Adriana Sanford will be addressing the International Committee of the Senior Lawyers Division of the American Bar Association.
Comparing Criminal Justice in Multicultural Films – Event on November 16 at 11:30am EST
On Wednesday, November 16 at 11:30am EST, Fred Davis, who is an adjunct professor of law of Columbia University and an international law practitioner, will present excerpts from seven classic films – three each from England and France, one from Iran– that address some common and very specific criminal procedures, and how differently they are handled.
He will be joined by Sam Bettwy, a federal prosecutor and Professor at Thomas Jefferson School of Law and author of the e-book “Comparing Criminal Procedures Through Films.” The event will be entertaining, and offer real insights into comparative criminal justice.
Click here to register. It is sponsored by the International Academy of Financial Crime Litigators, of which Fred is a member.
Basel AML Index 2022 release – Global Ranking of Money Laundering Risks
Basel AML Index 2022: one step forward, four steps back in tackling money laundering
Progress in addressing money laundering and terrorist financing (ML/TF) risks remains paralysed in many countries, according to the latest release of the Basel AML Index.
The Basel AML Index is an independent ranking that assesses countries’ ML/TF risks and capacity to counter them. It draws on 18 indicators in five domains measuring different factors that contribute to high ML/TF risks.
The 11th Public Edition of the Basel AML Index reveals that the average global ML/TF risk remains stuck at 5.25 out of 10, where 10 is the maximum risk level. A tiny decrease in risks relating to the quality of AML/CFT frameworks has been offset by increased risks in the other four areas measured by the Basel AML Index: corruption, financial transparency, public transparency, and political/legal risks.
When it comes to tackling dirty money, most countries are taking one step forward and four steps back – and remaining too many steps behind criminals seeking to launder illicit funds.
Trends and concerns
The annual ranking this year includes 128 jurisdictions with sufficient data to calculate an overall risk score, up by 18 from last year. In addition, the Basel AML Index Public Edition report highlights some key trends in the data:
- Both public and private actors are getting better at applying a risk-based approach to ML/TF. This is a positive development that enables governments and financial institutions to efficiently allocate resources towards the biggest and most serious risks or cases.
- But progress is too slow in terms of compliance with standards on international cooperation and other crucial areas of AML/CFT. Fixing these weak spots in the global financial system is long overdue.
- With regard to cryptocurrencies and other virtual assets, average compliance levels are dropping. This is a worrying development considering the speed at which criminals are embracing new technologies to commit crimes and launder money.
- The gap between technical compliance with standards and the effectiveness of measures in practice is widening. The growing disconnect is especially concerning when it comes to key weak spots such as beneficial ownership transparency and the quality of supervision.
Too important and too complex for governments alone
Progress matters because AML/CFT is about more than just fighting financial crime – it is about protecting people and the planet. Weaknesses allow criminals to launder the proceeds of their corrupt deals, of fraud schemes, or of their illegal business trafficking in drugs, humans and wildlife. That makes the crimes they commit attractive. Those who ultimately suffer most are, as so often, ordinary people and our planet.
What’s more, failing to reach international AML/CFT standards can seriously impact business and investment opportunities.
The Basel AML Index Expert Edition hopes to make a contribution to addressing these challenges. It aims to help all stakeholders have a more in-depth understanding of their country’s main risks and weaknesses, thereby guiding efforts to effectively address them.
Covering 203 jurisdictions, the Expert Edition is reasonably priced for private-sector entities and free of charge for public authorities, multilateral institutions and non-profit organisations, as well as the media, academia and civil society.
Users can quickly understand how a country is doing on vital policy areas relevant to AML/CFT and what the main problems are, plus compare with other countries in the region or income category. The data covers country-level sanctions and relevant blacklists.
About the Basel Institute on Governance
The Basel Institute on Governance is an independent, non-profit organisation working around the world to strengthen governance and counter corruption and other financial crimes.
Headquartered in Basel, Switzerland since 2003, it is an Associated Institute of the University of Basel and has offices and field experts across Latin America, Africa and Southeast Asia. Some 120 staff members work with public, private and academic partners worldwide on cross-cutting issues in the areas of asset recovery, public governance, public finance management, green corruption, anti-corruption Collective Action and compliance.
The Basel AML Index is published by the Basel Institute’s International Centre for Asset Recovery (ICAR), which is dedicated to strengthening and supporting the capacities of developing and transition countries to recover stolen public assets. ICAR receives core funding from the Governments of Jersey, Liechtenstein, Norway, Switzerland and the UK.
Contact
- Technical or country-specific enquiries: kateryna.boguslavska@baselgovernance.org
- Media enquiries and interview requests: monica.guy@baselgovernance.org
- Subscriptions: via the website or email index@baselgovernance.org
U.S. Treasury Publishes Final Rule on Reporting Beneficial Ownership Information
On September 29, 2022, the Financial Crimes Enforcement Network (FinCEN) issued a final rule implementing the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting provisions.
Rule Brings U.S. Closer to Comply with the International Rules on Entity Transparency
In 2006 and 2016, the Financial Action Task Force Mutual Evaluations found the U.S. non-compliant with entity transparency standards.
The final rule will help bring the U.S. closer to complying with the international rules on entity transparency. However, the rules do not take effect until January 1, 2024. Reporting companies created or registered before January 1, 2024 will have one year (until January 1, 2025) to file their initial reports. The rules do not take effect until January 1, 2024. Reporting companies created or registered before January 1, 2024 must submit an initial report within one year of the effective date, the same as in the proposed rule. The rules do not take effect until January 1, 2024. Reporting companies created or registered after January 1, 2024, will have 30 days after receiving notice of their creation or registration to file their initial reports. The proposed rule required filing the initial report within 14 days of their creation or registration.
By then the international standards will have moved further. For instance, unlike the U.S., the EU and many countries include in their entity transparency standards reporting on common law trusts. In any addition, the EU and the international standard is to have public registries, allowing a broad segment of the public to view the BOI so that they can verify it and/or report discrepancies.
Access to the Beneficial Ownership Information and FinCEN Resource Issues
In the U.S. even proposed regulations on access to beneficial ownership information is not yet available. It is likely that the information on beneficial owners is kept by FinCEN and only can be accessed by financial regulators and law enforcement from federal, state, Indian tribes, and foreign governments and banks to verify Customer Due Diligence. All will likely have to request access and then await processing by FinCEN. FinCEN is already behind on releasing the other regulations on access and a revised CDD rule. FinCEN is seriously underresourced, especially in view of all the new regulatory projects. The OECD in 2018 downgraded the U.S. for timeliness in responding to requests for information and in the qualify of the information exchanged. The penalties for any misuse of the information are so harsh that banks receiving information will have to restrict it, so that they can protect themselves from any penalties.
Concessions to Formation Agents and the Business Community
The final rule has made concessions to the business community and formation agents. The rule defines a company applicant to be only two persons: the individual who directly files the document that creates the entity, or in the case of a foreign reporting company, the document that first registers the entity to do business in the United States; and the individual who is primarily responsible for directing or controlling the filing of the relevant document by another. The proposed rule stated that anyone in the chain of working on formation was considered a company applicant.
The rule, however, does not require reporting companies existing or registered at the time of the effective date of the rule to identify and report on their company applicants, as the proposed rule did. In addition, reporting companies formed or registered after the effective date of the rule also do not need to update company applicant information, as the proposed rule did.
Analysis
As I stated in my remarks on Sept. 22 at the STEP/LATAMCaribbean conference in Panama in a talk on Will the U.S. Remain the Jurisdiction of Choice for Latin Americans in the aftermath of the Enactment of the CTA, the U.S. will remain the jurisdiction of choice for both legitimate and illegitimate investors.
The current (October) issue of the IELR will have a more comprehensive discussion of the CTA BOI final rules.
Australian Waste Management Company Pleads Guilty to, and Former CEO Charged with, Criminal Price-Fixing
by Jonathan J. Rusch
Since Australia first criminalized cartel conduct in the Competition and Consumer Act 2010 (CCA), its progress in successfully bringing criminal cartel charges against companies or individuals has been slow and at times tortuous. As of July 2022, there had been only four matters that resulted in criminal convictions for cartel behavior in Australia, and in those matters all defendants had pleaded guilty to the offense. In one 2019 case – the first contested criminal prosecution under the CCA’s criminal cartel provisions – two former corporate executives were acquitted of price fixing and bid rigging. Not until June 2022 did the Australian Federal Court impose the first prison sentences for criminal cartel conduct.
During 2022, however, the Australian Competition & Consumer Commission (ACCC), which investigates criminal and civil violations of the cartel provisions, has been seeking to demonstrate that, as then-ACCC Chair Rod Sims stated, cartel conduct is “a critical component” of the ACCC’s competition portfolio, “and an enduring priority.” As of March 2022, the ACCC reportedly had six cartel matters before the Federal Court and additional investigations underway.
Most recently, on August 16, the ACCC announced that an Australian waste company, Bingo Industries, had entered guilty pleas to criminal cartel offences relating to price fixing for demolition waste services in Sydney. Bingo – now owned by Macquarie Infrastructure and Real Assets — provides landfill, waste processing, and skip bins [i.e., dumpsters] services throughout the states of New South Wales, Victoria, and Queensland.
According to the ACCC, in mid-2019, Bingo “agreed with [two competing firms] to fix and increase prices for the supply of skip bins and the provision of waste processing services for building and demolition waste in Sydney.” In addition, the former managing director and CEO of Bingo, Daniel Tartak, has been charged with two criminal cartel offences. These charges will be heard at a future date by the Federal Court.
At present, there is no indication of the penalties that the Commonwealth Director of Public Prosecutions (CDPP), which is responsible for prosecuting criminal cartel offenses, will seek from the Federal Court against Bingo. Under the CCA, the maximum fine for each criminal cartel offense by a corporate entity is the greater of (1) AUS$10 million, (2) three times the total benefit obtained and that is reasonably attributable to the commission of the offense, or (3) if the value of the benefit obtained cannot be determined, 10 per cent of the corporation’s annual turnover connected with Australia. The maximum penalty for an individual convicted of a criminal cartel offence is 10 years’ imprisonment, a fine of AUS$444,000, or both. The Federal Court has not yet set a date for a case management hearing.
* * *
Jonathan J. Rusch is Principal of DTG Risk & Compliance LLC and Adjunct Professor at American University Washington College of Law and Georgetown University Law Center.
Meeting of Mexican and U.S. Heads of States Results in Enforcement Cooperation Promises
On July 12, 2022, the meeting between Mexico President Andrés Manuel López Obrador and U.S. President Joseph Biden resulted in a joint statement, containing some promises of cross-border law enforcement cooperation.
Drug Trafficking, Arms Trafficking, Human Smuggling, and Transnational Criminal Organizations
Through the Bicentennial Framework for Security, Public Health, and Safe Communities, the two leaders reaffirmed their commitment to cooperate to address major security issues affecting the two nations, including the challenges of fentanyl, arms trafficking, and human smuggling, and to reduce levels of drug abuse and addiction.
They committed to deepen their cooperation to combat transnational criminal organizations. They reaffirmed the robust operational efforts between law enforcement agencies to address these security efforts. They pledged to establish a U.S.-Mexico operational task force to disrupt the flow of fentanyl into their countries.
Migration Issues
The two leaders referred to the tragic deaths of 51 migrants on June 27 at the hands of human smugglers in San Antonio. The incident further strengthens their “determination to go after the multi-billion-dollar criminal smuggling industry preying on migrants and increase our efforts to address the root causes of migration.” The Departments of Justice (DOJ) and Homeland Security (DHS) and Mexico’s Attorney General’s Office have coordinated to arrest and prosecute those who endanger the lives of vulnerable migrants.” In doing so, they will, among other things, work through Joint Task Force Alpha and its Mexican partners.
Joint Task Force Alpha is a law enforcement task force. It will marshal the investigative and prosecutorial resources of the DOJ, in partnership with the DHS, to enhance U.S. enforcement efforts against the most prolific and dangerous human smuggling and trafficking groups operating in Mexico and the Northern Triangle countries of Guatemala, El Salvador, and Honduras.
The Joint Task Force is composed of federal prosecutors from U.S. Attorney’s Offices along the Southwest Border (District of Arizona, Southern District of California, Southern District of Texas, and Western District of Texas), from the Criminal Division and the Civil Rights Division. Also participating are law enforcement agents and analysts from DHS’s Immigration and Customs Enforcement and Customs and Border Patrol. The FBI and the Drug Enforcement Administration are also part of the Task Force. It works closely with Operation Sentinel, a recently announced DHS operation focused on countering transnational criminal organizations affiliated with migrant smuggling.
The two leaders pledged to build on the commitments at the Summit of the Americas made by twenty-one countries in the hemisphere pursuant to the Los Angeles Declaration on Migration and Protection, they said they are taking immediate and coordinated steps to manage the flows of migrants arriving into their countries. They have joined efforts to address the underlying economic and security drivers of migration. Recognizing that development must be at the center of all migration policies, they will accelerate and expand international cooperation programs focused on the most marginalized communities. At the same time, they will maintain strong border enforcement policies while ensuring full protection of human rights.
Analysis
Perhaps the most concrete development is pledged to establish a U.S.-Mexico operational task force to disrupt the flow of fentanyl. Some of the ingredients tend to originate in China and are brought into Mexico, where they are further processed for export to the U.S.
The most difficult pledge is to have strong border enforcement policies while ensuring full protection of human rights. The U.S. border situation suffers from the failure of the U.S. Congress to enact modernize legislation, the lack of resources at the border to process the number of aliens, the failure to invest in resources to adjudicate the number of asylum applicants, policies of U.S. state governments which sometimes do not complement and even work at cross-purposes with U.S. immigration and human rights policies, and the lack of consistent border and immigration policies when administrations change.
A limitation of the Los Angels Declaration on Migration and Protection is that some of the most countries that are the sources (e.g., Cuba) and intermediary locations (e.g., Nicaragua) have not joined the Declaration.
The Bicentennial Framework provides at least a detailed framework for cross-border enforcement cooperation between the two countries. In addition, the U.S.-Mexico-Canada Free Trade Agreement has strengthened enforcement provisions, especially for labor and the environment. Those provisions also enable the two governments and other stakeholders to ensure enforcement cooperation occurs with respect to the issues covered in the agreement. These provisions also extend to intellectual property enforcement.
Ukraine Accountability Conference Takes Place in the Hague
On July 13-14, the Ukraine Accountability Conference is being hosted by Wopke Hoekstra, the Minister of Foreign Affairs of the Netherlands, Karim A.A. Khan QC, Prosecutor of the International Criminal Court, and EU Commissioner of Justice Didier Reynders.
The Conference is aimed at ensuring accountability for war crimes committed in Ukraine, according to Hoekstra in his opening speech, “Just like a climate strategy and a Covid strategy, we need an accountability strategy.” Hoekstra continued, “A strategy driven by the universal belief that all of us are protected by law. Ensuring that all roads lead to justice. Now and in the future.”
ICC Prosecutor Karim A.A. Khan called for an “overarching strategy” to coordinate efforts to bring perpetrators of war crimes in Ukraine to justice. Since the beginning of the invasion, his office has applauded international efforts sending prosecutors and investigators to Ukraine. “The simple truth is that, as we speak, children, women and men, the young and the old are living in terror” said Khan.
Additional speakers included Minister of Foreign Affairs of Ukraine, Dmytro Kuleba, High Representative of the European Union for Foreign Affairs and Security Policy, Josep Borell, and closing words from Ukrainian President Volodymyr Zelensky.
Zelensky’s speech included breaking news in the conflict, “Today in the morning, Russian missiles hit our city of Vinnytsia, an ordinary, peaceful city. Cruise missiles hit two community facilities, houses were destroyed, a medical center was destroyed, cars and trams were on fire. . . This is the act of Russian terror.”
45 countries at the conference signed a political declaration to work together on investigations into war crimes in Ukraine. International cooperation will help avoid the duplicating investigations, train Ukrainian prosecutors, and expand the forensic teams operating in Ukraine. Additionally, a 20 million euros was pledged to the ICC, the prosecutor general’s office in Ukraine, and United Nations support efforts.
Among the topics on the agenda are: the principles of complementarity in action; Ensuring evidence collected can be put before courts; and prioritizing the interests and needs of survivors and victims of core international crimes
Some sessions are closed while others are open to the public and available on YouTube through the conference website.
US Sanctions on the Provision of Accounting, Trust and Corporate Formation, and Management Consulting Services to Persons Located in Russia
Date: Wednesday, July 6, 2022
Time: 12:00pm to 13:30pm (EST)
Webinar Registration: Please click here
Moderator:
Alan Winston Granwell, Of Counsel, Holland & Knight LLP, Washington, DC
Presenters:
Daniel J. Bell, Partner, McDermott Will & Emery LLP, Washington, DC
Antonia Tzinova, Partner, Holland & Knight LLP, Washington, DC
Bruce Zagaris, Partner, Berliner Corcoran & Rowe LLP, Washington, DC
Program Description:
Among the sanctions imposed on the Russian Federation, the United States has prohibited the provision of accounting, trust and corporate formation, and management consulting services from the United States or by a US Person, wherever located, to persons located in the Russian Federation.
Our Webinar
- Will provide some general background on sanctions
- Will explain these new services prohibitions, effective date, exceptions and General Licenses related thereto
- Discuss guidance issued by OFAC through FAQs as to how these prohibitions are intended to operate
- Discuss how these prohibitions may impact STEP members and what STEP members need to know
- Discuss US governmental initiatives to enforce sanctions
Presenters:
Daniel Bell focuses his practice on domestic and international estate, gift and income tax planning. He has assisted clients with sophisticated estate, income and gift tax mitigation strategies, including domestic and offshore tax compliance, tax controversy and litigation, pre-immigration, expatriation and business succession planning, estate and trust administration, as well as family multigenerational wealth preservation.
Alan Granwell is a tax lawyer with 50 years of experience in the area of international taxation. He advises private clients and corporate clients on cross-border planning, controversy, transparency and compliance. Mr. Granwell is a former International Tax Counsel and Director, Office of International Tax Affairs, U.S. Treasury Department and a Fellow, American College of Tax Counsel. In the past few months, Alan has chaired several panels dealing with the US sanctions targeted at oligarchs and is a contributing author to the STEP USA paper on the recent services prohibitions.
Antonia Tzinova practices in the areas of international trade, foreign direct investment and industrial security. She advises on defense and high-technology exports; U.S. trade embargoes and economic sanctions; and customs matters. She is a member of the Law360 International Trade Editorial Board.
Bruce Zagaris advises individual, entities and governments on international business, especially the regulatory and enforcement aspects. He has worked on tax controversy matters, including representing individuals on voluntary disclosures, audits, and litigation, as well as consulting and serving as an expert witness in criminal trials for defendants and the U.S. government. He has also represented foreign governments in international tax and financial services, including advising and helping negotiate income tax, tax information exchange agreements, and bilateral investment treaties. Bruce’s practice also includes a substantial amount of money movement issues, especially international ones.
We hope you can join us.
Kind regards,
STEP Mid Atlantic
Note: Contact Robert Hottle – robert.hottle@bakertilly.com if you have technical issues
INTERPOL and Growing Transnational Repression
Wednesday, July 12, 2022 – 12:00 pm EDT – 1:00 pm EDT
The panel will discuss new U.S. legislation concerning INTERPOL abuse, the organization’s response to recent political events on the international stage and the panelists’ experiences advising victims of INTERPOL abuse.
Specifically, the panelists will review: the U.S. Transnational Repression Accountability and Prevention (TRAP) Act of 2021 and U.S. policy towards INTERPOL abuse, INTERPOL’s lifting of “corrective measures” imposed on Syria in 2012 and the organization’s approach to requests from Russia in light of the latter’s invasion of Ukraine, the decisions made by the 89th (most recent) INTERPOL General Assembly and how they may affect victims of INTERPOL abuse, the controversies surrounding the financing of INTERPOL’s activities, the problems that the Commission for the Control of INTERPOL’s Files (CCF), a critical part of INTERPOL’s redress mechanism, faces on a daily basis, as well as CCF’s consideration of the principle of ne bis in idem, preemptive requests, bounced checks and other provisions of INTERPOL’s rules.
Moderator:
Bruce Zagaris, Berliner Corcoran & Rowe LLP
Speakers:
Ted Bromund, The Heritage Foundation (Washington DC)
Michelle Estlund, Estlund Law (Miami)
Laurent Grosse-Kozlowski, former General Counsel and Director of the Office of Legal Affairs at INTERPOL (Lyon, France)
Yuriy L. Nemets, Nemets Law (Washington DC)
Rebecca Schaeffer / Bruno Min, Fair Trials (Washington DC / London, UK)
Ahmadreza Djalali Faces Likely Execution in Another Episode of Iran’s Hostage Diplomacy
Today, the execution of Dr. Ahmadreza Djalali appears to be on another hiatus following his scheduled execution on May 21, 2022. His wife fears that Iranian authorities will execute Djalali at any minute without warning, and Djalali’s fate of life and death may be solely in the hands of Swedish authorities and their willingness to spare a war criminal for her husband’s return.
In April 2016, Iranian Swedish physician Ahmadreza Djalali left Sweden to attend a workshop sponsored by the University of Tehran. A few days after his arrival in Iran, Djalali was detained and charged with spying on behalf of Israel and assisting the assassination of two Iranian nuclear scientists.
In October 2017, Djalali was sentenced to death for “espionage” by Branch 15 of the Revolutionary Court in Tehran based primarily on confessions likely to have been induced by torture. During his imprisonment, Djalali says he was tortured, faced ill-treatment, and denied access to a lawyer.
In November 2017, the UN Working Group on Arbitrary Detention called on Iran to release Djalali and offer him the right to claim reparations, Iranian authorities chose to delay Djalali’s execution after global intervention.
On May 7, 2022, Djalali’s wife stated that his lawyers were told by Iranian judicial officials that they assert they had acted in “good faith” by postponing her husband’s execution, but the arrest and prosecution of Hamid Nouri in Sweden left them with “no option” but to carry out the execution.
Hamid Nouri is an Iranian national charged with international war crimes and human rights abuses in connection with the murder of more than 100 people at Gohardasht prison in 1988 at the order of Ayatollah Ruhollah Khomeini and Ebrhim Raisi, Iran’s current president. Nouri is being tried in Sweden and Iran appears to be subtly implying that the fate of the two men are intertwined.
The statements by Djalali’s wife points to the direction that the Iranian regime see the execution of Djalali as a viable retaliatory tactic for the prosecution of Nouri. Iranian state media released a statement on May 4th accusing Swedish authorities of leveraging Nouri’s fate for the release of Djalali. The statement concluded with a declaration that Djalali’s death sentence would be carried out by the end of May, but there have been no indications that Djalali has been executed as of mid-June. Inside sources at various human rights NGOs also confirm the existence of private conversations of Iranian officials seeking prisoner swaps of Djalali for Nouri.
Both Iran and Sweden are party to the International Convention Against the Taking of Hostages, which criminalizes the detention of any person accompanied by threats to kill, injure, or continue to detain them unless certain conditions are met by a third party. The conditions may be set explicitly or implicitly. Research conducted by Amnesty International concluded that Djalali’s case morphed from a case of unjust and arbitrary detention into hostage-taking by late 2020, when Iranian authorities began conditioning his fate on a “deal” with Belgium to release former Iranian diplomat Asadollah Asadi and/or a deal with Sweden to release Hamid Nouri. The practice of hostage diplomacy in Iran dates back more than 4 decades and sees no signs of stopping given its success in producing favorable results for the Iranian regime.[1]
Analysis
The United Nations World Tourism Organization (UNWTO), of which Iran is a member, is tasked with promoting a code of ethics which include the protection of tourists and visitors, and the prevention of attacks, assaults, and kidnappings even by state actors. Sadly, it appears that the Secretary-General of the UNWTO, Zurab Pololikashvili, is willing to sanitize the dangerous realities of visiting Iran. At the 40th anniversary of the UNWTO in Tehran, Pololikashvili expressed his willingness to “introduce Iran as a safe and peaceful destination” and expressed solidarity in the goal “to attract more and more tourists to Iran.”
Today, there at least four Americans, two Germans, two Austrians, two Frenchmen, and two Swedish nationals (including Djalali) held in Iranian detention, nearly all being charged with spying or “collaborating with hostile states.” Individual states have had to take measures into their own hands in deterring citizens from visiting Iran. The State Department Iran Travel Advisory says, “Do not travel to Iran due to the risk of kidnapping and the arbitrary arrest and detention of US citizens,” and similar warnings are repeated by Sweden, the UK, and other nations contending with Iran’s hostage diplomacy.
Barry Rosen, one of the hostages from the 1979 Embassy Crisis, demands the Biden administration do more in ensuring the safe return of the four American hostages as well as leverage US influence to induce Iran to stop these practices. Rosen suggests the US form a coalition with allies acutely affected by the regimes’ tactics to force the suspension of Iran’s membership from the UN WTO Executive Council until it frees all foreign and dual-nationality hostages.[2]
Indeed such political maneuvering and pressuring may be possible for a nation like Iran, but hostage diplomacy disputes can even occur between permanent members of the UN Security Council. On December 1, 2018 Meng Wanzhou, daughter of the CEO of Huawei, was arrested in Canada, at the request of the United States, for allegedly defrauding HSBC, a British bank. The US requested Wanzhou’s extradition and China responded by detaining two Canadian nationals, Michael Spavor and Michael Kovrig, charging them with espionage. After each of their respective trials, and negotiations between US and Chinese officials, the extradition request for Meng was dropped as part of her deferred prosecution agreement with the DOJ and both Michaels were released on the same day.[3]
Solutions to combat hostage diplomacy will require greater collective action on several levels. States that feel they have the most to lose from hostage diplomacy should band together and collectively agree to not give in to the demands of rogue states. Additionally, international conventions require greater enforcement mechanisms to uphold the Articles to which States are party to. The International Convention Against the Taking of Hostages explicitly denies the legality of hostage taking for political ends. Also, in the cases of Djalali, Michael Spavor, and Kovrig, the defendants were denied the right to consular assistance, a violation of the Vienna Convention on Consular Relations Article 36(a) to which both China and Iran are party.
[1] Iran: Swedish-Iranian Doctor Held Hostage and at risk of Retaliatory Execution, AMNESTY, May 19, 2022.
[2] Barry Rosen, Time to Stand up to the UN Body Aiding Iran’s Hostage Diplomacy – opinion, THEJERUSALEMPOST, February 24, 2022.
[3] Scott Kennedy, Beijing Suffers Major Loss from its Hostage Diplomacy, CSIS, September 29, 2021.
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