The Globe
May 2003 VOL. 40, NO. 5
Statements or expressions of opinion or comments appearing herein are those of the editors or contributors, and not necessarily those of the association or section.
Contents
* Special registration and third-country nationals
* Read for yourself: French and German cases translated on the Web
* The legend lives on: A look at the Foreign Corrupt Practices Act of 1977
* International trademark protection: A brand new way in the U.S.A.
* Cost of doing business: Air freight carriers pay prejudgment interest too
This is the fifth issue of The Globe for this year.
International and Immigration Law Section Council member Jacqueline Lentini McCullough wrote the article "Special registration and third-country nationals." Earlier this year Ms. McCullough contributed an article on "Termination of H1B workers."
Shannon Jackson, a law student in her third year at The John Marshall Law School in Chicago, has been one of our consistent contributors. In this issue is her article "Read for yourself: French and German cases translated on the Web." Previous Globe articles include "Hot topics in immigration law," "Authentication of documents for use abroad: Some helpful Web sites" and "Three Web sites keep you up to date on immigration law."
John W. Rossiter is a certified public accountant with a degree in Economics from Albion College and an MBA from Iowa State University. He is currently completing both his JD and LLM at The John Marshall Law School in Chicago. "The legend lives on: A look at the Foreign Corrupt Practices Act of 1977" is his first submission to The Globe.
Similarly Pradip Sahu, an LLM candidate in Intellectual Property Law at The John Marshall Law School, is submitting his first article, "International Trademark Protections: A brand new way in the U.S.A."
"Cost of doing business: Air freight carriers pay prejudgment interest too" is a casenote concerning Motorola, Inc. v. Federal Express Corporation prepared by Michael Schimmel and Matthew J. Kissling. Kissling is a third-year law student at The John Marshall Law School. Schimmel is a second-year student at The John Marshall Law School, who with Mike McCaskey, a first-year law student at John Marshall, provided a casenote, "Recent developments: $26 million from Iran" for the last issue.
We appreciate the many submissions that we receive from law students. Section Council member Professor Mark Wojcik's efforts to keep The Globe, the International and Immigration Law Section and the Illinois State Bar Association in front of the JD and LLM students have been successful.
All members of the Section and other readers are encouraged to submit articles for consideration to
lfmatuszewich@c-m-law.com.
Lewis F. Matuszewich
Chmiel & Matuszewich
Chicago 773-279-8787
Crystal Lake 815-459-3120
Editor
Special registration and third-country nationals
By Jacqueline Lentini McCullough
How would you respond if a client asks, "I am a Canadian citizen, but I was born in Iran. Do I need to comply with Special Registration?" The answer is not altogether clear from current immigration policies and regulations, but it is advisable to err on the side of compliance--even if it proves unnecessary. Your client may be wary of reporting to the Bureau of Citizenship and Immigration Services, ("BCIS," formerly the Immigration and Naturalization Service, or "INS") due to fear, or simply to avoid the hassle, but the risks of not doing so are enormous to the client's nonimmigrant visa status. Consequences of non-compliance include: (1) deportation pursuant to INA 273(a)(1)(C)(i) and INA 273 (a)(3)(A); (2) criminal penalties pursuant to INA 266(a), including fines or imprisonment; and (3) detention for failure to notify BCIS regarding a change of address within 10 days of moving.
For those who may not be familiar with Special Registration, it is part of an initiative called the National Security Entry-Exit Registration System (NSEERS), implemented on September 11, 2002. Special Registration applies to four groups of individuals to date, and was formulated in response to the attacks on the U.S. on September 11, 2001. The list includes nationals of the following countries:
Group 1: All nationals or citizens of Iran, Iraq, Libya, Sudan and Syria born on or before November 15, 1986;
Group 2: Male nationals from Afghanistan, Algeria, Bahrain, Eritrea, Lebanon, Morocco, North Korea, Oman, Qatar, Somalia, Tunisia, United Arab Emirates, and Yemen born on or before December 2, 1986;
Group 3: Male nationals from Pakistan and Saudi Arabia born on or before January 13, 1987; and
Group 4: Male nationals from Bangladesh, Egypt, Indonesia, Jordan and Kuwait born on or before February 24, 1987.
In addition to these four groups, if a nonimmigrant visa holder from any country travels to one of the above listed countries without a reasonable explanation, such as a business trip, he will be subject to Special Registration. Each of the four groups has a call-in date by which individuals must comply with Special Registration. The INS was reorganized and split into various agencies within the Department of Homeland Security on March 1, 2003. For Special Registration updates, check the BCIS' Web site at <www.bcis.gov> or <www.immigration.gov>.
Special registration is conducted at the Port of Entry/Exit or during a call-in. It requires that the nonimmigrant visa holder be photographed, fingerprinted and interviewed under oath by a BCIS officer. For special call-in interviews, it is advisable for an individual to bring a copy of his apartment lease, school transcripts, W-2 forms, tax returns, or a letter from his employer explaining the legitimate reasons for his stay in the U.S. Special registration also includes annual re-registration.
Individuals not subject to Special Registration include (1) nonimmigrants in A or G status (government officials and international representatives), (2) U.S. permanent residents, or (3) an asylee with an application pending on or before November 6, 2002.
It is difficult to ascertain from the Immigration and Nationality Act whether "nationality" means an individual's country of current citizenship or country of birth. The INA 101(1)(2) defines "national" as "a person owing permanent allegiance to a state." This definition is not very helpful for purposes of determining if an individual is subject to Special Registration. An Iranian-born Canadian who does not carry an Iranian passport would ostensibly not be considered an Iranian national for purposes of this definition. Without an Iranian passport, it would be difficult to prove the individual's loyalty to Iran.
In a precedent decision regarding an individual's nationality, claimed in the context of a nonimmigrant E-2 change of status petition, the Board of Immigration Appeals held that an individual's nationality claimed or established at the time of entry to the U.S. must be regarded as the sole or operative nationality for the duration of temporary stay. Matter of Ognibene, 18 I&N Dec. 425 (R.C. 1983). The holding was limited to section 214 of the Immigration and Nationality Act. This reasoning can be applied to the Special Registration context. For example, the local Chicago BCIS District office has indicated that it may consider issuing letters of exemption for individuals who were born in a country subject to special registration, who did not acquire citizenship of the subject country, and who entered the U.S. as a citizen of a non-subject country. No such written documentation is given by the local Chicago BCIS District Office at the time of this publication.
On November 1, 2002, the Justice Department addressed this issue of nationality by announcing that "place of birth, by itself, will not automatically trigger registration." However, the Justice Department did not provide any guidance as to what factors will be used to determine if someone is subject to special registration.
On November 6, 2002 in the Federal Register, the INS published a notice stating that Special Registration applies to "any alien who is a national or citizen of a designated country, notwithstanding any dual nationality or citizenship." This notice indicates that those individuals who hold two passports and who maintain dual citizenship are subject to Special Registration, but it does not address those individuals born in one of the countries subject to special registration who do not maintain "permanent allegiance" to a country on the list. Identifying citizenship becomes even more problematic because each country determines its own citizenship and nationality laws differently. Therefore, a determination of an individual's nationality should include a review of the law of the country in which the individual was born.
In practice, an Iranian-born Canadian who tries to complete Special Registration will likely be met with confusion by a BCIS officer. Different officers may give conflicting information. The local Chicago BCIS District Office is registering individuals who were born in one of the above listed countries but are citizens of a different country at this time.
Unfortunately, the ground rules for Special Registration are not likely to become clearer over time due to the daunting task of registering thousands of nonimmigrants. The safest advice for those individuals who were born in countries subject to Special Registration, but who are citizens of a different country, is to comply with Special Registration. As described above, the consequences of non-compliance far outweigh the inconvenience.
Special Registration is here to stay. Congress recently passed an omnibus bill, including funding for Special Registration and immigration enforcement activities. Attorney General John Ashcroft has also asserted that Special Registration will continue, and additional countries will be added to the list until all foreign nationals requiring nonimmigrant visas will be subject to the entry and exit system. Due to the ongoing concern over terrorism, Special Registration may be around for years to come.
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Jacqueline Lentini McCullough is an attorney at the business immigration law firm, Law Offices A.E. Gustafsson, P.C. You may contact her at jacqueline@lawgustafsson.com. Jacqueline Lentini McCullough is a member of the ISBA International and Immigration Law Section Council.
Read for yourself: French and German cases translated on the Web
By Shannon Jackson
The University College of London (UCL) has emphasized comparative law since its first law professor came on board in 1826. UCL is now associated with the University of Texas at Austin (UT) and, more recently, the University of Paris I (Panthéon-Sorbonne). UCL's Institute of Global Law has put together a great Web site for international lawyers looking for sources of foreign law. The site was designed for use by students at all three of the universities, UCL, UT, and the Sorbonne. It is a good overview of cases from civil law countries, all conveniently translated into English for you!
Included in the table of German law are cases covering contract law, constitutional law, administrative law, and torts. Cases from both the Bundesverfassungsgericht and the Bundesgerichtshof are included. A table of cases listed shows the date of the opinion, the relevant statutes, a quick summary of the case, and, if applicable, references to other cases that are also included in the site's table. There is also a helpful link called "Guide to use of Web site" if you have difficulty figuring it out. One link will take you to the German version of the statutes (warning: no translations there!).
The French law cases are set up in a similar fashion. They include constitutional law, administrative law, contracts, and torts. Cases from the Counseil d'État and the Cour de Cassation are listed; the site says it expects to have cases from the Conseil Constitutionnel soon as well. The table of contents for the French cases lists the date of the opinion, the citation with subsequent developments (if applicable), a quick summary including the relevant French statutes, and related decisions that are in the table (if applicable). Some of the French cases include extracts and not the full text.
The French cases are broken up according to the court they were heard in, while the German cases are broken up by subject matter. It is still easy to determine what the general subject matters of the French cases are, but it is clearer on the German table.
The site can be a bit confusing because it is a part of UCL's general Web site, so it is easy to wander off of the global law institute portion accidentally. But the links are easy to follow back to where you want to go. The cases listed were fairly recent, but not within the last year or so; if you're looking for something from the last 12 to 24 months, be advised that you probably won't find it here.
The Web site's disclaimer also warns that it is for educational purposes only and obviously should not be relied on by practicing attorneys without further research of the subsequent history of the cases cited.
You can find the site at: <www.ucl.ac.uk/>.
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Shannon Jackson is a third-year student at The John Marshall Law School in Chicago and has previously contributed articles to The Globe.
The legend lives on: A look at the Foreign Corrupt Practices Act of 1977
By John W. Rossiter
"Among a people generally corrupt, liberty cannot long exist."1
A. The four myths regarding corruption in business
Professor Richard T. De George2 has identified and discussed "four social myths" related to corruption.3 He begins in regard to the myth that corruption is necessary for capital formation, and has simply stated that although corruption may have initially been the primary method of capital accumulation, today it is neither the only nor the most effective means to accomplish this.4
He goes on to postulate that "cost-free" corruption is a myth; that the citizens have at least three soft-costs related to any commercial bribery.5 First, the cost of public services is inflated so that the provider of the service can recoup the cost of the bribe they paid in order to get the business. Second, the services and products they receive tend to be of lesser quality because it is only the less efficient firms that must resort to payment of bribes to secure contracts. Finally, there is ordinarily economic shrinkage related to bribes because the bribe recipient will often deposit the funds outside of the jurisdiction to avoid potential tax or criminal complications.
De George then suggests that a free-floating economy is entirely mythical;6 whatever the economic model adopted by a particular culture, it is necessary that the populous embrace the concept. And in order to receive this systemic endorsement, the individual members of the community must recognize the efficiency of the economic form and how that form meets their individual needs. De George suggests that any theory of "cultural acceptance" of bribery is misguided; those cultures previously characterized as "accepting" of corruption were in fact merely tolerant of it during the period when it served their economic needs. What we see today in anti-corruption movements across the globe simply indicates that in more and more cultures the tolerance threshold has been exceeded and people are ready for change.
Finally, De George speaks of the myth of amoral international business.7 In general, the idea that you must participate in local foreign corrupt practices so as not to 'impose your morality on others' is a failing argument. Through the act of refusing to participate in regionally accepted corrupt practices, an individual is merely 'abiding by his own moral code.' Because corruption is not a necessity to that participation, the idea that international business is inherently corrupt is inaccurate.
To accept De George's mythology theory is to recognize that the traditional arguments supporting the "necessity" of corruption in international business simply fail. The recent international efforts at controlling corruption further support the argument that there was a gradual acceptance of this idea by most developed nations during the final years of the 20th century.
B. The merits of prohibiting corruption in international business
The United States enacted the Foreign Corrupt Practices Act of 1977 (FCPA)8 at a time when corruption was simply recognized as part of the ordinary course of business in foreign lands. The legislation was enacted in response to a series questionable--if not illegal--payments to foreign officials that had been made by American corporations involved in business abroad.9
For many years the United States was alone in its condemnation of the role bribery played in international business. Some commentators initially suggested that the FCPA would have a negative impact on America's ability to compete in a global market. They argued that since the competitors would continue paying bribes to obtain or retain business, U.S. concerns would have reduced chances to participate in international business.10 In reality, it caused few material complications with American business abroad, and that example eventually led the rest of the international business community to embrace similar prohibitions.
Since the resulting international treaties have been signed, the FCPA--standing on its own--has become obsolete. As amended however, it does satisfy our obligation to have legislation reflecting various treaty provisions. The FCPA may be dead in its individual significance, but the spirit it embraced has been reborn in a new generation of international legislation as we begin the new millennium.
Section I discusses the enactment of the FCPA and its history and development over the past 25 years. Section II then moves on to consider the various international efforts which have been initiated to control corruption within the emerging global economy. Finally, Section III discusses the benefits that will result from the concerted global efforts and what that will mean to participants in the international business arena in the coming years.
I. Foreign Corrupt Practices Act of 1977
A. The Act as enacted in 1977
After the United States enacted the Foreign Corrupt Practices Act of 1977, there was much debate regarding the prudence of such a measure. The question was addressed during the last quarter of the 20th Century as American business proved they could survive in the international arena without making payment of illegal bribes to foreign officials. They also caused the international business world to stop and reconsider the issue themselves. The result was that a substantial amount of international regulation went into place during the late 1990s which parallels, in many ways, the spirit of the FCPA.
Three particular international treaties, which all came into effect after 1997, are important to a global discussion of corruption in business. The Inter-American Convention Against Corruption (3/6/97), the OECD Anti-Bribery Convention (2/15/99), and the Council of Europe Anticorruption Convention (1/7/02) have changed the landscape of international corruption. They have, for the most part, replicated the essential provisions of the FCPA and because they are widely embraced international treaties, they have extended the spirit of the FCPA to most of the international business community.
The Foreign Corrupt Practices Act of 1977 (FCPA) was the first legislation of its kind. It sought to put a measure of integrity back into the corruption of business that Americans were becoming more and more involved in. At the time it was very common practice for foreign officials to demand, or at least accept the payment of bribes from outsiders who wanted to become involved in business in their country.
United States economists, consumers, and even politicians recognized that this was not an acceptable behavior because the additional costs of bribes that had to be paid by American corporations would ultimately be borne by the American consumer. The FCPA was our solution to that problem.
The Act presented a two-pronged assault on bribes paid to foreign officials. First, it simply prohibited payment of bribes to foreign officials. Second, it included reporting requirements that would prevent creative accounting measures that could be used to make the cost of corruption less visible in a corporation's financial statements.11
Prohibition against paying bribes
Under the provisions of the FCPA, a violation under the bribery provisions of the Act involves five separate elements.12 First, the actor must be a U.S. person or an SEC issuer, and must act outside of the United States or use interstate commerce or the U.S. mail in carrying out the act. Second, the actor must make payment or an offer to pay or promise to pay money or something of value. Third, for the offer to pay to be a violation, it must be extend