Extraterritorial
Application of National Legislation:
Sanctions
Imposed Against Third Parties
Remarks
by H. E. Dr. M. Javad Zarif
Deputy
Foreign Minister of the Islamic Republic of Iran
for
Legal and International Affairs
In the
Name of God the Compassionate the Merciful
1. At the outset I wish to make some general remarks concerning
the topic under discussion. Subsequently, I will make an attempt to depict,
from the legal point of view, the status of Extraterritorial Application of
National legislation in the contemporary international relations. Lastly, I
will make a specific reference to the recent legislation of the United States
with Extraterritorial effects.
A. General Remarks
2. First, the principles of Sovereign Equality and Territorial
Integrity of states are fundamental principles of international law, that form
the cornerstones of the contemporary international relations. Respect for these
principles have been incorporated in a number of international instruments
including inter-alia the Charter of the United Nations, Manila Declaration on
the Peaceful Settlement of International Disputes and the Declaration on
Principles of International Law Concerning Friendly Relations.
3. Second, sovereignty, primarily is territorial and
"includes certain powers to be exercised within a particular territory
unimpeded by any interference from outside."[1] As it
was declared in the North Atlantic Coast Fisheries case:
One of the essential elements of sovereignty is
that it is to be exercised within territorial limits, and that, failing proof
to the contrary, the territory is coterminous with the territory.[2]
4. Thus, in international law, territorial sovereignty
continues to remain a right "with which almost all international relations
are bound up."[3] As the
International Court of Justice has observed. "territorial sovereignty is
an essential foundation of international relations."[4]It is
obvious that the territorial sovereignty of each State imposes corresponding
obligation of non-intervention and non-interference on the part of other
States.
5. Third, It must be emphasized however, that in contemporary
international relations states do not enjoy the absolute sovereignty. The old
theory of absolute sovereignty fitted in very well with the actual conditions
of international society at that time. In place of an "anarchy of
sovereignties" there exists a society of interdependent states, bound by
international law. They are not only bound by freely accepted treaty
obligations, but also by generally accepted principles of customary
international law. It has to be stated further, that sovereignty creates
international law, and that law recognizes sovereignty as its foundation and as
a basic principle of law among nations. To put it bluntly, the law of nations
is not enacted by some higher authority and superimposed upon states; it arises
directly from their consent. It is a law of not subordination but of
coordination. As the Permanent Court of International Justice observed in LOTUS
case:
International law governs relations between
independent states. The rules of law abiding upon states therefore emanate from
their own free will as expressed in conventions or by usages generally accepted
as expressing principles of law and established in order to regulate relations
between those co-existing independent communities or with a view to the
achieving of common aims.
6. Thus, while the will of parties creates law between them, it
does not depend on the discretionary will of the state whether it should or
should not respect the principles of international law.
7. Forth, it is universally admitted that in the case of a
conflict between municipal law and international law, the latter prevails over
the former. The Permanent Court of International Justice observed in the
Treatment of Polish Nationals in Danzig case:
According
to generally accepted principles, a state cannot rely, as against another
state, on the provision of the latter's constitution, but only on international
law and international obligation duly accepted....and conversely, a state
cannot adduce as against another state, its own constitution with a view to
evading obligations incumbent upon it under international law or
treaties in force.
B. legal Status of
Extraterritorial Application of National Legislation
8. Now I wish to turn to the Status of Extraterritorial
Application of National Legislation in International Law. The doctrine
concerning extraterritorial application of national legislation is not well
settled. there are no uniform or universally settled principles in this regard.
The basic principle, however, is that all national legislation are, prima
facie, territorial in character. While the Permanent Court in the Lotus
Case, recognized this principle, it also held that several states did
approve extraterritorial effect being given to their national laws and that
such a policy and practice were not prohibited by international law.
9. There are other principles, however, extending the
jurisdiction of states beyond their boundaries. These are inter alia:
nationality principle, under which a state may prescribe laws governing the
conduct of its citizens irrespective of where they reside; in accordance with
the "passive personality principle", a state may assume jurisdiction
for offenses committed outside its territory against its nationals; the effect
principle, provided the basis for some countries to extend the reach of their
laws over activities affecting their interests (including the interests of
their nationals); and finally, universal jurisdiction, may be invoked to
prosecute the offenses that recognized by the community of nations, as of
universal concern, such as piracy, salve trade, attacks on or hijacking of
aircraft, genocide, and war crimes. These principles are indeed exceptions to
the basic principle of jurisdiction, the principle of territoriality.
10. Although the doctrine concerning extraterritorial application
of national legislation, as was illustrated, is not well settled, In some cases
public international law provides for detailed rules concerning the exercise of
extraterritorial jurisdiction. For instance the Vienna Conventions on Consular
and Diplomatic relations provide detailed rules concerning the application of
laws of sending states in receiving states of diplomatic and consular missions.
Apart from those cases that regulated by public international law, a state may
at bilateral level allow another state to exercise jurisdiction in its
territory in specific areas such as custom matters. International law, however,
does not provide a complete set of provisions concerning the limits of
extraterritorial jurisdiction.
11. Lack of a comprehensive set of rules and regulations at the
international level cannot and should not be construed to provide a leeway for
those states that wish to extend their jurisdiction beyond their boundaries to
the detriment of other sovereign and independent states. Based on the
principles of Sovereign Equality of States and Exclusive Sovereignty of states
over their national territories, the legality of extraterritorial effects of
administrative, judicial, and legislative acts of states has to be tested as to
whether these fundamental principles are violated.
C. National Legislation with
Extra-territorial Effect Violate Principles of International law
12. Now I come to the last segement of my statement. There have
been instances that certain legislation enacted by a given state which extended
the jurisdiction of that state beyond
its boundaries contrary to the norms and principles of international law. These
types of conduct of states have been objected and continue to be opposed by
other states of the international community. For instance two legislation
enacted by the United States Congress, that extended the jurisdiction of that
states beyond its territory, by imposing sanctions against third states that
invest in, or enter into business with Iran, Lybia and Cuba.
13. It needs to be clarified here that measures adopted by the
United States Administration to interrupt foreign trade relations of Iran,
Libya and Cuba are totally different from regular economic policies that states
normally follow in pursuit of their material advantages. They are, without
doubt, concerted and coercive efforts for achieving political objectives and destabilizing
the countries mentioned.
14. The imposition of sanction is permissible only by the United
Nations under the Chapter seven of the Charter. Article 41 of the United
Nations Charter provides for including inter alia "complete or
partial interruption of economic relation" in order to give effect to the
Security Council decisions with respect to maintaining or restoring
international peace and security, without using the term "sanctions"
to designate such measures. Sanctions can only be imposed by the Security
Council against a law-breaking state after the determination of the existence
of "threat to peace, breach of peace or act of aggression".
The Security Council has followed this procedure over the past half a century.
Although the sanction policies of the United Nations remains under sever
criticism, the powers of the United Nations to enforce sanctions and the
obligation of the member states to abide by such decisions continue to remain
as a part and parcel of contemporary international law.
15. Whereas the international Community has empowered the United
Nations only to adopt coercive economic measure on specific conditions where
there exists threat to peace or breach of peace, actions of states to
unilaterally exert coercive economic measures against other states has no
foundation in international law. Various resolutions adopted by the United
Nations organs affirms this point.
16. I will make reference only to the latest examples in this
respect. General Assembly Resolutions 47/19 and 50/10 while expressing concern
over "application by member states of laws and regulations whose
extra-territorial effects affect the sovereignty of other states and the
legitimate interests of entities or persons under their jurisdiction, and the
freedom of trade and navigation",reiterate its call to all States to
refrain from promulgating and applying such laws and measures in conformity
with their obligations under the Charter of the United Nations and
international law which, inter alia, reaffirm the freedom of trade
and navigation. These resolutions call upon States to revoke such laws:
Urges States which have such laws or measures to
take the necessary steps to repeal or invalidate them as soon as possible in
accordance with their legal regime.
17. Imposition of sanctions violate the principle of
non-intervention. The principle of non-intervention is backed by established
and substantial state practice, indicating the existence of opinio juris
of states.
18. Moreover, the principle has been presented as a corollary of
the principle of sovereign equality of states. A particular instance of this is
General Assembly Resolution 2625(XXV), the Declaration on the Principles of
International Law Concerning Friendly Relations and Co-operation among States.
19. As regards the exact content of the principle so accepted,
treaties, Resolutions of the General Assembly and the proceedings of the
International Court of Justice provide ample evidence that it encompasses the
rejection of intervention and interference in both internal and external
affairs of other states..
20. The International Court of Justice considered the content of
this principle in the Case Concerning Military and Para military Activities in
and Against Nicaragua, and ruled in the following terms:
[I]n the view of the generally accepted
formulations, the principle forbids all states or groups of states to intervene
directly or indirectly in internal or external affairs of other states. A
prohibited intervention must accordingly be one bearing on matters in which
each state is permitted by the principle of state sovereignty, to decide
freely. One of these is the choice of a political, economic, social and
cultural system, and the formulation of foreign policy. Intervention is
wrongful when it uses methods of coercion in regard to such choices, which must
remain free ones.
21. States Practice opposes imposition of unilateral sanctions.
the strong opposition demonstrated by various governments around the world,
before and after the enactment of the Sanctions Act, has proved that the
International Community stands firm to reject the extraterritorial application
of domestic legislation of the United States.
22. The European Union strongly opposed the enactment of such
legislation by the United States calling the extraterritorial application of
U.S. jurisdiction baseless in international law. Speaking on behalf of the European
Union before the 51st Session of the General Assembly the Permanent
Representative of Irland stated:
the European Union wishes to reiterate its
rejection of attempts to apply national legislation on an extra-territorial
basis. We have always rejected attempts by the United States to coerce other
countries into complying with the commercial measures it has adopted
unilaterally against Cuba.
For this reason, we continue to oppose United
States legislation which provides for the application of United States law to
companies and individuals outside the jurisdiction of the United States,
including provisions designed to discourage third country companies from
trading with, or investing in, Cuba. We cannot accept that the United States
may unilaterally determine or restrict the European Union's economic and
commercial relations with any other State. Measures of this type violate the
general principles of international law and the sovereignty of independent
states.
23. The Non-Aligned Movement, in several
statements, including one adopted after the signature of D'Amato law, rejected
extra-territorial application of domestic law as illegal and unacceptable. The
Ministerial meeting of the Group of 77 in New York in October 1996, and
the preparatory meeting for the 24th OIC Ministerial Conference
adopted similar positions. Finally the General Assembly, in its resolution
A/51/23, called for the immediate repeal of unilateral extraterritorial
measures.
24.
The serious opposition to U.S. unilateral measures, particularly those with an
extra-territorial dimension, indicate that the world community has detected the
gravity of this new tendency and its implications which go far beyond the
attempt by the United States to implement its hostile policy against Iran or
few other States.
25. Indeed it is a duty for free and
independent states to continue to oppose the illegal extraterritorial application
of national legislation of other states. Failure of the international community
in encouraging the recalcitrant states to abide by the law of nations would be
a step backwards which, may lead to the retrieval of the old society of
"anarchy of sovereignties".
[1]. Anand, R. P.,
"Sovereignty of States in an Interdependent World", Recueil Des
Cours, Collected Courses of Hague Academy of International Law, 1986, p. 27.
. On August
4, 1996, the President of the United States signed the Iran-Libya
Sanctions Act of 1996, passed earlier by U.S. Senate and House of
Representatives, imposing sanctions against foreign companies that make
investments which contribute to Iran's ability to develop its petroleum
resources..
. On March 12, 1996, President Clinton signed the Cuban
Liberty and Democratic Solidarity Act of 1996, generally known by names its
principal cosponsors as the Helms-Burton Act. The Act is a mixture of
codification of existing economic sanctions previously imposed pursuant to
executive orders; inducement and promises related to restoration of democracy
in Cuba; threats against persons from third countries that do business with
Cuba; a new, unprecedented remedy for expropriation; and restriction on entry
into the United States by persons who "traffic in confiscated
property" or who are affiliated with such persons by ownership ,
employment or family. (Pub. L. No. 104-114, Stat 758 (Mar. 12, 1996), see also
"AGORA: The Cuban Liberty and Democratic Solidarity Act", AJIL, Vol.
90:419, pp. 419-440.)
.
It has been argued that by imposing sanctions the Security Council intends to
discipline the government of a target state, whereas the population of that
state suffer as a result of these measures. Furthermore, coercive economic measures
sometimes lead to new conflicts and therefore prove to counter-productive.
Applying double standard in inflicting embargo is another point that concerns
many states. The adverse effects of sanctions on third parties is another flaw
which has been on the agenda of the United Nations for years. See Hans Kochler,
The United Nations Sanctions Policy and International Law, Just World Trust,
1995, pp. 6-7.
.The
United Nations Conference on Trade and Development condemned the application
of economic coercion, especially when it is used against developing countries.
That
resolution also signified that "such measures do not help to create the
climate of peace needed for development." In a resolution entitled Rejection
of Coercive Economic Measures stipulates in part:
all developed countries shall refrain from
applying trade restriction, blockade, embargoes and other economic sanctions
incompatible with the provisions of the Charter of the United Nations ...
against developing countries as a form of political coercion which affects
their economic, political and social development. (UNCTAD Resolution 152 (IV)
dated July 2, 1983).
The General Assembly has repeatedly denounced
economic coercion as a means of achieving political goals. Among these the
resolution entitled "Economic Measures as a means of Political and
Economic Coercion against developing Countries" has strongly urged the
industrial nations to reject the use of their superior position as a means of
applying economic pressure "with the purpose of inducing changes in the
economic, political, commercial and social policies of other countries."
(G.A. Resolution 210 of December 1991.)
. General Assembly Resolution A/50/L.10 dated
November 2 1995.
. The principle of non-intervention is embodied in
Article 8 of the Montevideo Convention on the Rights and Duties of States 1933;
Article 15 of the Charter of the Organization of American States 1948; Article 8 of
the Charter of the League of Arab States 1945; and Article 3 of the Charter of
the Organization of African Unity 1963.
.
The American states have provided a specific criterion concerning the
non-intervention principle in Article 18 of the "OAS Charter", adhered to by the
United States, which, as may be seen in the text, is clearly declaratory of a
general principle of international law applicable to all states, and not
limited to relations between state-members of OAS:
No
State or group of States has the right to intervene, directly or indirectly,
for any reason whatever, in the internal or external affairs of any other
State. The foregoing principle prohibits not only armed forces but also
other forms of interference or attempted threat against the personality of the
State or against its political, economic, and cultural elements.
.
In a letter addressed to Senator Robert Dole on December 7, 1995, and in a separate
letter addressed to the State Department on December 8 1995, the European Union
made a strong and unequivocal protest against the extraterritorial application
of the United States legislation, which imposes sanctions on foreign persons,
who export, transfer, or release to Iran any petroleum-related goods or
technology. These letters of protests are almost identical and state inter
alia:
However, as stated in the letter of 3 May, the
European Community maintains its strong and unequivocal opposition to the
extraterritorial application of U.S. jurisdiction which would restrict EC trade
with third countries as a matter of law and policy, and takes the position that
the U.S. has no basis on international law to claim the right to impose
sanctions on any foreign person or foreign-owned company who supplies Iran with
oil development equipment. This applies particularly to sanctions against trade
in products that have no connection with proliferation-related technology.
(The text of the letter is reprinted in, Inside
U.S. Trade, December, 15, 1995). See also letter dated January 1996, addressed
to Senator Robert Dole on behalf of the European Presidency; see letter dated April 18, 1996 addressed by
European Commission to the Chairman of the Finance Committee of the US Senate.
. Statement of 23 August 1996, NOAL/0733/F.