Law, International Transactions & Federal Courts — Forex, Trade Sanctions, Corruption (FCPA) & Alien Torts.

                                                 Globe Map (Black)

         This summer has not proven to be dull in international legal cases from the federal courts impacting international transactions and issues concerning China, Cuba, Iran and others. These cases and issues involve, among others, foreign corruption (FCPA), foreign antitrust conspiracies (FOREX), federal and state trade sanctions (over Iran and Cuba), foreign investment (CFIUS), trade and economic embargoes. Here are the most recent developments:

  • Hiring relatives of executives of foreign Sovereign Wealth Funds (SWF),  from the Middle East, as Interns violates the Foreign Corrupt Practices Act. No doubt other expansive and similar corruption cases to follow as either SEC actions of criminal indictments by the U.S. Dept. of Justice. …. Probably involving U.S. firms in China. “Bank of New York Mellon.” New York Times (August 18, 2015).
  • First, the US Dept. of Justice fined various multinational banks billions for rigging currency markets (FOREX.) Second, these banks then settled for billions in private litigation in the US. Third, these banks now face more extensive liability as they confront foreign court actions. Big banks just can’t learn to say no to criminal antitrust conspiracies. Fast money schemes often lead to big judgments, damaged reputations, and loss of global business. “Billions in Fines and Judgments and Forex.” Financial Times (August 17, 2015).

  • Calls for CFIUS nat’l security review of Tsinghua’s bid for Micron Tech. Another legal issue concerning national security and trade and raising questions of Congressional and Executive authority in foreign trade and foreign policy. “China Investment in US and National Security and Congressional Law.” Wall Street Journal (August 12, 2015).
  • State trade sanctions and federal law. The law is clear. The federal law and international agreements preempt state law. There really isn’t very much state officials can do even though they are personally opposed to Obama’s diplomacy with Iran. Foreign affairs and foreign trade are matters of exclusive federal authority with great powers vested in the president and delegated to him. Federal preemption over states is clear. This is a key aspect of federalism that is long-standing. “State Trade Sanctions and Iran.” Wall Street Journal (August 4, 2015).
  • Congress has significant constitutional authority in trade issues and sanctions policy. It’s time for it to get in line with the President’s newer Cuban policy, favored by most Americans, and the global community. That policy can more fully engage the Cuban people in the world of trade and commerce. The policy of the last 50 years has accomplished none of its initial objectives. This is one area a generally dysfunctional congress should be able to agree upon. Let’s do away with the Cuban embargo, now. “Cuban Embargo.” New York Times (August 3, 2015).
  • Billions in Iranian assets will be unfrozen when sanctions are lifted. They will be subject to US court claims and judgments against Iran by US terrorist victims and others. Huge potential litigation. Somewhat similar to issues concerning claims by US nationals and firms against Cuba when the Cuban embargo is lifted. Issue of individual claims, diplomacy and private US litigation are complicated. Do have precedents going back to Russian assets in the US after Soviet recognition in the 1930s and even earlier. “Terror Cases and Iran.Wall Street Journal (August 2, 2015).
  • The idea that US states can impose sanctions on Iran despite an int’l deal is wrong. These lawyers ought to go back to law school and read cases on federalism, preemption, and international agreements. “Lawless and Nuclear Deal.” Wall Street Journal (July 26, 2015).
  • China’s foreign currency reserves drives its overseas investments which reflects its assertive foreign policy. This is now a challenge for US policy. But it is also an opportunity for attracting investment for state economic development in the US. “China’s Global Ambitions.” New York Times (July 24, 2015).

About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
This entry was posted in Global Trade Relations. Bookmark the permalink.

1 Response to Law, International Transactions & Federal Courts — Forex, Trade Sanctions, Corruption (FCPA) & Alien Torts.

  1. Shared! Thank you, dear Professor, Dr. Malawer! Ludmila Morozova-Buss from Berlin, Germany

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