|
[p176]
The Court,
composed as above,
delivers the following Judgment:
On October 28th, 1950, the Chargé d'affaires a.i. of France to the
Netherlands filed in the Registry, on behalf of the Government of the French
Republic, an Application instituting proceedings before the Court against
the United States of America, concerning the rights of nationals of the
United States of America in Morocco. The Application referred to the
Declarations by which the Government of the United States of America and
the French Government accepted the compulsory jurisdiction of the Court in
accordance with Article 36, paragraph 2, of the Court's Statute. It also
referred to the Economic Co-operation Agreement of June 28th, 1948, between
the United States and France, and to the Treaty for the Organization of the
French Protectorate in the Shereefian Empire, signed at Fez on March 3oth,
1912, between France and the Shereefian Empire. It mentioned the Treaty of
Peace and Friendship of September 16th, 1836, between the United States and
the Shereefian Empire, as well as the General Act of the International
Conference of Algeciras of April 7th, 1906.
Pursuant to Article 40, paragraphs 2 and 3, of the Statute, the Application
was communicated to the Government of the United States as well as to the
States entitled to appear before the Court. It was also transmitted to the
Secretary-General of the United Nations.
The time-Iimits for the deposit of the Pleadings were fixed by Order of
November 22nd, 1950. The Memorial of the French Government, which was filed
on the appointed date, quoted several provisions of the General Act of
Algeciras and drew conclusions therefrom as to the rights of the United
States. The construction of a convention to which States other than those
concerned in the case were parties being thus in question, such States were
notified in accordance with Article 63, paragraph 1, of the Statute : for
this purpose notes were addressed on April 6th, 1951, to the Governments of
Belgium, Spain, Italy, the Netherlands, Portugal, the United Kingdom of
Great Britain and Northern Ireland and Sweden.
On June 21st, 1951, within the time-limit fixed for the deposit of its
Counter-Memorial, the Government of the United States of [p179] America
filed a document entitled "Preliminary Objection". The proceedings on the
merits were thereby suspended. The Preliminary Objection was communicated to
the States entitled to appear before the Court as well as to the States
which had been notified of the deposit of the Application pursuant to
Article 63 of the Statute. The proceedings thus instituted by the
Preliminary Objection were terminated following a declaration by the
Government of the United States that it was prepared to withdraw its
objection, having regard to the explanations and clarifications given on
behalf of the French Government, and following a declaration by the French
Government that it did not oppose the withdrawal. An Order of October 31st,
1951, placed on record the discontinuance, recorded that the proceedings on
the merits were resumed, and fixed new time-limits for the filing of the
Counter-Memorial, Reply and Rejoinder.
The Counter-Memorial and Reply were filed within the time-limits thus fixed.
As regard the Rejoinder, the time-limit was extended at the request of the
Government of the United States from April 11th to April 18th, 1952, by
Order of March 31st, 1952. On April 18th, 1952, the Rejoinder was filed and
the case was ready for hearing. Public hearings were held on July 15th,
16th, 17th, 21st, 22nd, 23rd, 24th and 26th, 1952, during which the Court
heard : MM. André Gros and Paul Reuter on behalf of the French Government;
and Mr. Adrian S. Fisher and Mr. Joseph M. Sweeney on behalf of the
Government of the United States.
At the conclusion of the argument before the Court, the Submissions of the
Parties were presented as follows :
On behalf of the French Government :
"May it please the Court,
To adjudge and declare
That the privileges of the nationals of the United States of America in
Morocco are only those which result from the text of Articles 20 and 21 of
the Treaty of September 16th, 1836, and that since the most-favoured-nation
clause contained in Article 24 of the said treaty can no longer be invoked
by the United States in the present state of the international obligations
of the Shereefian Empire, there is nothing to justify the granting to the
nationals of the United States of preferential treatment which would be
contrary to the provisions of the treaties ;
That the Government of the United States of America is not entitled to claim
that the application of all laws and regulations to its nationals in Morocco
requires its express consent;
That the nationals of the United States of America in Morocco are subject to
the laws and regulations in force in the Shereefian Empire and in particular
the regulation of December 3oth, 1948, on imports not involving an
allocation of currency, without the prior consent of the United States
Government;[p180]
That the decree of December 3oth, 1948, concerning the regulation of
imports not involving an allocation of currency, is in conformity with the
economic system which is applicable to Morocco, according to the conventions
which bind France and the United States;
That Article 95 of the Act of Algeciras defines value for customs purposes
as the value of the merchandise at the time and at the place where it is
presented for customs clearance;
That no treaty has conferred on the United States fiscal immunity for its
nationals in Morocco, either directly or through the effect of the
most-favoured-nation clause ;
That the laws and regulations on fiscal matters which have been put into
force in the Shereefian Empire are applicable to the nationals of the United
States without the prior consent of the Government of the United States ;
That, consequently, consumption taxes provided by the Dahir of February
28th, 1948, have been legally collected from the nationals of the United
States, and should not be refunded to them."
On behalf of the Government of the United States :
"1. The Submissions and Conclusions presented by the French Government in
this case should be rejected on the ground that the French Government has
failed to maintain the burden of proof which it assumed as party plaintiff
and by reason of the nature of the legal issues involved.
2. The treaty rights of the United States in Morocco forbid Morocco to
impose prohibitions on American imports, Save those specified by the
treaties, and these rights are still in full force and effect.
The Dahir of December 30, 1948, imposing a prohibition on imports is in
direct contravention of the treaty rights of the United States forbidding
prohibitions on American imports and the French Government by applying the
Dahir of December 30, 1948, to American nationals, without the consent of
the United States, from December 31, 1948, to May II, 1949, violated the
treaty rights of the United States and was guilty of a breach of
international law.
American nationals can not legally be submitted to the Dahir of December 30,
1948, without the prior consent of the United States which operates to waive
temporarily its treaty rights.
3. The jurisdiction conferred upon the United States by the Treaties of 1787
and 1836 was jurisdiction, civil and criminal, in all cases arising between
American citizens.
In addition, the United States acquired in Morocco jurisdiction in all cases
in which an American citizen or protégé was defendant through the effect of
the most-favoured-nation clause and through custom and usage.
Such jurisdiction was not affected by the surrender by Great Britain in 1937
of its rights of jurisdiction in the French Zone of Morocco. [p181]
Such jurisdiction has never been renounced, expressly or impliedly, by the
United States.
4. Under the regime of extraterritorial jurisdiction now exercised by the
United States in Morocco, United States citizens are not subject, in
principle, to the application of Moroccan laws.
Such laws become applicable to the United States citizens only if they are
submitted to the prior assent of the United States Government and if this
Government agrees to make them applicable to its citizens. The Dahir of
December 30, 1948, not having been submitted to the prior assent of the
United States Government, cannot be made applicable to United States
citizens.
As a counter-claim :
1. Under Article 95 of the Act of Algeciras, the value of imports from the
United States must be determined for the purpose of customs assessments by
adding to the purchase value of the imported merchandise in the United
States the expenses incidental to its transportation to the custom-house in
Morocco, exclusive of all expenses following its delivery to the
custom-house, such as customs duties and storage fees.
It is a violation of the Act of Algeciras and a breach of international law
for the customs authorities to depart from the method of valuation so
defined and to determine the value of imported merchandise for customs
purposes by relying on the value of the imported merchandise on the local
Moroccan market.
2. The treaties exempt American nationals from taxes, except as specifically
provided by the same treaties ; to collect taxes from American nationals in
violation of the terms of the treaties is a breach of international law.
Such taxes can legally be collected from American nationals only with the
previous consent of the United States which operates to waive temporarily
its treaty right, and from the date upon which such consent is given, unless
otherwise specified by the terms of the consent.
Consumption taxes provided by the Dahir of February 28, 1948, which were
collected from American nationals up to August 15, 1950, the date on which
the United States consented to these taxes, were illegally collected and
should be refunded to them.
3. Since Moroccan laws do not become applicable to American citizens until
they have received the prior assent of the United States Government, the
lack of assent of the United States Government to the Dahir of February 28,
1948, rendered illegal the collection of the consumption taxes provided by
that Dahir."
***
The Court will first deal with the dispute relating to the Decree issued by
the Resident General of the French Republic in Morocco, dated December 3oth,
1948, concerning the regulation of imports [p182] into the French Zone of
Morocco. The following Submissions are presented :
On behalf of the Government of France :
"That the Decree of December 3oth, 1948, concerning the regulation of
imports not involving an allocation of currency, is in conformity with the
economic system which is applicable to Morocco, according to the conventions
which bind France and the United States."
On behalf of the Government of the United States of America :
"The treaty rights of the United States in Morocco forbid Morocco to impose
prohibitions on American imports, save those specified by the treaties, and
these rights are still in full force and effect.
The Dahir of December 30, 1945, imposing a prohibition on imports is in
direct contravention of the treaty rights of the United States forbidding
prohibitions on American imports...."
The French Government contends that the Decree of December 3oth, 1948, is
in conformity with the treaty provisions which are applicable to Morocco and
binding on France and the United States. This contention is disputed by the
United States Government for various reasons. The Court will first consider
the claim that the Decree involves a discrimination in favour of France
which contravenes the treaty rights of the United States.
By a Dahir of September 9th, 1939, His Shereefian Majesty decided 3s follows
:
"Article I.It is prohibited to import into the French Zone of the
Shereefian Empire, whatever may be the customs regulations in force, goods
other than gold in any form.
Article 2.The Director General of Communications may, however, waive this
prohibition on entry as regards combustible solid mineral matter and
petroleum products, and the Director of Economic Affairs may do likewise as
regards any other products.
Article 3.It is left to the decision of the Resident General to determine
the measures whereby the provisions herein contained shall be put into
effect."
A Residential Decree of the same date laid down the terms of application of
the Dahir, including provisions relating to requests for a waiver of the
prohibition of imports. Article 4 provided :
"Goods of French or Algerian origin shipped from France or Algeria, shall
for the time being be admitted without any special formalities."
Further regulations were prescribed by a Residential Decrec of September
10th, 1939, subjecting imports without official allocation [p183] of
currency to special authorization. Article 7 provided in its first paragraph
:
"Commercial arrangements with France, Algeria, French Colonies, African
territories under French Mandate, and Tunisia, are not subject to the
provisions herein contained."
By a Residential Decree of March 11th, 1948, a new Article 5 was added to
the Decree of September 9th, 1939 :
"Article 5.Save for such exceptions as may be specified by the appropriate
heads of departments, the prohibition on entry shall hereafter be generally
waived as regards goods imported from any origin or source, when import does
not entail any financial settlement between the French zone of the
Shereefian Empire, France, or any territory of the French Union on the one
part and foreign territory on the other part."
Finally, this new Article 5 was revoked by the Decree of December 30th,
1948, which is the subject-matter of the present dispute. After having
referred to the Dahir of September 9th, 1939, and to the Decrees of that
date and of March 11th, 1948, the Resident General of the French Republic
decreed :
"Article I.The provisions of Article 5 of the aforesaid Residential Decree
of September 9th, 1939, will cease to apply as from January 15th, 1949, Save
for the exception set out in Article 2 hereof.
Article 2.Goods which are proved to have been shipped directly to the
French Zone of the Shereefian Empire before January 15th, 1949, shall still
fall within the provisions of Article 5 of the aforesaid Residential Decree
of September 9th, 1939.
The effect of this Decree was to restore the import regulations introduced
in September 1939. Imports without official allocation of currency were
again subjected to a system of licensing control. But these import
regulations did not apply to France or other parts of the French Union. From
France and other parts of the French Union imports into the French zone of
Morocco were free. The Decree of December 3oth, 1948, involved consequently
a discrimination in favour of France, and the Government of the United
States contends that this discrimination contravenes its treaty rights.
It is common ground between the Parties that the characteristic of the
status of Morocco, as resulting from the General Act of Algeciras of April
7th, 1906, is respect for the three principles stated in the Preamble of the
Act, namely : "the sovereignty and independence of His Majesty the Sultan,
the integrity of his domains, and economic liberty without any inequality".
The last-mentioned principle of economic liberty without any inequality
must, in its [p184] application to Morocco, be considered against the
background of the treaty provisions relating to trade and equality of
treatment in economic matters existing at that time.
By the Treaty of Commerce with Great Britain of December 9th, 1856, as well
as by Treaties with Spain of November 20th, 1861, and with Germany of June
1st, 1890, the Sultan of Morocco guaranteed certain rights in matters of
trade, including imports into Morocco. These States, together with a number
of other States, including the United States, were guaranteed equality of
treatment by virtue of most-favoured-nation clauses in their treaties with
Morocco. On the eve of the Algeciras Conference the three principles
mentioned above, including the principle of "economic liberty without any
inequality", were expressly accepted by France and Germany in an exchange
of letters of July 8th, 1905, concerning their attitude with regard to
Morocco. This principle, in its application to Morocco, was thus already
well established, when it was reaffirmed by that Conference and inserted in
the Preamble of the Act of 1906. Considered in the light of these
circumstances, it seems clear that the principle was intended to be of a
binding character and not merely an empty phrase. This was confirmed by
Article 105, where the principle was expressly applied in relation to the
public services in Morocco. It was also confirmed by declarations made at
the Conference by the representative of Spain, who referred to "equality of
treatment in commercial matters", as well as by the representative of
France.
The establishment of the French Protectorate over Morocco by the Treaty of
March 3oth, 1912, between France and Morocco, did not involve any
modification in this respect. In the Convention between France and Germany
of November 4th, 1911, concerning the establishment of this Protectorate,
the Government of Germany made in Article I the reservation that "the action
of France should secure in Morocco economic equality between the nations".
On the other hand, the Government of France declared in Article 4 that it
would use its good offices with the Moroccan Government "in order to prevent
any differential treatment of the subjects of the various Powers."
The other States on behalf of which the Act of Algeciras was signed, with
the exception of the United States, adhered later to the Franco-German
Convention of 1911, thereby again accepting the principle of equality of
treatment in economic matters in Morocco. France endeavoured to obtain also
the adherence of the United States, and in a Note of November 3rd, 1911,
from the French Ambassador in Washington to the United States Secretary of
State, reference was made to the Franco-German Convention. It was declared
that France would use her good offices with the Moroccan Government in
order to prevent any differential treatment of the subjects of the Powers.
In another Note from the French Ambassador to the Secretary of State, dated
November 14th, 1918, [p185] it was declared that the benefit of commercial
equality in Morocco results, not only from the most-favoured-nation clause,
but also from the clause of economic equality which is inserted in the Act
of Algeciras and reproduced in the Franco-German Convention of 1911.
These various facts show that commercial or economic equality in Morocco was
assured to the United States, not only by Morocco, but also by France as the
protecting State. It may be asked whether France, in spite of her position
as the protector of Morocco, is herself subject to this principle of
equality and can not enjoy commercial or economic privileges which are not
equally enjoyed by the United States.
It is not disputed by the French Government that Morocco, even under the
Protectorate, has retained its personality as a State in international law.
The rights of France in Morocco are defined by the Protectorate Treaty of
1912. In economic matters France is accorded no privileged position in
R4orocco. Such a privileged position would not be compatible with the
principle of economic liberty without any inequality, on which the Act of
Algeciras is based. This was confirmed by the above-mentioned Note from the
French Ambassador in Washington of November 14th, 1918, where it is stated
that, by virtue of the clause of economic equality inserted in the Act of
Algeciras, other States have preserved their right to enjoy such equality,
"même vis-à-vis de la Puissance protectrice", and that the United States
can, therefore, not only recognize French courts in Morocco, but also give
up, in the French Zone, the enjoyment of all privileges following from
capitulations, without thereby losing this advantage.
It follows from the above-mentioned considerations that the provisions of
the Decree of December 3oth, 1948, contravene the rights which the United
States has acquired under the Act of Algeciras, because they discriminate
between imports from France and other parts of the French Union, on the one
hand, and imports from the United States on the other. France was exempted
from control of imports without allocation of currency, while the United
States was subjected to such control. This differential treatment was not
compatible with the Act of Algeciras, by virtue of which the United States
can claim to be treated as favourably as France, as far as economic matters
in Morocco are concerned.
This conclusion can also be derived from the Treaty between the United
States and Morocco of September r6th, 1836, Article 24, where it is
"declared that whatever indulgence, in trade or otherwise, shall be granted
to any of the Christian Powers, the citizens of the United States shall be
equally entitled to them". Having regard to the conclusion already arrived
at on the basis of the Act of Algeciras, the Court will limit itself to
stating as its opinion that the United States, by virtue of this
most-favoured-nation clause, [p186] has the right to object to any
discrimination in favour of France, in the matter of imports into the French
Zone of Morocco.
The Government of France has submitted various contentions purporting to
demonstrate the legality of exchange control. The Court does not consider it
necessary to pronounce upon these contentions. Even assuming the legality
of exchange control, the fact nevertheless remains that the measures applied
by virtue of the Decree of December 3oth, 1948, have involved a
discrimination in favour of imports from France and other parts of the
French Union. This discrimination can not be justified by considerations
relating to exchange control.
For these reasons the Court has arrived at the conclusion that the French
Submission relating to the Decree of December 3oth, 1948, must be rejected.
It therefore becomes unnecessary to consider whether this Submission might
be rejected also for other reasons invoked by the Government of the United
States. In these circumstances, the Court is not called upon to consider
and decide the general question of the extent of the control over
importation that may be exercised by the Moroccan authorities.
***
The Court will now consider the extent of the consular jurisdiction of the
United States of America in the French Zone of Morocco. The French
Submission in this regard reads as follows :
"That the privileges of the nationals of the United States of America in
Morocco are only those which result from the text of Articles 20 and 21 of
the Treaty of September 16th, 1836, and that since the most-favoured-nation
clause contained in Article 24 of the said Treaty can no longer be invoked
by the United States in the present state of the international obligations
of the Shereefian Empire, there is nothing to justify the granting to the
nationals of the United States of preferential treatment which would be
contrary to the provisions of the treaties."
The United States Submission concerning consular jurisdiction reads as
follows :
"3. The jurisdiction conferred upon the United States by the Treaties of
1787 and 1836 was jurisdiction, civil and criminal, in all cases arising
between American citizens.
In addition, the United States acquired in Morocco jurisdiction in all cases
in which an American citizen or protégé was defendant through the effect of
the most-favoured-nation clause and through custom and usage.
Such jurisdiction was not affected by the surrender by Great Britain in 1937
of its rights of jurisdiction in the French Zone of Morocco.
Such jurisdiction has never been renounced, expressly or impliedly, by the
United States."
It is common ground between the Parties that the present dispute is limited
to the French Zone of Morocco. It is an this ground that[p187] it has been
argued. The Court cannot, therefore, pronounce upon the legal situation in
other parts of Morocco.
In order to consider the extent of the rights of the United States relating
to consular jurisdiction, it has been necessary to examine three groups of
treaties.
The first group includes the bilateral treaties of Morocco with France, the
Netherlands, Great Britain, Denmark, Spain, the United States, Sardinia,
Austria, Belgium and Germany, which cover the period from 1631 to 1892.
These treaties, which were largely concerned with commerce, including the
rights and privileges of foreign traders in Morocco, dealt with the question
of consular jurisdiction in three different ways :
(1) Certain of the treaties included specific and comprehensive grants of
rights of consular jurisdiction to the Powers concerned, e.g., the Treaties
with Great Britain of 1856 and with Spain of 1799 and 1861.
(2) Certain of the treaties made strictly limited grants of privileges with
regard to consular jurisdiction, e.g., the Treaties with the United States
of 1787 and 1836.
(3) There were other treaties, which did not define in specific terms the
treaty rights granted by Morocco, but, instead, granted to the foreign
nations through the device of most-favoured-nation clauses, the advantages
and privileges already granted, or to be granted, to other nations.
There is a common element to be found in the most-favoured-nation clauses
which have brought about and maintained a situation in which there could be
no discrimination as between any of the Powers in Morocco, regardless of
specific grants of treaty rights. When the most extensive privileges as
regards consular jurisdiction were granted by Morocco to Great Britain in
1856 and to Spain in 1861, these enured automatically and immediately to the
benefit of the other Powers by virtue of the operation of the
most-favoured-nation clauses.
The second group consisted of multilateral treaties, the Madrid Convention
of 1880 and the Act of Algeciras of 1906. The method of relying on
individual action by interested Powers, equalized by the operation of the
most-favoured-nation clauses, had led to abuse and it had become necessary
not merely to ensure economic liberty without discrimination, but also to
impose an element of restraint upon the Powers and to take steps to render
possible the development of Morocco into a modern State. Accordingly, the
rights of protection were restricted, and some of the limitations on the
powers of the Sultan as regards foreigners, which had resulted from the
provisions of the earlier bilateral treaties, were abated. The possi-[p188]bility of abuse in the exercise by Morocco of the powers thus extended,
\vas taken care of by reserving an element of supervision and control in the
Diplomatic Body at Tangier.
The third group of treaties concerned the establishment of the Protectorate.
It included the agreements which preceded the assumption by France of a
protectorate over Morocco, and the Treaty of Fez of 1912. Under this Treaty,
Morocco remained a sovereign State but it made an arrangement of a
contractual character whereby France undertook to exercise certain sovereign
powers in the name and on behalf of Morocco, and, in principle, all of the
international relations of Morocco. France, in the exercise of this
function, is bound not only by the provisions of the Treaty of Fez, but also
by all treaty obligations to which Morocco had been subject before the
Protectorate and which have not since been terminated or suspended by
arrangement with the interested States.
The establishment of the Protectorate, and the organization of the tribunals
of the Protectorate which guaranteed judicial equality to foreigners,
brought about a situation essentially different from that which had led to
the establishment of consular jurisdiction under the earlier treaties.
Accordingly, France initiated negotiations designed to bring about the
renunciation of the regime of capitulations by the Powers exercising
consular jurisdiction in the French Zone. In the case of all the Powers
except the United States, these negotiations led to a renunciation of
capitulatory rights and privileges which, in the case of Great Britain, was
embodied in the Convention of July 29th, 1937. In the case of the United
States, there have been negotiations throughout which the United States had
reserved its treaty rights.
The French Submission is based upon the Treaty between the United States and
Morocco of September 16th, 1836, and it is common ground between the
Parties that the United States is entitled to exercise consular jurisdiction
in the case of disputes arising between its citizens or. protégés. There is
therefore no doubt as to the existence of consular jurisdiction in this
case. The only question to be decided is the extent of that jurisdiction in
the year 1950, when the Application was filed.
***
The first point raised by the Submissions relates to the scope of the
jurisdictional clauses of the Treaty of 1836, which read as follows:
"Article 20.-If any of the citizens of the United States, or any persons
under their protection, shall have any dispute with each [p189]other, the
Consul shall decide between the parties ; and whenever the Consul shall
require any aid, or assistance from Our government, to enforce his
decisions, it shall be immediately granted to him.
Article 21.If a citizen of the United States should kill or wound a Moor,
or, on the contrary, if a Moor shall kill or wound a citizen of the United
States, the law of the country shall take place, and equal justice shall be
rendered, the Consul assisting at the trial; and if any delinquent shall
make his escape, the Consul shall not be answerable for him in any manner
whatever."
It is argued that Article 20 should be construed as giving consular
jurisdiction over all disputes, civil and criminal, between United States
citizens and protégés. France, on the other hand, contends that the word
"dispute" is limited to civil cases. It has been argued that this word in
its ordinary and natural sense would be confined to civil disputes, and that
crimes are offences against the State and not disputes between private
individuals.
The Treaty of 1836 replaced an earlier treaty between the United States and
Morocco which was concluded in 1787. The two treaties were substantially
identical in terms and Articles 20 and 21 are the same in both. Accordingly,
in construing the provisions of Article 20 and, in particular, the
expression "shall have any dispute with each otherit is necessary to take
into account the meaning of the word "dispute at the times when the two
treaties were concluded. For this purpose it is possible to look at -the
way in which the word "dispute" or its French counterpart was used in the
different treaties concluded by Morocco : e.g., with France in 1631 and
1682, with Great Britain in 1721, 1750, 1751, 1760 and 1801. It is clear
that in these instances the word was used to cover both civil and criminal
disputes.
It is also necessary to take into account that, at the times of these two
treaties, the clear-cut distinction between civil and criminal matters had
not yet been developed in Morocco.
Accordingly, it is necessary to construe the word "dispute", as used in
Article 20, as referring both to civil disputes and to criminal disputes, in
so far as they relate to breaches of the criminal law committed by a United
States citizen or protégé upon another United States citizen or protégé.
***
The second point arises out of the United States Submission that consular
jurisdiction was acquired "in all cases in which an American citizen or
protégé was defendant through the effect of the most-favoured-nation clause
and through custom and usage" and that such jurisdiction was not affected by
the surrender by Great Britain in 1937 of its rights of jurisdiction in the
French Zone and has never been renounced expressly or impliedly by the
United States. [p190]
It is necessary to give special attention to the most-favoured-nation
clauses of the United States Treaty of 1836. There were two grants of
most-favoured-nation treatment.
Article 14 provides :
"The commerce with the United States shall be on the same footing as is the
commerce with Spain, or as that with the most favored nation for the time
being ; and their citizens shall be res-pected and esteemed, and have full
liberty to pass and repass our country and seaports whenever they please,
without interruption."
Article 24 deals with the contingencies of war, but it contains a final
sentence :
".... and it is further declared, that whatever indulgence, in trade or
otherwise, shall be granted to any of the Christian Powers, the citizens of
the United States shall be equally entitled to them."
These articles entitle the United States to invoke the provisions of other
treaties relating to the capitulatory regime.
The most extensive privileges in the matter of consular jurisdiction
granted by Morocco were those which were contained in the General Treaty
with Great Britain of 1856 and in the Treaty of Commerce and Navigation with
Spain of 1861. Under the provisions of Article IX of the British Treaty,
there was a grant of consular jurisdiction in all cases, civil and criminal,
when British nationals were defendants. Similarly, in Articles IX, X and XI
of the Spanish Treaty of 1861, civil and criminal jurisdiction was
established for cases in which Spanish nationals were defendants.
Accordingly, the United States acquired by virtue of the
most-favoured-nation clauses, civil and criminal consular jurisdiction in
all cases in which United States nationals were defendants.
The controversy between the Parties with regard to consular jurisdiction
results from the renunciation of capitulatory rights and privileges by Spain
in 1914 and by Great Britain in 1937. The renunciation by Spain in 1914 had
no immediate effect upon the United States position because it was still
possible to invoke the provisions of the General Treaty with Great Britain
of 1856. After 1937, however, no Power other than the United States has
exercised consular jurisdiction in the French Zone of Morocco and none has
been entitled to exercise such jurisdiction.
France contends that, from the date of the renunciation of the right of
consular jurisdiction by Great Britain, the United States has not been
entitled, either through the operation of the most-favoured-nation clauses
of the Treaty of 1836 or by virtue of the provisions of any other treaty, to
exercise consular jurisdiction [p191] beyond those cases which are covered
by the provisions of Articles 20 and 21 of the Treaty of 1836.
The United States Submission is based upon a series of contentions which
must be dealt with in turn.
*
The first contention is based upon Article 17 of the Madrid Convention of
1880, which reads as follows :
"The right to the treatment of the most favoured nation is recognized by
Morocco as belonging to all the Powers represented at the Madrid
Conference."
Even if it could be assumed that Article 17 operated as a general grant of
most-favoured-nation rights to the United States and was not confined to the
matters dealt with in the Madrid Convention, it would not follow that the
United States is entitled to continue to invoke the provisions of the
British and Spanish Treaties, after they have ceased to be operative as
between Morocco and the two countries in question.
The contention of the United States is based upon the view that
most-favoured-nation clauses contained in treaties with countries like
Morocco must be given a different construction from that which is accorded
to similar clauses in treaties with other countries. Two special
considerations need to be taken into account.
The first consideration depends upon the principle of a personal law and the
history of the old conflict between two concepts of law and jurisdiction :
the one based upon persons and the other upon territory. The right of
consular jurisdiction was designed to provide for a situation in which
Moroccan law was essentially personal in character and could not be applied
to foreigners.
The second consideration was based on the view that the most-favoured-nation
clauses in treaties made with countries like Morocco should be regarded as a
form of drafting by reference rather than as a method for the establishment
and maintenance of equality of treatment without discrimination amongst the
various countries concerned. According to this view, rights or privileges
which a country was entitled to invoke by virtue of a most-favoured-nation
clause, and which were in existence at the date of its coming into force,
would be incorporated permanently by reference and enjoyed and exercised
even after the abrogation of the treaty provisions from which they had been
derived.
From either point of view, this contention is inconsistent with the
intentions of the parties to the treaties now in question. This is shown
both by the wording of the particular treaties, and by the [p192] general
treaty pattern which emerges from an examination of the treaties made by
Morocco with France, the Netherlands, Great Britain, Denmark, Spain, United
States, Sardinia, Austria, Belgium and Germany over the period from 1631 to
1892. These treaties show that the intention of the most-favoured-nation
clauses was to establish and to maintain at all times fundamental equality
without discrimination among all of the countries concerned. Further, the
provisions of Article 17 of the Madrid Convention, regardless of their
scope, were clearly based on the maintenance of equality.
The contention would therefore run contrary to the principle of equality and
it would perpetuate discrimination. It can not support the Submission of the
United States regarding the extent of the consular jurisdiction in the
French Zone.
The second contention of the united States is based upon the geographically
limited character of the renunciation of consular jurisdiction by Great
Britain. This was restricted in its scope to the French Zone.
It has been claimed on behalf of the United States that Great Britain
retained its jurisdictional rights in the Spanish Zone and it has been
argued that "the United States, which still treats Morocco as a single
country, is entitled under the most-favoured-nation clause in Article 24 of
its treaty to the same jurisdictional rights which Great Britain to-day
exercises in a part of Morocco by virtue of the Treaty of 1856".
The Court is riot called upon to determine the existence or extent of the
jurisdictional rights of Great Britain in the Spanish Zone. It is sufficient
to reject this argument on the ground that it would lead to a position in
which the United States was entitled to exercise consular jurisdiction in
the French Zone notwithstanding the loss of this right by Great Britain.
This result would be contrary to the intention of the most-favoured-nation
clauses to establish and maintain at all times fundamental equality without
discrimination as between the countries concerned.
Reliance has also been placed upon the position of France and French
nationals as regards the new tribunals of the Protectorate, which have been
established for the purpose of exercising jurisdiction over foreigners and
applying Moroccan laws to them in the French Zone. These tribunals have been
constituted with French aid and under French direction and supervision. It
is suggested that these arc, in reality, consular courts and that the United
States is entitled to be placed, in this regard, in a position of equality
with France.
But the tribunals of the Protectorate in the French Zone are not in any
sense consular courts. They are Moroccan courts, organized [p193] on French
models and standards, affording guarantees of judicial equality to
foreigners.
Accordingly the Court can not accept this contention.
*
The third contention of the United States is based upon the nature of the
arrangements which led to the termination of Spanish consular jurisdiction
in the French Zone. By a Convention between France and Spain of November
27th, 1912, provision was made for the exercise by Spain of special rights
and privileges in the Spanish Zone. By a bilateral Declaration between
France and Spain of March 7th, 1914, Spain surrendered its jurisdictional
and other extraterritorial rights in the French Zone, and provision was made
for the subsequent surrender by France of similar rights in the Spanish
Zone. This was accomplished by a bilateral Declaration between France and
Spain of November 17th of the same year.
The United States contends that, as both the Convention of 1912 and the
Declarations of 1914 were agreements between France and Spain, and as
Morocco was not named as a party to either agreement, the rights of Spain
under the earlier provision still exist de jure, notwithstanding that there
may be a de facto situation which temporarily prevents their exercise.
Even if this contention is accepted, the position is one in which Spain has
been unable to insist on the right to exercise consular jurisdiction in the
French Zone since 1914. The rights which the United States would be entitled
to invoke by virtue of the most-favoured-nation clauses would therefore not
include the right to exercise consular jurisdiction in the year 1950. They
would be limited to the contingent right of re-establishing consular
jurisdiction at some later date in the event of France and Spain abrogating
the agreements made by the Convention of 1912 and the Declarations of 1914.
France contends that these agreements were concluded pursuant to the power
which Morocco conferred on France by the provisions of the Treaty of Fez of
1912. The general terms of Articles V and VI were broad enough to give to
France the conduct of the international relations of Morocco, including the
exercise of the treaty-making power. The Convention and the Declarations
must therefore be regarded as agreements made by a protecting Power, within
the scope of its authority, touching the affairs of and intended to bind the
protected State, as is made clear by the third paragraph of Article 1 of the
Treaty of Fez of 1912 which provided that: "The Government of the Republic
will come to an understanding with the Spanish Government regarding the
interests which the latter Government has in virtue of its geographical
position and territorial possessions on the Moroccan coast." In these
circumstances, it is necessary to hold that these agreements bound and
enured to [p194] the benefit of Morocco and that the Spanish rights as
regards consular jurisdiction carne to an end de jure as well as de facto.
It is necessary to deal with another aspect of this question which arises
out of the wording of the Declaration made by France and Spain on March 7th,
l914. This Declaration contained the following provisions :
"Taking into consideration the guarantees of judicial equality offered to
foreigners by the French Tribunals of the Protectorate, His Catholic
Majesty's Government renounces claiming for its consuls, its subjects, and
its establishments in the French Zone of the Shereefian Empire all the
rights and privileges arising out of the regime of the Capitulations.
So far as the Government of the French Republic is concerned, it binds
itself to renounce equally the rights and privileges existing in favour of
its consuls, its subjects, and its establishments in the Spanish Zone as
soon as the Spanish Tribunals are established in the said Zone.
The Declaration whereby France complied with the above undertaking was made
on November 17th, 1914, and included the following paragraph :
"Taking into consideration the guarantees of judicial equality offered to
foreigners by the Spanish Tribunals in the Protectorate, the Government of
the French Republic hereby renounces claiming for its consuls, its subjects
and its establishments in the Spanish Zone of the Shereefian Empire, all the
rights and privileges arising out of the regime of the Capitulations."
It will be observed that both Declarations use the words "renonce a
réclamer" (renounces claiming) and the question has arisen whether these
words were intended as a surrender or renunciation of all the rights and
privileges arising out of the capitulatory regime, or whether they must be
considered as temporary undertakings not to claim those rights or privileges
so long as the guarantees for judicial equality are maintained in the French
Zone by the tribunals of the Protectorate and so long as the corresponding
guarantees arc maintained in the Spanish Zone.
The question is academic rather than practical. Even if the words in
question should be construed as meaning a temporary undertaking not to
claim the rights and privileges, the fact remains that Spain, in 1950, as a
result of these undertakings was not entitled to exercise, consular
jurisdiction in the French Zone. It follows that the United States would be
equally not entitled to exercise such jurisdiction in the French Zone in the
year 1950. [p195]
Nevertheless. it is necessary for the Court to examine these Declarations in
order to determine what the parties had in mind when they used the words in
question.
The parties in both Declarations used the expression "taking into
consideration the guarantees of judicial equality ....". These are words
which, if given their ordinary and natural meaning, state the consideration
which led to the making of the surrender, but they are not words which would
normally be used if it was intended to make a conditional surrender.
The Court is of opinion that the words "renonce à réclamer" must be regarded
as an out-and-out renunciation of the capitulatory rights and privileges.
This view is confirmed by taking into account the declarations and other
arrangements made by France with other interested Powers designed to bring
about the surrender of their jurisdictional and other extraterritorial
rights in the French Zone.
The two Declarations made by France and Spain in 1914 show that they both
regarded the expression "renonce à réclamer" as equivalent to a renunciation
of the rights in question. In the Declaration of March 7th, 1914, the
French Government bound itself "to renounce equally the rights and
privileges ....". In the later Declaration of November 17th, 1914, France
gave effect to this obligation by using the expression "renonce à réclamer".
It is clear, therefore, that both France and Spain regarded this expression
as proper for bringing about a complete surrender or renunciation of the
rights and privileges in question.
On July 31st, 1916, the French Ambassador at Washington sent to the
Secretary of State of the United States "the text of the Declaration signed,
with reference to the abrogation of capitula-tions in the French Zone of
Morocco, by all the Powers signatory of the Algeciras Conference and by the
South-American Republics". In the text, thus transmitted, the expression
used in English was "relinquishes its claim to all the rights and privileges
growing out of the Capitulation regime ....". It is thus clear that at that
date, long before the present dispute had arisen, France regarded the
expression "relinquishes its claim" (or, in other words, "renonce à
réclamer") as bringing about the abrogation of the privileges in question.
The Declaration made by France and Spain of March 7th, 1914, was one of a
series of agreements negotiated by France with more than twenty foreign
States "for the surrender of their jurisdictional and other extraterritorial
rights so far as concerned the French Zone of Morocco". At least seventeen
of these agreements used the expression "renonce à réclamer" as a means of
bringing about a complete abrogation of all rights and privileges arising
out of the regime of Capitulations. They are referred to in the
Counter-Memorial in the following words : "for the surrender of their
juris-[p196]dictional and other extraterritorial rights", and again, "for
the renunciation of extraterritorial rights". Further, all of the States
which had signed these agreements abandoned forthwith the exercise of
consular jurisdiction or other capitulatory rights or privileges in the
French Zone.
III these circumstances, it is necessary to conclude that the Spanish
Declaration of March 7th, 1914, brought about the surrender or renunciation
of all Spanish jurisdictional or other extraterritorial rights in the French
Zone, and an abrogation of those provisions of the Spanish Treaty of 1861
which concern "the rights and privileges arising out of the regime of
Capitulations".
The Court, therefore, can not accept the contention that the United States
is entitled, by virtue of the most-favoured-nation clauses, to invoke in
respect of the French Zone those provisions of the Spanish Treaty of 186r
which concern consular jurisdiction.
*
The fourth contention of the United States is that the extensive consular
jurisdiction as it existed in Morocco in the year 1880 was recognized and
confirmed by the provisions of the Madrid Convention, and that the United
States, as a party to that Convention, thereby acquired an autonomous right
to the exercise of such jurisdiction, independently of the operation of the
most-favoured-nation clauses.
There can be no doubt that the exercise of consular jurisdiction in Morocco
in the year 1880 was. general, or that the Convention presupposed the
existence of such jurisdiction. It dealt with the special position of
protégés and contained proovisions for the exercise of jurisdiction with
regard to them.
On the other hand, it is equally clear that there were no provisions of the
Convention which expressly brought about a confirmation of the then
existing system of consular jurisdiction, or its establishment as an
independent and autonomous right.
The purposes and objects of this Convention were stated in its Preamble in
the following words : "the necessity of establishing, on fixed and uniform
bases, the exercise of the right of protection in Morocco and of settling
certain questions connected therewith....". In these circumstances, the
Court can not adopt a construction by implication of the provisions of the
Madrid Convention which would go beyond the scope of its declared purposes
and objects. Further, this contention would involve radical changes and
additions to the provisions of the Convention. The Court, in its Opinion
Interpretation of Peace Treaties (Second Phase) (I.C.J. Reports 1950, p.
229)stated : "It is the duty of the Court to interpret the Treaties, not to
revise them."
*
[p197]
The fifth contention of the United States is that the consular jurisdiction
in Morocco was recognized and confirmed by various provisions of the Act of
Algeciras, and that the United States acquired an autonomous right to
exercise such jurisdiction independently of the operation of the
most-favoured-nation clauses.
In 1906 the twelve Powers at Algeciras all exercised capitulatory rights and
privileges to the extent that they were prescribed either by the General
Treaty with Great Britain of 1856 or by the Spanish Treaty of 1861. They did
so by virtue of direct treaty grant, as in the case of Great Britain or
Spain ; or by virtue of most-favoured-nation clauses, as in the case of the
United States ; or without treaty rights, but with the consent or
acquiescence of Morocco, as in the case of certain other States.
Accordingly, the Act of Algeciras pre-supposed the existence of the regime
of Capitulations, including the rights of consular jurisdiction, and many of
its provisions assigned particular functions to the then existing consular
tribunals. Reference has been made in the course of the argument to
Articles 19, 23, 24, 25, 29, 45, 59, 80, 81, 87, 91, 101, 102 and 119. For
example, Chapter V, which deals with "the customs of the Empire and the
repression of fraud and smuggling", contains Article 102, which provides :
"Every confiscation, fine or penalty must be imposed on foreigners by
consular jurisdiction, and on Moorish subjects by Shereefian jurisdiction."
In the conditions which existed at the time, this Article made it necessary
for the prosecution of nationals of the twelve Powers for fraud and
smuggling to be dealt with in the consular courts.
Since 1937, the position has been one in which eleven of the Powers have
abandoned their capitulatory privileges, and their consular jurisdiction has
ceased to exist. Accordingly, Morocco has been able to make laws and to
provide for the trial and punishment of offenders who are nationals of these
eleven countries. The position of the United States is different, and must
now be examined.
Unlike the Madrid Convention, the Act of Algeciras was general in its scope
and was not confined to a limited problem such as that of protection. On the
other hand, the interpretation of the provisions of the Act must take into
account its purposes, which are set forth in the Preamble in the following
words :
"Inspired by the interest attaching itself to the reign of order, peace, and
prosperity in Morocco, and recognizing that the attainment thereof can only
be effected by means of the introduction of reforms based upon the triple
principle of the sovereignty and independence of His Majesty the Sultan,
the integrity of his domains, and economic liberty without any
inequality...." [p198]
Neither the Articles to which reference has been made above nor any other
provisions of the Act of Algeciras purport to establish consular
jurisdiction or to confirm the rights or privileges of the regime of
Capitulations which were then in existence. The question, therefore, is
whether the establishment or confirmation of such jurisdiction or privileges
can be based upon the implied intentions of the parties to the Act as
indicated by its provisions.
An interpretation, by implication from the provisions of the Act,
establishing or confirming consular jurisdiction would involve a
transformation of the then existing treaty rights of most of the twelve
Powers into new and autonomous rights based upon the Act. It would change
treaty rights of the Powers, some of them terminable at short notice, e.g.,
those of the United States which were terminable by twelve months' notice,
into rights enjoyable for an unlimited period by the Powers and incapable of
being terminated or modified by Morocco. Neither the preparatory work nor
the Preamble gives the least indication of any such intention. The Court
finds itself unable to imply so fundamental a change in the character of the
then existing treaty rights as would be involved iii the acceptance of this
contention.
There is, however, another aspect of this problem arising out of the
particular Articles to which reference has been made above. These are the
Articles which include provisions necessarily involving the exercise of
consular jurisdiction. In this case, there is a clear indication of the
intention of the parties to the effect that certain matters are to be dealt
with by the consular tribunals and to this extent it is possible to
interpret the provisions of the .Act as establishing or confirming the
exercise of consular jurisdiction for these limited purposes. The
maintenance of consular jurisdiction in so far as it may be necessary to
give effect to these specific provisions can, therefore, be justified as
based upon the necessary intendment of the provisions of the Act.
This result is confirmed by the provisions of Articles 10 and 16 of the
Convention between Great Britain and France of July 29th, 1937. These
Articles refer to the jurisdictional privileges "accorded or1 the basis of
existing treaties" or "enjoyed by the United States of America under
treaties at present in force". They presuppose, therefore, that the
jurisdictional privileges of the United States, even after the surrender of
British capitulatory rights, would not be limited to the jurisdiction
provided by Articles 20 and 21 of the Treaty with Morocco of 1836. This view
is also supported by the provisions of Article 4 of the Protocol of
Signature to this Convention. This Article provided for the abrogation of
certain provisions of the General Treaty of 1856 and, as regards the Act of
Algeciras, for the renunciation "of the right to rely upon Articles I to 50,
54 to 65, 70, 71, all provisions of Article 72 after the word 'permit', [p199 ] 75, 76, 80, 97, 101, 102, 104, 113 to 119", and it also provided that
"in Article 81 the words 'by the competent consular authority' must be
deemed to be omitted and in Article 91, the word 'competent' must
henceforth be substituted for the word 'consular' ".
It is clear that, in 1937, France (representing Morocco) and Great Britain
were proceeding upon the assumption that certain of the provisions of the
Act of Algeciras recognized a limited consular jurisdiction for the purposes
of the judicial proceedings therein described.
The Court is not called upon to examine the particular articles of the Act
of Algeciras which are involved. It considers it sufficient to state as its
opinion that the consular jurisdiction of the United States continues to
exist to the extent that may be necessary to render effective those
provisions of the Act of Algeciras which depend on the existence of consular
jurisdiction.
This interpretation of the Act, in some instances, leads to results which
may not appear to be entirely satisfactory. But that is an unavoidable
consequence of the manner in which the Algeciras Conference dealt with the
question of consular jurisdiction. The Court can not, by way of
interpretation, derive from the Act a general rule as to full consular
jurisdiction which it does not contain. On the other hand, the Court can not
disregard particular provisions involving a limited resort to consular
jurisdiction, which are, in fact, contained in the Act, and which are still
in force as far as the relations between the United States and Morocco are
concerned.
*
The sixth contention of the United States is that its consular jurisdiction
and other capitulatory rights in Morocco are founded upon "custom and
usage".
This contention has been developed in two different ways. The first relates
to custom and usage preceding the abandonment of capitulatory rights in the
French Zone by Great Britain in 1937. The second relates to the practice
since that date.
Dealing first with the period of 150 years, 1787 to 1937, there are two
considerations which prevent the acceptance of this contention.
The first is that throughout this whole period, the United States consular
jurisdiction was in fact based, not on custom or usage, but on treaty
rights. At all stages, it was based on the provisions either of the Treaty
of 1787 or of the Treaty of 1836, together with the provisions of treaties
concluded by Morocco with other Powers, especially with Great Britain and
Spain, invoked by virtue of the most-favoured-nation clauses. This was the
case not merely of the United States but of most of the countries whose
nationals were trading in Morocco. It is true that there were Powers
represented at the Conference of Madrid in 1880 and at Algeciras in 1906
which had no treaty rights but were exercising consular jurisdiction with [p200] the consent or acquiescence of Morocco. It is also true that France,
after the institution of the Protectorate, obtained declarations of
renunciation from a large number of other States which were in a similar
position. This is not enough to establish that the States exercising
consular jurisdiction in pursuance of treaty rights enjoyed in addition an
independent title thereto based on custom or usage.
The second consideration relates to the question of proof. This Court, in
the Asylum Case (I. C. J. Reports 1950, pp. 276-277), when dealing with the
question of the establishment of a local custom peculiar to Latin-American
States, said :
"The Party which relies on a custom of this kind must prove that this custom
is established in such a manner that it has become binding on the other
Party. The Colombian Government must prove that the rule invoked by it is in
accordance with a constant and uniform usage practised by the States in
question, and that this usage is the expression of a right appertaining to
the State granting asylum and a duty incumbent on the territorial State.
This follows from Article 38 of the Statute of the Court, which refers to
inter-national custom 'as evidence of a general practice accepted as law'."
In the present case there has not been sufficient evidence to enable the
Court to reach a conclusion that a right to exercise consular jurisdiction
founded upon custom or usage has been established in such a manner that it
has become binding on Morocco.
This contention has also been based upon the practice since the date when
the treaty right of the United States to exercise extended consular
jurisdiction and derivative rights came to an end with the coming into
operation of the Convention between France and Great Britain of 1937.
During this period France and the United States were in negotiation with
regard to a number of questions, including t he renunciation of
capitulatory rights. There are isolated expressions to be found in the
diplomatic correspondence which, if considered without regard to their
context, might be regarded as acknowledgments of United States claims to
exercise consular jurisdiction and other capitulatory rights. On the other
hand, the Court can not ignore the general tenor of the correspondence,
which indicates that at all times France and the United States were looking
for a solution based upon mutual agreement and that neither Party intended
to concede its legal position. In these circumstance, the situation in which
the United States continued after 1937 to exercise consular jurisdiction
over all criminal and civil cases in which United States nationals were
defendants, is one that must be regarded as in the [p201] nature of a
provisional situation acquiesced in by the Moroccan authorities.
*
Accordingly, it is necessary to conclude that, apart from the special rights
under Articles 20 and 21 of the Treaty of 1836 and those which arise from
the provisions of the Act of Algeciras, to which reference has been made
above, the United States claim to exercise and enjoy, as of right, consular
jurisdiction and other capitulatory rights in the French Zone came to an end
with the termination of "all rights and privileges of a capitulatory
character in the French Zone of the Shereefian Empire" by Great Britain, in
pursuance of the provisions of the Convention of 1937.
***
The Court will now consider the claim that United States nationals are not
subject, in principle, to the application of Moroccan laws, unless they have
first received the assent of the United States Government.
The French Submission is this regard reads as follows :
"That the Government of the United States of America is not entitled to
claim that the application of all laws and regulations to its nationals in
Morocco requires its express consent;
That the nationals of the United States of America in Morocco are subject to
the laws and regulations in force in the Shereefian Empire and in particular
the regulation of December 3oth, 1948, on imports not involving an
allocation of currency, without the prior consent of the United States
Government."
The United States Submission in this regard reads as follows :
"4. Under the regime of extraterritorial jurisdiction now exercised by the
United States in Morocco, United States citizens are not subject, in
principle, to the application of Moroccan laws.
Such laws become applicable to the United States citizens only if they are
submitted to the prior assent of the United States Government and if this
Government agrees to make them applicable to its citizens. The Dahir of
December 30, 1948, not having been sub-mitted to the prior assent of the
United States Government, cannot be made applicable to United States
citizens."
The claim that Moroccan laws are not binding on United States nationals,
unless assented to by the Government of the United [p202] States, is linked
with the regime of Capitulations, and it will not be necessary to repeat the
considerations which have already been discussed in dealing with consular
jurisdiction.
There is no provision in any of the treaties which have been under
consideration in this case conferring upon the United States any such right.
The so-called "right of assent" is merely a corollary of the system of
consular jurisdiction. The consular courts applied their own law and they
were not bound in any way by Moroccan law or Moroccan legislation. Before a
consular court could give effect to a Moroccan law it was necessary for the
foreign Power concerned to provide for its adoption as a law binding on the
consul in his judicial capacity. It was the usual practice to do this by
embodying it either in the legislation of the foreign State or in
ministerial or consular decrees of that State issued in pursuance of
delegated powers. The foreign State could have this done or it could refuse
to provide for the enforcement of the law. There was a "right of assent"
only to the extent that the intervention of the consular court was necessary
to secure the effective enforcement of a Moroccan law as against the
foreign nationals.
In the absence of any treaty provisions dealing with this matter, it has
been contended that a "right of assent" can be based on custom, usage or
practice. It is unnecessary to repeat the reasons which have been given for
rejecting custom, usage and practice as a basis for extended consular
jurisdiction, and which are largely applicable to the "right of assent". It
is, however, necessary to point out that the very large number of instances
in which Moroccan laws were referred to the United States authorities can
readily be explained as a convenient way of ensuring their incorporation in
ministerial decrees binding upon the consular courts. In that way, and in
that way only, could these laws be made enforceable as against United States
nationals so long as the extended consular jurisdiction was being exercised.
The problem arises in three ways, which must be considered separately.
The first is in cases where the application of a Moroccan law to United
States nationals would be contrary to the treaty rights of the United
States. In such cases, the application of Moroccan laws, whether directly or
indirectly to these nationals, unless assented to by the United States,
would be contrary to international law, and the dispute which might arise
therefrom would have to be dealt with according to the ordinary methods for
the settlement of international disputes. These considerations apply to the
Decree of December 30th, 1948, which the Court has found to be contrary to
treaty rights of the United States. [p203]
The second way in which the problem arises is in cases in which the
co-operation of the consular courts is required in order to enforce the
Moroccan legislation. In such cases, regardless of whether the application
of the legislation would contravene treaty rights, the assent of the United
States would be essential to its enforcement by the consular courts.
The third way in which the problem arises is in cases where the application
to United States nationals, otherwise than by enforcement through the
consular courts, of Moroccan laws which do not violate any treaty rights of
the United States is in question. In such cases the assent of the United
States authorities is not required.
Accordingly, and subject to the foregoing qualifications, the Court holds
that the United States is not entitled to claim that the application of
laws and regulations to its nationals in. the French Zone requires its
assent.
***
The Government of the United States of America has submitted a
Counter-Claim, a part of which relates to the question of immunity from
Moroccan taxes in general, and particularly from the consumption taxes
provided by the Shereefian Dahir of February 28th, 1948. The following
Submissions are presented with regard to these questions :
On behalf of the Government of the United States :
"2. The treaties exempt American nationals from taxes, except as
specifically provided by the same treaties ; to collect taxes from American
nationals in violation of the terms of the treaties is a breach of
international law.
Such taxes can legally be collected from American nationals only with the
previous consent of the United States which operates to waive temporarily
its treaty right, and from the date upon which such consent is given, unless
otherwise specified by the terms of the consent.
Consumption taxes provided by the Dahir of February 28, 1948, which were
collected from American nationals up to August 15, 1950, the date on which
the United States consented to these taxes, were illegally collected and
should be refunded to them.
3. Since Moroccan laws do not become applicable to American citizens until
they have received the prior assent of the United States Government, the
lack of assent of the United States Government to the Dahir of February 28,
1948, rendered illegal the collec-tion of the consumption taxes provided by
that Dahir."
On behalf of the Government of France :
"That no treaty has conferred on the United States fiscal immunity for its
nationals in Morocco, either directly or through the effect of the
most-favoured-nation clause ;[p204]
That the laws and regulations on fiscal matters which have been put into
force in the Shereefian Empire are applicable to the nationals of the United
States without the prior consent of the Government of the United States ;
That, consequently, consumption taxes provided by the Dahir of February
28th, 1948, have been legally collected from the nationals of the United
States, and should not be refunded to them."
The Government of the United States contends that its treaty rights in
Morocco confer upon United States nationals an immunity from taxes except
the taxes specifically recognized and permitted by the treaties. This
contention is based on certain bilateral treaties with Morocco as well as on
the Madrid Convention of 1880 and the Act of Algeciras of 1906.
The Court will first consider the contention that the right to fiscal
immunity can be derived from the most-favoured-nation clauses in Article 24
of the Treaty between the United States and Morocco of 1836 and in Article
17 of the Madrid Convention, in conjunction with certain provisions in
treaties between Morocco and Great Rritain and Morocco and Spain.
The General Treaty between Great Britain and Morocco of 1856 provided in the
second paragraph of Article IV that British subjects "shall not be obliged
to pay, under any pretence whatever, any taxes or impositions". The Treaty
between Morocco and Spain of 1861 provided in Article V that "Spanish
subjects can not under any pretext be forced to pay taxes or contributions".
It is submitted on behalf of the United States that the most-favoured-nation
clauses in treaties with countries like Morocco were not intended to create
merely temporary or dependent rights, but were intended to incorporate
permanently these rights and render them independent of the treaties by
which they were originally accorded. It is consequently contended that the
right to fiscal immunity accorded by the British General Treaty of 1856 and
the Spanish Treaty of 1861, was incorporated in the treaties which
guaranteed to the United States most-favoured-nation treatment, with the
result that this right would continue even if the rights and privileges
granted by the Treaties of 1856 and 1861 should come to an end.
For the reasons stated above in connection with consular jurisdiction, the
Court is unable to accept this contention. It is not established that
most-favoured-nation clauses in treaties with Morocco have a meaning and
effect other than such clauses in other treaties or are governed by
different rules of law. When provisions granting fiscal immunity in
treaties between Morocco and third States have been abrogated or renounced,
these provisions can no longer be relied upon by virtue of a
most-favoured-nation clause. In such circumstances, it becomes necessary to
examine [p205] whether the above-mentioned provisions in the Treaties of
1856 and 1861 are still in force.
The second paragraph of Article IV in the General Treaty with Great Britain
was abrogated by the Franco-British Convention of July 29th, 1937, Protocol
of Signature, Article 4 (a). As from the coming into force of this
Convention, that paragraph of Article IV of the General Treaty of 1856 could
no longer he relied upon by the United States by virtue of a
most-favoured-nation clause.
As already held above, the effect of the declaration made by France and
Spain of March 7th, 1914, was an unconditional renunciation by Spain of all
the rights and privileges arising out of the regime of Capitulations in the
French Zone. This renunciation involved, in the opinion of the Court, a
renunciation by Spain of the right of its nationals to immunity from taxes
under Article V of its Treaty with Morocco of 1861, since such a general and
complete immunity from taxes must be considered as an element of the regime
of capitulations in Morocco. When Spain relinquished all the capitulatory
rights, it must thereby be considered as having given up the rights to
fiscal immunity.
This view is confirmed by the attitude taken by number of other States in
this respect. Great Britain renounced all rights and privileges of a
capitulatory character in the French Zone by Article I of its Convention
with France of 1937. In the Protocol of Signature it was declared that the
effect of this Article and of Article 16 is to abrogate a number of articles
in the General Treaty of 1856, including, as has been stated above, the
second paragraph of Article IV. This seems to show that France, representing
Morocco, and Great Britain were proceeding on the assumption that the tax
immunity accorded by that Article w-as a right of a capitulatory character.
The other States, which, during the years 1914-1916, equally renounced all
rights and privileges arising out of the regime of Capitulations in the
French Zone, have acquiesced in the taxation of their nationals.
For these reasons, the Court holds that the right to tax immunity accorded
by Article V of the Spanish Treaty of 1861, having been surrendered by
Spain, can no longer be invoked by the United States by virtue of a
most-favoured-nation clause.
The Government of the United States has further contended that it has an
independent claim to tax immunity by virtue of being a party to the
Convention of Madrid and the Act of Algeciras. It contends that by these
instruments a regime as to taxes was set up, which continued the tax
immunity in favour of the nationals of foreign States, thereby confirming
and incorporating this preexisting regime, which therefore is still in
force, except for the States which have agreed to give it up.
The Court is, however, of opinion that the Madrid Convention did not confirm
and incorporate the then existing principle of tax [p206] immunity. It
merely pre-supposed the existence of this principle and curtailed it by
exceptions in Articles 12 and 13 without modifying its legal basis. It did
not provide a new and independent ground for any claim of tax immunity.
Similar considerations apply to the Act of Algeciras, which further
curtailed the regime of tax immunity by exceptions in Articles 59, 61, 64,
and 65. It did not provide any new and independent legal basis for exemption
from taxes.
The Government of the United States has invoked Articles 2 and 3 of the
Madrid Convention, which grant exemption from taxes, other than those
mentioned in Articles 12 and 13, to certain "protected persons". But the
"protégés" mentioned in Articles 2 and 3 constituted only a limited class of
persons in the service of diplomatic representatives and consuls of foreign
States. No conclusion as to tax immunity for nationals of the United States
in general can, in the opinion of the Court, be drawn from the privileges
granted to this limited class of protected persons.
It is finally contended, on behalf of the Government of the United States,
that the consumption taxes imposed by the Dahir of February 28th, 1948, are
in contravention of special treaty rights. Reference is made to the Treaty
of Commerce between Great Britain and Morocco of 1856, Articles III, VII,
VIII and IX, and it is submitted that United States nationals are exempt
from those consumption taxes by virtue of these Articles in conjunction with
the most-favoured-nation clauses in the Treaty of 1836 between Morocco and
the United States.
These four Articles in the British Commercial Treaty of 1856 relate to taxes
and duties on goods exported from or imported into Morocco, or on goods
conveyed from one Moroccan port to another. The consumption taxes provided
by the Dahir of February 28th, 1948, are, according to its Article 8,
payable on all products whether they are imported into the French Zone of
Morocco or manufactured or produced there. They can not, therefore, be
assimilated to the particular taxes mentioned in the articles of the British
Commercial Treaty, invoked by the United States, nor can they be considered
as a customs duty. The mere fact that it may be convenient in the case of
imported goods to collect the consumption tax at the Customs Office does not
alter its essential character as a tax levied upon all goods, whether
imported into, or produced in, Morocco. It may be recalled in this
connection that the Permanent Court of International Justice recognized that
fiscal duties collected at the frontier on the entry of certain goods were
not to be confused with customs duties ; in its Judgment of June 7th, 1932
in the Free Zones Case (P.C.I.J., Series A/B, No. 46, 11. 172), it laid down
that "the withdrawal of the customs line does not affect the right [p207]
of the French Government to collect at the political frontier fiscal duties
not possessing the character of customs duties".
The Court is, consequently, unable to hold that the imposition of these
consumption taxes contravenes any treaty rights of the United States. In
such circumstances the question of a partial refund of consumption taxes
paid by United States nationals does not arise.
It follows from the above-mentioned considerations that the Government of
the United States is not entitled to claim that taxes, including consumption
taxes, shall be submitted to the previous consent of that Government before
they can legally be collected from nationals of the United States. Since
they are, in the opinion of the Court, not exempt from the payment of any
taxes in the French Zone, there is no legal basis for the claim that laws
and regulations on fiscal matters shall be submitted to United States
authorities for approval.
The conclusion which the Court has thus arrived at seems to be in accordance
with the attitude which other States have taken with regard to this
question. Sax immunity in the French Zone is not claimed either by the
United Kingdom or by Spain or any other State which previously enjoyed such
a privileged position. The only State now claiming this privilege is the
United States, though no tax immunity is guaranteed by its Treaty with
Morocco of 1836. To recognize tax immunity for United States nationals alone
would not be compatible with the principle of equality of treatment in
economic matters on which the Act of Algeciras is based.
***
The final Submission of the United States of America upon that part of its
Counter-Claim which is based upon Article 95 of the General Act of
Algeciras, is as follows :
"1. Under Article 95 of the Act of Algeciras, the value of imports from the
United States must be determined for the purpose of customs assessments by
adding to the purchase value of the imported merchandise in the United
States the expenses incidental to its transportation to the custom-house in
Morocco, exclusive of all expenses following its delivery to the
custom-house, such as customs duties and storage fees.
It is a violation of the Act of Algeciras and a breach of international law
for the customs authorities to depart from the method of valuation so
defined and to determine the value of imported merchandise for customs
purposes by relying on the value of the imported merchandise on the local
Moroccan market." [p208]
The final Submission of the Government of France upon this part of the
Counter-Claim is as follows :
"That Article 95 of the Act of Algeciras defines value for customs purposes
as the value of the merchandise at the time and at the place where it is
presented for customs clearance ;"
which, as was made clear in the oral argument, means the value in the local,
i.e. Moroccan, market.
The necessity, evidenced by Articles 95, 96 and 97 of the Act of Algeciras,
of creating some kind of machinery for securing a just valuation of goods by
the Customs authorities would appear to follow, inter alia, (a) from the
principle of economic equality which is one of the principles underlying the
Act, and (b) from the fact that the import duties were fixed by the
signatory Powers at 12½ %. Clearly, it would be easy, if it were desired to
do so, to discriminate against particular importers by means of arbitrary
valuations or to evade a fixed limitation of duties by means of inflated
valuations. But while the signatory Powers realized the necessity for some
such machinery, it does not appear that the machinery has given rise to a
practice which has been consistently followed since the Act entered into
force.
Article 95 specifies four factors in valuing merchandise :
(a) the valuation must be based upon its cash wholesale value ;
(b) the time and place of the valuation are fixed at the entry of the
merchandise at the custom-house ;
(c) the merchandise must be valued "free from customs duties and storage
dues", that is to say, the value must not include these charges ;
(d) the valuation must take account of depreciation resulting from damage,
if any.
Article 96, which relates only to the principal goods taxed by the Moorish
Customs Administration, contemplated an annual fixing of values by a
"Committee on Customs Valuations" sitting at Tangier. The local character of
this Committee, and of the persons whom it is directed to consult, should be
noted. The schedule of values fixed by it was to be subject to revision at
the end of six months if any considerable changes had taken place in the
value of certain goods. Article 96 is procedural and is intended to operate
within the ambit of Article 95.
Article 97 provided for the establishment of a permanent "Committee of
Customs", intended to supervise the customs service on a high level and to
watch over the application of Article 96 and 97, subject to the advice and
consent of the Diplomatic Body at Tangier".
The Committee on Customs Valuations referred to in Article 96 appears to
have lapsed in 1924 when the Convention of Decem-[p209]ber 18th, 1923, on
the Tangier Zone came into force, and replaced it by a Committee
representing the three Zones. The latter Committee has not met since 1936.
Articles 82 to 86 of the Act, which relate to declarations by importers,
must also be noted. Article 82 requires an importer to file a declaration,
which must contain a detailed statement setting forth the nature, quality,
weight, number, measurement and value of the merchandise, as well as the
nature, marks and numbers of the packages containing the same. A declaration
of value made by the importer can clearly not be decisive, because he is an
interested party, but at the same time he knows more about the goods than
anybody else, and, unless fraud is suspected, it is right that the value
appearing in the declaration should form an important element in the
valuation about to be made.
It can not be said that the provisions of Article 95 alone, or of Chapter V
of the Act considered as a whole, afford decisive evidence in support of
either of the interpretations contended for by the Parties respectively. The
four factors specified by Article 95 are consistent with either
'interpretation ; in particular, the expression "free from customs duties
and storage dues" affords no clear indication, because, if the value in the
country of origin, increased by the amount of insurance, freight, etc., is
to be taken as the basis, this expression means "before entering the customs
office and paying duties" ; whereas, if the value in the local market is to
be accepted as the basis, some such expression is necessary (or at any rate
prudent) in order to indicate that the duty of 12½ % must not be levied on a
value which already contains the 12½ %.
The Court has examined the earlier practice, and the preparatory work of the
Conference of Algeciras of 1906, but not much guidance is obtainable from
these sources. The Commercial Agreement made between France and Morocco,
dated October 4th, 1892, consists of two letters exchanged between the
Foreign Minister of Morocco and the Minister of France in Morocco, the
latter of which contains the expression :
"These goods shall be assessed on the basis of their cash wholesale market
value in the port of discharge, in reals of vellon."
A preliminary draft of the Act (p. 97 of French Documents diplomatiques,
1906, fascicule 1, Affaires du Maroc, entitled "II. Protocoles et comptes
rendus de la Conférence d'Algésiras) contains the following article :
"Article XIX.Import and export duties shall be paid forthwith in cash at
the custom-house where clearance is effected. The ad valorenz duties shall
be determined and paid on the basis of the cash wholesale value of the goods
at the port of discharge or the custom-[p204]house in the case of imports.
Merchandise can only be removed after the payment of customs duties and
storage.
The holding of the goods or the collection of duty shall, in every case, be
made the subject of a regular receipt delivered by the officer in charge."
Later (p. IOO), upon a British proposal, the second sentence was modified so
as to read :
"The ad valorem duties shall be determined and paid on the basis of the cash
wholesale value of the goods at the custom-house, free from customs duties."
At a later stage the German delegation made the following proposal (ibid.,
p. 232) :
"The ad valorem duties imposed on imports in Morocco shall be assessed on
the value of the imported goods in the place of shipment or of purchase, to
which shall be added the transport and insurance charges to the port of
discharge in Morocco...."
That amendment was rejected, from which it may be inferred that the value in
the country of origin was rejected as the conclusive test.
It is also necessary to examine the practice of the customs authorities
since 1906, in so far as it appears from the materials made available to the
Court by the Parties. It seems that there has been a reluctance to attribute
a decisive effect to any single factor in valuing merchandise.
For instance, in a letter of July 16th, 1912, from the Controller of
Moroccan Customs to the American Minister at Tangier, it is stated that the
customs officers "apply for the appraisal of merchandise the rules
established by the Act of Algeciras and by the Customs regulations. They use
market prices, bills of sale and their professional knowledge."
The following excerpts occur later in the same letter :
"The bill of sale is an element of valuation, but it is not conclusive
evidence.
The customs has always proceeded as described above in regard to petroleum
products imported from Fiume and from Trieste ; for which importers furnish
means of appraisal by attaching to the declarations the original bills of
sale, of which the prices are compared with the market prices of origin.
This value [i.e. for customs purposes] includes the purchase price of the
petroleum f.0.b. New York, increased by all expenses subsequent to the
purchase, such as export duties paid to foreign customs, transportation,
packing, freight, insurance, handling, [p211] unloading, etc.in short, all
that contributes to make up at the moment of presentation at the customs
office the cash wholesale value of the product, according to which, under
Article 95 of the Act of Algeciras, the duties must be paid.
It is also interesting to note from the Minutes of the meeting at Tangier of
the Committee on Customs Valuations on June 7th, 1933, that the Director of
Customs explained :
".... that his Department adopts as elements of valuation for the
application of the duties concerned, the invoice of origin, transport costs
to the port of importation, the value of the merchandise on the local market
on arrival, general market price lists and any other information which may
be useful to fix the value upon which the duty is based".
On the other hand, passages can be found in the Customs regulations and in
circulars issued by the Moroccan Debt Control in which the emphasis is laid
upon the value in the Moroccan market as the important factor. The latest
"Tables of minimum and maximum values of the principal merchandise imported
into Morocco", adopted by the Committee on Customs Valuations at their last
meeting on March 11th, 1936, at Tangier, reveal a range so great that they
could only afford the most general guidance as to the actual valuation of a
particular cargo or piece of merchandise.
The general impression created by an examination of the relevant materials
is that those responsible for the administration of the customs since the
date of the Act of Algeciras have made use of all the various elements of
valuation available to them, though perhaps not always in a consistent
manner.
In these circumstances, the Court is of the opinion that Article 95 lays
down no strict rule on the point in dispute. It requires an interpretation
which is more flexible than either of those which are respectively contended
for by the Parties in this case.
The Court is of the opinion that it is the duty of the Customs authorities
in the French Zone, in fixing the valuation of imported goods for customs
purposes, to have regard to the following factors :
(a) the four factors specified by Article 95 and mentioned above ;
(b) the contents of the declaration which the importer is required by the
Act to file in the custom-house ;
(c) the wholesale cash value in the market of the French Zone ;
(d) the cost in the country of origin, increased by the cost of loading and
unloading, insurance, freight, and other charges incurred before the goods
are delivered at the custom-house ; [p212]
(e) the schedule of values, if any, which may have been prepared by the
Committee on Customs Valuations referred to in Article 96 or by any
committee which may have been substituted therefor by arrangements to which
France and the United States have assented expressly or by implication ;
(f) any other factor which is required by the special circumstances of a
particular consignment or kind of merchandise.
The factors referred to above are not arranged in order of priority but
should operate freely, within any limits that have been, or may be,
prescribed under Article 96 of the Act ; and, in view of the governing
principle of economic equality, the same methods must be applied without
discrimination to all importations, regardless of the origin of the goods
or the nationality of the importers. The power of making the valuation rests
with the Customs authorities, but it is a power which must be exercised
reasonably and in good faith.
***
For these reasons,
The Court,
on the Submissions of the Government of the French Republic,
unanimously,
Rejects its Submissions relating to the Decree of December 3oth, 1948,
issued by the Resident General of the French Republic in Morocco ;
unanimously,
Finds that the United States of America is entitled, by virtue of the
provisions of its Treaty with Morocco of September 16th, 1836, to exercise
in the French Zone of Morocco consular jurisdiction in all disputes, civil
or criminal, between citizens or protégés of the United States ;
by ten votes to one,
Finds that the United States of America is also entitled, by virtue of the
General Act of Algeciras of April 7th, 1906, to exercise in the French Zone
of Morocco consular jurisdiction in all cases, civil or criminal, brought
against citizens or protégés of the United States, to the extent required by
the provisions of the Act relating to consular jurisdiction ;
by six votes to five,
Rejects, except as aforesaid, the Submissions of the United States of
America concerning consular jurisdiction ; [p213]
unanimously,
Finds that the United States of America is not entitled' to claim that the
application to citizens of the United States of all laws and regulations in
the French Zone of Morocco requires the assent of the Government of the
United States, but that the consular courts of the United States may refuse
to apply to United States citizens laws or regulations which have not been
assented to bv the Government of the United States ;
on the Counter-Claim of the Government of the United States of America,
by six votes to five,
Rejects the Submissions of the United States of America relating to
exemption from taxes ;
by seven votes to four,
Rejects the Submissions of the United States of America relating to the
consumption taxes imposed by the Shereefian Dahir of February 28th, 1948 ;
by six votes to five,
Finds that, in applying Article 95 of the General Act of Algeciras, the
value of merchandise in the country of origin and its value in the local
Moroccan market are both elements in the appraisal of its cash wholesale
value delivered at the customhouse.
Done in English and French, the English text being authoritative, at the
Peace Palace, The Hague, this twenty-seventh day of August, one thousand
nine hundred and fifty-two, in three copies, one of which will be placed in
the archives of the Court and the others will be transmitted to the
Government of the French Republic and to the Government of the United States
of America, respectively.
(Signed) Arnold D. McNair,
President.
(Signed) E. Hambro,
Registrar.
[p214]Judge Hsu Mo declares that, in his opinion, the jurisdictional rights
of the United States of America in the French Zone of Morocco are limited to
those provided in Articles 20 and 21 of its Treaty with Morocco of September
16th, 1836, and that the United States is not entitled to exercise consular
jurisdiction in cases involving the application to United States citizens of
those provisions of the Act of Algeciras of 1906 which, for their
enforcement, carried certain sanctions. The Act of Algeciras, as far as the
jurisdictional clauses are concerned, was concluded on the basis of a kind
of consular jurisdiction as it existed at that time in its full form and in
complete uniformity among the Powers in Morocco. The various provisions, in
referring to "consular jurisdiction", "competent consular authority",
"consular court of the defendant", etc., clearly meant that jurisdiction
which was being uniformly exercised by foreign States over their respective
nationals as defendants in all cases. They did not mean such limited
jurisdiction as might be exercised by the United States consular courts, in
accordance with Article 20 of the Moroccan-United States Treaty of 1836, in
cases involving United States citizens or protégés only. When, therefore,
consular jurisdiction in its full form ceased to exist in respect of all the
signatory States to the Act of Algeciras, the basis for the application by
the various consular tribunals of the measures of sanction provided in that
Act disappeared, and the ordinary rules of international law came into play.
Consequently, such sanctions should thenceforth be applied by the
territorial courts, in the case of United States citizens as well as in the
case of all other foreign nationals. As regards reference in the
Franco-British Convention of 1937 to the jurisdictional privileges enjoyed
by the United States, it must be considered as a precautionary measure on
the part of France against the possibility of the refusal of the United
States to relinquish such privileges. In any case, the rights of the United
States vis-à-vis Morocco in matters of jurisdiction must be determined by
their own treaty relations, and could not derive from any admission made by
France on Morocco's behalf to a third party.
Judges Hackworth, Badawi, Levi Carneiro and Sir Benegal Rau, availing
themselves of the right conferred on them by Article 57 of the Statute,
append to the Judgment the common statement of their dissentirig opinion.
(Initialled) A. D. McN
(Initialled) E. H. [p215]
DISSENTING OPINION OF JUDGES HACKWORTH, BADAWI, LEVI CARNEIRO AND SIR
BENEGAL RAU
We feel bound to dissent from the Court on the conclusions relating to
consular jurisdiction, fiscal immunity and the interpretation of Article 95
of the Act of Algeciras.
Consular jurisdiction
The Court has found that the United States is not entitled to exercise, as
of right, consular jurisdiction in the French Zone of Morocco in cases other
than those expressly provided for in the Treaty of 1836 (Articles 20 and 21)
and in the Act of Algeciras.
There is hardly anyone to-day who will question the general proposition that
what is known as the capitulatory regime is an anachronism which should be
brought to a speedy end, wherever it exists. In fact the United States
Government itself has at all times been ready to negotiate with both France
and Morocco a new arrangement or agreement "to replace and recast in a form
more properly adapted to present circumstances the treaty bounds originally
contracted with the State of Morocco". (Rejoinder, page 43.)
The question in the present case is not whether the capitulatory regime is
good or bad, but whether and to what extent it subsists on a legal basis in
respect of United States nationals in Morocco. This is the issue raised in
the first Submission of the French Government and the third Submission of
the United States Government. In both Submissions the reference is to
Morocco.
The judgment of the Court is concerned with consular jurisdiction only in
the French Zone.
The Court holds that except for the limited consular jurisdiction aforesaid,
the United States claim to such jurisdiction came to an end with the
termination of the capitulatory rights and privileges of Great Britain in
that Zone by virtue of the Anglo-French Convention of 1937. We cannot
accept this view.
By Article 10 of the Anglo-French Convention of 1937, the United Kingdom
agreed that henceforth it could not invoke that Article or Article 20 (a
most-favoured-nation clause) of the Anglo-Moroccan General Treaty of 1856
for the purpose of claiming the "jurisdictional privileges accorded on the
basis of existing treaties concluded by His Majesty the Sultan of Morocco
and the United States of America". Article 16 of the same Convention
contains a similar provision referring to "jurisdictional privileges enjoyed
by the United States under treaties at present in force". It mentions
[p216] Article 20 of the General Treaty of 1856 and also Article 13, another
most-favoured-nation clause. From these provisions it appears that in the
opinion of the parties to the Convention, that is to Say, in the opinion of
the French Government and the British Govern-ment, the United States would
continue to enjoy "jurisdictional privileges", as of right, in Morocco, even
after the Anglo-French Convention of 1937 came into force.
After the signature of the Convention, the French Ambassador in Washington
wrote to the Secretary of State on August 26th, 1937 : "The United States
enjoys in Morocco the capitulatory regime by virtue of the Treaty concluded
between the two Powers on September 16th, 1836." He then referred to Article
25 of the Treaty of 1836 and continued : "The above-mentioned Convention
between the United States and Morocco not having been denounced, the United
States continues to benefit by the capitulatory regime in Morocco. In fact,
following the conclusion of the Franco-Britannic Agreement (of 1937), it
remains to-day the last Power in a position to avail itself of that regime.
In advising Your Excellency of the desire of my Government to conclude with
the American Government an agreement which would put an end to this regime,
I take the liberty of recalling to Your Excellency that during the
Conference of Montreux, which ended the regime of the capitulations in
Egypt, the representative of the American Government made declarations
indicating the conciliatory spirit in which the American Government intended
to settle this question .... These declarations have given my Government
reason to think that, like the British Government, the American Government
will be willing to consent to the abolition of the regime of capitulations
in Morocco."
In the light of these statements, it seems clear that in 1937, the French
Government regarded the United States as entitled to avail itself of the
capitulatory regime even after the Anglo-French Convention of 1937. We
concur in this view and consider that the "jurisdictional privileges"
referred to in Articles IO and 16 of the Anglo-French Convention of 1937 can
mean nothing else than full consular jurisdiction. According to those
Articles, these jurisdictional privileges rested "on the basis of existing
treaties". This brings us to the most important of these treaties, viz., the
Act of Algeciras.
We regard the Act of Algeciras as so fundamental that "every article arid
clause thereof must be observed and fulfilled with good faith". These were
the words addressed to the United States and its citizens by President
Theodore Roosevelt when causing the Act to be made public in 1907. The
importance of the Act and of the principles which it embodies has been
acknowledged by all. We [p217] therefore consider that in interpreting the
Act due effect must be given not only to its express provisions but also to
the underlying implications which lend coherence and meaning to the express
provisions. Otherwise the entire structure of the Act may be undermined.
So far as the United States is concerned, none of its provisions have been
abrogated or renounced.
The Act of Algeciras is a great multilateral convention directly binding
upon Morocco and the United States as well as the other signatory Powers.
Its status in regard to the old bilateral treaties, as an independent and
superior act, is formally expressed in its last Article 123. The scheme of
rights and obligations which it established, whether expressly or by
necessary implication, as between Morocco and the United States can not,
therefore, be allowed to be impaired by any transactions concluded between
any of the other signatories without the concurrence of both Morocco and the
United States. This appears to us to be fundamental.
At the date of the Act of Algeciras, all the foreign signatory States had
acquired, by usage or by treaty and usage, full consular jurisdiction in
Morocco. The system in its entirety had been well established for at least
fifty years, as shown by the Anglo-Moroccan General Treaty of 1856. The Act
adopted the system as it stood and, far from seeking to end it or to modify
it in any way, extended it to the new criminal prosecutions and civil suits
that might arise under the Act. We need not enumerate all the articles of
the Act in which this has been done, but shall mention only the salient
ones. Article 29 extends the consular system to prosecutions for violations
of the Regulations in Chapter II of the Act, and Articles IOI and 102 to
those of the Regulations in Chapter V. Article 45 extends the system to
actions instituted by the State Bank of Morocco against foreign nationals.
The extent to which the capitulatory system, with all its implications, is
embedded in the Act is indicated by the fact that when Great Britain
renounced the system in the French Zone by the Convention of 1937, the
effect was declared in the Protocol of Signature of the Convention to be "to
involve the renunciation by His Majesty the King of the right to rely upon"
no less than 78 articles out of the 123 articles of the Act.
We consider that the Act has adopted the system. It was the natural thing to
do at that date and it was an obvious inducement to the foreign signatory
Powers not only to assent to all the laws and regulations made by or under
the Act, but to uphold what was of paramount importance to the ruler of
Morocco at that time, namely, "the triple principle of the sovereignty and
independence of H.M. the Sultan, the integrity of his domains and economic
liberty without any inequality", which was declared in the Preamble of the
Act to be the foundation of a new order. [p218]
The consular system has been adopted in the Act, not so much by express
provision as by necessary implication. It would have occurred to no one to
do so except by implication, because the system \vas part of the established
order at that time. To give effect to the bare provisions of the Act and
ignore this basic implication in respect of all other cases of the exercise
of consular jurisdiction would result in curious anomalies. For example, it
is admitted that actions against a United States national by the State Bank
of Morocco must, under Article 45 of the Act, be brought before the United
States consular court; but not any other civil action by a Moroccan or a
foreigner. What is there peculiar to the Bank's actions that they and they
alone should be tried by the consular court ? Similarly, what is the special
feature of prosecutions for breach of customs and arms regulations that they
and they alone should be dealt with by the consular court under Chapters II
and V of the Act ? Furthermore, what is there peculiarly onerous about the
taxes mentioned in Chapter IV of the Act that they and only they should be
leviable from foreign nationals subject to the safeguards provided in that
Chapter, while other and perhaps heavier taxes may be freely levied ? It is
difficult to find a satisfactory answer to these questions.
It seems to us that if the Act of Algeciras is to be maintained as a logical
and coherent structure, the full consular system embedded in it must be
adopted.
There is no danger that this adoption would confer upon the system any
longer lease of life than it would otherwise have had. For, even without the
Act, the system, being based inter alia upon long-established usage, which
is only another name for agreement by conduct, can only be terminated in the
way in which international agreements can be terminated ; and its adoption
in the Act makes no difference in this respect.
We now come to the implications of another important multilateral treaty,
the Convention of Madrid. Article 5 of the Convention makes special
provision for the trial of civil suits against protégés commenced before
protection is granted arid against ex-protégés before protection is
withdrawn ; it also provides that the right of protection shall not be
exercised towards protégés under prosecution for a crime before they have
been tried by the authorities of the country or before their sentence has
been executed. These provisions necessarily imply that civil suits and
prosecutions against the protégés of any foreign Power that signed the
Convention are normally to be tried by the consular courts of that Power ;
otherwise the Article, which prescribes special rules for pending cases,
would be unintelligible. Amongst the protégés are not only [p219] Moorish
subjects employed by the legation and the consular officers of the foreign
Power, but also a certain number of Moorish factors, brokers, or agents
employed by foreign merchants for their business affairs. Articles I and I0
of the Convention maintain the position of these factors, brokers and agents
unchanged.
The Convention in still in force, so far as the United States is concerned,
so that United States protégés are still entitled to its benefits. If such
is the position of United States protégés, who are Moroccan subjects, a
fortiori must it be the position of United States nationals, who are in some
cases their employers in business. This was the view of the French
Government itself in 1905, as evidenced by a despatch dated August 21st,
1905, addressed by the President of the French Cabinet to the French
Diplomatic Representatives in London, Petrograd, Berlin, Rome, Vienna,
Washington, Brussels, The Hague, Copenhagen, Stockholm and Lisbon.
"Our Minister at Tangier informs me that the Shereefian Government has
imprisoned one of Our Algerian subjects .... and made known its intention to
remove him from our jurisdiction.
This fact is a violation of treaties.
All the Powers signatories with Morocco to the Madrid Convention of July 3,
1880, or having adhered to it, have an interest in the respect of the
principles which are put in issue. By virtue of a rule recognized by this
international instrument, Moroccan protégés are removed from Moroccan
jurisdiction ; a fortiori the foreigners, subjects of the Powers, must
benefit of the same advantage.
I would appreciate your indicating to the Government to which you are
accredited the point of view of the Government of the [French] Republic...."
(Rejoinder, p. 34.)
At the date of the Madrid Convention, the signatory Powers were,
independently of the Convention, entitled to claim full consular
jurisdiction for their nationals, and therefore it was not necessary to
mention this right separately in the Convention itself. But even where the
external sources of the right have ceased, the right continues to flow from
the express provisions which have been inserted in the Convention itself in
respect of protégés.
The Court has rejected the contention of the United States Government basing
its claim to consular jurisdiction and other capitulatory rights in Morocco
on "custom and usage". The rejection appears to proceed on the ground that
sufficient evidence has [p220] not been produced in support of the claim.
We consider that the evidence available is sufficient.
Usage is an established source of extraterritorial jurisdiction and has, for
example, been enumerated as a lawful source in the Preamble to the British
Foreign Jurisdiction Act, 1890, which recites that "by treaty, capitulation,
grant, usage, sufferance and other lawful means, Her Majesty the Queen has
jurisdiction within divers foreign countries". Usage and sufferance are only
different names for agreement by prolonged conduct, which may be no less
binding than agreement by the written word. The full consular jurisdiction
which the United States in fact exercises in Morocco to this day has been in
existence for nearly a hundred years, if not longer ; and during this long
period both treaties and usage, in the broad sense of these terms, have
contributed to the total result in varying measure. It is not possible, nor
is it of any practical inter-est, at this distance of time, to isolate and
assess separately the contribution made by each of these sources. Both were
at work supplementing each other.
The first treaty in which full consular jurisdiction was conceded by the
ruler of Morocco to a foreign Power appears to be the Anglo-Moroccan General
Treaty of 1856. It is admitted in the French Government's Reply to the
Counter-Memorial of the United States Government that this Treaty
incorporated existing usages, which necessarily implies that usage was at
work even before 1856. It is true that the admission has been made for the
purpose of contending that after incorporation the usages shared the fate
of the Treaty, a contention with which we do not agree ; nevertheless, there
is the admission that the Treaty incorporated prior usage.
Article XIV of that Treaty and Article XVI of the Treaty of 1861 between
Morocco and Spain are, equally, evidence that usage was at work before, as
well as during, the period of these two Treaties. These Articles provide
that litigation between British subjects or Spanish subjects and other
foreigners shall be decided solely in the tribunal of the foreign consuls
without the interference of the Moorish Government "according to the
established usages which have hitherto been acted upon or may hereafter be
arranged between such consuls", or "could according to established forms, or
according to those which may be agreed upon among the said consuls". This
shows that usage was operating and was supplementing treaties both before
and after 1856 and 1861.
It is also significant that United States Congressional legislation has,
ever since 1860, invested the consular courts in Morocco with jurisdiction
in both criminal and civil matters "so far as the same is allowed by treaty,
and in accordance with the usages of the countries in their intercourse with
the Franks or other Christian nations". In other words, the United States
has been openly relying [p221] on usage as one of the sources of its
jurisdiction ever since 1860.
Even after 1937, when, according to the French Government, the benefits of
the capitulatory provisions of the Treaties of 1856 and 1861 were no longer
available to the United States, the French Government has been transmitting
Moroccan taxation and other laws to the United States Government in order to
have them made applicable to United States nationals in the French Zone. The
assent of the United States to taxation laws was sought in this way some
twenty-three times in the period 1938-1948. This could only be on the ground
that jurisdiction to enforce these laws against United States nationals lay
with the United States consular courts.
The conduct of the French Government was not due merely to what was
described during the hearings as "gracious tolerance". As early as October
1937, the Secretary of State of the United States wrote as follows to the
French Ambassador in Washington :
"I observe that in your Note [of August 26, 1937], reference is made to
Article 25 of the American-Moroccan Treaty of September 16, 1836, which
provides for the termination of the Treaty upon one year's notice given by
either party. In order that there may be no misunderstanding, I think it is
pertinent to point out that American capitulatory rights in Morocco are
derived not only from the American-Moroccan Treaty of 1836, but also from
other treaties, conventions, or agreements and confirmed by long-established
custom and usage."
Thus the French Government knew in 1937 that the United States was asserting
usage as at least one legal basis of its rights, and in spite of this
knowledge, the French Government continued the old practice without any
reservation. It \vas not, therefore, a case of mere "gracious tolerance". As
we have shown, usage has been continuously at work, in varying measure,
during a period of nearly a hundred years, if not longer, and, therefore,
what has been happening since 1937 is evidence of a continuous process which
began nearly a century before that date.
It is significant that during the years 1914-1916, France negotiated a
series of agreements with foreign States by which they renounced claiming
their "rights and privileges arising out of the regime of capitulations" in
the French Zone. Some of these States, such as Switzerland, Greece and
Japan, had never entered into treaty relations of any sort with Morocco.
Only through usage could these States have acquired the rights which they
undertook not to claim. The position of the United States can not be worse
merely because it had treaties with Morocco containing most-favoured-nation
clauses. [p222]
It has often been said in the course of this case that the United States is
now the only Power that has not renounced its capitulatory rights in
Morocco. This is hardly accurate. The renunciation by Great Britain in the
Anglo-French Convention of 1937 is confined to the French Zone ; so too is
the renunciation (such as it is) by Spain in the Franco-Spanish Declaration
of 1914. Neither of these renunciations extends to the whole of 14orocco
which the United States still treats as a single country. Moreover, there
are still "French tribunals" in the French Zone and "Spanish tribunals" in
the Spanish Zone. These, it may be noted, are the names used in the
Franco-Spanish Declaration of 1914. Technically, the French tribunals are
not consular courts ; but in fact they exercise, as part of their functions,
the jurisdiction formerly exercised by the French consular courts. The
United States is not therefore claiming a unique position. Such inequality
as may appear to exist is the result, not of the claim of the United States,
but of attempts to secure piecemeal renunciation, from each signatory Power,
of rights which had accrued to all of them equally through usage and
treaties, particularly the Convention of Madrid and the Act of Algeciras.
This appears to be admitted in the Memorial of the French Government :
"Moreover, in Morocco especially, the disappearance of capitulatory
privileges in general had logically to result from simultaneous action by
all foreign Powers. Otherwise, inequalities of status would have resulted
which would have been in contradiction with the general contractual
principles governing the international status of the Shereefian Empire."
(Memorial, 1). 47.)
Our conclusion, upon this part of the case, is that the third Submission of
the Government of the United States, which relates to its jurisdictional
privileges, must be accepted, even apart from the effect of the
most-favoured-nation clauses in its Treaty of 1836 with Morocco.
Fiscal Immunity
The right to tax necessarily implies the right to take coercive measures in
case of non-payment. It follows from what we have said on the issue of
consular jurisdiction that no coercive measures can be taken against the
person or property of nationals of the United States except with the aid of
the consular courts of the United States, which, in the ultimate analysis,
means the assent of the United States. In this sense, and to this extent,
therefore, they enjoy a general immunity from Moroccan taxation, apart from
the effect of any most-favoured-nation clause. [p223]
We need not repeat our arguments regarding consular jurisdiction based on
the Convention of Madrid and the Act of Algeciras. But there are certain
special provisions both in the Convention and the Act which relate to taxes
on foreigners and to which we would invite attention.
The Convention of Madrid provides for the levy of two taxes on foreigners,
the agricultural tax and the gate tax. Article 12 deals with the
agricultural tax and is in the following terms :
"Foreigners and protected persons who are the owners or tenants of
cultivated land, as well as brokers engaged in agriculture, shall pay the
agricultural tax. They shall send to their Consul annually, an exact
statement of what they possess delivering into his hands the amount of the
tax.
He who shall make a false statement shall be fined double the amount of the
tax that he would regularly have been obliged to pay for the property not
declared. In case of repeated offense this fine shall be doubled.
The nature, method, date and apportionment of this tax shall form the
subject of a special regulation between the Representatives of the Powers
and the Minister of Foreign Affairs of His Shereefian Majesty."
Article 13 deals with the gate tax and runs thus :
"Foreigners, protected persons and brokers owning beasts of burden shall pay
what is called the gate-tax. The apportionment and the manner of collecting
this tax which is paid alike by foreigners and natives, shall likewise form
the subject of a special regulation between the Representatives of the
Powers and the Minister of Foreign Affairs of His Shereefian Majesty.
The said tax shall not be increased without a new agreement with the
Representatives of the Powers."
Chapter IV of the Act of Algeciras provided for the levy of some additional
taxes from foreigners. In the case of every one of these new taxes, as in
the case of those provided for in the Convention of Madrid, special
safeguards are prescribed. The "tertib" leviable under Article 59 is not to
be applied to foreign subjects except under the conditions stipulated by the
Regulations of the Diplomatic Body at Tangier on November 23rd, 1903. This
Regulation provided, inter alia, that if a foreigner or protégé refused to
pay the tax in time and coercive measures became necessary, these measures
would be taken exclusively through the consular authorities. Safe-guards are
provided under Article 61 in respect of the building taxes ; under Article
64 in respect of certain taxes on trades, industries, and professions ;
under Article 65 in respect of the stamp tax, the transfer tax on the sale
of real estate, the statistical and weighing tax and the wharfage and
lighthouse dues ; under Article 70 in respect of harbour dues ; under
Article 71 in respect of customs-storage dues.[p224]
We would invite particular attention to the second paragraph of Article 64 :
"If as the result of the collection of such taxes from Moorish subjects the
Diplomatic Body at Tangier should deem it advisable to extend the same to
those under foreign jurisdiction, it is hereby specified that the said taxes
shall be municipal."
This should be read with Article 76, which implies that for the purposes of
Article 64, the decision of even a majority of the Diplomatic Body would not
suffice. Nothing could indicate more clearly that foreigners were not to be
taxed except with the consent of their Government.
So long as the provisions of the Convention of Madrid and the Act of
Algeciras to which we have referred are in force, as they undoubtedly are in
force so far as the United States is concerned, a general immunity follows
from those provisions by necessary implication. For it would be meaningless
to enumerate certain special taxes and provide safeguards for their levy
from foreign nationals, if the rest of the whole field of taxation were left
open. At the time of the Convention of Madrid and the Act of Algeciras,
foreign nationals enjoyed a general immunity from taxes. Therefore, the
taxes enumerated in these treaties were exceptions to a prevailing general
rule and they must now be read as if the general rule were embodied in the
treaties.
Our conclusion on this subject is that United States nationals are entitled
to a general immunity from taxes save those specifically recognized by the
Convention of Madrid, the Act of Algeciras, and any other relevant treaty or
agreement.
We are consequently of opinion that the consumption taxes provided for in
the Dahir of February 28th, 1948, were wrongly levied from United States
nationals up to August 15th, 1950, the date on which the United States
consented to these taxes. But we have not sufficient data upon which to base
a conclusion as to the refund of the taxes aheady paid.
Spanish Treaty of 1861
In view of the preceding considerations, the United States need not, in our
opinion, rely on the Spanish Treaty of 1861 as one of "the existing
treaties" of "the treaties at present in force" referred to in Articles 10
and 16 of the Anglo-French Convention of 1937, from which the United States
derives its broader consular jurisdiction and fiscal immunity. (Articles 5
and 16.)
The United States having in its pleadings relied on this Treaty, the Court
thought it necessary to adjudicate on the contention and reject it on the
ground that the relevant part of the Treaty has [p225] been abrogated by
the Declarations of 1914 made by Spain and France on behalf of Morocco.
In view of the fact that Spain was not represented before the Court during
the hearings, we think it inadvisable to base any conclusion upon a definite
finding that any part of the Treaty of 1861 with Spain has been abrogated or
that it has not been abrogated. Without pronouncing any definite opinion
one way or the other, we may point out that the abrogation of the Treaty is
more than doubtful.
Article 63 provides :
"It is agreed that after 10 years have transpired from the day of the
exchange of the ratifications of the present Treaty, either of the two
contracting Parties shall have a right to demand the modification of the
Treaty ; but until such modification shall have taken place by mutual
agreement, or a new treaty shall have been concluded and ratified, the
present one shall continue in full force and vigour,."
Neither the Convention of 1912 between France and Spain, nor the
Declarations of 7th March and of 14th November 1914, seem to accomplish the
modification of the Treaty by mutual agreement, since in neither of them did
France purport to act on behalf of Morocco. The letter of the French Embassy
of 10th January 1917 to the Department of State (see Annexes to
Counter-Memorial, P. 277), referring to the Spanish rights mentioned in
Article I of the Treaty of Fez, specifies expressly that they were defined
"by an agreement between the Governments, not of Morocco, but of France and
Spain".
On the other hand, these agreements do not seem to stipulate any
renunciation by either of the two Governments of its capitulatory rights in
the other zone, in the Ray the United Kingdom renounced its own rights by
the 1937 Convention. The difference between the formula adopted in the
Declarations of 1914 and that of the 1937 Convention is not without
significance. To renounce claiming a right may be nothing more than the
suspension of the exercise of that right.
The renunciation was made in view of the guarantees of judicial equality
offered to foreigners by the French or Spanish tribunals respectively. It
may therefore be considered as subject to a condi-tion. In this case, each
of the two Governments would be entitled to re-open the question of its
rights in the event of the guarantees proving to be ineffective, or the
tribunals ceasing to exist or being substantially modified, or in the event
of a change in the political position of either of them.
It has been contended that there is no difference between the two formulas,
that the choice of the wording of the Declarations of 1914 is merely due to
considerations of diplomatic convenience, and [p226]finally that it was the
same formula which was used by France in more than 20 Declarations by which
it obtained between 1914 and 1916 the renunciation of the Powers subscribing
to these Declarations. It is asserted that France was entirely free to
choose either of the two formulas, and that its choice must therefore be
construed as evidence of their perfect equivalence.
In fact, these 20 Declarations which are posterior to the Spanish
Declaration, have simply followed the pattern of that Declaration. They
would not, by themselves, impair any conclusion which may be drawn from the
wording of their model.
In these conditions, the most-favoured-nation clauses granted to the United
States by the Treaty of 1836 FN1, when applied to the Treaty of 1861, viewed
in the light of the 1914 Declarations, ma' have the effect of extending to
the United States all the rights and favours granted by that Treaty,
notwithstanding the suspension of their exercise by Spain.
---------------------------------------------------------------------------------------------------------------------
FN1
The most-favoured-nation clause in Article 24 of the Treaty of 1930 runs as
follows : " .... and it is further declared that whatever indulgence., in
trade or otherwise, shall be granted to any of the Christian Powers, the
citizens of the United States shall be equally entitled to them".
---------------------------------------------------------------------------------------------------------------------
It is recognized that the failure by a Power, to which a favour has been
granted, to exercise that favour does not affect or prejudice, the right of
any other Power entitled to that favour by virtue of a most-favoured-nation
clause. For all useful purposes, suspending the exercise of a favour is
equivalent to failure to exercise it. Therefore, nothing would or should
preclude the United States from exercising the capitulatory rights granted
by the Treaty of 1861.
This conclusion may be considered to be supported by a decision of 12th
.July 1924, delivered by the Court of Appeal of Rabat, the highest French
judicial authority in Morocco (see Dalloz, Recueil periodiquee, 1925, Part
II, p. 35).
By this decision the Court granted an exequatur (executory title) for the
execution of a judgment by one of the national Moroccan tribunals in a case
relating to a matter of real property, a matter which had always been
considered in the capitulatory regime to be within their exclusive
jurisdiction. This regime had, however, developed an indirect control on the
exercise of that jurisdiction, by subjecting the execution of such judgments
to an exequatur to be granted by the consul.
According to the decision of the Court of Rabat, this right for the consul
derives from Article 5 of the Treaty of 1861 between Morocco and Spain and
has been extended to all the other capitul-atory Powers by virtue of the
most-favoured-nation clause.
In exercising that right in 1924, the Court must therefore have held that at
that period both the French and Spanish Capitulations were still in force in
the French Zone of Morocco. The Spanish Capitulations continued then to be a
source of that right in that [p227] Zone, while the French Capitulations,
by virtue of the most-favoured nation clause, made it possible for the
French Court of Rabat, successor of the French consular court, to receive
and exercise that right.
Article 95
Both France and the United States agree that Article 95 of the Act of
Algeciras defines the value on the basis of which the ad valorem duties of
12½ % are to be liquidated. Each of them gives an interpretation of this
provision, as regards imported goods, different from the other's and each
disputes the other's interpretation.
That the two Governments are justified in considering that Article 95
defines that value is borne out by Article 96, which, while setting up a
committee on valuations, requires that committee to appraise the value of
the chief articles of merchandise dutiable in the Moorish customs under the
conditions specified in the foregoing article. Article 95 must therefore be
considered to have laid down the definition of that value.
Which, then, of the two interpretations is the correct one ?
France interprets the value in question to be the local market value, while
the United States interprets it to be the export value plus freight,
insurance and similar expenses.
Both methods of valuation have been and are known in Morocco as well as in
other countries, either as exclusive or as combined methods. In Morocco, the
local market value had been adopted by the German Treaty of 1890 (Article
2). The greater number of countries adopt, however, the other method of
valuation. Sometimes, the local market value is adopted when the export or
foreign market value can not be ascertained, or when it is desired to adopt
protectionist measures or to conceal a higher customs duty under the guise
of a moderate one.
The point which concerns us here is what the framers of the Act of Algeciras
intended to establish by Article 95, and how this provision was understood
by the Moroccan authorities from 1906 to 1912 and has been understood by the
Protectorate authorities since.
In Article 95 two phrases are the subject of contention between the Parties.
In the following sentence they are underlined :
"The wholesale value of the merchandise delivered in the custom-house and
free from customs duties and storage dues."
If the natural sense of these two phrases yields a coherent and reasonable
proposition, then this proposition can only be set aside [p228] if
sufficient evidence is adduced to prove that it could not have been
contemplated.
The first phrase refers to transportation of merchandise from the place of
origin to the custom-house and thereby conveys an indication of the two
elements of the value inseparably connected, viz., export value and expenses
of transportation.
The second phrase describes, in the technical language of customs, an
article of merchandise without or before the levy of customs dues. This
description excludes any connection with local market value, since the
latter includes customs dues and can only be used as a basis for valuation
after these dues have been deducted. The usual expression in this case would
be "after deduction of customs duties" (see below Treaty of Commerce of 1938
between the United Kingdom and Morocco, signed but not ratified).
Both phrases, therefore, point to the export or foreign market value of
country of origin plus freight and insurance.
It is true that Article 95 applies to exports and imports, but this double
function must imply that the terms employed refer equally to both
operations. In fact, local market value for exports would correspond
perfectly to market value of the country of origin.
It must be noted that Article 95 does not provide for the whole procedure of
valuation. To ascertain this procedure, Article 95 must be read in
conjunction with Article 96. This last provision sets up a committee on
customs valuations to appraise annually the chief articles of merchandise
dutiable in the Moorish customs. This appraisal is, however, to be made
under the conditions specified in Article 95. Article 96 does not prescribe
the establishment of minimum and maximum values, but the schedule referred
to in that Article has contained both, either to allow for the different
qualities or for the different countries of origin of goods, or for any
other reason.
In any case, two methods of valuation have been adopted in the execution of
the Act of Algeciras, one for the chief articles of merchandise and another
for others. Both these methods have a common basis.
In Our view, this common basis is the market value of the country of origin.
Any necessary guidance for verifying declared values is provided for by the
Schedule of Values fixed under Article 96.
This brings us to the provisions relating to declarations contained in
Articles 82 to 86.
Article 82 of the Act requires importers to file in the customhouse a
declaration stating, inter alia, the value of the merchandise.[p229]
Articles 83 to 86 provide penalties for inaccurate statements by the
importer concerning the kind, quality or value of imported goods.
As to value, Article 85 states that if the declaration should be found to be
inaccurate as to the "declared value" and the declarant should be unable to
prove his good faith, certain results shall follow.
Now it would be reasonable to suppose that had it been intended that the
market value in Morocco should be the basis for determining the customs
duty, there could have been little purpose in attaching such importance to a
declaration by the importer.
Moreover, the market value in Morocco would reflect many charges attaching
to the goods after leaving the custom-house, such as transportation,
warehousing, handling, commissions and other expenses incident to placing
the goods on the market, and the profit realized by the importer and by any
brokers or middlemen. Obviously, there is room for a wide difference
between the local market value of goods and the value at the time of
delivery to the custom-house. Local market values may fluctuate, depending
upon the plenitude or scarcity of the goods at a given time.
In conclusion, the text of Article 95 presents no ambiguity, unless we do
violence to the word "r endue" to find therein a reference to the local
market or to the word "franche" by making it synonymous with "déduction
faile".
Assuming that the text is ambiguous, the examination of the travaux
préparatoires might throw some light on its interpretation.
The original draft (Art. 19) siibmittcd to the Conference of Algeciras
provided :
"Les droits ad valorem seront liquidés et payés d'après la valeur en gros et
au comptant de la marchandise au port de débarquement ou au bureau d'entree
s'il s'agit d'importation."
[Translation]
"The ad valorem duties shall be liquidated and paid according to the
wholesale value of the merchandise at the port of landing, or at the bureau
of entry, in the case of imports."
The provision contrasts with that in the older treaties, especially the
Treaty between Morocco and Germany (1890). It does not make the market value
either of the port of landing or the bureau of entry the basis of
liquidation of customs duties. The reference to the port or to the bureau
relates simply to the destination of the merchandise and is clearly made
with a view to including the expenses incurred in transporting the
merchandise up to the port or to the bureau. This reference naturally
implies the adoption of the market value of the country of origin.[p250]
To this draft an amendment was proposed by the delegate of Great Britain at
the 8th sitting of the Conference and was accepted.
It simply replaced "at the port of landing or at the bureau of entry, in the
case of imports," by the words "au bztreau de douane et franche des droits
de douane". ([Translation]"At the custom-house and free from customs
duties".) Later, at the 15th sitting, the German and British delegates
deposited amendments, not to Article 19 but to Article 20, which has become
Article 96 of the Act of Algeciras.
The German amendment reads as follows :
[Translation]
"The duties ad valorem levied in Morocco on imports shall be calculated or
the value which the imported article has in the place of loading or buying,
increased by expenses for transportation and insurance to the port of
unloading in Morocco.
In order to fix for a specified period the value in the port of entry of the
more important articles which are taxed, the Moroccan Customs
Administration will invite the principal merchants interested in the import
trade to proceed in agreement with it, to the establishment of a tariff for
a period not to exceed twelve months. The tariff so established shall be
communicated by the Moroccan Customs to the Diplomatic Body and shall at the
same time be officially published.
It will be considered officially recognized so far as concerns the products
of the ressortissants of signatory States, in so far as no member of the
Diplomatic Body will have formally opposed it during the two weeks which
will follow the official publication arid the communication addressed to the
Diplomatic Body."
The amendment not only provides for a procedure for establishing a tariff
for a specified period, which was the subject-matter of the provisions of
the original Article 20, but takes up again the question of fixation of
value, which had already been decided at the 8th sitting.
This amendment raised the objection of the French delegate, not as regards
the method of fixation of value, which no one opposed, but as regards the
composition of the body or commission for the establishment of the tariff.
The two amendments were referred to the Drafting Committee, which adopted a
text based on the British amendment to the same Article (Art. 20).
Therefore, all that can be said in respect of the first paragraph of the
German amendment is that it was not maintained by the Drafting Committee.
But the reason for this lies in the fact that the question raised in that
paragraph had already been adopted as Article 19, which has become Article
95. It can not then be said that it has been rejected on the ground that it
stated a rule which the Conference was unwilling to adopt. In fact, it
repeated in more detailed form the purport of the British proposal presented
at the 8th sitting. [p231]
In short, the German amendment was not adopted, not because it was
controverted on the point with which we are now concerned, but because of
its other unsatisfactory features.
In the final draft, Articles 19 and 20 of the draft of Customs regulations
(which became in the final Act of Algeciras Articles 95 and 96) were
slightly modified, the first by the addition of the word "rendue" before the
words "au bureau" and the second by the addition of the phrase "dans les
conditions specifiees a l'article précédent", thus linking the two
provisions.
***
As regards the practice followed in the period subsequent to the Act of
Algeciras, the evidence resulting from the documents filed by the Parties is
in favour of the interpretation put forward by the United States in respect
of the measures adopted during the period of 1908-1912. It is even decisive
in respect of the period following the Protectorate up to 1928. The letter
of 1912 of M. Luret, the chief representative in Morocco of French
bondholders in control of the Moroccan Customs Administration, [FN1] as well
as the Regulations published by the Customs Administration in 1928,[FN2]
relevant extracts of which are reproduced below, can leave no doubt in this
respect.
---------------------------------------------------------------------------------------------------------------------
[FN1] "Following a complaint from the American Minister concerning customs
duties assessed against imports of the Vacuum Oil Company, he wrote to the
American Minister that the Company had failed to furnish the original
invoices which could be checked against quotations on the market of origin
and defined the dutiable value of imported merchandise under Article 95 of
the Act of Algeciras thus :
[Translation]
"This value comprises the purchase price of the petroleum f.0.b. New York
increased by all expenses subsequent to the purchase, such as outgoing dues
paid at foreign custom-houses, transportation, packing, freight, insurance,
manipulation, landing, et cetera, in a word, everything that contributes to
constitute, at the moment of presentation at the custom-house, the cash
wholesale value of the product, on the basis of which, according to Article
95 of the Act of Algeciras, the duties must be paid." (Translation ; quoted
in the Note dated November 13, 1947, from the American Consul General at
Casablanca to the Diplomatic Counsellor of the French Residency ; Annex
59.)
[FN2] [Translation] "(81) Merchandise taxed on value :
By the terms of Article 95 of the Act of Algeciras, the duties ad valorem
are liquidated according to the cash wholesale value of the merchandise
delivered to the custom-house and free from customs duties and storage fees.
The value of this merchandise for the application of the tariff is
consequently that which it has in the place and at the moment it is
presented for payment of duties. It comprises, therefore, in addition to the
purchase price in the foreign country, the expenses following the purchase
such as the export duties paid to foreign customs, the transportation or
freight, insurance, expenses for unloading, in a word all which contributes
to form upon arrival in Morocco the wholesale value of the merchandise
(excepting customs duties and storage fees), that is the current price of
the merchandise in the place where the customs duties are assessed."
---------------------------------------------------------------------------------------------------------------------
[p232]
However, since 1930 a new policy of valuation based, more or less, on the
local market value has been asserted by draft regulations prepared by the
Protectorate authorities. They have given rise to protests from various
foreign Powers and bodies. As evidenced by the documents filed by the
Parties, the same policy was equally asserted in the proceedings of the
Committee on Valuation instituted by Article 50 of the Statute of Tangiers
to replace that provided for by Article 96 of the Act of Algeciras. It gave
rise to conflicting attitudes by the member representing the International
Zone of Tangier and the two other members representing the French and
Spanish Zones. The two sides sustained the two interpretations put forward
in the present instance, without the issue being settled in one way or the
other. The Committee had no authority to decide the issue, but the concrete
decisions on valuation were generally taken by a majority vote of the French
and Spanish members.
This part of the history of Article 95, revealed by the documents filed at
the end of the oral proceedings, brings no contribution to the
interpretation of that provision. It merely shows that the conflict goes as
far back as 1930. However, a document referred to in the annexes of the
Counter-Memorial throws great light on this matter of interpretation. It is
the Treaty of Commerce of 1938 between Morocco and the United Kingdom,
signed but not ratified. It had been communicated to the United States in
order to be considered with the 1937 Anglo-French Convention as models for a
double convention of the same nature between Morocco and the United States
(Annexes to Counter-Memorial, p. 322).
There was an exchange of Notes between the French and British Governments at
the time of the signature of the Convention on July 18th, 1938. In its Note
(No. 5) of that date, the British Government states that it has been
informed by the French Government that the provisions contained in Chapter
V of the Act of Algeciras (which includes Article 95) are, in the opinion of
that Government, incompatible with modern conditions and that the said
Government has communicated to it certain provisions which it intends to
incorporate in the customs legislation. It also states that the Government
of the United Kingdom is prepared to give its consent to the abrogation of
the provisions contained in the said Chapter. A new text is annexed to this
Note which is intended to be substituted for the provision of Article 95 and
which sets out [p233] the view now put forward by France. (Command 5823
(1938), pp. 49-54.)
All this shows that the view now put forward by France as an interpretation
of Article 95 was described by France and the United Kingdom in 1938 as an
abrogation of that Article.
Accordingly we find that, in applying Article 95 or the Act of Algeciras,
the only value to be taken account of is the value in the country of origin
plus expenses incident to transportation to the custom-house in Morocco.
(Signed) Green H. Hackworth.
(Signed) A. Badawi.
(Signed) LEVI Carneiro.
(Signed) B. N. Rau. |
|