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Yesterday, the American Bar Association (ABA) and the international community celebrated International Criminal Justice Day. https://www.americanbar.org/news/abanews/aba-news-archives/2017/07/statement_of_abapre.html
In particular, the ABA and the international community recognized that 15 years ago the International Criminal Court (ICC) was created. Today depending on your perspective the ICC has accomplished significant victories in bringing prosecutions and holding trials that have been judged to meet international standards of fairness. However, the ICC suffers from a shortage of resources and inability to implement its orders. Its reliance on other countries to carry out arrest warrants and requests for witnesses to testify mean that in a number of cases countries do not comply. Just as in national courts many cases are politicized. Many , if not most defendants, have significant resources and utilize criminalized power structures to resist indictment or prosecution by the ICC.
As some of the key powers, such as the China, United States, and Russia are not members of the ICC, the Court often lacks the ability to carry out its mandates.
As the production and distribution of arms, including sophisticated weapons like drones, increasingly become available to both state and non-state actors, the ability of persons in international and internal conflicts to perpetrate mass destruction becomes easier and the growth of international atrocities outpaces the ability of the ICC and the international community to stop such conflicts and adjudicate the violations of the laws of war.
Increasingly, one of the values of the ICC is to help other ad hoc criminal tribunals as the latter try to develop and implement norms to meet best standards of operation.
On April 27, 2017, the U.S. Department of Justice announced that Singaporean citizen Lim Yong Nam, also known as Steven Lim, had been sentenced to 40 months in prison in connection with the export of thousands of radio transmitters from the U.S. to Iran, in violation of longstanding U.S. sanctions against the nation. 14 of these radio transmitters were later found in undetonated improvised explosive devices (IEDs) used against U.S. soldiers in Iraq.
Lim, 43, was extradited to the United States in April 2016 from Indonesia, where he had been held since 2014 pending extradition proceedings. On December 15, 2016, Lim pleaded guilty to a charge of conspiracy to defraud the U.S. by dishonest means. He will be deported to Singapore upon the completion of his sentence.
The radio transmitters used in the fraud had numerous commercial applications; Lim purchased 6,000 transmitters from a Minnesota-based company between August 2007 and February 2008, falsely reporting that he intended to use them for a telecommunications project in Singapore. Instead, he exported the transmitters to Iran, in knowing violation of U.S. law. Lim was not alone in this scheme; the initial indictment, filed in 2010 and unsealed in 2011, charged four co-conspirators, three other Singaporeans and an Iranian national named Hossein Larijani. Two of those Singaporeans, Lim Kow Seng and Hia Soo Gan Benson, have already faced prosecution; Singaporean Wong Yuh Lan and Larijani remain at large.
Once in Iran, these transmitters, which have encryption capabilities and have a range allowing them to transmit data wirelessly as far as 40 miles, were used for varying purposes, some of them dangerous. According to the press release announcing the sentence, during 2008 and 2009, “coalition forces in Iraq recovered numerous modules made by the Minnesota firm that had been utilized as part of the remote detonation system for IEDs.” 14 such recoveries were from the shipment sent to Lim and his associates.
U.S. law enforcement authorities thanked the governments of Singapore and Indonesia “for the substantial assistance that was provided in the investigation of this matter.”
The press release announcing the sentence can be found here: https://www.justice.gov/opa/pr/singapore-man-sentenced-40-months-prison-plot-involving-exports-iran-us-components
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On March 7, 2017, the U.S. Department of Treasury announced that the Office of Foreign Assets Control (OFAC) had reached a settlement with Zhongxing Telecommunications Equipment (ZTE) Corporation of $100,871,266. The settlement, which is a part of a total resolution between ZTE and the U.S. government of $1.192 billion, relates to the Chinese telecommunications giant’s multi-year effort to circumvent and subsequently conceal their circumvention of U.S. sanctions against Iran. The settlement is OFAC’s largest to date with a non-financial entity.
In the press release announcing the settlement, the Treasury Department described ZTE’s action as a “multi-year and systemic practice of utilizing third-party companies to surreptitiously supply Iran with a substantial volume of U.S.-origin goods, including controlled goods appearing on the Commerce Control List.” The Treasury Department states in the release that ZTE utilized third parties to actively conceal their involvement in selling goods to Iran, and that top-level executives not only approved this plan, but had full knowledge of the legal risks of doing so before entering into contracts that were contingent on their selling goods to Iran.
Additionally, when ZTE’s business with Iran became public knowledge in 2012, the company assured the United States that it intended to cease this activity. However, in 2013, the company decided to resume this clandestine program, and “under the direction of its leadership, ZTE deleted evidence and provided the U.S. government with altered information to hide the fact that it had resumed its unlawful business with Iran.”
If ZTE’s criminal plea is approved in federal court, the resolution would also include the imposition of $430,488,798 in combined criminal fines and forfeitures on ZTE as part of a plea agreement with the U.S. Department of Justice, and a $661,000,000 penalty – of which $300,000,000 is suspended during a seven-year probationary period – to the U.S. Department of Commerce.
In addition to the financial penalty, the settlement dictates that ZTE maintain policies and procedures that minimize the possibility that they subsequently engage in the circumvention of U.S. export control law or economic sanctions. The settlement requires oversight from an independent auditor for a period of three years.
The press release can be found here: https://www.treasury.gov/press-center/press-releases/Pages/sm0023.aspx.
The text of the settlement can be found here: https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20170307_zte_settlement.pdf.
On March 6, 2017, President Donald Trump released an executive order in which he rescinded and modified the controversial Executive Order 13769, his travel ban on immigrants from seven Muslim-majority countries. This new executive order is considerably more limited than the previous iteration signed on January 27. Most importantly, the order now only applies to people seeking new visas; visas that had already been approved as of the signing of Executive Order 13769, and the permanent residency status of those who hold passports from the banned countries, will be considered valid. In the implementation of Executive Order 13769, hundreds of people with valid visas and permanent residency status were barred from re-entering the country and either detained at airports or returned to their country of origin, leading to widespread protests at airports around the country. This aspect of the order underwent particular scrutiny by the Ninth Circuit Court of Appeals when that court decided to uphold a temporary restraining order from a district court barring implementation of the order until it had been properly adjudicated.
While the 120-day ban on refugees entering the United States still remains a part of the order, as does the 90-day ban on visa issuance to the listed countries, the new order removes Iraq from the blacklisted countries, leaving Syria, Yemen, Iran, Libya, Somalia, and Sudan. The inclusion of Iraq, whose government is a U.S. ally in the fight against the Islamic State, drew considerable criticism, and was used as a basis for the claim that the travel ban was intended to target Muslim immigrants rather than being driven by the political situation in the listed countries. Additionally, dual nationals whose citizenship includes one of the countries impacted by the ban will no longer be barred from seeking U.S. visas.
It remains to be seen whether the modifications to the ban will allow it to pass muster with the courts. While the new order resolves many of the individual concerns the Ninth Circuit had with the previous order, including a clarification of the status of permanent residents and current visa holders (whom the court decided had clear constitutional due process rights on which the previous order impinged), it does not resolve the fundamental question regarding whether this order, immutably by its character, amounts to a Muslim ban.
The full text of the revised order can be found here: https://www.whitehouse.gov/the-press-office/2017/03/06/executive-order-protecting-nation-foreign-terrorist-entry-united-states.
On March 2, 2017, agents representing the U.S. attorney’s office for the Central District of Illinois, the Internal Revenue Service, and two other agencies raided three Peoria, Illinois buildings owned by construction equipment manufacturing company Caterpillar Inc., in relation to Caterpillar’s offshore tax practices. These tax practices involve the use of a subsidiary corporation based in Switzerland, known as CSARL.
In a statement, Caterpillar spokeswoman Corrie Heck Scott confirmed that “law enforcement is present in various Peoria-area Caterpillar facilities executing a search warrant.” She also stated that, “Caterpillar is cooperating” with law enforcement.
Caterpillar CEO Jim Umpleby also released a statement in which he confirmed the raids and apologized to his employees. “This morning, a number of our colleagues in the Peoria area were surprised when federal authorities arrived to execute a search warrant,” the statement read. “I’m sorry that we had to experience this today,”
The tax strategy, designed by the accounting firm then known as PriceWatterhouseCoopers, involved the transfer of the rights to Caterpillar’s profits to CSARL, a wholly-owned subsidiary. Rather than paying the 29 percent effective tax rate it would owe on the profits had they remained in the United States, Caterpillar only paid a rate of 4 to 6 percent that it had negotiated directly with the Swiss government.
These tax practices were the subject of a formal Congressional inquiry in 2014, in which it was concluded that the scheme, in which Caterpillar had transferred over $8 billion in profits to CSARL, allowed Caterpillar to slash its U.S. tax bill by $2.4 billion over the course of 13 years; however, the inquiry did not conclude that Caterpillar’s practices had been illegal. In 2015, Caterpillar was served with a grand jury subpoena for documents related to the movement of cash between its U.S. business and its Swiss subsidiary.
Caterpillar, whose stock prices fell 4.3 percent on the day of the raid, has been the subject of recent praise from President Trump. While Trump railed against corporate expatriation of profits throughout his campaign, it remains to be seen how his administration intends to deal with the issue.
Malaysian authorities announced March 1, 2017, that they had brought charges against the two women who had been arrested on February 13 for the murder of Kim Jong-Nam, half brother of North Korean leader Kim Jong-Un. Siti Aisyah, 25, of Indonesia, and Doan Thi Huong, 28, of Vietnam, are accused of using a water gun to poison Kim with a deadly nerve agent, called Agent VX.
Simultaneously, the North Korean government has sent diplomatic delegations to Beijing and Kuala Lumpur in an effort to repair the damage caused by the assassination. The North Korean diplomats sent to Kuala Lumpur include the former deputy ambassador to the United Nations, Ri Dong-il; a key objective of the delegation is securing the release of Mr. Kim’s body to North Korea. The delegation to Beijing includes a high-ranking official in Vice Foreign Minister Ri Gil-song — earlier this week, the North Korean government condemned the Chinese government’s decision to adhere to the sanctions regime imposed on the purchase of North Korean coal by the UN.
In addition to the arrests of Aisyah and Huong, Malaysian authorities have also arrested Ri Jong-chol, a North Korean national, and are said to be seeking seven other North Koreans for their involvement in the assassination. There has been widespread speculation, and accusations from the South Korean government, that the killing of Kim Jong-Nam was orchestrated by the North Korean government at the behest of Kim Jong-Un in an effort to consolidate power. There is no word on whether the Malaysian government intends to levy charges on Ri or the seven others suspected of involvement.
On February 27, 2017, the Department of Justice announced that the Takata Corporation, a major global supplier of automotive safety equipment, had pleaded guilty to one count of wire fraud and agreed to pay $1 billion in relation to its marketing and selling of defective airbags. Takata, a multinational corporation based in Japan but with production facilities on four continents, admitted to defrauding customers and automakers by manipulating airbag inflator test data to make its airbags seem more safe than they in fact were.
“For over a decade, Takata lied to its customers about the safety and reliability of its ammonium nitrate-based airbag inflators,” said Acting Assistant Attorney General Blanco. “Takata abused the trust of both its customers and the public by allowing airbag inflators to be put in vehicles knowing that the inflators did not meet the required specifications. Today’s sentence shows that the department will work tirelessly to hold responsible those who engage in this type of criminal conduct.”
The plea agreement is structured thusly: $850 million will be paid by Takata to a fund for airbag replacement and recall costs incurred by auto manufacturers who had been given defective airbags. $125 million will be given to those who had been physically injured by Takata’s defective airbags (and have not already reached a separate settlement with the company). In addition, Takata will pay a $25 million fine, and has been given three years probation.
At least 16 deaths have been attributed to the defective airbags, which have led to the recall of a record 42 million vehicles. The press release announcing the settlement can be found here: https://www.justice.gov/opa/pr/takata-corporation-pleads-guilty-sentenced-pay-1-billion-criminal-penalties-airbag-scheme.
Ex-CIA officer Sabrina De Sousa, convicted in an Italian court in absentia for her role in the extraordinary rendition of Egyptian cleric Osama Hassan Mustafa Nasr (also known as Abu Omar), had her sentence partially commuted by order of Italian President Sergio Mattarella. After announcing that De Souza’s sentence had been commuted by a year, from four years to three, the Italian government announced on March 1, 2017 that they would no longer seek extradition of De Souza, thereby allowing for her release.
De Souza, who was born in India holds both U.S. and Portuguese citizenship, was arrested and detained by Portuguese authorities as she was attempting to return to India to visit her ailing mother. Though she denied involvement in the plot, De Souza was one of 23 Americans convicted in absentia for the kidnapping of Abu Omar on a street in Milan on February 17, 2003. De Souza, whose sentence had initially been set for seven years before being reduced to four, had been in a battle over her extradition to Italy for several years.
In announcing the commutation, President Mattarella stated he had based his decision on “the attitude of the sentenced party, the fact that the United States has discontinued the practice of extraordinary renditions and the need to weigh up the penalty with that of others convicted of the same offenses.” Abu Omar, in a telephone interview with Adnkronos Internation, stated he was “satisfied” with President Mattarella’s decision, and that “De Sousa has suffered enough.”
The act of imprisoning De Sousa for an act committed while acting in an official capacity as an agent of the United States would likely have strained the relationship between the U.S. and Italy in a time of great uncertainty regarding the strength of the U.S.’ commitment to its European allies.