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Question

States as trade partners - Anti-Corruption Policy:

Answer 1

Sector-specific initiatives, e.g. EITI (Extractive Industries Transparency Initiative) for oil, gas and mineral resources; 31 countries are ‘compliant’ with the EITI Standard 2011, 18 more have promised to comply. New standard 2016, assessment in progress.

Answer 2

* Economic instruments such as investment abroad, export finance, and inversely screening and possibly restricting foreign investment, restricting outward flow of data, are used for strategic reasons, such as access to resources, technological advantage, national security in a wide sense …. * Pure market and profit considerations (partially) set aside in favor if such straegic interests

Answer 3

• Starting point of the international public law: - sovereignty also regarding the economic order; - equality of rights under international law, also in relation to (participation in) international trade * Many international treaties provide benefits for « developing countries » (further benefits for LLDC’s, least developed countries) * Disputed « right » to development and « duty » of solidarity (soft law ?) * Infra: immunities

Answer 4

- Starting point: immunity, unless waived - Many restrictions (national law, treaties). - In Europe: European Convention (CoE) on State Immunities Basel 1972 (only 8 ratifications, incl. Belgium, NL, D, UK) - In the UK internally: British State Immunities Act (SIA) 1976/1978 - In the US: FSIA (Foreign Sovereign Immunities Act 1976, am. 2008, now 28 US Code ch. 97) - Attempt at harmonisation: UN Convention on Jurisdictional immunities of states and their property 2004 (not in force yet, 22 ratifications, but 30 required). But cited by the ECtHR (23 March 2010, Kudak/Lithuania (labour case) and 29 June 2011 Sabeh El Leil) as customary law and recognised as customary law in eg Belgian case law) - In general not contrary to art. 6 ECHR if there is no immunity before their own domestic courts (see ECtHR in McElhinney 21 Nov 2011, in Fogarty, in Al-Adsani, in Jones/UK 2 June 2014) (courts of canon law within the Roman-catholic church also considered as domestic courts) or if there is another reasonable way to protect one’s interests, which is normally the case if there is an arbitration clause (Belgian cass. 27 Sep 2018 i.c. NATO)

Answer 5

Rule and exceptions - In the USA - FSIA: with exceptions in § 1605 ff, mainly: claims based upon commercial activity in the US, tort committed in the US, expropriation in violation of international law, terrorism (§ 1605 B added in 2016) - UN Convention has exceptions for i.a. Commercial contracts (art. 10), Labour contracts (but not for members of diplomatic missions, ect..) (art. 11), IP rights art. 14) etc. - Overall Result: distinguish acta iure imperii / acta iure gestionis (doctrine originally developed by Italian and Belgian courts, already Belgian Cass. 11 June 1903); not every ’act of state’ is immune. - Jurisdictional immunity also covers foreign torts (ICJ 3 feb 2012 Germany v. Italy on acts committed by German soldiers in Italy in WW II: no jurisdiction of Italian courts*), unless the tort is unrelated to the political order (Cass. 11 June 1903) (comp. Art. 12 UN Convention: no immunity for personal injury or damage to property by author acting in a foreign country) - Immunity covers also the « Holy See » (as a sovereign) * But the Italian Constitutional Court refuses to abide and gives absolute priority to jurisdictional protection over state immunity: Corte Costituzionale 238/2014. * Immunity from jurisdiction for foreign states * Separate immunity for diplomatic missions (Vienna Diplomacy Convention art. 22 and 25 + general principle ne impediatur legatio) * Waiver, i.e. acceptance of jurisdiction, mostly not before domestic courts of foreign state, but only for: - international courts - arbitration , see Ch. 8 and 12. - Form & Effect of waiver: art. 7 UN Convention

Answer 6

Starting point: immunity Waiver of immunity of jurisdiction is not yet a waiver of immunity of enforcement against state property Result: immunity for assets used by the public service (s. eg art. 55 New York Arbitration Convention) Cass.B. set immunity of international organisations aside in 3 cases because of lack of effective remedy (art. 13 ECHR). Idem Cass.Fr

Answer 7

- When issuing sovereign debt, often waiver of jurisdictional immunity; sometimes counterbalanced by collective action clauses - Enforcement remains complex - In the Argentina debt cases, a US Court allowed post-judgment discovery of Argentinian assets in the US held by third parties (banks). Compare the ‘alter ego’ doctrine assimilating certain entities to the state itself (eg possibly a central bank) - Belgian Court of Cass. (22 Nov. 2012) did not set aside immunity of the Argentinian embassy accounts; idem French Court of Cass. 28 Sep 2011 (but reasoning changed in a more recent case Cass. 13 May 2015 Commisimpex/Congo and then changed again in Cass.(F) 10 Jan 2018, Commisimpex following a new statute requiring a ‘specific’ waiver) - States are not subject to insolvency proceedings. But there may be a need dor Sovereign debt restructuring processes (see UN Resolution 15 Sep 2015)

Answer 8

- GATT, now WTO (1994), with a General Council and separate Councils for GATT, GATS, TRIPS and a Dispute Settlement Body - UNO, with General Assembly, Security council, EcoSoc - Uncitral (international trade law): treaties and model laws - Unctad (trade & development): granting developing countries access to the world economy - ILO: labour standards - Unidroit: create uniform law (mostly private law) - Hague conference: unification of IPL

Answer 9

i.a. OECD, OPEC, G10+>G20 (with Basel Committee) etc.

Answer 10

Types: free trade zone / customs union / common market / monetary union Examples: - EU - EFTA, EEA - NAFTA, CAFTA (Central America), Mercosur, Caricom - ASEAN / SAARC (SAFTA) - Possibly CETA (Canada - Europe) - COMESA (East & Southern Africa), …

Answer 11

* Private organisations: not subjects of international public law, but governed by national law (although sometimes involved in the activities of I.O.’s) * Some influential NGO’s relevant for international business law: - ICC: for standard contracts and uniform rules; Court of arbitration (organising arbitral tribunals) - International Accounting Standards Board (IASB), setting the IFRS (International Financial Reporting Standards) - World economic forum Davos - Comité maritime international: maritime transport conventions - Institut de droit international: tries to « codify » international public law, ….. - ICANN = California corporation (internet corporation for assigned names and numbers), with a Governmental advisory committee (111 countries) - SSO’s = Standard Setting Organisations (or SDO, Standard Development Organisations), creating technical standards; see Ch. 7

Answer 12

* Legal forms: depends on national law - natural persons / different forms of legal personality / unincorporated organisations * Rights and obligations of business: - Will mostly be determined by the applicable national law (see Ch. 2 for the determination of the applicable law) - sometimes directly protected by international law, see esp. Investment protection in Ch. 8. - Sometimes able to create their own rules and make them nearly self-executing. Next slide - International soft law: UN Human Rights Council Guiding Principles on Business and Human Rights 2011 * Subject to insolvency proceedings (see Ch. 11) * Business ars rule-makers (making private law rules) - within a single relationship, business designs contractual rules on the basis of freedom of contract - business customs as source of private law (but different conceptions of customs and usages in different legal systems; see also Ch. 4 and 5) - Further reaching influence: ‘private governance’ in supply chains, not merely regulating rights and obligations but organising ‘governance’ of the supply chain - Another development in a digitalised economy is the influence of algorithms creating decisions, either precontractually (determining price, other conditions, etc… in an automated way) or for the enforcement of a contract (”smart contracts”, often using blockchain technology) - See e.g. certain private payments systems in Ch. 9 • States try to get grip over supply chains, either by regulating behaviour directly or by introducing « governance » rules (e.g. obliging to negotiate collectively with stahkeholders)

Answer 13

- prohibition of unfair commercial practices (some of them are discussed in Ch. 4 /5); rules on advertising and marketing (see also ICC Code of Advertising and Marketing Communication) - prohibition of agreements and practices restricting competition - prohibition of corruption; in some countries even an obligation to prevent bribery (UK Bribery Act art. 7) - obligation of financial information (accounts, …) - obligation of non-financial information (big enterprises): EU Directive 2013/34 (as amended Dir 2014/95) - related transparency obligations eg in UK duty for big companies to report on payment practices (since 2017) - obligations to pay taxes etc... and provide relevant information - obligations from the applicable labour law - environmental protection obligations, public safety obligations (eg EU Reg. 2001/95 on Product Safety), … - respect IP rights - data protection obligations (respect privacy) now in the EU Reg. 2016/679 - liability for unsafe products put on the market (product liability) - universal service obligations for operators of telecom, electricity, postal services, etc.

Answer 14

Contractual liability: - Business may be contractually liable for acts of their suppliers - See chapters on contract law (4. sales, 5. general contract law) Collective agreements between downstream business and trade unions or similar groups, under which business engages in obligations of inspection and control in relation to their upstream suppliers. • E.g. 2018 ‘Accord on Fire and Building Safety in Bangladesh’, between garment companies sourcing in Bangladesh and trade unions (with choice of Dutch law and arbitration in The Hague according to the Uncitral rules under supervision of the Permanent Court of Arbitration) • S. also the development of « social audits »: auditors engaged to certify the conformity of working conditions etc. with the code of conduct (but such auditors can also be negligent: see the audit of Rana Plaza by Bureau Veritas and of Ali Enterprises by RINA). Extracontractual liability: - Tendency to impose upon business duties of care in relation to earlier chains in the supply chain (what happens upstream) (environmental and human rights concerns), e.g.: - EU Reg. 995/2010 on obligations of operators who place timber and timber products on the market - OECD Due diligence Guidelines for Responsible Supply Chain of Minerals, on EU level EU Reg. 2017/821 laying down supply chain due diligence obligations for responsible sourcing of minerals originating in conflict-affected and high-risk areas, in the US S.1522 of the Dodd-Frank Act 2010 - OECD Due Diligence Guide for responsible supply chains in the garment and footwear sector 2017. But liability was not accepted by US & canadian courts in Rana Plaza litigation. In Germany in KIK textilien, judgment in 1st instance has judged the claim anyway prescribed. - OECD-FAO Guidance on Responsible Agricultural Supply Chains 2016 - E.g. Efforts to prevent ‘slavery’ and trafficking required by the UK Modern Slavery Act 2015, California Transparency in Supply Chains Act 2010; Dutch child labour duty of care Act 2019; French Duty of Vigilance Act 2017 - E.g. efforts required by Anti-Corruption laws: in some countries even an obligation to prevent bribery (UK Bribery Act art. 7) - IUU Regulation (Reg. 1005/2008 on Illegal, Unreported and Unregulated Fishing) Extracontractual liability for downstream activities: - Possible duty to control also later chains in the supply chain: - E.g. Lanham Act in the USA (15 US § 1051): trademark owner must supervise the quality of goods and services produced under its trademark by third parties - Otherwise downstream liability has to do with risks that one has created oneself (product liability - products that can be unsafely used by clients, etc..-, environmental liability, …) - Possible setting aside of the corporate veil: making mother companies liable for daughter companies. This also happens when torts are imputed to a mother company, e.g. under Belgian law when they have an intrinsic relationship with the realisation of the purpose of the mother company or its interests, or have in concreto been committed on the account of the mother company (art. 5 Criminal Code).

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