May 4, 2024 | Online Scholarship, Perspectives
Patrick C. R. Terry*
1. Introduction
For some time now, States and scholars have been debating whether mere cyber espionage, exemplified by the acquisition of data stored on servers located within another State’s territory, violates that State’s sovereignty. Some States and most experts compiling the Tallinn Manual argue that such activities, when conducted without causing any harmful effects on the target State’s territory, do not amount to sovereignty violations and are, therefore, not unlawful. This argument has never been convincing, but it has now become very difficult to sustain, following the recent statement on the matter by the African Union (AU), thereby expressly representing its 55 member States.
As I have argued in the past,[1] cyber espionage activities need not have caused harmful effects in order to amount to a violation of the target State’s sovereignty. The AU concurs with this position.[2] Its recently published Common African Position on the Application of International Law to the Use of Information and Communication Technologies in Cyberspace states that cyber espionage activities violate the target State’s sovereignty when they aim for data stored on servers located in its territory, irrespective of whether they thereby cause any negative effects.
Most experts who compiled the highly influential Tallinn Manual 2.0 on the International Law Applicable to Cyber Operations disagree with this assessment. They argue in favor of a de minimis approach that requires cyber espionage activities to have negative or harmful effects on the target State’s territory for them to qualify as a sovereignty violation.
However, in order to justify this assertion, the experts would need to show that the general rule of international law on sovereignty violations, which has traditionally not required such negative effects, has, at least with respect to cyber espionage, evolved in the way they claim. Based on a review of States’ officially expressed views, strongly reinforced by the AU’s recent statement, they cannot do this convincingly. Therefore, the Tallinn Manual’s contrary position does not reflect current customary international law.
2. Violation of Sovereignty as a Violation of Public International Law
There is widespread agreement that violating another State’s sovereignty is unlawful under public international law.[3] As early as 1927, the Permanent Court of International Justice (PCIJ) had already declared that a State, “failing the existence of a permissive rule to the contrary […] may not exercise its power in any form in the territory of another State.”[4] In 1949, shortly after its creation, the International Court of Justice (ICJ) also stressed that “[b]etween independent States, respect for territorial sovereignty is an essential foundation of international relations.”[5]
Recently, the United Kingdom has sought to call this long-standing view into question by arguing that respecting another State’s sovereignty was not a rule but only a principle of international law that merely serves to justify legal rules derived from it, such as the prohibition of interventions.[6] Unsurprisingly, the United Kingdom has received very little official support from other States for this novel line of argument.[7] In fact, some States, such as France, Germany, and Canada, have explicitly rejected the United Kingdom’s view.[8] In 2020, North Atlantic Treaty Organization (NATO) member States reaffirmed that sovereignty is a primary rule of international law, forcing the United Kingdom to add a reservation.[9] International courts,[10] the UN Security Council,[11] and the General Assembly[12] have consistently taken that view, as have many States in the past.[13] The AU has now thrown its weight behind this position as well.[14]
This near-unanimous view affirms that violating another State’s sovereignty is unlawful under international law.
3. Mere Cyber Espionage is Unlawful
In contrast to traditional forms of espionage, cyber espionage often does not require the physical presence of a ‘spy’ on the target State’s territory. Rather, States often conduct such espionage remotely without sending an agent abroad. In fact, monitoring and intrusion into electronic databases often occur from within the spying State’s territory.[15] This practice makes it more difficult to claim a violation of the target State’s territorial sovereignty.
However, when States engage in cyber espionage, they usually attempt to obtain data stored on servers in the target State by manipulating software or exploiting security risks and subsequently copying the desired data. In such cases, States are actually engaged in remotely conducted activities on the target State’s territory.
Territorial sovereignty, though, encompasses a State’s “right to exercise therein, to the exclusion of any other State, the functions of a State,”[16] which means a State “may not exercise its power in any form in the territory of another State.”[17] The intrusion of one State into another State’s data violates the target State’s territorial sovereignty when the data is stored on servers requiring physical infrastructure on the target State’s territory.[18] By carrying out such actions, the spying State is unlawfully exercising its own governmental authority on the target State’s territory.[19] The fact that the target State’s authorities, in many cases, would require a court order to access the data obtained by the spying State underlines the governmental character of the act of espionage.[20] That the act of espionage is initiated remotely and undertaken by technical means is irrelevant, as the intrusion and interception take place on the target State’s territory. Cyber espionage, undertaken in order to obtain data stored on servers in the target State, is therefore unlawful.[21]
4. Mere Cyber Espionage is Lawful
This is disputed by those who agree with the position adopted by the Tallinn Manual 2.0,[22] according to which an act of cyber espionage that merely obtains data located on the territory of another State does not violate that State’s sovereignty.[23] This argument is sometimes referred to as the de minimis[24] or relativist[25] approach to sovereignty, according to which cyber espionage only violates another State’s sovereignty if it produces noticeable negative effects in the target State.[26] Others even argue that some kind of harm or damage must have been caused on the target State’s territory for such activities to qualify as a sovereignty violation.[27] While there is disagreement on the precise degree of harm or damage necessary,[28] a number of States have publicly supported that view.[29]
5. Assessment of the Tallinn Manual‘s Approach to Sovereignty
This relativist approach, however, fails to convince. As Kevin Jon Heller has explained persuasively, the prohibition of intruding on another State’s sovereignty qualifies as a general rule of international law.[30] As such, it applies to any act that implicates international law, including cyber espionage.[31] It is incorrect that advances in technology and science create a lacuna in international law, which may simply be closed by creating new rules.[32] Rather, at least initially, the general rules of international law apply automatically[33] as the ICJ confirmed in its Advisory Opinion on the Legality of Nuclear Weapons.[34] Of course, subsequent amendments by States are always possible.
The relevant general rule of international law on sovereignty applicable here does not require harm or damage to be caused on the other State’s territory for an intrusion to be unlawful.[35] For example, the unauthorized overflight of a foreign aircraft over a State’s territory is generally viewed as an unlawful violation of territorial sovereignty, although the mere overflight will not cause any damage or harm to the State concerned.[36] The United States reaction to the Chinese surveillance balloon that, in early 2023, crossed United States territory on an alleged mission to spy on military installations confirms this. Although there was no claim of harm or damage intended or caused, “senior State Department officials” stated that “the presence of this balloon in our airspace is a clear violation of our sovereignty, as well as international law, and it is unacceptable that this has occurred.”[37] Similarly, despite usually not causing any harm to the target State, the conduct of cross-border criminal investigations without that State’s consent is generally viewed as a usurpation of governmental functions and, therefore, as a sovereignty violation, irrespective of any damage caused.[38] Applied to the cyber realm, the conclusion must, therefore, be that in the case of cyber espionage, no harm or damage is required to qualify the remote intrusion onto the other State’s territory as unlawful.[39]
Undoubtedly, States are free to create new rules of customary international law (leges speciales) regarding cyber espionage.[40] For such a process to be successful, however, sufficient State practice and sufficient State reaction to evidence opinio juris in support of such a change are required.[41] Given the Common African Position, recently issued by the Peace and Security Council of the AU, such a development seems far off.[42] Although some States support the relativist approach to sovereignty in cyberspace,[43] many others do not.[44] Rather, the latter have taken the view that an unlawful intrusion into a State’s cyber system is a violation of sovereignty, irrespective of whether harm or damage was caused.[45]
France[46] and Iran,[47] two of the States explicitly rejecting the de minimis threshold, are, in fact, major cyber actors.[48] Moreover, considering their reasons for rejecting the Budapest Cybercrime Convention, it seems China and the Russian Federation, well-known for their massive cyber-espionage operations,[49] also support the pure sovereignty approach. Both States disapproved of the Budapest Cybercrime Convention on the grounds that Article 32 (b) of the treaty, which in specific circumstances allows one State to access computer data in another State without the latter’s consent, amounted to a violation of State sovereignty.[50] This fact is particularly relevant, as the ICJ has stated that any analysis of State practice and opinio juris in order to identify a rule of customary international law must include those “States whose interests are specially affected.”[51] The relativist approach to sovereignty fails that test: some major players in the field of cyber espionage oppose it. Now, in February 2024, the 55 member States of the AU that are more vulnerable to and whose interests are therefore also ‘specially affected’ by acts of cyber espionage[52] have likewise rejected the approach to sovereignty espoused by the authors of the Tallinn Manual.[53]
6. Conclusion
The AU’s statement confirms that, by now, many States, including some of the most important perpetrators and many of the particularly vulnerable targets of cyber espionage, have come to oppose the approach to sovereignty adopted in the Tallinn Manual. This reality confirms that no lex specialis has been created with respect to cyber espionage that negates a sovereignty violation in cases where no noticeable negative effects have been caused.
Acts of cyber espionage that serve to obtain data stored on the target State’s territory violate that State’s sovereignty and are, therefore, unlawful. The Tallinn Manual’s current relativist approach to sovereignty in cyberspace does not have sufficient support among States to be viewed as reflective of customary international law.
* Patrick C. R. Terry is a professor of law and the dean of the faculty of law at the University of Public Administration in Kehl (Germany). I wish to thank Cody Corliss and the editors of the Harvard International Law Journal, especially Amirah Mimano, for insightful comments on previous drafts of this piece and during the editing process. All errors are mine.
[1] Patrick C. R. Terry, “The Riddle of the Sands” – Peacetime Espionage and Public International Law, 51 Geo. J. Int’l L. 377 (2020).
[2] Mohamed Helal, Common African Position on the Application of International Law to the Use of Information and Communication Technologies in Cyberspace, and all associated Communiqués adopted by the Peace and Security Council of the African Union ¶¶ 15-16 (Ohio St. Legal Stud, Research Paper No. 823, 2024), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4714756.
[3] Chimène Keitner, Foreign Election Interference and International Law, in Election Interference: When Foreign Powers Target Democratic Institutions 1, 14-15 (Duncan Hollis & Jens Ohlin eds., 2020); Wolff Heintschel von Heinegg, Territorial Sovereignty and Neutrality in Cyberspace, 89 Int’l L. Stud. 123 (2013); Michael N. Schmitt, Virtual Disenfranchisement: Cyber Election Meddling in the Grey Zones of International Law, 19 Chi. J. of Int’l L. 30, 40, 42-43 (2018); see also Tallinn Manual 2.0 on the International Law Applicable to Cyber Operations 11-29, especially Rule 4 (at 17) (Michael N. Schmitt ed., 2017); Russell Buchan & Iñaki Navarrete, Cyber Espionage and International Law, in Research Handbook on International Law and Cyberspace 231, 240-43 (Nicholas Tsagourias & Russell Buchan eds., 2021).
[4] The Case of the S.S. Lotus (Fr. v. Turk.), Judgment, 1927 P.C.I.J. (ser. A) No. 10, at 18 (Sept. 7, 1927); see also Island of Palmas Case (Neth. v. U.S.), 2 R.I.A.A. 829, 838 (Perm. Ct. Arb. 1928).
[5] Corfu Channel Case (U.K. v. Alb.), Judgment, 1949 I.C.J. Rep. 4, at 35 (Apr. 9, 1949); see also Armed Activities on the Territory of the Congo (Dem. Rep. Congo v. Uganda), Judgment, 2005 I.C.J. Rep. 168, ¶¶ 153, 165, 257, 259 (Dec. 19, 2005).
[6] Jeremy Wright, U.K. Attorney General, Speech at the Royal Institute of International Affairs: Cyber and International Law in the 21st Century (May 23, 2018), https://www.gov.uk/government/speeches/cyber-and-international-law-in-the-21st-century; see Suella Braverman, U.K. Attorney General, Speech at the Royal Institute of International Affairs: International law in Future Frontiers (May 19, 2022); https://www.gov.uk/government/speeches/international-law-in-future-frontiers.
[7] See Michael N. Schmitt & Liis Vihul, Respect for Sovereignty in Cyberspace, 95 Tex. L. Rev. 1639 (2017) (under the Trump Administration, the United States seemed to take an ambivalent view on whether respecting another State’s sovereignty was a rule of international law. The Department of Defense General Counsel, Paul C. Ney, Jr., stated that the United States position ‘share[d] some similarities with the view expressed by the U.K. Government in 2018’. However, Ney’s subsequent legal analysis of espionage indicated that he believed it was indeed unlawful to violate another State’s sovereignty); see Paul C. Ney, Jr., General Counsel, U.S. Department of Defense, DOD General Counsel Remarks at U.S. Cyber Command Legal Conference (Mar. 2, 2020), https://www.defense.gov/Newsroom/Speeches/Speech/Article/2099378/dod-general-counsel-remarks-at-us-cyber-command-legal-conference/; see also Dan Efrony & Yuval Shany, A Rule Book on the Shelf? Tallinn Manual 2.0 on Cyberoperations and Subsequent State Practice, 112 Am. J. Int’l L. 583, 640 (2018) (where the authors point out that no State accused of violating another State’s sovereignty has claimed to be entitled to do so); see Harald Hongju Koh, Legal Adviser, U.S. Department of State, Speech at USCYBERCOM Inter-Agency Legal Conference: International Law in Cyberspace (Sept. 18, 2012), https://2009-2017.state.gov/s/l/releases/remarks/197924.htm; Brian J. Egan, Legal Adviser, U.S. Department of State, Speech at the University of California, Berkeley School of Law: Remarks on International Law and Stability in Cyberspace (Nov. 10, 2016), https://2009-2017.state.gov/s/l/releases/remarks/264303.htm (under the Obama Administration, the United States adopted the view that violating another State’s sovereignty was unlawful).
[8] G.A. Off. Compendium of Voluntary Nat’l Contributions on the Subject of How Int’l L. Applies to the Use of Info. and Commc’n Tech. by States Submitted by Participating Gov’t Experts in the Group of Gov’t Experts on Advancing Responsible State Behaviour in Cyberspace in the Context of Int’l Sec. Established Pursuant to G.A. Res. 73/266, U.N. Doc. A/76/136, Netherlands, 55-57 (July 13, 2021), https://front.un-arm.org/wp-content/uploads/2021/08/A-76-136-EN.pdf (hereinafter Netherlands); G.A. Unofficial Translation of France’s Response to Res. 73/27 “Developments in the Field of Information and Telecommunications in the Context of International Security” and Res. 73/266 “Advancing Responsible State Behaviour in Cyberspace in the Context of International Security,” ¶ 3 (a) (2019), https://www.diplomatie.gouv.fr/IMG/pdf/190514-_french_reponse_un_resolutions_73-27_-_73-266_ang_cle4f5b5a-1.pdf (hereinafter France); Ger. Fed. Gov’t, On the Application of International Law in Cyberspace 3-4 (Mar. 2021), https://www.auswaertiges-amt.de/blob/2446304/32e7b2498e10b74fb17204c54665bdf0/on-the-application-of-international-law-in-cyberspace-data.pdf (hereinafter Germany); Can. Fed. Gov’t, International Law Applicable in Cyber Space ¶ 13 (Apr. 22, 2022), https://www.international.gc.ca/world-monde/issues_development-enjeux_developpement/peace_security-paix_securite/cyberspace_law-cyberespace_droit.aspx?lang=eng#a3 (hereinafter Canada); Pol. Ministry of Foreign Affairs, The Republic of Poland’s Position on the Application of International Law in Cyber Space 3 (Dec. 29, 2022), https://www.gov.pl/web/diplomacy/the-republic-of-polands-position-on-the-application-of-international-law-in-cyberspace (hereinafter Poland).
[9] North Atlantic Treaty Organization, Allied Joint Publication-3.20, Allied Joint Doctrine for Cyberspace Operations (Edition A Version 1) 20 fn. 26 (Jan. 2020).
[10] Military and Paramilitary Activities in and against Nicaragua (Nicar. v. U.S.), 1986 I.C.J. Rep 14, ¶¶ 87-91, 251 (June 27, 1986); Certain Activities Carried Out by Nicaragua in the Border Area (Costa Rica v. Nicar.), 2015 I.C.J. Rep. 665, ¶¶ 66-99, 221-23 (Dec. 16, 2015); Weber and Saravia v. Ger., 2006-XI Eur. Ct. H.R. App. No. 54934/00, ¶ 88 (June 29, 2006); see also Re Canadian Security Intelligence Service Act, 2009 F.C. 1058 (Can.) (dealing with espionage).
[11] S.C. Res. 138, ¶ 2 (June 30, 1960); S.C. Res. 1234, ¶ 1 (April 9, 1999); S.C. Res. 1304 ¶ 4 (a), (June 16, 2000).
[12] G.A. Res. 2625 (XXV) (Nov. 25, 1970); see also U.N. Convention against Transnational Organized Crime, art. 4 (2), Annex I to G.A. Res. 55/25 (Nov. 15, 2020).
[13] Keitner, supra note 3, 14-15; Schmitt, supra note 3, 40, 42-43; see Full Text: International Strategy of Cooperation on Cyberspace, Xinhua News Agency ¶ 2 (Mar. 1, 2017), http://www.xinhuanet.com//english/china/2017-03/01/c_136094371_2.htm.
[14] Helal, supra note 2, ¶ 16.
[15] Stefan Talmon, Sachverständigengutachten gemäß Beweisbeschluss SV-4 des 1. Untersuchungsausschusses des Deutschen Bundestages der 18. Wahlperiode 1–39, at 19-20 (2014) (Ger.), https://www.bundestag.de/blob/282872/2b7b605da4c13cc2bc512c9c899953c1/mat_a_sv-4-2_talmon-pdf-data.pdf; but see Anne Peters, Surveillance Without Borders? The Unlawfulness of the NSA-Panopticon, Part I, EJIL: Talk! 2 (Nov. 1, 2013), http://www.ejiltalk.org/surveillance-without-borders-the-unlawfulness-of-the-nsa-panopticon-part-i/; see also Aaron Shull, Cyberespionage and International Law, in GigaNet 8th Annual Symposium 5 (2013).
[16] Island of Palmas Case, supra note 4, 838.
[17] The Case of the S.S. Lotus, supra note 4, 18.
[18] Nicholas Tsagourias, The Legal Status of Cyberspace: Sovereignty Redux?, in Research Handbook on International Law and Cyberspace, 9, 22-23 (Nicholas Tsagourias & Russell Buchan eds., 2021); von Heinegg, supra note 3, 125-26; see also Tallinn Manual on the International Law Applicable to Cyber Warfare 15, 18 (Michael N. Schmitt ed., 2013); Tallinn Manual 2.0, supra note 3, 13.
[19] International Telecommunication Union (ITU), Understanding Cybercrime: Phenomena, Challenges and Legal Response 277-78 (2012), http://www.itu.int/ITU-D/cyb/cybersecurity/docs/Cybercrime%20legislation%20EV6.pdf; Iñaki Navarrete, L’espionnage en tamps de paix en droit international public, 52 Can. Y.B. Int’l L. 1, 30-34 (2015); cf. Peters, supra note 15, 2.
[20] See, e.g., Electronic Communications Privacy Act of 1986 (ECPA), 18 U.S.C. § 2518; §§ 100 a, 100 e Strafprozessordnung (German Code of Criminal Procedure) for criminal proceedings and §§ 5, 51 Bundeskriminalamtgesetz (Law on the Federal German Police Office) for preventive measures (Ger.).
[21] Russell Buchan, Cyber Espionage and International Law, 54-55 (2019); Kevin Jon Heller, In Defense of Pure Sovereignty in Cyber Space, 97 Int’l L. Stud. 1432, 1480-86 (2021).
[22] Tallinn Manual 2.0, supra note 3, Rule 32 (especially Comment 8, at 171).
[23] Ibid.
[24] Przemyslaw Roguski, Application of International Law to Cyber Operations: A Comparative Analysis of States’ Views, The Hague Program for Cyber Norms Policy 4 (Policy Brief, 2020).
[25] Heller, supra note 21, 1436.
[26] Heller, supra note 21, 1461-63; see, e.g., Tallinn Manual 2.0, supra note 3, Rule 4 (Comment 14, at 22).
[27] Buchan, supra note 21, 53-54; Heller, supra note 21, 1461-63.
[28] See, e.g., Tallinn Manual 2.0, supra note 3, Rule 4 (Comment 14, at 22); Germany, supra note 8, 4; Netherlands, supra note 8, 57; G.A. Off. Compendium of Voluntary Nat’l Contributions on the Subject of How Int’l L. Applies to the Use of Info. and Commc’n Tech. by States Submitted by Participating Gov’t Experts in the Group of Gov’t Experts on Advancing Responsible State Behaviour in Cyberspace in the Context of Int’l Sec. Established Pursuant to G.A. Res. 73/266, U.N. Doc. A/76/136, United States, 140 (July 13, 2021); https://front.un-arm.org/wp-content/uploads/2021/08/A-76-136-EN.pdf (hereinafter United States); Richard Kadlčák, Special Envoy for Cyberspace Director of Cybersecurity Department, Statement at the 2nd Substantive Session of the Open-Ended Working Group on Developments in the Field of Information and Telecommunications in the Context of International Security of the First Committee of the General Assembly of the United Nations 2 (Feb. 11, 2020), https://www.nukib.cz/download/publications_en/CZ%20Statement%20-%20OEWG%20-%20International%20Law%2011.02.2020.pdf (hereinafter Czech Republic); Canada, supra note 8, ¶¶ 15, 17.
[29] Germany, supra note 8, 4; Netherlands, supra note 8, 57; United States, supra note 28, 140; Czech Republic, supra note 28, 3; Canada, supra note 8, ¶¶ 15, 17.
[30] Heller, supra note 21, 1451-54.
[31] Heller, supra note 21, 1451-54; Antonio Coco & Talita de Souza Dias, ‘Cyber Due Diligence’: A Patchwork of Protective Obligations in International Law, 32 Eur. J. Int’l L. 771, 779-80 (2021).
[32] Heller, supra note 21, 1451-53; Coco & de Souza Dias, supra note 31, 779-80.
[33] Heller, supra note 21, 1454; Coco & de Souza Dias, supra note 31, 779-80.
[34] Legality of the Threat or Use of Nuclear Weapons (Advisory Opinion), 1996 I.C.J. Rep. 226, ¶ 86 (July 8, 1996) (“Indeed, nuclear weapons were invented after most of the principles and rules of humanitarian law applicable in armed conflict had already come into existence; […] However, it cannot be concluded from this that the established principles and rules of humanitarian law applicable in armed conflict did not apply to nuclear weapons. Such a conclusion would be incompatible with the intrinsically humanitarian character of the legal principles in question which permeates the entire law of armed conflict and applies to all forms of warfare and to all kind of weapons, those of the past, those of the present and those of the future”).
[35] Heller, supra note 21, 1464-68; Buchan & Navarrete, supra note 3, 243-44.
[36] Military and Paramilitary Activities in and against Nicaragua, supra note 10, ¶¶ 87-91, 251.
[37] U.S. Dept. of State, Senior State Department Officials on the People’s Republic of China, Special Briefing (Feb. 3, 2023), https://www.state.gov/senior-state-department-officials-on-the-peoples-republic-of-china/; see also Donald Rothweill, Too Much Hot Air? A Balloon which Tested the Limits of International Law, Australian National University College of Law (Feb. 16, 2023), https://law.anu.edu.au/research/essay/cipl-discussion-paper-series/too-much-hot-air-balloon-which-tested-limits/.
[38] The Case of the S.S. Lotus, supra note 4, 18-19; see also Tallinn Manual 2.0, supra note 3, Rule 11 (at 66), especially Comment 14 (at 69-70); François Delerue at al., The Geopolitical Representations of International Law in the International Negotiations on the Security and Stability in Cyberspace, Report No. 75, 52 (“generally…accepted”) (Ministère des Armées, 2020).
[39] Heller, supra note 21, 1458-61, 1464-74.
[40] Heller, supra note 21, 1454.
[41] Heller, supra note 21, 1454; Case Concerning the Continental Shelf (Libyan Arab Jamahiriya v. Malta), 1985 I.C.J. Rep. 13, ¶ 27 (June 3, 1985); Legality of the Threat or Use of Nuclear Weapons, supra note 34, ¶ 64.
[42] Common African Position, supra note 2, ¶ 17.
[43] See supra note 29.
[44] See France, supra note 8, ¶ 3 (a) (at 8) (according to France’s official response to two GA resolutions, no harm is necessary for a violation of sovereignty to have occurred); see Declaration of General Staff of the Armed Forces of the Islamic Republic of Iran Regarding International Law Applicable to the Cyberspace, art. II, ¶ 4 (Aug. 18, 2020), https://nournews.ir/En/News/53144/General-Staff-of-Iranian-Armed-Forces-Warns-of-Tough-Reaction-to-Any-Cyber-Threat (for Iran’s position on sovereignty violations in cyberspace); see also Switzerland’s Position Paper on the Application of International Law in Cyberspace, Swiss Federal Department of Foreign Affairs 2, https://www.eda.admin.ch/content/dam/eda/en/documents/aussenpolitik/voelkerrecht/20210527-Schweiz-Annex-UN-GGE-Cybersecurity-2019-2021_EN.pdf; see G.A. Off. Compendium of Voluntary Nat’l Contributions on the Subject of How Int’l L. Applies to the Use of Info. and Commc’n Tech. by States Submitted by Participating Gov’t Experts in the Group of Gov’t Experts on Advancing Responsible State Behaviour in Cyberspace in the Context of Int’l Sec. Established Pursuant to G.A. Res. 73/266, U.N. Doc. A/76/136, Brazil, 18 (July 13, 2021), https://front.un-arm.org/wp-content/uploads/2021/08/A-76-136-EN.pdf; Poland, supra note 8, at 3; Przemyslaw Roguski, Poland’s Position on International Law and Cyber Operations: Sovereignty and Third-Party Countermeasures, Just Security (Jan. 18, 2023), https://www.justsecurity.org/84799/polands-position-on-international-law-and-cyber-operations-sovereignty-and-third-party-countermeasures/; see also Rashad Rolle, Lawyers to Act in N.S.A. Spy Row, The Tribune (June 5, 2014) (responding to accusations that the NSA had recorded every cell phone conversation in the Bahamas, that State’s Minister for Foreign Affairs, Fred Mitchell, declared: “The Bahamas wishes to underscore the most worthy principles of this organisation, as expressed in the OAS charter: that international law is the standard of conduct of States, the primacy of sovereignty, maintenance of territorial integrity, freedom from undue external intrusion and influence […]”), http://www.tribune242.com/news/2014/jun/05/lawyers-act-ns-spy-row/; see further Note Verbale Dated 22 July 2013 from the Permanent Mission of The Bolivarian Republic of Venezuela to the United Nations Addressed to the Secretary-General (on Behalf of the MERCUSOR Member States Argentina, Bolivia, Brazil, Uruguay, And Venezuela), U.N. Doc. A767/746 (July 22, 2013) (in relation to the NSA “interception of telecommunications” the MERCUSOR member States declared that these “constitute unacceptable behaviour that violates our sovereignty […]“), https://digitallibrary.un.org/record/754199; African Common Position, supra note 2, ¶¶ 15-16.
[45] Ibid.
[46] See supra note 44.
[47] See supra note 44.
[48] Arthur B.P. Laudrain, France’s New Offensive Cyber Doctrine, Lawfare (Feb. 26, 2019), https://www.lawfareblog.com/frances-new-offensive-cyber-doctrine; Boris Toucas, With its New ‘White Book’, France Looks to become a World-Class Player in Cyber Space, Texas National Security Review/War on the Rocks (Mar. 29, 2018), https://warontherocks.com/2018/03/with-its-new-white-book-france-looks-to-become-a-world-class-player-in-cyber-space/; Eric Rosenbaum, Iran is ‘Leapfrogging Our Defenses’ in a Cyber War ‘My Gut is We Lose’: Hacking expert Kevin Mandia, CNBC News (Nov. 18, 2021), https://www.cnbc.com/2021/11/18/iran-leapfrogging-our-defenses-in-cyber-war-hacking-expert-mandia-.html; Catherine A. Theohary, Iranian Offensive Cyber Attack Capabilities, Congressional Research Service (Jan. 13, 2020), https://sgp.fas.org/crs/mideast/IF11406.pdf; Publicly Reported Iranian Cyber Actions in 2019, Center for Strategic & International Studies, https://www.csis.org/programs/technology-policy-program/publicly-reported-iranian-cyber-actions-2019.
[49] See, e.g., Bill Whitaker, Solar Winds: How Russian Spies Hacked the Justice, State, Treasury, Energy and Commerce Departments, CBS News (July 4, 2021), www.cbsnews.com/news/solarwinds-hack-russia-cyberattack-60-minutes-2021-07-04/; Zolan Kanno-Youngs & David E. Sanger, U.S. Accuses China of hacking Microsoft, The New York Times (Aug. 26, 2021), www.nytimes.com/2021/07/19/us/politics/microsoft-hacking-china-biden.html.
[50] Eleonore Pouwels, The Road Towards Cyber-Sovereignty Passes Through Africa, Konrad Adenauer Foundation (Dec. 9, 2019), https://www.kas.de/de/laenderberichte/detail/-/content/the-road-towards-cyber-sovereignty-passes-through-africa.
[51] The North Continental Shelf Cases (Ger. v. Den. and Neth.), 1969 I.C.J. Rep. 3, ¶ 74 (Feb. 20, 1969) (“[…] State practice, including that of States whose interests are specially affected, should have been both extensive and virtually uniform in the sense of the provision invoked; – and should moreover have occurred in such a way as to show a general recognition that a rule of law or legal obligation is involved”); Nico Krisch, International Law in Times of Hegemony: Unequal Power and the Shaping of the International Legal Order, 16 Eur. J. Int’l L. 369, 380 (2005).
[52] Common African Position, supra note 2, ¶ 17.
[53] Common African Position, supra note 2, ¶¶ 15-16.
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Apr 9, 2024 | Online Scholarship, Perspectives
Lorenz Dantes
I. Introduction
On October 25, 2023, a first-of-its-kind legal effort began in the Philippines. The “Philippine Act on Crimes Against International Humanitarian Law, Genocide, and Other Crimes Against Humanity,” Republic Act (RA) No. 9851, was invoked as a means of prosecuting and achieving justice for atrocities that occurred outside of the Philippines. Burmese refugees who fled to the Philippines initiated criminal proceedings against members of the ruling junta regime in Myanmar for violations of International Humanitarian Law before the Philippine Department of Justice. According to one Burmese refugee, “[w]e can’t find justice in our own country[,] and we are expecting that the Philippines is the place where we can find some form of justice from the atrocities we have suffered.” Philippine prosecutors must first determine the existence of “probable cause” before the case can proceed to court.
The charges against the junta primarily involve violations of RA 9851’s Section 4(b)(1), Section 4(c)(2), Section 4(c)(7) and Section 4(c)(10). RA 9851 is often referred to as the Philippine version of the 1998 Rome Statute and was enacted in 2009 to enable the Philippines to prosecute “serious crimes of concern to the international community” such as genocide, crimes against humanity, and war crimes, especially since it is not a member of the International Criminal Court (“ICC”). Section 4(b)(1) covers situations of non-international armed conflicts wherein “serious violations of common Article 3 to the four Geneva Conventions of 12 August 1949” occurred, through the infliction of violent acts against persons taking no active part in the hostilities. Sections 4(c)(2), 4(c)(7), and 4(c)(10), on the other hand, penalize “serious violations of the laws and customs applicable in armed conflict.” This includes intentional attacks on civilian (non-military) objectives, bombardment of undefended towns, and attacks on buildings dedicated to “religion, education, art, science or charitable purposes, historic monuments, hospitals and places where the sick and wounded are collected.”
One main feature of RA 9851 that Burmese refugees sought to use is Section 17, which states that jurisdiction can be exercised:
[O]ver persons, whether military or civilian, suspected or accused of a crime defined and penalized in this Act, regardless of where the crime is committed, provided, any one of the following conditions is met:
(a) The accused is a Filipino citizen;
(b) The accused, regardless of citizenship or residence, is present in the Philippines; or
(c) The accused has committed the said crime against a Filipino citizen.
In assessing its applicability, it is important to remember that the accused, in this case, are the members of the military junta. The complaint includes Dr. Vung Suang Thang (Chief Minister of the State of Chin), Lt. Gen. Min Naing (chair of the Cyclone Mocha Emergency Response in the State of Chin), Lt. Gen. Tay Zar Kyaw (chief of the Bureau of Special Operations), Maj. Gen. Phyo Thant and Than Htike, Brig. Gen. Myo Htut Hlaing, Col. Saw Tun, Lt. Col. Myo Zin Tun, and Maj. Nay Myo Oo. Notably, it also includes Gen. Min Aung Hlaing, the overall head of the ruling military junta and the commander in chief of the Tatmadaw, the military forces of Myanmar.
The Burmese refugees stated in their complaint that these members of the military junta bear criminal liability for the murder of civilians and the torching of houses in Myanmar’s Chin state, one of the least developed regions in Myanmar. They also narrated that following a clash between the Tatmadaw and rebel groups that resulted in the deaths of 30 Tatmadaw soldiers, the Tatmadaw took revenge on the residents of the town of Thantlang by burning their houses and firing on villagers and members of a Baptist church group delivering medical supplies and putting out the fires. This violence then produced a massive forced displacement of the town’s villagers into neighboring India’s Mizoram state. To support these factual allegations, the complaint cites a report dated February 25, 2022, from the United Nations High Commissioner of Human Rights, which states that the Tatmadaw Light Infantry Brigade burned down over 900 buildings in Thantlang through at least 23 successive attacks on churches, houses, schools, churches, and offices of non-governmental organizations.
According to the Filipino lawyers of the Burmese refugees, RA 9851 is sufficient to provide the Philippine legal system with universal jurisdiction over these incidents. They contend that “universal jurisdiction means that any state can prosecute a crime … This is not an ordinary crime. It’s considered a crime against the entire international community.” The lawyers also argued that since the military junta “do not represent the legitimate government of the people of Myanmar under international law,” they cannot invoke sovereign or diplomatic immunity. Coincidentally, this complaint also corroborates the damning evidence released last August by a group of investigators from the United Nations known as the Investigative Mechanism for Myanmar, which indicates that the Tatmadaw deliberately targeted civilians with bombs and carried out mass executions of detained people during its operations. This includes dropping fuel-air explosives on a village in the Sagaing region that resulted in the deaths of numerous children.
With the filing of this case, the Philippines has now become the fifth country after Germany, Turkey, Indonesia, and Argentina where legal cases have been sought to be initiated over the crimes committed by the Tatmadaw against a number of civilian population groups in Myanmar. In addition, proceedings are also ongoing at the ICC and at the International Court of Justice (“ICJ”). The lawyers of the Burmese refugees in the Philippines note, however, that the combination of the Philippines having its own domestic law over crimes against International Humanitarian Law as well as being geographically conducive towards getting testimony from witnesses in Myanmar makes it a crucial legal jurisdiction for pursuing international justice over the crimes committed in Myanmar.
It remains unclear whether the existing domestic legal framework in the Philippines is sufficient to pursue international justice over the alleged atrocities committed in Myanmar. To answer this question, we must examine relevant legal and policy considerations.
II. Relevant Philippine Legal Framework
As early as 1952, the Philippines had already ratified the Fourth Geneva Convention on the Protection of Civilian Persons in Time of War. As such, Article 146 of the Fourth Geneva Convention, which has been described as an explicit reference to universal jurisdiction, has the force and effect of a domestic statute within the Philippine jurisdiction. According to this provision, “[e]ach High Contracting Party shall be under the obligation to search for persons alleged to have committed, or to have ordered to be committed” grave breaches of the convention, as well as to “bring such persons, regardless of their nationality, before its own courts.”
In the case of Bayan Muna v. Romulo, the Philippine Supreme Court (“The Court”) described the relationship between “jus cogens crimes” and universal jurisdiction. According to the Court, jus cogens crimes are so fundamental to the existence of a just international legal order that
[A]ny state may exercise jurisdiction over an individual who commits certain heinous and widely condemned offenses, even when no other recognized basis for jurisdiction exists. The rationale behind this principle is that the crime committed is so egregious that it is considered to be committed against all members of the international community and thus granting every State jurisdiction over the crime.
Thus, the Court concluded that even if a particular country does not have domestic legislation on crimes against humanity and war crimes, it would still have jurisdiction to try these crimes due to the principle of universality. According to the Court, this is even more so in countries that adhere to the doctrine of incorporation or those that “recognize [ ] international law as part of the law of the land, necessarily including international crimes, even without any local statute,” since international legal principles on genocide, war crimes, and crimes against humanity have already attained the status of customary international law (“CIL”). Through this pronouncement, therefore, the Court recognized that universal jurisdiction can indeed be utilized within the Philippines’ domestic legal system.
However, a right to try does not mean a duty or obligation to do so, especially for an accused that is in absentia. As stated by the Court in another case, “notwithstanding an array of General Assembly resolutions calling for the prosecution of crimes against humanity and the strong policy arguments warranting such a rule, the practice of states does not yet support the present existence of an obligation to prosecute international crimes.” Moreover, the Court added that an invocation of the concept of erga omnes obligations, or those obligations which are “owed by States towards the community of states as a whole,” will not alter this analysis because it cannot be shown yet that the “duty to prosecute perpetrators of international crimes is an erga omnes obligation.”
Fittingly, the Court has thus described universal jurisdiction as being an “accepted” concept in international law, but only applying in special circumstances, rather than absolutely or unconditionally. Accordingly, before Section 17 of RA 9851 can give rise to universal jurisdiction within the Philippine domestic legal framework, it must first comply with the conditions set forth therein. In the case of the Myanmar junta, these conditions can never be satisfied as long as they are in absentia (outside the Philippines). As stated by the Court, universal jurisdiction confers authority unto the forum only after physical custody of the perpetrator of offenses considered particularly heinous and harmful to humanity is obtained.
Considering the above, both Section 17 of RA 9851 and the Philippine Supreme Court’s pronouncements on universal jurisdiction constitute a significant hurdle to the exercise of jurisdiction by Philippine courts as the perpetrators, the Myanmar junta, are outside the Philippines. Theoretically, it may be true, as one legal observer pointed out, that R.A. 9851 also states that the provisions of the Geneva Convention and the rules and principles of CIL are also to be considered in the application and interpretation of RA 9851. Nonetheless, it is also arguable that the limited enumeration of instances under the law where jurisdiction can be exercised operates to preclude any notion of an expansive grant of universal jurisdiction under the interpretative legal maxim of Expressio unius est exclusio alterius. Moreover, even if the supplementary application of the principles of the Geneva Convention and CIL are interpreted as granting an implied universal jurisdiction to Philippine courts beyond what Section 17(b) provides, it would still not solve the quandary of the lack of obligation to assume jurisdiction and try a case against persons who are in absentia. As mentioned in the commentary provided by the International Committee of the Red Cross on the Geneva Convention, the “decision whether or not to prosecute an alleged perpetrator should be taken by competent authorities in line with national legal requirements.” According to the commentary, the words “bring such persons, regardless of their nationality, before its own courts,” which can be found in both Article 49 of the First Geneva Convention and Article 146 of the Fourth Geneva Convention, conceivably “does not imply an absolute duty to prosecute or to punish.” While the principle of Aut Dedere Aut Judicare may provide an important argument in favor of the obligation to assume jurisdiction over the case, doubts about the consistent and widespread state practice of this principle, in the absence of treaty obligations, raise uncertainty and debates over its status as CIL. It is worth remembering the observation made by the former President of the ICJ, Gilbert Guillaume, in a Separate Opinion that “Universal jurisdiction in absentia […] is unknown to international law.”
III. Foreign Comparisons?
Curiously, the filing of this criminal complaint is also being compared to the prosecution and sentencing by Senegal of former Chad leader Hissène Habré. While universal jurisdiction was also invoked in that case, the similarities are more surface level. Senegal had to institute “constitutional and legal amendments that removed the obstacles to holding Hissène Habré’s trial in Senegal, as well as to the establishment of the Extraordinary African Chambers within the Senegalese judicial system to judge Hissène Habré.” Senegal likewise signed a judicial cooperation agreement with Chad to facilitate investigations in Chad. None of these circumstances are present here. As highlighted by one observer, “the Habré case was made possible by different movements, both political and judicial, key of which was the African Union supporting the creation and funding of a special court, then pushing Senegal to amend its law so they could clearly obtain universal jurisdiction.” Moreover, even taking into account the ruling of the ICJ in Belgium v. Senegal, the comparison would still not square with the legal action in the Philippines. In Belgium v. Senegal, Belgium submitted that Senegal failed to prosecute the former President of Chad, Mr. Hissène Habré, for large-scale human rights violations that he allegedly committed during his presidency in Chad. At that time, Mr. Habré was already a resident of Senegal. The ICJ then ruled that Senegal breached its obligations under Article 6(2) and Article 7 (1) of the Convention Against Torture (“CAT”). Article 6(2) requires Senegal to “immediately make a preliminary inquiry into the facts” against “a person alleged to have committed acts of torture” that is within its territory. Article 7 (1), on the other hand, requires Senegal to “submit the case to its competent authorities for the purpose of prosecution.”
Evidently, the legal ruling in Belgium v. Senegal relates more specifically to the interpretation of the provisions of the CAT rather than on crimes against humanity and war crimes. More importantly, Mr. Habré was present in the territorial jurisdiction of Senegal at that time, while General Min Aung Hlaing and the members of the Myanmar junta are not within Philippine territory, nor will they be in the foreseeable future. This is essentially the same reason why the requirement under Section 17(b) of RA 9851 for the presence of the accused within Philippine territory is so important. While universal jurisdiction can present an important tool for pursuing international justice and accountability, RA 9851’s conditional view of it asserts that it cannot come at the expense of the accused’s fundamental due process rights. Even in Germany, a country that has been frequently described as a model of universal jurisdiction through its Code of Crimes against International Law (Völkerstrafgesetzbuch – VStGB), it has been noted that “a trial can never be initiated without the accused being before the court” because it is a “mandatory requirement for a lawful process that defendants have the chance to defend themselves against the accusations brought against them.”
Relevantly, it was reported in 2014 that Spain moved away from absolute, unconditional universal jurisdiction by enacting reform legislation that adopted a restrictive model of universal jurisdiction, just like the Philippines’ RA 9851. This reform legislation thus excluded the possibility of conducting investigations, prosecutions, and trials in absentia, and limited “the exercise of universal jurisdiction to the circumstance that the suspect is present in the territory of Spain.” When this change was questioned before the Supreme Court of Spain, the Spanish Supreme Court rejected the challenge by stating that an absolute and unconditional exercise of universal jurisdiction is not mandated by international law, whether through international treaties such as the Geneva Conventions or by CIL. This ruling from the Supreme Court of Spain is persuasive authority within the Philippine legal jurisdiction, and there is a strong possibility that Philippine prosecutors and courts may interpret Section 17 of RA 9851 similarly to the Spanish Court.
Concomitantly, RA 9851 also provides that the relevant Philippine authorities may dispense with the assumption of jurisdiction if another court or international tribunal is already conducting such an investigation or undertaking the prosecution. As noted previously, legal proceedings over atrocities in Myanmar have been initiated in Argentina, Turkey, Indonesia, and Germany and also in the ICC and the ICJ. While some of these cases may deal with completely different egregious acts committed by the Myanmar military, such as those against the Rohingyas, the possibility of an overlap and connection between these cases can present another challenge to any assumption of jurisdiction by Philippine authorities.
IV. Policy Considerations
Under the Philippine legal system, it is the executive branch, through the Secretary of Justice and the prosecutors, that first determines the existence of probable cause before the case can proceed in court, akin to grand juries in the American legal system. As an executive function, it would be hardly surprising if other factors beyond just the legal questions are also investigated by Philippine executive officials in making their determination. Current Philippine foreign policy, for example, may increase the hesitancy of Philippine authorities to assume jurisdiction on behalf Burmese refugees. The Philippines, as a member of the Association of Southeast Asian Nations, or ASEAN, is expected to observe the long-standing principle of non-interference in the internal affairs of other member countries. While this principle has not stopped the Philippines from issuing and supporting critical statements on the atrocities in Myanmar, allowing criminal proceedings to progress and possibly result in Philippine courts issuing arrest warrants for the members of the ruling junta regime can altogether become a step too far for the Philippines in terms of non-interference. Two years ago, it was essentially this very same principle that prevented the Philippines from even joining the call made by the United Nations’ Human Rights Council that the military junta should release detained Myanmar leader Aung San Suu Kyi.
Additionally, an executive determination by the Philippine Department of Justice must also consider any potential reprisals by the ruling Junta regime against the Filipino population in Myanmar. For instance, it was reported previously that the arrest of a British national in Myanmar was possibly made in retaliation to the imposition of sanctions by the United Kingdom on Myanmar. Since the welfare of Filipino nationals overseas continues to play a significant and primary role in the country’s foreign policy dealings with other states, any executive decision on the Myanmar cases would therefore have to take into account its potential ramifications for the Filipino nationals that are residing in Myanmar.
V. Conclusion
While not entirely implausible, there are a number of legal and policy obstacles to the Philippines assuming universal jurisdiction over the case filed by the Burmese refugees. These obstacles could impede possible investigations and court hearings conducted by relevant Philippine authorities. As such we should not expect the existing legal framework in the Philippines to become the go-to destination for pursuing international justice over atrocities committed in Myanmar anytime soon.
However, the Philippine domestic legal framework may still be useful to the pursuit of justice by the Burmese refugees. Even if no criminal cases are tried in the Philippines, officials can assist Burmese refugees in the gathering of evidence. This is akin to structural investigations conducted in Germany, whereby investigations are “led irrespective of whether it is foreseeable that investigation proceedings on specific cases will arise.” In this manner, evidence is gathered merely for purposes of submitting it later on to a foreign or international jurisdiction that wants to assume jurisdiction over the case.
Cover image credit
Mar 25, 2024 | Annual Symposia, Content, Perspectives, Symposia
Harvard International Law Journal and The Harvard Law & International Development Society*
On March 2, the Harvard International Law Journal and the Harvard Law & International Development Society jointly hosted the 2024 Harvard International Law Conference. The Conference focused on the future of international economic law and featured panels on foreign investment, sovereign debt, international financial regulation, and global trade reform. Each panel included experts from academia, governments, and private practice. In total, the Conference welcomed 19 speakers and over 100 attendees.
The Conference began with a discussion on foreign investment and emerging markets. Panelists included Dr. Zongyuan Zoe Liu of the Council on Foreign Relations, Daniel Crosby of King & Spalding, Rohan Sandhu of the Harvard Kennedy School, and Karen Mathiasen of the Center for Global Development. The panel was moderated by Cristian Rodriguez-Chiffelle of the OECD Business Investment Committee. The discussion began by questioning whether current multilateral regimes governing resources, exports, and investments are geopolitical in nature, and, if so, how they might require institutional reforms to better allocate monetary and market investments. Ms. Mathiasen cited the World Bank as an example of an institution with an inbuilt lending preference for emerging market economies, which are responsible for many current climate challenges, as opposed to low-income countries, which shoulder most of the effects of climate change. The panelists also commented on the rise of new geopolitical players in the global investment landscape. For example, Dr. Liu drew attention to the lack of transparency in Chinese mixed-ownership entities investing in the United States, while Mr. Sandhu pointed out the lack of capacity in India’s government to manage an influx of private investment.
The second panel explored sovereign debt in an era of “great powers.” The panel featured four experts: Prof. Mark Weidemaier of UNC Chapel Hill School of Law, Dr. Gregory Makoff of the Harvard Kennedy School, Melissa Butler of White & Case, and Dr. Sebastian Grund of the International Monetary Fund. Of particular interest to both the panelists and the participants were debt-for-nature swaps, a solution that exchanges a portion of a state’s existing debt for its investment in local nature conservation projects. The discussion also touched on various contributors to the global debt environment: collective action restructuring provisions, complex creditor groups, and the rise of new country lenders like China. Although the panel at times included lively disagreement, the speakers largely agreed that “brutal restructurings,” as described by Prof. Weidemaier, were often the only way out for sovereigns in debt distress. Current reform proposals that merely “tinker at the edges” (e.g., proposals to limit the powers of holdout creditors) may be masking the growing underlying sovereign problems,including the magnitude of refinancing needs in the coming decades.
Hassane Cisse, Former Deputy General Counsel of the World Bank, delivered the Conference’s keynote address on the theme of global governance. Mr. Cisse was introduced by Ada Ordor, Professor of Comparative Law at the University of Cape Town and Visiting Professor at Harvard Law School. Prof. Ordor emphasized the need for international institutions to refocus their attention on issues relevant to developing economies, and, in particular, to Sub-Saharan Africa. Mr. Cisse’s speech built on the theme of s institutional refocusing as he encouraged consistent self-reflection and reform in global governance. He drew on 30 years of experience at the IMF and World Bank to share both positive and sobering examples of international institutional reform. Mr. Cisse then called for the development of more inclusive governance structures that accurately reflect the modern global political economy and proposed a “Declaration on Values, Principles, Rights, and Obligations to Govern Nation States and other Stakeholders in Global Governance”.
After the lunch break, the Conference proceeded with a panel on the future of international financial regulation. Present at the panel was Dr. Larissa de Lima of Oliver Wyman, Prof. David Zaring of Wharton Business School, and H. Rodgin Cohen of Sullivan & Cromwell. The speakers agreed that emerging technologies and digital innovations will challenge the international financial regulation status quo (e.g., digital assets and distributed ledger technologies), and regulators will need to improve their ability to keep pace with technology. The speakers noted that shared goals for future governance frameworks could include focusing on stability, limiting spillover effects, ensuring proper data sharing, and scaling standards to avoid regulatory arbitrage opportunities. The panelists noted that Basel III Endgame is a promising sign of international cooperation, but the fact that the U.S. may end up treating it as an aspirational ceiling for banking standards potentially endangers the coherence of Basel III’s workability. Further discussion centered on the need for liquidity regulation rather than a myopic focus on capital regulation. Finally, when it came to the future of the dollar’s reserve currency status, the panel noted that the current currency hierarchy may be affected by changing technology related to price discovery and search costs.
The fourth and final panel discussed the World Trade Organization and the international trading system more broadly. The panel consisted of Prof. Kathleen Claussen of the Georgetown University Law Center, Prof. Shipping Liao of Beijing Normal University School of Law, Pablo Bentes of Baker McKenzie, Prof. Petros Mavroidis of Columbia Law School, and Marc Gilbert of Boston Consulting Group. Taking place in the aftermath of a controversial meeting of the 13th Ministerial Conference of the WTO, the panelists generally agreed that international trade law and the institutions undergirding it are, if not in outright crisis, very much adrift. Against a backdrop of countries increasingly resorting to trade policy measures that the WTO had long ruled out of bounds, the recent Ministerial Conference’s inability to agree to more than stopgap measures, such as a temporary extension of the international moratorium on digital trade taxes, was uniformly found to signal a crisis of leadership, with major players such as the U.S., China, and the E.U. either unwilling or unable to take the reins in repairing the WTO’s credibility. The panelists also agreed that this gave room for rising powers, such as India, South Africa, and Brazil to exercise increased leverage, furthering their agendas and obstructing major initiatives that clash with their economic priorities. Finally, the panelists noted that international trade flows themselves had shifted, with the U.S.-China bilateral trade relationship giving up ground to new patterns of exchange between the U.S. and its North American neighbors, and with the developing economies of South and Southeast Asia. The panelists disagreed, however, on the nature of a core feature of this new status quo in international trade: the use of national security as a justification for departures from international trade norms. Some took the stance that this phenomenon is an inevitable feature of the international system, given that states have always intertwined economics with national security, and that the WTO would have to adjust to this reality by giving members greater flexibility to pursue national security goals under Article XXI of the GATT. Others adopted the position that this resort to national security is a slippery slope, giving countries a useful pretext to circumvent existing rules and unilaterally pursue non-national security oriented goals, such as climate policy or protectionism.
Speakers and participants finished the Conference by an evening reception at Harvard Law School’s Wasserstein Hall, where discussion on the future of international economic law continued.
*The Harvard International Law Journal and The Harvard Law & International Development Society are student organizations at Harvard Law School.
Feb 21, 2024 | Online Scholarship, Perspectives
Moise Jean*
Introduction
Almost a year after the Haitian government requested an international force to deal with gang violence, the United Nations Security Council adopted a resolution under Chapter VII of the United Nations Charter authorizing the formation and deployment of a Multinational Security Support (MSS) mission. This resolution came at a time when public opinion was beginning to question the inaction of the international community, and even its responsibility to protect, in situations such as this, where the state is incapable of ensuring the protection of its own population.
The resolution contains some particularly encouraging aspects: it requires the Mission to carry out its mandate in strict compliance with international law; it commits the Mission to guarantee respect for fundamental human rights, to protect children, and to prevent sexual and gender-based violence and exploitation; and it provides for the establishment of a complaint mechanism. In the event of allegations of misconduct, the Mission is required to conduct investigations and, if necessary, determine who is responsible. The resolution also requests member states participating in the MSS to adopt appropriate wastewater management and other environmental controls to guard against the introduction and spread of water-borne diseases, in accordance with the “World Health Organization’s 2001 report on water quality guidelines.”
These aspects are encouraging because international military interventions are at a high risk of violating international law, whether it be the risk of misuse of the mandate or the risk of human rights violations. In Haiti, U.N. peacekeepers were accused of human rights violations, sexual exploitation, and being responsible for the cholera epidemic that claimed thousands of victims. The formal inclusion of these provisions in the resolution is therefore a commendable initiative: it should help to dissuade the states involved and could contribute to the conduct of operations on a basis closer to the rule of law.
Beyond these positive prospects, however, the resolution raises several fundamental issues by authorizing the creation and deployment of an international military force whose legal nature is ambiguous. As we shall see, this ambiguity may have a negative impact on the smooth running and effectiveness of the authorized operation and may generate difficulties in the event of responsibility for any violations of international obligations.
I. A New Kind of Mission
The Mission to be deployed in Haiti is neither a collective security mission nor a U.N. peacekeeping mission. Although it is based on Chapter VII of the Charter, the resolution does not mention the precise article that is being invoked for authorization of the Mission. The authorized intervention, like many others before it, will not be carried out under the authority of the Security Council. It is therefore not a collective security mission. Similarly, it cannot be described as a peacekeeping mission, since the link between these types of operations and the United Nations is clear from their names––which is not the case for the Mission in question. The international force to be deployed in Haiti is therefore akin to what the doctrine calls an “authorized operation,” as was the case in Korea in 1950, Iraq in 1991, and Libya in 2011. The only difference is that, in those cases, the operation was imposed. Here, it was requested.
There are, however, distinctive features of the Mission that set it apart from authorized operations. First, there is the question of its mandate. According to the resolution, the Mission is to “provid[e] operational support to the Haitian National Police, including building its capacity through the planning and conduct of joint security support operations.” It must also “provid[e] support[] to the Haitian National Police[] for the provision of security for critical infrastructure sites and transit locations.” In other words, it is not a direct intervention force, with a clear mission to restore security in Haiti. Rather, its mission would be to support the Haitian police in their efforts to combat crime and insecurity. The multinational force would carry out its operations in complementarity with, or even under the leadership of, the police.
This is a new feature in the history of operations authorized by the Security Council. In principle, operations authorized under Chapter VII of the Charter are intended to intervene directly to pacify a situation threatening international peace and security. They do not have to act as a complement to a national force. They are operations that are justified by a peace-threatening situation, requiring emergency military intervention to maintain or restore peace. This is their raison d’être. By deciding that the authorized operation should be carried out in conjunction with the local police, the Security Council is breaking new ground.
What’s more, and this is even more curious, the resolution asks those in charge of the Mission (Kenya, or possibly another state that would take the lead), in coordination with the Haitian government, to communicate to the Security Council information concerning “the goals of the mission and the end result sought, the rules of engagement” prior to the deployment of forces on the ground. In clear terms, this means that it is the participating states, in consultation with the Haitian authorities, who will define the Mission’s operational and final objectives.
This is unprecedented. Never before in the history of the United Nations has an authorized operation had to define its own objectives, never mind in cooperation with the authorities of the state in which it is intervening. In principle, it is up to the Security Council to define the objectives of the mandate, and to monitor and supervise its execution. It cannot delegate this power to a third party. Nor does the Council need the approval of the state concerned to determine the objectives of the mandate of an authorized operation adopted under Chapter VII of the Charter, even if it is the state that requests it. In the latter case, the Council may, if it sees fit, authorize the state concerned to participate simply as an observer in meetings of the “steering committee” for the operation, as was the case with Albania in 1997 (S/1997/362, par. 7). But the state’s participation is not decisive, still less in defining the terms of the mandate. The Security Council is therefore setting a new precedent. No previous resolution adopted in connection with the creation and deployment of a coercive international military operation contains provisions of this kind.
As a result, the nature of the Mission in Haiti is ambiguous. It is an authorized operation created under Chapter VII of the Charter, even though its main characteristics diverge from this type of mission. In reality, it is a U.N. peacekeeping operation created under the umbrella of an authorized operation. Almost all its features, from the question of operational support for the national police to the involvement of the government in determining objectives and rules of engagement, are peacekeeping in nature. It is a hybrid mission combining elements of the collective security system (Chapter VII) and the peacekeeping system but ultimately establishing an institution with an uncertain legal status, that is, a mission which in practice clearly does not fit into any of the categories of institutionalized international military intervention hitherto known.
Because of these legal uncertainties, the MSS Mission is not without its political and legal concerns.
II. Political Issues: The Question of Mission’s Effectiveness
Established on foundations as unstable as they are superficial, the operation authorized in Haiti is undoubtedly fragile. This shortcoming could undermine its effectiveness. It is hard to understand why the Security Council should so lightly authorize an international mission that will mobilize so many resources in a country that is only asking for real support from the international community to solve its problems. One of the consequences of the ambiguities in the Mission’s mandate will be that any disagreement between the operations directorate and the Haitian police or authorities will paralyze their actions. The Haitian government undoubtedly has its own agenda, its own understanding of the problems, and its own solutions. The countries involved also have their own. Compromises will have to be made every time. Will this compromise always be possible? At this stage, it is hard to say.
In the meantime, suffice it to say that while this kind of arrangement, which seems to take Haiti’s sovereignty and independence into account, is not a bad thing in itself, it is something to be wary of. We would be surprised if the Mission were effective in such circumstances. But more fundamentally, there is a risk of disempowerment. For, in the end, it will be easy for those in charge of the Mission to point to the fact that cooperation with the Haitian authorities has not worked well to justify a lack or even an absence of results. What’s more, when Security Council resolutions authorizing a mission are ambiguous, the states involved tend to interpret them for their own benefit, for example by considering their mission accomplished and withdrawing their troops, particularly if they have suffered losses on the ground, as was the case in Somalia.
The vagueness identified in the definition of the mandate of the operation authorized in Haiti can have another, even more devastating consequence: misuse of the Mission. Indeed, in this type of operation, there is always a risk of deviation or instrumentalization. However, the risk becomes even greater when the resolution authorizing its implementation does not sufficiently clarify the mandate, does not clearly spell out what is authorized and what is not, and does not precisely delimit the scope of the intervention. In Libya, for example, Resolution 1973 (2011) did not authorize the overthrow of the Libyan government, contrary to what actually happened. Intervention forces have interpreted it broadly. The lack of precision in these parameters in the resolution adopted on October 2 could lead to a deviation from the mandate of the operation authorized in Haiti, which would ultimately be a disservice to the population we are supposed to be helping.
III. Legal Issues: The Question of U.N. Responsibility
Because of these essential ambiguities, the MSS Mission also raises the fundamental legal concern of responsibility. This is an important issue, given the risks of violations of international law, in particular international humanitarian law and human rights law, during the military intervention. This is especially so in a country like Haiti, where the question of U.N. responsibility has been the subject of debate in the recent past, even though there was not a shadow of a doubt as to whether the mission responsible for the illicit acts (MINUSTAH) belonged to the United Nations. The situation therefore becomes very worrying when the intervening mission is one whose legal nature is not very clear.
And with good reason: according to the United Nations, a distinction must be made between operations authorized by the United Nations and carried out under national or regional command and control, and U.N. operations carried out under their command and control, when assessing imputability to the United Nations (A/CN.4/637/Add.1, p. 10). In the case of U.N. operations, there are two hypotheses to be considered. First, if the operations were carried out jointly by a U.N. force and a force under national command and control, such as the U.N. Operation in Somalia II (UNOSOM II) and the U.S.-led Rapid Reaction Force in Somalia, the conduct of the troops would be attributed to the entity exercising operational command and control. Second, if the operations were carried out by peacekeeping forces, as was the case with U.N. Stabilization Mission in Haiti (MINUSTAH), the Secretary-General considers that, given these forces’ status as subsidiary organs of the United Nations, the conduct would be attributed to the United Nations.
On the other hand, when it comes to operations authorized by the Security Council, as is the case with the Mission to be deployed in Haiti, the United Nations declines all responsibility. According to the venerable organization, international responsibility for operations authorized by the Security Council under Chapter VII of the Charter and conducted under national or regional command and control lies with the state or states conducting the operations in question (A/CN.4/637/Add.1, p. 10). This was the case, for example, in Somalia during Operation Restore Hope, when a car accident occurred. The United Nations declined responsibility on the grounds that the person involved in the accident was working for Operation Restore Hope and not for the UNOSOM. According to the United Nations, the troops of the Unified Task Force were not under its command.
A priori, this should not pose any particular problem if, once established, the responsibility of the state or states could be called into question without any particular difficulties. In practice, however, there is no room for optimism. In most of the authorized operations in which international obligations have been violated and lawsuits brought against the states concerned, the latter have constantly tried to absolve themselves of responsibility by insisting on the central role of the Security Council, and ultimately on the responsibility of the United Nations. This was the case, for example, with the appeals against Kosovo Force (KFOR). While for the plaintiffs, KFOR’s actions or omissions could not be attributed to the United Nations, for the targeted states, on the contrary, KFOR’s actions were indeed attributable to the United Nations. Moreover, both international and national judges have so far refused to rule on the conduct of multinational forces. This creates a gap between the principle of state responsibility for acts committed during an authorized operation and the actual implementation of their responsibility for said acts.
Hence the importance of clarifying the legal nature of the Mission. As already mentioned, the Mission to be deployed in Haiti has the appearance of a U.N. mission in terms of its characteristics, but it is officially an authorized operation. This means, therefore, that the United Nations will not be held responsible for any misadventures that may occur during operations. They automatically rule out any possibility of linking any illicit acts to them. This is an important legal issue, particularly in a country where the United Nations has shirked its responsibility for damage committed by an international force that was its own. The Haitian government, politicians, and civil society need to be aware of this aspect of the issue.
Conclusion
Ultimately, the authorization of the international military force is not a bad thing, given the situation in Haiti. The Haitians could not take it anymore. Even the intellectuals and other actors traditionally opposed to any international military intervention were for the most part in favor or almost in favor of military intervention, subject to certain conditions. However, the mission that has been set up has shortcomings in its design that leave us perplexed and questioning. Finally, the main, if not the only real virtue of the resolution adopted by the Security Council lies in the fact that it commits the intervening states to act within the framework of the law. It remains to be seen whether this rare virtue will enable the mission to succeed in its challenge, that is, to set an example, bring peace to Haiti, and enable the Haitian people to resume the normal course of their lives, not only for the duration of the operation but beyond.
*Moise Jean is a postdoctoral researcher at the University of Geneva, in the Department of International Law and Organization. He is very grateful to Jacob Libby for his very thoughtful comments and edits.
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Feb 13, 2024 | Online Scholarship, Perspectives
Juan Carlos Portilla*
Introduction
Because a paradigm shift is currently underway in the international monetary system, international financial regulators should establish a global standard setter for virtual currencies (“VCs”). This article will refer to such an entity as the Global Agency for the Virtual Currency Economy (“GAVCE”). Two monetary ecosystems coexist today. The first ecosystem involves central banks and depository institutions that supply economies with fiat currency; the second includes VCs. VCs emerged in 2009 “as a means of defiance against a financial system in crisis and ‘captured’ by state regulation and private agents.” For some, VCs inspire a level of confidence that money managed by central authorities might not sustain. Nevertheless, the rise of VCs also implicates important risks including market manipulation and financial crime—and governments across the globe are struggling to regulate VCs because of their disintermediated technological constitution.
Although the European Union agreed in June 2023 on a provisional version of the Markets in Crypto Assets framework, and while some scholars in the United States are making the case for self-regulation in the VC industry, this article argues for some form of global governance intervention in case these or other mechanisms fail. Regulations must protect VC consumers from market failure, asymmetric information, and negative externalities. Yet, most countries have not taken any regulatory action on VCs, creating significant regulatory gaps. According to the World Economic Forum, regulatory systems governing VCs are “fragmented, ineffective, and, in some countries nonexistent.” Because there is no harmonized global regulatory governance for VCs, criminal enterprises can engage in regulatory arbitrage across nations to commit financial crimes, such as the financing of terrorism and money laundering. Therefore, international financial law should establish a GAVCE to regulate VCs.
This article draws upon the interdisciplinary dialogue between international law (“IL”) and international relations (“IR”) scholarship to make the case for a GAVCE. In Part I, the article introduces blockchain technologies and the VC ecosystem. Part II outlines emerging risks related to VCs and discusses matters of law related to the establishment of a GAVCE. Finally, Part III discusses the politics that would emerge while establishing global governance for VCs, which implicate regulatory capture theories and the role of time as an analytical variable, in the rule-making process.
I. Introducing Blockchain
VCs are peer-to-peer electronic cash systems that use blockchain technology to operate without the need for intermediaries (banks). According to a memorandum by presumed Bitcoin creator Satoshi Nakamoto, the peer-to-peer nature of VCs “allows online payments to transfer directly from one party to another without routing through a financial institution.” Blockchain technology, in turn, gathers information (a ledger for transactions) into “blocks” that hold it. Blocks have storage capacities; ledgers for transactions are placed into a block until it is filled. Once a block is filled, it is then closed and immediately linked to the previously filled block. This process forms a chain of information (a “blockchain”), whose blocks are linked through cryptography, creating a peer-to-peer electronic cash system. Thus, VCs “are distributed, open-source, math-based peer-to-peer virtual currencies” that can operate with no central bank involvement, no intermediaries, and no government oversight.
VCs are different from fiat currencies, e-money, and central bank digital currencies (“CBDCs”). While fiat currency is the paper money of a country that is designated to be its legal tender, and accepted as a medium of exchange, VCs are digital representations of value that can be digitally traded, and they are typically neither issued nor guaranteed by governments. VCs are also different from e-money, which digitally represents fiat currency and is utilized to electronically transfer the value denominated in fiat currency. Although some countries have used blockchain technology to issue CBDCs, like the digital yuan of China, CBDCs do not fully encapsulate all of the attractive features of VCs, such as anonymity, decentralization, and governance. While central banks that issue CBDCs decide on the rules governing those CBDCs, the users of VCs control VC networks by making consensus-based decisions.
The VC Ecosystem
Several specific VCs—including Bitcoin and Ethereum—are well-known to the public. Bitcoins, which are convertible units of account composed of unique strings of letters and numbers constituting units of the currency, are decentralized in nature. Since individual users are willing to pay for Bitcoins and other VCs, they have value in the marketplace. Ethereum, Ripple, Litecoin, and Dashcoin came after Bitcoin and utilize a similar form of blockchain technology. Stablecoins, in turn, are VCs backed by fiat currencies, like the U.S. dollar, or commodities, like gold. Tether, for example, is the largest stablecoin by market capitalization and its value is pegged to the U.S. dollar.
Several different actors make up the VC market. The supply side of the VC market consists of exchange firms, such as Binance. Supply-side firms also include administrators, miners, and wallet providers. Exchangers, for a commission, trade VCs for other VCs—or for precious metals or fiat currencies. Administrators are individuals or legal entities that issue VCs, write rules for the use of VCs, maintain central payment ledgers, and redeem VCs. Miners act as market makers; they use computer systems to verify transactions by adding them to the blockchain. VC wallets hold, store, and transfer VCs (examples of wallet providers include Multibit or Coinbase). Finally, users compose the demand side of the VC market. Users exercise their freedom of choice to select VCs and they generally buy VCs for payment or investment needs.
II. Emerging Risks
Emerging risks related to VCs include consumer panic, market manipulation, and financial crime. Confidence is a bedrock principle of the modern financial system. Unlike traditional financial products (such as savings accounts), Bitcoin and other VCs are presently uninsurable—which undermines investor confidence and heightens the risk of consumer panic. When an individual in the United States deposits money with a bank in a single ownership capacity, he or she has access to up to U.S. $250,000 at the Federal Deposit Insurance Corporation (“FDIC”) if the bank fails for the U.S. dollar is backed by the full faith and credit of the U.S. government. In contrast, government deposit insurance is not available for VCs because they are not regulated or backed by any government. Additionally, the price history of VCs demonstrates that the VC market may in fact be a speculative bubble. Bitcoin investors can manipulate its price; for example, media coverage of Bitcoin or fake news associated with Bitcoin can induce individuals who have not previously traded Bitcoin to invest in it for the first time. In the absence of a central government authority backing the value of Bitcoin, Bitcoin investors could lose their shirts, were Bitcoin to fail.
According to Nobel Prize-winning economist Joseph Stiglitz, VCs are also often used for illicit purposes such as tax evasion. According to the Financial Action Task Force (“FATF”), money launderers, terrorist financiers, and sanctions evaders use VCs as a powerful tool for financial crime endeavors, outside the reach of law enforcement. Indeed, bad actors can and often do use technology and Bitcoin to pursue chaos and perpetrate financial crimes. One example is the May 2017 WannaCry ransomware attack, in which a worm component exploited vulnerabilities in the widely used Microsoft Windows operating system. Ultimately, the cyberattack cost eight billion US dollars in damages. The criminals behind the attack demanded payment in Bitcoin because they have easy access to VC service providers around the world.
III. Global Governance for VC
Multiple instruments, including but not limited to treaties, may be used to create a GAVCE. Traditionally, states have been the primary source for the creation of international organizations (“IOs”), particularly by way of international treaties. Examples of this approach include the International Monetary Fund Articles of Agreement. Nevertheless, many legitimate and powerful IOs have also originated outside of the treaty process. These IOs, with more innovative institutional designs, have increasingly found their way into the international legal order. For example, the central bank governors of the G-10 countries established, without a treaty, the Basel Committee on Banking Supervision (“BCBS”)—the primary global standard setter for the prudential regulation of banks. Likewise, the International Organization of Securities Commissions (“IOSCO”)—the international body recognized as the global standard setter for securities—is not a treaty organization but rather a not-for-profit legal entity incorporated under a private act in Quebec, sanctioned by the Quebec National Assembly. FATF—the global money laundering and terrorist financing watchdog—is similarly not a treaty-based international organization but rather a task force composed of member states who fund FATF on a temporary basis for the achievement of specific mandates. Decentralized government agencies, under the control of the executive branch of national governments, can also form IOs; in 1995, a network of national financial intelligence units established the Egmont Group, which provides a platform to exchange financial intelligence to combat financial crime. In sum, there are multiple legal instruments besides treaties available to create a GAVCE.
Considering the above, domestic regulatory agencies should establish GAVCE outside the treaty-based model, which involves a slow and politically costly ratification journey. Although the establishment of GACVE outside the treaty process may face concerns related to legitimacy or a perceived democratic deficit, a more efficient approach here is warranted because of the urgency of the issuance of global VC regulations as well as the widely recognized success of other non-treaty based IOs like IOSCO.
The proposed GAVCE should also have the capability to influence relations amongst states, market agents within the virtual currency economy, and multilateral financial institutions. GAVCE should build power and influence from the inside out to affect the behavior of states when regulating VCs; to achieve this, domestic regulatory agencies should delegate certain law-making capabilities to GAVCE to regulate VCs. This act of delegation upon GAVCE is feasible because IOs can be explicitly empowered to make international law through a delegated law-making process, which is best explained under the principal-agent theory, mainly associated with corporate law. The principal-agent theory can be applied to the relationship between state actors and global standard setters under international law. According to Ian Johnstone of the Fletcher School of Law and Diplomacy at Tufts University, the simplest form of delegation exists in this context when states explicitly grant authority to IOs, because it is typically fairly straightforward to identify the agent, the principals, and the powers that the principals have conferred.
Although this type of delegation to GAVCE may face criticism related to a loss of sovereignty or the risk of capture by special interests, several distinct benefits of delegation outweigh those concerns. First, the delegation at issue will be limited in scope—exclusively to the world of VCs. As such, there is no significant incursion on state sovereignty. A second benefit of delegation is the standardization of norms across jurisdictions to avert regulatory arbitrage and mitigate financial crime. As previously stated, current regulatory systems governing VCs are fragmented, ineffective, and often nonexistent. Third, there is currently a dire need for regulatory experts to develop technical skills related to the various complex features of VCs, blockchain, and exchangers. The development of such expertise through the proposed GAVCE would in turn help the international community to sow the seeds for a good governance model for the VC market. Under this good governance approach, global crypto policymakers would make decisions, through the proposed GAVCE, based on data and widely accepted methodologies to protect the virtual currency economy from the risks outlined above.
Another way to reduce the risks of delegation and institutional capture is for GAVCE to issue soft law rather than hard law. International law is more than just a formalistic set of black-letter rules; a more pluralistic conception of international law, embraced by many scholars today, also considers soft law, which is formally non-binding but habitually obeyed. According to Shaffer and Pollack, states do not always only favor the hard law model when making international law and instead often adopt the soft law approach, as a design choice. Although the concept of soft law may be problematic to legal positivists because it suggests a continuum between political and legal commitments, functionalist scholars argue that soft law norms offer several advantages over hard law, including 1) greater flexibility for states to cope with uncertainty, 2) greater opportunity for states to gain expertise over time through information sharing and deliberation, and 3) lower negotiation costs. In this context, hard law does not provide states with the necessary flexibility to deal with the uncertainties of VCs, because VCs are an emerging, ever-changing technology. Soft law will better accommodate the shifting nature of VCs.
Politics of International Corporate Capture
Concerns about international corporate capture may play a significant role in the establishment of a GAVCE, as corporate capture could materially affect the substantive outcomes of GAVCE’s eventual regulations. Institutional theory, regulatory capture, and the role of time as an analytical variable are all key topics that capture the attention of scholars when analyzing global financial rule-making processes. The politics that revolved around BCBS while it began to regulate international banking set a precedent that leaders should consider in the process of regulating VCs. Indeed, there are different sets of conditions that result in captured regulation, which serves narrow vested interests, versus common interest regulation, which serves the broader public interest.
Indeed, global VC regulators would not be immune to the risk of regulatory capture by self-interested actors and powerful interest groups. If VC firms were to capture GAVCE’s rulemaking, they might pursue policies that would be contrary to the public interest. One hypothetical example to illustrate the risk of VC capture would be a rule allowing the issuers of stablecoins to use an algorithm-based system to maintain their peg to the U.S. dollar instead of a system of cash reserves. History proves that such a rule would have costly effects; TerraUSD—a U.S. dollar stablecoin that sparked a crisis in VC markets in 2022—used an algorithm-based system rather than cash reserves to maintain its peg to the dollar, causing it to lose its price peg during a crisis of liquidity in early 2022. During this crisis, investors expected to be able to cash out the stablecoin for one U.S. dollar at any point, but ultimately were not able to when TerraUSD lost its price peg. The TerraUSD meltdown caused losses of $300 billion across the broader VC market.
To prevent corporate capture and scenarios like the above, scholars have presented theoretical frameworks that emphasize the importance of timing and sequencing in determining rulemaking outcomes in global finance. For instance, a close examination of Basel Committee deliberation records and other key documents provides strong evidence that the first movers in the Basel process, namely powerful international banks, played a key role in determining the Committee’s outcomes. Domestic regulatory agencies should carefully consider time and sequencing to prevent large VC groups from arriving at the decision-making table well before others. The first-mover advantage cannot be part of the regulatory process for VCs. In addition, transparency around lobbying and the establishment of a “cooling off” period after serving in the private sector can prevent powerful VC firms from capturing GAVCE’s rulemaking.
Conclusion
So far, VCs have largely escaped from the regulatory grasp of national governments. Because there is no harmonized regulatory governance regime in place, VCs are often used for illicit purposes. International law must regulate VCs to strengthen the governance of the overarching global financial architecture. Multiple instruments, including treaties and non-treaty mechanisms, are available to create a GAVCE that can issue soft law to regulate VCs. Nevertheless, non-state actors may also pose regulatory capture risks concerning the global VC rule-making process. Global policymakers should take careful measures to avert regulatory capture if they decide to establish a global standard setter for VCs.
*Juan Carlos Portilla is an International Financial Law Professor at Sabana University School of Law (Colombia) & Anti-Corporate Crime Law Professor at the ITAM Law School (Mexico), an ACAMS Speaker, a Legal Consultant and a Compliance Professional at several different global financial institutions including the Central American Bank for Economic Integration (Honduras), Santander Securities LLC, Raymond James Financial Services Inc., Wise Ltd (a fintech company), and Wells Fargo NA. Juan Carlos is a lawyer with a LL.B. degree from Sabana Law School, Colombia. He earned a master’s degree in international law from the Fletcher School of Law and Diplomacy, Tufts University, and completed the Program on Negotiation and Dispute Resolution course at the Harvard Law School.
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Feb 8, 2024 | Online Scholarship, Perspectives
Rizky Citra Anugrah*
Introduction
The humanitarian crisis in Gaza highlights the persistent struggle to enforce international humanitarian law (IHL), a legal framework aimed at mitigating the devastating consequences of armed attacks, particularly the loss of innocent lives. Within just one week, we were confronted with a toll of approximately 3,500 lives lost, with no less than 2,215 belonging to the Palestinian people. In contrast, over the years, Israel has consistently experienced significantly lower casualties. This asymmetry raises a complicated question at the intersection of ethics, technology, and justice: what role does cutting-edge technology play in this equation, and can it contribute to upholding humanitarian principles in the face of such immense suffering?
To understand Israel’s relatively low casualty rate, we must delve into the deployment of the world’s most advanced defensive autonomous weapons system (DAWS), known as the ‘Iron Dome.’ Marco Sassòli, a professor and leading expert on international law at the University of Geneva, Switzerland, affirmed that the Iron Dome has helped Israel reduce its civilian casualties despite the arbitrary targeting by Hamas’ traditional rockets. Introduced in 2011, this defense system has been claimed to have a 97 percent success rate in intercepting incoming missiles. Put into context, Israel’s weekly average of around 3,000 incoming missiles translates to approximately 415 successful interceptions daily.
To get this number, the Iron Dome operates through three key components: radar, control, and battery. First, its radar detects incoming missiles and other airborne threats, distinguishing their size, velocity, and type. Second, the control acts as the ‘brain’ of the operation, employing algorithms and, more recently, artificial intelligence (AI) to guide interceptor rockets toward their targets automatically, even when the incoming missiles exhibit erratic movements. Additionally, it can prioritize intercepting missiles aimed at populated areas. Lastly, the battery fires two interceptors at each incoming missile and can release up to 20 interceptors at a time.
While Israel stands out as a prime example of the application of the world’s most advanced AI-powered DAWS, it is far from being the sole user. The United States, a co-producer of the Iron Dome, has ventured into testing the system’s application in Guam. Meanwhile, the United Kingdom is making significant progress in developing the DragonFire, a DAWS that harnesses concentrated laser beams to safeguard both land and maritime targets. Israel has taken a similar approach to developing the Iron Beam, which is designed to be a cost-efficient alternative to the Iron Dome.
Generally, autonomous weapons systems (AWS) have seen decades of use, but not all have been employed exclusively for defensive purposes. Recently, we have witnessed their integration with AI technologies, enabling these systems to operate substantially independently from human interference. In response to this growing threat to human dignity, there is an uprising movement to limit the further developments of AWS, with some advocating for stopping its development entirely. Spearheaded by the Campaign to Stop Killer Robots, this coalition has made significant progress in raising global awareness about the escalating threats posed by autonomous weapons. Particularly noteworthy is the coalition’s Vote Against The Machine campaign, which prompted the United Nations (UN) General Assembly to adopt Resolution L.56, entitled “Promoting International Cooperation on Peaceful Uses in the Context of International Security,” in October 2023. Sponsored by 44 states, the proposal has garnered the support of 120 other states, calling for all states to address the humanitarian, legal, and ethical risks posed by AWS.
I. The Case for Defensive Autonomous Weapons Systems
While extensive discussions and policies have delved into the legal and ethical challenges associated with lethal autonomous weapons systems (LAWS), a noticeable gap exists with DAWS. In the discourse on AWS, the focus has predominantly gravitated toward LAWS, often overlooking the existence and potential of AWS designed exclusively for defensive purposes. Furthermore, the terminology used in these discussions has contributed to this oversight. The term AWS is frequently used interchangeably with ‘Killer Robots,’ emphasizing the perception of autonomy in weapons systems predominantly geared toward offensive actions. In Resolution L.56 itself, although the title explicitly concerns LAWS, the umbrella term of AWS is still used repeatedly throughout several clauses. It is essential to acknowledge that weapons, in general, are not exclusively developed for offensive purposes. In this context, Black’s Law Dictionary provides an inclusive legal definition of ‘weapon’ as “an instrument of offensive or defensive combat.” In the realm of lexical discourses, weapons are inherently recognized as serving two opposing functions. However, this duality is often overlooked in legal discussions surrounding AWS. In light of this reality, this article proposes introducing a new term, ‘Guardian Robots,’ as a synonym for DAWS, aiming to provide a balanced perspective.
The differentiation between DAWS and LAWS is crucial because several ethical and legal considerations driving the push for a ban on LAWS are not applicable to DAWS. First and foremost, LAWS are often challenged on the grounds that they cannot comply with IHL, which requires adherence to the principles of humanity, distinction, proportionality, and military necessity. These arguments are based on the fact that current AI technologies are incapable of making decisions to the extent humans can. Indeed, AI is not yet technologically advanced enough to differentiate a surrendering soldier from a civilian who might be carrying weapons for defense. However, DAWS do not even need to make such decisions because of its purpose to exclusively aim at offensive weapons. Conversely, it can help and has helped humans in upholding humanitarian principles. For instance, the Iron Dome’s capability to target only missiles directed at civilian areas can help both the aggressor and the defender align with the goals of the distinction principle in IHL, significantly protecting civilian lives.
Another common argument supporting legal limitations on the development and deployment of LAWS revolves around the concept of meaningful human control (MHC). MHC is rooted in the philosophical discussions surrounding AWS, with the primary objective of constraining the reduction of significant human oversight and deliberation in weapons deployment. Two fundamental principles guide the preservation of MHC. The first principle dictates that weapons systems should not be able to apply force and operate without any form of human control. The second principle highlights the notion of ‘meaningful’ control, asserting that pressing a ‘fire’ button falls short of constituting substantive human oversight.
Some scholars argue that, while permitted, automation must be largely restricted to ensure significant human control in AWS. Others have pointed out that even a limited role for automated systems in AWS decision-making promotes an authority imbalance, perpetuating automation bias and ultimately influencing the human operator who should be in charge of the system. Automation bias is a psychological phenomenon in which individuals tend to favor decisions made by automated systems over their own judgments, even when the automated decision is proven inaccurate. Undeniably, automation bias and systematic errors are not exclusive to LAWS and can also arise in the decision-making of DAWS. However, the substantial benefits of widespread DAWS deployment far outweigh the potential drawbacks. Unlike LAWS, in which error exacerbates its already-destructive nature, DAWS only poses a risk in cases of extreme malfunctions. So far, the Iron Dome’s failures have been linked almost exclusively to the inability to intercept missiles without any breaches of IHL principles. Moreover, the Iron Dome is classified as a weapon with a very short launch range. This limitation prevents the Iron Dome from becoming lethal. Given the Iron Dome’s exceptionally high success rate, DAWS’s lawful and comprehensive technological development remains unlikely to pose lethal concerns during errors.
This proposition can be further argued to assert that, in the evolving landscape of military weaponry, autonomous defenses are not only beneficial but also essential for upholding IHL principles. Even without LAWS and AI technologies, military weapons are developed in increasingly complex ways that often surpass human capacity for effective defense. Due to its precision and rapid response capabilities, DAWS can be strategically deployed in vulnerable areas or sectors where the threats are beyond human control. Even in cases where DAWS fail to completely stop an attack, its role in mitigating its consequences can significantly help uphold IHL’s principle of proportionality. When sufficiently developed, the utilization of DAWS is pivotal in significantly reducing civilian casualties, as evidenced by the Iron Dome.
II. The Challenges of Defensive Autonomous Weapons Systems
Nevertheless, the pursuit of lawful development for DAWS while eliminating LAWS is not without its unique set of challenges. The first fundamental concern revolves around the definition of ‘defense.’ To what extent does the use of AWS qualify as an act of defense? The Caroline Doctrine provides a clear framework for ‘anticipatory’ self-defense, allowing a response when the need to react is “instant, overwhelming, and leaves no choice of means, and no moment for deliberation.” It readily addresses the permissibility of actions based on whether they constitute an attack or a counterattack. If the counterattack aligns with the criteria outlined in the Caroline Doctrine, it can be considered a lawful and justifiable response to an action initiated by another party. However, this doctrine is only relevant to decide whether or not the start of a defense is justifiable.
The definition of defense becomes increasingly blurry when it comes to the proportion of the counterattack. Two common yet contradictory parameters are often used to define proportionality in times of defense: the ‘tit for tat’ and the ‘means-end’ parameters. The ‘tit for tat’ parameter suggests that defensive actions are permissible when the counterattack is proportionate to the initial attack. In contrast, the ‘means-end’ parameter focuses on completely deterring the attacker from the ability to launch further attacks, determining the legitimacy of a proportional counterattack based on the objective of using force. The utilization of systems like the Iron Dome aligns more closely with the ‘tit for tat’ approach, where defense matches the scale of the attack.
Proponents advocating for the complete prohibition of all forms of AWS may argue that DAWS could potentially be exploited as LAWS under the guise of self-defense. The lack of a universally agreed-upon definition for defensive weapons creates a vulnerability, allowing for the manipulation of international law principles and doctrines. However, this concern can be effectively addressed by establishing an international agreement that outlines the characteristics of DAWS. The international agreement could explicitly define the elements that categorize a weapon as a DAWS to enhance clarity and prevent misuse. Additionally, incorporating the ‘tit for tat’ parameter into the agreement would provide a specific criterion for assessing the legitimacy of an AWS in relation to its defensive or lethal nature. This criterion ensures that the evaluation of autonomous weapons aligns with the principle of proportionality, wherein the defensive response corresponds appropriately to the scale of the initial attack. By deliberately excluding the ‘means-end’ parameter from the assessment criteria, such an agreement would significantly reduce the potential for abuse of DAWS and uphold IHL principles.
The second fundamental concern revolves around the danger of reverse engineering. As Israeli Prime Minister Benjamin Netanyahu expressed on the Russo-Ukrainian war, “We’re concerned also with the possibility that [the Iron Dome] systems that we would give to Ukraine would fall into Iranian hands and could be reverse engineered.” He continued by adding that this is not a theoretical concern, as a similar case has happened previously with other anti-tank systems. The Iron Dome’s technologies are especially at a heightened risk for reverse engineering due to their high mobility nature. While this feature is an advantage for Israel to strategically place the weapon in densely populated areas, it means that it is also severely vulnerable to being captured. Beyond the concern of physical capture, as AI is also a highly adaptive technology, the other party can learn to continuously feed the system with false positives, which intentionally transforms DAWS into LAWS. In this scenario, the aggressor can use human shields and trick the AI into thinking that the ‘human baits’ are weapons to be attacked for defense.
Critics of DAWS may argue that even when adhering to a strict definition of DAWS to govern their permissibility, the inherent unpredictability of machine learning still introduces a great risk of reverse engineering. However, in the case where the adversary employs false positives to reverse engineer the DAWS, this issue can be overcome by continuous and close oversight from humans to evaluate the decisions carried out by the DAWS. Also, DAWS can incorporate mechanisms such as timers before taking actions to allow human intervention when it responds to false positives. While such a mechanism does not equate to MHC as it does not involve human decision in the firing process, it allows humans to override the system’s action when necessary. In addition to temporal safeguards, advanced physical and technical features can be embedded in DAWS to thwart potential misuse, particularly if the system is captured. These measures include a self-destruction feature, rendering the system inoperable if compromised. Moreover, incorporating custom-built proprietary hardware, which is not commercially available, adds complexity to reverse engineering attempts. Continuous code obfuscation, achieved through regularly updating the codebase with intricate modifications, makes understanding the system’s logic and functionality more challenging for those attempting to reverse engineer DAWS.
Reverse engineering also presents a unique legal issue surrounding the development of DAWS that is not present in the deployment of LAWS. By design, LAWS are made with the intention to attack, while DAWS are not. This distinction prompts a critical consideration regarding whether an act of reverse engineering can be categorized as an attack when the underlying intent to cause harm is absent. According to Article 8 of the Rome Statute of the International Criminal Court, intention, or mens rea, is an element of finding a war crime in an attack against civilians. In a reverse-engineered DAWS, the two parties’ responsibility for the attack becomes divided. The weapon user becomes accountable for the physical act of the offense, referred to as actus reus, while the party manipulating the system holds the mens rea element. So far, there is no international law governing reverse engineering. This dilemma poses another layer of complexity in AWS’s accountability.
Conclusion
Cutting-edge defensive technologies, particularly when integrated with AI, play an indispensable role in upholding humanitarian principles. However, our current global governance on AWS seems to overlook the promising potential of such technology despite the remarkable success evident with the Iron Dome. The L.56 Resolution stands as evidence of the denial of this potential, as it fails to acknowledge the crucial distinction between DAWS and LAWS. The Iron Dome’s pivotal role in safeguarding civilian lives is a testament to years of continuous development. Restricting the freedom to explore such technology further jeopardizes its promise to enhance civilian protection, as emphasized in the resolution’s preamble. While this article presents a diverse set of arguments justifying the use of DAWS, it is undeniable that further elaboration and detailed implementation are required. Beyond advocating for the promotion and protection of the lawful development of DAWS, comprehensive governance should encompass other essential aspects. This governance involves clarifying the definition of defense, establishing a legal foundation for cases of reverse engineering, and researching the possibility of further technical restrictions on DAWS.
Planned to conclude in a legally binding instrument by 2026, the UN is set to have the next provisional agenda on AWS next year. In the following forum, the UN plans to involve various parties to start taking action on the issue and revisit Resolution L.56 to develop it further. This article advocates for a strong and explicit recognition of the distinction between DAWS and LAWS within the UN General Assembly’s resolution on AWS. This recognition can be achieved by refining the legal and political language related to AWS, steering clear of the ambiguous use of the term “LAWS” in the current resolution. Additionally, this article emphasizes the imperative for separate legal instruments governing DAWS and LAWS to duly acknowledge their inherent differences in impacting human lives. While reaching international consensus on military and warfare-related laws remains a challenging endeavor, the adoption of soft laws by the UN to acknowledge the significance of DAWS can carry significant political influence. Such recognition can contribute to the promotion of a peaceful, legally sound, and ethically responsible.
*Rizky Citra Anugrah is an S.H. (LL.B.) Candidate at Universitas Gadjah Mada, specializing in international law. Rizky has received numerous awards from several international institutions for his proficiency in writing and researching within various aspects of international studies. As an undergraduate student, he actively engages in multiple international youth organizations, promoting multilateral cooperation through people-to-people diplomacy. The author is grateful for the guidance and support given by Mr. Haekal Al Asyari, S.H., LL.M., during the process of writing this article.
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