The US Department of Homeland Security’s Customs and Border Protection agency (CBP) announced on September 14 the issuance of five new withhold release orders (WROs) on entities allegedly using forced labor in or from China’s western Xinjiang Uyghur Autonomous Region (XUAR). The WROs bar the import into the United States of various goods alleged to
Business and Human Rights
Supreme Court to Decide Whether Firms can be Sued in Human Rights Cases
The unsettled question of whether corporations may be held liable for international human rights abuses may finally, after a tortuous deviation, be addressed by the Supreme Court in the case of Jesner v. Arab Bank.
The case, on appeal from the United States Court of Appeals for the Second Circuit in New York, contains allegations that the Arab Bank processed financial transactions on behalf of groups linked to terrorism. The plaintiffs are victims of terror attacks. Among other things, plaintiffs alleged that the Jordan-based bank “knowingly used its New York branch to collect donations, transfer money, and serve as a ‘paymaster’ for international terrorists.”
Central to the case is the Alien Tort Statute, a 1789 law that allows United States federal district courts to hear “any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” The phrase “violations of the law of nations” has been construed by federal courts to cover human rights violations that are “obligatory and universal.” Examples of such acts have included extrajudicial killing, genocide, war crimes, crimes against humanity, cruel, inhuman or degrading treatment, forced labor, and other similarly peremptory norms.
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Alleged Human Trafficking Victims Seek Supreme Court Review of Alien Tort Statute Standards
As many commentators anticipated after the Fifth Circuit’s January 3, 2017 decision in Adhikari v. Kellogg Brown & Root, Inc., No. 1520225 (5th Cir. Jan. 3, 2017), the Adhikari plaintiffs are seeking Supreme Court review of the Fifth Circuit’s decision. The January 2017 decision held that claims asserted against a US defense contractor for alleged human trafficking and related injuries in Nepal, Jordan, and Iraq were not cognizable under the Alien Tort Statute (ATS). The Fifth Circuit, applying the US Supreme Court’s 2013 decision in Kiobel v. Royal Dutch Petroleum Co., held that the presumption against extraterritorial application of a statute bars claims under the ATS for injuries occurring abroad.
The Supreme Court in Kiobel concluded that the ATS could create jurisdiction over violations of “the law of nations or a treaty of the United States” occurring overseas only when claims “touch and concern the territory of the United States . . . with sufficient force to displace the presumption against extraterritorial application.” The plaintiffs in Adhikari alleged that although the injuries occurred outside the United States, Kiobel’s “touch and concern” language permitted their claims because the complaint alleged that trafficking was conducted by agents of KBR’s US operations, KBR paid the agent from US banks, KBR employees in the US were aware of the trafficking scheme, and that KBR’s contract was issued and directed from the United States, supported the US military, and performed on a US military base in Iraq. As we noted previously, here, the Adhikari court, however, held that the “focus” of the ATS is “conduct that violates international law.” Because the alleged conduct in violation of international law occurred in Nepal, Jordan, and Iraq, the claims did not “touch and concern” the US and were, therefore, barred under Kiobel.
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Fifth Circuit Rules on Extraterritoriality of ATS Claims, Creating Circuit Split
On January 3, 2017, the United States Court of Appeals for the Fifth Circuit issued a decision in Adhikari v. Kellogg Brown & Root, Inc., No. 1520225 (5th Cir. Jan. 3, 2017) relevant to US government contractors and subcontractors performing contracts overseas. In the decision, the court held that claims asserted against a US …
OFPP Issues Proposed Combating Trafficking in Persons Best Practices for Government Contractors and Contracting Officials
The Office of Federal Procurement Policy (OFPP), in conjunction with an inter-agency task force on combating trafficking in persons recently published for public comment a set of “Anti-Trafficking Risk Management Best Practices & Mitigation Considerations.” The task force states that the proposed guidance was developed as a set of best practices and mitigation…
US Maintains Arms Embargo on Myanmar Due to Religious Freedom, After Sanctions Lifted
On December 6, 2016, the State Department’s Office of International Religious Freedom published a notice in the Federal Register announcing that it would maintain the unilateral US arms embargo on Myanmar (which the US Government still calls “Burma”) pursuant to the International Religious Freedom Act of 1998 (Pub. L. 105–292), as amended. Along with Myanmar, China, Eritrea, Iran, North Korea, Saudi Arabia, Sudan, Tajikistan, Turkmenistan, and Uzbekistan were all designated as “countries of particular concern” under that law for having “engaged in or tolerated particularly severe violations of religious freedom,” although different sanctions were imposed on the different countries, and for some the sanctions were waived altogether. For Myanmar, the State Department determined that this designation warrants the continuation of the country’s inclusion in Section 126.1 of the International Traffic in Arms Regulations (ITAR), which imposes a unilateral US arms embargo. While the State Department has imposed this Section 126.1 measure on Myanmar in the past, this is the first time this has come up since the President lifted all US economic and financial sanctions on Myanmar on October 7, 2016, as we discussed in a previous post. As detailed in that earlier post, this is just one example of the risks that remain in doing business in Myanmar. …
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US Removes Restrictions on Government-to-Government Assistance for Myanmar
As we discussed in a previous post, the United States terminated its economic sanctions program targeting Myanmar (which the US Government still calls “Burma”) on October 7, 2016. Building upon the normalization of relations that led to the lifting of sanctions, the US Government has determined that the circumstances now allow for a resumption of certain types of government-to-government assistance as well. On December 2, 2016, the President issued a determination pursuant to Section 570(a) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act of 1997 (Public Law 104-208) that “that Burma has made measurable and substantial progress in improving human rights practices and implementing democratic government.” Under Section 570(a), such a determination renders inapplicable a statutory prohibition on government-to-government assistance to Myanmar and allows for the possibility that government-to-government assistance may now resume. (A few areas were never affected by the statutory prohibition in the first place, specifically humanitarian assistance, counter-narcotics or crop substitution assistance, and assistance promoting human rights and democratic values. Those areas of assistance can continue as before.) This determination also does away with the requirement that the United States vote in international financial institutions (IFIs) against any loans or other assistance for Myanmar, and allows the US Government to begin granting entry visas in the normal course to government officials from Myanmar. Pending appropriations from Congress and lending decisions at IFIs, this could potentially unleash a considerable amount of development assistance for Myanmar and make it easier for multinational companies to invest there.
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Human Trafficking Rule Clarification: US Government Contractors Face Broad Prohibitions on Employee Paid “Recruitment Fees”
The latest regulatory action by the Obama administration to address human trafficking in contractor supply chains occurred on May 11, 2016 when the Federal Acquisition Regulation (FAR) Council published a proposed definition of prohibited “recruitment fees.” The proposed definition would supplement the recently revised FAR Combating Trafficking in Persons regulations, and define “recruitment fees” for…