Sov­er­eign im­mu­nity – A Pan­dora’s Box that must re­main unopened

Pakistan Observer - - INTERNATIONAL - [Baria Ala­mud­din is a jour­nal­ist and com­men­ta­tor on Mid­dle East cur­rent] affairs.

LBARIA ALA­MUD­DIN AST month, the US Supreme Court uni lat­er­ally or­dered that around $2 bil­lion in frozen Ira­nian as­sets be handed over to Amer­i­cans af­fected by at­tacks which Iran stands ac­cused of or­ga­niz­ing over past decades, par­tic­u­larly the 1983 bomb­ing of the US bar­racks in Beirut that killed 241 peo­ple.

Within a short space of time the Ira­nian Par­lia­ment pre­dictably re­tal­i­ated with a list of com­pen­sa­tion de­mands for “63 years of spir­i­tual and ma­te­rial dam­age,” in­clud­ing the 1953 CIA-sponsored coup and sup­port for Iraq against Iran in the 1980s, cul­mi­nat­ing in at­tacks against Ira­nian oil plat­forms and ship­ping.

The US and Iran have not traded with each other for a long time and nei­ther has in­vested sig­nif­i­cant as­sets in the other’s econ­omy. So although such claims may thwart Obama’s de­sire for im­proved re­la­tions, the im­pact of such re­cip­ro­cal com­pen­sa­tion de­mands is mostly sym­bolic.

How­ever, what hap­pens when two coun­tries with very tightly en­meshed economies start mak­ing com­pen­sa­tion claims against each other? In many cases this would not be pos­si­ble be­cause most de­vel­oped na­tions with so­phis­ti­cated le­gal sys­tems have laws in place pre­vent­ing tri­als be­ing pur­sued against other states; in par­tic­u­lar the prin­ci­ple of sov­er­eign im­mu­nity.

This may be about to change. On May 17, the US Se­nate unan­i­mously passed a bill stat­ing that for­eign states could be put on trial if they were found cul­pa­ble for ter­ror­ist at­tacks that killed Amer­i­can ci­ti­zens. Those Repub­li­can sen­a­tors who forced this bill through make no se­cret of the fact that they are tar­get­ing Saudi Ara­bia, us­ing flimsy circum­stantial ev­i­dence to claim that Saudi of­fi­cials aided and abet­ted the al-Qaeda ter­ror­ists re­spon­si­ble for 9/ 11.

The 9/11 Com­mis­sion stated clearly that there was “no ev­i­dence that the Saudi gov­ern­ment as an in­sti­tu­tion or se­nior Saudi of­fi­cials in­di­vid­u­ally funded” the ter­ror­ists. Lead­ing fig­ures from the Com­mis­sion, speak­ing to CNN and other me­dia out­lets in re­cent days, rub­bished such ru­mours and stressed that no ev­i­dence ex­ists for any kind of Saudi com­plic­ity. How­ever, cer­tain pow­er­ful US fig­ures de­test Saudi Ara­bia and the Mus­lim world and are will­ing to be­lieve any num­ber of bizarre con­spir­acy the­o­ries.

Of­ten laws are in place for very good rea­sons. This is cer­tainly the case regarding sov­er­eign im­mu­nity Obama’s Ad­min­is­tra­tion has made it clear that they plan to veto this bill. Fur­ther­more, Saudi For­eign Min­is­ter Adel alJubeir warned that if the leg­is­la­tion passes the King­dom could with­draw up to $750 bil­lion in Trea­sury se­cu­ri­ties and other as­sets to avoid any risk of them be­ing frozen. You don’t have to be an eco­nomic ex­pert to re­al­ize what ef­fect the sud­den with­drawal of this vol­ume of as­sets would have on the US econ­omy!

While it ap­pears un­likely that such an at­tack on the prin­ci­ple of sov­er­eign im­mu­nity could suc­ceed, with cer­tain US pres­i­den­tial can­di­dates tak­ing op­por­tunis­ti­cally anti-Saudi stances in their cam­paign­ing, who knows what may hap­pen?

A ma­jor prob­lem with in­di­vid­u­als pur­su­ing par­ti­san com­pen­sa­tion claims is that they ig­nore the na­tional in­ter­est. Although Obama is of­ten slow to rec­og­nize it, the US-Saudi re­la­tion­ship is para­mount if the US seeks to have an ef­fec­tive re­la­tion­ship with the Arab world and an in­flu­ence on events. It would be dan­ger­ous to al­low lit­i­ga­tion bat­tles to poi­son this al­ready some­what fraught re­la­tion­ship.

Mis­in­formed at­tacks: We rec­og­nize how trau­matic 9/11 was for Amer­ica, but mis­in­formed at­tacks against the King­dom make Amer­ica less safe, by jeop­ar­diz­ing its re­la­tion­ship with the power­bro­ker in the re­gion with the strong­est record in com­bat­ting mil­i­tancy, while coun­ter­ing Iran’s ag­gres­sive sup­port for ter­ror­ist prox­ies in the re­gion. Obama has said it him­self – The close in­tel­li­gence-shar­ing re­la­tion­ship has thwarted at­tacks and saved Amer­i­can lives.

Those pur­su­ing this at­tack on sov­er­eign im­mu­nity have been so fo­cused on their own par­ti­san in­ter­ests that they have spared no thought to the dan­ger of such a prece­dent if their ef­forts were suc­cess­ful.

The re­moval of sov­er­eign im­mu­nity would al­low some­one to walk into a US court and - with the as­sis­tance of a good lawyer claim that Venezuela, Azer­bai­jan or Bos­ni­aHerze­gov­ina had en­gaged in state-sponsored ter­ror­ism against them. Mech­a­nisms could then be set in mo­tion, freez­ing all fi­nan­cial as­set be­long­ing to those coun­tries within the US sphere of in­flu­ence.

As we have seen when Amer­ica uni­lat­er­ally seized $2bn in Ira­nian as­sets – no coun­try will fail to re­act to such a provo­ca­tion. Their first re­ac­tion would be to with­draw all vul­ner­a­ble as­sets and their sec­ond move would be to take re­tal­ia­tory mea­sures against US as­sets – chang­ing their own do­mes­tic laws if nec­es­sary.

The White House Press Sec­re­tary raised this ex­act concern, say­ing: “This leg­is­la­tion would change long-stand­ing in­ter­na­tional law regarding sov­er­eign im­mu­nity and the Pres­i­dent of the United States and con­tin­ues to har­bor se­ri­ous con­cerns that this leg­is­la­tion would make the United States vul­ner­a­ble in other court sys­tems around the world.”

Glass houses: The ex­pres­sion that “peo­ple who live in glass houses shouldn’t throw stones” has never ap­plied so strongly. As was pointed out in an LA Times ed­i­to­rial: “The po­ten­tial ex­po­sure such a mea­sure would bring to the US is ines­timable. Ex­pect to see civil claims by vic­tims of col­lat­eral dam­age in mil­i­tary at­tacks, law­suits by peo­ple caught up in the na­tion’s post-9/11 de­ten­tion poli­cies, in­clud­ing Guan­tanamo Bay, and chal­lenges over atroc­i­ties com­mit­ted by USbacked Syr­ian rebels. Pretty much any­where that US poli­cies have led to dam­ages, those who suf­fered could po­ten­tially seek re­dress in their own courts, jeop­ar­diz­ing Amer­i­can as­sets over­seas, where the rule of law some­times is solid, but in other cases is a tool wielded for po­lit­i­cal pur­poses.”

Qatar, Rus­sia and other oil-rich states have in­vested hun­dreds of mil­lions of Bri­tish pounds in UK prop­erty. We are all too fa­mil­iar with spu­ri­ous me­dia claims that fund­ing for Syr­ian en­ti­ties in­di­rectly al­lows arms to reach ex­trem­ist groups re­spon­si­ble for at­tacks on Western­ers. It is not an is­sue of whether th­ese claims are cred­i­ble. It is sim­ply a ques­tion of whether some­one with a good enough le­gal team is will­ing to force this is­sue in court. Even a slight prospect of such ac­tions would make ma­jor in­vestors re­luc­tant to in­vest abroad in long-term as­sets. We don’t have to fol­low the logic of this thought ex­per­i­ment too far to see the mak­ings of a global fi­nan­cial cold war. —Cour­tesy: AA

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