Comments on: BIS Denies Export Privileges for Dutch Aircraft Parts Company

By: Mike Deal

Mike Deal — Mon, 08 Oct 2007 15:58:42 +0000

Clif:

In 2005 in U.S. v. Clark, the 9th Circuit revisited the issue of extraterritoriality:

U.S. v.Vasquez-Velasco, 15 F.3d 833, 839 (9th Cir. 1994) (“In determining whether a statute applies extraterritorially, we also presume that Congress does not intend to violate principles of international law.”) (citing McCulloch v. Sociedad Nacional de Marineros de Honduras, 372 U.S. 10, 21-22 (1963)); see
also United States v. Neil, 312 F.3d 419, 421 (9th Cir. 2002).

It went on to cite with approval in a footnote, the five prong bases of extraterritoriality set out in the Restatement 3rd of Foreign Relations Law:

“8. The five jurisdictional bases are territorial, national, protective, universal,and passive personality. See Restatement (Third) of Foreign Relations Law of the United States § 402 (1987); United States v. Hill, 279 F.3d 731, 739 (9th Cir. 2002) (listing the five principles).”

I think finding jurisdiction will be a stretch, but the popular dislike of Iran suggests that the district court may be willing to make that stretch. We’ll just have to see whether it ever gets tried in the US. Of course, the company could try to enter a special appearance (through counsel) for the limited purpose of challenging jurisdiction of the district court in the criminal case.

By: John Liebman

John Liebman — Fri, 05 Oct 2007 16:47:48 +0000

Mr. Kraaipoel has company. His fellow Dutchman, Victor Ton, was indicted in the U.S. for diverting medical equipment to Iran in the EPMedsystems case. But Mike Deal’s point raises another interesting issue – whether IEEPA can support denial orders. Add the question of whether IEEPA can support search warrants authorized only by EAA s. 12. BIS deputizes OEE agents as “U.S. Marshals”, but when I last looked, U.S. Marshals can’t obtain and levy search warrants, either. Perhaps there’s something new out there.

By: Mike Deal

Mike Deal — Fri, 05 Oct 2007 13:39:51 +0000

The defendants/respondents in the Netherlands can and should also invoke EU Regulation 96/2271 and Dutch national law implementing it to prohibit cooperation with OEE, ICE and DoJ by not just the Dutch government but all EU nationals, individuals and companies.

In the absence of the EAA, BIS does not have statutory authority to impose denial orders as a sanction. The Administrative Procedures Act states that a government agency cannot impose a sanction unless authorized by law. The only administrative sanction provided in IEEPA’s newly amended penalty section, 50 USC 1705, is a civil penalty of $250,000. The Senate Report for S.1612, which raised the penalties under IEEPA, explicitly states that it is not a substitute for renewal and revision of the EAA.