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EU implements various sanctions against Yugoslavia, including the oil embargo agreed to by NATO
The European Union (EU) has taken several restrictive measures against the Federal Republic of Yugoslavia (Yugoslavia). On April 23, 1999, the Council issued a Common Position (1999/273/CFSP) to bar the supply and sale of petroleum and petroleum products to Yugoslavia.
This ban does not apply, however, to sales or supplies for verified humanitarian purposes, in particular for the needs of internally displaced persons and returnees. The Council has requested the EU-Associated Countries of Central and Eastern Europe and Cyprus, as well as the EFTA Members of the EEA, to follow this Common Position.
On May 10, 1999, the Council issued a Common Position (1999/318/CFSP) with additional restrictive measures. It prohibits the issuance of visas to President Milosevic, his family, all Ministers and Senior Officials of Yugoslavia and Serbia, as well as to supporters of Milosevic. The Common Position also continues the freeze on funds held abroad by the Yugoslav and Serbian Governments, and extends it to individuals associated with Milosevic and Government companies.
Next, the Common Position bans any private export finance to Yugoslavia and Serbia or companies controlled by these countries. It bans all flights between the EU and Yugoslavia. Finally, it forbids the export of any goods, services, technology or equipment that would assist Yugoslavia in repairing damage caused by air strikes.
In a related matter, the Council has issued an implementing decision with the names of the individuals to whom the EU will not issue visas. (1999/319/CFSP). Also here, the Council has asked the associated countries to follow this Common Position.
Citation: 1999 O.J. of the European Communities (L 108) 1, 27 April 1999 [petroleum supply] & (L 123) 1-13 [additional measures].
Filed in: 1999 International Law Update, Issue 5
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Fifth Circuit finds that regulations dealing with sanctions against Libya apply not only to transactions that benefit Libya directly, but also to those that profit individuals who represent Libyan interests
In 1986, U.S. President Ronald Reagan issued executive orders to restrict commerce with Libya and to freeze Libyan assets. This case concerns the resulting Libyan Sanctions Regulations [31 C.F.R. Section 550.101-.803].
Chris Paradissiotis, a citizen of Cyprus, was an officer of Holborn Investment Company. Holborn is a subsidiary of a Dutch company which, in turn, is a wholly-owned subsidiary of a Libyan state-controlled holding company.
Because of his involvement in Libya-affiliated companies, the Treasury Department’s Office of Foreign Assets Control (OFAC) labeled Paradissiotis a “Specially Designated National” of Libya pursuant to 31 C.F.R. Section 550.304(c) and froze his U.S. assets.
Later OFAC denied Paradissiotis’ request for a license to sell stock and exercise stock options he had received as a company officer before the Libyan sanctions had gone into effect. In his federal lawsuit, Paradissiotis claimed that OFAC had misapplied the regulations to his private transactions since they do not benefit Libya directly.
The district court ruled against him. The U.S. Court of Appeals for the Fifth Circuit finds that Paradissiotis is in fact a Specially Designated National of the Government of Libya and subject to the sanctions. The Court rejects his contention that the sanctions only apply to transactions ‘to the extent’ that they benefit Libya.
“Section 550.304(c) is among the definitional provisions in the Libyan sanctions regulations. Its purpose is to cast the widest possible net over individuals who are or have been or are suspected of being actors directly or indirectly on behalf of the government of Libya. Unlike Paradissiotis, we do not read the phrase ‘to the extent’ as a limiting device, whereby individuals who otherwise fall within the definition may splice their activities and attempt to avoid the sanctions regulations. Instead, ‘to the extent’ is, in this context, a proxy for ‘to whatever extent’ or ‘to any extent’ and includes rather than excludes subjects from the regulations.”
“Without such language, people might argue that they were independent contractors or brokers or that mere occasional or incidental work for the government of Libya would exempt them from coverage. OFAC’s interpretation of the language to broadly cover ‘any person’ who has acted or purported to act on behalf of the government of Libya is therefore a reasonable interpretation of its regulation, and even an equally reasonable interpretation by Paradissiotis would not prevail.” [Slip op. 7-8]
Citation: Paradissiotis v. Rubin, No. 97-20905 (5th Cir. April 1, 1999).
Filed in: 1999 International Law Update, Issue 4
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Fourth Circuit reverses dismissal of criminal charges for violating export ban to Iran holding that term “export”� not ambiguous despite lack of definition in Iranian Transactions Regulations
A federal grand jury indicted Mohammad Reza Ehsan for shipping equipment to Iran in violation of export restrictions imposed on Iran based on an Executive Order and its implementing regulations [Exec. Order No. 12959, 60 Federal Register 24757 (1995), 31 C.F.R. §§ 560-203-.205, .406 (Iranian Transactions Regulations)]. President Clinton had issued that Executive Order to counter Iran’s threat to U.S. national security, foreign policy, and economy. It bans most imports, exports, and transshipments of goods between the U.S. and Iran. The implementing regulations issued by the Office of Foreign Assets Control bar any exports, or financing thereof, to Iran.
In 1996, Ehsan had ordered “Transformer Oil Gas Analysis Systems” (TOGASs) for shipment to Dubai, United Arab Emirates (U.A.E.), though the ultimate destination was Iran. TOGASs were not subject to export license application requirements at that point and were exempt from the reexportation ban. Customs Agents created a dummy package for a controlled delivery. Authorities arrested Ehsan after the package reached the U.A.E.
Pointing to the absence of definitions in the Executive Order’s and regulations’ lack of definitions, Ehsan argued that his planned shipment of the goods to Iran was a permissible “reexport,” not an impermissible “export” or “transshipment.” The district court agreed with Ehsan that the provisions were ambiguous. Under the rule of lenity, the court dismissed counts two and three of Ehsan’s indictment that charged violations of the export ban.
The U.S. Court of Appeals for the Fourth Circuit reverses and remands to reinstate counts two and three of Ehsan’s indictment. Even though the regulations do not define “export,” its ordinary meaning is clear. It merely involves the transit of goods from one country to another for the purpose of trade. If Ehsan had intended to sell the products in Iran, then the shipment plainly amounted to an “exportation” to Iran.
This view is consistent with the purpose of the Executive Order, which is to isolate Iran from trade with the U.S. Absent a severe ambiguity, to apply the rule of lenity would take this important foreign policy decision out of the hands of the Executive and put it into those of the courts.
“Ehsan’s transaction may indeed have constituted a reexport, if he shipped the TOGAS with the purpose of joining them with the commerce of the U.A.E. and then shipped them from the U.A.E. with the intent to join them with the commerce of Iran. … This, however, is a question for the jury, not an ambiguity in the regulatory scheme. Ehsan also places great weight on the fact that the TOGAS cleared customs in Dubai. Once the shipment cleared customs, he argues, the “�export’ to the U.A.E. was complete. Customs clearance, however, is simply another fact for the jury to weigh in determining whether Ehsan intended to export the goods to Dubai or to Iran “� just as bills of lading, his purchase orders, and the situs of his ultimate customer certainly will be.”� [Slip op. 12]
Citation: United States v. Ehsan, No. 98-4036 (4th Cir. December 15, 1998).
Filed in: 1999 International Law Update, Issue 1
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U.S. Department of Treasury issues regulations to implement President’s sanctions on Sudan
On November 3, 1997, the President issued Executive Order 13067, declaring a national emergency with respect to the policies and actions of the Government of Sudan, and blocking all property and property interests of the Sudanese Government and related entities.
The Foreign Assets Control Office of the U.S. Department of the Treasury has now issued regulations to implement the President’s declaration of a national emergency and imposition of sanctions against Sudan (31 C.F.R. 538). They went into effect on July 1, 1998.
Pursuant to the Executive Order, the new regulations block all property and interests in property of the Sudanese Government that are in the U.S. or under control of U.S. persons, including their overseas branches (Section 538.201). The regulations also ban the importation of goods or services of Sudanese origin (Section 538.204). They also bar U.S. persons from exporting goods, technology, or services to Sudan (Section 538.206).
Citation: 63 Federal Register 35809 (July 1, 1998).
Filed in: 1998 International Law Update, Issue 7
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EU ends its WTO challenge to U.S. Cuban Sanctions Act
On April 21, 1998, the EU dropped its legal challenge before the WTO involving the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (also called Helms-Burton Act). The EU had claimed that the Act’s trade restriction on goods of Cuban origin related to expropriated properties were inconsistent with WTO trading rules.
In a related matter, U.S. President Bill Clinton and European Commission President Jacques Santer announced on May 18, 1998, that they had reached a general agreement regarding extraterritoriality and secondary boycotts of U.S. sanctions laws such as the Iran-Libya Sanctions Act and the Helms-Burton Act.
On May 18, 1998, at the EU-U.S. London Summit, the parties issued a statement on “Transatlantic Partnership on Political Cooperation.” In that statement, as for economic sanctions, the parties agreed on a new set of principles. Economic sanctions should be used only as a last resort. “Wherever possible, effective measures taken by the UN Security Council are the optimal approach.” As to extraterritoriality, the parties agreed that “a partner will not seek or propose and will resist the passage of new economic sanctions legislation based on foreign policy grounds which is designed to make economic operators of the other behave in a manner similar to that required of its own economic operators.”
Citation: European Union News press release No. 43/98 (May 18, 1998); Notice on the WWW website of the WTO www.wto.org; The New York Times, April 21, 1998, page A1. [The complete statement on Political Cooperation is available on the website of the EC Commission Office in Washington, D.C., http://www.eurunion.org.]
Filed in: 1998 International Law Update, Issue 6
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U.S. Treasury Department implements Burma sanctions
On May 20, 1997, U.S. President Bill Clinton issued Executive Order 13047 “Prohibiting New Investment in Burma.” The Executive Order certified to Congress under Section 570(b) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act of 1997 [Pub.L. No. 104-208] that Burma’s Government had committed large-scale repression of the Democratic opposition, and thus invoked the U.S. prohibition on new investment by U.S. persons.
The Office of Foreign Assets Control of the U.S. Department of the Treasury has now issued the Burmese Sanctions Regulations (31 C.F.R. 537) to implement the Executive Order. The regulations bar any contracts that include the economic development of Burmese resources. Also, a U.S. person may not approve or facilitate such activities by a foreign person. The effective date of the regulations is May 21, 1998.
Citation: 63 Federal Register 27846 (May 21, 1998).
Filed in: 1998 International Law Update, Issue 6
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Federal Maritime Commission suspends per-voyage fees on Japanese vessels imposed as punishment for discriminatory Japanese port practices
The Federal Maritime Commission (FMC) recently imposed a $100,000 per-voyage payment for Japanese vessels as punishment for Japan’s alleged discriminatory port practices [see 1997 Int'l L. Update 45]. The alleged practices include the unfavorable licensing of port transportation businesses and the requirement of “prior consultation” for the docking of foreign vessels. Under the “prior consultation” system applied by the Japan Harbor Transport Authority (JHTA), shipping lines had to secure approval before changing their port schedules.
Effective November 13, 1997, the FMC suspended the sanctions in light of agreements reached between the U.S. and Japanese governments, and among the affected parties. The FMC learned on October 27, 1997, that government negotiators had agreed on a reform of Japanese port practices. It then entered into a consent order with the Japanese shipping lines concerned.
The order involved a compromise payment of $1.5 million for the month of September for Japanese vessels entering U.S. harbors. The FMC will stay its hand while the agreement on Japanese port practices is pending.
Citation: Federal Maritime Commission, Port Restrictions and Requirements in the United States/Japan Trade, 62 Federal Register 61648 (November 19, 1997). [The rule suspends the effective date of the rules published in 62 Federal Register 9696, amended by 62 Federal Register 18532.]
Filed in: 1997 International Law Update, Issue 12
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Canada and Cuba enact laws to counteract Helms-Burton Act
In response to the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (also referred to as the Helms-Burton Act), both Canada and Cuba have enacted counter-effective laws. The European Union, too, has recently adopted a regulation to restrict the enforcement of judgments based on the Act (see 1997 Int’l L. Update 2).
The Canadian law, called Bill C-54, An Act to amend the Foreign Extraterritorial Measures Act, went into force on January 1, 1997. In essence, it permits Canadian citizens to recover in their courts any losses that they have suffered as a result of the American Act. In particular, the Canadian law provides that:
- The Canadian courts may restrict the production of records and other information sought to enforce the Helms-Burton Act.
- The plaintiffs may recover the amounts of foreign judgments and additional damages in Canadian courts.
- Canadian courts will not recognize foreign judgments based on the Helms-Burton Act or may reduce the amount of the judgments.
The Cuban National Assembly adopted the Law on the Reassertion of Cuban Dignity and Sovereignty on December 24, 1996. The Law declares the “‘Helms-Burton’ Law illegal, inapplicable, and void of any value or juridical effect.” (Article 1). It does recognize, however, the possibility of compensating U.S. companies and individuals whose property the Cuban government had expropriated in 1959 when Fidel Castro came to power. It provides, in particular, that:
- Cuba is willing to provide fair and adequate compensation for expropriations. A negotiation process with the U.S. will determine the amount of the compensation with an offset for any damages that the U.S. has caused Cuba (Articles 2&3).
- Any use of the Helms-Burton Act is unlawful (Articles 4-8).
- Cuba will develop additional laws and regulations to counter the Helms-Burton Act (Article 13).
Citation: (1) The House of Commons of Canada, Bill C-54, An Act to amend the Foreign Extraterritorial Measures Act, 2nd Session, 35th Parliament, 45 Elizabeth II, 1996; (2) Cuban Law on the Reassertion of Cuban Dignity and Sovereignty (December 24, 1996). [You may obtain a Spanish version of the Cuban law from the Cuban Representation in Washington, DC, Phone: (202) 797-8518 or 797-8520.]
Filed in: 1997 International Law Update, Issue 2
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EU takes further action against Helms-Burton Act as well as Iran and Libya Sanctions Act; adopts position paper on Cuba policy to improve relations with U.S.; has WTO convene dispute panel to examine Act’s compatibility with GATT 1994 and GATS
The EU Council has issued a regulation intended to counter the effects of the U.S. Helms-Burton Act [Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996, Pub.L. No. 104-114 (March 12, 1996), H.R. 927, 110 Stat. 785] as well as the Iran and Libya Sanctions Act [see 1996 Int'l L. Update 143]. In Article 1, the regulation “provides protection against and counteracts the extra-territorial application” of the above laws. If these U.S. laws affect the interests of an EU person, that person must inform the EC Commission (Article 2). No EU person is to comply with any requirement or prohibition deriving from those U.S. laws (Article 5).
Most importantly, the regulation provides that “[n]o judgment of a court or tribunal and no decision of an administrative authority located outside the Community giving effect … to the [above] laws … shall be recognized or be enforceable in any manner.” (Article 4). Moreover, a person affected by those U.S. statutes may recover any damages from the “entity causing the damages or from any person acting on its behalf …” (Article 6). Such litigation has to conform to the Brussels Convention of 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters [29 I.L.M. 1413 (1990)].
The EU Council of Ministers, however, has taken some conciliatory action that might improve relations with the U.S. On December 2, 1996, it approved a “common position” designed to foster human rights in Cuba and critically to evaluate Cuba’s internal and foreign policies [96/697/CFSP, Common Position of 2 December 1996, 1996 O.J. of the European Communities (L 322) 1, 12 December 1996].
In a related matter, on November 20, 1996, the World Trade Organization (WTO) established a dispute settlement panel to review the EU complaint that Helms-Burton’s restrictions on Cuban goods and the possible refusal of U.S. visas are inconsistent with the U.S.’s obligations under the WTO Agreement (Case WT/DS38/2). According to the complaint, the Act violates GATT Articles I, III, V, XI, and XIII, as well as GATS Articles I, III, VI, XVI and XVII. Even if the Act does not violate specific requirements, the EU alleges that the Act “nullifies or impairs” its expected benefits under GATT 1994 and GATS, thus thwarting GATT 1994′s objectives.
Citation: Council regulation (EC) no 2271/96 of 22 November 1996 protecting against the extra-territorial application of legislation adopted by a third country …, 1996 O.J. of the European Communities (L 309) 1, 29 November 1996; European Union News press release No. 72/96 (December 3, 1996); EU to Adopt Paper on Cuba in Move to Heal U.S. Rift, 1996 Wall St.J. Eur. 2 (November 29, 1996).
Filed in: 1997 International Law Update, Issue 1
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EU enacts regulation to protect EU companies against Helms-Burton Act, approving “anti-boycott” regulation
The EU Council of Foreign Ministers has approved a regulation to protect European companies from the effect of the Helms-Burton Act [Cuban Liberty and Democratic Solidarity Act (Libertad)] [Note: The Act purports to affect companies outside the U.S. that do business with Cuba]. The regulation aims to protect EU companies and to counteract the effects of the extraterritorial application of the Act. It bars any person or company from complying with the Act or other legislative instruments that derive from it. Companies must notify the EU Commission how the listed extraterritorial laws affect their interests. The EU may grant exemptions if non-compliance might seriously damage the company or the European Union. The Member States must impose “effective, proportional and dissuasive” penalties on companies that violate the Regulation. EU courts are not to recognize or enforce the judgment of any foreign court that effectuates those extraterritorial laws. There are also “clawback” provisions whereby EU companies that have paid out damages under listed extraterritorial measures can get them back from a successful U.S. claimant anywhere in the EU.
Citation: You may obtain a copy of the draft Regulation from Delegation of the European Commission to the United States, Phone: (202) 862-9500; European Union News Press Release No. 62/96 (October 29, 1996) [Editors' Note: In the EU, a "regulation" is directly applicable law within the Member States and, unlike a "directive," does not require implementation by national law].
Filed in: 1996 International Law Update, Issue 12
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