between the parties.[16]

The form of a document, however, is not as important in determining its legal nature as its aim and content which are essential criteria.[17] The document institutes a number of commitments for the EU, and has therefore a similar content to that of an international agreement. The use of certain terminology, words like “decided” and “agreed,” shows that the commitments have a normative and binding character.[18] Based on this assessment, the deal seems to constitute an international agreement.

If the EU-Turkey Statement indeed is an international agreement with the EU as a party, judicial examination before the European courts would be possible. In early 2017, the General Court dismissed three cases brought by asylum seekers who were affected by the deal on the ground that it lacked jurisdiction to hear them.[19] The court reasoned that the deal was not an act of an EU institution, but that of the Member States.[20]

The cases were brought by Afghan and Pakistani nationals who came to Greece from Turkey by boat after the EU-Turkey statement was implemented. In Greece, they were forced by Greek authorities to submit their asylum applications. Pursuant to the EU-Turkey statement, they face the risk to be returned to Turkey if their applications are rejected, so they decided to challenge the legality of the statement. They argued before the court that the EU-Turkey Statement was an act attributable to the European Council establishing an international agreement between the European Union and Turkey, and sought annulment of the act[21] because the established process to conclude international agreements by the EU was not followed.

The Court states in its three Court Orders that there were inaccuracies in the press release that announced the statement as to the identification of the authors of the EU-Turkey statement.[22] The press release indicates that it was the EU, not its Member States who acted, and that it was the “Members of the European Council”[23] who had met with their Turkish counterpart during the meeting which gave rise to the press release. The Court examined the evidence provided by the European Council regarding the meetings on the migration crisis held in 2015 and 2016 and concluded that it shows that it was indeed not the EU but its Member States who conducted the negotiations.[24]

The Court specifically stated that there were actually two different events that took place on March 17 and 18, 2016: First, on March 17, 2016, the European Council, as an institution of the European Union, held a session with representatives of the Member States acting in their capacity as members of the European Council.[25] Second, an international summit took place on March 18, 2016, where representatives of the Member States acted in their capacity as Heads of State or Government.[26] The Court states that the two events were organized in parallel in distinct ways from a legal, formal and organizational perspective, confirming the distinct legal nature of those two events.[27] The second meeting had taken place in the same building as that used for the meetings of the European Council for reasons of costs, security and efficiency.[28] Thus, the Court concluded that neither the European Council nor any other institution of the European Union decided to enter into an agreement with the Turkish government regarding migration,[29] and that it therefore does not have jurisdiction to review the lawfulness of the statement.[30]

The three Court Orders have been appealed to the Court of Justice of the EU,[31] and decisions are still pending. Whether the Court will take a different approach than the General Court remains to be seen.

Further analysis and critique

With view to these three decisions outlining that it was not the EU or any of its institutions acting, the question becomes whether the Member States were competent to act on their own. The instruments and procedures to conduct law- and policy-making within the European Union are laid out in the TFEU. Pursuant to Art. 2(2) TFEU, in areas of shared competences which includes area of freedom, security and justice (Art. 4(2)(j) TFEU), Member States are only allowed to exercise their competence to the extent the European Union has not exercised its competence. Since the European Union has exercised its competence in this specific area, Member States are precluded to enter into an agreement with Turkey on that topic.[32] Some scholars therefore conclude that the Member States had no competence to act in any way on issues covered by the deal.[33] Other scholars state that the EU-Turkey deal constitutes a “new mode of action at the European level”[34] and even called it a “strange legal creature.”[35] The critique is that this crisis-led governance circumvents the democratic and judicial checks and balances laid down in EU treaties.[36] Determining the responsible actors became more difficult with the decisions of the General Court, and that constitutes a serious challenge to the transparence, accountability, and quality of EU decision-making.[37] Furthermore, a crisis should not exempt European Union actors from their obligations, in the end “the legitimacy of the EU project is at stake.”[38]

Practical implications – were the objectives achieved?

            Putting the legal and political controversies aside, the practical effects of the EU-Turkey Statement were immediate: arrivals decreased dramatically from more than 10,000 migrants arriving in a single day in October 2015 to around 43 daily arrivals in March of 2016.[39] The number of deaths in the Aegean decreased from 1,145 in the year before the EU-Turkey Statement to 80 in the following year. Although arrivals sharply decreased after the EU-Turkey deal was implemented, the United Nations refugee agency statistics show that still about 26,000 people made the treacherous journey via the Eastern Mediterranean route between January and September of 2017.[40] With a decrease of arrivals, the total number of deaths also went down. However, critics point out that the number of those who either died or went missing at sea has never fallen below 3,000 per year (this number relates to total deaths in the Mediterranean Sea, not only on the Eastern route).[41] In fact, there are fewer people attempting the journey, but the risks of dying in the Mediterranean have only grown as smuggling networks employ more dangerous routes and methods using smaller, overcrowded vessels that are not seaworthy: In 2015, there was a 1 in 269 chance of dying or going missing at sea for those who crossed the Mediterranean; in 2016, the number increased to a 1 in 71 chance; and 2017, the odds rose to 1 in 55.[42]

Conclusion

While the legality of the EU-Turkey Statement is controversially discussed, it seems to be delivering on its main objectives of reducing the number of migrants arriving irregularly to the EU and the loss of lives in the Aegean. The question remains, however, whether a focus on containing the migration flow is desirable and effective when migration is a far more complex phenomenon.

 

Julia Roberts is Staff Editor with the Denver Journal of International Law and Policy, and a 1LE at University of Denver Sturm College of Law.

______________________________________________________________________________________________________________________________

[1] Elizabeth Collett, The Paradox of the EU-Turkey Refugee Deal, migration policy institute (Mar. 2016), https://www.migrationpolicy.org/news/paradox-eu-turkey-refugee-deal

[2] European Commission, Factsheet EU-Turkey Statement – One year on, Eur. Agenda on Migration – Factsheets (Mar. 17, 2017), https://ec.europa.eu/home-affairs/sites/homeaffairs/files/what-we-do/policies/european-agenda-migration/background-information/eu_turkey_statement_17032017_en.pdf.

[3] Id. The Schengen area is an area between twenty-six European Union countries where boarder checks have largely been eliminated to allow free movement throughout the entire zone.

[4] European Commission Press Release MEMO/15/5860, European Commission – Fact Sheet

EU-Turkey joint action plan (Oc. 15, 2015).

[5] Id.

[6] See generally Narin Idriz, The EU-Turkey Statement or the ‘Refugee Deal’: The Extra-Legal Deal of Extraordinary Times?, 2017-06 Asser Inst. for Int’l & Eur. Law Res. Paper 4-5 (2017).

[7] European Council Press Release 144/16, EU-Turkey statement, 18 March 2016 (Mar. 18, 2016).

[8] Id.

[9] Id.

[10] Kenan Malik, The dark side of the EU-Turkey refugee deal, Al Jazeera Media Network (Mar. 9, 2016), http://www.aljazeera.com/indepth/opinion/2016/03/dark-side-eu-turkey-refugee-deal-160309080433064.html

[11] European Council Press Release 144/16, supra note 7.

[12] Idriz, supra note 6, at 2.

[13] See Idriz, supra note 6 at 6.

[14] European Council Press Release 144/16, supra note 7.

[15] Consolidated Version of the Treaty on the Functioning of the European Union, 2008 O.J. C 115/47 [hereinafter TFEU].

[16] Constanța Mătușescu, Considerations on the Legal Nature and Validity of the EU-Turkey Refugee Deal, IV Int’l J. of L. & Juris. Online Semiann. Publ’n 95 (2016).

[17] Id. at 97.

[18] Id.

[19] Case T-192/16, NF v. European Council, ECLI:EU:T:2017:128 (Feb. 28, 2017); Case T-193/16, NG v. European Council, ECLI:EU:T:2017:129 (Feb. 28, 2017); and Case T-257/16, NM v. European Council, ECLI:EU:T:2017:130 (Feb. 28, 2017).

[20] See, e.g., Case T-192/16, NF v. European Council, ECLI:EU:T:2017:128 at ¶ 73 (Feb. 28, 2017).

[21] See, e.g., Case T-192/16, NF v. European Council, ECLI:EU:T:2017:128 (Feb. 28, 2017).

[22] See, e.g., id. at ¶ 53.

[23] European Council Press Release 144/16, supra note 7.

[24] See, e.g., Case T-192/16, NF v. European Council, ECLI:EU:T:2017:128 at ¶ 49-55 (Feb. 28, 2017).

[25] See, e.g., id. at ¶ 63-64.

[26] See, e.g., id. at ¶ 63.

[27] See, e.g., id. at ¶ 62.

[28] See, e.g., id. at ¶ 63.

[29] See, e.g., id. at ¶ 71.

[30] See, e.g., id. at ¶ 73.

[31] See Idriz, supra note 6 at 14.

[32] Idriz, supra note 6 at 11.

[33] Idriz, supra note 6 at 13.

[34] Mătușescu, supra note 16 at 100.

[35] Sergio Carrera, Leonhard den Hertog & Marco Stefan, It wasn’t me! The Luxemburg Court Orders on the EU-Turkey Refugee Deal, CEPS Policy Insight No. 2017/15, Apr. 2017, at 2.

[36] Mătușescu, supra note 16 at 100.; and Carrera, et al., supra note 35 at 8.

[37] Carrera, et al., supra note 35 at 7.

[38] Id. at 13.

[39] European Commission, supra note 2.

[40] United Nations High Commissioner for Refugees, Desperate Journeys, Update January through September 2017 (Nov. 2017), https://data2.unhcr.org/en/documents/download/60865.

[41] See id.

[42] Priyanka Boghani, The “Human Cost” of The EU’s Response to the Refugee Crisis, Pub. Broad. Serv. (Jan. 23, 2018), https://www.pbs.org/wgbh/frontline/article/the-human-cost-of-the-eus-response-to-the-refugee-crisis/.

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Source: CNBC

Trouble in the Arctic?

Source: CNBC

Source: CNBC

The Arctic, a region that proved elusive to explorers for centuries, is now more important than ever. As ice thaws and the Arctic warms at a rate twice that of the global average,[1] international interest and attention in the region has piqued. The combination of natural resources, potential new trade routes, and strategic interests holds the possibility of shifting international dynamics, for better or worse.

Though relations in the region have been peaceful thus far, the prospect of resource and territorial disputes could turn contentious. In order to avoid conflict in the Arctic, the international community must continue to work as a whole, reaffirming the conventions and treaties that have been largely responsible for facilitation of peace in the region thus far. However, even if the Arctic remains emblematic of accord and international cooperation, continued development of the region may still serve to perpetuate power discrepancies worldwide, as nations with deep pockets buy influence.

This paper will address the increasing importance of the Arctic, beginning with the history of exploration and the role of climate change in current exploration. It will then outline the various international doctrines and agencies responsible for establishing guidelines concerning Arctic governance. Next, primary motivations for exploration will be outlined. These include the presence of natural resources, improved trading opportunities, and advanced strategic interests. The paper will consider the various implications that could result from increased Arctic development, both good and bad. It concludes by presenting policy considerations, arguing for the creation of oversight bodies and inclusive platforms for discussion.

I. The Arctic in Context

A. Historical Background

The Arctic has an extensive exploratory past. By the 16th century, European exploration of the region was well underway.[2] Finding a Northwest Passage that could allow for more efficient trade between Europe and Asia was the driving force behind Arctic exploration.[3] Though expeditions through the Arctic proved dangerous, exploration persisted.[4] By the end of the 19th century, as a result of this continued exploration and warming temperatures, the Northwest Passage was revealed.[5] As polar ice continues to melt, the Northwest Passage and the Arctic itself have become increasingly accessible.

B. The Role of Climate Change

Since 1979, the length of the melt season for Arctic sea ice has grown by 37 days, with ice now beginning to melt 11 days earlier and refreezing 26 days later than it used to, on average.[6] In August 2012, sea ice extent[7] reached its lowest level since satellite observations began in 1979.[8] It is estimated that within the next 25 years, the Arctic will have iceless summers.[9] As the ice continues to thaw at an accelerated rate, access to new trading routes, fishing grounds, and significant deposits of oil, gas, and minerals will become available. The irony of this is that climate change has played an integral role in opening the Arctic up for business opportunities capable of furthering climate change.

II. International Law and the Arctic

Currently, various international conventions and councils determine the ways in which countries interact with one another and the Arctic. The Arctic Council is the preeminent intergovernmental forum used to address Arctic issues.[10] The council is consensus-based and addresses issues pertaining to sustainable development, the environment, and scientific cooperation in the Arctic Region.[11] It is comprised of 14 members who possess Arctic territory: Canada, Russia, Denmark, Norway, the U.S., Sweden, Finland, Iceland, and six permanent groups that represent the indigenous peoples of the Arctic.[12] States and entities that lack Arctic territory but have interests in the region are able to gain a limited observer status within the council.[13]

The United Nations Convention on the Law of the Sea (UNCLOS) is also important in providing a framework for Arctic relations.[14] UNCLOS is an international agreement, which 167 parties have signed onto.[15] It establishes guidelines and a “legal framework within which all activities in the oceans and seas must be carried out.”[16] While the U.S. recognizes UNCLOS as customary international law, it is not a party to the convention.[17]

In addition to the Arctic Council and UNCLOS, there are various other sources that contribute to the framework of governance in the Arctic Region, including the Svalbard Treaty, the North Atlantic Coastguard Forum, and the Conference of the Parliamentarians of the Arctic Region.[18] Each addresses maritime relations or the development of the Arctic more specifically.[19]

III. Why is Exploring the Arctic So Important?

A. Natural Resources

The abundance of natural resources is a primary factor contributing to increased international interest in the region. It is estimated that as much as 30% of the world’s undiscovered gas and 13% of the world’s undiscovered oil is located in the Arctic Circle.[20] UNCLOS gives members exclusive rights to natural resources found within 200 miles of their coastlines.[21] If a country wishes to make any additional claims that fall outside of this 200-mile demarcation, they must prove the seabed is physically connected to their country, thereby ensuring that the only nations able to extract Arctic resources are those who possess Arctic territory.[22] In this way, UNCLOS plays a role in limiting potential resource exploitation. However, because UNCLOS grants exclusive rights to the member states, member states are fairly unrestricted in the ways they can develop their Arctic territory, potentially creating room for harmful environmental practices. Many Arctic countries have begun planning initiatives relating to natural resource exploration, and Russia leads with the proposal of nearly 250 potential Arctic projects.[23]

Although non-Arctic countries are prevented from physically claiming territory in the region, countries with deep pockets and ambition can assert influence in other ways. China’s ambition is being pursued in exactly this way, as the nation finances Arctic scientific research, projects, and negotiating free-trade agreements with Arctic countries.[24] The problem is that much of the world lacks the capital to fund Arctic development in the way China has begun to. This prevents many nations from asserting any influence in the region, despite the ways in which such development will impact the global environment and economy.

B. New Trade Routes

The prospect of shorter shipping routes is key to understanding the increase in Arctic interest, largely because of the effect such routes would have on global trade. The Arctic could provide faster and more direct routes between Asia, Europe, and America.[25] Three trading routes are key to this prospect: the Transpolar Sea Route, the Northwest Passage, and the Northern Sea Route.[26] While each of these routes is only accessible seasonally without the use of an icebreaker,[27] the rapidly changing climate in the Arctic means it is only a matter of time until the routes become viable for longer periods. Most recently, on January 26, 2018, China announced its intention to work cooperatively with other nations to develop shipping routes through the Arctic.[28] China vocalized the importance of ensuring that every country has rights to use the potential shipping routes.[29]

C. Strategic Positioning

A third reason for the increased interest in the region is the potential for utilizing Arctic terrain as a means of advancing strategic interests. As a result of escalating anxieties with Russia, Finland is currently considering joining NATO[30] and in 2017 Sweden reintroduced a military draft.[31] This increasing tension and the possibility that Russia could become surrounded by NATO member nations is one potential explanation for Russia’s involvement in Arctic activities. Russia is a unique state, possessing an Arctic border that spans a whopping 4,000 miles.[32] Russia could be playing defensive geopolitics in the Arctic, rather than offensive in an attempt to protect its borders. Likewise, U.S. Arctic strategy could be a prioritization of the same goals. In January 2017, Defense Secretary James Mattis described the Arctic as “key strategic terrain,” encouraging the development of a comprehensive strategy, especially in light of Russia’s increased activity in the region.[33]

IV. The Future of Arctic Impact on the Globe

The effect that Arctic development will have on the future of international relations is anything but clear. The multiple motivations for getting involved in the region contribute to a plentitude of potential outcomes.

A. The Good

The best-case scenario is that future relations in the Arctic remain emblematic of peaceful international cooperation, largely as they are now. The possibility of nations working together to further develop efficient Arctic trade routes could help facilitate unprecedented international partnership. This could help improve diplomatic relations and further the advancement of the global economy.

B. The Bad

The worst-case scenario is that Arctic development contributes to escalating global tensions. The fast-paced nature of today’s world leaves room for dramatic shifts in international relations to occur overnight. As countries assert territorial claims and extract natural resources, nations’ interests may run counter to each other. This type of contention has already presented itself. Take the Northwest Passage, for example. Canada claims the passage constitutes internal waters, while the U.S. asserts the water is an international strait.[34] Beyond just internal disputes, the amount of natural resources available in the Arctic region may lead to resource extraction that further denigrates the environment at the will of a small handful of countries. An increased volume of shipping through new passages and pipeline installation for oil extraction will increase the likelihood of accidents and spills.[35] The possibility for this outcome is only further exacerbated by the remoteness of the region, potentially preventing adequate monitoring of economic and geopolitical activity.

Perhaps most concerning is the fact that, even under the most optimal outcomes, conversations concerning the future of the Arctic center on only a few global players. Huge portions of the world will find themselves unable to participate or compete in this new emerging market. Lacking an authoritative voice in this debate, many nations will not have their interests adequately represented in a region that will certainly affect the world as a whole. In this way, the future of the Arctic will unavoidably contribute to even more obvious and detrimental global power imbalances. This limiting nature of the Arctic is a problem, as nations with Arctic territory and nations with big money are the only ones able to claim a stake in the region. In this way, the Arctic may play a crucial role in cementing harmful power dynamics, speaking loudly to the aphorism, “the rich get richer and the poor get poorer.”

C. What Now?

There is an opportunity to develop additional policy and law that address Arctic development and promotes positive outcomes for the global community. For one, Arctic Council members should explore the possibility of creating a watchdog body for the council, tasked with observing and monitoring action in the region in order to spot harmful activity. Additionally, the formation of such a body could play a beneficial role in facilitating constructive relationships and alleviating tensions among member states.

The international community should also work more purposefully at taking into consideration the voices and concerns of non-Arctic nations, lacking the ability to assert monetary or political influence in the region, yet likely to be impacted by Arctic development. One potential way of accomplishing this would be to work within the confines of UNCLOS by creating a separate committee represented by UNCLOS member states. This would provide a platform for discussion, where member states could express their concerns with Arctic development and articulate changes they would like to see. Because so many countries have signed onto UNCLOS, working within its constraints is an efficient way to have the voices of many nations heard and potentially propel future policy initiatives that are more reflective of all member states.

V. Conclusion

The Arctic is a dynamic region of critical importance. It has the potential to affect both the present and future of the globe, in positive and negative ways. The combination of regional exploration and climate change has culminated in the high stakes environment we see today—one where the prospect of abundant natural resources, more efficient trading routes, and the ability to advance strategic goals has piqued the interests of many. In continuing to develop the Arctic, measures should be taken to guarantee that the environment and international relations are supported. In order to ensure future international cooperation and inclusion of all concerned, the Arctic must be developed in strategic and tempered ways.

Payton Martinez is a Staff Editor with the Denver Journal of International Law & Policy, and a 1L at the Sturm College of Law.

___________________________________________________________________________________________________________________

[1] Tim Koivurova, The Dialectic of Understanding Progress in Arctic Governance, 22 Mich. St.  Int’l L. Rev. 1, 1-21 (2013).

[2] Woods Hole Oceanographic Inst., The Arctic: Exploration Timeline, Polar Discovery (2006), http://polardiscovery.whoi.edu/arctic/1594.html.

[3] Id.

[4] Greg Miller, These Maps Show the Epic Quest for a Northwest Passage, Nat’l Geographic (Oct. 20, 2016), https://news.nationalgeographic.com/2016/10/northwest-passage-map-history/.

[5] Id.

[6] Climate Change Indicators: Arctic Sea Ice, U.S. Env’t Prot. Agency (2016), https://www.epa.gov/climate-indicators/climate-change-indicators-arctic-sea-ice.

[7] See generally Nat’l Snow & Ice Data Center, https://nsidc.org/cryosphere/quickfacts/seaice.html (last visited Jan. 27, 2018) (defining extent as a measurement of the area of ocean where there is at least some sea ice).

[8] Nat’l Snow & Ice Data Center, http://nsidc.org/arcticseaicenews/2012/09/arctic-sea-ice-extent-settles-at-record-seasonal-minimum/ (last visited Jan. 27, 2018)

[9] Eric Roston, How a Melting Arctic Changes Everything, Bloomberg (Dec. 29, 2017), https://www.bloomberg.com/graphics/2017-arctic/the-economic-arctic/.

[10] Evan Bloom, Establishment of the Arctic Council, 93 Am. J. Int’l Law 712, 712 (1999), https://2009-2017.state.gov/documents/organization/212368.pdf.

[11] Id.

[12] Id.

[13] Joseph F.C. DiMento, Environmental Governance of the Arctic: Law, Effect, Now Implementation, 6 U.C. Irvine L. Rev. 23, 23-60 (2016).

[14] See generally U.N. Convention on the Law of the Sea, opened for signature Dec. 10, 1982, 1833 U.N.T.S. 397 (entered into force Nov. 16, 1994), available at http://treaties.un.org/doc/publication/UNTS/Volume%201833/v1833.pdf.

[15] The U.N., United Nations Convention on the Law of the Sea, Sustainable Development Knowledge Platform – the United Nations, https://sustainabledevelopment.un.org/topics/oceans/unclos (last visited Jan. 27, 2018).

[16] Id.

[17] DiMento, supra note 13, at 33.

[18] Id. at 42.

[19] Id. at 42-44.

[20] Donald L. Gautier et al., Assessment of Undiscovered Oil and Gas in the Arctic, 324 Science 1175, 1175-79 (2009).

[21] Koivurova, supra note 1, at 11.

[22] Id.

[23] Roston, supra note 9.

[24] Id.

[25] China to Develop Arctic Shipping Routes Opened Up by Global Warming, BBC News (Jan. 26 2018), http://www.bbc.com/news/world-asia-china-42833178 [hereinafter China to Develop Arctic].

[26] Shane C. Tayloe, Projecting Power In The Arctic: The Russian Scramble for Energy, Power, and Prestige In The High North, 8 Pepperdine Pol’y Rev. 1, 1-19 (2015).

[27] Id. at 8.

[28] China to Develop Arctic, supra note 25.

[29] Id.

[30] Reid Standish, Wary of Russia, Finns take another look at NATO, Politico (Oct. 30, 2017), https://www.politico.eu/article/finland-russia-nato-wary-finns-take-another-look/.

[31] Colin Dwyer, Sweden Brings Back the Draft, Alarmed by Russian Activities, NPR (Mar. 2, 2017), https://www.npr.org/sections/thetwo-way/2017/03/02/518116191/sweden-brings-back-the-draft-alarmed-by-russian-activities.

[32] Tayloe, supra note 26 at 6.

[33] Paul Watson, A Melting Arctic Could Spark a New Cold War, Time (May 12, 2017) http://time.com/4773238/russia-cold-war-united-states-artic-donald-trump-barack-obama-vladimir-putin/.

[34]William Y. Kim, Global Warming Heats up the American-Canadian Relationship: Resolving the Status of the Northwest Passage under International Law, 38 Canada-U.S. L.J. 168 (2013).

[35] DiMento, supra note 13, at 26.

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Booming startup tech sector in Palestine provides hope for future industry success.
Source: The Technews

Investment Mechanisms Driving the Tech Startup Boom in Palestine

Booming startup tech sector in Palestine provides hope for future industry success. Source: The Technews

Booming startup tech sector in Palestine provides hope for future industry success.
Source: The Technews

Despite the ongoing Israeli military occupation, Palestinian technology startups have flourished in recent years, providing a glimpse of an independent economy and overall improved quality of life for Palestinians. While more traditional forms of industry—such as textiles, agriculture, and manufacturing—have failed under the obstacles of the occupation, the tech sector is uniquely poised to transcend physical barriers like strict import restrictions and lengthy export delays. With just a laptop and an internet connection, Palestinian startups are able to thrive in the international economy and valuably contribute to global tech development. A host of individuals and entities have invested in Palestinian tech startups over the last two decades and new investors continue to grow by the day. Below, we will examine just a few of the venture capital funds and tech incubators that are making a positive impact in the Palestinian economy.

The Palestinian startup boom is due, in large part, to a carefully cultivated, Silicon Valley-esque ecosystem of startup incubators and accelerators, venture capitalist funds, and seasoned business owners and mentors. In the West Bank, many startups have received their initial funding from private investment funds like Sadara Ventures and the IbPreviewtikar Fund. These venture capital funds are exceptionally effective in impacting tech in the region because many of their managers and investors are Palestinian, or of Palestinian descent. These individuals are representative of the greater VMCE_V9 return of the Palestinian diaspora, often Western-educated and trained in buzzing tech cities around the world. Upon returning, these Palestinians bring with them the desire to improve Palestinian quality of life and the requisite skillset to do so.

Sadara Ventures, for instance, seeks to “build the first wave of world-class, high-growth, tech companies in Palestine.” In 2011, Palestinian software innovator Saed Nashef established Sadara Ventures and secured startup funding from financers that include George Soros, Google, Cisco, and the European Investment Bank of the EU. Nashef and his partner, Israeli businessman Yadin Kauffman, founded Sadara to capture the “promise for investment and growth” in the Palestinian tech market. Before creating Sadara, Nashef spent almost twenty years working at Microsoft and other tech companies in the United States Pacific Northwest. When he returned to Palestine, Nashef was able to use the entrepreneurial skills acquired in the U.S. and leverage his Silicon Valley contacts to jump start Sadara Ventures. To date, the fund supports six highly successful Palestinian startups that operate in an array of industries, from freight shipping to healthcare to travel.

Incubators and accelerators are another source driving Palestine’s startup tech sector forward. Palestine’s Information and Communications Technology Incubator (PICTI), for example, receives funding from private investment, crowdfunding, and foreign government aid such as USAID and the EU. It is the express mission of this non-profit incubator to “improve the economic situation in Palestine” and “support Palestinians in becoming active participants at the global level.” This clear purpose and directive sets PICTI and other Palestinian incubators apart from the many profit-driven incubators of Silicon Valley.

The tech startup wave has also reached the Gaza Strip. Founded in partnership with Google and the international NGO Mercy Corps, Gaza Sky Geeks is the leading incubator, accelerator, educator, and mentor for tech startups in the territory. It regularly hosts startup weekends and programs in business education for Palestinian businesses. These events regularly attract mentors from around the world to support Gazan entrepreneurs. In addition to supporting the Gazan startup community, Gaza Sky Geeks must of course cope with operating a business under the Israeli occupation. One salient example of this was the incubator’s crowdfunding campaign to purchase an independent electricity generator. The generator was necessary to offset “Gaza’s most severe energy shortage to date,” and keep the incubator’s doors open despite frequent and lengthy power outages that consume the area.

Most investors are well-aware of the uncertainties associated with investing in Palestinian tech startups. Operating a startup under the occupation is risky because, among other things, there is an ever-present threat of Israeli military engagement. Despite—and in spite of—the occupation, investing in the Palestinian tech sector is a worthy effort. There are many indicators that suggest the Palestinian labor force is primed for success in a tech startup economy. Palestinian universities turn out an estimated 2,000 Information Technology graduates each year and demographics reveal that 56.7% of the Palestinian population is “working age.” Without opportunity for participation in traditional economic activities, these well-educated youths are already leading the tech sector forward in Palestine. This, combined with the returning Palestinian diaspora with tech backgrounds and capital to invest, will certainly continue to propel the tech startup industry in Palestine.

The growth of Palestine’s technology sector is not without opposition as some Palestinians consider the growing startup tech sector be an action of normalization. Within the context of the Israeli-Palestinian conflict, “normalization” essentially refers to the acceptance of activities that deviate from the larger Palestinian struggle for self-rule and independence. By investing in a new economic sector, tech startups normalize Palestinian life under the occupation. Although this argument may have merit, poverty and unemployment rates persist at levels above the global average and the economy is in desperate need of innovative revitalization. Through the tech startup sector, Palestinians can participate in the global economy and propel their “desire to see Palestine prosper, to rise above stereotypes and to project 810-403 a positive image.”

Rachel Ronca is a third-year dual degree student (J.D. and LL.M. in International Business Transactions) at the University of Denver Sturm College of Law. She is the Senior Managing Editor for Volume 46 of the Denver Journal of International Law and Policy.

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Capture

Boko Haram Attacks Again: 110 Girls Missing

CaptureOn the night of February 19, 2018, armed members of Boko Haram stormed the grounds of Dapchi Government Girls Science and Technology College, a school of 900, in Yobe state, northeast Nigeria. The armed intruders surrounded the school and began to fire their weapons causing girls to run in all directions. While shooting rang out from all over, a number of vehicles, painted in military colors, began to enter the college campus and men in military uniforms attempted to persuade girls to get in their vehicles. An eyewitness remembered the men shouting: “Stop, stop! We are not Boko Haram! We are soldiers, get into our vehicles. We will save you.” This was the latest attack by Boko Haram, a militant group who abducted 276 schoolgirls from Chibok in 2014.

Eyewitnesses state that the “attackers arrived in pickup trucks under cover of darkness, wearing military uniforms and firing guns, pretending to be Nigerian soldiers and taking the schoolgirls into their confidence, then herding them onto vehicles and carrying them away.” During this attack, the militant group abducted 110 girls from the school between the ages of 11 and 19. However, some girls were suspicious of the men because their attire and actions were not in compliance with the Nigerian military and ran for safety and cover. Some of these individuals scaled a wall and escaped into the nearby bush. For those girls who were captured, they quickly realized they had been deceived. As Boko Haram drove out of the area with the girls, they passed vigilantes who could do nothing to stop them. One eyewitness described the scene: “The girls were shouting and crying, ‘Please help us! Save us’. The Boko Haram men had whips in their hands, flogging the girls. They said: Keep quiet, you stupid things.’”

The next day, February 20, 2018, parents went to the school in efforts to find survivors of the attack as well as account for the missing. While majority of the girls were found and are safe, 110 girls have been displaced from their families. Now, the families of those 110 girls must wait and hope that their 070-464 missing daughters will be returned safely. Since this attack, the Nigerian President Muhammadu Buhari has increased military presence around schools and deployed aircrafts to help in an aerial search for the missing girls. However, these attacks have caused some parents to reconsider enrolling their children in government colleges. Kachallah Bukur, a parent of one of the girls missing, stated “[i]f there had been enough security, this will not be happened” and that he will find his other daughters new schools with proper security to attend.

Dapchi is a predominantly Muslim town. Alhaji Kachalla Yoroma, the emir in the village of Dapchi, condemned the actions of Boko Haram, whose name translates to “education forbidden”, by stating: “Islam means peace. We are living for 070-243 peace. Abducting children and killing innocent people and burning houses – this is haram. What they do is haram.” Though the Nigerian government has claimed that Boko Haram is technically defeated, experts say the group is working to professionalize its kidnapping operation. Over the years, Boko Haram has displaced almost 2 million people, killed more than 20,000 people, and abducted thousands of boys, girls, men, and women. Thus, if Boko Haram is truly working to professionalize its kidnapping operation, the world must do more and help Nigeria extinguish this threat to its community.

Quiwana N. Chaney is a 3L at the University of Denver – Sturm College of Law. She currently serves as the Editor-in-Chief of Denver Journal of International Law and Policy and Online Editor of Denver Law Review.

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Photo Credit: Dr. Kevin E. Trenberth

The Science Behind Climate Change and Extreme Weather Events

Photo Credit: Dr. Kevin E. Trenberth

Photo Credit: Dr. Kevin E. Trenberth

The environment in which all storms form has changed owing to human activities.”

– Dr. Kevin E. Trenberth, Distinguished Senior Scientist

What is the science behind climate change? What explains Category 5 hurricanes? Dr. Kevin E. Trenberth, Distinguished Senior Scientist in the Climate Analysis Section at the National Center for Atmospheric Research (NCAR), offered his perspective on these questions in his recent talk at the University of Denver Sturm College of Law.[1]

Dr. Trenberth obtained his Sc. D. in meteorology in 1972 from the Massachusetts Institute of Technology.[2] He was a lead author of the 1995, 2001 and 2007 Scientific Assessment of Climate Change reports from the Intergovernmental Panel on Climate Change (IPCC), and shared the 2007 Nobel Peace Prize, which went to the IPCC.[3]

The World Meteorological Organization (WMO) and the United Nations Environment Program (UNEP) established the IPCC in 1988.[4] The IPCC’s principal function is to provide policymakers with scientific bases for climate change, as well options for adaptation and mitigation.[5] Hundreds of experts contribute to the information needed to understand climate change in the IPCC reports.[6] The IPCC’s reports underlie negotiations under the United Nations Framework Convention on Climate Change (UNFCCC).[7] The Conference of the Parties (COP) meets annually to review the UNFCCC’s implementation and to adopt instruments ensuring its effective implementation.[8]

Dr. Trenberth acknowledges that the data on changes in the climate are of 700-802 mixed quality and length.[9] However, taken together, the data tells a compelling story about the extent of the human role in climate change.[10] Today, research on climate change demonstrates that 97 percent of “actively publishing climate scientists agree: Climate-warming trends over the past century are extremely likely due to human activities.”[11]

 Observable Changes in Climate

What have observed in terms of climate change since the Industrial Revolution? There is an increase in carbon dioxide and in the planet’s temperature.[12] Glaciers are melting and sea levels are rising.[13] Artic sea ice areas are decreasing, with 2012 as the lowest on record, which is denoted in the lowest point in the graph by NCAR below.[14]

The National Aeronautics and Space Administration (NASA) takes satellite images of artic sea ice.[15] According to their animated time series, the 2017 photograph below reveals less artic sea ice than the1979 photograph.[16] Further, according to the most recent IPCC report in 2014, “Human influence on the climate system is clear, and recent 70-246 anthropogenic emissions of greenhouse gases are the highest in history. Recent climate changes have had widespread impacts on human and natural systems.”[17]

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Measures

 Scientists use observations and theoretical models to understand changes in the climate. Key observable measures include the Global Surface Temperature and Ocean Heat Content. In the following sections, these measures are defined and analyzed.

Global Surface Temperature

According to the National Oceanic and Atmospheric Administration (NOAA), a temperature anomaly signifies a departure from a specific reference value.[18] Reference values allow for a more accurate representation of temperature patterns within regions.[19] A positive anomaly indicates an observed temperature warmer than that reference value.[20] A negative anomaly reflects an observed temperature cooler than that reference value.[21] The global temperature anomaly provides a measure based on average global temperatures compared to a specified reference value.[22] The global surface temperature is based on land surface and sea surface temperatures.[23]

If you look at the graph below, this measure reveals an overall upward trend (see black line across the graph) with 2016 as the warmest year on record.[24] In 2016, there was a 1.2 degrees Celsius rise above pre-industrial levels.[25] The international community set a goal through the Paris Agreement (2015) to keep the global mean surface temperature increase below two degrees Celsius above pre-industrial levels and to limit the temperature increase even further to 1.5 degrees Celsius.[26] Government policies and actions must be directed at maintaining the global surface temperature to reach the Paris goal.[27]

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Ocean Heat Content

The Earth’s energy imbalance drives the ongoing global warming and can best be assessed from changes in Ocean Heat Content.[28] Ocean Heat Content measures the heat stored in the ocean. It is measured from the surface of the ocean to 700m, which reflects the 1967 to 2002 measures, and from the surface to 2000m, which reflects 2003 to present.[29] If the ocean absorbs more heat than it releases, the Ocean Heat Content increases. According the graph below, the ocean heat content has been increasing since the 1990s, with 2017 as the warmest year on record.[30]

Further, natural variability is the element of uncertainty in climate changes within a certain range because the components of the climate are never in perfect equilibrium.[31] Climate scientists are therefore interested in deviations from that natural variability to explain other causes of climate change. Natural variability, according to Dr. Trenberth, is a lot less for Ocean Heat Content than for global mean surface temperature.[32]

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Climate Models

 In addition to the measures above, climate scientists can run models to assess differences in global surface temperature in the absence of an increase of carbon dioxide in the atmosphere.[33] For Dr. Trenberth, these models demonstrate that around the 1960s and 1970s, global warming emerged from the noise of natural variability.[34]

Extreme Weather Events

What explains hurricanes such as Harvey, Irma, and Maria? Hurricanes are natural, but they are intensified because of changes in the climate.[35] According to Dr. Trenberth, hurricanes feed off the sea temperatures.[36] When the ocean warms, water from the surface of the ocean then evaporates to cool the ocean, adding warm moist air, or vapor, into the atmosphere.[37] Rising air condenses the water vapor, which produces strong updrafts, drawing in more air.[38] The updraft creates clouds that lead to thunderstorms.[39] Then air spirals into the thunderstorm at the bottom and then out at the top.[40] The storm strengthens and strong surface winds increase evaporation, rainfall, and energy into the storm.[41]

For Dr. Trenberth, the increase in Ocean Heat Content results in evaporative cooling, which releases additional moisture into the atmosphere.[42] That moisture results in heavy rain that releases latent heat.[43] That heat is redistributed by winds and can radiate.[44] The moisture from an evaporating ocean gives fuel to hurricanes, creating an extreme weather event.[45] For example, if we look at Hurricane Harvey, the total rainfall, which was 140.7 mm, or 4.65´1020 J of latent energy in rainfall, matches the amount of Ocean Heat Content lost after the hurricane.[46] Therefore, Dr. Trenberth determined that if the Ocean Heat Content had been less, then rainfall would have been less.[47]

Dr. Trenberth’s Conclusions & Recommendations

Dr. Trenberth emphasizes that human activities are the dominant cause of the observed warming of the Earth.[48] Accordingly, he suggests that there is likely a human fingerprint on the extreme nature of recent hurricanes.[49] Hurricane Harvey caused approximately 30 billion USD in damages (insured and uninsured losses)[50], Hurricane Irma caused approximately 50 billion USD in damages (insured and uninsured losses)[51], and Hurricane Maria exceeded 63 billion USD damages (estimate for insured losses only).[52]

Dr. Trenberth recommends that to avoid the costs of hurricanes, we should: stop building in flood plains, adhere to strict building codes, manage drainage systems, plan evacuation routes, and plan emergency shelters.[53] He also stresses that while we do need mitigation and adaptation strategies to respond to climate change, we also need information.[54]

Read more on Dr. Trenberth’s work here: http://www.cgd.ucar.edu/staff/trenbert/#research.

Meera Nayak is a Staff Editor with the Denver Journal of International Law & Policy, and a 2L at the Sturm College of Law.

_________________________________________________________________________________________________________________

[1] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[2] http://www.cgd.ucar.edu/staff/trenbert/#research

[3] http://www.cgd.ucar.edu/staff/trenbert/#research

[4] http://www.ipcc.ch/

[5] http://www.ipcc.ch/

[6] http://www.ipcc.ch/

[7] http://www.ipcc.ch/

[8] http://unfccc.int/bodies/body/6383.php

[9] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[10] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[11] https://climate.nasa.gov/scientific-consensus/#*

[12] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[13] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[14] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[15] https://climate.nasa.gov/vital-signs/arctic-sea-ice/

[16] https://climate.nasa.gov/vital-signs/arctic-sea-ice/

[17] https://www.ipcc.ch/pdf/assessment-report/ar5/syr/AR5_SYR_FINAL_SPM.pdf

[18] https://www.ncdc.noaa.gov/monitoring-references/faq/anomalies.php

[19] https://www.ncdc.noaa.gov/monitoring-references/faq/anomalies.php

[20] https://www.ncdc.noaa.gov/monitoring-references/faq/anomalies.php

[21] https://www.ncdc.noaa.gov/monitoring-references/faq/anomalies.php

[22] https://www.ncdc.noaa.gov/monitoring-references/faq/anomalies.php

[23] https://www.ncdc.noaa.gov/monitoring-references/faq/anomalies.php

[24] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[25] https://www.ncdc.noaa.gov/cag/global/time-series/globe/land_ocean/ytd/12/1880-2017

[26] http://unfccc.int/paris_agreement/items/9485.php; https://public.wmo.int/en/media/press-release/provisional-wmo-statement-status-of-global-climate-2016

[27] http://climateactiontracker.org/

[28] http://advances.sciencemag.org/content/3/3/e1601545.full

[29] https://www.ncdc.noaa.gov/cdr/oceanic/ocean-heat-content

[30] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[31] https://www.ipcc.ch/ipccreports/tar/wg1/042.htm

[32] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[33] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[34] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[35] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[36] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[37] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[38] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[39] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[40] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[41] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[42] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[43] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[44] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[45] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[46] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[47] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[48] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[49] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[50] http://www.bbc.com/news/business-41075704

[51] https://www.reuters.com/article/us-hurricane-irma-corelogic/corelogic-estimates-hurricane-irma-property-damage-at-42-5-65-billion-idUSKCN1BU28T

[52] https://www.wsj.com/articles/hurricane-maria-caused-as-much-as-85-billion-in-insured-losses-air-worldwide-says-1506371305

[53] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

[54] http://www.cgd.ucar.edu/staff/trenbert/Presentations/Trenberth_Steamboat_Jan18.min.pdf

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images

The Franco Zone: Colonial Tax or Stabilizing Unity?

Photo Credit: nsnbc international

“Without Africa, France will slide down into the rank of a third [world] power.” Former French President, Jacques Chirac, commented in 2008 on the close relationship and reliance France has on her former colonies. After World War II, France was quickly losing power over several former colonies in Africa and it appeared more bloodshed and destruction was imminent. In an effort to prevent war, and under pressure from the international community, France entered into a series of cooperative agreements known as the Colonial Pact with the nations of Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, Togo, Cameroon, Central African Republic, Chad, Congo-Brazzaville, Equatorial Guinea, and Gabon. These bilateral treaties between France and each former colony granted the nations independence and freedom in exchange for organizing their nation along several guidelines. The conditions included topics such as staffing government personnel, higher education, military policies, and a monetary framework. On its face, it appeared France was making a benevolent effort to give millions of people theirwww.itexamfun.com freedom without any war or bloodshed. However, in recent years, these agreements have sparked controversy as some scholars believe they operate as a legal colonial tax, while others advocate that the centralized banks have helped stabilize some of these nations’ economies.

Many scholars believe these agreements are antiquated and hold the nations to monetary policies that prohibit real growth and economic independence. The most controversial condition found in the agreements is the continuation of the Communuate Financiere de la Afrique (CFA) currency and the utilization of the Bank of Issue. An example of this provision is found in Article 21 of The Agreement for Co-operation in Economic, Monetary, a Financial Matters between France and Dahomey, stating :

“Convertibility between the CFA Franc and the French Franc shall be unrestricted and guaranteed by the opening of a working account in the name of the Bank of Issue to be registered 70-342 with the French Treasury.”

Furthermore, under this agreement, each country was required to remain a member of the West African Economic and Monetary Union (WAEMU) or the Central African Economic and Monetary Community (CEMAC). The French treaty with Dahomey, mentioned above, further demonstrates this: “The Republic of Dahomey affirms its intention to remain a member of the West African Monetary Union, which has a Joint Bank at Issue.”

Under these stipulations, each country concedes to the continued use of a central “Bank of Issue” which will house over 80% of each nation’s foreign exchange reserve in an “operations account” completely controlled by the French Treasury. This increases the French Federal Reserve by approximately 500 billion dollars. From this account, France can withdraw funds to ‘repay’ itself for the development and improvements it made to the nations during colonization. Furthermore, the agreements lend France a priority option to purchase any raw materials after the country’s consumption, forced these nations to declare French as the national language, required the nations buy all military equipment from France, and allowed French businesses to maintain monopolies.

Some scholars believe that the continuation of the CFA and the WAMU and CEMAC organizations contribute to the stabilization of the Franco Zone. These proponents believe that the CFA Franc is a credible and stable currency which is necessary for the Franco Zone nations to achieve economic and political consistency. By having the majority of each nation’s foreign exchange reserve kept in the French Treasury, France is essentially backing the currency and advocating its credibility. However, this argument is easily defeated as many nations have left the Franco Zone and found much greater economic success with its own currency, such as Morocco.

Though this brief article highlights France’s beneficial relationship to its former colonies, colonization remains a current issue in the international community. Today, there are still 17 non-self-governing territories and many nations, including The United Kingdom and The United States, are being confronted about their control of territories and exploitation of people groups who have the universal human right to self-determination. The international community should work with both sides of colonization to determine the best financial and economic policies suited for each nation in the process of establishing self-determination.

 

Mallory Miller is a Staff Editor with the Denver Journal of International Law & Policy, and a 1L at the Sturm College of Law.

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Sheets Article Photo

The Principle of Non-Refoulement: The Legality of Refugee Caps Amidst Record High Migration Rates

Photo Credit: Steve Evans

This article will discuss the illegality of refugee caps under international law. The first section will discuss the binding customary principles of non-refoulement and the right to seek asylum. The second section uses the United States’ and Austria’s attempt to cap refugees to explore the inconsistency of refugee caps in international law, while the third section will argue why a plain-language reading of the principle of non-refoulement is unreasonable. Finally, this paper explains that working together provides a way for countries to find relief from the burden of mass migration.

Introduction

The number of those forced to flee their homes each year is on the rise. The number of forcibly displaced persons in the world was at a record high of 65.6 million people in 2016, including approximately 22.5 million refugees and 2.8 million asylum seekers.[1] Of those,

552,200 people were returned to their homes, often in dangerous conditions, while countries admitted only 189,300 for resettlement.[2] Developing countries have the highest migration rates, but also overwhelmingly bear the burden of accepting migrants. In 2016, the top six countries hosting the highest number of refugees are all developing countries.[3] Turkey hosted the highest number for the third year in a row at 2.9 million, while Lebanon had the highest number of refugees relative to its population with one refugee for every six people.[4]

Developed countries, however, remain reluctant to receive refugees. Responses to the growing number of migrants and refugees are alarming. Many countries are responding to the crisis by placing caps on the number of refugees allowed into the country on any given day, month, or year. President Trump’s “travel ban” not only limited who could enter the U.S., but also capped the number of refugees it would allow to enter the country at 50,000 for the year 2017.[5] Equally controversial, in 2016, Austria announced it would place a cap on the number of refugees allowed to apply for asylum or pass through the country each day.[6] Though the European Union warned Austria that the cap would violate international law, Austria only cancelled their plan to cap refugees because the number of refugees decreased.[7]

The legality of these actions is questionable. The United States’ Ninth Circuit Court of Appeals recently ruled that there was no justification for the Executive Order’s cap on refugees, holding that allowing more than 50,000 refugees would not be detrimental to the United States, a precondition for capping refugee numbers.[8] The European Commission criticized Austria, claiming that it had an obligation to accept refugees and to do otherwise would violate the Geneva Convention.[9] Countries do in fact have obligations to refugees under international law and refugee caps appear to contradict those obligations. However, with on-going wars, terrorism, and climate change, as well as the steadily increasing number of migrants, countries will continue to attempt to implement measures like refugee caps, as the “migrant crisis” is unlikely to go away anytime soon.

A country’s obligations to refugees under international law

The most important instrument regarding refugees under international law is the 1951 Convention on the Status of Refugees.[10] One of the fundamental principles laid out by the Refugee Convention is the principle of non-refoulement, stating that no country may “expel or return. . . a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion.”[11] The principle of non-refoulement is customary international law, meaning even those states which are not parties to the Refugee Convention, or its 1967 Protocol,[12] are obligated to abide by the principle.[13] The principle of non-refoulement is also non-derogable, meaning that there 1V0-603 are no exceptions where a state may refuse to comply with the principle.[14]

In addition to non-refoulement, there is also a right to seek asylum.[15] In 1948, the United Nations General Assembly, which later laid the basis for the Refugee Convention, explicitly recognized a right to seek asylum in the Universal Declaration of Human Rights.[16] Article 13(2) states that “everyone has the right to leave any country, including his own, and to return to his country,” while article 14 states that “everyone has the right to seek and to enjoy in other countries asylum from persecution.”[17] Additionally, the International Covenant on Civil and Political Rights (ICCPR), supports these principles, and dictates that all persons have the right to leave his or her own country.[18] The UNHCR has also declared a right to asylum, attaching it to the “fundamental principle of non-refoulement [which] should be maintained at all times.” [19]

The U.S. and Austria’s justifications for capping refugees are inconsistent with international law

President Trump’s Executive Order cites national security as a reason for capping the number of refugees allowed into the United States at 50,000 per year, stating that “the entry of more than 50,000 refugees in fiscal year 2017 would be detrimental to the interests of the United States, and thus [I will] suspend any entries in excess of that number until such time as I determine that additional entries would be in the national interest.”[20] Similarly, Austria justified 1Z0-804 its plan to cap the number of refugees filing asylum claims at the border at 80 per day, and those travelling through Austria to Germany at 3,200 per day, claiming that it was unfair to require Austria to take on more refugees and that it was “unthinkable” that Austria alone should be responsible for the refugees.[21] Further, the countries also claim that they are not in violation of the principle of non-refoulement, arguing that the principle only applies to those already in the country. For example, in Sale v. Haitian Centeres Council, Inc., the United States Supreme Court held that by intercepting Haitian refugees at sea and retuning them to Haiti, the United States was not in violation of the principle of non-refoulement because the principle only applied to “those aliens physically present in the host country.”[22]

However, as a whole, the international community disagrees with this assessment. While the Refugee Convention allows states to suspend certain rights of refugees in very rare cases, this exception only applies “in time of war or other grave and exceptional circumstances.”[23] This exception does not include economic concerns, concerns over public order, or national security.[24]

Further, there is criticism of the idea that refugees are only protected when physically in a country.[25] The principle of non-refoulement today is generally understood to include the obligation to not reject refugees at the border.[26] In 1981, the UNHCR explained that non-refoulement “must be scrupulously observed” and included non-rejection at the border.[27] These obligations to refugees and asylum seekers applies even in cases of mass migration influx.[28]

Additionally, numerous regional and multilateral conventions and declarations by international bodies provide that non-refoulement includes non-rejection. For example, the Cartagena Declaration on Refugees, specifically “reiterate[s] the importance and meaning of the principle of non-refoulement (including the prohibition of rejection at the frontier) as a corner-stone of the international protection of refugees….”[29] The OAU Convention Governing Specific Aspects of Refugee Problems in Africa also provides that “[n]o person shall be subjected by a Member State to measures such as rejection at the frontier, return or expulsion, which would compel him to return to or remain in a territory where his life, physical integrity or liberty would be threatened….”[30] Moreover, when read closely, the Refugee Convention seems to imply that rejecting refugees, or capping the number allowed in a country, violates non-refoulement, as it states that there may be no refoulement “in any manner whatsoever.”[31]

A plain language interpretation of the Refugee Conventions renders the obligation of non-refoulement meaningless

A plain language interpretation of the Refugee Convention also leads to an absurd result. If non-refoulement applies only to those already in the country, seemingly every country could take the stance to cap the number of refugees each year, either stranding millions of refugees and asylum seekers in limbo or sending them back into danger by forcing them to return home. The right to leave one’s country and the right to seek asylum also lead to a necessity of receiving, and not rejecting or capping refugees and asylum seekers. If countries can place caps on refugees, an asylum seeker may never be able to utilize his or her right to seek asylum, for there would be no one willing to review the application. The idea that countries can essentially ignore the obligation of non-refoulement and the right to seek asylum by refusing to accept any refugees would render both the Refugee Convention and the customary norm meaningless.

Moreover, whether all persons seeking refugee status actually qualify is irrelevant. As mentioned above, there is a right to at least seek asylum. Additionally, the UNHCR has stated that “a person does not become a refugee because of recognition, but is recognized because he or she is a refugee.”[32] Thus, non-refoulement includes both those who already have refugee status and those who “have not yet had their status formally declared.”[33]

Regardless of the arguments against non-rejection, the actions of developed countries like the United States and Austria imply that they do in fact consider there to be a right of non-refoulement as well as a right to seek asylum. Developing countries routinely bear the weight of the refugees their developed neighbors are unwilling to take. In fact, the United States and the European Union expect other countries to prevent refugees from crossing their shared borders. In response to a massive influx of migrants from Central America, President Obama pressured the Mexican government to increase its border security in order to help curb the flow of migrants into the United States.[34] Similarly, the European Union provides aid to Turkey in return for Turkey’s help to reduce the number of refugees that might otherwise make their way to the European Union.[35] These expectations are simply examples of pushing other countries to take on a higher burden in the refugee crisis while limiting their own obligations towards refugees.

Helping other countries provide assistance to refugees implies that countries like the United States realize that refugees are entitled to protections, but that they do not want to fulfill that obligation themselves. Expecting other, usually less developed countries, to take on the obligations of developed countries, makes developed countries appear as though they are exempt from their international obligations.

Cooperation among countries is intended to make the principle of non -refoulement less burdensome

There is no denying that the continually growing number of migrants and refugees takes a toll on every country. However, there are possible solutions, unlike the approaches of the United States and Austria, that help countries reduce the burden of hosting refugees, while also complying with international law. While countries are not required to permanently admit refugees, they must temporarily admit refugees until finding a satisfactory solution to adequately assist them.[36] Countries should work together bilaterally, multilaterally, and universally to determine how to work together during mass influxes of migrants.[37] Additionally, countries are encouraged to provide assistance to those countries most heavily affected by large numbers of refugees. Assistance includes providing financial aid or other emergency assistance to countries heavily affected, encouraging burden sharing among countries, and assisting with voluntary repatriation and resettlement in third countries.[38] Cooperation among countries is essential as “[n]o legal system can consider itself totally independent or self-sufficient enough for isolated unilateral application.”[39]

Conclusion

Though potentially burdensome, the principle of non-refoulement and the right to seek asylum are essential to the protection of millions of refugees around the world. Even if countries experience strain on their infrastructure, the principle of non-refoulement is non-derogable. To allow derogations would render a country’s obligations towards refugees and asylum seekers meaningless. Because of the great strain on a country hosting a large number of refugees, international cooperation is not only recommended, but essential. It is only possible to manage the refugee crisis when countries work together in solidarity. Countries must recognize this immediately, because as the number of migrants grows, the more difficult it becomes for any individual country to bear the burden.

 

Ali Sheets is a 2L at the University of Denver Sturm College of Law and a staff editor on the Denver Journal of International Law and Policy.

_____________________________________________________________________________________________________________________________________

[1] U.N. High Comm’r on Refugees, Global Trends Report: Forced Displacement in 2016, at 2, June 19, 2017, http://www.unhcr.org/5943e8a34 [hereinafter Global Trends Report].

[2] Id. at 3.

[3] Id.

[4] Id.

[5] Exec. Order No. 13769, 82 C.F.R. 8977 (Jan. 27, 2017), https://www.gpo.gov/fdsys/pkg/FR-2017-02-01/pdf/2017-02281.pdf [hereinafter EO1]; replaced by Exec. Order No. 13780, 82 C.F.R. 13209 (March 6, 2017) https://www.gpo.gov/fdsys/pkg/FR-2017-03-09/pdf/2017-04837.pdf [hereinafter EO2].

[6] Duncan Robinson, EU says Austria asylum move breaches Geneva Convention, Financial Times (Feb. 18, 2018), https://www.ft.com/content/a415ef60-d651-11e5-829b-8564e7528e54.

[7]Austria says will not breach asylum cap, sidestepping rights row, Reuters (Dec. 13, 2016), http://www.reuters.com/article/us-europe-migrants-austria/austria-says-will-not-breach-asylum-cap-sidestepping-rights-row-idUSKBN142152

[8] Hawaii v. Trump, 859 F. 3d 741, 776 (9th Cir. 2017).

[9] Robinson, supra note 6.

[10] Convention Relating to the Status of Refugees, July 8, 1951, 189 U.N.T.S. 137 [hereinafter Refugee Convention].

[11] Id. at art. 33.

[12] Protocol Related to the Status of Refugees, Jan. 31, 1967, 606 U.N.T.S. 267. The 1967 Protocol also binds parties to the Refugee Convention.

[13] U.N. High Comm’r on Refugees, Advisory Opinion on the Extraterritorial Application of Non-Refoulement Obligations under the 1951 Convention relating to the Status of Refugees and its 1967 Protocol, ¶ 15, June 26, 2007, http://www.unhcr.org/4d9486929.pdf [hereinafter Advisory Opinion].

[14] Id. at ¶ 11.

[15] Roman Boed, The State of the Right of Asylum in International Law, 5 Duke J. of Comp. & Int’l Law 1, 23 (1994).

[16] G.A. Res. 217 (III) A, Universal Declaration of Human Rights (Dec. 10, 1948).

[17] Id.

[18] International Covenant on Civil and Political Rights, art. 12, Dec. 16, 1966, 999 U.N.T.S. 171 [hereinafter ICCPR].

[19] Conclusion on the Civilian and Humanitarian Character of Asylum No. 94(LIII), UNHCR Executive Comm. of the High Comm’r Programme on its Fifty-Third Session, U.N. Doc. A/AC.96/973 (2002), http://wwwunhcr.org/refworld/ docid/3dafdd7c4.html.

[20] EO2, supra note 5, at Sec. 6.

[21] Robinson, supra note 6.

[22] Sale v. Haitian Centeres Council, Inc., 509 U.S. 155, 187 (1993).

[23] Refugee Convention, supra note 10, at art. 31.

[24] James C. Hathaway & Anne K. Cusick, Refugee Rights Are Not Negotiable, 14 Geo. Immgr. L. J. 481, 491 (2000).

[25] Katy Long, No Entry! A review of UNHCR’s response to border closures in situations of mass refugee influx, ¶ 67, UNHCR, PDES/2010/07, Policy Development and Evaluation Service (June 2010), http://www.unhcr.org/4c207bd59.pdf.

[26] Id. ¶ 63.

[27] Protection of Asylum-Seekers in Situations of Large-Scale Influx Protection of Asylum-Seekers in Situations of Large-Scale Influx No. 22 (XXXII), at II(A)(2), UNHCR Executive Comm. of the High Comm’r Programme on its Thirty-Second Session, U.N. Doc. A/36/12/Add.1 (1981), http://www.unhcr.org/en-us/excom/exconc/3ae68c6e10/protection-asylum-seekers-situations-large-scale-influx.html [hereinafter Protection of Asylum Seekers].

[28] Id. at I(3).

[29] Organization of American States, Cartagena Declaration on Refugees, Nov. 22, 1984, at III(5), Annual Report of the Inter-American Commission on Human Rights, OAS Doc. OEA/Ser.L/V/II.66/doc.10, https://www.oas.org/dil/1984_cartagena_declaration_on_refugees.pdf.

[30] OAU Convention Governing Specific Aspects of Refugee Problems in Africa, art. II(3), Sept. 10, 1969, 1001 U.N.T.S. 45.

[31] Refugee Convention, supra note 10, at art. 33; see also Advisory Opinion, supra note 13, at ¶ 7.

[32] Id. at ¶ 6.

[33] Id.

[34] David Nakamura, Obama thanks Mexico for ‘absorbing’ Central American refugees. His own administration wants to turn them away, The Washington Post, (Sept. 20, 2016),

https://www.washingtonpost.com/news/post-politics/wp/2016/09/20/obama-thanks-mexico-for-absorbing-central-american-refugees-his-own-administration-wants-to-turn-them-away/?utm_term=.7604ebfbe8d7.

[35] Elizabeth Collett, The Paradox of the EU-Turkey Refugee Deal, Migration Policy Institute (March 2016), http://www.migrationpolicy.org/news/paradox-eu-turkey-refugee-deal.

[36] Protection of Asylum Seekers, supra note 26, at II(A).

[37] Id. at IV(2).

[38] Id. at IV(3),(4).

[39] Pablo Antonio Fernandez-Sanchez, The Interplay between International Humanitarian Law and Refugee Law, 1 J. Int’l Human. Legal Stud. 329, 381 (2010).

Posted in 1TVFA Posts, 2Featured Articles, Alison Sheets, DJILP StaffComments (0)

Anti-Bribery Ministerial Felkai ÁT

Is less more? Settlement Agreements in the Fight Against Bribery of Foreign Public Officials

OECD Anti-Bribery Ministerial Meeting

The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions[1] (the Convention) will celebrate its 20th anniversary at the end of this year. There is a consensus that the Convention has achieved an important change in the way that foreign corruption is perceived. Bribery is no longer seen as “business as usual” and there is a “higher level of consciousness on the part Water trampolines Costco of the media and public opinion.”[2] It has also been successful making countries equip themselves with rules against international bribery. Perhaps one of the most important examples is how the Convention served as a catalyst for the adoption and refinement of systems of liability of legal persons.[3]While research conducted in 2014 by the OECD shows that “enforcement of anti-bribery laws has drastically increased since the entry into force of the Convention,”[4] more skeptic voices point out that active investigation and prosecution is weak or completely inexistent in most of the countries[5]. Recent developments show that more and more countries have introduced settlement procedures into their legal systems that allow the public prosecutor and the investigated company to reach an agreement and suspend charges provided that the company accepts a series of terms. These procedures have been used to resolve some of the most important enforcement actions not only in the United States but also in other jurisdictions, including in countries seen as weak performers under the Convention.

This subject raises various interesting questions related to the reasons, limits, and necessary safeguards that are inherent to negotiated settlements in bribery allegations. After providing background information on the way the Convention and related instruments operate, this article will discuss how more and more countries are introducing and using settlement procedures. The possible reasons will be analyzed as well as the main critiques. Finally, the article will discuss necessary safeguards to assure credibility, legitimacy and effectiveness of these proceedings.

Background

The Convention was signed in December 1997 and has been ratified by all 35 OECD member countries and 8 non-OECD countries.[6] Since then, several other international anti-bribery instruments and initiatives have been adopted,[7] but the Convention retains unique features including that it (1) specifically targets the “supply side” of bribes and, therefore, targets the behavior of companies that do business abroad and (2) established a control mechanism which seeks to monitor implementation efforts by member countries in a strict, comprehensive, and systematic way using mutual evaluation and peer pressure to induce compliance. The body that carries out the monitoring is the OECD Working Group on Bribery (the Working Group), a group composed of representatives from State Parties to the Convention. Today, the Working Group controls not only the implementation of the Convention but also compliance with the 2009 Anti-Bribery Recommendation (the Recommendation) and the Good Practice Guidance on Internal Controls, Ethics and Compliance,[8] two soft law instruments that were added to the body of OECD anti-bribery “rules.” In order to comply with the Convention, countries have to, first, adopt a robust regulatory system criminalizing foreign bribery, and second, equip themselves with the willingness and means to implement that system.

Research shows that over two-thirds of foreign bribery cases are settled out of court.[9] However, until 2014 only six member countries had concluded foreign bribery cases using settlement procedures.[10] In the U.S., these procedures usually take the form of a deferred prosecution agreement (DPA) or a non-prosecution agreement (NPA). Appellations, requirements, and procedures vary between countries but the principle is the same: give enforcement authorities and private entities or individuals the possibility to reach an agreement and avoid prosecution.

Neither the Convention nor the Recommendation require parties to set up settlement procedures. Participation of member countries in the Working Group gives them the opportunity to take part in the examination of systems established in other countries and in discussions on best practices. Important events in the last year show how more and more countries are deciding to follow the example of their peers and adopt settlement procedures.

More countries are adopting settlement procedures

In August 2013 Brazil introduced the possibility of an out-of-court settlement called a “leniency agreement”[11] and the UK introduced DPAs into its legal system on 24 February 2014[12]. Since its introduction, it has been used three times to resolve bribery investigations. It’s most recent and probably most important settlement occurred in the Rolls-Royce case. With a total combined monetary sanction of $800 million,[13] the case entered into the list of the top five global foreign bribery enforcement actions. The company was under investigation in three jurisdictions, the U.S., the UK and Brazil, for conduct that occurred in several countries over decades. Additionally, on December 9, 2016, France adopted the “Loi Sapin II” that established the possibility of a “Public Interest Judicial Agreement,”[14] a settlement procedure very similar to the American DPA[15]. Finally, recent events in Argentina offer another interesting example.

In March 2017, the Working Group urged Argentina to comply with the Convention. In fact, Argentina has not yet established corporate legal liability and cannot, therefore, prosecute companies when foreign bribery allegations arise.[16] The draft bill on corporate criminal liability (the draft bill) was high on the political agenda, and the executive power transferred it to the legislative power for an opinion and possible amendments. In the meantime, the discovery of Odebrecht’s bribery scheme that touched 15 countries around the globe had deep effects, especially, in Latin America.[17] In June 2017, Argentina’s legislative body issued amendments to the draft bill introducing Section 37, which allows for “administrative collaboration agreements to be executed for events taking place prior to the enactment of the law.”[18] The bill not only introduces the possibility of a settlement procedure, but this procedure can be applied retroactively.

The retroactive application of law, especially in criminal matters, is usually exceptional. One cannot be held liable for something that was not considered illegal at the time the act was committed. A possible exception to this principle is when the law is more favorable to the prosecuted party.[19] The order of events that lead to the proposed amendments of Argentina’s legislative body gives the appearance that the possibility to apply Section 37 retroactively was introduced for the sole purpose of giving Odebrecht the opportunity to settle with the Argentinian authorities. This leads us to consider the adequacy of settlement procedures as a possible outcome of bribery investigations.

The pros and cons of settlement procedures in foreign bribery cases

Corporate structures and bribery schemes are becoming increasingly complicated and sophisticated. Settlement procedures, because they are of a voluntary nature instead of a punitive and imposed nature, have various advantages for public authorities as well as for the investigated companies. The prosecutor bears no burden of proof. Rather, the company must be willing to cooperate with the investigation and provide all necessary information, thus not only reducing important costs but also providing the authorities with crucial information that it might not obtain otherwise. A company’s reputation might be less affected by a settlement agreement than by a formal judicial conviction because, amongst other factors, the company only need agree to a set of facts and terms without having to accept actual culpability to conclude the settlement. In the same line, considering different legal traditions, a settlement agreement could have more success in countries that put more weight on individual criminal sanctions over corporate criminal sanctions.[20] However, the most important advantage for companies is likely that “[t]here is no set list of terms, and one of the attractions of DPAs is that bespoke terms can be created to suit a particular case, in a way that is not possible when a corporate is sentenced after a conviction.”[21] Because a settlement procedure is negotiated, a company could demand, for example, that it will not be barred from future public tenders or contracts already won.[22]

However, several critiques have emerged, concerning mainly two points. The first one is related to the non-criminalizing nature of settlement agreements. It is argued that criminal prosecution, not negotiation, is the adequate procedure to sanction important criminal acts committed by companies.[23] The second concerns the procedure itself. Because there is no actual judicial procedure and the negotiations are made between the prosecutor and the companies, the settlement may appear uncertain, illegitimate, and non-transparent.[24] Additionally, because bargaining power can vary greatly between companies the results of the agreements can also appear to unfairly favor big corporations.

As explained above, the majority of foreign bribery cases are concluded with a settlement agreement. Recent events exposed suggest a probable increase in this trend. The U.S. Department of Justice has even introduced a new “Pilot Program” [25] (the Pilot Program), which includes a whole new category of enforcement action, declination with disgorgement. This action is a highly simplified agreement. It can be used only when the company has voluntarily self-disclosed the acts committed and the investigations are closed without imposition of penalties despite violations of the Foreign Corrupt Practice Act. However, the company must agree to fully cooperate with the investigation, timely remediate the violations, and disgorge all profits made from the bribery.

Settlement procedures will therefore not only be more numerous, but it seems that new simplified forms might emerge. The Argentinian example shows, however, the important bargaining power that a corporation holds. This power has a stronger hold when it comes to settlement procedures in comparison to judicial procedures. It is thus vital that safeguards are installed and respected in order for the system to remain legitimate and effective.

Necessary Safeguards

In order to preserve justice and effectiveness, countries must ensure that the system is applied in a uniform way and that whatever enforcement actions public authorities use, those actions will deter companies from reiterating or committing acts of bribery. To that end, what matters is really what the company has to lose. If monetary and other forms of penalties under settlement agreements are higher than the benefits that the companies earn from corrupt transactions, then it is a deterrent enough. However, information about settlement procedures needs to be detailed and available in order to control for uniformity and effectiveness. The Working Group recommends that settlements should “respect the principle of due process, transparency and consistency […] the outcome of settlement negotiations should be made public, where appropriate and in conformity with the applicable law, especially the reasons why the settlement was appropriate, the basic facts of the case, the legal or natural persons sanctioned, the sanctions agreed, and the terms of the agreement.”[26] It seems that countries are on their way to adopting more detailed guidelines, principles, and sometimes rules to help inform prosecutors when they are concluding settlements.[27] However, guidelines are not binding upon prosecutors. In some countries, judges need to approve the settlement but this is not always systematic.

The Working Group, NGOs active in the anti-bribery sector, and the general public must not lose sight of these aspects and monitor closely the developments in this area in order to ensure that what has been accomplished by the existence of the Convention in the last 20 years will not be undermined by obscure procedures that can result in fake compliance.

 

Samantha Bloch is a LLM student at the University of Denver Sturm College of Law and a staff editor on the Denver Journal of International Law and Policy.

_______________________________________________________________________________________________________________________________________

[1] Convention on Combating Bribery of Foreign Public Official in International Business Transactions, Dec. 17, 1997, 37 I.L.M. 1 (entered into force Feb. 15, 1999).

[2] Nicola Bonucci & Patrick Moulette, The OECD Anti-Bribery Convention 10 Years on, Oecd Observer (Dec. 2007- Jan. 2008), http://oecdobserver.org/news/archivestory.php/aid/2475/The_OECD_Anti-Bribery_Convention_10_years_on.html.

[3] Org. for Econ. Co-operation and Dev. [OECD], The Liability of Legal Persons for Foreign Bribery: A Stocktaking Report, at 13, (Dec. 9, 2016), http://www.oecd.org/daf/anti-bribery/liability-of-legal-persons-for-foreign-bribery-stocktaking-report.htm.

[4] OECD, OECD Foreign Bribery Report: An Analysis of the Crime of Bribery of Foreign Public Officials, at 7, (Dec. 2, 2014), http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm
http://dx.doi.org/10.1787/9789264226616-en [hereinafter OECD Foreign Bribery Report].

[5] Transparency Int’l, Exporting Corruption Progress Report 2015: Assessing Enforcement of the OECD Convention on Combating Foreign Bribery, at 7, (Aug. 20, 2015), https://www.transparency.org/whatwedo/publication/exporting_corruption_progress_report_2015_assessing_enforcement_of_the_oecd.

[6] Oecd, OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, http://www.oecd.org/corruption/oecdantibriberyconvention.htm (last visited Sep. 8, 2017).

[7] See, e.g., United Nations Convention Against Corruption, adopted Oct. 31, 2003, 2349 U.N.T.S. 41 (entered into force Dec. 14, 2005); The Wbg and the United Nations Office on Drugs and Crime [UNDOC], Stolen Asset Recovery Initiative, G20 Anti-Corruption Working Group, https://star.worldbank.org/star/about-us/g20-anti-corruption-working-group(last visited Sep. 10, 2017).

[8] OECD, Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions (With Amendments Adopted by Council 18 February 2010 to Reflect the Inclusion of Annex II, Good Practice Guidance on Internal Controls, Ethics and Compliance) (Nov.25, 2009), http://www.oecd.org/corruption/oecdantibriberyconvention.htm.

[9] OECD Foreign Bribery Report, supra note 4, at 19.

[10] Id. at 20.

[11] Felipe Rocha dos Santos, Felipe Rocha dos Santos: New Guidance for Brazil Anti-Corruption Settlements, The Fcpa Blog (Sep. 7, 2017, 7:18 AM), http://www.fcpablog.com/blog/2017/9/7/felipe-rocha-dos-santos-new-guidance-for-brazil-anti-corrupt.html.

[12] Serious Froud Office, Deferred Prosecution Agreements, https://www.sfo.gov.uk/publications/guidance-policy-and-protocols/deferred-prosecution-agreements/.

[13] Press Release, U.S. Dep’t of Just., Rolls-Royce Plc Agrees to Pay $170 Million Criminal Penalty to Resolve Foreign Corrupt Practices Act Case- Company Agrees to $800 Million Global Resolution with Authorities in the Unites States, The United Kingdom and Brazil, DOJ Press Release 17-074 (Jan 17, 2017), https://www.justice.gov/opa/pr/rolls-royce-plc-agrees-pay-170-million-criminal-penalty-resolve-foreign-corrupt-practices-act.

[14] Cyrille Mayoux, Loi Sapin II: Le Nouvel Arsenal Répressif, Uggc Avocats (Feb. 14, 2017), https://www.uggc.com/2017/02/14/loi-sapin-ii-nouvel-arsenal-repressif/, (Called in French a “convention judiciaire d’intérêt public”, translated by us).

[15] Stephanie Faber, New French Anti-Corruption Law “Sapin II”, The Anticorruption Blog (Jan. 4, 2017), http://www.anticorruptionblog.com/france/new-french-anti-corruption-law-sapin-ii/.

[16]Press Release, OECD, Argentina Must Urgently Enact Corporate Liability Bill to Rectify Serious Non-Compliance with Anti-Bribery Convention (Mar.24, 2017), http://www.oecd.org/corruption/argentina-must-urgently-enact-corporate-liability-bill-to-rectify-serious-non-compliance-with-anti-bribery-convention.htm.

[17] Michael Griffiths, The Odebrecht Fact Sheet, Global Investigations Rev. (Apr. 18, 2017), http://globalinvestigationsreview.com/article/1129308/the-odebrecht-fact-sheet.

[18] Baker McKenzie, Draft Bill- Corporate Criminal Liability, Lexology (June 21, 2017), https://www.lexology.com/library/detail.aspx?g=487a884e-d97a-4fba-b795-c3e7f6d5d5f1.

[19] Editors, Today’s Law and Yesterday’s Crime: Retroactive Application of Ameliorative Criminal Legislation, 121 U. Pa. L. Rev. 120, 120 (1972).

[20] Bonucci & Moulette, supra note 2.

[21] Ben Morgan, Joint Head of Bribery and Corruption, Serious Froud Office, Speech at a Seminar for General Counsel and Compliance Counsel from Corporates and Financial Institutions Held at Norton Rose Fulbright LLP, https://www.sfo.gov.uk/2017/03/08/the-future-of-deferred-prosecution-agreements-after-rolls-royce/.

[22] https://www.reuters.com/article/us-argentina-odebrecht/argentina-bans-brazils-odebrecht-from-new-projects-for-12-months-idUSKBN19O2JV.

[23] Ben Morgan, supra note 21.

[24]Rocha dos Santos, supra note 11.

[25] Dep’t of Just, Crim. Division, The Fraud Section’s Foreign Corrupt Practices Act Enforcement Plan and Guidance (April 5,2016), https://www.justice.gov/criminal-fraud/pilot-program.

[26] OECD Foreign Bribery Report, supra note 4, at 20.

[27] See, e.g., Rocha dos Santos, supra note 11; Serious Froud Office, supra note 12; U.S. Dep’t of Just, Crim. Division, The Fraud Section’s Foreign Corrupt Practices Act Enforcement Plan and Guidance (April 5,2016), https://www.justice.gov/criminal-fraud/pilot-program.

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Uraguay

The Impact of Drug Enforcement Policies on Transnational Organized Crime in Latin America: A Case Study

Photo Credit: AP

“For illicit drugs, organized crime is sine qua non. In other words, organized crime can exist without drug trafficking, but illicit drugs cannot live without organized crime.”[1] This quote illustrates the long standing and infamously mutually beneficial relationship between organized crime and illicit drug trafficking. While the public threat of this relationship is long recognized and well understood, the solution is far less clear-cut. While the majority of the international community has stood with the consensus of prohibition and enforcement, in recent years countries have begun to reexamine this approach for a variety of reasons. [2] Proponents of replacing prohibition with regulation have cited a variety of social issues to support their arguments, such as limiting violence from criminal organization and reducing illicit drug use.[3] This article will briefly survey the relationship between drug trafficking and modern organized crime and the modern controlling international law on illicit drugs. Then, the article will examine the effect, if any, of two different styles of drug laws on combatting organized crime through Uruguay’s landmark policy of marijuana decriminalization and Mexico’s hard-lined approach to drug enforcement and organized crime.

Modern Organized Crime and the Illicit Drug Market

The United Nations Convention against Transnational Organized Crime defines organized crime, as “a structured group of three or more persons, existing for a period of time and acting in concert with the aim of committing one or more serious crimes or offences established in accordance with this Convention, in order to obtain, directly or indirectly, a financial or other material benefit…” [4] The very nature of transnational illicit drug trafficking, which typically involves multiple actors committing drug trafficking offenses over a period of time, motivated by financial gain, results in the majority of drug trafficking groups fitting into the U.N.’s definition of organized crime.

Given the profit-driven focus of most drug traffickers, the illicit drug trade is often seen as the most lucrative activity.[5] This high profitability is attributed largely to the nature of drug consumption; unlike firearms, gems, or even human beings, drugs are constantly consumed and are hence in need of continuous supply renewal.[6] In fact, in 2014, between one third to one fifth of all revenue attributed to transnational organized crime groups was estimated to have been from drug sales.[7]

Modern organized crime has continued to evolve and shift in form and function to both survive increased efforts by law enforcement while harnessing new technology to expand drug markets and increase trafficking efficiency.[8] Recent statistics show that many criminal organizations have started to move away from the traditional rigid hierarchical organizational model, to looser “horizontal” networks, in response to efforts of law enforcement to remove key individuals and disrupt the organizational hierarchy.[9] This reorganization has allowed these groups to quickly restructure when individuals have been detained.[10] The adaptation has continued to increase across organizations. Currently thirty to forty percent of criminal organizations identified in 2017 were made up of loose criminal networks.[11] Furthermore, transnational criminal organizations have utilized advances in communication technology, transportation, and even the dark web to expand their ability to smuggle larger quantities of illegal drugs, making it more difficult for law enforcement to detect and disrupt these activities.[12]

Current International Drug Laws

For over 100 years, the international community has formally recognized and condemned the use of certain drugs. The 1912 Hague International Opium Convention became the first official international effort to control drug use and illicit drug trade.[13] Since then, several multilateral treaties have taken this idea and expanded its scope well beyond opium. The 1988 Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, which currently includes 189 parties and eighty seven signatories,[14] focuses primarily on developing a strategy to combat transnational organized crime by creating mandates for member states to mitigate and disrupt the international drug trade.[15] The Convention requires signatories to take steps to eliminate demand within their respective countries for illegal drugs and other psychotropic substances.[16] To fulfill these objectives, the treaty maintains that member states should take steps to implement domestic criminal laws outlawing “possession, purchase or cultivation of narcotic drugs or psychotropic substances for personal consumption.”[17]

Mexico: A Policy of Prohibition

Mexico first outlawed marijuana use in 1920, seventeen years before the United States.[18] Over the last few decades, Mexico, in response to the well published rise in organized crime, has taken several different approaches towards marijuana and drug trafficking to curb cartel operations. During the reign of President Felipe Calderon, from 2009- 2012, the Mexican government took a strong approach to prohibition enforcement, targeting high level organization members, increasing drug interdiction at the U.S./Mexico border, and utilizing the Mexican army to combat criminal activities.[19] This led to an explosion in drug related killings, from 1,080 in 2001 to 6,587 in 2009.[20] Some experts attribute this spike to the increased interdiction efforts, saying that removing powerful organizational leaders creates a power vacuum that results in infighting, encroachment by rival organizations, and organizational splintering.[21]

In response to this spike in gang-related violence, Mexico has taken surprising steps towards relaxing their drug laws and reforming their criminal justice system. In 2009, Mexico passed a law legalizing the possession of small amounts of drugs, including 5 grams of marijuana.[22] This appears to have had minimal immediate effect on the illegal drug trade; in 2010 the FBI reported Mexico as the number one importer of marijuana into the U.S.[23] In 2015, the Mexican supreme court handed down a landmark decision in marijuana legalization, ruling that it is the right of individuals to grow and use cannabis for personal recreational use.[24] While this has not overruled the black letter law of the country, it is seen by many as a significant step towards legalization. In April 2016, in response to both the 2015 supreme court ruling and increasing disenchantment of the population towards the ongoing violence from the cartel wars, President Enrique Pena Nieto sent a proposal to the Mexican congress calling for an increase to the allowance of personal possession of marijuana from 5 grams to 28 grams.[25]

While these measures seemed promising, with homicide rates declining from 2013-2014, the homicide rate again exploded. 2016 saw an estimated 7,000-11,000 homicides (25-40% of the nationwide total) attributed to organized crime.[26] The steps taken towards marijuana legalization were named as a reason for this upswing, due in part to organized crime changing their focus  from trafficking marijuana to harder drugs such as cocaine and heroin.[27]

Uruguay: Leading Latin America towards Marijuana Legalization

On December 24, 2013, Uruguay passed a law legalizing the purchase, possession, and growing of small to moderate quantities of marijuana.[28] The law allows registered users to buy up to 40 grams of marijuana a month from licensed dealers, registered growers to keep up to six plants; and “cannabis clubs” of up to 45 members to cultivate as many as 99 plants.[29] When the bill was first introduced in 2012, supporters of the bill cited both promotion of public health and reduction of organized crime among the top reasons for the supporting of the initiative.[30]

This law has been met with limited success since its inception. The price for legal marijuana undercut its illegal counterpart sold on the street, resulting in the drastic drop in price of “black market” marijuana.[31] As of 2011, 66% of all marijuana users reported they were still purchasing their marijuana from illegal dealers.[32] Despite assurances from independent sources and officials that the illegal drug market will subside over time,[33] there has been a recent increase in organized crime activity in the county. In the past several years, the number of foreign organized crime group members arrested in Uruguay rose.[34] Officials believe that this is because of recent intensified international efforts to limit Pacific drug smuggling routes, which shifted these routes to the Atlantic.[35] This triggered fear among Uruguayan officials that the country would subsequently then be used as a primary “springboard” for drug trafficking from the Americas to Europe.[36] Recent statistics seem to support this fear. In 1999, only ten kilograms of illegal cocaine were sized in the country; in 2013, this exploded into over one ton of the drug being seized.[37] The annual homicide rate for Uruguay, which historically has been astonishingly low at around 180 homicides per year, nearly doubled to 289 in 2015.[38] Finally, officials have reported that the style of killings has likewise changed drastically, with the majority of the recent murders bearing the signature of organized crime: daylight assassinations and execution style killings.[39]

Conclusion & Recommendations

The evidence discussed here supports a variety of conclusions and recommendations. First, due to the evolving nature of organized crime via loose organizational structures, advanced technologies, diversified drug trade, and global markets, legalization of only one drug within one country has a minimal impact on transnational organized crime. Additionally, policies of pure prohibition backed by hard-lined enforcement techniques do little except increase violence amongst organized criminal groups. This evidence suggests that to be effective, decriminalization needs to be on a global scale followed up with targeted enforcement. Decriminalization not only limits income sources to drug traffickers, it also frees up valuable law enforcement resources to concentrate on combatting other profit sources for organized crime. Finally, the requirements in the 1988 Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances should be adjusted to allow for member states to include legalization and decriminalization policies as part of their plan to eliminate the demand for illegal drugs. Implementing these lessons learned from Uruguay and Mexico will allow nations across the world to take a collective step at eliminating transnational criminal organizations.

 

Christopher Barbera is a 2L at the University of Denver Sturm College of Law and a staff editor on the Denver Journal of International Law and Policy.

______________________________________________________________________________________________________________________________________

[1] Engin Dumagol, The Role of Drugs in Terrorism and Organized Crime, 2 Ankara B. Rev. 46, 61 (2009), http://www.ankarabarosu.org.tr/siteler/AnkaraBarReview/tekmakale/2009-2/6.pdf.

[2] Dan web, et el, Effect of Drug Law Enforcement on Drug-Related Violence: Evidence from a Scientific Review 56-57 (2010), http://www.countthecosts.org/sites/default/ICSDP-1%20-%20FINAL.pdf.

[3] Id. at 20

[4] United Nations Office of Drugs and Crime, World Drug Report 2007, 170 (United Nations Publication Sales No. E. 07.XI.5 ISBN 978-92-1-148222-5.N).

[5] Dumagol, supra note 1, at 54.

[6] Dan Web, et el, supra note 2, at 58.

[7] United Nations Office on Drugs and Crime, World Drug Report 2017, 9 (ISBN: 978-92-1-148291-1, eISBN: 978-92-1-060623-3, United Nations publication, Sales No. E.17.XI.6).

[8] Id. at 16.

[9] Id.

[10] Id.

[11] Id. (citing European Union Serious and Organised Crime Threat Assessment 2017, Europol, at 14 (2017), https://www.europol.europa.eu/activities-services/main-reports/european-union-serious-and-organised-crime-threat-assessment-2017.

[12] Id. at 16-17.

[13] U.N. Office on Drug and Crime, The 1912 Hague International Opium Convention, https://www.unodc.org/unodc/en/frontpage/the-1912-hague-international-opium-convention.html.

[14] Status of United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, United Nations Treaty Collection (Sep. 10, 2017, 7:30 AM), https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=VI-19&chapter=6&clang=_en.

[15] United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances [hereinafter The Convention], art. 2, Dec. 20, 1988, 28 I.L.M. 493.

[16] The Convention, supra note 15, at 495.

[17] The Convention, supra note 15, at 494.

[18] Matt Thompson, The Mysterious History of ‘Marijuana,NPR (July 22, 2013, 11:46 AM), http://www.npr.org/sections/codeswitch/2013/07/14/201981025/the-mysterious-history-of-marijuana.

[19] David A. Shirk, Drug Violence in Mexico: Data and Analysis from 2001-2009 3, 9 (2010) https://justiceinmexico.org/wp-content/uploads/2014/09/2010_DVM.pdf.

[20] Id. at 9.

[21] Kimerly Heinle , Cory Molzahn & David A. Shirk, Drug Violence in Mexico: Data and Analysis through 2014 (2015) https://justiceinmexico.org/wp-content/uploads/2015/04/2015-Drug-Violence-in-Mexico-final.pdf.

[22] Ionn Grillp, Mexico’s Drug Law May Set an Example, Time (Aug. 26, 2009), http://content.time.com/time/world/article/0,8599,1918725,00.html.

[23] Drug Trafficking Violence in Mexico: Implications for the United States: Before the U.S. Senate Caucus on International Narcotics Control, 111th Cong., (2010) (statement of Kevin L. Perkins and Anthony P. Placido, Assistant Director, Criminal Investigative Division and Assistant Administrator for Intelligence Drug Enforcement Agency, Federal Bureau of Investigation), https://archives.fbi.gov/archives/news/testimony/drug-trafficking-violence-in-mexico-implications-for-the-united-states.

[24] Elizabeth Malkin & Azam Ahmed, Ruling in Mexico Sets in Motion Legal Marijuana, N.Y. Times, Nov. 23, 2015, https://www.nytimes.com/2015/11/05/world/americas/mexico-supreme-court-marijuana-ruling.html?_r=2.

[25] Mexico President Pena Nieto proposes relaxing marijuana laws, BBC News (Apr. 22, 2016), http://www.bbc.com/news/world-latin-america-36107947 (last visited Sep. 10, 2017).

[26] Kimberly Heinle, Octavio Rodríguez Ferreira & David A. Shirk, Drug Violence in Mexico: Data and Analysis Through 2016 2-3 (2017), https://justiceinmexico.org/wp-content/uploads/2017/03/2017_DrugViolenceinMexico.pdf.

[27] Id. at 46.

[28] John Walsh & Geoff Ramsey, Uruguay’s Drug Policy: Major Innovations, Major Challenges 7 (May 9, 2015), https://www.brookings.edu/wp-content/uploads/2016/07/Walsh-Uruguay-final.pdf.

[29] Id.

[30] Dario Klein, Catherine E. Shoichet & Rafael Romo, Uruguay to legalize marijuana, Senate says, CNN (Dec. 10, 2017 9:42 PM), http://www.cnn.com/2013/12/10/world/americas/uruguay-marijuana-legalization/index.html?iref=allsearch.

[31] Uruguay’s Year In Marijuana: 3 Successes, 3 Burning Questions, NBC News (Jan. 7, 2015), https://www.nbcnews.com/news/latino/uruguays-year-marijuana-3-successes-3-burning-questions-n281311.

[32] Guillermo G. Espinosa, Delays in Uruguay Marijuana Law Leave Door Ajar for Drug Trafficking, Insight Crime (Jan. 23, 2017), http://www.insightcrime.org/news-analysis/delay-marijuana-law-uruguay-leaves-door-ajar-drug-trafficking.

[33] Id.

[34] Michael Lohmuller, Is Uruguay the New Argentina of Drug Trafficking?, Insight Crime (May 23, 2016), http://www.insightcrime.org/news-briefs/is-uruguay-the-new-argentina-of-drug-trafficking.

[35] Gabriel Pereyra, Organized Crime is Here, El Observador Newspaper, May 23, 2016, http://www.elobservador.com.uy/el-crimen-organizado-ya-esta-aqui-n914361.

[36] Id.

[37] Id.

[38] Id.

[39] Id.

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Photo Credit: Josh Edelson/AFP/Getty Images

The EU Takes Ireland to Court: Understanding the Apple Tax Ruling and the Legal Ramifications of Ireland’s Failure to Act

Photo Credit: Josh Edelson/AFP/Getty Images

Photo Credit: Josh Edelson/AFP/Getty Images

In August 2016, the European Commission ruled that Ireland provided illegal state aid to the Irish subsidiaries of Apple, Inc. between 2003 and 2014, which amounted to approximately €13 billion. The Commission determined that Ireland’s illegal state aid took the form of “undue tax benefits” provided exclusively to Apple’s Irish subsidiaries: Apple Sales International (ASI) and Apple Operations Europe (AOE). Notably, ASI and AOE hold the rights to use Apple’s intellectual property to sell and manufacture Apple products outside North and South America under a cost-sharing agreement with Apple, Inc. The sales from such usage, nearly 60% of Apple’s total profits, are routed through these subsidiaries.

In 1991 and 2007, the Irish government issued two tax rulings that permitted Apple to artificially allocate the taxable profits of ASI and AOE. The method of determining Apple’s corporate tax liability in Ireland did not correspond with economic reality as almost all of the sales profits recorded by ASI and AOE were internally attributed to a “head office” that existed only on paper. The “head office” was not located in any state for tax purpose, it did not have any employees or operations, and it could not have possibly earned the sales profits that Ireland’s tax rulings permitted it to claim. Additionally, ASI and AOE sent yearly payments of approximately $2 billion to their parent corporation, Apple, Inc., for research and development (R&D) purposes. R&D payments are deductible expenses under Irish tax law, and so these amounts were not included in ASI or AOE’s annual taxable profits. As a result, Apple’s effective tax rate (ETR) in Ireland during the identified years amounted to 1% or less, compared with the statutory rate of 12.5%.

Under Article 107 of the Treaty on the Functioning of the European Union (TFEU), “any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings … shall, in so far as it affects trade between Member States, be incompatible with the internal market.” The EU Commission determined that Ireland’s tax rulings permitted Apple to artificially determine its tax liability in a manner that did not reflect economic reality. This gave Apple an undue advantage over competitors in the EU marketplace.

TFEU Article 108(2) provides that the Commission decision may direct the violating Member State to abolish such aid and practices and recover the illegal aid “within a period of time determined by the Commission.” Traditionally, the Commission provides the violating Member States with four months from the date the decision was issued to recover the specified amounts of illegal state aid. The recovery time must be speedy so that the corporation does not continue to receive further illegal state aid for a prolonged period. The deadline for Ireland to implement the Commission’s ruling and recover the €13 billion from ASI and AOE was January 3, 2017. Over a year has passed since the decision was issued and Ireland has not recovered a cent of the €13 billion. Ireland has, however, identified its methods of calculating the precise amount of illegal state aid owed, and it seeks to recover the full amount from Apple amount by March 2018. Despite both Ireland and Apple’s appeal from the Commission’s decision, the €13 billion still must be recovered. The disputed sum plus interest should be held by a third party in an escrow account until all appeals are finalized.

Ireland’s failure to recover the €13 billion in the time provided by the Commission constitutes a violation of Article 108 of the TFEU. As such, the Commission is permitted to bring the matter before the European Court of Justice (ECJ). Per TFEU Article 108(2), “if the State concerned does not comply with this decision within the prescribed time, the Commission … [may] refer the matter to the Court of Justice of the European Union direct.” The Commission did exactly that on October 4, 2017 when it moved to refer Ireland’s violations to the ECJ. EU rules provide that the Commission can first seek a declaratory ruling that Ireland failed to comply with the Commission’s decision. If Ireland still fails to recover the amount in dispute after an ECJ declaration, then the Commission may bring a second case that could result in fines.

The Commission’s recent referral of the Ireland-Apple decision to the ECJ has put pressure on the divided Irish government. Many politicians hope to maintain Ireland’s reputation for having a corporation-friendly tax system, which will continue to incentivize multinational companies to set up subsidiaries, branches, and offices in Ireland. This in turn, is beneficial for Irish citizens as it brings in new jobs and economic growth. Others argue, however, that the corporate taxation scheme favors rich, foreign companies to the disadvantage of Ireland’s poor. Recovering €13 billion in alleged illegal state aid would fully cover Ireland’s health services for one year and permit rampant infrastructure upgrades nationwide. The Apple tax ruling puts Ireland in hot water as it continues to lure in multinational corporations, attempts to comply with EU law, and seeks to appease the demands of its divided population. Until the ECJ issues its decision, however, Ireland certainly ought to continue collecting the alleged illegal state aid from Apple.

 

Rachel Ronca is a 3L Dual Degree student (JD and LLM in International Business Transactions) at the University of Denver Sturm College of Law. She is the Managing Editor on the Denver Journal of International Law and Policy for the 2017-2018 academic year.

Posted in 1TVFA Posts, 2Featured Articles, DJILP Staff, Rachel RoncaComments (0)

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