Volume XXII, No. 1

07/06

THE FLORIDA BAR Summer 2006

The Florida Bar Website: www.floridabar.org International Law Section Website: www.internationallawsection.org

INSIDE:Annual Section Report ..........2

OECS Bar 3rd Regional Law 2006 ...................................3

Is the United States’ Liquidity Compromised? ..................4

Maxcess, Inc. v. Lucent Technologies, Inc. (11th Cir. 2005) ...............................11

Baywatch – A Column of Updates on International Law in the Making ............14

Bar Leaders’ Conference in London hosted by the

IBA ...................................17

Puerto Rico Labor Laws: Recent Amendments to Christmas Bonus Act and Law 80 .............................18

The Role of the L-1 Visa in a Restrictive Immigration Environment ....................20

Former Peruvian Ombudsman Receives Jon Mills Award at UF Conference in Peru ..........24

National Benefits Center/Florida Bar Liaison

Meeting ............................25

Cape Town: How to Close an Aviation Transaction After the Rules Change ............28

Minutes of Texas Service Center Liaison/ Florida Bar Liaison Meeting ...............30

2006 – 2007 International Law Section Executive Council .............................35

See the Section Calendar

on page 10 for upcoming meetings and

seminars. See “Competition,” page 3

Second Annual Willem C. Vis International Commercial 

Arbitration Moot Pre-CompetitionBy J. Brock McClane

TheWillemC.Vis InternationalCom-mercialArbitrationMootCompetition isheldannually inVienna,Austria.Teamsfrom150lawschoolsaroundtheglobefromboth common lawand civil law systemsmeetinViennaeachSpringtocompete.Allteamsargue theirpositionsbasedon thesameproblem,giventotheminthepreced-ingFall.Theproblem isalwaysbasedon

an international trade issue inwhichtheUnitedNationsConventiononContractsfortheInternationalSaleofGoodsgovernsormaygovernthetransaction. Lastyear,inanefforttoliaisewithlawstudentsinterestedininternationallawanddisputeresolution, toprovidea forumforstudentsfromdifferentlawschoolstomeet,

Post 9/11 Increased Export Controls by U.S. Government

By Peter A. Quinter

Mostarticlesdiscussingthetopicof“Ex-portControls” focusupon the two tradi-tional agencies: the U.S. Department ofState’sDirectorateofDefenseTradeCon-trols (“DDTC”)and theU.S.DepartmentofCommerce’sBureauofIndustryandSe-curity (“BIS”).Yet,a lesserknownfederalagency,theU.S.ImmigrationandCustomsEnforcement (“ICE”), isnowarguablythelead investigationagency forexport con-trols. CreatedonMarch1,2003, ICE is thelargestinvestigativebureauwithintheU.S.Department ofHomelandSecurity.1 ICEemploys15,000people,including6,000Spe-cialAgentslocatedthroughouttheUnitedStatesaswellasinternationally,servingas

ICEAttachesatU.S.Embassies.2ThestatedmissionofICEisto“protectAmericaandup-holdpublicsafety…byidentifyingcriminalactivitiesandeliminatingvulnerabilitiesthatposeathreattoournation’sborders,aswellasenforcingeconomic,transportationandinfrastructuresecurity.Byprotecting…nationalandbordersecurity,ICEseekstoeliminate thepotential threatof terroristactsagainsttheUnitedStates.”3ICESpecialAgentsareCriminalInvestigatorsfromthelegacyU.S.CustomsServiceandU.S.Immi-grationandNaturalizationService,bothofwhichwereeliminatedwiththecreationoftheU.S.DepartmentofHomelandSecurityin2003.4 ICESpecialAgentsoftenworkcloselywithBIS,DDTC,FederalBureau

See “Export Controls,” page 33

2

2005 - 2006 Annual Section Report TheInternationalLawSection (ILS)ismadeupof1,059members, whichrepresents an in-crease inmember-shipof62memberssincethistimelastyear.Theofficersofthe ILS for 2005 -2006wereJohnH.

Rooney,Jr.,Chair;FrancescaRusso-DiStaulo,Chair-Elect,EdwardH.Da-vis,Jr.,Secretary;J.BrockMcClane,Treasurer;andLuciusSmejda, Im-mediatePast-Chair.Theofficers,whocomprise theExecutiveCommittee,metonamonthlybasis to considerproposalsforsectionactivities,moni-tor on-going projects, and plan forthe future.Thisyear,aftera seriesof interruptions causedbynaturalevents, the Section sponsored andconductedanumberofactivities tofurther its over-all goal of promot-ing theunderstanding, applicationanddevelopmentofinternationallaw.Someeventsanddevelopmentswar-rantparticularmention.Thesectionconductedasuccessful internationaltaxseminar,underthesupervisionofWilliamNewton,cosponsorshipwiththeAmericanImmigrationLawyersAssociationofasuccessfulnationalimmigrationseminarheldinMiamiinFebruary,amootcourtcompetitioninMarch,andahighlysuccessfullitiga-tionandarbitrationupdatesponsoredbymanyinternationallawfirms. Atthemid-yearmeeting, thesec-tionheld itsannual retreat,whichhadbeentwicecancelledduetohur-ricanes.Duringthewell-attendedre-treat,membersexchanged ideasonhowto further thesection’s specificgoalsof(1)recognitionofthepositiveeconomicimpactthatthepracticeofinternationallawbringstoourstateandoutreach toChambersofCom-merceandsimilarorganizations; (2)reachingouttotheeducationalinsti-tutionsofthestateinordertocreateaforumforinternationallawscholarsthatwillbecomea resource for thesectionand for thebarasawhole;(3)considerationofthesuitabilityofmodellegislationsponsoredbyinter-

nationalorganizations foradoptionby Florida, and (4) rationalizationofthesection’sbylawstoestablishamoreefficientadministrativestruc-tureandtorecognizethe importantnon-economicmissionof thesectioninfieldsofhumanrightsandgeneralpromotionof theruleof law.At themid-year luncheon,sectionBoardofGovernorsliaisonandPresident-ElectoftheFloridaBar,FranciscoAngones,introducedourluncheonspeaker,JanPaulsson.Mr.Paulsson isapartnerintheParisofficeof theFreshfieldslaw firm and known as one of theworld’spremierpractitioners in thefieldofinternationalarbitration.Mr.Paulssonspokeoncurrenttrendsininternationalandnationallaw,draw-ingfrequentlyonhisvastprofessionalexperience and referencing his re-centlypublishedbook,Denial of Jus-tice under International Law.Duringthemid-yearmeetingof theExecu-tiveCouncil, therequirementofourbylawsthatmembersattendcouncilmeetingsasarequirementofserviceonthecouncilwasnoted,aswellastheintentionoftheExecutiveCommitteetoenforcethatrequirement. InFebruary,thesectionsponsoredwiththeAmericanImmigrationLaw-yersAssociation,averysuccessfulan-nualimmigrationlawprogramthatattractsanationalfacultyandaudi-enceofpractitioners.LarryRifkin(Miami) headed up the section’sparticipation.For the secondyear,thesectionsponsoredanarbitrationmootpre-competitioninpreparationfor theparticipationofFlorida lawschoolsintheVisInternationalMootCompetitionheldinVienna,Austria.The sectionmootpre-competition,held inOrlando,drewanumberofdistinguishedFloridapractitionersas arbitrators, who heard threeroundsofcompetitionamongteamsfromNovaSoutheasternUniversity,StetsonUniversity,theUniversityofFloridaandtheUniversityofMiami.PenelopePerez-Kelly(Orlando)wasthechairoftheevent.Thisyear,theteam from theStetsonUniversityCollegeofLawwonthecompetition. On May 11 and 12, 2006, thesection’s International Litigation

andArbitrationCommittee (ILAC)sponsored itsannual InternationalLitigationandArbitrationUpdate.Theeventwasheld inMiami,andassembledadistinguishedfacultyofpractitioners fromFlorida, therestoftheUnitedStatesandabroad.Thetwo-dayeventenjoyedthesponsor-shipofmany lawfirmswith inter-nationalpracticesand livedup tothequalityofpastupdates.NicolasSwerdloff (Miami)wasChairof theupdate.A long-standingpriorityofthesectionistoreplicatethesuccessofILACinthetransactionalarea.Tothisend,anad-hocexploratorycom-mitteecomprisedofMiguelZaldivar(Miami)andErikaLitvak (Miami)hasbeenestablishedtoassessinter-estand to lay thegroundwork forwhatwehopewillbecomeastalwartofoursection.OurLegislativeCom-mittee has promoted the passageofbills toaddressgaps inFlorida’sstatutoryregime forserviceofpro-cessoncorporations,andjurisdiction,andwill commencestudyofmodellegislationdraftedandapprovedbyorganizationssuchastheUnitedNa-tionsCommissionon InternationalTradeLawandUNIDROIT. ILACalsopublishesadigestofrecentcaselawwhichisfastbecominganessen-tialresourceforinternationallitiga-torsandpractitionersinthefieldofinternationalarbitration. Undertheeditorialandadminis-trativeguidanceofEdMullins(Mi-ami)andManjitGill (Miami) , thesectionpublishes the International Law Quarterly,whichfeaturesarti-clesfromsectionmembersandotherpractitionersinthefieldofinterna-tionallaw. Insummary,2005-2006hasbeenayearofbuildingontheaccomplish-mentsyearspastandrefinementofourmissionandourgoalsforthefu-ture.TheILSisfortunatetohaveatitsdisposalmanyhard-workinganddedicatedmembers,manyofwhomworktirelesslywithouttherecogni-tionthattheydeserve.

John H. Rooney, Jr.2005-2006 Chair

International Law Section

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COMPETITIONfrom page 1

exchangeviewsandgainasenseofca-maraderieamongtheothermembersoftheFloridadelegationtoVienna,and toestablishaworthwhile sec-tionserviceproject,theInternationalLawSectionforthefirsttimeheldapre-competitioninOrlandoforthe4participatingFloridateams.WewereallveryproudlastyearwhenStetsonUniversityCollegeofLawwentontowinfirstplaceinViennaafterbeingedgedoutbyUniversityofFloridaintheOrlandopre-competition. OnMarch18,2006, theInterna-tional Litigation andArbitrationCommitteeoftheInternationalLawSection hosted its SecondAnnualVisPre-competition.The fourFlor-ida teamscompetingwereUniver-sityofFlorida,LevinSchoolofLaw,StetsonUniversityCollegeofLaw,

NovaSoutheastern,ShepherdBroadSchoolofLawandUniversityofMi-amiSchoolofLaw.Thewinnerthis

yearwasStetson!Thebest oralistwinnerwasKathrynHarriganChris-tianofStetson.

A happy Stetson team poses after the competition.

OECS Bar �rd Regional Law 2006Signing of the Cooperative Agreement between The Florida Bar and the

Bar of the Organization of Eastern Caribbean StatesBy Elizabeth Ortega

EdwardH.Davis,Jr.,afoundingshare-holder ofAstigarraga Davis, and Chair-electofTheFloridaBarInternationalLawSection,signedaCooperativeAgreementwiththeBarAssociationoftheOrganiza-tionofEasternCaribbeanStatesrelatingtomutualCLEexchangesandacloseaffili-ationinpursuitofvariouslegalcooperativeendeavors. “Thiscooperativeagreement isawon-derful step forward in thedevelopmentofameaningfulandlonglastingrelation-shipbetween internationalpractitionersin Florida and their colleagues in theCaribbean,“saidDavis. Ed Davis, center

SECTION MEETINGS AT THE FLORIDA BAR GENERAL MEETINGWednesday, September 1�, Tampa Airport Marriott

9:30a.m.-11:30a.m. ILACCommitteeMeeting11:30a.m.-12:00noon InternationalLawSectionExecutiveCouncilMeeting12:00noon-1:30p.m. ILACLuncheon(RSVPtoAngelaFroelichatafroelic@flabar.org.)

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Is the United States’ Liquidity Compromised?

By Ivan A. Rodriguez Seda1

I. Historical Analysis of the United States National Debt On January 1, 1790, the Unit-ed States public debt stood at$52,788,722.03. It consistedof thedebtoftheContinentalCongressand$191,608.81borrowedbySecretaryoftheTreasuryAlexanderHamiltoninthespringof1789fromNewYorkbankstomeetthenewgovernment’sfirstpayroll.Since then, thepublicdebthaspassedbyanumberofhis-toricalmilestones: theassumptionofRevolutionaryWardebtinAugust1790,theredemptionofthedebtin1835,thefinancinginnovationsrisingfromtheCivilWarin1861,theintro-ductionofwarloansdrivesin1917,theriseofdeficitspendingafter1932,thelastingexpansionofthedebtfromWorldWarII,andthepassageoftheBudgetControlActin1975.Allthis,alongwiththehugesumsofbudgetdeficitsmountedduring the1980’sand thepresentday expendituresofPresidentGeorgeW.Bushontaxcutsand the“waron terror,”bringthegrandtotalofnationaldebttoastaggering$7.9trillion.2

A.  How  did  we  get  this  far  in debt? Ever sinceSirRobertWalpole’s(1676–1745)3 introduction of thefundingsystem inEnglandduringthe1720’s, thesecretwasout thatgovernmentdebtneedneverbere-paid.Justcreatearegularandde-pendablesourceofrevenueanduseittopaytheannualinterestonandtheprincipalofmaturingbonds.Then,foreveryretiredbond,sellanewone.Inthisway,anationaldebtcouldbemadeperpetual.SirWalpole’ssystemproveditsworthinfinancingBritishoverseasexpansionandimperialwarsin the eighteenth and nineteenthcenturies.WemightsaytheBritishEmpirewasbuiltonmorethanthebloodofitssoldiersandsailors;itwasbuiltondebt.Theever-growingdebthadtheancillarybenefitofattachingtheinterestsofwealthycreditorstothegovernment.Thiswasnotlostin

themindofoneoftheleadersoftheinfantAmericanRepublic,AlexanderHamilton(1755-1804). Inthe1790’sAlexanderHamilton4andotherFederalistssoughttograftthisstatisticmodelupontheinfantrepublic.Totheirdismay,theywereoverthrownbytheJeffersonianRe-publicans5in1800.AlexanderHam-ilton’srationaleforaperpetualpublicdebtincludedhisbeliefthatitwouldhelpkeepuptaxesandpreservethecollectionapparatus.Hamiltonal-waysbelievedthatAmericanswereinclinedtowardlazinessandneededto be taxed to prod them to workharder.ItwasthereforenosurprisethatvotersoptedforThomasJeffer-son(1743-1826)6andhisbeliefs. ForJefferson,everygenerationhasthesameright toenjoy thebountyofnatureandthe fruitsof their la-bor as the preceding one, withoutbeingboundorencumberedby theprofligacyorambitionof thosewhowentbefore.Jeffersonbelievedthatno generation could contract debtgreaterthanwhatitcouldpayduringthecourseofitsownexistence,and,iftheydid,thefollowinggenerationwasunderno obligation topay it.Allportionof thedebt thatshouldremainunpaidorunsatisfiedwithinthatperiodoftimeshouldthereforebecancelled.Suchaprovisionwouldcheckthenaturalprofligacyofgov-ernmentsandreducewarsbyrais-ingtheriskofpremiumsonbonds,therebyraising theexpenseofbor-rowing.Itwouldputlendersandbor-rowersontheirguard.Also,reducingthe facultyofborrowingwithin itsnaturallimitswouldbridlethespiritofwar,towhichtoofreeacoursehasbeenprocuredbythe inattentionofmoney-lenderstothislawofnaturethatsucceedinggenerationsarenotresponsiblefortheprecedingones. InresponsetoJefferson,hisfriend,JamesMadison,repliedthatthepres-ent generationbenefited from theproductivelabor,discoveries,capitalimprovements,anddefensivewarsofpreviousgenerations.Madisonbe-lieved thatbecauseof thebenefits

received futuregenerationsshouldhelppayforthoseimprovementsandendeavors when the expenses in-curredwere toomuch forpreviousgenerationstodischarge.Debtcouldbeincurredforpurposesthatinter-esttheunborn,aswellastheliving.Madisonalwayshad theAmericanWarforIndependence inmindasaclearexample. Whenhecameintoofficein1801,PresidentThomasJeffersoninheritedanationaldebtof$83million,mostofwhichhadbeencontractedtofundtheRevolutionaryWar. Inhisfirstyear,hehadhis treasurysecretary,Albert Gallatin,7 set up a sinkingfundtobeginretiringtheprincipal.Despitetheunexpectedexpenditureof $15million for thepurchase ofLouisiana,heandGallatinreducedtheprincipalby$37million,leavingonly$57millionwhenheleftofficein1809.Hissuccessor,JamesMadison,reduced it to $45millionby early1812.However,renewedborrowingtofundthewarof1812,coupledwithaprecipitousdeclineintariffrevenuesincident to thewar, increased thedebtto$127millionbyearly1816. Underthenextpresident,AndrewJacksonofTennessee (1767-1845),8the last outstandingbondwas re-tired,andin1835thecountrystoodunencumberedofasingledollarofnationaldebt.Thecountryremaineddebt free foronemoreyear (1836),but itwouldneveragainenjoythisdesideratum. From1837through1843thefed-eralgovernment randeficits total-ing$46millionfinancedbytreasurynotes.Suchwere the fruits of thepanicin1837,thedepressionof1839to1843,andannualtariffreductions.However,thedebthadrisentoonly$16 million when James K. Polk(1795-1849)9tookofficein1845.Polkwasahardmoneyanda lowtariffman,buthewasalsoacontinentalexpansionist.HewasdeterminedtoobtainCaliforniaandthenorthernprovinces ofMexico, sohe startedawar.Whatever thereason for theMexicanWar (1846-1847), ithadat

5

least two consequences.The coun-tryacquiredanimmenseamountofvaluableand scenic territory thatwouldeventuallybemade into sixnew states, and thenationaldebtincreased from$16million to$63million by the end of 1848. From1853-1857PresidentFranklinPierce(1804-1869)10retiredmorethanhalfthenationaldebt;itfellfrom$64mil-lionto$28million.Thenationaldebtwouldneveragainbethatlow. TheCivilWarcausedanexplosionofdebt.Thedebtrosefrom$75mil-lioninMarch1861to$2.8billioninAugust1865.Thedebtwas$75percapita.Ithadbeen$2percapitain1860.Suchwasoneofthecosts,butbynomeansthedearest,ofcoercingthe southernstates intoa consoli-datedandcentralizedunion,whichwas formerlya confederation,andnowbecameaunitary republic. In1877the federalgovernmentendedthemilitaryruleofthelasttwooc-cupiedstates (LouisianaandSouthCarolina),andthetyrannyofradicalReconstructionismwasat lastover.Thegoldstandardwasrestored in1879,withallnationalbanknotesredeemable ingoldordemand.By1880thenationaldebtstoodat$2.1billion,by1890itstoodat$1.1billion,andby1900itwas$1.2billion. Inthe1900’swarwouldnegatethefruitsofyearsofpatientbutmodestdebtreduction.AfterPresidentWood-rowWilson (1856-1924)11 declaredwaronGermany in1917, thedebtskyrocketed from$3billion to$26billioninjusttwoyears. In ten years, President Frank-linDelanoRoosevelt (1882-1945)12andhisNewDealmanagedtomorethan triple thenationaldebt from$22to$72billion,whichwasbyanymeasure the largestpeacetime in-creaseinAmericanhistory.13DuringPresidentRoosevelt’sfirst termwesawanacceptanceofwhatwasthencalled“neweconomics,”whichwouldlaterbecomeknownas“Keynesian-ism.”14Basically,neweconomistsbe-lievedthatthebusinesscyclecouldbecounteractedthroughgovernmentintervention.Duringeconomicdown-turns,thegovernmentcoulddampenthedowncycleby stimulating theeconomy through lower taxes, in-creasedgovernmentspending,andanexpandedmoneysupply.As theeconomyrecovered,thesestimulantswouldbereversedtodampentheup

cycleoftheeconomy. DuringWorldWarII,theU.S.na-tionaldebtreachedtheheightof$260billion.Wehavenever lookedbackon thatnumber. If todaywewouldreturn to$260billion, itwouldbeconsideredagreatmilestoneofprog-ress. Peace would inaugurate a newerainAmericanhistory.Afterabriefdemobilization, the countrywouldreturntoapermanentwar footing,andforgetheColdWar.Apart fromveryslightdeclinesin1947-1948and1956-1957 (the lastyear therewasanyreductionatallwas1960), thedebtbegananupwardtrajectory.By1970thenationaldebthadreached$390billion.In1980itwasamodest$930billion. UnderPresidentRonaldReagan(1911-2004)15 and his RepublicanSenate,thedebtroseto$2.7trillion.UnderPresidentBillClinton(1946),16itreached$5.7trillionAnd,underthecurrentpresident,GeorgeW.Bush,17ithasreachedtheastronomicalnum-berof$7.9 trillion,withmajoreco-nomicanalystsprojectingthatattheendofhiscurrenttermthenationaldebtcouldreach$10trillion. Somehavesuggestedthatthe“waron terror”will lastmanydecades.Less thanamonthafter9-11,De-fense Secretary Donald Rumsfeldcomparedittothe50years,plusorminus,ofColdWarwiththeSovietUnion.FormerSecretary ofState,ColinPowell,hasexpressedthatthewarinIraqwillnotbeover,atleastnotinourlifetime.

B. What is the national debt com-posed of? TheU.S.nationaldebt,alsoknownasthepublicdebtorthegrossfederaldebt,istheamountofmoneyowedbytheU.S.government.Thisdoesnotinclude themoneyowedbystates,corporations, or individuals. Thedebtcanbemeasuredasa fractionofthenation’sgrossdomesticproduct(GDP).Atpresent,theU.S.nationaldebtisaboutsixty-fivepercentoftheGDP–aratheraveragelevelwhencomparedtoothernations. TheBureauof thePublicDebt18divides thenationaldebt into twomaincategories:debtheldbythepub-licand intragovernmentalholdingsdebt. Intragovernmental holdingsdebtincludesmoneyforgovernmen-taltrustfunds,suchaspensionplans

andsocialsecurity,whichwasabout$1.7trillionasofMay2005.Overall,intragovernmentalholdingsaccountforover$3.1trillionofthetotaldebtatthistime. Theremaining$4.6trillionorsohasbeenpurchasedbythepublic,in-cludingforeignentities.ThislargelycomesfromtheissuanceofU.S.Trea-surysecurities.Nearlyhalf($2.2tril-lion) iscomposedofTreasurynotes(a.k.a.T-notes),whileTreasuryBills(a.k.a.T-bills)andTreasurybonds(a.k.a.T-bonds) (including savingsbonds)covermostof theremainingpublicportionofthedebt.Bondssoldfor infrastructureprojectsarealsopartofthenationaldebt. T-billsmatureinoneyearorless.Theyarelikezerocouponbonds19inthattheydonotpayinterestpriortomaturity.Instead,theyaresoldatadiscountoftheparvaluetocreateapositiveyieldtomaturity.Treasurybillsareconsideredbymanytobethemostriskfreeinvestment.Theyarecommonlyissuedwithmaturitydatesof28days(fourweeks),91days(thir-teenweeks),and182days(twenty-sixweeks). T-Notesmaturebetweenoneyearand ten years and have a couponpaymenteverysixmonths.Treasurynotesarecommonlyissuedwithma-turitydatesof two, three,five,andsevenyearsand indenominationsfrom$1,000to$1,000,000. T-Bondsmatureinmorethantenyears,buthavecouponpaymentsev-erysixmonthslikeT-Notes.Treasurybondsarecommonlyissuedwithma-turitydatesoftenandthirtyyears. TheU.S.governmentstoppedissu-ingthewell-knownthirty-yearTrea-surybonds(oftencalledlong-bonds)onOctober31,2001.AstheU.S.gov-ernmentuseditsbudgetsurplusestopaydownthefederaldebtinthelate1990’s, the ten-yearTreasurynotebegantoreplacethethirty-yearTrea-surybondasthemostfollowedmetricoftheU.S.bondmarket.However,theU.S.Treasuryannounced inAugust2005thatduetoaflatteningoftheyieldcurve (thedifferencebetweenshort-termbondyieldsandlong-termbondyieldsisnarrowing)andduetodemandfrompensionfundsandlarge,long-terminstitutionalinvestors,thethirty-yearTreasury bond will bereintroducedinFebruary2006.ThiswillbringtheU.S.inlinewithJapanandseveralEuropeangovernments,

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whichissuedlongerdatedmaturitiesamidgrowingglobaldemand frompensionfunds.20

Bondscanbeconsideredan“IOU”fromthe federalgovernmentto theholder. Infinance,abond isadebtsecuritywhere the issuerowes theholderadebtandisobligatedtopaytheprincipaland interest, togetherwithotherobligationsunderthetermoftheissue,suchastheobligationtoprovidecertaininformation.Abondisjustaloanintheformofasecurity,although the terminology used isdifferent.Theissuerisequivalenttotheborrower,thebondholdertothelender,andthecoupontotheinter-est. Governmentbondsareusuallyre-ferredtoasrisk-freebonds,21becausethegovernment can raise taxesorsimplyprintmoremoneytoredeemthebondatmaturity.Somecounter-examplesexistwhereagovernmenthasdefaultedon itsdomestic cur-rencydebt,suchasRussia in1998,thoughthisisveryrare.Governmentbondsarethedebtfinancinginstru-mentoftheU.S.government. SomeothertypesofbondsthataresoldintheU.S.areconvertiblebonds,corporatebonds,22highgradebonds,highyieldbonds, samuraibonds,23andshogunbonds.24Anotherspecialtype of bondwas the“warbonds.”Thesewerea formofsavingsbondusedbymanycombatantnationstoraisefundsforWorldWarIandWorldWarII.Theywerealsoameasuretomanageinflationbyremovingmoneyfromtheeconomy,whichhadheatedupduetothewarefforts.

Bondsareboughtandtradedmost-lybyinstitutionslikepensionfunds,insurance companies, and banks.Most individualswhowant toownbondsdoso throughmutual funds.Still,intheU.S.,nearlytenpercentof all outstanding bonds are helddirectlybyhouseholds.

II. Our National Debt Is Domestic and Extends to Foreign Countries The Bureau of the Public Debtkeeps trackof themoneyowedbytheU.S.governmentonadailybasis,issuingmonthlyandyearlyreports.WhilethefiguresprovidedbytheBu-reauaremostcommonlyused,someeconomistsprefertouseothermeth-odsandincludeadditionaldebts.Thedebtisusuallyviewedasanabsolutenumber,butitcanalsobemeasuredasapercentageoftheGDP.Bythismeasure,theU.S.ismerelyanaver-agenation.TheeconomyofJapancould be more worrisome, as thatcountry’sdebt isabout165%of itsGDP. ItiscommonforindividualAmeri-cansandbusinessestobuybondsandothersecurities,thoughmuchofthedebt isnowheldoverseas.Accord-ingto theU.S.CensusBureau,ourcountryishometoslightlylessthan300millionpeople, soournationaldebtbreaksdowntocover$26,500foreveryman,woman,andchildlivinginAmerica.At theendof2004 for-eignholdingsofTreasurydebtwere$1.886billion,whichwas forty-fourpercentofthetotaldebtheldbythepublic.Foreigncentralbanksownedsixty-fourpercentoftheFederaldebt;privateinvestorsownednearlyalltherest. Internaldebt is thepart of the

country’sdebtowedtocreditors in-sidethecountry.Thesecreditorsarethecitizens,thatistosaythegovern-mentisowedlocally,anditborrowseitherT-BondsorT-Billsfromacen-tralbank in trulymonetary terms.Atthetimeofrepayment,itborrowsonceagain inorder torepay.Thesedebtsaretakenformoreorlessthanoneyearasaplacementforgovern-ment. Externaldebt25isthatpartofthegovernment’sdebtthatisowedtoitscreditorsoutside the country.Thisdebt includes money owed to pri-vate commercialbanks, othergov-ernments,orinternationalfinancialinstitutions, such as the Interna-tionalMonetaryFundandtheWorldBank. Havingunderstoodexternaldebtasthatpartofsovereign(orgovern-mentdebt)ofacountrythatisowedto outsiders (or foreigners), it canbedefinedas the totaloutstandingliabilities to theexternalworldonbehalfofthehostnation.Thisbringsus toa clearproposition thatanyflowoffundsfromoutsideacountryinward, in the form of debt, shallcompriseapartoftheexternaldebtofthecountry,provideditisborrowedonagovernmentaccount.

A. Who holds or owns  the U.S. debt? To whom are we  indebt-ed? Toanswerthequestionbluntly,itseemstheU.S.oweseverybody.Ev-erybodyholdspartofourdebt.Thus,thequestion toask is:howdoes itaffectus? Sovereign debt problems havebeenamajorpublicpolicyissuesinceWorldWar II, including the treat-mentofdebtrelatedtothatwar,thedevelopingcountry“debtcrisis”inthe1980’s,andtheshockofRussia’sde-faultin1998andArgentina’sdefaultin2001. Letussee theexactamount theU.S.owes.Thedebtheldbythepublic,whichincludesordinarycitizens(likeyouandme), corporations, foreignbanks,foreigngovernments,andlocalorstategovernments,asofOctober13,2005was$4,616,371,850,871,07.AnddebtheldbyIntragovernmentalholdings,whicharesecuritiesheldbygovernmenttrustfunds,revolvingfunds,andspecialfunds,andFederalFinancingBanksecurities,wasanas-tonishing$3,379,090,536,140.42.26

LIQUIDITy COMPROMISEDfrom preceding page

The International Law Quarterly is prepared and published by the International Law Section of The Florida Bar.

Francesca Russo-Di Staulo, Miami .................................................................................Chair

Edward H. Davis, Jr., Miami ...................................................................................Chair-elect

Edward Mullins/Manjit Gill .......................................................................... Newsletter Editors

Angela Froelich, Tallahassee ............................................................... Program Administrator

Lynn M. Brady, Tallahassee .......................................................................................... Layout

Articles between 3 and 10 pages involving the various disciplines affecting international trade and commerce may be submitted on computer disk with accompanying hard copy, or via electronic format in Word or WordPerfect (with the use of endnotes, rather than footnotes.) Please contact Manjit Gill at msgill@becker-poliakoff.com for submissions to the Quarterly and for any questions you may have concerning the Quarterly.

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In2001theU.S.’snetdebttotherestoftheworldjumpedto$2.3tril-lion–aleveldoublethatrecordedin1999.Muchof the increasereflectsthenewborrowingbythecountrytofinanceitsmountingcurrentaccountdeficit.Athirdofthechange,however,canbetracedtoasimpleaccountingeffect– the impactofa risingdol-laronthevalueofU.S.assetsheldabroad. Thesizablecurrentaccountdefi-citsrunbytheU.S.inthe1990’shavebeenaccompaniedbyasubstantialaccumulationofdebt to foreign in-vestors.At theendof2001, foreigninvestorsowned$9.2trillionworthofU.S.assets,includingstockandbondholdings and ownership shares ofbusinessenterprises.U.S. investors,by contrast, ownedamoremodest$6.9trillionworthofforeignassets.ThedifferenceinvaluebetweenU.S.holdingsofforeignassetsandforeignholdingsofU.S.assets27isameasureofthenetdebtoftheU.S.totherestoftheworld,ortheU.S.’snetinterna-tionalinvestmentposition. Asofthisyear,theforeigncountryholdingbyfarthemostU.S.nationaldebtisJapan,whichheld$679billion(andgrowing)at theendofMarch2005. In recentyears, thePeople’sRepublicofChinahasalsobecomeamajorholderofournationaldebt,holding$223.5billionasofMarch2005.“WearemortgagingAmericatotheJapanese,”sayseconomistLeon-ardBurman.28

Howdoforeigncountriesthatownpartofournationaldebtaffectoureconomyandoureconomicrelations?Leftunchecked,mountingdeficitsarenevergoodnews.Whatisworse,theU.S.isshippingarisingportionofin-terestpaymentsonthatdebtabroad.Thismeanslessofthatmoneystaysathometobespentorinvested.Thisis clearlya reasonwhy theecono-miesofChinaandJapanhavebeengrowingbiggerandstronger,whiletheU.S.’seconomyhasweakened.Ofcourse, it isnosurprise tosee thisadministrationaskquestionsaboutJapan’sandChina’s economicandmilitarybuild-uporgrowth,whileoverlooking the fact that theyareindirectly,butprobablyknowingly,ignitingthefuseofthatgrowth. Already foreigners receivemorethata thirdof the interestpaidonthe$4.6trillioninfederaldebtnowheldbythepublic.29

Thetrueproblemisnot,however,foreigners.BylendingtheirmoneytotheU.S.,theyhavekeptinterestrateslowandindirectlyhelpedfinanceeco-nomicgrowthinthiscountry.TherealculpritisAmerica’smountingdebt. AsofJune2005, foreignprivateinvestorsandforeignbanks(notin-cludingforeigngovernments)owned$1.35trillionofU.S.TreasurySecu-rities,orsome37.6%.Theyalsoheld$744.5billionofagencydebts(FannieMae,FreddieMac, etc.), or12.9%.Thesenumberskeepclimbingbythemillionseachday. TheCommitteeforEconomicDe-velopment,TheConcordCoalition,andtheCenteronBudgetandPolicyPriorities(CBPP)hasestimatedthatwiththepresentdeficits,andlargerdeficitsahead, facinga$9 trilliondeficit by 2013 would mean $473billionininterestpayments.Ofthat$473billion,alittlemorethan$200billionU.S.dollarswillbeshippedtoothercountriesthatyearalone.ThesadpartisthateveniftheU.S.paidthe$200billion, itwouldnotretireapennyofthenationaldebtowedtoforeigners.Interestpaymentswouldconsumefifteenpercentofallfederalrevenues,asopposedto8.8%today.Interestcostswouldbeequaltosev-enty-twopercentoftheprojectedde-fensebudgetof$660billionin2013. Since2001,inthestartoftheBushadministration, total federalexpen-ditureshavegrownsixteenpercent.Infiscalyear2004,federalspendingpassed$25,000perhouseholdforthefirsttimesinceWorldWarII.30Morethanhalfofallthenewspendingisunrelatedtodefenseandthe9-11at-tacks. TheforeignentitiesholdingT-Bills,T-Bonds,orotherkindsofsecuritiesthatturninto“IOUs”willjusthopethat theU.S.keeps inflationundercontrolandcontinuesbuildingandgrowingtheeconomy,sotaxreceiptswillbe justenoughtocoverthe in-terestpaymentsonall the“IOU’s”theypossess.Ofcourse,theinterestpaymentswillgrow,butsowill thetax receipts, and thatmeans thatinterestpaymentsshouldsafelystayrightaroundtenpercentof thetaxreceipts.Whatdoes thisallmean?Well, the foreignentitieswillgetalargeamountofU.S.dollarseachyearuntiltheirbondsmature.Andwhathas been the practice until todaywhenthebondsmature?Theforeign

entities use the principal of theirbondsthathavebeenrepaidandrein-vesttheminyetanothergovernmentbond.TheywillcontinuerollingtheprincipalvalueofthebondoverandoveragainandcontinuedrawingtheinterestpaymentseachyearfromtheU.S.government.This isas longasthegovernmentkeeps inflation lowandtheeconomygrowing. It isnobig surprise then to seethatten-yearT-NotesrosethemostsinceAugust2005afteroverseasin-vestorsboughtarecordamount.Bid-ders,includingforeigncentralbanks,purchased55.6%ofthe$13billionoften-yearT-Notessold–themostsincetheTreasuryDepartmentbeganre-leasingsuchdatainMay2003.The55.6%purchaserecordbyso-calledindirect bidders, including foreigncentralbanks,compareswith21.1%of the$13billionfive-yearT-Notessalesand29.9%ofthe$18billionsaleofthree-yearT-Notes.31

Overseas investorsowned$2.06trillion,orfiftypercent,of the44.1trillionof tradeableTreasuriesout-standingasofAugust,upfromlessthan fortypercent threeyearsago.And,whynot?Withtreasurysecuri-tiesandgovernmentbondsearninghighratesofinterest,theyareviewedasarisk-freeinvestment. Underthesefacts,itappearsthatthe U.S. has become the best re-tirementplan for foreign investors,foreignbanks,and foreigngovern-ments.

III. How Does the U.S. Debt Affect the Stock Markets and Our Ability to Buy or Sell in the International Markets? Bondmarkets32 in theU.S.havehadalong,illustrious,andsometimesquestionablehistory.Earlybondmar-ketsfinancedourcountry’swestwardexpansion,includingconstructionofthetranscontinentalrailroadandtheErieCanal.Theywerevital to thecountry’sdevelopmentinmorewaysthanone, but itwasnotalwaysaprettypicture.Manyearlyinvestors,includingforeigninvestors,lostlargesumsofmoneyas companieswentbankruptdue to fraudormisman-agement.TherewasnoSecuritiesandExchangeCommission33at thetime, soanentireprivate industrydevelopedtogiveinvestorsmorein-

�

areindeedcorrelated,apricechangecanalterthevalueofU.S.grossassetsandU.S.grossliabilitiestoasimilarextent.Sincethechangeingrossli-abilitieslargelyoffsetsthechangeingrossassets, the impactonthenetinternationalinvestmentpositionislikelytobemoderate. Whether the valuation effectsfromcurrencymovementsimproveorweakentheU.S.netpositiondependsupontheexchangerateexposureofthegrossassetsandgrossliabilities.Forexample,anappreciationofthedollarreducesthevalue(indollars)ofassetsandliabilitiesdenominatedinforeigncurrencybuthasnoimpactonthevalue(indollars)ofassetsandliabilitiesdenominatedindollars.Ifforeigncurrencydenominatedsecuri-tiesaccountforasmalleramountofU.S.grossassetsthanofU.S.grossli-abilities,anappreciationofthedollarwillreducethevalueoftheseassetsbylessthanitreducesthevalueoftheliabilities,leadingtoanimprovementinthenet international investmentposition.Bycontrast, if foreigncur-rencydenominatedsecuritiesmakesupalargeramountofU.S.grossas-setsthanofU.S.grossliabilities,thestrongerdollarwilllowerthevalueofU.S.grossassetsbymorethanitlow-ersthevalueofU.S.grossliabilities,andthenetinternationalinvestmentpositionwillworsen.Sincethelatterconditionactuallyholds, securitiesdenominated ina foreigncurrencyaccount fora largeramountofU.S.assets thanU.S. liabilities,we canexpectanappreciation35ofthedollartohurtthenetinternationalinvest-mentposition. Thefluctuationof theU.S. stockmarketcanbeanalyzedontheconfi-denceinvestorshaveintheeconomy.Asnotedabove,agrowingeconomyandcontrollinginflationleavesinves-torswithahealthyinterestpaymentcheckeveryyear.InthebeginningofNovember2005, stocks sold in theU.S.hadrisen,afterarobustdemandfromoverseasinvestorsforU.S.gov-ernmentdebt,which isa signalofresurgingconfidence in theUnitedStateseconomy. ThislatesurgeinNovember2005could “mean the appetite for U.S.assets is still strongand thatwasenoughtogivestocksaboost,”asstat-edbyMichaelMetz,chiefinvestmentstrategistatOppenheimerHoldingsInc.inNewYork.36

LIQUIDITyCOMPROMISEDfrom preceding page

formationaboutthesecompaniesandthelikelihoodthattheywouldrepaytheirdebts. TheU.S.netinternationalinvest-mentpositiondeclineswhenthecoun-tryborrowsfreshfundsfromtherestof theworld.This inflowof funds isdrivenbythecurrentaccountdeficit.34Thecountrymustmakeupthediffer-enceeitherby liquidating itsassetsabroad orby obtainingnew creditfromforeigners,hence,financialflows.Initsrecoursetosuchfinancingandtheensuingdecline in itsposition,the country might be likened to ahouseholdthatweakensitsfinancialpositionbyincreasingitscreditcarddebttopayforcurrentconsumption.Financialflowshavebeenthechiefmechanismdrivingthedeteriorationofthecountry’sinvestmentrelation-shipwiththerestoftheworld. Evenwhennonewborrowingoc-curs,theU.S.netinternationalinvest-mentpositionmayriseor fallwithchangesinthevalueoftheexistingstocksofassetsandliabilities.Valu-ationchangescantakethe formoffluctuationsinassetpricesorchang-esinexchangerates.TounderstandhowsuchchangesaffecttheU.S.net

investmentposition,considertheim-pactofaU.S.stockmarketboom.TheriseinthevalueofU.S.equitiesheldby foreign investorswould increaseU.S.grossliabilitiesandconsequentlyreducethecountry’snetinvestmentposition. Thedegreetowhicheachofthesemechanisms shapes the U.S. netinternational investment positionwillaffect the judgmentswemakeaboutthegravityoftheU.S.netdebtproblem.Anaccumulationofnewli-abilitiesbytheU.S.thatstemsfrompersistent currentaccountdeficitscanbeasignificantcauseforconcern.Reducing, or even stabilizing, thestockofU.S. liabilitieswill requirecutbacks in investmentandspend-ing that can impose strain on theeconomybyslowinggrowth.However,aworseningofthenetinternationalinvestmentpositionthatresultsfromvaluation effects is relatively lessworrisome.Becauseassetpricesandexchangeratesexhibitmorevolatil-itythanrealvariablessuchasGDP,thenetinternationalinvestmentpo-sition canbequickly stabilized orreduced throughpricemovementswithlittleadverseimpactongrowth.TheimpactofassetpricechangesontheU.S.netpositiondependsontheextenttowhichU.S.andforeignassetmarketsmoveinstep.Ifthemarkets

Public Library ofNew Orleans

Needs Donations The New Orleans Public Library is asking for any and all hardcover and paperback books for people of all ages in an effort to restock the shelves after Hurricane Katrina. The staff will assess which titles will be designated for its collections. The remainder will be distributed to destitute families or sold for library fundraising.

Please send your books to: Rica A. Trigs, Public Relations, New Orleans Public Library, 219 Loyola Avenue, New Orleans, LA 70112. If you inform the post office that the books are destined for the library in New Orleans, the post office will give you the library rate which is slightly less than the book rate. The New Orleans Public Library thanks you for your donations!

9

continued, next page

Ofcourse,itisnotallgoodnews;onemonthcannotturnbackdecadesofdeficits that turn todebt.Whiletheexternaldebtkeepsincreasingsodothepaymentsofinterest.Thus,itbecomesharderandhardereachyeartotryandlowerthedebt,andtheU.S.tradedeficitkeepsgrowing.Inotherwords,theymaybebuyingourdebt,buttheyarenotbuyingourproducts.Incontrast,whiletheUnitedStateshasnotboughtmuchof thedebtofother countries, thenumberof for-eignproductsboughtand importedintotheU.S.keepsgrowing.Wanttoguesswhoareacoupleofourbiggestsellers?TheyareJapan,Taiwan,andChina, the leading owners of U.S.governmentaldebt.

IV. Opinion and Conclusion Thenationaldebtnowamountstoover$7.9trillion. As the debt has accumulatedthroughouttheyears,therewerecer-tainperiodsoftimewhenweneededthedeficits,weneededtospend,andweneeded toborrow.Nobodycallsintoquestion thatduring theCivilWar,WorldWar I, andWorldWarII,aswellasduringtheGreatDe-pression,debtwasnecessary.Nobodyevenquestionswhendebtismountedtoassistthoseinneedandsuffering,likethevictimsofnaturaldisastershere, such as Hurricane Katrina,andabroad,suchasthetsunamisinSouthAsia.Butwhat isdifficult tocomprehendiswhenthedebtshootsupat timeswhen it isnotneeded,orwhenitrisesforreasonsthatarenotbeneficialtoitscitizens.Nobodyseems toquestion thedebtduringthesemomentseither. Whenpeopledoquestionthedebt,otherpeopleandthegovernmentlis-ten,atleastmostofthetime.Indeed,duringtheCivilWar,FirstLadyMaryToddLincolnusedtaxpayers’moneytorefurnishandredecoratetheWhiteHouse,aswell to fundherendlessshoppingsprees.37TheFirstLady’sactionswerecalledintoquestionbythepublic,newspapers,andgovern-mentofficials.WhenPresidentLin-colndiscoveredheractions,hesharplyquestionedherandwrotealetterofapologytotheNation.Sheneverusedonedimeofthetaxpayers’moneyforherpersonalaffairsagain. Thenationaldebtisaseriousprob-lemthataffectsoureconomyinevery

way.Nationaldebtcanberelatedtoallkindsofeconomicproblems,suchasinflationandrecession. Despite theproblems thatarise

andareassociatedwithdebt,politi-ciansareoftenunconcernedabouttheir current spendinghabits.Not

Mark your calendars for these important Section meeting & CLE dates:Formoreinformationcontact:AngelaFroelich:

850-561-5633/afroelic@flabar.org

November 10 - 11, 2006Fall Section Retreat

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January 1�, 200�International Law Update and Certification Review CLE

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January 1�, 200�International Law Section

Executive Council Meeting and LuncheonInconjunctionwithTheFloridaBarMidyearMeeting

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February 22 - 2�, 200�2�th Annual Immigration Law Update CLE

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Section Calendar

10

everypoliticianorgovernment of-ficial feels thisway,however; thereare thosewhoare consciousof theproblemandtrytofixit,oratleasttrytostoporslowdowntheincreaseindebt.But,ofcourse,theyarefew,especiallytoday.It isnosecretthatrunning forpublicofficerequiresalot ofmoney,and corporationsareoftenmajorcampaigncontributors.Eventhosecandidateswiththebestof intentionsfind themselvesmak-ingcompromisesandconcessionsinorder tosecureadequatecampaignfinancing.Once in office, theyareforcedtokeeptheirpromises,sotheystartlegislatingandspending. Weshould stopholding thegov-ernmentresponsibleforourpersonalproblemsandstartmakingitrespon-sible for thenation’sproblems.Wecannotexpectthegovernmenttosolveevery single problem by throwingmoneyatit.Thegovernmenthastoreducespendingandhastostarttodoitnow.Indirectly,wearebecomingtheretirementprogramofmanyforeignentities.Thatmoneyshouldbeturnedaround; insteadofgoing to foreigncountries,itshouldstayhere. Weneedtotakeseriousaction,andthefirstactshouldbetoapproveaconstitutionalamendmentbanningbudgetdeficitsandrequiringthegov-ernmenttobalancethebudgeteachyear.This isanecessaryaction toslowdowndebtandwouldalsohelpslowdowninflation inthiscountry.Andthisamendmentshouldprovidethatintimesofwarornationalemer-gency,suchasnaturaldisasters,thegovernment couldsurpass thebal-ancedbudget.Thiswouldguaranteethatthedeficitswouldoccurintimesofneed,notintimesofgreed. Thesolvencyofourgovernmentisdependentuponthesolvencyof itscitizens.Thus,oneof thebestwaystofixthebudgetdeficitproblemistofix theeconomy. IfAmericanwork-ershavebetterjobswithhigherpay,or, in fact,areguaranteedasteadyincome,theywillpayhigherincometaxes.Soanothersolutionistoraisetheincomeofthisnation’sworkers. For fiscal year2004 the federalgovernmentcollected$809billioninindividual incometaxesand$189.4

LIQUIDITyCOMPROMISEDfrom preceding page

billionincorporateincometaxes.Thegovernmentdoes collectadditionaltaxesforprogramssuchasSocialSe-curityandMedicare,butthismoneyhasbeenallotted foraspecificpur-pose.Nevertheless, these taxesareautomaticallyincludedinthebudgetandasingleaccountingentryallowedthe government to borrow $198.7billionfromtheseprogramsin2004.Soonenough, thegovernmentwillno longerbeable toborrowmoneyfromSocialSecurity.Therefore,gov-ernment revenue totaled$1,146.8billionin2004.Whilethatnumberisimpressive, the interestexpenseonthenationaldebtamountedto$321.6billionforthatyear;thismeansthattwenty-eightpercentofouravailabletaxrevenuewenttowardpayingtheinterestonthenationaldebt. Isourliquidityasanationandasapeoplecompromised?Notyet,butweareheadinginthatverydirection,andeverydaywearegoingfasterandfaster,andgettingcloserandcloser.Untilwestartmakingourgovern-mentresponsibleforitsunnecessaryspending,anduntilwestartmakingthepresidentof theU.S.andCon-gress,presentandfuture,responsiblefortheiractions,wewillnotbeabletoturnbackthetideofdebt.

Endnotes:1 IvanA.RodriguezSedaistheU.S.AttorneyfortheJurisdictionofPuertoRico.HereceivedhisLL.M. fromStetsonUniversityCollegeofLaw,Florida,andhisJ.D. fromPontificalCatholicUniversityofPuertoRico.2 Justtoseeitwrittenout,theU.S.nationaldebtis$7,900,000,000,000.00.3 HeisregardedasthefirstPrimeMinisterofGreatBritain.4 HebelievedinastrongNationalGovern-mentandamoremercantileeconomy.5 ThisisnotrelatedtothepresentRepubli-canParty.6 HewasthethirdpresidentoftheU.S.7 Heheldthepostoftreasurysecretaryforthirteenyears, the longestever forsuchof-fice.8 HewastheseventhpresidentoftheU.S.9 HewastheeleventhpresidentoftheU.S.10 Hewas the fourteenthpresidentof theU.S.11 Hewasthetwenty-eighthpresidentoftheU.S.12 Hewasthethirty-secondpresidentoftheU.S.13 ThiswasalsotheperiodoftheGreatDe-pression,whichbeganwiththeStockMarketCrashontheinfamousdayknownas“BlackThursday”in1929.14 Keynesianeconomicsisaneconomythe-orybasedupon the ideasofJohnMaynardKeynes. InKeynes’s theory,general (macro-level) trendscanoverwhelmthemicro-levelbehavior of individuals. Insteadof theeco-

nomicprocessbeingbaseduponcontinuousimprovements inpotential output,asmostclassicaleconomicshadfocuseduponfromthelate1700s,Keynesassertedtheimportanceoftheaggregatedemandforgoodsasthedrivingfactor,especiallyindownturns.Fromthis,hearguedthatgovernmentpoliciescouldbeusedtopromotedemandata“macro”level,tofighthighunemploymentanddeflationofthesortseenduringthe1930’s.15 HewasthefortiethpresidentoftheU.S.16 Hewastheforty-secondpresidentoftheU.S.17 Hewas the forty-thirdpresidentof theU.S.18 This is theagencyof theU.S.TreasuryDepartment thatborrowsmoneyneeded tooperatethefederalgovernmentandaccountsfortheresultingdebt.Borrowingtotalsabout$2trillioneachyearthrough140orsoauctionsandsalesatover40,000locationsthroughouttheU.S.19 Thesebondsarepurchasedatadiscountfromwhattheywillbeworthwhentheyma-ture.Theholderofazerocouponbondisen-titledtoreceiveasinglepayment,usuallyofaspecifiedsumofmoneyataspecifiedtimeinthefuture.20 FranceandtheUnitedKingdomareevenofferingafifty-yearbond.21 Thisisatheoreticalbondthatrepaysinter-estandprincipalwithabsolutecertainty.22 Thebondholderhasan“IOU”fromtheis-suer,butnocorporateownershipprivileges.23 Thesearebondsofferedbyanon-residentissuerinJapananddenominatedinJapaneseYen.24 Thesearebondsofferedbyanon-residentissuerinJapananddenominatedinU.S.dol-lars.25 Thisisalsoreferredtoas“Foreigndebt.”26 U.S.DepartmentoftheTreasury,BureauofthePublicDebt.27 Here,itis$2.3trillion.28 LeonardBurmanisaneconomistat theUrbanInstituteinWashington.29 China,Taiwan,andJapanreceiveabouttwenty-fivepercentof the interest theU.S.payseveryyearforthefederaldebtownedbythepublic.30 Thesumisadjustedforinflation.31TreasuriesRise;ForeignDemandReachesRecordatDebtAuction,http://www.bloomberg.com(November10,2005).32 Thesearealsoknownascreditmarketsordebtmarkets.33 This istheU.S.governingbodythathasprimaryresponsibilityforoverseeingtheregu-lationofthesecuritiesindustry.34 TheU.S.importsmoregoodsandservicesthanitexports,andtheproceedsfromexportsareinsufficienttopayforthefullcostofim-ports.35 Thisisthetermusedinaccountingrelatingtotheincreaseinvalueofanasset.36 Reuters,USStocks:MarketRallyofDebtAuction, http://www.reuters.com (Nov. 13,2005).37AfterPresidentLincoln’sdeath, shebe-camethesoleownerofhisestate.Becauseofherspendingspreesandherbuyingcompul-sion,theoldestsonof theLincoln’s,RobertToddLincoln,hadhercommittedtoanasy-lumsohecouldtakecontroloftheestate.Shewasreleasedthreemonths laterandneverforgaveher son forwhat she consideredabetrayal.

11

Maxcess, Inc. v. Lucent Technologies, Inc.(11th Cir. 2005) :

Limitation-of-Action Provision, Valid Pursuant to Governing Law, Enforceable Under Florida Law Unless Provision Itself Procured by Fraud

By Ann LaClair1

UnderFloridalaw,itiswell-settledthatchoice-of-lawprovisionsareen-forceable“unlessthelawofthecho-senforumcontravenesstrongpublicpolicy.”2 It isalso settled law that,althoughcontractprovisionsshort-eningtheapplicablestatutoryfilingperiod foranaction (“limitation-of-actionprovisions”) arevoidunderFloridalaw,3suchprovisionsarenotcontrarytostrongpublicpolicyandwill be enforcedbyFlorida courtswhenapplying the lawof jurisdic-tions inwhichsuchprovisionsareacceptable.4The breadth of thesetworuleswastestedrecentlywhentheEleventhCircuitCourt ofAp-peals consideredwhether toaffirmtheMiddleDistrictofFlorida’sdis-missalofMaxcess,Inc.’s(“Maxcess”)pre-contractfraudclaimsagainstLu-centTechnologies,Inc.’s(“Lucent”)inMaxcess, Inc. v. Lucent Technologies, Inc.5

Facts of the Case Maxcess, theplaintiff-appellant,providedtelecommunicationsservic-esovertheInternet.Maxcesssignedanagreementwithdefendant-appel-lee,Lucent,inFebruary,2000,underwhichMaxcesspurchased fromLu-centthePathstarSystem,aswellascertainsoftwarelicensesandinstal-lationandtechnical-supportservices(the“PurchaseAgreement”).6LucentportrayedPathstarasa“revolution-ary” telecommunications system.7Indeed, inLucent’ssalespitches, it“toutedtheSystemasanactual,fullyandwell functioningproduct thatwouldprovidea‘totalsolution’” forMaxcessinofferingtelecommunica-tionsservices.8

The Purchase Agreement con-tainedachoice-of-lawprovisionpro-vidingthatNewYorklawgovernedtheagreement9aswellasa choiceofvenueandjurisdictionclausedes-ignating“the federal court, locatedinornearOrlando,Florida”as the

propervenue.10Theagreementalsoincludeda limitation-of-actionpro-vision,whichprovidedthatMaxcess“shall giveLucentpromptwrittennoticeofanyclaim”andthat“[a]nyactionorproceedingagainstLucentmustbebroughtwithintwenty-four(24)monthsafter the cause of ac-tionaccrues.”11UnderNewYorklaw,limitation-of-actionprovisionsaregenerallyenforceable.12 The Pathstar System, however,wasa“colossalfailure”and,lessthanayearafterthepurchaseofthesys-tembyMaxcess,Lucentdiscontinuedit and stopped providing Maxcesswith technicalsupport for theSys-tem.InMay2001,Maxcesswentoutofbusiness.13 OnFebruary19, 2004,Maxcessfiled suit in theMiddleDistrict ofFlorida against Lucent allegingseveral causesofaction, includingfraudulentor intentionalmisrepre-sentations,negligentmisrepresenta-tion, falseadvertising,and fraudu-lentconcealment.14Maxcessclaimeddamagesarising fromthePathstarSystem’sfailuretomeetMaxcess’ex-pectations.15IntheComplaint,Max-cessdidnotdenythattwoyearshadpassedsinceitsclaimsaccrued.16 Lucentfiledamotion todismissMaxcess’claimsonseveralgrounds,includingthatMaxcess’claimswerebarredunder the two-year limita-tionprovisioninthePurchaseAgree-mentandthatthetortclaimswereindependentlybarredbyFlorida’seconomic lossrule.17Lucentarguedthat the Court should not permitMaxcesstorecastitsclaimstosoundintorttoavoidthelimitationsinthePurchaseAgreement’swarrantyandremediesprovisions.18InitsresponsetoLucent’smotiontodismiss,Max-cess alleged that“pre-contractualfraudvitiatesacontractatitsincep-tion.”19ThedistrictcourtdismissedMaxcess’ claimswithprejudice, onthegrounds that theywerebarred

underthe24-monthlimitationperiodcontainedinthePurchaseAgreementandunderFlorida’s economic lossrule.20Maxcessappealed.

The Eleventh Circuit’s Decision TheEleventhCircuitaffirmedthedistrictcourt’sdismissalofMaxcess’claims, agreeing with the districtcourtthatMaxcess’claimsweretimebarredunder thePurchaseAgree-ment.21Relyingonpreviousrulingsof theFloridaSupremeCourt, theEleventhCircuitalsoconcludedthat,underFloridalaw,choice-of-lawpro-visionsaregenerallyenforceableun-less theyareagainststrongpublicpolicy22andlimitation-of-actionpro-visionsarenotagainststrongpublicpolicy.23 The Eleventh Circuit, however,tookadifferentviewfromthedistrictcourt inanalyzingMaxcess’ claimsunderthePurchaseAgreement.Ap-plyingNewYork law, theEleventhCircuit concluded that, contrary toMaxcess’assertionthatitshouldnotbeboundbyastatuteoflimitationsthatwas included inanagreementthatwas fraudulently inducedandthereforevoidasamatteroflaw,suchalimitationprovisionwasenforceable“absentashowingoffraud,duress,ormisrepresentation,with respect totheactualshortened limitationpe-riod.”24Thus,sinceMaxcessdidnotallege that the limitation-of-actionprovisioninthePurchaseAgreementitselfwasfraudulently induced,thecourt concluded that theprovisionwasenforceable.25

TheEleventhCircuit completedits analysis without mentioningFlorida’seconomic-loss rule,whichwasthedistrictcourt’smainfocusingrantingLucent’smotiontodismiss,asdiscussedsupra. ApplyingNewYorklaw,theElev-enthCircuitconcludedthattheplain

continued, next page

12

meaningof the limitationprovisionin thePurchaseAgreementclearlycovered“anyactionorproceeding”and,accordinglyappliedtoMaxcess’pre-contractual fraudulent induce-mentclaim.26Accordingly, theElev-enthCircuitsolelyheldthatMaxcess’claimswere timebarredunder the

PurchaseAgreement.27

The District Court’s Order Thedistrictcourt’srulingisequal-lynoteworthy.Indeed,althoughtheEleventhCircuitaffirmedthedistrictcourt’sgrantingofLucent’smotiontodismiss,thedistrictcourtundertookadifferentanalysisofMaxcess’claims.Thedistrict court, indeterminingwhetherMaxcess’ claimsshouldbedismissed,28 dedicatedmuchof itsfocusandanalysisonwhether the

economic-loss rule applied to theclaims.29 Rather than turningdirectly tothe validity and applicability ofthechoice-of-lawand limitation-of-action provisions in the PurchaseAgreement,thedistrictcourtbeganits analysis with a determinationthat“[h]owever cast,Maxcess’ tortclaims concernalleged fraudsandnegligenceandciteddamagesarisingwhentheSystemfailed toperformto Maxcess’ expectations.”30 Fromthere, thedistrict courtperformedanextensiveanalysisoftheapplica-bilityofFlorida’seconomic-lossrule,which,asthecourtnoted,“barspur-chasersfromcharacterizingormain-tainingtheirclaimsastortcausesofaction,”and“restsonthedistinctionbetweentheproperscopeoftortlawversusthelawofcontractsandwar-ranty,”31toMaxcess’claims.Thedis-trictcourtconcludedthatthedisputebetweenMaxcessandLucent“turns,fundamentally, on theproper legalcharacterizationofMaxcess’claims”andthatregardlessofhowMaxcess’claimsare characterized, theyare“inextricably interwoven with thecontractsincetheproductqualityandcharacter(i.e.fitnessorvalue)areattheircore.”32Accordingly,thedistrictcourtheld thatFlorida’seconomic-lossruleappliedtoMaxcess’claimsandtherefore,the“claimscannotbecharacterizedormaintainedastortcausesofaction.”33 Thedistrictcourtnext turnedtoananalysisofMaxcess’ claimsandthePurchaseAgreement,whichwasfollowed in some respects by theEleventhCircuit,asdiscussedinfra.ThedistrictcourtnotedthatunderFloridalaw,contractualchoice-of-lawprovisionsaregenerallyenforceableunlesstheyarefoundtobeagainststrongpublicpolicy34andthatlimi-tation-of-actionprovisionsarenotconsidered to reflect strongpublicpolicy.35Thus,thedistrictcourtheldthatbecauselimitation-of-actionpro-visionsareenforceableunderNewYork law,36a contract containingachoice-of-lawprovisionthatselectedNewYorkasthe lawgoverningthecontract is enforceable in FloridaregardlessofwhethertheeffectistoshortentheperiodoftimeinwhichanactioncanbecommencedtolessthanwouldotherwisebeprovidedunderFloridalaw.37 Thesimilaritiesbetweenthedis-

MAXCESS v. LUCENT, INCfrom preceding page

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andthe Immigration and Nationality Law Certification Committee are pleased to announce the following

attorney is Board Certified as of June 1, 2006:

Congratulations!Roger A. Bernstein

MakeItYourGoalToo!FilingPeriodforMarch16,2007Examination:

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Contact:

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or for further information go to:www.floridabar.org/certification

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trictcourtandtheEleventhCircuit’sanalyses,however,endedhere.With-outdirectlyaddressingthe issueofwhetherthelimitation-of-actionpro-visioninthePurchaseAgreementonits faceprecludesMaxcess’pre-con-tract fraudclaims,asdidtheElev-enthCircuit, thedistrictcourtheldthatMaxcess’claimswerebarredun-dertheeconomic-lossruleandtimebarredunder thePurchaseAgree-ment.38Onthesegrounds,thecourtgrantedLucent’smotiontodismisswithprejudiceasagainstLucent.39

Inconclusion,althoughtheElev-enthCircuitandthedistrictcourt’sapplicationsof the lawtoMaxcess’claimsvarysignificantly,bothrulingsaffirmthatpre-contractfraudclaimsmaybebarredunderacontractthatcontainsbothachoice-of-lawprovi-sionaswellasabroadlimitation-of-actionprovision.

Endnotes:1 AnnLaClairisamemberoftheInterna-tionalLawSection’sInternationalLitigationandArbitrationCommitteeandpractices intheMiamiofficeofWhite&Case,LLP.2 Mazzoni Farms, Inc. v. El Dupont de Nemours and Co.,761So.2d306,311 (Fla.2000);seealsoPunzi v. Shaker Adver. Agency, Inc.,601So.2d599(Fla.2dDCA1992).3 Section95.03,FloridaStatutes,provides:“Anyprovisioninacontractfixingtheperiodoftimewithinwhichanactionarisingoutofacontractmaybebegunatatimelessthanthatprovidedbytheapplicablestatuteof limita-tionsisvoid.”4 See Burroughs Corp. v. Suntags of Miami, Inc.,472So.2d1166,1168-69(Fla.1986).InBurroughs, theFloridaSupremeCourtheldthatalimitation-of-actionprovisioninacon-tract that includedachoice-of-lawprovisiondesignatingMichiganasthelawgoverningthecontractwasnotagainststrongpublicpolicysince,underMichiganlaw,suchaprovisionisvalid.Id.Punziat1169.5 2005WL3527130(11thCir.Fla.2005)(the“EleventhCircuit’sDecision”).6 EleventhCircuit’sDecision,at*1.7 Id.8 Maxcess, Inc. v. Lucent Technologies, Inc.,No.05-10636,slipop.at2 (M.D.Fla.Jan.5,2005)(the“DistrictCourt’sOrder”).9 EleventhCircuit’sDecision,at*2.10Id.at*4,n.1.Additionally, thePurchaseAgreement included a warranty provisioncoveringthesoftware,whichprovidedthatthesoftware“willbefreefromthosedefectswhichmateriallyaffectperformance inaccordancewithLucent’spublishedspecifications.Dur-ingthewarrantyperiod, ifLucent isunabletorepairorreplace theProductofSoftware

[Maxcess]willhave the right to return thenonconformingProductorSoftwareforare-fundofthepricepaid.”DistrictCourt’sOrder,at3.Theagreementalsoincludedawarrantyprovisionexclusionprovidingasfollows:“Theforegoingwarrantiesareexclusiveandareinlieuofallotherexpressandimpliedwarran-ties,includingbutnotlimitedtowarrantiesofmerchantabilityandfitness foraparticularpurpose. [Maxcess’] soleandexclusiverem-edies shallbeLucent’s obligation to repair,replace,credit,orrefundassetforthaboveinthewarrantysection.”Id.(originalinallcaps).11Id.at*1(originaltextinbold).12Id.at*2.13Id.at*1.14Maxcess v. Lucent,SecondAmendedCom-plaint (the“Complaint”) , at17-20.CopperMountainNetworks,Inc.(“CopperMountain”)wasalso listedasadefendant in theCom-plaint.Originally,CopperMountainfiledamotiontodismiss.CopperMountain,however,didnotappearbeforetheCourtatthehearingonthemotionandMaxcess,onbehalfofCopperMountain,requestedthatthecourtwithholdits considerationof themotionbecause thepartieswere in theprocessof resolving thedispute.DistrictCourt’sOrder,at1,n.1.15Id.at20,21-22.16EleventhCircuitDecision,at*1.17Maxcess v. Lucent,DefendantLucent’sMo-tiontoDismissAmendedComplaint,Alterna-tiveMotionforMoreDefinitiveStatementandSupportingMemorandumofLaw,at4-13.18DistrictCourt’sOrder,at5.19Id.20Id.at20.21EleventhCircuit’sDecision,at*4.22Id.at*2.FortheFloridaSupremeCourt’sholdingon this issue, theEleventhCircuit,followingthedistrictcourt,citedtoMazzoni Farms.Id.AtissueinMazzoniwasachoice-of-lawprovisioninasettlementagreementthatreleasedthedefendantsofallclaims,whetherknoworunknown.Mazzoni Farms, 761So.2dat 308. In this case, the Florida SupremeCourtheldthatachoice-of-lawprovisioninasettlementagreementgenerallycontrols thedispositionofaclaimthattheagreementwasfraudulentlyprocuredifthedefraudedpartyhaselectedtoaffirmthecontractandsuefordamages.Id.at313.23EleventhCircuit’sDecision,at*2.Forthisproposition, theEleventhCircuit, followingthedistrictcourt,citedtotheFloridaSupremeCourt’sholdinginBurroughs. Id. 24Id.at*3(quoting Kozemko v. Griffith Oil Co., 256A.D.2d1199, 1200 (N.Y.App.Div.1998)).25Id.TheEleventhCircuitnotedthatMax-cessdidnotallegethatLucenthadengagedinanyparticularfraudwithrespecttothechoice-of-lawprovisionortheprovisionshorteningthestatuteoflimitation.Id.26Id.at*3.TheEleventhCircuitfoundthatthelimitation-of-actionprovisionisnotlimitedtocontractortortclaims.Moreover,inresponse

toMaxcessargument that thechoice-of-lawprovisiondoesnotapplytoitsfraudclaim,thecourtstatedthat“Maxcess’argumentconfusestwoissues.”WhileconcedingthatFloridalawmayverywellgoverntheelementsofMaxcess’tortandstatutoryclaims, thecourtempha-sized,however, that“theagreementtobring‘anyactionorproceeding’withintwoyearsisanobligationpursuanttothePurchaseAgree-ment,making itsubject to thechoice-of-lawprovision”whereas“[t]hecontractual limita-tionsprovisionhasnothingwhatsoevertodowiththebasisforMaxcess’underlyingclaimsorwhethertheyaregovernedbyFlorida,NewYork,oranyotherlaw.”Id.at*4.27Id.28In itsorder, thedistrictcourtreferredtothePurchaseAgreementasthe“MasterAgree-ment.”SeeDistrictCourt’sOrder.29See id.at7–16.30Id.at4.31Id.at8.TheFloridaSupremeCourtad-optedthe“economic-loss”rulein1987whenitdecidedFlorida Power & Light Co. v. Westing-house Elec. Corp.,510So.2d899(Fla.1987).Aspointedoutbythedistrictcourt,therulewasoriginallyintendedtoapplytoactionsin-volvingproductdeficienciesthatcausedpurelyeconomicdamagetoitspurchaser.Id.32Id.at7,12-13.See also id.at20.33Id.at17,20.ThedistrictcourtwassimilarlyunpersuadedbyMaxcess’argumentthattheexceptiontotheeconomic-lossrule for fraudintheinducementwasapplicabletoitsclaims,holdingthat“[i]ffraudintheinducementwereliberallyconstrued,theexceptionwouldswal-lowtheruleandcontractclaimswouldelideintoaquestionof thepromisor’s subjectiveintentatthetimeofthecontractformation.”Id.at16.34DistrictCourt’sOrder,at18(citingtoMaz-zoni,761So.2dat311).35Id.at18,19.ThedistrictcourtnotedthatalthoughFlorida law,by statute,disallowscontractuallimitationprovisionsthatfixtheperiodoftimewithinwhichanactionmaybebroughttolessthanthatprovidedbytheappli-cablestatuteoflimitations,this“prohibition,…, isnotconsideredtoreflectstrongpublicpolicy.”DistrictCourt’sOrder,at18(quotingBurroughs Corp.,472So.2dat1168-69andreferringtoFla.Stat.§95.03).36DistrictCourt’sOrder,at18.Forthispropo-sition,thedistrictcourtreferredgenerallytoIncorporated Village of Saltaire v. Zagata,720N.Y.S.2d200,200(N.Y.App.Div.2001).Id.37Id.Thedistrict courtprovideda lengthyanalysisofwhetherNewYorklawwouldlooktoFloridalawinachoice-of-lawanalysiswithrespecttowhethertheclaimsarecontractualorintortandconcludedthat“bothstateswouldlooktoNewYorklawgivenarelevantcontractwithaprovisionidentifyingNewYorklawasthelawofchoice.”Id.at18-20.38Id.at20.39Id.

1�

Baywatch—A Column of Updates on International 

Law in the MakingBy Attilio M. Costabel

UNITED  NATIONS  CONVEN-TION  ON  CONTRACTS  FOR THE INTERNATIONAL SALE OF GOODS (“CISG”) Effect of Forum Selection Clause in a CISG ContractAmerican Biophysics Corp. v. du-bois Marine Specialties,  �11  F. Supp. 2d 61 (D. R.I. 2006)  Theissueinthiscasewaswhetherapartymaywaiveitsrighttochal-lenge personal jurisdiction by en-tering intoacontract thatcontainsa forumselectionclause.Thecourtrestatedtheprinciple“thatapartythathasagreedtobeboundbyavalidforumselectionclausecannotassertforumnon conveniens asagroundfordismissingasuitbroughtinthechosenforum.”American Biophysics,411F.Supp.2dat62(citationsomit-ted).Thethresholdquestioninthiscasewaswhether the forumselec-tionclausecontainedintheparties’DistributorshipAgreementwasvalidandbinding. Forumselectionclausesareconsid-ered“primafacievalidandshouldbeenforcedunlessenforcementisshownbytheresistingpartytobe‘unreason-able’under the circumstances.” Id,(quotingM/S Bremen v. Zapata Off-Shore Co.,407U.S.1,92S.Ct.1907,1913,32L.Ed.2d513(1972)).Further,thecourtrestatedtheprinciplethat“apartychallenginga forumselec-tionclausemustpresent‘evidenceoffraud,undueinfluence,overweeningbargaining power or such seriousinconvenience in litigating in theselected forumthat it iseffectivelydeprivedof itsday incourt.”Id.at63.Nosuchshowingwasmadeinthiscase. The defendant further arguedagainst enforcement of the forumselectionclauseonthegroundthattheAgreementwasgovernedbytheCISG.Asthecourtnoted,theCISGapplies to“contracts for thesaleofgoodswherethepartieshaveplacesofbusinessindifferentnations,thenationsareCISGsignatories, and

thecontractdoes not contain a choice of law provision.”Id.at63,(quotingAmco Ukrservice v. Am. Meter Co.,312F.Supp.2d681,686(E.D.Pa.2004)). Here,theCISG,atfirstblush,ap-pearedtoapplybecausethepartieshadplacesofbusiness indifferentCISGsignatorynations.However,the contract containeda choice oflawprovision that theAgreement“shallbeconstruedandenforced inaccordancewiththelawsofthestateofRhodeIsland.” Thecourtheldthatprovisionsuf-ficient toexcludeapplicationof theCISG,citingtoDelchi Carrier SpA v. Rotorex Corp., 71F.3d1024,1028n.1(2dCir.1995).Further,thecourtheldthattheforumselectionclausehere“expressly” invested thecourtwithjurisdiction, citing to the decisioninSummit Packaging System, Inc. v. Kenyon & Kenyon, 273F.3d9,13(1stCir.2001)(“Whenpartiesagreethatthey‘willsubmit’theirdisputetoa specified forum, theydo so totheexclusionofallother forums.”);andLambert v. Kysar, 983F.2d1110,1116 (1st Cir. 1993) (forum selec-tionclausewillbeenforced“’wherevenue is specifiedwithmandatorylanguage.’”)(quotingDocksider, Ltd. v. Sea Tech., Ltd., 875F.2d762,764(9thCir.1989)).

Choice of Law –CISG or Domestic?American Mint LLC v. Gosoftware, Inc., 2006 U.S. dist. LEXIS 1569  (M.D. Pa Jan. 6, 2006)1

Thiscase(seeminglyatoddswith American Biophysics,above)presentsanotherinterestingtwistontheap-plicationofGISGinAmericancourts.Theplaintiffsweretwocorporations,onefromGermanyandoneheadquar-teredinPennsylvania;defendantwasacompanyheadquarteredinSavan-nah,Georgia.At issue:whetherthecourthadjurisdictionunder28U.S.C.§§1331 (federalquestion)and1332(diversity)over this contract-baseddispute.

The plaintiffs argued that thecourthad federalquestion jurisdic-tionundertheCISG,atreatythattheUnitedStateshasratified,whilethedefendantcounteredthattheCISGdidnotapplybecause thecontractcontainedaprovisionselectingGeor-gialawasthelawgoverningdisputesunder the contract.Thecourtheldthat the CISG is a self-executingtreatywiththepreemptive forceoffederallaw.SeeU.S.Const.(Art.VI,Supremacy Clause),and thus that,as incorporated federal law,CISGgovernsdisputesinvolvingcontractsforthesaleofgoodsbetweenpartieswhoseplaceofbusinessisindiffer-entCISGcontractingstates,solongasthepartieshavenotelectedtoex-cludeitsapplication.Thecourtsidedwithprecedentsfromothercircuits,2

holdingthatpartiesseekingtoapplya signatory’s domestic law in lieuof theCISGmustaffirmativelyoptoutoftheCISGand, inthespecificcase,foundthatthemerereferencetoGeorgialaw,withoutspecificoustingofGISG,wasnotsufficienttoexcludeapplicationofCISG. ThecourtalsorejecteddiversityjurisdictionasbetweenthetwoAmer-icanpartiesbecausethecontractcon-tainedalimitationofliabilityclauseat$10,995,andprecludedrecoveryforincidentalorconsequentialdam-ages, thusputting this casebelowthe$75,000 threshold fordiversityjurisdiction.

FOREIGN LAWRule ��.1 Notice.Rationis Enterprises Inc. of Pan-ama v. Hyundai Mipo dockHyun-dai Co., �26  F.�d  5�0  (2nd  Cir. 2005)  Theownersandmanagersofacon-tainershiplostatseasuedaKoreanshipyard(Hyundai)intheSouthernDistrictofNewYork,allegingHyun-dai’snegligenceinworkperformedtotheship.Inthepre-trialproceedings,Hyundaiargued,amongotherthings,thattheDistrictCourtlackedperson-

15continued, next page

al jurisdictionandcommenced twodeclaratory judgments toestablishnon-liabilityinaKoreancourt.TheDistrictCourtissuedananti-suitin-junction,latervacatedandremandedto theDistrictCourt toconductanevidentiaryhearing,andthenHyun-daimoved for summary judgment,arguing, inpart, that theplaintiffscouldnotprevailunderthe lawsofeither Korea, Sweden or Panama.TheDistrictCourtdeniedthemotion,concludingthatHyundaihadwaiveditschoiceoflawdefensebyfailingtoselectaparticularforeignlawuntilthe summary judgment, delayingthroughfouryearsoflitigation,un-til after the completion of discov-ery,beforeprecisely identifyingtheapplicable foreign law.TheDistrictCourt reasoned that this alterna-tivepleadingstyle failedtoprovidetheopposingpartywith thenoticerequiredbyFed.R.ofCiv.Proc.44.1.TheDistrictCourt concluded thatHyundai’soverlyexpansive formu-lationof foreign lawprejudicedtheplaintiffs.Findingwaiver,theCourtsawnoneed toconductachoiceoflawanalysisandproceededtoapplyUnitedStateslaw. Onappeal,theSecondCircuitheldthatalternative theoriesmaywellsuffice as reasonable notice whenrelevanteventsoccurredinmultipleforeign locations and legitimatelypointtoseveraldifferentapplicablebodiesof law.Thecourt foundthatHyundaigaveproperRule44.1noticeandtheapplicabilityof foreign lawwasnotwaived,andheld that theDistrictCourt’sdecisionthatnoticewasnotproperand that thereforeHyundaiwaived the foreignchoiceoflawargumentwasanabuseofitsdiscretion. Thecourtpointedout thatCon-gresspassedRule44.1 in1966 toavoidunfairsurprise, tomakeuni-formthepermissibilityofraisinganissueof foreign lawafterpleadingswherethechoiceoflawissuebecameapparentlater,andtoputtorestthenotionthatforeignlawisaquestionof fact thatmustbeprovedat trialandreviewedonappealonlyforclearerror. “Thequestionhere”,saidthecourt,“isnotwhetherHyundaifailedtogiveanynotice,but rather,whether itsalternativepleadingoffendedRule44.1.Although this may force theopposingparty to conduct further

research, such additional work inamaritimemass tort ishardly theunduesurpriseRule44.1 seeks toprevent.Perhapsitiseventobeex-pected,whenshippinggoodsfromEu-ropetotheUnitedStates,onaSwed-ishship,modifiedinKorea,currentlyownedandoperatedbyPanamanians.We therefore recognizealternativepleadingof choiceof law issuesassatisfyingthenoticerequirementsofRule44.1.Forthesereasons,wefindHyundai’salternativenoticereason-ableunderRule44.1.”Rationis,426F.3dat586.

PARALLEL LITIGATION Antisuit Injunction – Compelling ArbitrationIbeto Petrochemical Industries, Ltd., v. M/T “BEFFEN,” in rem; and Bryggen Shipping and Trading A/S, in personam, �12 F. Supp. 2d 2�5 (S.D.N.y. 2005)  AdisputearosebetweenShipown-ersandCharterersunderaCharterPartyfordamagestoacargocarriedfromtheUnitedStates toNigeria.PlaintiffCharterersobtainedabondto secure the boat in Nigeria andnotifieddefendantShipownersthatitwascommencingarbitration.Plain-tifffiledsuitintheSouthernDistrictofNewYorkonthesamedayinor-dertoprotectthetimeforsuit.Fivemonthsafterplaintiffbeganarbitra-tionproceedingsinLondon,plaintiffnotifieddefendantsthatithadclosedthearbitrationandintendedtopur-suelitigationinNigeriaandmovedforaRule 41(a)(2) dismissalof theComplaint. Plaintiff moved for a voluntarydismissalpursuanttoRule 41(a) (2) ,whichpermitsdismissalafterserviceofdefendants’answerwithpermis-sionofthecourt.Defendantscontest-edthismotion,arguingthatbecausethey had asserted counterclaims,Rule 41(a) (2) no longerpermitsavoluntarydismissalwithoutpreju-dice.DefendantsinsteadaskedthattheCourteitherdismissthecasewithprejudiceorissueastayandcompelarbitration.Infact,Defendantshadcounterclaimedforadismissalorstayofplaintiff ’scauseofactioninfavorofarbitration inLondonandforaninjunctionagainstplaintiff ’s litiga-tioninNigeria.Thecourtfoundthatthepresenceofthesecounterclaimsweighedagainstgrantingplaintiff ’smotiontodismiss.Plaintiffdisputed

thatamotiontocompelarbitrationcouldbeviewedasacounterclaim,citingauthorityfromtheNinthCir-cuit,butthecourtfoundthatmotionstocompelarbitrationhaveroutinelybeenconsideredpropercounterclaimsintheSecondCircuit. TheDefendants’MotiontoCompelArbitrationwasgranted.TheCharterPartyFixture(stipulation)wassentfromdefendantstoplaintiffviaemail.Thefixture incorporated the termsofastandardcharterpartynamed“Chemlube,”whichdoesnothaveageneralArbitrationclause,buthasatermthat“generalaverage,arbitra-tion[is]tobeinLondon,Englishlawtoapply.”Thecourtheldthisfixture,sentbyemail,justasbindingasthosesentby faxor telex.Thecourtalsofound thegeneralaveragearbitra-tionclausetobe“broad,”thusthataclaimfornegligentdamagetocargofellwithinthescopeoftheChemlubeTermsarbitrationagreement. TheMotiontoEnjoinNigerianLit-igationwasalsogranted.Thecourtfoundthattherequirementsforthecourt’spower to issueananti-suitinjunctionweremetinthiscase:thesamepartieswere involved inboththiscaseand in theNigeriancase,andresolutionofthiscase(througharbitration) would have been dis-positiveoftheNigerianmatter.TheCourtthenaddressedthefive“China Trade factors”: (1) frustrationofapolicyintheenjoiningforum;(2)theforeignactionwouldbevexatious;(3)athreattotheissuingcourt’sinremorquasiinremjurisdiction;(4)theproceedings in theother forumprejudiceotherequitable consider-ations;or(5)adjudicationofthesameissuesinseparateactionswouldre-sultindelay,inconvenience,expense,inconsistency,oraracetojudgment.3Thecourtfoundthatfactors1,2and5weighed in favorofgranting theinjunction.

Parallel Proceeding Pending  in Foreign Country - Motions to Dis-miss and to StayCows, Inc. v. Viacom Interna-tional, Inc., 2005 U.S. Dist. LEXIS 29�19 (D. Utah 2005)  Plaintiff, COWS, Inc., sells icecreamandt-shirts,mugs,caps,etc.,“featuringparodiesofpopularcultureandcaricature images.”Defendants(“Viacom”)assertedthatCOWS’suseoftheirgraphicsconstitutedinfringe-

16

mentof trademarksandcopyrightsownedbyViacom, falsedesignationof origin and trademark dilution.COWS sought a declaratory judg-ment in theUnitedStatesDistrictCourtfortheDistrictofUtah,Cen-tralDivision.Shortlyafterthecasewasfiled,ViacomfiledasimilarcaseinCanadianFederalCourt.Viacommovedtodismiss,oralternativelytostay,theUtahactionassertingthatthecourthaddiscretionaryjurisdic-tionindeclaratoryjudgmentactionswhichshouldnotbeexercisedinthisinstance. Thiscaseisausefulmini-checklistofthefactorstobeevaluatedinamo-tiontodismissadeclaratoryaction.“Thecourtisguidedbytwoconsider-ations:“Willadeclarationofrights,under the circumstances, serve toclarifyorsettlelegalrelationsinis-sue?Willitterminateoraffordrelieffromtheuncertaintygivingrise totheproceeding?Iftheanswertothesequestionsisyes,acourtshouldretainjurisdictionoverthecase.Factorstoconsider indeterminingwhethertoexercisejurisdictioninadeclaratoryjudgmentactioninclude:[1]whetheradeclaratoryactionwouldsettlethecontroversy; [2] whether it wouldserve a useful purpose in clarify-ing the legal relationsas issue; [3]whether thedeclaratory remedy isbeingusedmerelyforthepurposeof“proceduralfencing”or“toprovideanarenaforaracetoresjudicata”;[4]whetheruseofadeclaratoryactionwouldincreasefrictionbetweenourfederalandstatecourtsandimprop-erlyencroachuponstatejurisdiction;

and[5]whetherthereisanalterna-tiveremedywhichisbetterormoreeffective.A furtherconsideration iswhether thepresence of a federalquestionmilitatesagainstdismissal.Courts in other circuitshaveheldthatadistrictcourtshouldconsiderthe presence of federal questionswhendecidingwhethertodismissadeclaratoryjudgmentsuit.” Against thisbackdrop, theCourtconcludedthatdismissalof thisac-tionwasinappropriate.Thecasepre-sentedaquestionofUnitedStatestrademark law that could not besettledor clarifiedby theapplica-tionofCanadiantrademark law inaCanadian court.Accordingly, analternativeremedywasnotavailabletoaffordCOWSthereliefrequested.Also,thecourtdidnotfindmeritinViacom’sallegationthatCOWSracedtothecourthousetogainsomeproce-duraladvantage.

FORUM NON CONVENIENSJack King v. Cessna Aircraft Co., �05  F.  Supp.  2d  1���  (S.D.  Fla. 2005)  The familiesofpassengerskilledina tragicairplane crash in Italysued theaircraftmanufacturer intheSouthernDistrictofFlorida.Thecasewasconsolidatedwiththoseof69otherPlaintiffs,allEuropeanciti-zens.Defendantmovedtodismissforforum non conveniens,andthecourtinitiallydeniedthemotionfordefer-ence to thechoiceof theAmericanplaintiff,andontheassumptionthattheissuesofItalianlawweresimpleandquicktoresolve.Amotionforre-considerationwasfiled,anddeniedbytheDistrictCourt.SoonthepartiesmodifiedtheirclaimsandtheItalian

lawissuesprovedtobenotsosimpleandquick.ClaimswerefiledinItalyalso,andtheAmericanplaintifffiledlawsuits in Italyagainstdifferentdefendants.TheDistrictCourt,sua sponte,calledforthepartiestorebrieftheMotionforReconsideration. Onconsiderationofthere-briefedMotion, theDistrictCourtde-con-solidated theUnitedStatesPlain-tiffs from theEuropeanPlaintiffs,dismissedthesuitsoftheEuropeanplaintiffsandstayedthesuitoftheAmericanplaintiff.The court rea-soned that theEuropeanplaintiffsdidnotselecttheAmericanforumforproceduralconvenience,andthattheItalianforumwouldnotbevexatiousfor theAmericanplaintiff,whohadelectedtopursuecompanionactionsthere. Apartfrombeingausefulrefresh-erof theprivateandpublic factorstobeweighedbythecourt,thiscaseis interesting for itspragmaticap-proach:thereluctanceoftheCourtinapplyingItalianlawwasnotduetoitsdifficulty,buttotheapparentdi-rectconflictintheexperts’testimony.StayingtheAmericancaseuntiltheItaliancourtshaveresolvedtheItal-ianlawdisputesastheyrelatetothe69otherplaintiffs,thecourtintendedtohavethebenefitofactualItaliancourtdecisionsrelatedtothatprecisecase,withoutanyconflictinfollowingItalianlaw

Attilio M. Costabel is a partner of Rumrell. Costabel, Warrington & Brock, LLP, with offices in Miami, Jacksonville, St. Augustine, Alachua and Key West, and of counsel to Conte & Giacomini Law Office, with offices in Milan, Genoa, Rome, Bruxelles and Beijing. Adjunct Professor of Law at St. Thomas University School of Law. J.D. Univ. of Genoa, 1962; Univ. of Miami, 1987. Engaged in the practice of Maritime and Admiralty Law and Transnational Transactions. Admit-ted in Florida and in Italy.”

Endnotes:1 DecidedJanuary5,2006.2 Namely in theThird,Fifth,EighthandNinth Circuits.This case is an invaluablesourceofreference.3 China Trade & Dev. Corp. v. M.V. Choong Yong, 837F.2d33,35(2dCir.1987).

UPDATESfrom preceding page

HoldtheDate!

February22-23,2007

28thAnnualImmigrationLawUpdate

HyattRegencyMiami–Miami,Florida

1�

Bar Leaders’ Conference in London Hosted by the IBA

By J. Brock McClane

The Event: OnMay24–26,2006,theInter-nationalBarAssociationhostedforthefirsttimeinhistoryabarleaders’ conference, inviting theleadersof the lawsocietiesandbarassociationsaroundtheworldtoLondontoparticipate.Consis-tentwiththethemethathasbeenadoptedamongthecurrentandpast leadership ofThe FloridaBarInternationalLawSectionofbeingaquality-orientedbar, intermsof international litigationand transactionalCLEtrainingandalso intermsof theFloridaBar’s reputationworldwide, theexecutivecommitteesentoneofourmemberstorepresenttheSec-tionandtheBarattheconference.Theconferencewasattendedbyanestimated150 lawyers fromeveryinhabitedcontinent.

The Program: Theprogramwasbetterandmorerelevantthanexpected,in-cludingsectionsontrainingnewlawyers at which the speakersfromEdinburgh,Scotlanddemon-stratedhow(followinggenerallythe National Institute ofTrialAdvocacy format) they takeanactiveroleasabarassociation(ofadvocate/litigators) in thetrain-ingofyounglawyersingoodtrialtechnique inaveryconstructivemanner.Whilewemaynotadmitit,thiskindoftrainingwouldbeveryhelpfulfortheinternationallitigatorsinFlorida,basicallygiv-ingabitofScottishperspectivetothe issueofgood litigationtech-nique. Anothergood section coveredpoints and counter-points on a

newlawgoingintoeffectinEng-landandWaleswherebytheregu-lationofthebarisbeingofficiallyovertaken by the governmentbasedonthecriticismoutlinedinawhitepaperknownastheCle-menteMemorandumsuggestingthatthereissomethingimproperaboutthebarpolicingitself.Mostofthebar’sdisciplinaryfunctionswillbe re-delegatedback to thelawsocieties,butconsumercom-plaints/grievanceswillbereviewedandpursuedbyagovernmentap-paratchik.Giventhehostilityofourowngovernorandpresidentandmanystateandfederallegis-latorstothe legalprofession,wewoulddowell tobeprepared torespondtothispotentialthreattoourindependentBar.

Contacts: Asimportantastheformalpro-gram for thismeetingwere theinformalgatheringsatwhichonewasabletomeetmanyofthebarleadersfromsuchdiversejurisdic-

tionsasBrazil,Australia,NewZealand,SouthAfrica,Switzer-land,Franceandof course, theUK.The caliber of the lawyerstherewasineverycaseveryhigh,lendingcredence toourconceptthatitisimportanttohavebeenpresentandforTheFloridaBartobeperceivedasanoptionwhenlegalservicesareneeded in theUnitedStates.

General Observation: Under thedirection ofMarkEllis, the executive director ofthe IBA, the IBAhasbecomeameaningfulpartof thepracticeoflawforlawyersinjurisdictionsaroundtheworld.TheCLEisofahighquality.The levelofpar-ticipation ishigh, and the IBAalsogoes far topromotepublicsectorprobonoassistancewhereappropriate,e.g.,wherethelegalsystemsarenotwelldevelopedandneedtoworkontheruleoflawconcept.

Holdthedate!

January17,2007

International Law Update and Certification Review

HyattRegencyMiamiMiami,Florida

1�

Puerto Rico Labor Laws: Recent Amendments to Christmas Bonus Act and Law 80

By Mark R. Cheskin1 and Maria Eugenia Ramirez2

TheislandofPuertoRicoisaself-governingcommonwealthassociatedwith theUnitedStatesofAmerica.AsaresultofPuertoRico’scommon-wealthstatus,bothlocalandfederallaborlawsapply. Intheemploymentcontext,Puer-toRico is one of themostheavilyregulated jurisdictions within theUnitedStates.TwoofPuertoRico’smoreunique local labor lawshaveundergonerecentamendmentsasthelocalgovernmentstrives toprovideevengreaterprotectionsandrightsfor employees on the island.Thisarticleprovidesabriefsummaryofthe recent amendments to PuertoRico’s“ChristmasBonus”Actanditsmandatoryseverancelaw.

A. Christmas Bonus Act�

UnderPuertoRicolaw,everyem-ployerwhoemploysmore thanoneemployee in the twelve-monthpe-riodcommencingonOctober1standending on September 30th of anyyearhasanobligation topayeachqualifiedemployee4whoworks700hoursormoreperyearamandatoryannualbonusor“ChristmasBonus”as it iscommonlyknown inPuertoRico.5TheChristmasBonusmustbepaidbetweenDecember1standDecember15thunlesstheemployerandtheemployeesmutuallyagreeonadifferentdateforitspayment.6

The Christmas BonusAct wasamendedseveralmonthsagoto in-creasetheamountoftheChristmasBonus,whichhadnotbeenrevisedsincetheenactmentofthestatutein1969.7Prior totheamendment, theChristmasBonusActrequiredquali-fiedemployerstopaytheiremployeeswhoworked700hoursormore (or100hoursormoreinthecaseofdockemployees)abonusequivalentto2%ofthetotalsalaryoftheemployeeuptoamaximumofUS$10,000.8ThismeantthatanemployeewhosesalarywasUS$10,000, for instance,wouldbeentitledtoabonusofonlyUS$200attheendoftheyear. Now,anemployerwhoemploysfif-teenemployeesorlessisobligatedto

payqualified employees the follow-ingbonus: (i) 2.5%of the total sal-aryoftheemployeeuptoamaximumofUS$10,000forthe2006bonus; (ii)2.75%of the total salaryof theem-ployeeuptoamaximumofUS$10,000forthe2007bonus;and(iii)3%ofthetotal salaryof theemployeeup toamaximumofUS$10,000forthe2008bonus.9Thoseemployerswhoemploymorethanfifteenemployeesareobli-gatedtopayqualifiedemployeesthefollowingbonus:(i)3%ofthetotalsal-aryoftheemployeeuptoamaximumofUS$10,000forthe2006bonus; (ii)4.5%ofthetotalsalaryoftheemployeeuptoamaximumofUS$10,000forthe2007bonus;and(iii)6%ofthetotalsal-aryoftheemployeeuptoamaximumofUS$10,000forthe2008bonus.10

PaymentoftheChristmasBonusunderPuertoRicolaborlawisman-datory,andfailuretopayitwillleadtopenalties and fines for the em-ployer.11

B. Employment Termination UnderPuertoRicolaborlaw,sever-ancepayalsoismandatoryforallem-ployeeswhoareunjustlydischargedfromtheiremployment,thatis,em-ployeeswhoareterminatedwithout“justcause.”12Thisrighttoseverancepaycannotbewaivedbytheemployerortheemployee.13

“Justcause” isdefinedasoneormoreofthefollowing:

(i)That the employee indulgedinapatternof improperordis-orderlyconduct;

(ii)That the employee did notperformhisworkinanefficientmanner, or did it belatedly andnegligently or in violation ofthe standards of quality of theproduct(s) produced or handledbytheemployer;

(iii)That the employee repeat-edlyviolatedthereasonablerulesand regulations established bythe employer for its businessoperations (provided a writtencopy thereof was opportunely

furnishedtotheemployee);

(iv)That there was a full, tem-porary, or partial closing of theoperationsoftheemployer;

(v)That there were technologi-calorreorganizationchangesaswellaschangesofstyle,designorthenatureof theproductmadeorhandledbythecompany,andchangesintheservicesrenderedtothepublic;

(vi)That there were reductionsof the employment force madenecessarybya reduction in theanticipatedorprevailingvolumeofproduction,salesorprofitsatthe time of the employee’s dis-charge.14

ThePuertoRicoLegislaturerecent-lyamendedtheamountofstatutoryunjustdismissal indemnity.15Priortotheamendment,employershadtopayemployees terminatedwithout“justcause”thefollowingseverance:(i)(a)anamountequaltoonemonthoftheemployee’ssalaryforthoseem-ployeeswhohadlessthanfiveyearsof service; (b) anamount equal totwomonthsoftheemployee’ssalaryforthoseemployeeswhohadatleastfiveyearsbutlessthanfifteenyearsofservice;or(c)anamountequaltothreemonthsoftheemployee’ssalaryfor thoseemployeeswhohadmorethanfifteenyearsofservice;and(ii)anamountequivalenttooneweekofsalaryforeveryyearofserviceoftheemployee.16

Under thenewamendment,em-ployeeswhoareunjustlyterminated,thatis,without“justcause,”areen-titled to the following mandatoryseverancepay:

(i) 2 months of salary if the em-ployee has less than 5 years ofservice;or3monthsofsalaryiftheemployeehasatleast5yearsbutlessthan15yearsofservice;or6months of salary if the employeehasmorethan15yearsofservice;

and

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(ii) an additional compensationconsistingof1weekofsalaryforeach year of service if the dis-chargeoccurswithin thefirst5yearsofemployment;or2weeksofsalaryforeachyearofserviceifthedischargeoccursafter5yearsofservicebutbefore15yearsofservice;or3weeksofsalaryforeach year of service if the dis-charge occurs after completing15yearsormoreofservice.17

Eveniftheemployeeisnotentitledtoamandatoryseverance,anemployermaypayanamountequivalenttotherequired“severance”underthelawtohelptheformeremployeeinthetransi-tionperiodbetweenjobs,toavoidpos-siblefuturelitigationcosts,orforanyotherreasonexpressedbytheemploy-er.Themereofferingofthispaymentor itsactualpayment to the formeremployee,however,doesnotconstituteanadmissionbytheemployerthatthe

dismissalwas“unjust.” In short,PuertoRicooffers em-ployeeswithinitsjurisdictionspecialprotectionsandrights,andemployersmustbeawareoftheselawsorfacesignificantpenaltiesor court chal-lengesfromtheiremployees.

Endnotes:1 MarkCheskin isapartnerwith the lawfirmofHogan&Hartson,L.L.P., inMiami,Florida,andisamemberofthefirm’slaborandemploymentandcommerciallitigationpracticegroups.2 MariaEugeniaRamirez is anassociatewiththelawfirmofHogan&Hartson,L.L.P.,inMiami,Florida,andisamemberofthefirm’slaborandemploymentandinternationallitiga-tionandarbitrationpracticegroups.3 Copies of the Puerto Rico laws and/oramendmentscited inthisarticlemaybeob-taineduponwrittenrequesttoHogan&Hart-sonL.L.P.,c/oMariaEugeniaRamirez,1111BrickellAvenue,Suite1900,Miami,Florida33131.4 Employeesengaged in farmingactivities,housekeeping,charitableentities,localgovern-ment,orwhoreceiveannualbonusesthrough

acollectivebargainingagreement(withafewexceptions)arenotqualifiedemployeesunderthelaw.SeeP.R.LawsAnn.tit.29,§505.Ex-ecutives,administrators,andprofessionals,however,arecoveredunderthelaw.5 See P.R. Laws Ann. tit. 29, §§501-507(“ChristmasBonusAct”or“LaLeydelBonodeNavidad”asitisknowninPuertoRico).6 Seeid.§502.7 SeePuertoRicoLawNo.124ofSeptember29,2005(“Law124”).8 See P.R. LawsAnn. tit. 29, §501(2005)(amended2005).9 SeePuertoRicoLawNo.124.10See id.11Id.12SeeP.R.LawsAnn.tit.29,§§185a-185l(col-loquiallyknowninPuertoRicoas“Law80”).13See id.§185i(“Law80”).14Id.§185b(“Law80”).15PuertoRicoLawNo.128ofOctober7,2005(“Law128”).ThisamendmentdoesnotappeartoberetroactivetoclaimswheretheallegedunjustdischargeoccurredpriortotheOctober2005enactmentofLaw128.16SeeP.R.LawsAnn. tit.29, §185a (2005)(amended2005).17SeePuertoRicoLawNo.128 (emphasisadded).

ThinkingAboutBecomingBoardCertifiedin

InternationalLaw?

TheapplicationfilingperiodfortheMarch16,2007examinationstartsonJuly1andendsonAugust31,2006.

The following minimum requirements must be met by August 31, 2006: a minimum of 5 years in the practice of law; demonstration of substantial involvement (defined as devoting no less than 50%) in the practice of international law during the 3 years immediately preceding the date of application; comple-tion of at least 60 continuing legal education hours in international law activities within the 3 year period preceding the date of application; peer review of 5 attorneys or judges who can attest to your reputation for knowledge, skills, proficiency and substantial involvement as well as your character, ethics and pro-fessionalism in the field of international law. You must also pass an examination applied uniformly to all applicants.

You can obtain an application by downloading a copy from the Bar’s website (www.floridabar.org). Click on the Professional Practice link, then Certification. You can also request an application by writing to: The Florida Bar, Legal Specialization and Education, 651 East Jefferson Street, Tallahassee, FL 32399-2300. Please read the standards and policies for the international law certification plan (Rule 6-21) on the Bar’s website at the same link referenced above.

Questions? Please call Adam Brink at the Legal Specialization and Education Department of The Florida at (850) 561-5850.

20

The Role of the L-1 Visa in aRestrictive Immigration Environment

By Larry S. Rifkin, Esq. and Monica P. Hagan, Esq.

As of this writing, immigrationpractitionersare facedwithadis-couragingtrendinemploymentbasedimmigration:theincreasingunavail-abilityofimmediateoptionsforalienworkers seeking temporaryand/orpermanentemploymentintheUnit-edStates. For example, the 65,000 H-1B1non-immigrantvisacategorycapfortheUSCitizenshipandImmigrationServices’(“USCIS”)2006fiscalyearwas exhaustedwithinamatter ofafewmonths,evenbeforethestartofthe2006fiscalyearonOctober1,2005.ThisquickdepletionofH-1B1non-immigrant visas has closed apopularavenueusedbyU.S. com-paniestohirequalifiedalienwork-erswhopossessabachelor’sdegree,itsequivalency inexperience,or itsequivalency throughacombinationofeducationandexperience.1Manyof thequalifiedalienworkersmayneedtowaituntilthestartoffiscalyear2007onOctober1,2006,tobeabletoworkforaU.S.companythatiseagertohirethematthistime. Another setback to employmentbased immigrationcanbe found intherecentvisaretrogressionphenom-enonestablishedbytheDepartmentofStateinitsOctober2005VisaBul-letin,whichsignificantlyretrogressedtheprioritydatesoftheemploymentbased3rd immigrantvisacategory.Asaresultofvisaretrogression,analienworker,whodoesnotpossessaMasterorhigherdegree,andisthebeneficiary of a labor certificationfiledwiththeDepartmentofLaborunder Reduction in Recruitment(“RIR”)orPERM,mayhavetowaitseveralmonthsorevenyearsbeforebecomingeligibletofileanapplica-tionforlawfulpermanentresidencyunder the employment based 3rdimmigrantvisa category.2 Inmanycases,asaresultof this change inpolicyby theDepartmentofState,practitionershavebeenforcedtofindnewwaystomaintainlawfulnon-im-migrantstatusfortheirclientswhiletheyawaittheavailabilityofavisaintheemploymentbased3rdimmigrantcategory.

Theabovecircumstancesrequirepractitioners to reevaluate theop-tionsavailabletotheirclients.Someclientsmaybeabletoavoidthelim-itedavailabilityof theH-1B1non-immigrantvisaandtherecentvisaretrogressionphenomenon,byavail-ingthemselvestotheL-1Anon-immi-grantvisacategoryanditsoffshoot,theemploymentbased1stimmigrantvisacategoryformultinationalexecu-tivesandmanagers.

Overview of the L-1 Visa Category TheL-1nonimmigrantvisa cat-egory for intracompanytransfereesprovidesavehiclebywhichU.S.busi-nesseswithan internationalpres-enceand internationalbusinessesseekingexpansion into theUnitedStates can transferexecutivesandmanagers(undertheL-1Avisa)andspecializedknowledgeprofessionals(undertheL-1Bvisa)totheUnitedStatesforpurposesofworkingintheUnitedStatestemporarily.3Assuch,U.S. companies thatareaparent,branch, subsidiary, oraffiliateofacompanybased inanother countryare able to utilize the L-1 visa totransferkeyemployees to theU.S.companyforatemporaryperiod.See8CFR§214.2(l). Tobe eligible foranL-1visa,aforeign national must have beenemployedabroad (i.e.physically lo-catedoutsideof theUnitedStates)bythe foreigncompanyforat leastonecontinuousyearduringthepre-cedingthreeyears inamanagerialorexecutivepositionorinapositionrequiringspecializedknowledge.Theforeignnationalmustbecomingtothe United States to provide ser-vices toaqualifyingU.S. companyinasimilarexecutive,managerialorspecializedknowledgeposition.See8CFR§214.2(l)(1)(i). L-1visasarenormallyinitiallyis-suedforthreeyears.ExecutivesandmanagerscanrenewtheirL-1Avisaforamaximumofsevenyears,whilespecializedknowledgeprofessionalsmayrenewtheirL-1Bvisaforamaxi-mumoffiveyears.L-1visaextensions

are normally granted in two yearincrements,andrenewalapplicationsutilizing Form I-129 may be filedduringthesix-monthperiodpriortotheexpirationoftheapprovedstay.FornewU.S.officesthathavebeenopenforlessthan1year,aone-yearL-1visawillbeissuedtotheforeignworker.Anextensionbeyondtheini-tialL-1visayearwillonlybegrantediftheU.S.companycandemonstratethatithasremainedactiveandhasproceeded with the business planthatwasoutlinedintheoriginalL-1petition, includingproofofengage-mentofU.S.workersandbusinessactivity. The spouses and children of L-1 visa holders are allowed to ac-company their familymembers totheUnitedStatesonL-2visas.ThespouseofanL-1visaholderiseligibletoobtainemploymentauthorizationforthedurationofhisorherstayintheUnitedStatesundertheL-2visa.Minor children (under21years ofage)L-2visaholdersarenoteligibleforemploymentauthorization.

The L-1A Visa for Managers and Executives TheL-1Avisais issuedtotrans-feree executives and managers.AforeignemployeetransferredtotheUnitedStatesunderanL-1AvisainamanagerialorexecutivecapacitymayworkintheUnitedStatesforuptosevenyears. ExecutiveCapacityforpurposesoftheL-1AvisaisdefinedbyUSCISreg-ulationsat8CFR§214.2(l)(1)(ii)(C)asanassignmentwithinanorganiza-tion inwhichtheemployeeprimar-ily:

• Directs the management of theorganization or a major compo-nentorfunctionoftheorganiza-tion;

• Establishesthegoalsandpoliciesoftheorganization,component,orfunction;

• Exerciseswidelatitudeindiscre-tionarydecision-making;and

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Visitthesectionwebsite:

internationallawsection.org

continued, next page

• Receivesonlygeneralsupervisionordirectionfromhigherlevelex-ecutives,theboardofdirectors,orstockholdersoftheorganization.

ManagerialCapacityforpurposesoftheL-1Avisa isdefinedbyUSCISregulationsat8CFR§214.2(l)(1)(ii)(B)tomeananassignmentwithinanorganizationinwhichtheemployeeprimarily:

• Manages the organization, or adepartment, subdivision, func-tion,orcomponentoftheorgani-zation;

• Supervisesandcontrolstheworkofothersupervisory,professional,ormanagerialemployees,orman-agesanessentialfunctionwithintheorganization,oradepartmentor subdivision of the organiza-tion;

• Has the authority to hire andfireorrecommendthoseaswellasotherpersonnelactions(suchas promotion and leave autho-rization) ifanotheremployeeorotheremployeesaredirectlysu-pervised;ifnootheremployeeisdirectlysupervised,functionsataseniorlevelwithintheorgani-zationalhierarchyorwithrespecttothefunctionmanaged;and

• Exercises discretion over theday-to-dayoperationsof theac-tivity or function for which theemployeehasauthority.Afirst-linesupervisorisnotconsideredto be acting in a managerialcapacitymerelybyvirtueofthesupervisor’s supervisory dutiesunlesstheemployeessupervisedareprofessional.

For foreign worker transfereescoming to theUSasamanageror

executive foraUScompanyofficethathasbeenconductingbusinessforlessthanoneyear,thegovernmentismorelenientwithitsmanagerialandexecutivedefinitions.Insuchcircum-stances,theL-1Apetitionmustshow,amongotherrequirements,thattheproposedemploymentwill supportanexecutiveormanagerialpositionwithinoneyear.

The L-1B Visa for Specialized Knowledge Workers TheL-1Bvisais issuedtotrans-feree employees with specializedknowledge.To qualify for special-izedknowledge, theemployeemustpossessspecialknowledgeofthepe-titioningorganization’sproduct,ser-vice,research,equipment,techniques,management,orotherinterestsanditsapplicationininternationalmar-kets,oranadvancedlevelofknowl-edgeintheorganization’sprocessesandprocedures.8CFR§214.2(l) (1)(ii)(D). A foreignworker transferred totheUnitedStatesunderanL-1BvisamayworkintheUnitedStatesforuptofiveyears. TheL-1VisaReformActof2004(“L-1ReformAct”) ,whichbecameeffective on June 6, 2005, made asignificantchangeto theL-1Bvisacategorybyaddinganti-jobshopre-strictions.Theanti-jobshoprestric-tionisdetailedinWilliamR.Yates’InterofficeMemorandumHQ70/8(Yates’L-1Memorandum)datedJuly28,2005,asfollows:“Thefirstsignificantchangeeffectedby theL-1VisaReformAct is thatanalien isnowexplicitly ineligiblefor classification as a specializedknowledge worker non-immigrant(L-1B)visaiftheworkeris“stationed

primarily”attheworksiteofanem-ployerother than thepetitioneroranaffiliate,subsidiary,orparentandeitherofthefollowingoccurs:(a)thealienwillbe“principally”underthecontrolandsupervisionoftheunaf-filiatedemployer,or(b)theplacementatthenon-affiliatedworksiteis“es-sentiallyanarrangementtoprovidelaborforhirefortheunaffiliatedem-ployer,”rather thanaplacement inconnectionwith theprovisionofaproductorserviceforwhichspecial-izedknowledgespecific to thepeti-tioningemployerisnecessary.”4

Thisnewgroundof ineligibilityapplies to all petitions filed on orafterJune6,2005,includinginitial,amendedorextendedL-1Bvisape-titionrequests. INA§214(c) (2) (F)doesnotapply toL-1Amanagerialorexecutiveforeignworkers.Further,forINA§214(c) (2) (F)toapply,theforeignworkermustbe“stationedprimarily”ataworksiteoutsidetheU.S.petitionercompany’sorganiza-tion.Assuch,amajorityoftheforeignworker’swork-relatedactivitiesmustoccuratalocationotherthanthatofthepetitioneroritsaffiliates. However, themere fact ofbeingstationed primarily outside the LorganizationisnotnecessarilyabartoobtainingL-1Bstatus.TheYates’L-1Memorandumrefers tovariousscenarios,andacknowledgesthatanL-1Bworkerwhoisstationedprimar-ilyoutside theLorganization,butreceivesalldirectionandinstructionfromasupervisorfromwithintheLorganizationmaybestillbefoundeli-gibleforL-1Bclassification.However,ifthecontrolandsupervisionoftheforeignworkerat thenon-affiliatedworksiteisprincipallybytheunaffili-atedemployer,thentheINA§214(c)(2)(F)barapplies.

22

ROLE OF L-1 VISAfrom preceding page

TheINA§214(c)(2)(F)bartoL-1Bstatusdoesapply if theoff-siteactivitiesoftheforeignworkerdonotrequirespecializedknowledgeofthepetitioner’sproductorservices,orifsuchknowledgeisonlytangentiallyrelatedtotheperformanceofsuchoff-siteactivities.Assuch,INA§214(c)(2) (F) significantly restrictsusageof theL-1Bforeignworkernon-im-migrantvisa.

The Blanket L Visa AnotheraspectoftheL-1visathatisoftenutilizedbyU.S. companieseligibleforL-1sponsorshipistheL-1“blanket”petition. AblanketLpetitionallowsem-ployerstohaveapetitiononfilethatcertifiesthattheorganizationmeetsthe requirementsof theblanketLvisaprogram.ThisU.S.companyuti-lizesastreamlinedprocesstobringanintracompanytransfereeintotheUnitedStates,allowingthe foreignworkerapplicanttoforgotheinitialfilingwith theU.S.Citizenship&ImmigrationServices(USCIS).How-ever,theforeignworkerwillstillberequiredtoattendaconsularinter-viewattheapplicableUnitedStatesConsulatebeforebeing issuedanLvisa. Toreceiveblanketapproval,aU.S.companymustmeet the followingqualifications for theblanketpeti-tion:(1)theU.S.petitionercompanyanditsentitiesareengagedincom-mercialtradeorservices;(2)theU.S.companymusthavebeendoingbusi-ness intheU.S. forat least1year;(3) itmusthaveat least3ormoredomesticorforeignbranches,subsid-iaries,oraffiliates;and(4)mustshowoneof the following: (a)at least10L-1visashavebeenapprovedduringtheprevious12months,(b)U.S.salesofat least$25million,or (c)aU.S.workforceofatleast1,000employees.See8CFR§214.2(l)(4)(i). The L-1 ReformAct previouslymentioned,whichbecameeffectiveonJune6, 2005, alsomadea sig-nificantchangetotheblanketLvisaprogrambymodifyingtheeligibilityrequirements forL-1 intracompanytransfereescoveredunderablanketpetitionfiledpursuanttoINA§214(c)

(2)(A)or8CFR§214.2(l)(4).TheL-1ReformActamendsINA§214(c)(2)(A)andrestorespriorlawrequiringthattheL-1beneficiaryofablanketLpetitionhavebeenemployedabroadbytheLentityforaperiodof1year,insteadof 6months.Theeffectivedateof thismodification isJune6,2005.

The L-1 Visa as an Alternative to the H-1B Visa Historically,L-1visausagehasalways laggedbehind theusageofthe H-1B, a popular worker non-immigrantvisa forprofessionals inspecialtyoccupations.Tobeeligiblefor theH-1Bvisa,a foreignworkermustpossessaminimumofaU.S.bachelor’sdegree,itsforeignequiva-lent,oracombinationofeducationandexperiencethatisequivalenttoaU.S.bachelor’sdegree.5TheH-1Bvisaisnormally issued foramaximumof6years,withextensionsbeyondthe6thyearavailableundercertaincircumstances. AstheH-1Bvisacapwasquicklyexhaustedforfiscalyear2006,prac-titionersmustconsiderotheravenuesofrelieffortheirclients.Atpresent,theL-1visaprogramisnotsubjecttoastatutoryyearlycap.Therefore,if a clientmeets thequalificationsmentionedaboveundertheL-1visaprogram,theL-1visawouldbeasuit-ablealternative for certain foreignworkerswhocannotavailthemselvesoftheH-1Bvisauntillatenextyear. AnadvantagetousingtheL-1visaprogram is that theU.S. companycan independently set the foreignworker’s salary,whileaminimumsalaryrequirement(prevailingwage)is set for the foreignworkerundertheH-1Bvisaprogram.Further,theU.S. companyunder theH-1Bvisaprogramisrequiredtofileanattes-tationformwiththeDepartmentofLaboragreeingtocertainconditions.6U.S.companiesutilizingtheL-1visaprogramarenotsimilarlyburdenedbecausetheL-1foreignworkerisnottechnically considered a new hirethat could displace a U.S. worker.Rather, theL-1 foreignworker isatemporarytransfereefromwithintheorganization. Anotheradvantageforclientsuti-lizingtheL-1visaprogram, is thattheiraccompanyingspousesare is-

suedL-2visas,makingthemeligiblefor employmentauthorization.Bycontrast,theaccompanyingspouses(H-4)ofH-1Bvisaholdersareineli-gibleforemploymentauthorization.Thisisasignificantandcriticaldif-ferencebetweenthetwocategories,asH-4spousesmayfindthemselvesresidingintheUnitedStatesforsev-eralyearswithouttheabilitytoworkintheUnitedStates. TheL-1Avisaforexecutivesandmanagersisissuedforamaximumof7years.TheL-1Bvisaforspecializedknowledgeworkers is issued foramaximumof5years.TheH-1Bvisaisnormallyissuedforamaximumof6years.However,unliketheL-1AandL-1Bvisa,theH-1Bvisacanbeex-tended,undercertaincircumstances,beyondthe6thyear.

Lawful Permanent Residency for Multinational Executives and Managers Despite theirdifferences, theH-1BandL-1visaprogramssharethesignificantcommondoctrineof“dualintent,”7bywhichaforeignworkerinvalidH-1BorL-1statusmaypursuelawfulpermanent residencywith-out jeopardizinghis orherabilitytomaintainhisorherH-1BorL-1status.As such, theU.S. companyemployingeitheranH-1BorL-1for-eignworkercanpetitionthatworkerforapermanentpositionintheU.S.company. In this respect, both theH-1BandtheL-1arepreferable toothernon-immigrantvisas thatdonotallow fordual intent.However,in applying for lawful permanentresidency, theL-1 foreignworker isinamoreadvantageouspositionthantheH-1BforeignworkerbecausetheL-1foreignworkercanforgothelaborcertificationprocessbefore theDe-partmentofLaborthatisaprerequi-siteforH-1Bvisaholderswhowishtopursue lawfulpermanentresidencyin theUnitedStates.By foregoingthelaborcertificationprocess,theU.S.companycandirectlypetitiontheL-1foreignworkerforpermanentemploy-mentwithouthavingtofirstconductanextensiverecruitmentprocess insearchofqualifiedU.S.workersbeforeoffering theposition to the foreignworker.TheH-1Bforeignworkercanonlybepetitionedforlawfulperma-nentresidencybytheU.S.company

2�

if theresultsof recruitmentdonotproduceaqualifiedU.S.worker. TheL-1 foreignworker thatap-pliesforlawfulpermanentresidencydoessoundertheemploymentbased1st immigrant visa category.8TheH-1Bforeignworkerthatappliesforlawfulpermanentresidencymainlydoessoundertheemploymentbased3rd immigrantvisacategory.9Asofthiswriting,due torecentprocess-ing changesby theDepartmentofStateinitiatedintheirOctober2005VisaBulletin,visaretrogressionhasoccurred in theemploymentbased3rd immigrantvisacategorywhichcanpotentiallydelaytheabilityofaforeignworkertofileanapplicationfor lawfulpermanentresidencyun-derthatcategoryformonthsorevenyears.10Bycontrast,theemploymentbased1st immigrantvisa categorythatappliestomultinationalexecu-tivesormanagers(L-1visaholders)isnotsubject tovisaretrogression.Assuch,themultinationalexecutiveormanagerimmigrantvisacategoryis“current,”meaning that theL-1foreignworkercanimmediatelyap-plyforlawfulpermanentresidency,solongastheU.S.petitionercompanyhasbeen inbusiness intheUnitedStatesforatleastoneyear. Amultinationalexecutiveorman-agercanapplyforlawfulpermanentresidencyunderthefollowingcircum-stances:11

• TheU.S.petitionercompanymustbetheparent,subsidiary,branchoraffiliateofacompanyinafor-eigncountry

• Duringthe3yearperiodpreced-ingtheapplicant’sentryintotheU.S., the applicant must haveworked at least 1 year over-seaswiththeparent,subsidiary,branch or affiliated company oftheU.S.company.

• The position that the applicantheldinthecompanyabroadwasat an executive or manageriallevel,andnotasafirst-linesu-pervisor.

• Theapplicantisbeingofferedapermanent executive or mana-gerial position at the U.S. com-pany

• The U.S. company has been inbusinessforatleastoneyear.

PriorL-1Astatusisnotaprerequi-

siteforeligibilityundertheemploy-mentbased1stimmigrantcategoryformultinationalexecutivesorman-agers.Duetothesimilaritybetweenthetwocategories,manyapplicantsforlawfulpermanentresidencyunderthemultinationalexecutiveorman-agercategoryhaveinitiallyheldL-1Avisastatus.However,itisimportanttonotethatholdingL-1Astatusdoesnotguaranteethatanapplicationforlawfulpermanent residencyunderthemultinationalexecutiveormana-gerialcategorywillbegranted. L-1BspecializedknowledgeforeignworkersarenoteligibletobypassthelaborcertificationprocessunlesstheU.S. petitioner company candem-onstrate that theapplicant servedasanexecutiveormanager for thecompanyabroadandthepermanentpositionbeingoffered intheU.S. isexecutiveormanagerialinnature.

Conclusion Basedon thecurrent restrictiveImmigrationclimate thatwemustpracticein,practitionersmustevalu-ateallpossibilitiesavailablefortheirclients.Inthisrespect,itisimportanttokeep inmind that even thoughotheravenuesofreliefmaybetempo-rarilyunavailableordelayed,theL-1Anon-immigrantvisacategoryanditsoffshoot, theemploymentbased1stimmigrantvisacategoryformul-tinationalexecutivesandmanagersmaybeaviablealternativeforyourclients.

Endnotes:1 OnOctober20,2005,theSenateJudiciaryCommittee,aspartofthebudgetreconciliationprocess,passedaproposaltoprovidetempo-

raryrelieffromtheH-1Bcaplimitation.TheSenate’spackagewould recapture300,000unusedH-1BnumbersdatingbacktoFY1991,ofwhich30,000visanumberswouldbeavail-ableannually,increasingthecapfrom65,000to95,000H-1Bvisas forat least10years.Unfortunately,thislanguagewasdeletedfromthefinalproposal.2 TheaforementionedSenateJudiciaryCom-mittee’sproposalthatwaspassedonOctober20,2005alsocontainedlanguagetoalleviatetheemploymentbasedimmigrantvisaback-logs.Theproposalwouldallowfortherecap-tureofunusedemploymentbasedvisasfromprioryearsandallowindividualstoapplyforadjustmentofstatusbeforeanimmigrantvisaisdeemedcurrentlyavailable.Thislanguagewasalsodeletedfromthefinalproposal.3 The aforementioned Senate JudiciaryCommittee’s proposal that was passed onOctober20,2005alsocontained languagetoincreasethefilingfeesonL-1visasby$750.00.OnSeptember28,2005,theHouseJudiciaryCommitteeapprovedH.R.3648 thatwouldimposea$1,500.00 fee onL-1applicationsundertheblanketL;initialL-1petitionsfiledwithUSCIS;andfirsttimeL-1extensions.4Codified in Immigration&NationalityAct(INA)§214(c)(2)(F).5 8CFR§214.2(h)(4)(i)(A)(1).6 8CFR§214.2(h)(4)(i)(B)(1).7 INA§214(b)ofINApresumesthataliensseekingadmissionto theU.S.arecomingtotheU.S. toresidepermanently, thusbarringalienswho intend tobecome lawfulperma-nentresidentsfromobtainingnon-immigrantvisas.However,H-1BandL intracompanytransfereesareexemptfromtherequirementtoprovethattheydonotwanttoliveintheU.S.permanently.8 8CFR§204.5(j).9 8CFR§204.5(l).10The aforementioned Senate JudiciaryCommittee’s proposal that was passed onOctober20,2005alsocontained languagetoalleviate theemploymentbased immigrantvisabacklogs.Theproposalwouldallowfortherecaptureofunusedemploymentbasedvisasfromprioryearsandallowindividualstoapplyforadjustmentofstatusbeforeanimmigrantvisaisdeemedcurrentlyavailable.Asofthiswriting,thebudgetreconciliationprocesshadnotbeencompleted.118CFR§204.5(j).

On-line Seminarsavailable on

The Florida Bar’s web site(www.FloridaBar.org)

through Legal Span

2�

Former Peruvian Ombudsman Receives Jon Mills Award at UF Conference in Peru FormernationalOmbudsmanofPeruJorgeSantistevandeNoriegareceivedtheJonMillsAwardforSig-nificantContribu-tionstoRelationsbetween FloridaandtheAmericasat theUniversityofFlorida’sCon-ference onLegal& Policy Issues,held in Lima,Peru,May25and26. Santistevanwasthefirst-evernationalombuds-maninPeru,pro-tecting citizensagainstabusebypublic officialsand serving asan independentwatchdog, withthe jurisdictionto challenge thepresident, courts,andpolice.AsVicePresidentof the InternationalOm-budsmanInstitute(IOI)andthroughhis involvement in theFederationofOmbudsmen(FIO),hepavedthewayforotheremergingdemocracies,manyofwhichhavesincecreatedanombudsmanposition. “Jorge Santistevan is a centralfigureinthedevelopmentoftheruleof law inPeruand theAmericas,”saidDeanEmeritusJonMills, di-rectoroftheCenterforGovernmen-talResponsibilityatUF’sLevinCol-legeofLaw,afterwhomtheawardisnamed.“We,attheUniversityofFlorida, have been fortunate that

hehassharedhisexperiencewithusandourstudents.” As a visiting professor at the

Levin College of Law in January2006, Santistevan gave a publiclecture onhuman rightsand civilsociety forwhichhewasawardedBestSpeaker of 2005-2006by theInternationalLawStudentsAsso-ciation,anon-profitorganizationofstudents and young lawyers withover150chaptersworldwide.San-tistevan began forging close tieswithUFduringhisconferencepar-ticipation in previous years, andwasinstrumentalinthisyear’scon-ferenceplanning. Theannualconferencebringsto-getherattorneys,judges,policymak-

ersandmembersofthebusinessandacademiccommunitytodiscusstheruleoflawandjusticereformthrough-

outtheAmericas.Thisyear,confer-enceparticipants-which includedPeruvian Presi-dent AlejandroToledo and U.S.Ambassador toPeru J. CurtisStruble-focusedontheneedtore-formthePeruvianjusticesystem. Pastaward re-cipients include:KennethH.“Bud-dy” MacKay, Jr.,former governorof Florida andspec ia l Whi teHouse envoy tothe Americas ;Alejandro Ogar-rio, president of

theMexicanBarAssociation;MiamiattorneyRaulValdes-Fauli;andBra-zilianenvironmentalattorneyPaoloRobertoPereiradeSouza. Formore informationabout theconferencevisithttp://www.law.ufl.edu/cgr/conference/. FormoreinformationcontactJonMills,DeanEmeritusandDirector,Center for Governmental Respon-sibility,UniversityofFloridaLevinCollegeofLaw,352-273-0835,mills@law.ufl.edu,orMeredithFensom,Di-rector of the Law & Policy in theAmericasProgram, fensom@law.ufl.edu.

Award recipient Jorge Santistevan (center) , former US Ambassador to Peru Dennis Jett (left) and Director for the Center for Governmental Responsibility Jon Mills (right) .

2006 – 200� International Law Section OfficersFrancesca Russo – Di Staulo, Miami – Chair

Edward H. Davis, Jr., Miami – Chair-Elect

J. Brock McClane, Orlando – Secretary

Francisco Corrales, Plantation – Treasurer

John H. Rooney, Jr., Miami – Immediate Past Chair

25

National Benefits Center/Florida Bar Liaison MeetingJanuary 1�, 2006

Attending on behalf of The Florida Bar:

LarryS.Rifkin,Esq.CeciliaM.Olavaria,Esq.Attending on behalf of theNational Benefits Center:

RobCowan,DirectorJackBennett,DeputyDirectorTerriRobinson,AssistantCenterDi-

rector,CustomerRelationsChrisSaucedo,ActingAssistantCen-

terDirector,AdjudicationsCindyEinhellig,Supervisor,Congres-

sionalLiaisonGroupJanet Clay, Congressional/Attorney

LiaisonLeslieTritten,CenterAdjudications

Officer

1. What is the policy re: submitting photos with EAd applications with adjustment applications? Since the client is later sched-uled for a biometrics appointment where a digital photograph is taken for production of the card, we have not submitted photos, but lately, we have received a couple of RFEs asking for pictures. Applicantsshouldcontinuetosub-mitphotographsifrequiredbyForminstructionsuntiltheinstructionsarechanged.However,theNBCdoesnotnormallyrequestphotographswhenelectronicbiometricsare captured.PleaseprovideuswithexamplesofcasesyoubelievewereRFEdinerrorthroughtheNBCAttorneyLiaisonMailbox. Inaddition,theNBCwillraisetheissueofupdatingForminstructionswithUSCISHeadquarters.

Practice Point Photos shouldbe submitted forI-131sbecausethesearescannedtogeneratethedocument.AlsophotosmayberequestedforanI-130inin-stancesinwhichtheI-485isdenied,andtheI-130isapprovedandtrans-ferredtoNationalVisaCenter.

2. Why did the NBC stop allowing

clients to self-schedule biometric appointments through the 1-800 number? ASC scheduling processes havechanged for cases handled by theNBC. Specifically, applicants whofiled cases thatwere receipted onor after July25th, 2005 receiveaseparatenoticefromtheNBCprovid-ingthemwithasetdate, timeandlocation for theASCappointment.(ApplicantswhofiledcasesthatwerereceiptedpriortoJuly25th,2005re-ceivedinstructionsviatheI-485and/orI-765ReceiptNotice(s)tocalltheNationalCustomerServiceCenter’s1-800 number to self-schedule anASCappointment.) Casescanonlymove forward forinterviewandadjudicationoncebio-metricsandfingerprintshavebeencaptured.Thepastpracticeofallow-ingapplicantstoscheduletheirownbiometricsappointmentsoften leftcasesina“limbo”status.Specifically,applicantswouldeitherdelay set-tingabiometricsappointmentornotsetanappointmentatall.Withoutfingerprints,thecasecouldnotmoveforward for interview,andwithoutaspecifiedfingerprintingdate, theServicehadnobasisuponwhichtodenythecaseforfailuretoappearatsuchanappointment.Providingtheapplicantwithasetfingerprintingand biometrics appointment dateensuresthatcasescanmoveforwardforadjudication.

Practice Point The system is about 98% accu-rateon locatingandcombininganapplicant’s I-485and I-765receiptnumbers onto one biometrics ap-pointmentnotice.However, if theseFormsarenotfiledtogether,orifthesystemcannotmatchanindividual’sI-765andI-485 foranyreason (i.e.because thenamesonbothFormsdonotmatchexactly,suchas“Mike”ononeapplicationand“Michael”onanother),thesystemmaynotbeableto issuea combinedbiometricsno-tice,andtheapplicantmayreceivetwoseparatebiometricsappointmentnotices.Ifthisoccurs,applicantsmaybring inbothreceiptnotices toone

of thescheduledappointments,andtheASCshouldbeable to capturebiometricsforbothreceiptnumbersatthesametime.

3. How long is NBC currently tak-ing to schedule biometrics for I-765’s? Upon receipt of the applicant’selectronic casedata, theNBC im-mediatelyforwardsthisinformationtoUSCISHeadquartersforApplica-tion Support Center (ASC) sched-uling. However, the date that theASCappointmentnotice ismailed,andtheappointmentdate,itself,aregreatlydependentonthecapacityoftheapplicant’s localASC.There isagreaterdemand forappointmentslotsatcertainASCs,andthismayaffecthowlongafterthedateoffilingtheapplicantisscheduledforthebio-metrics/fingerprintingappointmentandwhenheorshereceivesnoticeofthisappointment.

Practice Point Once the I-765 isapprovedandbiometrics are captured, theEADwillbeproducedandmailedwithin7to10daysafterthelastofthesetwoactionsoccurs(approvalorbiometricsupload).

4. Where do we request expedit-ed issuance of advance paroles: Through NBC or local USCIS of-fice? Customers or their representa-tivesrequestingexpeditedprocessingshouldfirstcontacttheirlocalFieldOffice.TheFieldOfficewillthenchan-nelmeritoriousrequeststhroughtheestablishedpointsofcontactat theNBCforfurtheraction.

5. What are the updated proce-dures to follow when we don’t re-ceive a receipt notice for an ap-plication? Pleasecontact theNBCthroughtheproceduresdetailedat theendof thisdocument (“Attorney/Accred-itedRepresentativeProcedures forContactingtheNBC”),providingtheapplicant’sname,dateofbirth,A-number,receiptnumber(MSC#),and

continued, next page

26

currentaddress,aswellasyournameastheattorneyofrecord.

Practice Point YouarenotrequiredtoprovideacopyoftheI-485receiptnoticeasevi-dencethatyoufiledthisapplicationwhenyousubmitarenewalI-765orI-131totheLockbox,butitishelpfulin theadjudicationof the I-765. Inmost cases, theNBCcannormallyfindevidenceofthependingI-485inthesystem.

6. In a situation where an Immi-grant Petition is denied for fail-ure to respond to RFE however attorney of record never received RFE or copy of denial despite nu-merous inquiries, what are the standards/procedure for request-ing that the Service reopen on its own without paying $385 filing fee? Where do you file Motions to Reopen? Pleasecontact theNBCthroughtheproceduresdetailedat theendof thisdocument (“Attorney/Accred-itedRepresentativeProcedures forContactingtheNBC”),providingtheapplicant’sname,dateofbirth,A-number,receiptnumber(MSC#),andcurrentaddress,aswellasyournameastheattorneyofrecord. Motions toReopenmaybefiled,withfee,withtheChicagoLockbox.

7. In Cuban Adjustment cases where the alien is claiming de-rived citizenship through a par-ent, members have recently re-ceived RFEs from NBC requesting a Certificate of Cuban Nationality from the Cuban Interests section in Washington, dC, while in other cases at other Service Centers, the USCIS has approved the cases directly. Is there some national standard/policy on this issue? Some CubanAdjustment caseshaveNBC (MSC) receiptnumbersbutareactuallybeingadjudicatedat theCaliforniaServiceCenterasinterviewwaiver cases.Thesepar-ticularRFEsmaybe coming fromtheCaliforniaServiceCenter.Pleaseprovideuswithspecificreceiptnum-bersofthecasesinquestionsothat

wecanresearchthisissue.

8. In family based cases (namely, son/daughter-parent relation-ships), we have seen NBC approve the I-130 petitions directly from the documentation submitted. If the alien has no admissibility issues (i.e. medical exam turned in, Petitioner overcomes public charge requirement, and the alien has no criminal record), can or will NBC approve the I-485 di-rectly without interview or is it mandatory that the case be sent to the local office for an interview? 8CFR245.6statesthateachappli-cantforadjustmentofstatusshallbeinterviewedbyanimmigrationofficer.However,inanefforttoreduceback-log,wehaverecentlyidentifiedcasesinwhichwehavemadean initialdeterminationthataninterviewmaynotbenecessary,andsentthesetotheCaliforniaServiceCenter (CSC) foradjudication.ThesecasesarebeingtransferredtotheCSCbecausetheycurrentlyhaveavailableofficers tohelp our officewith this caseload,whereastheNBCisstillworkingtoobtainouroptimumstaffinglevel. Thedetermination towaive theinterview isbaseduponstandardsset at the USCIS national level,and includeadjustment categoriesinwhich there isnormallyenoughevidencesubmittedwiththecasetomakeafinaldeterminationwithoutaninterview.TheNBCtakesintoac-countthesestandards,aswellasthespecificsituationofeachapplicant,in order to make a determinationastowhetherornotaninterviewisnecessary.Weidentifycasesthatmaybeeligibleforaninterviewwaiver,inpart,bymeansofanelectronicsweepof the case’s information obtainedfromtheI-485and/orI-130.

9. Will the NBC adjudicate I-130’s in marriage to USC cases with-out interview if the I-130 is sup-ported by sufficient documents of the validity of the marriage? (i.e. where the parties have already been married for a year or more and have good joint documenta-tion). NBC forwardsunadjudicated I-130s to theFieldOfficewiththeI-485,andadecisionwillbemadeonbothFormsat that time.Theonly

exceptiontothisiswhenanI-485isdeniedattheNBC;inthatevent,theI-130willbeadjudicatedseparately,onitsownmerits.

10. Michael Aytes (USCIS Act-ing director of domestic Opera-tions) recently announced that the submission of only the most recent year of Income tax returns (instead of 3 years) is required with the I-864. Are the Officers at NBC aware of this change? Yes,NBChaschangedourfilere-viewandRequestforEvidencepro-cesstoreflectthischangeonallcasesreviewed following the issuanceofthismemo.

11. If the I-485 file of an ap-plicant is at the local office (i.e. Miami) and the applicant moves out of the local office’s jurisdic-tion (i.e. to Orlando), is the appli-cant’s file returned to NBC to then be sent to the new USCIS office (Orlando) that has jurisdiction or does the first office (Miami) forward the file directly to the new office (Orlando)? MiamicanforwardthecaseontoOrlando;itdoesnotneedtoreturntotheNBCagain.

12. If we have a problem at the lockbox facility (i.e. application keeps getting wrongfully reject-ed), who can we contact at the facility, since the liaison contacts we have are in Missouri and the facility is in Chicago? At this time,please continue tosendyourquestionsregardingLock-box issues to theNBCthroughtheprocedures detailed at the end ofthisdocument(“Attorney/AccreditedRepresentativeProcedures forCon-tactingtheNBC”).

13. What issues do you have for us? How can we make your jobs easier; make the place run bet-ter? PleasereviewtheNBC’swebsiteonwww.uscis.gov(seelinkbelow),es-peciallythelistofFrequentlyAskedQuestions,which containsagreatdeal ofhelpful information. If youhaveanygeneralquestionsorcom-ments,orifyouhaveaquestionabouta specific case, please contact ourNBCAttorneyLiaisonMailboxand

MEETINGfrom preceding page

2�

provideasmuchspecificinformationasyoucantohelpusresearchtheseissues.

NBC Websitehttp://uscis.gov/graphics/fieldoffices/nbc/index.htm

Additional Practice Points

• NBCsendsdecision-readycasesto the District Offices. How-ever, the District Offices havestated that they have foundmany deficiencies in support-ing documentation that havedelayed decision making andcreated more continued cases,particularlywithregardtothosesupportingdocumentsrelatedtothe I-864Affidavit of Support.AsofJanuary3,2006,NBCnowreviewsallcasestocheckforanI-864andtherequiredsupport-ingdocuments,andtomakesurethattheI-864sponsormeetstheminimumincomerequirements.If not, NBC will issue an RFE.NBChas issuedRFEs inabout37%ofcasesrelatedtosupportingdocuments.

• Ifthecaseisappropriateforaninterviewwaiver,thecasewillbesenttoCSCforadjudication.

• Cases are normally sent to theDistrict Office 19 days prior totheinterviewdateinorderfortheofficertohavethephysicalfile14dayspriortotheinterview.

• An address change may triggerachangeintheinterviewingof-ficehaving jurisdictionoverthecase.IfthecasehasalreadybeenscheduledforinterviewanditisstillattheNBC,thecasecanberescheduledforthenewofficeofjurisdiction.However,ifthecaseis no longer at the NBC (i.e. itwas sent to the District Officeforinterview),theDistrictOfficewilldeterminewhetherornottointerviewthecaseortosendthecasetothenewofficeofjurisdic-tion.

• AlwaysrespondtoanRFEevenifyouthinkithasbeenissueder-roneously.Eveniftheinformationrequestedisduplicativeofwhathasbeensubmitted,itisbettertoprovideitagainforeaseofadju-dication,andtoavoidadenialof

thecaseduetofailuretorespondtotherequest(i.e.lackofprosecu-tion/abandonmentdenial).

• Allcasespecificissuesshouldbeaddressed through theattorneyliaison.

Attorney/Accredited Representa-tive Procedures  for Contacting the NBC Attorneysandaccreditedrepresen-tativeswhohaveaproperlyexecutedG-28onfilemaycontacttheNBCforspecificcaseinquiriesandproblems,suchas:

• Forms that are un-adjudicatedandarebeyondtheNBC’spostedprocessingtimes

• Specific case inquiries or prob-lems

• Noreceiptnoticeafter30days

• EAD orAdvance Parole Docu-menterrors

Pleasekeep inmind that fee is-sues,receiptnotices,andrejectionsareallLockboxissues.TheNBChasnocontroloverLockboxprocedures,butwecanforwardinquiriestotheLockboxforinvestigation.

MAILRegularMailUSCIS—NBCPOBox648003Lee’sSummit,MO64063

Regular or FedEx MailUCSIC—NBC705BMelodyLane,#107Lee’sSummit,MO64063

EMAIL Please forward all inquiries toyourFloridaBarPoint ofContact(Lsrifkin@rifkinfox.com),whomaythen forwarda consolidated list totheNBCforresolution. Pleasedonotsendaddresschang-estothesepostaloremailaddresses.Toensurea timelyupdateofyourclient’s address, please follow thebelowprocedures:

To submit a change of address,applicants and petitioners whohavefiledforbenefitswiththeNBCshould:1.FileaFormAR-11(http://uscis.gov/graphics/formsfee/forms/ar-11.htm)withtheUSCISaddresslistedontheForm

AND

2.Notify the NBC of the addresschangebyeither

• calling the National CustomerServiceCenter (NCSC) toll freeat1-800-375-5283(preferred),

or• writingtheCenterat: USCIS-NBC POBox648005 Lee’sSummit,MO64064

International Law Section

ReTReaT

November 10 - 11, 2006

The Biltmore Hotel

Miami, Florida

2�

Cape Town: How to Close an Aviation Transaction After the Rules Change

February 21, 2006By J. C. Ferrer, Esq. and Manuel A. Perez, Esq.

Harper Meyer Perez Ferrer & Hagen LLP

Introduction Themanner inwhichattorneysandfinanceprofessionalscloseavia-tion transactionswilldramaticallychangeonMarch1,2006,whentheprovisionsoftheConventiononInter-nationalInterests inMobileEquip-mentand its relatedProtocol1 foraircraftequipment(mostcommonlyreferredtoasthe“Convention”)comeintofullforceandeffect.Thesesweep-ingchangeswill immediatelyaffectthemanner inwhich theaviationindustrydocumentsand closes itstransactions relating to countriessigning and ratifying the treaty(knownasContractingStates).2

Althoughtypicallyassociatedwith“international”transactions,theCon-ventionwillalsobeapplicable toalargepercentageofpurelydomestictransactions; that is, transactionswheretheseller/lessor,buyer/lessee,and/orthefinancinginstitutionsareallU.S.-basedentities. Inparticu-lar,theprovisionsoftheConventionwill governany transactionwherethesubjectaircraftisregisteredinaContractingState, forexample, theUnitedStates (whereamajorityoftheworld’saircraftare registered)and/or where the“Debtor” (whosedefinitionisexpandedbytheConven-tion to include lessees, conditionalbuyers,borrowersand,oddlyenough,sellers) issituatedinaContractingStateandwhichinvolveanaircraftorenginethatmeetscertainminimumcriteria.3

The International Registry Generallyspeaking, theConven-tionismodeledaftertheU.S.UniformCommercialCodesettingforth,interalia, strict regulations concerninginterestpriorityandincreasingavail-able remedies for securedparties.4

Moreover,itestablishesacentralizedinternationalregistry5inDublin,Ire-land(the“InternationalRegistry”) .

Registrationsat the InternationalRegistryarenoticefilingsreferencingspecificdocumentsorinterestsfiledwiththedesignatedentrypointofaContractingState.Therefore,incasesweretheConventionappliesmultiplefilings/registrationswillberequiredtoappropriatelyperfectaninterest.TheU.S.hasdesignatedtheFederalAviationAdministration(the“FAA”)asthe“entrypoint”foralldocumentstoberegisteredattheInternationalRegistry,sodocumentsmustbesub-mittedforlocalrecordationwiththeFAAprior to registrationwith theInternational Registry, if applica-ble.Assuming that theConventionapplies toaU.S. transaction, thosedocumentsmustbeaccompaniedbyanFAAEntryPointFilingFormIn-ternational Registry6 when deliv-eredtotheFAAinordertoobtainadocumentspecificfilingcoderequiredbytheInternationalRegistryforitssupplementaryregistration.Thisfil-ingcodeissubmittedelectronicallytotheInternationalRegistry togetherwiththerelevanttransaction infor-mation.

The Race to File TheConventionbasespriority/per-fectionofaninterestona“firsttofile”system.Therefore,thefirstpartytoproperlyregistertheirinterestwiththeInternationalRegistrywillhavepriority overany other interestedpartywithrespecttothatobject,re-gardlessofwhetherornot thefirstparty toproperly registerwith theInternational Registry had noticeofanyoneelse’s interest inthatob-ject.7

Registration at the International Registry Aspartofthefilingprocess,eachparty to a transaction is requiredto register with the International

Registryaseitheratransactionuseror a professional user in order toregisteraninterestin(ortoconsenttotheregistrationofaninterestin)theparticularaircraft object.Thisincludes thosegrantingan interestaswellasthosereceivingone.AsitisestimatedbyAviareto(thecompanycontractedbytheGovernmentofIre-landtoruntheInternationalRegis-try)thattheprofessional/transactionuser registrationprocesswill takeapproximately forty-eighthours tocomplete,itisstronglyrecommendedthatallpartiesregisterwiththeIn-ternationalRegistrybeforetheonsetofeachtransactionsoastoavoidanyunnecessary delays in the closingprocess, Afterallofthepartieshaveregis-teredwiththeInternationalRegis-tryandtheapplicablefilingcode(s)has(ve)beenobtained fromtherel-evant local registry (e.g., theFAA)andsubmitted to theInternationalRegistry,thentheInternationalReg-istryshallnotifyallofthetransactionpartiesviae-mailandrequesttheirformalconsent toproceedwith theregistrationprocesswithin thirty-six (36)hoursof thesubmissionoftheregistrationrequesttotheInter-nationalRegistry.Intheeventthatanypartyfailstoconsenttothereg-istrationwithinthistimeframe,theregistration is invalidatedand theregistrationprocessmustbereiniti-ated.

Prospective International Interests Oneconsiderabledeparturefromthecurrentaviation industryprac-ticebroughtaboutbytheConventionistheintroductionofa“prospectiveinternational interest.” Inessence,theConventionallowspartiestocon-temporaneouslyregisteraninteresttobecreatedinthefutureinanair-craftorotherobjectupontheoccur-

29

renceofastatedevent,regardlessofwhetherornotsaidoccurrenceiscer-tain.Onceregistered,thepartieswillthenhavesixtydayswithinwhichtoclosethesubjecttransactionandfile/register thetransactiondocumentsinaccordancewiththeprovisionsoftheConvention;otherwise,thepro-spective international interestwillexpireofitsownaccord.Theprimarypurpose of a prospective interna-tionalinterestistoallowcreditorstoestablishthepriorityoftheirinterestinanobjectprior to theclosingofthetransaction.However,giventhefactthatnumerousdocumentsotherthanfinancingdocuments (suchastermsheetsandpurchaseandsaleagreements) can be registered asprospective international interestsaswell,theuseofprospectiveinter-nationalinterestsmaybecomesub-jecttoabusebyunscrupulouspartiesandcareshouldbetakentoavoidthecreationoffrivolousorunnecessarycloudsontitle.

IDERA Inadditiontotheuseofprospec-tiveinternationalinterests,theCon-ventionalsoprovidescreditorswithanewtooltorecoverassetsinafore-closure scenario - the IrrevocableDeregistrationandExportRequestAuthorization (the“IDERA”) .8TheIDERA is an irrevocablepower ofattorneyissuedinfavorofthecredi-torwhichempowersthecreditor toderegisterandexportanaircraftupontheoccurrenceofadefaultundertherelevantfinancingdocuments.WhiletheIDERAwillundoubtedlyserveasapowerfultoolforcreditors,itseemsthatitsusefulnesswillbesomewhatlimitedforthetimebeinguntilmorecountriesbecomesignatories to theConvention.

Changes to Transaction Documents and Closing Procedures The implementationof theCon-ventionwillrequireindustryprofes-

sionalstore-examinetheirstandarddocumentation and closing proce-dures.Forexample,financialinstitu-tionsshouldrevisetheirdocumenta-tionandcreate their own internalCapeTowncomplianceprogramssothattherepresentations,warrantiesandcovenantsaddress thevariousadditionalprotections(andcoverthevariouspotentialpitfalls)affordedby theConventionwhichmaynothavebeenotherwiseavailableunderlocal law.Similarly,manufacturers,lessorsandsellersofaircraftshouldalso revise theirdocumentation toaddresstherelevantportionsoftheConventionas they relate to salesandleasetransactions,includingtheuse(andperhapsmisuse)ofprospec-tive international interests.Finally,allparties toaviation transactionsshouldrevisetheirstandardclosingprocedurestoincludeitemssuchasrevised title/liensearchproceduresandtheuseofpre-closingsinanat-tempttoavoidclosingdelays.

Interests Created Prior to Effectiveness of Convention EachContractingStateholdstheright toelectwhether toapply theprovisionsoftheConventiontointer-estsorrightsinaircraft,helicoptersorengineswhichwere inexistencepriortoMarch1,2006.9Forexample,theUnitedStateselectednottoap-ply theconvention to thosepre-ex-isting interests, therefore no newfilingsattheInternationalRegistryare required in order tomaintainrightsand interests insuchobjectsinexistenceprior toMarch1,2006relatingtotheUnitedStates.10Itisimportanttobearinmind,however,thatanysubsequentmodificationsoramendmentsofexistingtransac-tionsmayrequireregistrationsattheInternationalRegistry.Theseshouldbeassessedonacase-by-casebasistoconfirmwhetheranewinterestwouldbecreatedwhichwouldqualify forinternationalregistration.

Conclusion TheeffectsoftheConventionwillbefarreachingandwillchangethelegallandscapeoftheaviationindus-try.Withproperguidance,however,aviationlenders,lessorsandvendorsshouldbeabletomaneuverthroughthe numerous challenges broughtaboutby theConventionandprob-ablyenjoy its intendedbenefits inthenottodistantfuture.Butfornow,themorerealisticgoalseemstobetosimplyavoidsubstantialdelaysintheclosingprocess.

J. C. Ferrer and Manuel A, Perez are founding partners of Harper Meyer Perez Ferrer & Hagen LLP, a full-service transactional aviation firm in Miami, Florida.

Endnotes:1ProtocolToTheConventiononInternationalInterests inMobileEquipment onMattersSpecifictoAircraftEquipment.2Asofthedateofthispublication,thecoun-tries signingand ratifying theConventionincludetheUnitedStates,Panama,Ethiopia,Nigeria,Pakistan,Oman, Ireland,MalaysiaandSenegal.3The qualifying criteria for internationalregistrationrequirestheobjecttobeanyofthefollowing:(i)anaircraftthatistype-certifiedtotransportatleast8persons(includingcrew)and/orgoodsinexcessof2,750kilograms,(ii)ahelicoptertype-certifiedtotransportatleast5persons(includingcrew),or(iii)anengineofatleast550horsepowerortheequivalent(1,750poundsofthrustforjetengines).4SeeChapterHIofTheConventiononIn-ternationalInterestsinMobileEquipmentonMattersSpecific toAircraftEquipment,andChapterIIoftheProtocol.5SeeArticle16oftheConvention.6FAAForm8050-135.7SeeArticle29oftheConvention.8SeeArticleXIIIof theProtocol includingAnnex.9SeeArticle60oftheConvention.10SeeDeclarationsdepositedrelatingtoAr-ticle 60 of the Convention in Declarationsdepositedunder theCaptTownConventionon International Interest inMobileEquip-ment and under the Protocol to the CapeTownConventiononInternational InterestsinMobileEquipmentonMattersspecific toAircraftEquipment.

�0

Minutes of Texas Service Center Liaison/Florida Bar Liaison Meeting

May 15, 2006

Attending on behalf of Florida Bar:LarryS.Rifkin,Esq.NataliaPoliakova,Esq.ElaineWeiss,Esq.

Attending on behalf of the Texas Service Center:RosieReyna,AssistantCenterDi-

rector,AdjustmentandBusinessImmigrantDivisions

WyvetteCovington,AssistantCenterDirector,FamilyDivision

JackPittman,AssistantCenterDi-rector,NaturalizationDivision

MorrisWhitacre,AssistantCenterDirector,COTRandRecords

JumePuripongs,SupervisoryCenterAdjudicationsOfficer

KellyAnnAnderson, SupervisoryCenterAdjudicationsOfficer

BobMeyer,SupervisoryCenterAdju-dicationsOfficer

JaniceHood,SupervisoryCenterAd-judicationsOfficer

KellyBotting,SupervisoryImmigra-tionInformationOfficer

KathyVaughan,ActingAssistantCenterDirector,BusinessNon-im-migrantDivision

MonicaCarroll,SupervisoryCenterAdjudicationsOfficer

Bi-Specialization1. Can you provide us with an up-dated list of which ACds will now be responsible for what products at TSC? RosieReynaiscurrentlyinchargeofboththeAdjustment(Employment-basedFormI-485s)andBusinessIm-migrantDivisions (I-140, I-360,Le-galization,andCubanI-485s).NancyMoser is currentlyacting forLisaKehlastheAssociateCenterDirec-tor forOperationswhileLisaKehlisdetailedtoHeadquarters.Lastly,KathyVaughaniscurrentlyactingastheAssistantCenterDirectorfortheBusinessNon-immigrantDivisionwhileNinfaLunaisalsodetailedto

Headquarters.Thereareno otherchangesatthistime.

2. How far into the bi-specializa-tion process do you think it will take for TSC and Nebraska Ser-vice Center to address uniformity in adjudications? When can we expect announcements regarding the first uniform changes in the process? i.e. Nebraska and TSC differ in treatment of G-28s for attorney contact purposes, ability to pay issues for I-140s and accep-tance of copies of letters evidenc-ing prior professional experience, to name just a few. TSCandNSChavebeendiscuss-ingandfinalizingtemplatesforRFEand denial letters. Please providespecifics regarding thedifferencesreferredto.

3. We understand that 14,000 con-currently filed I-140/I-485 peti-tions were transferred to TSC from Vermont Service Center. Will you be receiving more cases from the other Service Centers? How many I-140s and concurrently filed I-140/I-485 petitions do you antici-pate receiving in total from other Service Centers. How will this affect your processing times? Atthistime,TSChasreceivedap-proximately4500standaloneI-140sfromVSC.We do expect to receiveconcurrentlyfiledI-140/I-485sshort-ly.TSChas receivedapproximately19,000 I-140and I-485 filings fromCSC.TSCexpectstomaintainthesixmonthprocessingtimefortheI-140s.

4. Will we continue to file adjust-ment portability cases with the Service Center who issue the ini-tial I-485 filing receipt? Or is there a new procedure for these cases? With regard to theFormI-485sthataretransferredtoanotherSer-vice Center, a transfer notice willbesent/mailed.Correspondencere-lated to theForm I-485 shouldbesenttotheServiceCenterwherethe

FormI-485hasbeentransferred.Ifnotransfernoticehasbeenreceived,correspondenceshouldbesenttotheServiceCenterthatissuedtheinitialreceipt.

5. How long do you think it will take you to process all the I-129 petitions you have in the pipeline? Or will these be transferred to Vermont or California? TSCexpectstocompletereviewofallpendingFormI-129sbytheendofMay2006.AnycasesthatrequireanRFEwillbeworkedastheresponsetotheRFEisreceived.TSCwillnottransferanyFormI-129sthatwerependingasofApril1,2006.

6. If two I-140s are filed for the same beneficiary i.e. a national interest waiver and an extraor-dinary ability petition and one case goes to TSC and the other to Nebraska where would the I-485 be filed assuming the I-140 has not yet been approved? Ifthetwo(2)FormI-140sarefiledat thesametime, theywillbepro-cessedby thesameServiceCenter.Iftheyarefiledseparately,thentheymaybeprocessedbydifferentServiceCenters.TheconcurrentFormI-485shouldbefiledattheServiceCenterholdingthependingI-140thatfallswithin thedefinitionof concurrentfiling.

7. Where do we file I-765s for spouses of L and E visa holders? Are these subject to bi-specializa-tion? ConcurrentlyfiledI-129/I-765saretobefiledwiththeVermontServiceCenter.StandaloneFormI-765saretobefiledwithTSC,ifitiswithinourjurisdiction.

I-129 issues8. Will TSC approve a seventh year or more extension for a ben-eficiary who is currently outside the United States? Generallyspeaking,theTSCwill

�1

approveaseventhyearormoreex-tensionunderAC21providing thatthebeneficiaryhasmaintainedH-1Bnon immigrantstatus. Inaddition,theapplicantmustbeintheUnitedStatesatthetimeoffilingpriortotheH-1Bexpiring.

N-�00s9. When a naturalization case is filed, the receipt issued and the case is past normal processing times but the local office claims the case cannot be scheduled for interview because the file is still at TSC what procedure should we follow to make sure the case is transferred? a.LocalofficescanrequestanyfilewithapendingN-400fromaServiceCenter. b. Onitownvolition,TSCcannotsendapendingN-400filetoalocaloffice.The localofficemustrequestthefileorauthorize thesendingofthefile. c. Atthistime,N-400scanbetak-enallthewaythroughtheinterviewprocesswith“pending”processingissues.

I-90s10. We now have two e-mail ad-dresses for non-receipt of I-551s or EAds. These are: tsc.ponds@.dhs.gov and cardpush.tsc@dhs.gov. Which is the correct e-mail address to use? The correct address is tsc.card-push@dhs.gov.

11. What is the normal process-ing time to inquire on non-receipt of green card and/or to file an I-90? A recent client received a Welcome Notice on 3/23/2006 and called NCSC on 4/24/2006 as she had not received the green card. She was told to file an I-90 as more that 30 days had passed. Is this correct procedure? Ifaclienthasreceiveda“WelcomeNotice” and thirty (30) days havepassedwithnoreceiptof thegreencard,theNCSCshouldnotbeadvis-ingtheclient tofileanI-90.NCSCshouldroutethephonecallasanon-delivery inquiryand forward it totheappropriateServiceCenter forresolution.

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share informationonthenatureofanyinvestigationwithapplicantsortheirrepresentatives.Forcasestatusinquires,pleasecontacttheNCSC.

16. When a case is on appeal and we have requested additional time to submit evidence (i.e. 60 days) in appeal (SRC-06-112-53704) do we:a) wait for decision on request b) Count 60 days from date of re-ceipt notice and submit evidencec) Wait for TSC to issue RFE?d) none of the above (something else) Appealsfiledat theTSCarere-viewed.Ifattimeofthereviewtheydonotovercomethegroundsofde-nial,theyareforwardedtotheAAO.NoRFEwillbeissued.NorwilltheTSCholdacasetowaitforadditionalinformation.Theparty submittingtheappealhas30daysfromthedatesigning the appeal to submit anyevidence/brief.Additional timecanonlybegrantedifgoodcauseexists.AAOwoulddecideifadditionaltimecanbegranted.

Practice Points:1. If an applicant has multipleA

files–listallAnumbersonap-plications.

2. MakesurethattheI-485issignedandallquestionsanswered.

3. For ScheduleA filings – if theprincipal and derivatives arefiledseparatelypleaseannotateonderivativefiling“DERIVATEOFSCHEDULEAPRINCIPAL”

4. Ifanalieniseligibletobegrand-fathered under Section 245(i)clearlyannotatetheapplication“ELIGIBLEFOR245(i)GRAND-FATHERING” and include rel-evantdocumentationevidencingthe eligibility for grandfather-ing.

5. Ifthealienisalaborcertificationsubstitutionannotateapplication“245(a)ELIGIBLE”.

6. Ifthealienhasbeenarrestedthesubmission of a certified courtdisposition will help with back-groundchecks.

7. MakesurethatwhenyourespondtoRFEsthatyourespondtotheService Center that issued theRFE.

LIAISON MEETINGfrom preceding page

EthicsQuestions?CallTheFloridaBar’s

ETHICSHOTLINE:

1/800/235-8619

problems with card production. Generally, those who fail to re-ceive their card were approved by TSC directly (without a lo-cal interview), and generally, it seems that the reason that TSC doesn’t produce the cards is that the applicants do not have bio-metrics on file. The applicants are not aware, however, that they need to go for biometrics until 3-6 months pass and they don’t get their card. Is there a way that applicants without biometrics on file can receive instructions to go to biometrics with the approval notices? Currently, the approval notices instruct approved appli-cants NOT to schedule biometrics or do anything further. Should we start to send approved applicants to biometrics automatically? This was an internal problemwhichhasbeencorrected.Pleasepro-videexamplesanddatestheseweredone.

13. When an applicant files an I-90 and TSC returns the I-90 with instructions to obtain the I-89 (biometrics) at the local office, should the applicant re-file the I-90 after going for biometrics, or do the local offices automatically notify TSC that biometrics are now on file? No.Theapplicantdoesnotre-filetheI-90.WhentheygototheDistrictOfficefortheI-89itisamanualpro-cessandtheDistrictOfficewillsendthecompletedI-89tousforprocess-ing.

I-1�0/I-��5s14. We continue to see denials on I-140s where the L-1A petitions have been approved. In some of

these cases the companies are stronger with more employees than when the L-1A was approved and the I-140 is still denied. Is this a training issue? Each nonimmigrant and immi-grantpetitionisaseparaterecordofproceedingwithaseparateburdenofproofandeachpetitionmuststandon its own individual merits.TheapprovalofanonimmigrantpetitiondoesnotguaranteethattheCISwillapproveanimmigrantpetitionfiledonbehalfofthesamebeneficiary.TheAAOhasaddressedthisissueinsev-eraldecisionsthathaveupheldtheoriginaldenialof theI-140petitionbytheTexasServiceCenter.TheAAOhasstatedthatboththeimmigrantandnonimmigrantvisa classifica-tions rely on the samedefinitionsofmanagerialandexecutivecapac-ity,however, thequestionofoveralleligibilityrequiresacomprehensivereviewofalltheprovisions. TheAAO also notes that therearesignificantdifferencesbetweenthenonimmigrantvisaclassificationandan immigrantvisapetition. Ingeneral,giventhepermanentnatureofthebenefitsought,immigrantpeti-tionsaregiven fargreaterscrutinybytheCISthannonimmigrantclas-sifications.

15. We know that you have a sys-tem in place to identify when an immigrant visa becomes avail-able to EB-3 and EB-2 applicants to adjust status. However, mem-bers have reported that there are some applications pending at TSC that have had current prior-ity dates since March 1, 2006, and no communication has been re-ceived from TSC regarding these applications. If these cases are pending background clearances is there a way to be notified or to identify these cases? Should we make inquiries through NCSC? Whileacasemayhaveacurrentprioritydate, itmaynotbe readytoadjudicate to completiondue topendingsecurity checks.For casespendingsecuritychecks,itisnormalthatyoudonotreceiveanycommuni-cationfromtheTSC.Additionally,beadvisedthattheTSCdoeshaveanin-ternalsystemtoidentifycasespend-ingvarioussecuritychecks.Informa-tionfromthissystemisnotavailabletothepublicandtheServicedoesnot

��

of InvestigationandU.S.CustomsandBorderProtectionpersonnel ininvestigations.5

The ICEOfficeof Investigations(“OI”)isresponsibleforinvestigatingexportenforcementviolations.6TheOIhas itsownArmsandStrategicTechnology Investigations (“ASTI”)Unit toprevent illegalexportsandtarget foreign countries, terroristgroups,andotherinternationalcrim-inalorganizations toprevent theirtrafficking inWeaponsofMassDe-struction(“WMD”)andtheircompo-nents.7AccordingtoStevenArruda,ChiefofASTI,“Inthepost9/11world,keepingU.S.armsandsensitivetech-nologyoutofthehandsofterroristsandrogueregimeshasneverbeenmore important.Investigations intothe illegalexportofarms/strategictechnology are one of the highestprioritiesofICEandtheDepartmentofHomelandSecurity.”Mr.Arrudaaddedthat,“ICEhasinitiatedmorethan5,600investigationsintoillegalexports ofU.S.armsandstrategictechnology.Theseinvestigationshaveresultedinmorethan400arrests,300indictments,and280convictions.” ASTI isprobablybestknownfor“ProjectShieldAmerica,” its indus-tryoutreachprogram.8Pursuanttothis program, ICE SpecialAgentsservingintheASTIunitcontactandoftenvisitU.S.companiesinvolvedinthemanufacture,sale,andexportofU.S.originstrategictechnologyandmunitionsitems.ICEAgentsgener-ally recommend thateachof thesecompaniescreateandimplementanExportManagementSystem(“EMS”)forthepurposesofdeterringandde-tectingpotentiallyillegalexports.9AnEMSincludes:1)apolicystatementcommitting the company toexportcontrols,2)aneducationprogramforemployeesinvolvedinexports,and3)aprocedureforhandlingnon-compli-ancewithexportregulations.10

ASTIAgentsoftencooperatewithprivatecompaniesinconductingin-vestigations,andsometimesconductsuchoperations“undercover.” Illus-trative cooperative ICEoperationshaveresultedinthearrest,prosecu-tion,andconvictionof:1)anindivid-ualwhoattemptedtoillegallyobtainandexportF-4andF-14fighter jet

componentstoIran,112)anindividualwhoattemptedtoillegallyobtainandexport special night vision equip-mentforexporttoChina,12and3)anindividualwhoattemptedtoillegallyobtainandexport66nucleardetona-tordevicestoPakistanviathirdpartycountries.13

ICEinvestigationshavealsocon-tributedtoarrestsandprosecutionsonforeignsoil.OnDecember23,2005,FransVanAnraatwasconvictedandsentencedto15yearsinprisonintheNetherlands.14Mr.VanAnraathadpurchasedmore than1,000 tonsofthiodyglicol,amustardgasprecur-sor chemical, fromaU.S. companyfor export to Iraq.15The chemicalwassubsequentlyusedbySaddamHusseintogasandkillroughly5,000IraqiKurdsinthetownofHalabjain1988.16 TheprosecutionbyDutchauthori-tieswasbasedinpartonalong-termICE investigation which began in1984inBaltimore.17AlcolacInterna-tional, Inc,aBaltimore-basedcom-pany,wassupplyingVanAnraatwiththepoisongasprecursors,whichcanalsobeusedasanindustrialdye18TheICEinvestigationresultedintheprosecutionofAlcolacInternationalandultimately resulted in chargesagainstVanAnraat in theU.S.,al-thoughheremainedafugitive.19 Among theFederalagencies in-volvedinexportcontrols,ICEhastheuniqueauthoritytoissueaCustomsExportEnforcementSubpoena re-quiringtherecipienttoappearand/orproducerecords.Legalauthority toissue thesubpoena isderived fromtheExportAdministrationAct,21theArmsExportControlAct20,andtheInternationalEmergencyEconomicPowersAct.22The Subpoena mustbe signedby theSpecialAgent inChargeof the local ICEoffice,andmaybeserveduponanindividualorcompanybyanyICEagent.Atypicalsubpoenawouldstatethedate,time,andplaceforapersontoappearandproducetherecordsdescribedinthesubpoena.AnappearancebeforetherequestingICEofficerwillalwaysbeinthepresenceofat least twoICESpecialAgents,andthesubpoenaedpersonmustprovidesworntestimony(i.e.underoath)toICE.Anattorneyisallowedtoaccompanythepersontestifying. Failure to comply withthesubpoenawillresultintheICESpecialAgentcontactingthenearby

U.S.Attorney’sOfficetoprepareandobtainanorderfromafederaljudgerequiringanappearance. Anyone served with an ExportEnforcement Subpoena shouldpromptlyadviselegalcounselandtopmanagement.ExportEnforcementSubpoenasmaybeforacriminalorcivil investigation,andarenotonlyservedupontheexportingcompany,butoftenuponfreightforwardersorair and ocean companies involvedin the international transportationofcargo.However,receivinganEx-portEnforcementSubpoenadoesnotnecessarilymeanthatthepersonorcompany isunder investigation; itmayonlymeanthattheICEAgentneedstoobtaininformationordocu-mentation from the individual orcompanyaboutathirdpartythatisunderinvestigation. Exportcontrollegalchangessincethetragiceventsof9/11reveal thatthehighestlawenforcementprioritiesare:1)preventingWMDfromenteringtheUnitedStates,and2)preventingenemiesoftheUnitedStatesfromob-tainingandexportingsensitive,regu-latedtechnologiesandequipment.Tothatend,ICEwascreatedandorga-nized.Therearemoreexportcontrollawsandregulationsthaneverbefore;accordingly, therearemore specialagents,assignedbyincreasingnum-bersof federalagencies, conductinginvestigations toassurecompliancewith the myriad laws and regula-tions.Asexpected,arecordnumberofarrests,civilpenalties,andcriminalprosecutionsforexportviolationsoc-curredin2005.23Whilemanycompa-niesfacerisingcompliancecosts,thisisasmallpricetopayforthecrucialrole ICEactionsareplaying in lim-iting theproliferationofWMDandothersensitivetechnologies.

Peter A. Quinter is the partner in charge of the Customs and Interna-tional Trade Law Department at the international law firm of Becker & Poliakoff. He is Board Certified in International Law by The Florida Bar. Mr. Quinter is located in the Ft. Lauderdale office, and may be con-tacted at (954) 985-4101, or by email pquinter@becker-poliakoff.com.

Thank you to Larry Bassuk (3L, University of Florida Levin College of Law) for his contributions to this article.

EXPORT CONTROLSfrom page 1

continued, next page

��

Endnotes:1 U.S. ImmigrationandCustomsHomep-age,http://www.ice.gov/about/index.htm(lastvisitedMay30,2006).2 U.S.ImmigrationandCustomsHomepage,http://www.ice.gov/about/faq.htm(lastvisitedMay30,2006).3 U.S. ImmigrationandCustomsHomep-age,http://www.ice.gov/about/index.htm(lastvisitedMay30,2006).4 SeeU.S.DepartmentofHomelandSecurityHomepage,http://www.dhs.gov/dhspublic/in-terapp/editorial/editorial_0133.xml (lastvis-itedMay30,2006).5 SeeU.S.ImmigrationandCustomsHomep-age,http://www.ice.gov/about/operations.htm

(lastvisitedMay30,2006).6 U.S.ImmigrationandCustomsHomepage,http://www.ice.gov/about/operations.htm(lastvisitedMay30,2006).7 U.S.ImmigrationandCustomsHomepage,http://www.ice.gov/pi/news/factsheets/investi-gation_fs.htm,(lastvisitedMay30,2006).8 SeeU.S.ImmigrationandCustomsHomep-age, http://www.ice.gov/pi/news/factsheets/shield071204.htm(lastvisitedMay30,2006).9 U.S.ImmigrationandCustomsHomepage,http://www.ice.gov/partners/employers/illegal-trade/index.htm(lastvisitedMay30,2006).10Id.11ICENewsRelease,http://www.ice.gov/pi/news/newsreleases/articles/050706baltimore.htm(lastvisitedMay30,2006).12ICENewsRelease,http://www.ice.gov/pi/news/newsreleases/articles/051206seattle.htm(lastvisitedMay30,2006).13ICE News Release, http://www.ice.gov/pi/news/insideice/articles/insideice_081505_web6.htm(lastvisitedMay30,2006).

14See Saddam’sDutchLink,BBCNews,Dec.23,2005,http://news.bbc.co.uk/2/hi/middle_east/4358741.stm(lastvisitedMay30,2006);See alsoDutchmanJailedOverGassingofKurds,TimesOnline (UK),http://www.time-sonline.co.uk/article/0,7374-1958144,00.html(lastvisitedMay30,2006).15See Id.16Id.17SeeEricRich,BaltimoreFirmPartofProbeofPoisonGas,TheWashingtonPost,http://www.washingtonpost.com/wp-dyn/content/ar-ticle/2005/11/08/AR2005110801703.html(lastvisitedMay30,2006).18See Id.19Id.2050U.S.C.App.§ et seq.2122U.S.C.§2751et seq.2250U.S.C.1701et seq.23See generallyU.S. ImmigrationandCus-tomsHomepage,http://www.ice.gov/about/faq.htm(lastvisitedMay30,2006).

EXPORT CONTROLSfrom preceding page

The Board ofLegal Specialization and Education

andthe International Law Certification Committee

are pleased to announce the following attorney isBoard Certified as of June 1, 2006:

Congratulations!

John L. Murphy, Miami*****

FilingPeriodforMarch16,2007examination:July1,2006throughAugust31,2006

Contact:

AdamS.BrinkLegalSpecializationandEducation

TheFloridaBar

(800)342-8060,ext.5850or(850)561-5850

orforfurtherinformationgoto:www.floridabar.org/certification

�5

2006 – 200� International Law Section Executive Council

GaryEdwardDavidsonRascoReiningerPerez&EquenaziP.L283CataloniaAve.,Fl.2CoralGables,FL33134-6704(305)476-7100 • Fax:(305)476-7102Email:gdavidson@rrpev.com

MichelleAnnFongyeeGreenbergTraurig,P.A.1221BrickellAve.Miami,FL33131-3224(305)579-0578 • Fax:(305)579-0717Email:fongyeem@gtlaw.com

RobertRyonHendryHendryStonerandBrown20N.OrangeAve.,Ste.600Orlando,FL32801-4641(407)843-5880 • Fax:(407)425-7905Email:rhendry@hsdb-law.com

MaximIstominSmejda&Associates1300BigPineAve.BigPineKey,FL33043-3336(305)872-2677Email:mail@russian-law.com

LuisSergioKonskiRudenMcClosky701BrickellAve.,Ste.1900Miami,FL33131-2832(305)789-2789 • Fax:(305)537-3989Email:luis.konski@ruden.com

MarkE.KruseFloridaFirstCapitalFinanceCorp.1351N.GadsdenSt.Tallahassee,FL32303-5668(850)681-3601Email:markekruse@yahoo.com

SamuelRobertMandelbaumMandelbaum&Fitzsimmons,P.AP.O.Box3373Tampa,FL33601-3373(813)221-0200 • Fax:(813)221-8558Email:srm@manfitzlaw.com

AmblerHolmesMoss,Jr.1221BrickellAve.Miami,FL33131-3224(305)579-0543 • Fax:(305)579-0717Email:mossa@gtlaw.com

WilliamH.NewtonIII444BrickellAve.,Ste.300Miami,FL33131-2472(305)357-6265 • Fax:(305)358-6422Email:wnewton@law.miami.edu

PenelopeB.Perez-KellyMcClaneTessitore215E.LivingstonSt.Orlando,FL32801-1508(407)872-0600 • Fax:(407)872-1227Email:pbp@mcclanepa.com

NataliaV.PoliakovaNataliaV.Poliakova,P.A.18205BiscayneBlvd.,Ste.2221Aventura,FL33160-2148(786)428-2888 • Fax:(786)428-2889Email:natalia@poliakova.com

LauraAnneQuigley304HaverlakeCir.Apopka,FL32712-4056(407)843-5880 • Fax:(407)425-7905Email:hsdb@hsdb-law.com

D.KimRadcliffe111N.OrangeAve.,Ste.775Orlando,FL32801-2352(407)649-9192 • Fax:(407)649-7755Email:dkimradcliffe@aol.com

AlexanderReusGlobalExpansionGroup,Partner100S.E.2ndSt.,Ste.2610Miami,FL33131-2150(786)235-5000 • Fax:(786)235-5005Email:ar@geglaw.com

PaulB.SteinbergSteinberg&Associates,P.A.767ArthurGodfreyRd.MiamiBeach,FL33140-3413(305)538-2344 • Fax:(305)538-0419Email:pbs@senatorlaw.com

MichaelAnthonyTessitoreMcClaneTessitore215E.LivingstonSt.Orlando,FL32801-1508(407)872-0600 • Fax:(407)872-1227Email:mat@mcclanepa.com

NancyMarieTheveninIccInternationalCourtofArbitration1212Ave.oftheAmericasNewYork,NY10036-1602(212)703-5060 • Fax:(212)575-0327Email:nthevenin@uscib.org

FrancescaRusso-DiStauloChairKlugerPeretzKaplanandBerlinPl.201S.BiscayneBlvd.,Fl.17Miami,FL33131-4325(305)379-9000 • Fax:(305)379-3428Email:fdistaulo@kpkb.com

EdwardHarrisonDavis,Jr.Chair-electAstigarragaDavisMullins&Grossman,P.A.701BrickellAve.,Ste.1650Miami,FL33131-2847(305)372-8282 • Fax:(305)372-8202Email:edavis@astidavis.com

J.BrockMcClaneSecretaryMcClaneTessitore215E.LivingstonSt.Orlando,FL32801-1508(407)872-0600 • Fax:(407)872-1227Email:jbm@mcclanepa.com

FranciscoAlfonsoCorralesTreasurerGlantz&Glantz,P.A.7951S.W.6thSt.,Ste.300Plantation,FL33324-3276(954)424-1200Email:fcorrales@msn.com

JohnHenryRooney,Jr.,Immediate Past ChairShutts&Bowen,LLP201S.BiscayneBlvd.Miami,FL33131-4332(305)358-6300 • Fax:(305)347-7883Email:jrooney@shutts-law.com

IanM.Comisky,BoardLiaisonBlankRome,LLP1LoganSq.Philadelphia,PA19103-6933(215)569-5500 • Fax:(215)569-5350Email:icomisky@blankrome.com

DrucillaE.Bell8304thAve.N.W.Largo,FL33770-2315(727)251-4838 • Fax:(727)584-3263Email:dru@globalawfirm.com

TalbotD’AlemberteF.S.U.CollegeofLaw425W.JeffersonSt.Tallahassee,FL32301-1609(850)644-1441Email:dalember@mailer.fsu.edu

�6

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B A H A M A S • B A R B A D O S • B R I T I S H V I R G I N I S L A N D S • C A Y M A N I S L A N D S • C Y P R U S • G U E R N S E Y • H O N G K O N G

I S L E O F M A N • J E R S E Y • M A U R I T I U S • S W I T Z E R L A N D • U N I T E D K I N G D O M • U N I T E D S T A T E S • U . S . V I R G I N I S L A N D S

Contact us in Miami at 305-326-9224 or New York at 212-840-8280 or at usa@tridenttrust.com. Visit our web site at www.tridenttrust.com for contact details of other Trident Trust offices.

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