The ritual of condemnation of foreign corporations\u27 spoliations of the resources of developing countries and their elevation to the level of international concern have obscured the problem of spoliations by national officials of the wealth of the states of which they are temporary custodians. The pathology is not restricted to developing countries. Quite the contrary. Gibbon called it  the most infallible symptom of constitutional liberty.  But the consequences for developing countries are often catastrophic, for the issue is not garden-variety corruption. The amounts involved can be stunning, at times reportedly equaling the national debt.\u27 In some cases, absconding officials have left the economies of their countries ransacked and destroyed

Reisman, W. Michael

English

Yale Law School Legal Scholarship Repository

56 THE AMERICAN JOURNAL OF INTERNATIONAL LAW [Vol. 83
ficial for U.S. courts not to have to deal with cases that include many foreign
elements and political implications. Nor need one worry that such trends
will drain the docket of federal and state courts. They are not exactly short
of business.
If the objective is' to increase the conditions for trade and direct foreign
investment between the United States and the Soviet Union, a stable legal
environment is unquestionably an important factor. It is worth remember-
ing that it can be supplied in many ways. There is no special virtue in forcing
the Soviet Union to litigate in U.S. courts, any more than there is a special
virtue in forcing United States nationals to litigate in Soviet courts. Of
importance is the creation of a stable rule of law. Like due process, the rule
of law is not the exclusive attribute of one type of institution but is a set of
procedures that can be demanded and replicated in diverse institutional
arrangements, some of which provide comparatively higher returns in
terms of fairness and economy. The resolution of commercial disputes be-
tween U.S. nationals and the Soviet Government can be accomplished at the
institutional international level more efficiently than by private arbitration
or by two parallel national judicial processes.
W. MICHAEL REISMAN
HARNESSING INTERNATIONAL LAW TO RESTRAIN AND
RECAPTURE INDIGENOUS SPOLIATIONS
The ritual of condemnation of foreign corporations' spoliations of the
resources of developing countries and their elevation to the level of interna-
tional concern have obscured the problem of spoliations by national officials
of the wealth of the states of which they are temporary custodians. The
pathology is not restricted to developing countries. Quite the contrary.
Gibbon called it "the most infallible symptom of constitutional liberty." But
the consequences for developing countries are often catastrophic, for the
issue is not garden-variety corruption. The amounts involved can be stun-
ning, at times reportedly equaling the national debt.' In some cases, ab-
sconding officials have left the economies of their countries ransacked and
destroyed.
Factually, the problem of indigenous spoliation is international in terms of
means and consequences. In terms of means, the misappropriated funds
cross international boundaries to find a haven. In terms of consequences, a
I For background, see D. DELAMAIDE, DEBT SHOCK: THE FULL STORY OF THE WORLD
CREDIT CRISIS (1984); Henry, Where the Money Went, NEW REPUBLIC, Apr. 1, 1986, at 20;
LDC Capital Flight, WORLD FIN. MARKETS, March 1986, at 13-15; LDC Debt: Debt Relief or
Market Solutions?, id., September 1986, at 1, 6-7. See also Camdessus, IWF.Chef Camndessus: Wir
niissen alle Mittel mobilisieren, Die Welt, Sept. 15, 1988, at 13, cols. 1-6.
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EDITORIAL COMMENTS
significant part of the burden of reconstruction of the spoliated economies is
perforce shifted to the international community where it is folded into
development assistance. Its pathogeny is conveniently forgotten.
Legally, the problem is international, owing to changes in basic concep-
tions and principles of contemporary international law. Spoliation is not a
legal problem if the supreme leader can plausibly say "l'tat, c'est moi." As
long as the proprietary state was legitimate, there could be no question that
the sovereign or his family was entitled to alienate or liquidate parts of the
natural heritage of his fief and cache it in a convenient financial center
elsewhere in the world.2 But the incorporation of democratic ideals into
international law and into transnational notions of political legitimacy,
which has found its most authoritative expression in the United Nations
Charter, changes, by necessary implication, the competence of national
officials to dispose of the assets of a nation-state.
The point of a declaration about the permanent sovereignty of peoples
over their natural resources3 is not that the resources in question may not be
mined and sold. Such a doctrine would render them valueless. The point is
rather that the national community in which the resources are found is to be
a significant beneficiary of their exploitation. By implication here, and ex-
plicitly in other international instruments, the nation-state is now expected
to contribute to the welfare of all inhabitants, without even having the right
to discriminate among them.4
As in many other areas of international law, innovative constitutive princi-
ples such as these coexist uneasily with persisting structural features of the
classical state system: deference to the finality of a government's acts ac-
complished within national territory, sovereign immunity in foreign judicial
instances, and so on. Indeed, the autonomy of national jurisdiction and the
right of states to choose their own form of economic organization have been
invoked in defense of states whose bank secrecy laws have shielded spolia-
tions. Some of these states insist that bank secrecy laws, rather than shielding
the guilty, generally benefit persecuted peoples whose wealth is targeted for
expropriation by vicious governments. Even when spoliations that all would
condemn are taking place, the continuing crisis and competition of the
international political system inevitably press other states to adjust the ap-
plication of high principles to current exigencies. The locus classicus is
2But f. E. DF VATTEL, THE LAW OF NATIONS, bk. I, ch. II, § 15; see also id., ch. IV, §§39, 49
(Carnegie trans. 1916) (1758).
Resolution on Permanent Sovereignty over Natural Resources, GA Res. 1803, 17 UN
GAOR Supp. (No. 17) at 15, UN Doc. A/5217 (1962).
" On the welfare function of contemporary international law, see Friedmann, Human Welfare
and International Law-A Reordering of Priorities, in TRANSNATIONAL LAW IN A CHANGING
SOCIETY 113 (1972). Wilfred Jenks, in THE COMMON LAW OF MANKIND (1958), wrote elo-
quently on this subject. Jenks described international law as "increasingly shifting from the
formal structure of the relationships between States and the delimitation of theirjurisdiction to
the development of substantive rules on matters of common concern vital to the growth of an
international community and to the individual well-being of the citizens of its member States."
Id. at 17.
For examples of specific relevant international instruments, see infra note 5.
1989]
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58 THE AMERICAN JOURNAL OF INTERNATIONAL LAW [Vol. 83
Franklin D. Roosevelt's cryptic comment on Anastasio Somoza: "He may be
an S.O.B., but he's our S.O.B."
One of the anomalies of these cross-currents has been confusion and
paralysis about the status of national funds spoliated by high government
officials and cached abroad. The agents of these spoliations may themselves
be nationals of the violated collectivity, but that no more makes their acts
exclusively matters of domestic jurisdiction than would any other violation
of human rights. Such spoliations are violations of the internationally guar-
anteed rights of peoples to use their national wealth for national welfare.
Because the spoliations cannot be accomplished without havens abroad, the
exercise of the banking jurisdiction of another state in such a way as to
conceal funds is effectively part of the delict. It violates the international
legal rights of the deprived states and may itself constitute an international
legal wrong.
Because the legal principles have remained obscure, the international
unlawfulness of making possible and aiding spoliations by harboring them
has not been specified. National efforts to regain funds have perforce been
undertaken on a case-by-case basis. But since the governments needing to
regain their funds most urgently have often been spoliated to the point
where their institutions are close to bankruptcy, each has lacked the institu-
tional infrastructure and the funds necessary for this task. As a consequence,
there are many such ad hoc programs now under way, but there is no
accumulation of readily sharable international experience. In a number of
instances, national attorneys have made themselves available on a pro bono
basis, but such efforts have lacked the authority of an international man-
date. In the meantime, the expelled national officials, who have followed
their funds into relatively safe jurisdictions, are able to use those funds to
purchase skilled legal services to preserve their gains.
Has not the time come for the international community to address this
issue directly? It is proposed that, as a first step, an international declaration
be drafted (1) characterizing, unequivocally, spoliations by national officials
as a breach of national trust and of international law; (2) imposing on other
governments an obligation of supplying information and cooperation; and
(3) characterizing the failure of other governments to prevent such funds
from being cached in their jurisdiction and to aid in their recapture as
complicity, after the fact, and, as itself, an international delict. The author-
ity of such an endeavor may be rested on the Resolution on Permanent
Sovereignty, on the United Nations Charter, on various human rights decla-
rations and, in particular, on Article 19 of the Universal Declaration of
Human Rights regarding freedom of information.
5
As a second step, the United Nations should consider forming an interna-
tional high commission for the retrieval of diverted national wealth. The
' Other relevant human rights instruments include the International Covenant on Eco-
nomic, Social and Cultural Rights, GA Res. 2200, 21 UN GAOR Supp. (No. 16) at 49, UN
Doc. A/6316 (1966), especially Art. 1(2); the International Covenant on Civil and Political
Rights, GA Res. 2200, 21 UN GAOR Supp. (No. 16) at 52, UN Doc. A/6316 (1966), espe-
cially Art. 1(2):
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EDITORIAL COMMENTS
commission would be charged with responding to the requests of member
governments to identify the location of purloined funds and to secure their
return by negotiation or, where appropriate, by judicial action. The statute
of the agency would grant it international legal personality and authorize it
to cover its reasonable expenses from the funds regained.
The cultivation of responsibility and fidelity to duty in public officials is
not a problem unique to developing countries. Developed countries with
relatively stable governments are also plagued by official corruption; in-
deed, in absolute numbers, this corruption may exceed that of poorer
states.6 But its scale and consequences for economies of poorer states have
reached the point where it can no longer be ignored. Unless some interna-
tional mechanisms are set in place to facilitate economic recapturing of the
funds and, in the future, to deter indigenous spoliations, urgent welfare
goals of the international legal system will remain unfulfilled.
W. MICHAEL REISMAN*
All peoples may, for their own ends, freely dispose of their natural wealth and resources
without prejudice to any obligations arising out of international economic co-operation,
based upon the principle of mutual benefit, and international law. In no case may a people be
deprived of its own means of subsistence [emphasis supplied].
In addition, the European Convention for the Protection of Human Rights and Fundamental
Freedoms, Nov. 4, 1950, 213 UNTS 221, especially Art. 9 regarding freedom of information;
the Final Act of the [Helsinki] Conference on Security and Co-operation in Europe, Aug. 1,
1975, 73 DEP'T ST. BULL. 323 (1975), especially pt. VII, "Respect for Human Rights and
Fundamental Freedoms," and pt. VIII, "Equal Rights and Self-Determination of Peoples"; the
American Declaration of the Rights and Duties of Man (1948), Res. XXX, 6 NINTH INTERNA-
TIONAL CONFERENCE OF AMERICAN STATES, ACTAS Y DOCUMENTOS 297 (1953), especially
Art. IV regarding freedom of investigation, opinion, expression and dissemination of ideas; the
American Convention on Human Rights, Nov. 22, 1969, reprinted in ORGANIZATION OF
AMERICAN STATES, HANDBOOK OF EXISTING RULES PERTAINING TO HUMAN RIGHTS IN THE
INTER-AMERICAN SYSTEM, OEA/Ser.L/V/II.65, doc. 6, at 103 (1985), especially Art. 13,
"Freedom of Thought and Expression," and Art. 2 1, "Right to Property." These texts are also
reproduced in I. BROWNLIE, BASIC DOCUMENTS ON HUMAN RIGHTS (1981).
6 See generall W. M. REISMAN, FOLDED LIES (1979);J. NOONAN, BRIBES (1984).
* The author acknowledges the useful comments of Mahnoush H. Arsanjani and prelimi-
nary discussions with Frank Penna, Kevin Boyle and Katarina Tomsevski.
1989]
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Harnessing International Law to Restrain and Recapture Indigenous Spoliations

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Harnessing International Law to Restrain and Recapture Indigenous Spoliations

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