GJIL Vol. 45
Hilary J. Allen, What Is “Financial Stability”? The Need For Some Common Language In International Financial Regulation
Post-Crisis international financial regulation is animated by the buzzwords “financial stability,” but surprisingly little attention has been paid to what these buzzwords actually mean. This Article argues that there are many—largely unexplored— disagreements regarding the meaning of “financial stability,” and that this lack of consensus has the potential to cause a host of problems. Chief amongst these is that disagreement about the meaning of “financial stability” can thwart harmonized national implementation of international financial stability regulation. To draw attention to this largely-ignored definitional problem, and to start the process of addressing it, this Article proposes a working definition of “financial stability.” The proposed definition reflects technical notions about the state of financial institutions and markets during periods of stability, as well as a value-based assessment of the financial system as a means to broader global economic prosperity, rather than an end in itself.
Inu Barbee And Simon Lester, Financial Services In The TTIP: Making The Prudential Exception Work
n the Transatlantic Trade and Investment Partnership (TTIP) negoti- ations, one point of contention has been the inclusion of financial services regulation. The United States considers itself very competitive in most service areas, and often pushes for more trade liberalization, but in financial services there has been great resistance among some in the U.S. government to open up the U.S. market to competition. Of particular concern is that appropriate “pruden- tial” regulation may not be possible because the typical exceptions for prudential measures in trade and investment agreements do not function very well. This Article argues that concerns about an ineffective prudential exception have been overstated, but nevertheless, improved language in this area could bring certainty and reassure critics that trade liberalization will not undermine domestic regulation.
Michael S. Barr, Who’s In Charge Of Global Finance?
The global financial crisis caused widespread harm not just to the finan- cial system, but also to millions of households and businesses and to the global economy. The crisis revealed substantive, fundamental weaknesses in global financial regulation and raised serious questions about whether national regulators and the international financial regulatory system could ever be up to the task of overseeing global finance. This Article analyzes post-crisis reforms with two questions in mind: First, how can we build an effective international financial architecture with more than one architect? Second, can we build a system that is legitimate and accountable? The Article suggests areas for further substantive and procedural reform.
Winthrop N. Brown, With This Ring, I Thee Fence: How Europe’s Ringfencing Proposal Compares With U.S. Ringfencing Measures
On January 29, 2014, the European Commission released a proposal to restructure the activities of the largest European banks. The proposal sets out various ringfencing and reinforcement measures designed to insulate EU depository institutions from activities deemed too risky. The proposal would ban a depository institution and its affiliates from engaging in proprietary trading and investing in certain private funds and would require that other risky activities conducted by a bank be reviewed by a national regulator for transfer to a ringfenced trading entity affiliate. Those evaluating this proposal will find it instructive to compare it with the ringfencing measures—not merely the recently adopted Volcker Rule—that have long been in effect in the United States. In performing such a comparison, this Article highlights significant policy issues raised by the proposal that are also important to evaluating its merits.
Jens Dammann, The Banking Union: Flawed By Design
Banking supervision in the European Union (EU) has traditionally been the prerogative of Member State authorities. The financial crisis that started in 2008 exposed the limitations of this regime. These included, most notably, a tendency of national supervisors to be overly generous towards domestic banks, and the difficulty of supervising transnationally operating banks in an effective manner.
To address these problems, the EU created the Single Supervisory Mechanism (SSM), which assigns the European Central Bank (ECB) a central role in supervising European banks. This reform represents substantial progress over the status quo ante. However, this Article argues that the SSM is nonetheless deeply flawed.
One shortcoming is that banking supervision is placed in the hands of an institution, the ECB, which already has a different and potentially conflicting mission, namely the pursuit of price stability.
In addition, the scope of authority bestowed on the ECB in the domain of banking supervision is woefully inadequate. The ECB has no supervisory authority over banks in countries outside of the Eurozone, unless the relevant Member States choose to cooperate voluntarily. Moreover, even within the Eurozone, only the largest banks are directly supervised by the ECB whereas less significant institutions continue to be supervised by Member State authorities. Finally, in supervising the largest banks, the ECB must cooperate with national authorities in a relationship that is unlikely to function well. In light of constitutional and political constraints, these limitations may seem understand- able. As a matter of policy, however, they threaten to undermine the effectiveness of banking supervision in Europe.
Daniel Heath, International Coordination Of Macroprudential And Monetary Policy
Macroprudential policy design now considers the role of monetary policy in financial stability. While traditionally regarded as a blunt, if comprehensive, instrument, monetary policy can enhance or dilute the impact of macropruden- tial regulations. A widening interest in the interaction of the two sets of policy tools leads to an examination of the legal and institutional frameworks for policy coordination. The cross-border role of monetary policy in macroprudential regulation and the international coordination of relevant policies receive rela- tively little attention despite the vivid lessons from spillovers and imbalances during the Global Financial Crisis. This paper considers the limited efficacy of the International Monetary Fund in policy coordination and urges the Fund to rigorously examine its approach to financial diplomacy. A minilateralist ap- proach to coordination, embodied in several current proposals, offers hopeful ways forward for global macroprudential policy.
Kathryn C. Lavelle, The Foundations Of Regulatory Convergence And Divergence Between The Federal Reserve And European Central Bank
Neither the U.S. Federal Reserve nor the European Central Bank was created as a bank supervisory institution. Each has evolved into its current role, yet for different reasons. While international institutions such as the Basel Committee and Financial Stability Board have promoted regulatory cooperation from the system level down, the international and internal dynamics that have propelled the expansion of these supervisory roles have put competing and, at times, opposing pressures on transnational regulatory convergence and divergence. In order to explore the foundations of regulatory divergence between the U.S. and Europe, this Article will compare the political origins of the regulatory function of the Federal Reserve with the Single Supervisory Mechanism (SSM) of the European Central Bank (ECB) by considering a vast array of influences that shaped these institutions such as statutory authority, domestic politics, and bureaucratic context. The result will point to future dilemmas in the regulation of foreign banking authorities with respect to formal political institutions at the intersection of national and international politics.
Isaac Pflaum And Emmeline Hateley, A Bit Of A Problem: National And Extraterritorial Regulation Of Virtual Currency In The Age Of Financial Disintermediation
The recent development of virtual currencies, such as Bitcoin, as well as the computer networks that support them, have opened new avenues for the un- banked to reduce transaction costs and gain access to capital without reliance on existing remittance networks or traditional, often foreign, banking institutions that are the primary focus of Basel III. As this Paper will illustrate, however, the use of Bitcoin as a virtual currency is just the beginning of what can become a larger trend towards disintermediation of the delivery of financial services more generally. To realize the full potential of this revolutionary technology, however, it is essential that a coherent regulatory approach be developed that will address abuses of the technology, including fraud, money laundering, and tax evasion, such as what has recently been brought to light in the Silk Road case. In the absence of coordinated international action, a robust extraterritorial appli- cation of the U.S. Criminal Code appears to be the most viable option for the United States to shape the development of this technology as a legitimate complement to the international banking system. This Article begins with a discussion of what Bitcoin is, why it is important, and how it has been regulated to date in the United States and elsewhere. This is followed by a discussion, using the Silk Road case as a guide, of how the extraterritorial use of the U.S. Criminal Code provides a mechanism for regulating Bitcoin in the absence of a more coordinated international approach.
Stacy Goto Grant, International Financial Regulation Through The G20: The Proprietary Trading Case Study
Since the 2008 Financial Crisis, the G20 has taken center stage and begun regulating areas such as capital adequacy and liquidity, over-the-counter de- rivative markets, and wind-down of systemically important financial institu- tions (SIFIs). However, noticeably absent from the G20’s agenda has been promulgation of a regulation of proprietary trading. This Note explores why proprietary trading needs to be regulated—and specifically regulated on the international level. The Note also discusses the various current domestic regulations and proposes an international regulation that requires banking entities to ring-fence against speculative proprietary trading and regulates nonbank SIFIs that engage in speculative proprietary trading.
Kohshi Arnold Itagaki, Private Party Standing In The WTO: Towards Judicialization Of WTO Decisions In U.S.Courts
Only member states of the World Trade Organization (WTO) are authorized to initiate disputes under the WTO’s dispute settlement procedures to remedy violations of WTO Agreements by other member states. There has been debate as to whether the WTO dispute settlement procedures should be expanded to allow private parties, such as corporations and non-governmental organizations, the opportunity to initiate disputes. The overwhelming use of the dispute settlement procedures by developed countries and significant underuse by developing countries suggest an imbalance in the system of WTO dispute settlement. It has been argued that this incongruity may be alleviated if private parties could initiate disputes that developing countries cannot afford or lack the expertise to initiate themselves.
The United States legislature has made clear that decisions by the WTO are not self-enforcing. Instead, they merely represent recommendations for how the United States should respond, rather than signifying international obligations. Similarly, U.S. courts tend to treat decisions by the WTO as non-binding, choosing instead to defer to the legislature regarding appropriate action (or non-action) to adverse decisions by the WTO against the U.S. government. Nevertheless, U.S. courts have judicially created doctrines at their disposal to assess legislative actions invoking issues of international law and may strike down a statute as unreasonable if it is in violation of the United States’ international obligations.
This Note examines the potential impact that private party standing will have on the treatment and weight of WTO decisions in U.S. courts. It presents the proposition that WTO decisions may have binding authority in U.S. courts (“judicialization”) as international obligations. Such an effect, however, may only be invoked in specific circumstances where (1) a private party files a suit in U.S. court against the U.S. government (2) relying on a WTO decision in favor of that same private party (3) for the government’s failure to comply (including non-action) with the WTO decision in favor of the private party. Public policy constraints to the potential judicialization of WTO decisions, however, may force U.S. courts to defer to Congress on how to treat WTO decisions in light of private party standing.
Paul Sarlo, The Global Financial Crisis And The Transnational Anti-Corruption Regime: A Call For Regulation Of The World Bank’s Lending Practices
The World Bank performs little to no due diligence when it makes loans to borrowing countries to contribute to their developmental projects. The result is a breach of fiduciary duty—one that invites corrupt governments and their affiliates to steal forty percent or more of the World Bank’s loans each year. The World Bank’s lending practices not only undermine the transnational anti-corruption regime, but they also compare to the transactions of subprime mortgage brokerages and investment bankers that precipitated the financial crisis. To curb the World Bank’s high-risk lending, organizations in the in- ternational community must regulate how the World Bank conducts its business, namely through a form of bank resolution known as interbank discipline.
Robert D. “Bodie” Stewart, Missing The Mark On Mark-To-Market: The Arguments Against The Camp Plan To Require Mark-To-Market Accounting For Non-Traded Speculative Derivatives
This Note examines proposed changes to the U.S. Tax Code that would institute a “mark-to-market” tax accounting system for derivatives. From the perspective of international financial regulation, this change could lead to a reduction in tax arbitrage because it would bring the U.S. tax system into closer harmony with the more global International Financial Reporting Standards (IFRS) regime. Depending on the implementing regulations, investors, compa- nies, and speculators would no longer be able to choose between the mark-to- market, fair-valuation regime under IFRS 13, a more global standard, and the system created by the U.S. Tax Code and Treasury regulations, which currently only requires mark-to-market tax accounting of derivatives for dealers and lacks a coherent policy for the tax treatment of speculative derivatives.
However, this Note goes on to argue that despite the potentially salutary benefits of arbitrage-reducing international regulatory harmonization, mark-to- market tax accounting would be the wrong choice for non-traded speculative derivatives. The success and administrability of mark-to-market accounting depends on access to fair market values, which do not exist in the absence of a robust secondary trading market. Thus, similarly to persons operating under IFRS 13, persons subject to the U.S. Tax Code and Treasury regulations would have to create valuation systems—either proprietary or according to regulatory guidelines—for their non-traded speculative derivatives. These valuation sys- tems would inherently depend on a mix of objective and subjective factors, which for non-traded derivatives—and particularly non-traded speculative derivatives— could easily lead to gamesmanship of valuation for tax purposes.
The ensuing confusion and potential abuse would be a net-negative result for a reform intended by U.S. Representative Dave Camp to bring clarity to the U.S. tax treatment of modern financial instruments such as speculative derivatives. Therefore, the Note concludes that such non-traded speculative derivatives should be carved out of any future mark-to-market tax accounting requirements under the U.S. tax system. If the primary desire of Representative Camp is to curb the use of speculative derivatives, there are other, simpler means (such as the discussion drafts’ provision that would treat the gains and losses from sales of such speculative derivatives as ordinary income, a result that at least for individuals could lead to much higher tax liability).
Jack M. Beard, Autonomous Weapons and Human Responsibilities
Although remote-controlled robots flying over the Middle East and Central
Asia now dominate reports on new military technologies, robots that are capable
of detecting, identifying, and killing enemies on their own are quietly but steadily
moving from the theoretical to the practical. The enormous difficulty in assigning
responsibilities to humans and states for the actions of these machines grows with
their increasing autonomy. These developments implicate serious legal, ethical,
and societal concerns. This Article focuses on the accountability of states and
underlying human responsibilities for autonomous weapons under International
Humanitarian Law or the Law of Armed Conflict. After reviewing the
evolution of autonomous weapon systems and diminishing human involvement
in these systems along a continuum of autonomy, this Article argues that the
elusive search for individual culpability for the actions of autonomous weapons
foreshadows fundamental problems in assigning responsibility to states for the
actions of these machines. It further argues that the central legal requirement
relevant to determining accountability (especially for violation of the most
important international legal obligations protecting the civilian population in
armed conflicts) is human judgment. Access to effective human judgment
already appears to be emerging as the deciding factor in establishing practical
restrictions and framing legal concerns with respect to the deployment of the most
advanced autonomous weapons.
David A. Koplow, What Would Zero Look Like? A Treaty for the Abolition of Nuclear Weapons
Nuclear disarmament—the comprehensive, universal, and permanent abolition of all nuclear weapons, pursuant to a verifiable, legally binding international agreement—has long been one of the most ambitious, controversial, and urgent items on the agenda for arms control. To date, however, most of the discussion of “getting to zero” has highlighted the political, military, technical and diplomatic dimensions of this complex problem, and there has been relatively little attention to the legal requirements for drafting such a novel treaty. This Article fills that gap by offering two proposed agreements. The first, a non-legally-binding framework accord, would be designed for signature relatively soon (e.g., in 2015) to re-commit states to the goal of nuclear elimination and to energize their concerted individual and collective action on a set of prescribed steps in pursuit of it. The second, a legally-binding document, would be concluded at some point in the more distant future, when states had accomplished great reductions in their current nuclear arsenals and were ready, at last, to plunge forward to true abolition.
The Article describes the conditions necessary for the further articulation of
these two novel agreements, and the text of each instrument carries numerous
annotations that identify competing options, describe the negotiating range, and
illuminate the drafter’s choices. The hope is that something novel can be
gained—fresh insights can be suggested, and new questions can be raised (even
if answering them remains elusive)—by advancing the dialogue about nuclear
disarmament to the concrete stage of treaty drafting.
Haochen Sun, Reforming Anti-Dilution Protection in the Globalization of Luxury Brands
The luxury industry plays an important role in many contemporary western
and eastern societies. This Article discusses the rapid global expansion of the
luxury industry and the role of anti-dilution laws in protecting luxury brands. It
reveals that luxury companies face two major challenges in securing adequate
anti-dilution protection while they market their products or services globally. At
the international level, the major intellectual property treaties afford no minimum
standards for anti-dilution protection of well-known trademarks. At the
domestic level, divergences in anti-dilution protection in the world’s three main
luxury markets, the European Union, the United States, and China, have
rendered it more difficult for luxury companies to prevent and stop the potential
dilutions of their brands. Based on the analysis of these two challenges, the
Article offers thoughts about how policymakers should improve anti-dilution
protection for luxury brands while meeting their duties to adequately protect the
Jared Hanson, Setting Aside Public Policy: The Pemex Decision and the Case for Enforcing International Arbitral Awards Set Aside as Contrary to Public Policy
In the recent Pemex case, a U.S. district court recognized an international
arbitral award which had been “set aside” or annulled by a court in Mexico, the
place of arbitration, on the ground that the award was contrary to public policy.
To reach its decision, the U.S. court relied on the permissive language of the
New York and Panama Conventions, but ignored its obligation to refuse
recognition of the award under the U.S. Federal Arbitration Act (FAA). This
Note argues that the FAA should be amended to preclude U.S. courts from
refusing to recognize awards which have been set aside on public policy grounds.
Under this amendment, the Pemex court would have reached the desirable result
without bypassing its obligations under the FAA.
Cooper Mitchell-Rekrut, Search Engine Liability Under the LIBE Data Regulation Proposal: Interpreting Third Party Responsibilities as Informed by Google Spain
The “right to be forgotten”—now branded as the “right to erasure”— has been publicized as one of the “four pillars” of the EU’s proposed General Data Protection Regulation. Although the right to erasure is not promised to be an absolute one, it has been retained and strengthened in subsequent drafts of the proposed Regulation. However, technological, jurisdictional, and other practical limitations to effectively erasing data remain substantial. Accordingly, search engines are at risk of becoming a central battleground for efforts to make undesirable data effectively inaccessible, if not actually erased.
In June 2013, First Advocate General of the European Court of Justice Niilo Jääskinen issued an advisory opinion on Google Spain, a case that directly addressed the liability of search engines under the right to be forgotten. The advisory opinion counseled strongly against according liability for erasure to search engines for the independently published content that they neutrally catalogue. Although the Advocate General analyzed Google Spain under the EU Data Protection Directive, the opinion is useful for considering the proposed Regulation and addressing problems that may appear therein.
The Regulation’s most recent draft proposal in particular creates problematic
ambiguity as to the possibility of search engine liability either as a “third party” or
a “controller.” In order to avoid the potentially severe consequences of subjecting
search engines to such liability, as noted in Google Spain, search engines
should be considered third parties, not controllers. Further, the right to erasure
should be clarified to ensure that direct liability does not extend to third parties.
Finally, in as much as search engines might be considered controllers, the bases of
lawful processing enumerated in the Regulation should directly accommodate
neutral search engines instead of requiring that they seek legal refuge in
derogations by individual member states.
Stephanie Redfield, Searching for Justice: The Use of Forum Necessitatis
Due to the vast inequality of power existing between oppressed citizens and
their oppressors, many victims of human rights violations never see justice. In
this globalized economy with increased mobility it is imperative that the fight for
justice moves forward. To that end, in situations where victims cannot achieve a
just or fair trial in the country where the offense took place, jurisdiction may be
permitted in limited circumstances by exercising forum necessitatis to effect the
customary international law norm of the right of access to justice.
E. Tendayi Achiume, Beyond Prejudice: Structural Xenophobic Discrimination Against Refugees
In this Article, I argue that the UN Refugee Agency’s global policy for addressing foreignness or xenophobic discrimination is inadequate. By focusing narrowly on harm to refugees resulting from explicit anti-foreigner prejudice, it ignores pervasive structural xenophobic discrimination—rights violations that result from the disproportionate effect of facially neutral measures on refugees due to their status as foreigners. I argue that the international human rights law that the UN Refugee Agency has used to compel regulation of explicit prejudice-based xenophobic discrimination also requires regulation of structural xenophobic discrimination. As a result, the UN Refugee Agency should adopt an inclusive approach that targets both forms of xenophobic discrimination.
Dawn C. Nunziato, The Beginning of the End of Internet Freedom
Although the Internet was initially viewed as a medium for expression in which censorship would be impossible to implement, recent developments suggest exactly the opposite. Countries around the world—democracies as well as dictatorships—have implemented nationwide filtering systems that are changing the shape of Internet freedom. In addition to usual suspects like China, liberal democracies such as the United Kingdom and Australia have taken steps to implement nationwide Internet filtering regimes. In 2013, United Kingdom Prime Minister David Cameron announced a plan to require mandatory “family friendly” default filtering of all Internet access by the end of 2014. While such Internet filtering regimes may have laudable goals—like preventing children from accessing harmful content and preventing access to illegal child pornography— they inevitably lead to overblocking of harmless Internet content and present grave dangers of censorship.
International protections for freedom of expression, as well as the United States’ protections for First Amendment freedoms, provide not only substantive but also procedural protections for speech. These procedural protections are especially important for countries to observe in the context of nationwide Internet filtering regimes, which embody systems of prior restraint. Prior restraints on speech historically have been viewed with great suspicion by courts and any system of prior restraint bears a strong presumption of unconstitutionality. To mitigate the dangers of censorship inherent in systems of prior restraint such as those embodied in nationwide filtering systems, any country adopting such a system should provide the requisite procedural safeguards identified in international and U.S. law, including (1) by providing affected Internet users with the ability to challenge the decision to filter before an independent judicial body, (2) by providing meaningful notice to affected Internet users that content was filtered, and (3) by clearly, precisely, and narrowly defining the categories of speech subject to filtering.
Jordan J. Paust, Armed Attacks and Imputation: Would a Nuclear Weaponized Iran Trigger Permissable Israeli and U.S. Measures of Self-Defense?
This Article addresses a pressing issue of global concern—whether Israel and the United States would have a right under international law to engage in measures of self-defense against Iran if Iran creates a nuclear warhead. This specific question is considered in connection with two more general issues regarding the law of self-defense—first, the question of when an armed attack has commenced, and second, the question of when non-state actor armed attacks can be imputed to a state for the purpose of measures of self-defense against the state. As the Article notes, too few legal writers have paid detailed attention to various aspects of context that should be addressed when making realistic and policy-attentive decisions regarding whether an armed attack has begun. Meanwhile, too many legal writers have used the wrong test with respect to the interrelated issue of whether non-state actor armed attacks can be imputed to a state. With respect to imputation, the Article provides detailed attention to circumstances of direct and complicit aggression by a state and clarifies the substantial involvement test.
William Thomas Worster, The Inductive and Deductive Methods in Customary International Law Analysis: Traditional and Modern Approaches
Contemporary customary international law analysis is currently understood to be a struggle between traditional and modern approaches, implicating significant normative outcomes. These opposing approaches are supposed to reflect the use of the inductive and deductive methods respectively, with the former excusing the freedom of action of the state and the latter limiting the freedom of the state. This image of two schools, possibly in struggle, however, does not fully capture the ways in which the inductive and deductive methods are actually intertwined in customary international law analysis. The methods are not two opposing monolithic techniques. Instead, in practice, the methods are intermixed, combining a variety of choices. This Article will suggest the complex ways inductive and deductive analyses are layered in the assessment of customary international law and refute the notion that the inductive and deductive approaches can be so easily separated.
Customary international law is based on a deductive foundation that that the binding nature of the law can be based on consent, that custom is a source of law, and that custom is established by state practice and opinio juris. In determining which rules are binding under customary international law, we use either induction or deduction to construct hypotheses about the law, and determine that those hypotheses can be tested through a sampling study, amassing evidence. The conclusion that we can test for the law through an inductive process, is itself a deduction, and a deduction that avoids the question of whether the issue to be tested is truly a question of law or one of fact. After all, questions of fact are more easily understood as inductively verifiable. Once we determine that we can test for the law, we must construct most frequently through deduction, the types, forms and qualities of evidence, and the nature of the actors, that will be admissible for this examination. We reach conclusions on the form of the data pool and how it is to be assembled and we assess the sufficiency of the evidence to prove the hypothesis being tested, again most likely through deduction. Once we are convinced that the threshold of proof for the hypothesis has been met, we need to take the final step of determining whether that convincingly descriptive study can be realized as a prescription.
What we see is that fundamental, foundational questions about the methodology, process of analysis, and forms of evidence are largely deduced, whereas questions about the empirical verification of practice and opinio juris are largely induced. This conclusion means that no analysis of customary international law can be completely classified as deductive or inductive. Instead, each act of customary international legal analysis employs a blend of approaches across a handful of questions. In doing so, it balances the tension between apology and utopia, and realizes the benefit of the differing approaches. We can only critique the balance struck in each case and argue whether it is a just balance.
Shelby Leighton, Al-'Aqaba: What One Village Can Teach Us About the Law of Corruption
Al-‘Aqaba is a small village located in Area C of the West Bank, where Israel has full civil and military control. Ninety-seven percent of the structures in the village are under a demolition order, which means that the Israeli military can demolish houses, businesses, or the village school at any time. This is due to Israeli planning laws in the West Bank that block virtually all Palestinians from obtaining building permits to build on their own land. This Note examines these laws in the context of the law of occupation, questioning its applicability to prolonged occupations such as Israel’s occupation of Palestinian territories since 1967. In particular, it argues that contemporary prolonged occupations require significantly more proactive governance than conventional, temporary occupations, and that this need for increased involvement in the day-to-day lives of the occupied people contradicts the principle in Article 43 of the Hague Regulations and Article 64 of the Fourth Geneva Convention that the occupier must not change the laws of the occupied territory unless absolutely necessary. This Note uses Al-‘Aqaba to illustrate how a failure to update the laws of occupied territories and take a proactive approach to governance can lead to discrimination and violations of basic rights in the occupied territory. To address this failure, this Note suggests that the international community adopt a view of the law of occupation that incorporates international human rights law.
Alex Schank, Sectarianism and Transitional Justice in Syria: Resisting International Trials
Speculation has swarmed regarding prospects for transitional justice in Syria, and international actors have been particularly insistent on the need for international criminal courts to hold the Asad regime and opposition militant groups accountable for the human rights violations and war crimes they are committing on a near daily basis. These early calls for accountability in Syria often presuppose that the conflict is sectarian in nature, rendering the Syrians hopelessly divided by religion and ethnicity and in need of international assistance to bring about justice and reconciliation in their society. The historical experiences of Iraq and Lebanon caution against such a presupposition. They demonstrate how the fusing of sectarian discourse and international justice schemes has politicized international trials and entrenched ethno-religious divisions. In the Syrian context, this fusing obscures the political motivations of international actors, plays into the hands of the Asad regime’s sectarian narrative, and ignores the non-violent democratic activism that underlies the Syrian uprising. While the appropriate transitional justice mechanism for Syria is a decision for Syrians to make, this Note posits that truth-telling informed by religion can play a role in fostering reconciliation and accountable governance in the Syria of tomorrow.
Catherine M. Yang, Accounting for Accountability: A Post-Conflict Role for Transnational Advocacy Networks in East Timor
East Timor, located in Southeast Asia between Indonesia and Australia, is a fairly new democracy with a long history of colonization, occupation, and mass violence. On August 30, 1999, the East Timorese voted overwhelmingly to achieve independence from Indonesian rule. The Indonesian military and militias responded with a wave of violence that abated only with the intervention of the UN-mandated International Force in East Timor.
Though accountability mechanisms emerged in the aftermath, practical shortcomings in the efforts derailed the goal of meaningful accountability. As a result, there exists a gap in accountability for the East Timor-Indonesia conflict, such that high-level officials responsible for the violence have evaded prosecution and responsibility for their actions.
This Note takes the framework of transnational advocacy networks (TANs) out of its traditional usage—helping to end ongoing human rights violations— and applies it to the post-conflict situation in East Timor, asking whether and how TANs can influence implementation of meaningful accountability mechanisms in the aftermath of mass violence. The Note proposes three interrelated ways in which TANs can work to close the gap in accountability in East Timor: by (1) engaging in capacity building and domestic legal development, (2) participating in domestic legal proceedings, and (3) maintaining external and internal communications. It concludes that, even though there will be challenges in overcoming the present lack of political will, TANs can help to lay the groundwork for future, more comprehensive accountability efforts.
Judge Timothy C. Stanceu, full text
Jeffrey D. Gerrish and Luke A. Meisner, U.S. Court of International Trade Overview: Non-Market Economy Cases in 2012
In 2012, the U.S. Court of International Trade (CIT) advanced its jurisprudence related to antidumping proceedings involving nonmarket economy (NME) countries in a number of key areas. First, the CIT reviewed the evolving methodology used by the U.S. Department of Commerce (Commerce) for valuing labor in a NME. It upheld both an interim labor methodology and a new labor methodology used by Commerce but established certain limits on the implementation of these two methodologies based on the facts of particular cases. Second, the CIT required Commerce to more rigorously evaluate the reliability of certain data used to value raw material inputs for NME producers. Third, the CIT upheld Commerce’s application of adverse facts available to respondents who failed to cooperate in NME antidumping proceedings under a broad range of circumstances. However, the CIT was split in two decisions regarding whether Commerce could apply an adverse inference to determine a non-cooperating respondent’s entitlement to an antidumping duty rate separate from the NME-wide rate. The CIT was also split regarding the application of adverse facts available to NME respondents whose suppliers failed to provide data regarding their factors of production. In addition, the CIT signiﬁcantly limited Commerce’s discretion in calculating rates for non-cooperating respondents based on adverse facts available. Fourth, the CIT began to show increasing concern with the growing trend of circumvention and evasion of antidumping duty orders on NME countries. Finally, the CIT issued three decisions in the NME arena that, while not part of a broader pattern of cases, represent potentially signiﬁcant decisions in their own right. These decisions address Commerce’s selection of a country to serve as the primary surrogate market economy country in a NME case, Commerce’s determination of separate rate status for a company controlled by a state-owned enterprise, and Commerce’s policy of declining to conduct administrative reviews of antidumping duty orders for respondents with no unliquidated entries of subject merchandise.
Matthew R. Nicely and Robby S. Naoufal, 2012 U.S. Court of International Trade Decisions on Department of Commerce Market Economy Trade Remedy Decisions
This Article reviews the 2012 decisions of the Court of International Trade involving appeals by interested parties in Department of Commerce antidumping and countervailing proceedings for market economy countries. The Article outlines and analyzes the most important and sometimes recurrent issues addressed by the Court in 2012. Among the issues addressed were exhaustion of administrative remedies, zeroing of negative dumping margins, application of adverse inferences, collapsing entities, model matching methodologies, and calculation of production costs and sales expenses.
Neal J. Reynolds, The Court of International Trade’s Review of the International Trade Commission’s Injury Determinations in Antidumping and Countervailing Duty Proceedings in 2012: An Overview and Analysis
In 2012, the U.S. Court of International Trade issued several decisions addressing the International Trade Commission’s cumulation and likely injury analysis in sunset reviews, its injury and threat ﬁndings in original investigations, and its domestic like product analysis. The Court afﬁrmed the Commission’s determinations in each appeal, applying the appropriate level of deference to the Commission’s determinations under the statutory standard of review. The Court’s decisions reﬂect a traditional judicial approach to review of the Commission’s action under the antidumping and countervailing duty laws.
Lawrence M. Friedman and Christine H. Martinez, The Court of International Trade’s Denied Protest Jurisprudence in 2012
In 2012, the Court of International Trade considered a number of issues related to U.S. Customs and Border Protection’s denial of an administrative protest. Those decisions provide new guidance for importers involving questions of law and evidence, the use of experts in commodity classiﬁcation cases, determining the “principal use” of an article for classiﬁcation purposes, and the role of amici, intervenors, and patent jurisprudence in customs cases.
The Court also considered issues related to the content, sufﬁciency, and timeliness of the underlying administrative protest and failures that resulted in a lack of subject matter jurisdiction vesting with the Court. These issues and the Court’s decisions are analyzed and discussed in this overview of 2012 Court of International Trade opinions arising under the jurisdiction conferred in 28 U.S.C. § 1581(a).
Nancy A. Noonan, Court of International Trade Decisions during 2012 under 28 U.S.C. § 1581(I) Residual Jurisdiction
The Court of International Trade declined to use its residual jurisdiction in cases where the Court determined other jurisdictional provisions were available to plaintiffs. Where the Court reached the merits of cases brought pursuant to the residual jurisdiction provision, the plaintiffs’ relief at surviving the jurisdictional issue was short-lived. Those cases, which all involved challenges to the same statutory provision known as the Continued Dumping and Subsidy Offset Act, were dismissed for failure to state claims upon which relief could be granted. In short, the residual jurisdiction cases of 2012 do not provide any encouragement to plaintiffs who want to use the Court’s residual jurisdiction for favorable decisions on the merits. Nevertheless, it remains clear that the Court will use its residual jurisdiction in appropriate circumstances where its other jurisdictional provisions were not available to the plaintiffs.
Stephen C. Tosini, Developments in Customs Penalties in the Court of International Trade in 2012
The Court of International Trade is an Article III federal court created by Congress to address challenges to federal governmental actions involving international trade and afﬁrmative civil actions brought by the government to recover lost customs duties or penalties for violations of the customs laws. The court’s exclusive jurisdiction is narrowly deﬁned by statute to include speciﬁc matters, including certain afﬁrmative civil enforcement actions brought by the government against importers and customs brokers.
In its recent decisions related to afﬁrmative civil enforcement, the court has lessened its focus on the conduct of violators and turned its scrutiny towards the actions of U.S. Customs and Border Protection (CBP), requiring that the agency closely follow all administrative procedures before the government may sue a violator. This renewed scrutiny of government action primarily relates to two areas. First, unlike earlier decisions which focused on defendants’ conduct in penalty actions, the court has continued its recent trend of strictly requiring the government to exhaust administrative remedies during penalty proceedings, regardless of the defendants’ conduct or whether any administrative shortcoming prejudiced the defendant. Second, the court has begun to more closely scrutinize motions for default judgment in afﬁrmative enforcement actions.
The court also issued two other noteworthy decisions related to customs enforcement beyond the trend of focusing on CBP’s administrative actions. The court ﬁrst enforced CBP’s regulation which mandates that a carrier is responsible for duties owed on merchandise that is entered into the United States for re-exportation should the carrier be unable to establish that the merchandise was, in fact, re-exported. Second, the court declined to enjoin a district court action between an importer and a surety, in which the surety sought subrogation from the importer for amounts paid to CBP.
Beverly A. Farrell, Developments in Jurisdiction under 28 U.S.C. § 1581(A) and Customs Bond Enforcement in the U.S. Court of International Trade in 2012
This Article discusses several decisions issued by the United States Court of International Trade in 2012 that address the scope of the court’s jurisdiction commenced pursuant to 28 U.S.C. § 1581(a). Taken together, these decisions reﬂect that the court narrowly construes the scope of its own jurisdiction under § 1581(a). This Article also discusses a decision, currently on appeal, concerning whether the United States is entitled to equitable interest and interest pursuant to 19 U.S.C. § 580 when the government commences a collection action upon a customs bond.
Jordi de la Torre, The Hague Choice of Court Convention and Federal Power over State Courts
This Note addresses some of the constitutional issues that would arise if Congress enacted a statute to implement the Hague Choice of Court Convention. Congress could take such action under its Commerce Power or under its power to implement treaties. Because such a statute would regulate the procedures used by state courts adjudicating state law cases, it raises speciﬁc federalism concerns. This Note addresses those concerns and concludes that none of them is a bar to congressional action. State court procedures are not shielded from federal regulation. Even if Congress could not regulate state court procedures directly, however, it could federalize substantive law and then impose its choice of procedures as “part and parcel” of the newly created federal rights or as a necessary measure for its effective vindication.
Kate Hadley, Do China’s Bits Matter? Assessing the Effect of China’s Investment Agreements on Foreign Direct Investment Flows, Investors’ Rights, and the Rule of Law
Countries around the world pursue international investment agreements as an important component of their foreign policies. Government spokespeople and international organizations assert that investment agreements increase foreign direct investment (FDI) and support investors’ rights and the rule of law in developing countries. It is far from clear, however, whether investment treaties actually affect FDI ﬂows or developing countries’ legal systems. There have been few studies of the effects of investment agreements, and those that exist have advanced conﬂicting conclusions. This Note ﬁlls this gap in our understanding of investment agreements by analyzing the effects of the fastest-growing and most important bilateral investment treaty (BIT) program in the world: China’s.
This Note argues that China’s BITs seem to have been effective at promoting inbound FDI in China. On the other hand, they do not seem to have increased FDI ﬂows into China’s developing country treaty partners; this applies both to aggregate FDI inﬂows and to FDI from China alone. This suggests that, while BITs serve as a credible commitment by the Chinese government to property protection and liberal investment policies, China’s BITs with other developing countries may serve primarily political, rather than economic, purposes.
With respect to legal rights under the treaties, this Note argues that foreign investors’ rights under Chinese law have expanded and become more enforceable due to changes in the language of China’s BITs, and that these changes may promote rule of law development in China. The pro-investor and pro-rule of law changes to treaty language have occurred primarily through China’s BITs with developed, liberal partner countries. This suggests that the BIT programs instituted by developed countries and developed country groups, like the Organisation for Economic Cooperation and Development and the European Union, have been effective policy instruments for increasing investment ﬂows and strengthening investors’ rights and the rule of law. Overall, therefore, this Note argues that, for China and the developed democracies, BITs seem to be achieving their declared goals of increasing inbound FDI into China and promoting property rights and the rule of law.