An American Deserter in Europe: Asylum Law, War Crimes, and the Curious Case of Andre Shepherd

By Edward Grodin, Journal of Transnational Law & Policy Editor-in-Chief

Can an American servicemember qualify for asylum protections in Europe where he deserted for fear of committing war crimes? This question was recently answered in the affirmative by the Court of Justice of the European Union.[1]

Andre Shepherd enlisted in the U.S. military in late 2003 and was deployed to Iraq from September 2004 to February 2005, working in a non-combat role as a helicopter maintenance mechanic. He voluntarily re-enlisted, but when the Army sought to return him to Iraq in April 2007, he deserted and ultimately applied for asylum in Germany in August 2008. Shepherd argued that he had come to believe that the war in Iraq was illegal and felt that his continued participation would contribute to war crimes.

The German asylum authorities denied his application. On appeal, the Bavarian Administrative Court in Munich made a reference for preliminary ruling[2] to the Court of Justice, asking a number of questions including whether under E.U. law prosecution for refusal to perform military service constitutes persecution.

The Court of Justice held that where a servicemember risks prosecution for refusal to perform military service that would result in the commission of a war crime during a “conflict,” he is eligible for refugee status under the Qualification Directive (which governs the minimum standards for asylum that apply throughout the European Union). This applies even to an indirect participant who solely provides logistical support (such as Shepherd) where the support is “indispensable” to the preparation or execution of war crimes.[3] However, the servicemember must first exhaust other methods of avoiding the commission of war crimes, primarily through an application for “conscientious objector” status where available. Lastly, and perhaps most controversially, the national authorities must carry out an assessment of the conflict to determine whether “the situation in question makes it credible that the alleged war crimes would be committed . . . .”[4] This includes an analysis of whether the conflict is backed by a U.N. Security Council resolution or international consensus.[5] Though the court left it to national authorities to decide the likelihood of war crimes, it added that prosecution (resulting in imprisonment or military discharge) would probably not rise to the level of persecution.

The assessment of the likelihood of war crimes, and the extent to which the conflict held the support of the international community, puts German asylum authorities in the delicate role of deciding the legality of America’s involvement in Iraq. In other words, German asylum authorities would have to find that Shepherd’s service in Iraq was likely to result in the commission of war crimes in order to grant protection. This may seem like an awkward venue to adjudicate one of the great political and legal debates of our time. However, it highlights what Matthew Price has referred to as the “political conception of asylum”: grants of refugee status serve an expressive function, allowing a state to condemn the acts of the foreign state at issue.[6]

Combined with the International Criminal Court’s recent preliminary report on its investigation into war crimes committed (by the United States) in Afghanistan,[7] Shepherd’s case illustrates the potential ways in which the moral and legal underpinnings of American intervention may be questioned in various foreign legal arenas.[8] This is no longer the realm of polling or protests; the prospect of Shepherd’s legal protection depends in part on the legality of the warzone itself.

In the end, the Court of Justice has qualified the baseline eligibility for asylum for those in Shepherd’s position with so many thresholds that Shepherd himself is unlikely to prevail. In fact, if Shepherd were German and had applied for asylum in the United States, he would probably not receive asylum.[9] However, the court’s judgment has opened the door (within certain asylum cases) to a wholesale evaluation of the Iraq war and other conflicts by low-level officials in E.U. countries. That is, if nothing else, a powerful tool for challenging the historical narrative of these conflicts.

[1] Case C‑472/13, Shepherd v. Bundesrepublik Deutschland, Celex No. 613CJ0472 (Feb. 26, 2015).

[2] A reference for preliminary ruling essentially serves as a proactive, advisory-oriented method for any court at any level within the European Union to ask the Court of Justice (the highest E.U. judicial body) for an interpretation of E.U. law.

[3] Shepherd, Celex No. 613CJ0472 at para. 46.

[4] Id.

[5] Id. The court noted that “an armed intervention engaged upon on the basis of a resolution adopted by that Security Council offers, in principle, every guarantee that no war crimes will be committed . . . .” Id. at para. 41. However, commenters have criticized this conclusion. See, e.g., Steven Peers, The Iraq War and EU Asylum Law: The CJEU’s Answers Are Blowin’ in the Wind, EU Law Analysis (Feb. 27, 2015), (calling the court’s reasoning “quite implausible”).

[6] Matthew Price, Persecution Complex: Justifying Asylum Law’s Preference for Persecuted People, 47 Harv. Int’l L.J. 413, 418 (2006).

[7] See David Bosco, The War over U.S. War Crimes in Afghanistan Is Heating Up, Foreign Policy (Dec. 3, 2014),

[8] See also Glenn Greenwald, Bush and Blair Found Guilty of War Crimes for Iraq Attack, Salon (Nov. 23, 2011, 12:17 PM),, for a summary of an interesting case carried out in absentia against President George W. Bush and other high-ranking officials for war crimes committed in Iraq.

[9] Cf. Matter of Canas, 19 I. & N. Dec. 697, 709-10 (BIA 1988) (absent a showing of religiously motivated persecution, conscientious-objector Jehovah’s Witnesses did not show that possible prosecution for refusal to perform military service rose to the level of persecution required for asylum eligibility). Moreover, if asylum authorities decided that Shepherd had already contributed to war crimes during his 2004-05 service in Iraq, he would be ineligible for asylum from the outset under the “persecutor” bar.

Corporate Inversions: An Attempt to Make Substance Track Form

By Ted Stotzer, Journal of Transnational Law & Policy Member

“Corporate inversions,”[1] essentially a form of tax arbitrage (whereby a domestic corporation purchases[2] or more commonly merges[3] with a foreign rival incorporated in a foreign “tax haven” jurisdiction to reduce or eliminate its tax exposure),[4] are hot right now: according to the Ways and Means Committee “[f]orty-seven U.S. corporations have reincorporated overseas through corporate inversions in the last 10 years, far more than during the previous 20 years combined . . . .”[5] A recent example is the Burger King and Tim Horton merger, which caused significant public outcry and even condemnation from the Executive Branch.[6] However, it is well settled that “[a]ny one [including a corporation] may so arrange [its] affairs [so] that [its] taxes shall be as low as possible; [it] is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”[7] Public corporations seeking to invert to reduce their taxes should not be “shamed” into acquiescing to countervailing (and economically inefficient) public sentiments;[8] rather, if tax reform is desired, it should be effected through a legitimate change in the current tax structure regarding the incorporation of entities and the taxes levied thereon. One such possible restructuring is examined below.

The Internal Revenue Code (I.R.C.) currently uses a “place of incorporation” test in order to designate corporations as domestic. Once designated as such, domestic corporations are thereby subject to taxation on a worldwide basis on all earnings under I.R.C. § 11(a) and I.R.C. § 55.[9] Procedurally, to determine whether a corporation is domestic or foreign, a clear test is used under I.R.C. § 7701(a)[10]; as discussed below, this certainty of application is arguably the strongest advantage of the current formulation.

In contrast to the above regime, the majority of foreign countries use a “place of management” test. Thus, the determination of whether a corporation is domestic or foreign depends upon the inherently facts and circumstances analysis of where the central or key managerial decisions of the corporation are made.

In order to evaluate these dichotomous regimes, a value judgment must be made regarding which of the myriad tax policy goals our nation wishes to elevate. These include but are not limited to fairness, efficiency, economic impact, and revenue raising. Using this general policy rubric, the costs and benefits under the current system must be weighed against the costs and benefits of reform. I argue that while the place of incorporation test provides the benefits of simplicity, clarity, and general ease of administrability, it exalts form over substance and is too formalistic and rigid, making it prone to abuses which do not reflect the economic realities of the situation, thereby decreasing revenue raising and slowly depleting the federal fisc.[11] Additionally, the current minority regime may lead to a “chilling” of international transactions, especially outbound ones, for the profits of a corporation may be taxed by more than one country, under both regimes.[12] The place of management test is more in accordance with the doctrine of substance over form and is more likely to prevent shams or transactions that lack economic substance;[13] however, it suffers from the disadvantage of intrinsic inefficiency. Moreover, reasonable reliance interests predicated on the current regime must act as a thumb on the scale in favor of maintaining the status quo.

Balancing the above considerations, I propose that the U.S. adopt the place of management test. However, it should integrate the current place of incorporation test as an indicium for place of management under the formula, thereby minimizing harm to reasonable reliance interests. Other factors to be considered may include: the location of the “majority” (defined as greater than fifty percent (> 50%)) of the assets of the corporation (using either original basis or fair market value for valuation purposes); where the corporation is headquartered; where the corporation earns the majority of its gross income; and where the majority of the “key persons” of the corporation (defined as directors and officers, or using a more expansive definition for certain industries heavily dependent on intellectual capital) hold citizenship.

This is a rough sketch of a possible solution in order to prevent “abusive” corporate inversions, which are often primarily or even solely driven by tax considerations. As trade and business become increasingly globalized, the reflection of economic realities will be a significant consideration for countries like the U.S., for whom revenue raising is a primary tax policy consideration.

[1] Internal Revenue Serv., Notice 2014-52, Rules Regarding Inversions and Related Transactions (2014) (defining the term “inversion transaction” as “an acquisition in which the foreign acquiring corporation is treated as a surrogate foreign corporation under [I.R.C.] section 7874(a)(2)”).

[2] Either in a “stock” or “asset” sale.

[3] A merger is the more common method because while gain or loss is generally “realized” on the transaction (see Eisner v. Macomber, 252 U.S. 189 (1920), Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955), and I.R.C. § 61 (generally)), it may not be “recognized” under I.R.C. § 354 if 1. The “form” test is met (the transaction falls within one of the seven categories of I.R.C. § 368(a)(1)(A)-(G)), and 2. The “common law” test is met (the transaction (i) must have a business purpose, (ii) there must be a continuity of business, and (iii) there must be a continuity of shareholders).

[4] I.R.C. § 906(a) (“A nonresident alien individual or a foreign corporation engaged in trade or business within the United States during the taxable year shall be allowed a credit under [I.R.C.] section 901 for the amount of any income, war profits, and excess profits taxes paid or accrued during the taxable year . . . to any foreign country or possession of the United States with respect to income effectively connected with the conduct of a trade or business within the United States.”) (emphasis added). Tax loopholes can often be best leveraged where there is a tax treaty in place between the foreign country (the place of incorporation) and the U.S., the provisions of which may, and often do, control over the I.R.C. See I.R.C. § 7852(d)(1) (known as the “later in time” rule; for purposes of determining the relationship between a provision of a tax treaty and any U.S. law affecting revenue, neither the treaty nor the law shall have preferential status by reason of its being a treaty or a law – the source of legal authority which is enacted later in time controls). So, for example, the most current U.S. Model Income Tax Convention requires a “permanent establishment,” which is defined as a fixed place of business through which an enterprise is carried on; this is a higher bar than income effectively connected with a U.S. trade or business (I.R.C. §§ 864(c), 882). 2006 U.S. Model Income Tax Convention, art. V, § 1. Therefore, depending on whether the default “permanent establishment” language is adopted in the executed treaty, it is possible that a foreign incorporated entity may avoid taxes entirely (by both the home and host countries) if it does not meet that more exacting standard. See Adam H. Rosenzweig, Harnessing the Costs of International Tax Arbitrage, 26 Va. Tax Rev. 555 (2007).

[5] New CRS Data: 47 Corporate Inversions in Last Decade, Ways & Means Comm. Democrats (July 7, 2014),; see also Robert Litan, Are U.S. Corporate Tax Inversions a Necessary Crisis?, Fortune (July 18, 2014), (stating that “[s]uddenly, the hottest tax arbitrage game is the ‘tax inversion’ ” and citing several recent, multi-billion dollar examples).

[6] Jonathan Allen et al., Buffett Burger King Funds Flip Obama’s Inversion Calculus, BloombergBusiness (Aug. 27, 2014),

[7] Helvering v. Gregory, 69 F.2d 809, 810-11 (2d Cir. 1934) (emphasis added).

[8] Alexander C. Kaufman, How Americans Scared Walgreens Out Of A $4 Billion Tax Dodge, Huffington Post: Business (Aug. 7, 2014),

[9] Subject to various remedial measures to prevent double taxation by a foreign country, e.g. the I.R.C. § 901 foreign tax credit (subject to certain limitations under I.R.C. § 904) or tax treaties with foreign countries.

[10] I.R.C. § 7701(a)(30) states that the term “United States person” refers to both individuals and entities, including domestic corporations and partnerships. I.R.C. § 7701(a)(4) states that “[t]he term ‘domestic’ when applied to a corporation or partnership means created or organized in the United States . . . .”

[11] Rosenzweig, supra note 4.

[12] But see supra note 9.

[13] I.R.C. § 7701(o) (codifying the “economic substance doctrine” iterated in the now infamous Goldstein case).

Move Over Superman: The Rise of Supranational Judicial Bodies in Free-Trade Regimes

By Steven Specht, Journal of Transnational Law & Policy Member

In the pursuit of an intergovernmental free-trade regime, a strong judiciary is crucial for both endurance and possible expansion.

Any supranational body can be viewed as an intent to integrate, even for the most minimal of purposes. Political bodies ceding some level of sovereignty for any purpose, whether it be economic integration or a defense pact means international egos bumping into each other from time to time. As such, it is hard to imagine not having at least a bare minimum method of dispute resolution. However, when entering the realm of business, the conflicts go far beyond the realm of intergovernmental relations and touch on the contention between multiple corporations, multiple states, and even corporations in disputes with states. Though a system of dispute resolution need not be mighty or Byzantine, it must have certain factors present to provide a bare minimum of stability within any sort of integration, whether it be an ever closer union in the European Union (EU), something far weaker in NAFTA, or a middle ground in Mercosur. The rise of successful integration is dependent on neo-functionalism, an “institution-based political process theory.”[1] Paramount in this formation of institutions is the use of supranational judicial bodies. As no foundation of law is complete in its inception, a judicial body is necessary to establish the meaning and scope of laws in a manner similar to that of the US Supreme Court in Marbury v. Madison.[2]

In the realm of strong judicial bodies presiding over international economic organizations, the EU has the strongest institution thus far. This has helped create subsequent political integration that, if enduring, could change the face of geopolitics in a manner not seen since the dominance of the nation state emerging after the Peace of Westphalia. While the nation state remains the dominant regime for now, an exploration of the successes and failures of the EU when compared with other attempts at integration can provide a litmus of what can be done, what should be done, and what will be done in other supranational bodies. If the EU is a model for the way forward, then what other attempts at integration, if any, are useful models? Are groups like NAFTA and Mercosur copycats of the early EU failures or something else entirely? The EU’s success with arguably effective governance goes far beyond a mere trade agreement or cartel and actively undermines many aspects sought to be solely within the purview of sovereign nations.

International dispute resolution can be organized in four ways: (1) Independent negotiation between individual states in the treaty body; (2) A nonbinding arbitration body; (3) A third-party dispute resolution body; and (4) A full-fledged court system. The first method allows for a dispute to be left to independent negotiation among sets of individual states or among all states within a treaty body. The pitfalls of this could be analogized to the pitfalls of direct democracy. Beyond the problem of deadlock created by a failure to even establish a quorum, the idea that each miniscule problem must be decided at a diplomatic level would make the management of any supranational body difficult, if not impossible.

The second method creates a simple arbitration body that is not binding and performs on an ad hoc basis. The problem with this is that rulings form no precedent. This was a major problem of the General Agreement on Tariffs and Trade (GATT) Panels which preceded the WTO. For a hypothetical binding policy taken from ad-hoc arbitration panels, each ruling would require an amendment to the existing treaty body. This amounts to a continual reinventing of the wheel as each case might differentiate from the last. An ad hoc dispute resolution system that has any lasting effect would create an ad hoc administration system that would be notably capricious.

The third method of deferring to a third-party dispute resolution might mean using the WTO for conflicts. It can also be used in conjunction with the first two methods. However, if we are to merely cede dispute resolution to the WTO, then why even push for a new treaty body? With binding decisions by the WTO, and a commitment to policies of the WTO, arguably the existing framework can support the needs of most nations for dispute resolution.

The final method is a functioning court system. This is an incredibly dicey proposition in that a binding judicial authority means the inherent subordination of national sovereignty to a supranational body. So far, the EU is the only such attempt at this. Though the Court of Justice functioned only as an economic tribunal in early stages, the Court gradually took on greater responsibility that might historically have been within the realm of national courts. As such, the Court of Justice serves as both a beacon and a warning for the benefits and ramifications of future integration. While NAFTA has opted for some combination of options one, two, and three, Mercosur has demonstrated a proclivity to follow in the footsteps of the EU.

Dispute resolution in treaty bodies made up of states with varying economic power runs into a problem when dealing with states that do not have equal bargaining power. A weaker state wants more clearly established norms as well as protectionist policies, whereas a more powerful state is prone to desire a more liberal system with greater flexibility. The EU has been able to deal with the many Eastern European countries facing the ramifications of Cold War era economic policies, because there was already a strong political body and political institutions in place prior to their admission. However, it is unclear how Mexico in NAFTA and Paraguay or Uruguay in Mercosur have affected this regime.

[1] Karen J. Alter, Laurence R. Helfer, & Osvaldo Saldias, Transplanting the European Court of Justice: The Experience of the Andean Tribunal of Justice, 60 Am. J. Comp. L. 629, 636 (2012).

[2] 5 U.S. 137 (1803).

Florida Bankers Ass’n v. Treasury: Court Upholds Reporting Requirements Facilitating IRS Information Sharing with Foreign Revenue Authorities

By Steve Johnson, University Professor, Florida State University College of Law

There is a strong trend in the direction of international cooperation in tax enforcement. The ease with which money can flow around the global – approximately $1 trillion cross national borders every day – means that determined tax evaders often can hide taxable amounts from their home countries by moving wealth abroad.

Florida Bankers is an important recent event in international cooperation to detect and defeat such evasion. The United States District Court for the District of Columbia upheld the validity of Treasury regulations requiring U.S. banks to report interest paid to account holders residing in 70 foreign countries.[1] Pursuant to treaty obligations, this information can then be shared with the revenue authorities in those countries, to help them ascertain whether their residents are evading resident-country tax by using – and not reporting interest from – accounts in U.S. banks. Foreign countries will be expected to reciprocate by collecting and providing to the IRS information on accounts held by U.S. citizens and residents in banks in the foreign countries, helping the IRS curb evasion of U.S. taxes.[2]

For decades, Treasury regulations have required U.S. banks to provide to the IRS, to be shared with Canada, interest earned by Canadians from U.S. accounts.[3] In 2001, Treasury considered extending this approach as to nonresident aliens from all countries, but it chose not to do so.[4]

In 2011, Treasury revived that proposal. Extensive comments – some supportive, many negative – were submitted to Treasury with respect to the proposed regulations. Treasury considered and responded to these comments. It finalized the regulations, in 2012, but with changes.[5] Most importantly, the final regulations narrow the scope of the required reporting from accountholders from 196 countries to accountholders from only 70 countries – the 70 countries with which the U.S. has treaty obligations to share tax information.

The Florida Bankers Association and Texas Bankers Association collectively represent over 800 banks, at least 300 of which are considered small businesses under federal criteria. The Associations brought suit seeking injunctive and declaratory relief. They argued that the Treasury violated both the Administrative Procedure Act (“APA”)[6] and the Regulatory Flexibility Act (“RFA”)[7] in promulgating the regulations.

Before reaching the merits, the district court considered two jurisdictional arguments advanced by the Government. First, the court unsurprisingly rejected the Government’s contention that the plaintiffs lacked standing to sue. The Associations’ member banks were directly affected by the regulations. Under the representative standing doctrine, the Associations were proper parties to sue to vindicate their members’ interests because the suit was germane to their organizational purposes, “which involves policy advocacy on behalf of financial institutions.”[8]

Second, the Anti-Injunction Act (“AIA”) provides that, outside certain exceptions not here applicable, “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.”[9] Although judicial application of the AIA has been less than fully consistent, the AIA usually has been held to bar pre-enforcement challenge to tax regulations, requiring taxpayers or other aggrieved parties to raise the invalidity of the regulations in litigation after the IRS asserted that a tax or penalty was due.[10]

The district court rejected the Government’s contention that the AIA precluded the Associations’ pre-enforcement challenge to the regulations. The court reasoned in part that the suit sought to restrain a reporting requirement, not “the assessment or collection of [a] tax.”[11] Other recent cases also avoided the AIA on a variety of grounds.[12] Current AIA doctrine is in a state of serious confusion.

On the merits, the Associations’ principal set of arguments contended that the regulations were “arbitrary and capricious” under the APA. A long list of perceived substantive and procedural inadequacies was offered to support this contention, including that Treasury had failed to adequately quantify the relevant factors, had failed to adequately explain the choices embodied in the regulations, and had failed to appropriately balance the benefits and burdens of the additional reporting. Among the alleged burdens, the Associations were particularly concerned about loss of privacy of customers’ tax information and about possible capital flight – foreign depositors pulling their money out of U.S. accounts.

The court appropriately rejected these contentions. The Associations exaggerated the degree of precision the APA demands of an agency engaged in rulemaking. Agencies need not measure the immeasurable when exact data is not available. They may estimate within the bounds of reason. They need not explain what is common-sensical.[13]

Moreover, the Associations asked the court to perform an impermissible action in reweighing the competing policy considerations. The court noted that “arbitrary and capricious” is a narrow standard of review under which the court “is not supposed to substitute its judgment for that of the agency.”[14] Instead, “[b]alancing such costs and benefits is a policy choice for the Executive Branch to make.”[15]

The Associations’ other contention involved the RFA, which requires agencies to either analyze the impact of proposed rules on small businesses or certify “that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.”[16] The Treasury had so certified. Courts are highly deferential as to such certifications, upholding them as long as the agency made a “reasonable, good-faith effort to carry out RFA’s mandate.”[17]

The Associations’ “capital flight” contention did not matter for RFA purposes. The Court read the RFA narrowly, concluding that it is concerned only with direct impacts (like reporting, recordkeeping, and similar costs), not with indirect effects, such as capital flight.[18]

Two “meta” conditions contributed to the Associations’ defeat. First, Treasury saw the regulations as important to the effectiveness of our extensive web of information sharing tax treaties, and judicial deference to the Executive Branch is at or near its apogee when foreign relations are implicated.[19]

Second, the court understood the seriousness of cross-border tax evasion and the importance of international cooperation to solve it. The challenged regulations are part of that cooperation. Similarly, the IRS has begun doing joint audits of some taxpayers with other countries’ tax agencies; the Organization for Economic Cooperation and Development is spearheading an international effort to prevent erosion of countries’ tax bases through avoidance and evasion schemes, and the U.S. Foreign Account Tax Compliance Act[20] is spawning a network of cooperative treaty arrangements. The Associations’ suit appears as an “America First” effort in tension with growing international tax cooperation. It seems like an attempt to turn the clock back. A party on “wrong end of history” is fighting up a steep hill.

The Associations may choose to appeal, but such an appeal would not be likely to succeed.[21] But the Associations and their allies may also pursue political redress. Home states congressional delegations have protested the regulations. Thus, the district court’s decision probably will not be the last we hear of this issue.

[1] Florida Bankers Ass’n v. U.S. Dep’t of Treasury, ___ F. Supp. 2d ___, 2014 WL 114519 (D.D.C. Jan. 13, 2014).

[2] The seriousness of evasion of U.S. taxes by use of foreign accounts, and the seriousness of the Government’s efforts to combat such evasion, are indexed in Senate Comm. on Homeland Security & Governmental Affairs, Permanent Subcomm. on Investigations, Offshore Tax Evasion: The Effort to Collect Unpaid Taxes on Billions in Hidden Offshore Accounts (Feb. 26, 2014).

[3] 61 Fed. Reg. 17,572 (Apr. 22, 1996).

[4] 66 Fed. Reg. 3925 (Jan. 17, 2001), corrected by 66 Fed. Reg. 15,820 (Mar. 21, 2001) & 66 Fed. Reg. 16,019 (Mar. 22, 2001), withdrawn by 67 Fed. Reg. 50,386 (Aug. 2, 2002).

[5] T.D. 9584, 77 Fed. Reg. 23,391 (2012).

[6] As here relevant, 5 U.S.C. § 706(2)(A) & (E).

[7] 5 U.S.C. §§ 603 to 605.

[8] 2014 WL 114519 at * 6 (citing International Broth. of Teamsters v. Dep’t of Transp., 724 F.3d 206, 211 (D.C. Cir. 2013)).

[9] 26 U.S.C. § 7421(a). A comparable prohibition exists with respect to declaratory judgments. 28 U.S.C. § 2201(a).

[10]  E.g., Alexander v. “Americans United” Inc., 416 U.S. 752, 762 (1974).

[11] 2014 WL 114519 at * 6-7 (citing Foodservice & Lodging Inst. Inc. v. Regan, 809 F.2d 842, 846 (D.C. Cir. 1987).

[12] E.g., National Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566 (2012) (“NFIB”); Seven-Sky v. Holder, 661 F.3d 1 (D.C. Cir. 20122) abrogated on other grounds by NFIB; Cohen v. United States, 650 F.3d 717, 724 (D.C. Cir. 2011) (en banc); Halbig v. Sebelius, ___ F. Supp. 2d ___, 2014 WL 129023 (D.D.C. Jan. 15, 2014).

[13] 2014 WL 114519 at * 7-8.

[14] Id. at * 5 (quoting National Ass’n of Home Builders v. Norton, 340 F. 3d 835, 841 (9th Cir. 2003)).

[15] 2014 WL 114519 at * 9.

[16] 5 U.S.C. §§ 603-605(b).

[17] 2014 WL 114519 at * 10 (quoting United Cellular Corp. v. FCC, 254 F. 3d 78, 88 (D.C. Cir. 2001)).

[18] 2014 WL 114519 at * 10.

[19] E.g., Pasquantino v. United States, 544 U.S. 349, 369 (2004); United States v. Curtiss-Wright Export Corp., 299 U.S. 304, 320 (1936).

[20] 26 U.S.C. §§ 1471-1474.

[21] But see Patrick J. Smith, District Court Misapplies APA in Florida Bankers Association, 142 Tax Notes 745 (Feb. 17, 2014) (criticizing the decision).

Treasure salvage industry impacts of recent decisions upholding wreck sovereignty

By Davis George Moye, Journal of Transnational Law & Policy Member

Florida is a major center for commercial treasure salvage.  Countless wrecks have littered its waters since colonial days, and it is home to some of the most successful salvors in the world, such as Mel Fisher’s Fisher Salvors, which has recovered hundreds of millions of dollars worth of gold and silver, and Odyssey Marine Exploration, whose aggregate finds exceed $1 billion.[1] 

            Critics fear recent case law may dampen this industry.  Under the Abandoned Shipwreck Act, the federal government granted states title to any abandoned wrecks in state waters[2] and Florida has enacted laws creating a regulatory framework to responsibly govern salvage.[3]  However, federal courts constitutionally have jurisdiction over admiralty cases[4] and federal judicial procedure forbids attachment, arrest, and execution of sovereign wrecks—the remains of vessels that belonged to a sovereign state.[5] 

            Formerly, courts granted salvage rights when governments, most notably, Spain, failed to assert property rights over wrecks.[6]  This stance has changed in the past fifteen years, since the Fourth Circuit denied treasure salvors and the Commonwealth of Virginia title over two wrecks in Virginia waters because the Spanish government asserted a claim.[7]  Specifically, the court held the United States’ duties to Spain under treaty as a friendly nation supersede Virginia’s title claim under the Abandoned Shipwreck Act.[8] 

            In 2011 the Eleventh Circuit also declared Spanish sovereign vessels immune from arrest in admiralty court in Odyssey Marine Exploration. v. Unidentified Shipwrecked Vessel.[9]  Many Spanish treasure galleons lost in Florida’s waters belonged to the Spanish crown.  Because Florida is central to treasure salvage, there have been fears that the Eleventh Circuit’s holding in Spain’s favor may have eliminated a multi-billion dollar industry.[10]  The full effects have yet to reveal themselves, but salvors have begun to negotiate salvage agreements with sovereign wrecks’ governments. 

            After locating the wreckage of H.M.S. Victory in 2008, Odyssey negotiated a salvage agreement with the British government in early 2012.[11]  The agreement transferred ownership of the wreck to a government-owned charity, the Maritime Heritage Foundation, whereby the Maritime Heritage Foundation agreed to pay Odyssey a commission on the artifacts it recovers.[12]  Odyssey could not reach a similar agreement with the Spanish government in the case of Nuestra Señora de las Animas (the Mercedes).[13]  Nonetheless, Odyssey attempted to salvage the Mercedes without the Spanish government’s permission, incurring over $1 million in Rule 11 sanctions in the Middle District of Florida.[14] 

            The order granting sanctions estimated Mercedes’ value at $600 million dollars.[15]  With such rewards, even $1 million in sanctions may not deter some salvors.[16]  Odyssey’s recent actions indicate sovereign immunity has dampened salvage efforts little.  Rather, it has made salvors more furtive. 

[1] Odyssey Marine Exploration, (last visited Oct. 6, 2013); Mel Fisher’s Treasures, (last visited Oct. 6, 2013).

[2] Abandoned Shipwreck Act, 43 U.S.C. § 2101 (1988).  Historical wrecks often fall into this category.  Situations where a true owner has not abandoned the vessel will be described in further detail.

[3] Historical Resources Act, XVIII Fla. Stat. § 267.031 (2008).

[4] U.S. Const. art. III, § 2.

[5] 28 U.S.C. § 1609 (1976).

[6] Treasure Salvors, Inc. v. The Unidentified Wrecked and Abandoned Sailing Vessel, 569 F.2d 330, 337 (5th Cir. 1978).

[7] Sea Hunt, Inc. v. Unidentified Shipwrecked Vessel or Vessels, 221 F.3d 634, 641 (4th Cir. 2000).

[8] Id.

[9] Odyssey Marine Exploration, Inc. v. Unidentified Shipwrecked Vessel, 657 F.3d 1159, 1166 (11th Cir. 2011).

[10] Id.

[11] Odyssey Marine Exploration Executes Agreement with Maritime Heritage Foundation for Admiral Balchin’s HMS Victory Shipwreck, http://www. (last visited Oct. 10, 2013).

[12] Id.

[13] Odyssey Marine Exploration, Inc. v. Unidentified Shipwrecked Vessel, 2013 WL 5408413, at *1 (M.D. Fla. Sep. 25, 2013).

[14] Id. at 13.

[15] Id. at 1.

[16] Id.

Steroids and State Sovereignty: Who Has the Last Laugh in International Steroids Regulations?

By: Muriel Jones, Member of Journal of Transnational Law & Policy

In light of the upcoming Winter Olympics in Sochi, Russia, the world once again becomes captivated by the unique snow-oriented sports and conditioned athletes who have become masters of their craft. Behind the quirky sports, the International Olympics Committee (IOC) is coordinating an enormous body of international athletes and must regulate those athletes according to agreed upon international standards.  But what happens when a host country’s standards differ from the IOC established international standards in areas like steroids usage?  Should a State be forced to change domestic laws in order to comply with international standards?

Such a case arose in the London 2012 Olympics, where international anti-doping measures and UK domestic steroid laws were at odds. “Soft” UK laws concerning the importation of anabolic steroids allowed athletes to cross the border with banned substances without fear of criminal consequences from the UK.[1]  An athlete could not be apprehended if the banned drugs were deemed to be solely for “personal use.”[2]  The UK government, unlike the Summer Olympics hosts before it, had not toughened drug importation legislation before the games, synthesizing domestic steroid laws with IOC standards.[3]  Athletes were still strictly liable under the World Anti-Doping Agency (WADA), but the UK wasn’t.

International athletes are subject to the rules, standards and procedures of the IOC, WADA, International Federations (IF), which monitor individual sports, and their origin country’s National Olympic Committee (NOC).  Olympic athletes are monitored by all of these agencies with overlapping regulations.[4]  To participate in any Olympic sport, athletes must agree to be regulated by and under the sole authority of WADA and the World Anti-Doping Code (Code); however, countries themselves are not so strictly regulated.  “The Code sets forth specific anti-doping rules, definitions of doping, burdens of proof, prohibited substances and methods, and addresses standards for testing, sample analysis, sanctions, appeals, confidentiality, reporting and statute of limitations.”[5]  Like most international agreements there is no enforcement mechanism or world court to force State governments to adopt the Code and be legally bound by it.[6]

At the Second World Conference on Doping in Sport in March 2003, several States decided to formally recognize and implement the Code through the Copenhagen Declaration.[7]  The Copenhagen Declaration does not require countries to implement domestic legislation, but only “[c]ooperate with WADA…subject to relevant host countries’ regulations.”[8]  This seems to suggest that WADA’s anti-doping measures are subject to a host country’s regulations. Therefore, any difference in laws, as displayed in the London Olympics, could frustrate the international standard.  139 countries, including Russia, have signed the Copenhagen Declaration. [9]

175 countries, including the United States and Russia, have also ratified the International Convention against Doping in Sport through the United Nations Educational, Scientific, and Cultural Organization (UNESCO) Convention.[10]  Unlike the Copenhagen Declaration this is the “first global treaty against doping in sport.”[11]  However, ratification of a treaty does not necessarily equal compliance.  States must uphold their treaty obligations or face consequences set forth in the treaty, but many States have varying degrees of treaty implementation into domestic laws.  For example, the United States considers a case-by-case policy of examining whether a treaty is “self-executing” and whether the treaty law should automatically apply in the domestic law sphere.  Therefore, if the U.S. signs an international treaty and ratifies it internationally and domestically, through 2/3 approval of the Senate, but the treaty is not self-executing, then the international law does not apply to the domestic states.[12]  Other countries, like France, have duly ratified treaties, which are essentially always self-executing, automatically allowing ratified treaties to have the force of law in the domestic sphere. While in other countries, like the UK, treaties are never self-executing, and require an implementing statute from the domestic legislature to apply in the domestic sphere.  Therefore, even the ratification of an international treaty may not automatically compel a country to implement domestic legislation that conforms to international standards.

To encourage States to adopt international standards, States are subject to fines by international sports governing bodies if athletes are found to be doping. WADA may report non-compliance to the IOC, which can impose sanctions.[13]  Also, sports that do not adopt the Code are not eligible to be included in the Olympic Games.[14]  “Similarly, if a country does not ratify the UNESCO International Convention against Doping in Sport, it may also be subject to sanctions from the IOC and from other sports organizations, including losing the right to host major games.”[15]  There is no enforcement mechanism to force States to adopt the Code, but the IOC may issue “consequences” to non-compliant States including ineligibility to bid on host events, cancellation of international events, and symbolic consequences.[16]

Russia is no stranger to these measures and has had several athletes fail international steroid standards in recent years.[17]  In 2010 there was major concern that Russia’s anti-doping programs were inadequate, especially if the enormous country – which spans nine time zones – was going to be able to successfully regulate not only its native athletes but also global athletes in an international competition.[18]  However, unlike the UK, Russia, through its anti-doping agency RUSADA, has updated domestic anti-doping standards in compliance with WADA Code and International Conventions.[19]  Even though Russia has implemented RUSADA there are still major problems.  Since the beginning of 2013, 88 athletes have been sanctioned for a variety of anti-doping offenses, and more than 80 other competitions are currently under investigation.[20]

Why wouldn’t a country want to conform to WADA’s standards? Most NOC’s implement standards very similar if not identical to the Code, so why fight it?  And why not just fix domestic legislation right before the games like Australia and China did so that both domestic and international laws align?

It all comes down to State sovereignty and the role of international treaties in domestic laws.  Because there is no overhead enforcement mechanism or supreme world court to force compliance, countries are free to make and break treaties as they please.  It may be in a country’s best interest on an international stage to make sure steroid regulations are consistent, but outside of international competitions, governments are free to regulate domestic steroid usage however they want.

Despite a State’s seeming freedom under international regulation of steroid usage, there seems to be an overall high rate of compliance. There is a serious attempt by international organizations and participating States to gain across the board international anti-doping standards.  Also, most Olympic host countries seem to agree to the Code on its face.  However, despite there shaky anti-doping standards, both Russia and Brazil where given, some would deem, the greatest honor under the IOC – the privilege to host the Olympics.

[1] Jacquelin Magnay, “London 2012 Olympics,” The Telegraph (Mar. 29, 2012, 9:35 PM),

[2] Id.

[3] Id.

[4] Zachary Blumenthal, The Punishment of All Athletes: The Need For A New World Anti-Doping Code in Sports, 9 J. Int’l Bus. & L. 201, 204-07 (2010).

[5] Maureen A. Weston, 10 Pepp. Disp. Resol. L.J. 5, 25 (2009).

[6] See Governments, WADA (last updated Oct. 2009); Copenhagen Declaration on Anti-Doping in Sport, WADA (last updated Oct. 2009).

[7] See Governments, WADA (last updated Oct. 2009).

[8] “Copenhagen Declaration,” available at:

[10] See International Convention against Doping in Sport, WADA (last updated Oct. 2009).

[11] Id.

[12] See Foster & Elam v. Neilson, 27 U.S. 253 (1829); Asakura v. City of Seattle, 265 U.S. 332 (1924).

[13] Questions & Answers on Stakeholder Obligations on Compliance, WADA (last updated Sept. 2011).

[14] Id.

[15] Id.

[16] Questions & Answers on WADA Compliance Monitoring, WADA (last updated Sept. 2011).

[17] See “Russian Sports Minister promises major clean-up before Sochi 2014, inside the games,” June 4, 2010,; “Three Russian track and field athletes recognized ineligible,” Oct. 14, 2013,; “Two Russian kayak & canoe athletes provisionally suspended,” Oct. 9, 2013,

[18] See Associated Press, Anti-doping programs fall short, 2010,

[19] See RUSADA National Anti-Doping Rules

[20] Duncan Mackay, “Russians caught for drugs doubled in a year, admit country’s anti-doping agency,” Oct. 3, 2013,

What Has Been the Impact of the 2016 Olympic Bid on Environmental Efforts Throughout Rio de Janeiro, Brazil?

By Michael Kelly, Member of Journal of Transnational Law & Policy

  1. Overview

With Brazil’s longstanding history of environmental transgressions and deterioration, this blog post will discuss the regulatory structures that are in place from the International Olympic Committee (hereinafter “IOC”) and Brazilian Government to ensure that the Rio Olympics are the greenest games to date.

Since receiving the winning bid in 2009, environmental protection efforts and recognition in Brazil has significantly increased.[1] The Brazilian Government and various private organizations have focused on four areas, in setting standards and preparation for the Olympics and in following the guidelines laid out by the IOC (international, non-profit organization that is the governing body of the Olympic Movement): (1) Water Conservation; (2) Renewable Energy; (3) Carbon Neutral Games; and (4) Waste Management and Social Responsibility. These parties are making sure that the development of the Olympic Games will comply with local, national and international regulations to protect the environment.[2]

                                      i.         Water Conservation

Ensured by the Federal Government’s National Environmental Policy,[3] investment of $4 billion is already committed for restoration programs for two bays in proximity to Rio.[4] These programs will result in more than eighty percent of overall sewage in the area being collected and treated by 2016.[5] The State of Rio and private sector has made various contributions by donating over $165 million to complete full regeneration of two bodies of water in the Barra Zone of Rio.[6] The beaches in this area will have a water quality index that will be elevated from fifty to eighty percent[7] and monitoring of the beaches will be significantly expanded to make sure that no harmful substances are present.[8]

                                    ii.         Renewable Energy

Even though Rio’s air quality meet the World Health Organization’s standards, a 2009 Nationwide Air Quality Control Program (also known as PROCONVE)[9] was undertaken, which led to an increase in the number of air quality-monitoring stations in the area to monitor Carbon Monoxide and Sulfur Dioxide gases in the atmosphere.[10] Environmental authorities in Rio have already installed sixteen of these monitoring stations in locations where Olympic competitions are to be held, so air pollution can be closely monitored to make sure that harm does not occur to the athlete’s or those watching the events.[11] These new quality-monitoring stations will carry out a constant check on emissions of polluting gases like Carbon Monoxide while allowing strategies for prevention and immediate action if something were to occur in Rio. Also, through analyzing Brazil’s National Climate Change Plan,[12] a plan is being developed by the government to strengthen the protection and conservation of all city forests and parks while preserving local biodiversity.[13] To promote healthier lifestyles, government authorities have also begun improving mobility for Rio residents by implementing more direct routes for their bus system.[14] The objective is to reduce carbon emissions and develop optimal green space within the Olympic site.[15]

                                   iii.         Carbon Neutral Games

Some ideas for the Olympic Bid, such as a reforestation of many of the areas near Rio are already underway, while others are in early development.[16] Planting of 24 million trees is underway throughout the State of Rio to help air flow throughout the city.[17] Rio’s Olympic Park recently began construction and this building will focus on preserving the environment, while making use of existing structures in the area.[18] After the games have ended, Rio has a goal to use at least seventy percent of the new infrastructures built for the Olympics, including the Olympic Park. [19]

As part of the selection process, the IOC required Brazil to build arenas for the 2016 games to high environmental standards for low carbon emissions and energy efficiency.[20] Venues such as the Rio Olympic Village must demonstrate a range of requirements meant to meet a series of environmental criteria that include low energy consumption and use of local construction materials.[21] These facilities will reduce energy usage through measures such as increasing the use of natural light, adding solar panels to reduce power from the grid and installing “intelligent” elevators that are designed to make fewer trips to save energy.[22]

Other private organizations are getting involved with green development in Brazil as well. The Zurich based RAFAA Design Studio has also begun implementing a concept for a 345-foot tall solar city tower.[23] The tower is projected to be built atop the island of Cotonduba and would be the welcome symbol to the 2016 Games.[24] This tower is proposed to consist of a massive power plant that will generate energy for the Olympic village in Rio and will allow excess energy from the solar panels to pump seawater into the tower.[25] At night, the seawater can be released to power a turbine, which will be able to generate a substantial amount of energy.[26]

                                   iv.         Waste Management and Social Responsibility

The Brazilian government is introducing waste management systems that will help ensure the maximization of recycling waste products, with a plan to eradicate all illegal landfills in Rio by 2010.[27] The government is also planning on launching a new concept for the reuse of materials in all phases of the Olympics by installing methane gas pumps from landfills for energy production.[28] In areas where new venues are needed, buildings are going to use materials made from recycled objects such as plastic bottles and avoid paint and carpeting with toxic materials.[29]

  1. Conclusion

While Brazil is taking steps in the right direction for environmental protection, many countries tend to ignore the IOC regarding environmental regulations because they are often difficult to follow. While there are mechanisms in place for the IOC to sanction a host country for not following the standards set out in the Olympic Charter, in reality the IOC is unlikely to issue a sanction since it also has an interest in seeing the Games commence on time. Once a country is selected, the IOC should enter a legal contract with the host country to demand the country follow certain requirements that have been established. These revisions will hopefully reform substantive Olympic and international policies and bind all international parties to uphold their commitments to protect the environment.

[1] The Olympics have had a clear impact on the interest in green construction in Rio, where nearly all of the buildings under development by the city and state governments include LEED sustainability criteria. Brian

Ellsworth, Brazil Olympics spurring green construction, REUTERS (Nov. 3, 2010),

[2] Rio 2016 Olympics Report: Brazil’s moment to Shine, UK Trade & Investment 68 (2011), available at

[3] The National Environment Policy, Lei No. 6.938, de 31 agosto de 1981, DOFC de 02.09.1981 (Brazil), available at

[4] These programs are the Guanabara Bay Sanitation Program and the Barra-Jacarepagua Sanitation. Rio 2016 Olympics Report: Brazil’s moment to Shine, UK Trade & Investment 68 (2011), available at

[5] This treatment of sewage water is the process of removing contaminants and household sewage to produce an environmentally safe fluid waste stream and a solid waste suitable for disposal or reuse. United States Environmental Protection Agency, Primer for Municipal Wastewater Treatment Systems 8 (2004), available at

[6] Id.

[7] Water quality index provides a single number ranging from 1 to 100 and scores are determined for temperature, pH, fecal coliform, bacteria, dissolved oxygen, total suspended sediment, total phosphorus, and total nitrogen contained in the water. Scores are combined and results tabulated over time to produce a single yearly score for each sample station. Boulder Area Sustainability Information Network, Water Quality Index (December 27, 2005), With the beaches in Rio, the water quality index number the beaches are at currently will increase by a percentage of fifty to 80 percent. Rio 2016 Olympics Report, supra note 4, at 97.

[8] Rio 2016 Olympics Report, supra note 4, at 97.

[9] Ministry of Environment, Proconve: Program Air Pollution Control For Vehicles (2006), available at

[10] These air quality-monitoring stations are monitors of several components of ambient air and pollutants such as Carbon Monoxide (N02); Sulfur Dioxide (SO2); and Ozone (O3). Summary reports of this data are then made available to the public at large to make sure that the air levels are not polluted. Fabiana Frayssinet, Fresh Air for the Rio Olympics, Inter Press Service (Dec. 24, 2012),

[11] Rio 2016 Olympics Report, supra note 4, at 88.

[12] Interministerial Committee on Climate Change, National Plan on Climate Change (2008), available at

[13] The plan does not have a name at this point. Rio 2016 Olympics Report, supra note 4, at 88.

[14] Id.

[15] Id.

[16] Scot Horst, Let the Sustainability Games Begin, U.S. Green Building Council (Sep. 4, 2012),

[17] All of the trees should be planted by 2016. Rio 2016 Olympics Report, supra note 4, at 88.

[18] Id.

[19] Horst, supra note 16.

[20] These standards line up with LEED standards. Brian Ellsworth, supra note 177.

[21] Brian Ellsworth, Brazil Olympics spurring green construction, REUTERS (Nov. 3, 2010),

[22] Id.

[23] Solar Waterfall Could Power Rio Olympics, Environmental Leader: Environmental & Energy Management News (Aug. 3, 2012),

[24] Id.

[25] Id.

[26] Id.

[27] In Brazil, there has been a problem of many recyclable materials being forwarded to landfills even though they should have been recycled. These new plants will be implemented to minimize waste that is forwarded from the recycling plants to landfills and hopefully lead to a zero waste approach of recyclable materials. Rio 2016 Olympics Report, supra note 4, at 89.

[28] Id.

[29] Brian Ellsworth, supra note 21.