international comity taxation

98 73 168 22 (1992). . 165 408 Samson v. Daway (Case Digest. Story described comity as an imperfect obligationlike that of beneficence, humanity, and charity and added that [e]very nation must be the final judge for itself, not only of the nature and extent of the duty, but of the occasions on which its exercise may be justly demanded. INTERNATIONAL COMITY AFTER THE TAX CUTS AND JOBS ACT OF 2017 (PART TWO) Presented By: Diana L. Wollman, Esq., Panel Chair Cleary Gottlieb Steen & Hamilton LLP New York City Steve Edge, Esq. The comity of courts, Scalia said, referred to doctrines whereby judges decline to exercise jurisdiction over matters more appropriately adjudged elsewhere. Id. Thus, the Supreme Court properly rejected the U.S. governments argument in Kirkpatrick that the act of state doctrine should bar adjudication whenever the Executive determined that a case would cause too much embarrassment to a foreign government. 11, 51 (2010); see also Lawrence Collins, Comity in Modern Private International Law, in Reform and Development of Private International Law 89, 110 (James Fawcett ed., 2002) (The vast amount of material [on comity] cries out for some synthesis. States in the United States have adopted a variety of methodologies for choosing the law to apply in a case that touches more than one jurisdiction. See 336 U.S. at 285 ([The presumption] is a valid approach whereby unexpressed congressional intent may be ascertained. After the Peace of Westphalia in 1648, the world was understood to be divided into separate and independent states whose territorial sovereignty was deemed to be exclusive and absolute. This suggestion drew a sharp dissent from Justice Kennedy, who noted that judicial independence. Close See Sarah H. Cleveland & William S. Dodge, Defining and Punishing Offenses Under Treaties, 124 Yale L.J. Changes in international law have sometimes created new roles for international comity, and rules of international comity have sometimes evolved into rules of international law. note at 591 (Am. For example, Quackenbush v. Allstate Insurance Co. distinguished Burford abstention from forum non conveniens on the ground that abstention was concerned with comity and federalism, principles involving deference to the paramount interests of another sovereign, whereas the doctrine of forum non conveniens reflected a broader range of considerations, most notably the convenience to the parties. 55 23 limitations on taxation. Close - J. Brion, G.R. Close e (A state is responsible to other states, and to some extent to international organizations and private persons, for breach of its duties under international law or agreement.). . . See Sosa v. Alvarez-Machain, 542 U.S. 692, 733 n.21 (2004) (stating we would certainly consider [an exhaustion] requirement in an appropriate case). 14 The Article should not be understood to suggest that there is a single form of international comity appropriate to every situation. Colo. River Water Conservation Dist. See Socit Nationale Industrielle Arospatiale v. U.S. Dist. Situs or territoriality - As a rule, the taxing power cannot go beyond the territorial limit of the taxing authority. On the one hand, the executive branch plainly has authority to make some decisions that affect the application of international comity doctrines. Apr 30, 1957 (101 Phil. 101 <>>>/BBox[0 0 377.76 588]/Length 47>>stream 31 68 It may also depend on the good faith of the person raising the defense. Close. Close 171 367 Quackenbush v. Allstate Ins. In Intel Corp. v. Advanced Micro Devices, Inc., the Supreme Court refused to impose a rule limiting assistance to information that would be discoverable under the foreign tribunals rules + Close 413 354 Yet Story also thought that the territorial sovereign could trump other considerations and refuse to enforce foreign law: No nation can. w3TPI2T0 BC#=3\. 402 Yousuf, 699 F.3d at 773. to limit the extraterritorial application of the Sherman Act. Feb 27, 2017 (806 Phil. 396 320 2008) (Since Palestine is not recognized, under United States law, as a foreign state, the defendants cannot derivatively secure sovereign immunity as agencies and/or instrumentalities of Palestine.); Knox v. Palestine Liberation Org., 306 F. Supp. Close, Just two years after International Shoe, in Gulf Oil Corp. v. Gilbert, 86 138 . (quoting Verlinden, 461 U.S. at 486)). Oetjen v. Cent. . For mutual benefit, See WestlawNext, http:// VIII INTERNATIONAL COMITY IN TAXATION CLYDE J. CROBAUGH University of Indiana (Reprinted from the Journal of Political Economy, Vol. State Laws 1962) [hereinafter 1962 Uniform Act]. Starting in the 1970s, some turned to comitynow expressed as a weighing of contacts and interestsas a way of limiting the Sherman Acts reach. See infra notes 287288 and accompanying text (citing cases in which Court equates international comity with international law). 372 This article presents an argument that courts should be aware of supposed ideals like comity, which is a . Its claim, then, can only be one of sovereign party comity. endstream 105 . 183 S See Restatement (Third) of the Foreign Relations Law of the United States, ch. Posner and Sunstein characterize the public policy exception to the recognition of foreign laws and judgments as an anti-comity doctrine because it assert[s] American interests. When an award is annulled at the seat, however, enforcing courts in secondary jurisdictions must decide between enforcing the award or honoring the seat-court's nullification. 42 10 0 obj at 77273 (Douglas, J., concurring) (rejecting Bernstein exception); id. 200 But the distinction clarifies the respective roles of international comity and international law. Close endstream <>stream . 4 0 obj by the comity of nations.). 2012) (noting while some countries allow recognized governments to sue in local courts, great caution is needed in using municipal cases to establish propositions about recognition in general international law). Today, host countries generally hold primary jurisdiction to tax the active income 18 that is earned in their territories by foreign or domestic firms with permanent establishments. 96 30, at 36. endobj Mar. Close Rev. Achille Lauro, 937 F.2d 44, 4749 (2d Cir. Oil Co., 499 U.S. 244, 248 (1991) (citing McCulloch v. Sociedad Nacional de Marineros de Honduras, 372 U.S. 10, 2022 (1963)). xs 352 of being able to enter a political judgment in the court in cases where we would rather not do anything at all, but where there is enormous pressure from the foreign government that we do something). 215 is exercised by legislatures when they enact laws, and courts assume it has been exercised when they come to interpreting the scope of laws their legislatures have enacted.); Story, supra note 54, 38, at 42 (In the silence of any positive rule, affirming, or denying, or restraining the operation of foreign laws, courts of justice presume the tacit adoption of them by their own government, unless they are repugnant to its policy, or prejudicial to its interests.). 327 392 2012) ([H]ead-of-state immunity involves a formal act of recognition, that is a quintessentially executive function for which absolute deference is proper. (quoting Peter B. Rutledge, Samantar, Official Immunity and Federal Common Law, 15 Lewis & Clark L. Rev. See supra notes 7491 and accompanying text (discussing Huber and Story). 238 2006) (Applying [section 403] factors, we can only conclude that the doctrine of international comity does not require that we forego application of the United States Bankruptcy Code in favor of Bahamian bankruptcy law.); United States v. Nippon Paper Indus. It occurs when one country shows respect for the laws, judicial decisions, and institutions of another. Each directs the court to determine particular relevant facts. Close Close 213 54 0 obj Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 410 (1964). + Law Inst., Preliminary Draft No. xs 2009) (Dismissal of a suit on international comity grounds may sometimes be appropriate. See Restatement (Third) of the Foreign Relations Law of the United States 441 (restating doctrine of foreign state compulsion); see also Anthony J. Colangelo, Absolute Conflicts of Law, 91 Ind. Many of the comity doctrines are justified on the basis of respecting foreign sovereignty and fostering friendly relations. xs 120 See Samantar, 130 S. Ct. at 2292 (noting immunity of foreign official was properly governed by the common law). 377 Justice Gray began by restating the traditional rule of strictly territorial sovereignty: No law has any effect, of its own force, beyond the limits of the sovereignty from which its authority is derived. Finally, Part IV challenges two of the leading comity myths: (1) that comity must be governed by standards rather than rules; and (2) that comity determinations are best left to the executive branch. On the domestic plane, it is generally accepted today that Congress may pass statutes that violate customary international law or U.S. treaty obligations. general principles of taxation 1.without taxes, the government will be paralyzed for lack of motive. 102 39 See Parkcentral Glob. This Article limits itself to two of the principal misconceptions, with the hope that others may be able to use its framework to analyze other questions. 2014) (reaffirming Matar). 313 v. Chisholm, 268 U.S. 29, 32 (1925) (referring to comity of nations while interpreting Federal Employers Liability Act (quoting American Banana, 213 U.S. at 356)). w3TPI2T0 BC#=3\. Close, On the restraint side of the ledger, some courts applying section 403 of the Restatement (Third) of Foreign Relations Law have determined the geographic scope of U.S. statutes on a case-by-case basis. 153 See, e.g., Calamita, supra note 37, at 637 (noting adjudicatory comity serves as the founding principle for the courts acceptance of [forum non conveniens]); Slaughter, A Global Community of Courts, supra note 37, at 205 (As courts grapple with issues such as forum selection clauses, forum non conveniens motions, and parallel suits, they are developing a more nuanced conception of judicial comity.). at 857 ([C]ustomary international law may impose an exhaustion requirement that limits plaintiffs ability to bring [expropriation] claim outside the country against which they bring suit.); Sarei, 550 F.3d at 82930 (en banc) (plurality opinion) (McKeown, J.) Journal of Political Economy, University of Chicago Press, vol. 325 Id. See, e.g., Allied Bank Intl v. Banco Credito Agricola de Cartago, 757 F.2d 516, 522 (2d Cir. Close 416 Austen L. Parrish, Duplicative Foreign Litigation, 78 Geo. 373 371 ,.. 1985) (American courts have consistently recognized the interest of foreign courts in liquidating or winding up the affairs of their own domestic business entities.). endobj The United States has codified the rules governing foreign state immunity in the FSIA, which provides that foreign states, as well as their agencies and instrumentalities, are immune from suit in both federal and state courts unless an exception to that immunity applies. 354 Letter from Richard G. Kleindienst, Attorney Gen., & William P. Rogers, Secy of State, to the Speaker of the House of Representatives (Jan. 16, 1973), reprinted in Foreign State Immunity Hearing, supra note 406, at 34. endstream But Marshall emphasized that the territorial sovereign was capable of destroying this implication and of subjecting such vessels to the ordinary tribunals. Close 414 endstream 25 Both territorial sovereignty and respect for foreign rights were of particular concern in the Netherlands, which had recently won independence from Spain but whose status as a trading nation created a pressing need to treat foreigners fairly. 6. 162 International law binds the United States on the international plane, while international comity allows the United States to decide for itself how much recognition or restraint to give in deference to foreign government actors. 2005 Uniform Act, supra note 106; 1962 Uniform Act, supra note 106. 38 282 . 284 endstream 131 Close It is only when adjudicative comity operates as a principle of restraint through doctrines like forum non conveniens that international comity operates predominantly through standards rather than rules. When push comes to shove, the domestic forum is rarely unseated. But the origin of these rules in comity is clearly seen in the widespread adoption of a public policy exception. 4. residence of the taxpayer. 43 0 obj 320 Close Nevertheless, the Fourth Circuit gives State Department determinations of conduct-based immunity substantial weight, nor of mere courtesy and good will, 211 134 the Ninth Circuit held that in ATS cases where the United States nexus is weak, courts should carefully consider the question of exhaustion, particularlybut not exclusivelywith respect to claims that do not involve matters of universal concern. Davis L. Rev. AB, 773 F.2d 452, 458 (2d Cir. ,.. 61 Sabbatino, 376 U.S. at 409 ([T]he privilege of suit has been denied only to governments at war with the United States or to those not recognized by this country. (citations omitted)). 4(b). w3TPI2T0 BC#=C3\. 1965) ([W]hen property confiscated is within the United States at the time of the attempted confiscation, our courts will give effect to acts of state only if they are consistent with the policy and law of the United States. (quoting Restatement of the Foreign Relations Law of the United States 46 (Am. Rule, the taxing authority Third ) of the comity of courts, said. Country shows respect for the Laws, judicial decisions, and institutions of.! For the Laws, judicial decisions, and institutions of another close, Just two years international., Just two years after international Shoe, in Gulf Oil Corp. v.,! Immunity and Federal Common law ) a public policy exception generally accepted today that Congress may statutes. Allied Bank Intl v. Banco Credito Agricola de Cartago, 757 F.2d 516, 522 ( 2d.! Xs 120 see Samantar, 130 S. Ct. at 2292 ( noting Immunity of Official... 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