B-201492.OM, DEC 24, 1980

B-201492.OM, DEC 24, 1980

SUBJECT: LEGAL ANALYSIS OF THE PROPOSED DIPLOMATIC RECIPROCITY ACT (S. 2866) (FILE B-201492; CODE 462660)

SENIOR EVALUATOR, ID - BUTCH HINTON:

IN RESPONSE TO YOUR REQUEST, THE ATTACHMENT ANALYZES THE PROPOSED DIPLOMATIC RECIPROCITY ACT, 96TH CONG., S. 2866. IT IS LIKELY THAT A SIMILAR BILL WILL BE REINTRODUCED IN THE 97TH CONGRESS.

THE ATTACHMENT IS DIVIDED INTO THREE MAJOR SECTIONS. FIRST, THE PURPOSE AND THE PROVISIONS OF THE DIPLOMATIC RECIPROCITY ACT ARE ANALYZED. NEXT, THE AUTHORITY CONFERRED UPON THE DEPARTMENT OF STATE BY PREVIOUS LEGISLATION IS SUMMARIZED, SO THAT A DETERMINATION AS TO THE SCOPE OF THE SECRETARY'S DELEGATED POWER AS PROPOSED BY THIS LEGISLATION MAY BE MADE. THIRD, THE FEASIBILITY OF EFFECTIVELY ENFORCING THE LEGISLATION THROUGH APPLICATION OF THE PROPOSED SANCTIONS IS CONSIDERED. SINCE YOUR QUESTIONS FOCUS ON THE CREATION AND FUNCTIONING OF THE DIPLOMATIC SERVICES CORPORATION AND MAKE NO REFERENCE TO THE SECTION OF THE DIPLOMATIC RECIPROCITY ACT WHICH PRE EMPTS LOCAL ZONING AUTHORITY, THIS ATTACHMENT DOES NOT DEAL WITH THAT ASPECT OF THE NEW LEGISLATION.

PLEASE CONTACT US IF WE CAN BE OF FURTHER ASSISTANCE.

ATTACHMENT

LEGAL ANALYSIS OF THE PROPOSED DIPLOMATIC RECIPROCITY ACT

DIGEST:

DIPLOMATIC RECIPROCITY ACT WOULD CREATE DIPLOMATIC SERVICES CORPORATION WHICH COULD REQUIRE THAT FOREIGN MISSIONS APPLY FOR CERTIFICATE OF COMPLIANCE BEFORE OBTAINING SERVICES AND BENEFITS NECESSARY TO CONDUCT OFFICIAL ACTIVITIES AND THAT FOREIGN MISSIONS PAY SURCHARGE OR MEET CERTAIN CONDITIONS FOR SUCH SERVICES OR BENEFITS. ALTHOUGH CRIMINAL SANCTIONS MAY BE IMPOSED ON PERSONS SUBJECT TO U.S. JURISDICTION WHO WILLFULLY CONTRACT WITH NON-CERTIFIED FOREIGN MISSIONS, CORPORATION LACKS AUTHORITY TO ENJOIN TRANSACTION. SOVEREIGN IMMUNITY DOES NOT IMPOSE OBSTACLE TO EXERCISE OF U.S. POWER OF EMINENT DOMAIN SINCE CONDEMNATION PROCEEDING IS ESSENTIALLY PROCEEDING IN REM.

I. THE DIPLOMATIC RECIPROCITY ACT: PURPOSE AND MECHANICS

THE PURPOSE OF THE DIPLOMATIC RECIPROCITY ACT, AS SUMMARIZED BY SENATOR CHURCH IN THE CONGRESSIONAL RECORD, IS "TO PROVIDE THE MEANS TO REMEDY A SERIOUS AND GROWING IMBALANCE BETWEEN THE TREATMENT ACCORDED IN MANY COUNTRIES TO OFFICIAL MISSIONS OF THE UNITED STATES ABROAD, AND THAT MADE AVAILABLE TO FOREIGN GOVERNMENT MISSIONS IN THE UNITED STATES." 126 CONG. REC. S8110, (DAILY ED., JUNE 24, 1980.) IN REMARKS PRESENTED BEFORE THE SUBCOMMITTEE ON INTERNATIONAL OPERATIONS, HOUSE FOREIGN AFFAIRS COMMITTEE, ON JULY 22, 1980, MR. THOMAS TRACY, ASSISTANT SECRETARY FOR ADMINISTRATION, DEPARTMENT OF STATE, ARGUED THAT THE LEGISLATION COULD BENEFIT THE UNITED STATES BY FORCING FOREIGN GOVERNMENTS TO CONSIDER THE POSSIBLE CONSEQUENCES FOR THEIR MISSIONS IN THE U.S. OF UNREASONABLE RESTRAINTS AND/OR COSTS IMPOSED ON AMERICAN MISSIONS WITHIN THEIR BORDERS.

THE BILL CREATES A BODY CORPORATE WITHIN THE EXECUTIVE BRANCH TO BE KNOWN AS THE DIPLOMATIC SERVICES CORPORATION TO ASSIST THE SECRETARY OF STATE IN DETERMINING THE PRIVILEGES AND IMMUNITIES TO WHICH MEMBERS OF A FOREIGN MISSION ARE ENTITLED BY LAW, PRACTICE, OR INTERNATIONAL AGREEMENT, AND, WITH THE SECRETARY'S APPROVAL, TO ASSIST FOREIGN MISSIONS IN ACQUIRING SERVICES OR BENEFITS NECESSARY FOR THE CONDUCT OF THEIR OFFICIAL ACTIVITIES. IN PARTICULAR, THE CORPORATION WOULD ASSIST IN THE ACQUISITION OF REAL PROPERTY, OF SERVICES FROM PUBLIC AGENCIES (SUCH AS CUSTOMS AND UTILITIES), AND OF SUPPLIES AND MAINTENANCE SERVICES. WOULD ALSO AID FOREIGN MISSIONS IN HIRING STAFF PERSONNEL AND IN RECEIVING TRAVEL AND PROTECTIVE SERVICES. THE SECRETARY WOULD HAVE THE AUTHORITY TO REQUIRE THAT A FOREIGN MISSION APPLY TO THE CORPORATION FOR A CERTIFICATE OF COMPLIANCE BEFORE OBTAINING ANY OF THE ABOVE-MENTIONED SERVICES OR BENEFITS. THE CORPORATION, IN TURN, WOULD BE AUTHORIZED TO REQUIRE THAT A FOREIGN MISSION PAY A SURCHARGE OR COMPLY WITH CERTAIN CONDITIONS IN CONNECTION WITH THE EXECUTION OF ANY CONTRACT FOR SUCH SERVICE OR BENEFIT. THE CORPORATION HAS THE DUTY OF FURNISHING INFORMATION TO ANY GOVERNMENTAL UNIT, BUSINESS, OR INDIVIDUAL DESIROUS OF CONTRACTING WITH THAT MISSION AS TO WHETHER OR NOT A FOREIGN MISSION IS IN COMPLIANCE. ANY PERSON WHO WILLFULLY ENTERS INTO A CONTRACT FOR THE PROVISION OF ONE OF THE MENTIONED BENEFITS OR SERVICES WITH A NON-COMPLYING FOREIGN MISSION MAY BE FINED OR IMPRISONED.

SECTION 11 OF THE ACT ALLOWS A FOREIGN MISSION TO ACQUIRE AND HOLD AMERICAN REAL PROPERTY ONLY TO THE EXTENT THAT AMERICAN MISSIONS ARE ACCORDED COMPARABLE RIGHTS IN THAT PARTICULAR COUNTRY. WITHIN 30 DAYS OF THE ENACTMENT OF THE LEGISLATION, THE HEAD OF EACH FOREIGN MISSION IS REQUIRED TO REPORT ANY INTEREST WHICH THE MISSION HOLDS IN AMERICAN REALTY. BEFORE THE ACQUISITION OF ANY ADDITIONAL REALTY INTERESTS, A MISSION MUST FILE WITH THE SECRETARY A REPORT DETAILING BOTH THE NATURE OF THE PROPERTY AND THE NATURE OF THE INTEREST TO BE ACQUIRED. THE SECRETARY HAS THE DISCRETION TO DISAPPROVE THE PROPOSED ACQUISITION, BUT MUST EXPLAIN THE BASIS FOR HIS DECISION. A COUNTRY WHICH CONFERS UPON THE UNITED STATES LESSER RIGHTS WITH REGARD TO THE OWNERSHIP AND USE OF REALTY THAN THOSE RIGHTS WHICH THE U.S. CONFERS UPON IT WILL BE REQUIRED EITHER TO SELL SUCH INTEREST TO THE EXTENT DENIED THE UNITED STATES OR TO ACCORD THE U.S. A COMPARABLE INTEREST. THE CORPORATION IS AUTHORIZED TO ACQUIRE REAL PROPERTY INTERESTS FROM NON-COMPLYING STATES THROUGH EXERCISE OF THE POWER OF EMINENT DOMAIN.

II.PRIOR LEGISLATION: THE DIPLOMATIC RELATIONS ACT.

PRIOR TO THE PASSAGE OF THE DIPLOMATIC RELATIONS ACT ON SEPTEMBER 30, 1978 (P.L. 95-393, 92 STAT. 808), FOREIGN NATIONALS WHO WERE NOT PERMANENT RESIDENTS AND WHO HELD DIPLOMATIC VISAS (TYPE A-1 OR A-2 VISAS) ENJOYED WITH THEIR FAMILIES COMPLETE IMMUNITY FROM THE CRIMINAL, CIVIL, AND ADMINISTRATIVE JURISDICTION OF THE UNITED STATES UNDER THE PROVISIONS OF A STATUTE ENACTED IN 1790. THE DIPLOMATIC RELATIONS ACT CODIFIED THE PRIVILEGES AND IMMUNITIES PROVISIONS OF THE VIENNA CONVENTION ON DIPLOMATIC RELATIONS (TIAS 7502, 23 UST 3227; SIGNED ON APRIL 18, 1961, ENTERED INTO FORCE WITH RESPECT TO THE UNITED STATES ON DECEMBER 13, 1972) AS THE GOVERNING U.S. LAW ON THE SUBJECT, AND REPEALED EXISTING FEDERAL LEGISLATION WHICH WAS INCONSISTENT WITH THE CONVENTION. THE VIENNA CONVENTION GUARANTEED TO AMBASSADORS AND OTHER DIPLOMATIC OFFICERS (AND THEIR FAMILIES) THE FOLLOWING PRIVILEGES AND IMMUNITIES, AMONG OTHERS:

- INVIOLABILITY OF THE PERSON AND OF THE PRIVATE RESIDENCE OF THE DIPLOMATIC AGENT (ARTS. 29 AND 30);

- IMMUNITY FROM THE CRIMINAL JURISDICTION OF THE RECEIVING STATE (ART. 31);

- IMMUNITY FROM THE CIVIL AND ADMINISTRATIVE JURISDICTION OF THE RECEIVING STATE, EXCEPT IN THE CASE OF:

A. A REAL ACTION RELATING TO IMMOVABLE PROPERTY SITUATED IN THE TERRITORY OF THE RECEIVING STATE, UNLESS HE HOLDS IT ON BEHALF OF THE SENDING STATE FOR PURPOSES OF THE MISSION (ART. 31);

B. AN ACTION RELATING TO ANY PROFESSIONAL OR COMMERCIAL ACTIVITY EXERCISED BY THE DIPLOMATIC AGENT IN THE RECEIVING STATE OUTSIDE HIS OFFICIAL FUNCTIONS (ART. 31).

- LACK OF OBLIGATION TO GIVE EVIDENCE AS A WITNESS (ART. 31);

- EXEMPTION FROM SOCIAL SECURITY PROVISIONS IN FORCE IN THE RECEIVING STATE (ART. 33);

- EXEMPTION FROM ALL DUES AND TAXES, EXCEPT:

A. INDIRECT TAXES OF A KIND WHICH ARE NORMALLY INCORPORATED IN THE PRICE OF GOODS OR SERVICES;

B. DUES AND TAXES ON PRIVATE IMMOVABLE PROPERTY SITUATED IN THE TERRITORY OF THE RECEIVING STATE, UNLESS HE HOLDS IT ON BEHALF OF THE SENDING STATE FOR THE PURPOSE OF THE MISSION;

C. CERTAIN OTHER LIMITED EXCEPTIONS (ART. 34);

- EXEMPTION FROM CUSTOMS DUTIES ON VEHICLES FOR THE OFFICIAL USE OF THE MISSION AND PERSONAL USE OF THE DIPLOMATIC AGENT OR HIS FAMILY (ART. 36).

THE VIENNA CONVENTION, THROUGH THE DIPLOMATIC RELATIONS ACT, CONFERS LESS EXPANSIVE PRIVILEGES AND IMMUNITIES UPON MEMBERS OF THE ADMINISTRATIVE AND TECHNICAL STAFF OF A MISSION AND THEIR FAMILIES, AND MEMBERS OF THE SERVICE STAFF OF A MISSION. (ART. 37).

ARTICLE 47 OF THE VIENNA CONVENTION CALLED UPON VERIFYING STATES NOT TO DISCRIMINATE AS BETWEEN STATES, BUT NOTED THAT DISCRIMINATION WAS NOT TO BE REGARDED AS HAVING TAKEN PLACE:

"(A) WHERE THE RECEIVING STATE APPLIES ANY OF THE PROVISIONS OF THE PRESENT CONVENTION RESTRICTIVELY BECAUSE OF RESTRICTIVE APPLICATION OF THAT PROVISION TO ITS MISSION IN THE SENDING STATE;

"(B) WHERE BY CUSTOM OR AGREEMENT STATES EXTEND TO EACH OTHER MORE FAVORABLE TREATMENT THAN IS REQUIRED BY THE PROVISION."

CONGRESS INCORPORATED THIS PROVISION IN SECTION 4 OF THE DIPLOMATIC RELATIONS ACT, WHICH AUTHORIZES THE PRESIDENT, "ON THE BASIS OF RECIPROCITY AND UNDER SUCH TERMS AND CONDITIONS AS HE MAY DETERMINE, TO SPECIFY PRIVILEGES AND IMMUNITIES FOR MEMBERS OF A MISSION, THEIR FAMILIES, AND THE DIPLOMATIC COURIERS OF ANY SENDING STATE WHICH RESULT IN MORE FAVORABLE TREATMENT OR LESS FAVORABLE TREATMENT THAN IS PROVIDED UNDER THE VIENNA CONVENTION." BY EXECUTIVE ORDER NO. 12101 (43 FED. REG. 54195 (1978)), PRESIDENT CARTER DELEGATED TO THE SECRETARY OF STATE THE AUTHORITY TO PERFORM THE FUNCTIONS VESTED IN HIM BY THIS PROVISION.

ACCORDINGLY, THE SECRETARY OF STATE ALREADY HAS THE AUTHORITY TO BROADEN OR TO RESTRICT, ON A RECIPROCAL BASIS, THE PRIVILEGES AND IMMUNITIES PROVIDED FOREIGN DIPLOMATS, THEIR FAMILIES, AND THEIR COURIERS UNDER THE VIENNA CONVENTION. IN ORGANIZING A DIPLOMATIC SERVICES CORPORATION TO ASSIST THE DEPARTMENT OF STATE "IN DETERMINING WHAT PRIVILEGES AND IMMUNITIES MEMBERS OF A FOREIGN MISSION ARE ENTITLED TO BY LAW, PRACTICE, OR BY TREATY OR OTHER INTERNATIONAL AGREEMENT" (SECTION 5 OF THE PROPOSED BILL), CONGRESS HAS DELEGATED NO NEW AUTHORITY. THE DIPLOMATIC RECIPROCITY ACT DOES CONFER NEW POWERS UPON THE CORPORATION AND THE SECRETARY OF STATE, HOWEVER, IN REQUIRING THAT THE FORMER PROCESS APPLICATIONS FOR CERTIFICATES OF COMPLIANCE IN INSTANCES IN WHICH THE LATTER DETERMINES THAT SUCH APPLICATIONS ARE NECESSARY ON THE BASIS OF RECIPROCITY. SECTION 5(C) AUTHORIZES THE CORPORATION, BEFORE ISSUING A CERTIFICATION,

"TO REQUIRE A FOREIGN MISSION TO PAY A SURCHARGE TO THE CORPORATION OR MEET OTHER TERMS AND CONDITIONS IN CONNECTION WITH -

"(1) THE EXECUTION OF ANY CONTRACT OR AGREEMENT PROVIDING SERVICES OR BENEFITS OF THE TYPE DESCRIBED IN THE OPENING SECTION OF THIS MEMO OR THE ACCEPTANCE OR RETENTION OF ANY SUCH SERVICES OR BENEFITS ARISING OUT OF SUCH CONTRACT OR AGREEMENT; AND

"(2) THE APPLICATION OR ACCEPTANCE OF ANY SERVICE OR BENEFIT PROVIDED BY FEDERAL, STATE, OR LOCAL GOVERNMENT."

SECTION 11 OF THE BILL ALSO CONFERS NEW AUTHORITY UPON THE SECRETARY AND THE CORPORATION BY GRANTING THE FORMER THE POWER TO DISAPPROVE THE PROPOSED ACQUISITION OF ANY INTEREST IN AMERICAN REALTY BY A FOREIGN MISSION, AND BY GRANTING TO THE LATTER THE POWER TO ACQUIRE BY CONDEMNATION ANY INTEREST IN AMERICAN REAL PROPERTY WHICH A FOREIGN MISSION HAS REFUSED TO SELL AFTER THE SECRETARY HAS DETERMINED THAT SUCH SALE IS NECESSARY IN ORDER TO ACHIEVE RECIPROCITY.

III. PROPOSED SANCTIONS.

BEFORE PROCEEDING WITH A GENERAL DISCUSSION AS TO THE FEASIBILITY OF EFFECTIVELY ENFORCING THE LEGISLATION THROUGH THE APPLICATION OF THE PROPOSED SANCTIONS, RESPONSES TO YOUR TWO SPECIFIC QUESTIONS WILL BE OFFERED. FIRST, YOU ASK HOW THE PROPOSED LEGISLATION WOULD BLOCK THE PURCHASE/LEASE OF AN AUTOMOBILE FROM A DOMESTIC FIRM BY A MEMBER OF A FOREIGN MISSION. THE PROPOSED BILL WOULD NOT "BLOCK" SUCH A PURCHASE OR LEASE. THE LEGISLATION SEEKS TO IMPEDE TRANSACTIONS BETWEEN FOREIGN MISSIONS AND PERSONS SUBJECT TO THE JURISDICTION OF THE UNITED STATES BY PENALIZING THE LATTER FOR DEALINGS WITH THE FORMER. IT DOES NOT CONFER UPON THE CORPORATION SPECIFIC AUTHORITY TO ENJOIN SUCH TRANSACTIONS.

SECONDLY, YOU ASK HOW THE CORPORATION COULD COLLECT A FINE FROM A DIPLOMATICALLY IMMUNE FOREIGN MISSION. THE BILL DOES NOT PROPOSE TO COLLECT FINES FROM FOREIGN MISSIONS. THE SANCTIONS ARE TO BE IMPOSED ON AMERICAN CITIZENS (AND RESIDENT ALIENS), NOT ON FOREIGN DIPLOMATS OR MISSIONS. SECTION 5(E) PROVIDES THAT ANY PERSON SUBJECT TO THE JURISDICTION OF THE UNITED STATES (OTHER THAN THOSE ACTING FOR THE CORPORATION) WHO KNOWINGLY CONTRACTS WITH A NON-CERTIFIED FOREIGN MISSION OR MEMBER OF A FOREIGN MISSION WILL BE FINED AND/OR IMPRISONED.

WITH RESPECT TO THE FEASIBILITY OF EXERCISING THE POWER OF EMINENT DOMAIN (TO BE CONFERRED UPON THE CORPORATION BY SECTION 11(C) OF THE BILL) IN VIEW OF THE JURISDICTIONAL CONSTRAINTS WHICH THE CONCEPT OF SOVEREIGN IMMUNITY IMPOSES UPON AMERICAN COURTS, THE FOREIGN SOVEREIGN IMMUNITIES ACT OF 1976, CODIFIED AT 28 U.S.C. SEC. 1330(A), ESTABLISHED THAT:

"THE DISTRICT COURTS SHALL HAVE ORIGINAL JURISDICTION WITHOUT REGARD TO AMOUNT IN CONTROVERSY OF ANY NONJURY CIVIL ACTION AGAINST A FOREIGN STATE *** AS TO ANY CLAIM FOR RELIEF IN PERSONAM WITH RESPECT TO WHICH THE FOREIGN STATE IS NOT ENTITLED TO IMMUNITY EITHER UNDER SECTIONS 1605-1607 OF THIS TITLE OR UNDER ANY APPLICABLE INTERNATIONAL AGREEMENT."

SECTION 1605, REFERRED TO ABOVE, PROVIDES THAT A FOREIGN STATE SHALL NOT BE IMMUNE FROM THE JURISDICTION OF THE UNITED STATES OR OF THE STATES IN ANY CASE IN WHICH RIGHTS IN IMMOVABLE PROPERTY SITUATED IN THE UNITED STATES ARE IN ISSUE. 28 U.S.C. SEC. 1605(A)(4). THUS, SOVEREIGN IMMUNITY DOES NOT IMPOSE AN OBSTACLE TO THE EXERCISE OF THE POWER OF EMINENT DOMAIN.