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timely reporting on political contributions, gifts, commissions, and fees paid, or offered or agreed to be paid, by any person in connection with:
(a) sales of defense articles or defense services under section 22 of the Arms Export Control Act; or
(b) commercial sales of defense articles or defense services licensed or approved under section 38 of the Arms Export Control Act; to or for the armed forces of a foreign country or international organization in order to solicit, promote or otherwise secure the conclusion of such sales. It also provided that such regulations shall specify the amounts and kinds of payments, offers and agreements to be reported, and the form and timing of reports, and shall require reports on the names of sales agents and other persons receiving such payments. The Secretary of State was also authorized to require by regulation such recordkeeping as he determined necessary.
On September 16, 1976, Carlyle E. Maw, Under Secretary of State for Security Assistance, announced that the Department of State had adopted regulations so mandated. The regulations, effective December 1, 1976, amended the International Traffic in Arms Regulations (ITAR), 22 CFR Subchapter M (Parts 121-128), by adding a new Part 130 on political contributions and fees or commissions in connection with the sale of defense articles or services, to or for the use of a foreign country or international organization under the Foreign Military Sales program (§ 22 of the Arms Export Control Act, 22 U.S.C. 2762), as well as commercial sales for which licensing or other approval of exports is required under the ITAR ($ 38 of the Arms Export Control Act, 22 U.S.C. 2778).
The regulations set forth the obligation to furnish information to the Office of Munitions Control, Department of State, and specify the information to be furnished by the applicant or supplier to the Department, the information to be furnished by the vendor to the applicant or supplier, the information to be supplied by the recipient of the fee or commission, and the treatment to be accorded information designated “confidential business information."
See Fed. Reg., Vol. 41, No. 183, Sept. 20, 1976, pp. 40608-40611. Proposed regulations on the subject had previously appeared at Fed. Reg., Vol. 41, No. 154, Aug. 9, 1976, pp. 33446-33449, and the Dept. of State had conducted a public meeting on Sept. 14, 1976, to allow opportunity for public comment.
PRIVATE INTERNATIONAL LAW
Conflict of Laws
A nonresident alien appealed in In re Grand Jury Proceedings, 532 F.2d 404 (1976), to the U.S. Court of Appeals for the Fifth Circuit from an order of commitment for civil contempt for refusing to answer questions before a grand jury. The Court of Appeals held, on May 13, 1976, that the nonresident alien could be subpoenaed while present in the United States to testify before a grand jury investigating possible tax law violations, even though the very act of testifying might subject him to criminal prosecution in the country of his residence for violating that country's bank secrecy laws. It stated: The Fifth Amendment simply is not pertinent to the situation where a foreign state makes the act of testifying a criminal offense.
Regarding appellant's contention that as a matter of international comity the Court should refuse to enforce the subpoena, the Court said:
The first and most important factor to be considered is the relative interest of the states involved. In this case, the United States seeks to obtain information concerning the violation of its tax laws. In contradistinction, the Cayman Islands seeks to protect the right of privacy that is incorporated into its bank secrecy laws. Unfortunately, the Cayman Government position appears to be that any testimony concerning the bank will violate its laws. Therefore, either the United States or the Cayman interest must give way.
Under our system of jurisprudence the grand jury's function in investigating possible criminal violations is vital. . . . To the degree that the ability to obtain evidence is crucial to all criminal justice proceedings, the need for broad authority in the grand jury is greatest. The Supreme Court has stated "the grand jury's authority to subpoena witnesses is not only historic but essential to its task." Branzburg v. Hays, 408 U.S. 665, 668 (1973). Courts have repeatedly allowed the grand jury wide discretion in seeking evidence. . . . To defer to the law of the Cayman Islands and refuse to require Mr. Field to testify would significantly restrict the essential means that the grand jury has of evaluating whether to bring an indictment.
Since the general rule appears to be that for domestic investigations such information would be obtainable, we find it difficult to understand how the bank's customers' rights of privacy would be significantly infringed simply because the investigating body is a foreign tribunal.
We regret that our decision requires Mr. Field to violate the legal commands of the Cayman Islands, his country of residence. In a world where commercial transactions are international in scope. conflicts are inevitable. Courts and legislatures should take every reasonable precaution to avoid placing individuals in the situation Mr. Field finds himself. Yet, this court simply cannot acquiesce in the proposition that United States criminal investigations must be thwarted whenever there is conflict with the interest of other states.
Diamond Mining and Management, Inc. v. Globex Minerals, Ir.e., 421 F. Supp. 70 (1976) presented a question of the law to be applied in an action by one corporation to recover for breach of a joint venture agreement with another corporation, involving a mining concession in Liberia. The plaintiff corporation was incorporated under the laws of the Republic of Liberia and had its principal place of business in that republic. The defendant was a California corporation with its principal place of business in San Francisco.
The U.S. District Court for the Northern District of California, on September 27, 1976, held that in the absence of any showing as to substantive Liberian contract law or any suggestion of the interest of Liberia which might support the application of Liberian law to the controversy, it would apply California law to the joint venture agreement.
The joint venture agreement contained a provision that, in the event it was not confirmed by the Liberian Government, neither corporation would negotiate for any new or revised concession covering the concession area in question without the other's participation. The Court held that the clause was fatally uncertain and unenforceable since it did not define the term “participation" and was silent as to the nature and amount of responsibility or benefit which each party was to be guaranteed under the provision. Accordingly, the Court dismissed plaintiff's complaint.
§ 2 Multilateral Conventions
Legalization for Foreign Documents On July 19, 1976, the Convention Abolishing the Requirements of Legalization for Foreign Public Documents was transmitted to the Senate for advice and consent to ratification. The convention had
been adopted by the Hague Conference on Private International Law on October 26, 1960, and by 1976 was in force for 20 countries.
The purpose of the convention is to abolish the requirement of diplomatic and consular legalization for foreign public documents, the last step in a process known as the chain-certificate method of document certification. Under this method a document to be used in a foreign legal proceeding requires a chain of certifications, beginning with the issuer and leading ultimately to a consul of the recipient country sitting in the country of origin. The first certification is of the authenticity of the signature or seal of the issuer and each certifier thereafter merely certifies the signature, seal, or stamp of the preceding certification.
The convention establishes a simplified system for attaining the same objective. The key elements are (a) substitution of a standard certificate bearing one signature and (b) abolition of diplomatic or consular authentication of that certificate. The streamlining is aimed at elimination or reduction of costs, delays, and administrative burden on judicial, diplomatic, and consular officers.
The Department of State report on the convention, dated April 8, 1976, states that if the convention is ratified for the United States, clerks of Federal District Courts will be authorized to issue the certificates established by the convention. It also recommends that at least one official in each of the States and in the Territories should be authorized to issue the certificate.
For the President's letter of transmittal to the Senate, the Dept. of State report on the convention, and the text of the convention, see S. Ex. L, 94th Cong., 2d Sess.
Validity of Marriages A U.S. delegation headed by Ambassador Richard D. Kearney participated in the negotiation of a draft Convention on Celebration and Recognition of the Validity of Marriages at the Thirteenth Session of the Hague Conference on Private International Law, which convened at The Hague October 4-23, 1976. The Conference recommended that the convention be opened for signature October 1, 1977. In the United States the Secretary of State's Advisory Committee on Private International Law is undertaking consideration of the convention.
The text of the draft convention follows:
THE VALIDITY OF MARRIAGES
Desiring to facilitate the celebration of marriages and the recognition of the validity of marriages,
Have resolved to conclude a Convention to this effect, and have agreed on the following provisions
Article 1 This Chapter shall apply to the requirements in a Contracting State for celebration of marriages.
Article 2 The formal requirements for marriages shall be governed by the law of the State of celebration.
Article 3 A marriage shall be celebrated1 where the future spouses meet the substantive requirements of the internal lax of the State of celebration and one of them has the nationality of that State or habitually resides there; or
2 where each of the future spouses meets the substantive requirements of the internal law designated by the choice of law rules of the State of celebration.
Article lo The State of celebration may require the future spouses to furnish any necessary evidence as to the content of any foreign law which is applicable under the preceding Articles.
Article 5 The application of a foreign law declared applicable by this Chapter may be refused only if such application is manifestly incompatible with the public policy ('ordre public') of the State of celebration.
Article 6 A Contracting State may reserve the right, by way of derogation from Article 3. sub-paragraph 1, not to apply its internal law to the substantive requirements for marriage in respect of a future spouse who neither is a national of that State nor habitually resides there. CHAPTER II – RECOGNITION OF THE VALIDITY OF MARRIAGES
Article ? This Chapter shall apply to the recognition in a Contracting State of the validity of marriages entered into in other States.
Article 8 This Chapter shall not apply to 1 marriages celebrated by military authorities; 2 marriages celebrated aboard ships or aircraft; 3 proxy marriages; 4 posthumous marriages; 5 informal marriages.
Article 9 A marriage validly entered into under the law of the State of celebration or which subsequently becomes valid under that law shall be considered as such in all Contracting States, subject to the provisions of this Chapter.
A marriage celebrated by a diplomatic agent or consular official in accordance with his law shall similarly be considered valid in all Contracting States, provided that the celebration is not prohibited by the State of celebration.
Article 10 Where a marriage certificate has been issued by a competent authority, the marriage shall be presumed to be valid until the contrary is established.
Article 11 A Contracting State may refuse to recognize the validity of a marriage only where, at the time of the marriage, under the law of that State
1 one of the spouses was already married; or
2 the spouses were related to one another, by blood or by adoption, in the direct line or as brother and sister; or