b'Article 17 Bis of the Air Transport\nAgreement with the European Union\nArticle 17 bis of the Air Transport Agreement Between the United States of America and\nthe European Community and Its Member States does not provide an independent basis upon which the United States may deny a permit to an air carrier of a Party to the\nAgreement if that carrier is otherwise qualified to receive such a permit.\nApril 14, 2016\n\nMEMORANDUM OPINION FOR THE GENERAL COUNSEL\nDEPARTMENT OF TRANSPORTATION\nYou have asked whether Article 17 bis* of the Air Transport Agreement between the United States of America and the European Community\nand Its Member States, signed on April 25 and 30, 2007, as amended (the\n\xe2\x80\x9cAgreement\xe2\x80\x9d), provides an independent basis upon which the United\nStates may deny an air carrier of the European Union a permit to provide\nforeign air transportation services to and from the United States, assuming\nthat the carrier is otherwise qualified to receive such a permit under\nDepartment of Transportation (\xe2\x80\x9cDOT\xe2\x80\x9d or \xe2\x80\x9cDepartment\xe2\x80\x9d) authorities and\nthe Agreement. 1 You have indicated that, in your view, Article 17 bis\ndoes not provide such an independent basis for denying a permit. See\nLetter for Karl R. Thompson, Principal Deputy Assistant Attorney General, Office of Legal Counsel, from Kathryn B. Thomson, General Counsel, Department of Transportation, Re: DOT Legal Analysis of Article 17\nbis of the U.S.-EU Aviation Agreement (Mar. 17, 2016) (\xe2\x80\x9cDOT Legal\nAnalysis\xe2\x80\x9d). And the Department of State (\xe2\x80\x9cState Department\xe2\x80\x9d or \xe2\x80\x9cState\xe2\x80\x9d)\n* Editor\xe2\x80\x99s Note: As used here, the term bis \xe2\x80\x9cindicates a second article with the same\nnumber in a convention,\xe2\x80\x9d as when \xe2\x80\x9ca treaty is amended and a new article on a subject\nalready addressed is inserted next to the old article.\xe2\x80\x9d James R. Fox, Dictionary of International and Comparative Law 36 (3d ed. 2003).\n1 The agreement between the Parties was initially signed in 2007. See Air Transport\nAgreement Between the United States of America and the European Community and Its\nMember States, Apr. 25\xe2\x80\x9330, 2007, 46 I.L.M. 470 (\xe2\x80\x9c2007 ATA\xe2\x80\x9d). In 2010, this agreement\nwas amended by the Protocol to Amend the Air Transport Agreement Between the United\nStates of America and the European Community and Its Member States, Signed on 25 and\n30 April 2007, June 24, 2010, 2010 O.J. (L 223) 3 (\xe2\x80\x9c2010 Protocol\xe2\x80\x9d). References in this\nopinion to the \xe2\x80\x9cAgreement\xe2\x80\x9d are to the 2007 ATA, as amended by the 2010 Protocol.\nReferences to the 2007 ATA and the 2010 Protocol are to those specific documents.\n\n26\n\n\x0cArticle 17 Bis of the Air Transport Agreement with the European Union\n\nhas indicated that it agrees with your conclusion. See Letter for Karl\nThompson, Principal Deputy Assistant Attorney General, Office of Legal\nCounsel, from Brian J. Egan, Legal Adviser, Department of State (Apr.\n13, 2016) (\xe2\x80\x9cState Legal Analysis\xe2\x80\x9d). Nonetheless, because this question is\nimportant to the Department of Transportation and likely to recur, the\nSecretary of Transportation asked you to solicit our opinion. See Letter\nfor Karl R. Thompson, Principal Deputy Assistant Attorney General,\nOffice of Legal Counsel, from Kathryn B. Thomson, General Counsel,\nDepartment of Transportation, Re: Interpretation of Article 17 bis of the\nUS-EU Aviation Agreement at 1 (Mar. 11, 2016).\nWe note at the outset the limited nature of your question. You have not\nasked for our views on the propriety of granting a permit to any particular\nforeign air carrier, and we do not express any views on that subject.\nAlthough you have advised us that there are ongoing permitting proceedings related to applications by Norwegian Air International and Norwegian UK, two foreign air carriers that seek to provide services under the\nAgreement, we express no view on whether the Secretary should or\nshould not grant those carriers any relevant permits. We are also aware\nthat DOT has various domestic authorities under which it evaluates permit\napplications. See, e.g., 49 U.S.C. \xc2\xa7 41301 et seq. You have asked us to\nassume that the requirements for granting a permit under these authorities\nhave been satisfied, and we are not aware of any additional United States\nauthorities that would be relevant to granting such a permit. The question\nwe address is thus limited to interpreting the Agreement. That question\nis: Assuming an air carrier satisfies the relevant preconditions for a\npermit set forth elsewhere in the Agreement, may the Department nonetheless deny a permit application because, in its view, granting the permit\nwould undermine the principles articulated in Article 17 bis? For the\nreasons set forth below, we agree with DOT and State that if an air carrier of a Party to the Agreement is otherwise qualified to receive a permit,\nArticle 17 bis does not provide an independent basis upon which the\nUnited States may deny the carrier\xe2\x80\x99s application for a permit.\nI.\nWe begin with the relevant background. In April 2007, the United\nStates and the European Community and its Member States signed an Air\nTransport Agreement, which, among other things, sought \xe2\x80\x9cto build upon\n27\n\n\x0c40 Op. O.L.C. 26 (2016)\n\nthe framework of existing agreements with the goal of opening access to\nmarkets and maximising benefits for consumers, airlines, labour, and\ncommunities on both sides of the Atlantic.\xe2\x80\x9d 2007 ATA pmbl. Under the\n2007 ATA, the Parties granted certain rights to each other \xe2\x80\x9cfor the conduct of international air transportation by the[ir] airlines.\xe2\x80\x9d Id. art. 3, \xc2\xb6 1. 2\nThese rights included \xe2\x80\x9cthe right to fly across [the other Party\xe2\x80\x99s] territory\nwithout landing,\xe2\x80\x9d \xe2\x80\x9cthe right to make stops in [the other Party\xe2\x80\x99s] territory\nfor non-traffic purposes,\xe2\x80\x9d and, for airlines of the European Community\nand its Member States, \xe2\x80\x9cthe right to perform international air transportation . . . from points behind the Member States via the Member States . . .\nto any point or points in the United States and beyond.\xe2\x80\x9d Id. art. 3, \xc2\xb6 1(a)\xe2\x80\x93\n(c). Article 4 of the 2007 ATA, entitled \xe2\x80\x9cAuthorisation,\xe2\x80\x9d provided:\nOn receipt of applications from an airline of one Party, in the form\nand manner prescribed for operating authorisations and technical\npermissions, the other Party shall grant appropriate authorisations\nand permissions with minimum procedural delay, provided[:]\n(a) for a US airline, substantial ownership and effective control\nof that airline are vested in the United States, US nationals, or\nboth, and the airline is licensed[] as a US airline and has its principal place of business in US territory;\n(b) for a Community airline, substantial ownership and effective control of that airline are vested in a Member State or States,\nnationals of such a State or States, or both, and the airline is licensed as a Community airline and has its principal place of business in the territory of the European [Community];\n(c) the airline is qualified to meet the conditions prescribed under the laws and regulations normally applied to the operation of\ninternational air transportation by the Party considering the application or applications;\nand\n(d) the provisions set forth in Article 8 (Safety) and Article 9\n(Security) ar[e] being maintained, and administered.\nId. art. 4.\n2 The 2007 ATA defined \xe2\x80\x9cParty\xe2\x80\x9d as \xe2\x80\x9ceither the United States or the European Community and its Member States.\xe2\x80\x9d 2007 ATA art. 1, \xc2\xb6 6.\n\n28\n\n\x0cArticle 17 Bis of the Air Transport Agreement with the European Union\n\nIn order to further the \xe2\x80\x9cgoal of continuing to open access to markets\nand to maximise benefits for consumers, airlines, labour, and communities\non both sides of the Atlantic,\xe2\x80\x9d the 2007 ATA also required the Parties to\nstart \xe2\x80\x9c[s]econd stage negotiations\xe2\x80\x9d after provisional application of the\n2007 ATA began. Id. art. 21, \xc2\xb6 1. These second stage negotiations resulted\nin a further agreement between the United States and the European Union,\nsigned on June 24, 2010, to amend the 2007 ATA agreement. See 2010\nProtocol. 3 Among other things, this 2010 Protocol added to the Agreement Article 17 bis, entitled \xe2\x80\x9cSocial Dimension,\xe2\x80\x9d which provided:\n1. The Parties recognise the importance of the social dimension of\nthe Agreement and the benefits that arise when open markets are accompanied by high labour standards. The opportunities created by\nthe Agreement are not intended to undermine labour standards or the\nlabour-related rights and principles contained in the Parties\xe2\x80\x99 respective laws.\n2. The principles in paragraph 1 shall guide the Parties as they implement the Agreement, including regular consideration by the Joint\nCommittee, pursuant to Article 18, of the social effects of the\nAgreement and the development of appropriate responses to concerns found to be legitimate.\n2010 Protocol art. 4 (adding Agreement art. 17 bis).\nThe Joint Committee referenced in Article 17 bis is described in Article\n18, which was part of the 2007 ATA and was amended by Article 5 of the\n2010 Protocol. The Committee is required to meet at least once a year \xe2\x80\x9cto\nconduct consultations relating to this Agreement and to review its implementation.\xe2\x80\x9d Agreement art. 18, \xc2\xb6 1. A Party may also request a meeting of\nthe Joint Committee \xe2\x80\x9cto seek to resolve questions relating to the interpretation or application of th[e] Agreement.\xe2\x80\x9d Id. \xc2\xb6 2. The Joint Committee is\ntasked with reviewing \xe2\x80\x9cthe overall implementation of the Agreement,\nincluding . . . any social effects of the implementation of the Agreement,\xe2\x80\x9d\nid. \xc2\xb6 3, and \xe2\x80\x9cdevelop[ing] cooperation\xe2\x80\x9d among the Parties by, among other\nthings, \xe2\x80\x9cconsidering the social effects of the Agreement as it is imple-\n\n3 The 2010 Protocol noted that \xe2\x80\x9cthe European Union replaced and succeeded the European Community as a consequence of the entry into force on December 1, 2009 of the\nTreaty of Lisbon.\xe2\x80\x9d Id. pmbl. at 4.\n\n29\n\n\x0c40 Op. O.L.C. 26 (2016)\n\nmented and developing appropriate responses to concerns found to be\nlegitimate,\xe2\x80\x9d id. \xc2\xb6 4.\nThe 2010 Protocol also added (again among other provisions) Article 6\nbis, which provides that \xe2\x80\x9c[u]pon receipt of an application for operating\nauthorisation, pursuant to Article 4, from an air carrier of one Party, the\naeronautical authorities of the other Party shall recognise any fitness and/\nor citizenship determination made by the aeronautical authorities of the\nfirst Party . . . as if such a determination had been made by its own aeronautical authorities and not enquire further into such matters,\xe2\x80\x9d absent \xe2\x80\x9ca\nspecific reason for concern that, despite the determination made by the\naeronautical authorities of the other Party, the conditions prescribed in\nArticle 4 of this Agreement for the grant of appropriate authorisations or\npermissions have not been met.\xe2\x80\x9d 2010 Protocol art. 2. The 2010 Protocol\nclarified that a \xe2\x80\x9c[c]itizenship determination\xe2\x80\x9d is \xe2\x80\x9ca finding that an air\ncarrier . . . satisfies the requirements of Article 4 regarding its ownership,\neffective control, and principal place of business,\xe2\x80\x9d and that a \xe2\x80\x9c[f ]itness\ndetermination\xe2\x80\x9d is \xe2\x80\x9ca finding that an air carrier . . . has satisfactory financial capability and adequate managerial expertise to operate such services\nand is disposed to comply with the laws, regulations, and requirements\nthat govern the operation of such services.\xe2\x80\x9d Id. art. 1 (adding Agreement\nart. 1, \xc2\xb6\xc2\xb6 2 bis, 3 bis).\nThe United States, the European Union and its Member States, Iceland, and Norway later signed an agreement incorporating the provisions\nof the 2007 ATA and the 2010 Protocol and applying them to Iceland\nand Norway as if they were members of the European Union. See Air\nTransport Agreement Between the United States, European Union and\nIts Member States, Iceland, and Norway arts. 1\xe2\x80\x932, June 16\xe2\x80\x9321, 2011,\n2011 O.J. (L 283) 3.\nII.\nIn our view, the text of the Agreement, reinforced by its purpose,\nmakes clear that Article 17 bis does not provide an independent basis on\nwhich to deny an air carrier\xe2\x80\x99s application for a permit where the applicant\nis otherwise qualified to receive one under the Agreement. The interpretation of an international agreement begins with its text. See Abbott v.\nAbbott, 560 U.S. 1, 10 (2010) (\xe2\x80\x9cThe interpretation of a treaty . . . begins\nwith its text.\xe2\x80\x9d (internal quotation marks omitted)); Bank Melli Iran v.\n30\n\n\x0cArticle 17 Bis of the Air Transport Agreement with the European Union\n\nPahlavi, 58 F.3d 1406, 1408 (9th Cir. 1995) (\xe2\x80\x9cExecutive agreements . . .\nare interpreted in the same manner as treaties[.]\xe2\x80\x9d); Air Can. v. U.S. Dep\xe2\x80\x99t\nof Transp., 843 F.2d 1483, 1486 (D.C. Cir. 1988) (\xe2\x80\x9c[We interpret] an\ninternational executive agreement . . . according to the principles applicable to treaties.\xe2\x80\x9d); see also Vienna Convention on the Law of Treaties art.\n31(1), opened for signature May 23, 1969, 1155 U.N.T.S. 331, 340 (\xe2\x80\x9cVienna Convention\xe2\x80\x9d) (\xe2\x80\x9cA treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in\ntheir context and in the light of its object and purpose.\xe2\x80\x9d); Restatement\n(Third) of Foreign Relations Law \xc2\xa7 325(1) (1987) (\xe2\x80\x9cAn international\nagreement is to be interpreted in good faith in accordance with the ordinary meaning to be given to its terms in their context and in the light of its\nobject and purpose.\xe2\x80\x9d).\nAs noted above, Article 4 of the Agreement, entitled \xe2\x80\x9cAuthorisation,\xe2\x80\x9d\nsets forth the standards under which the Parties to the Agreement grant\nthe authorizations and permissions necessary to enable carriers of another\nParty to operate in their jurisdictions. Article 4 provides that \xe2\x80\x9c[o]n receipt\nof applications from an airline of one Party, in the form and manner\nprescribed for operating authorisations and technical permissions, the\nother Party shall grant appropriate authorisations and permissions with\nminimum procedural delay, provided\xe2\x80\x9d that three conditions are satisfied:\nfirst, the airline must be a citizen of an appropriate state; second, the\nairline must be \xe2\x80\x9cqualified to meet the conditions prescribed under the laws\nand regulations normally applied to the operation of international air\ntransportation by the Party considering the application or applications\xe2\x80\x9d;\nand third, the \xe2\x80\x9cprovisions set forth in Article 8 (Safety) and Article 9\n(Security)\xe2\x80\x9d must be \xe2\x80\x9cmaintained, and administered.\xe2\x80\x9d Agreement art. 4.\nAssuming these conditions are met (as we do for purposes of this opinion), the plain terms of Article 4 require the United States to grant the\n\xe2\x80\x9cappropriate authorisations and permissions\xe2\x80\x9d to the requesting carrier. Id.;\nsee id. (if enumerated conditions are met, Parties \xe2\x80\x9cshall grant\xe2\x80\x9d authorizations to carriers of other Parties).\nNotably, in contrast to its express references to Articles 8 and 9, Article 4 does not mention Article 17 bis, or make compliance with that\narticle a precondition for grant of an authorization. The fact that Article 4\nexplicitly conditions the grant of the relevant authorizations or permissions on \xe2\x80\x9cthe provisions set forth\xe2\x80\x9d in Articles 8 and 9 \xe2\x80\x9cbeing maintained\n31\n\n\x0c40 Op. O.L.C. 26 (2016)\n\nand administered\xe2\x80\x9d suggests that the drafters did not intend to condition a\ngrant of authorization under Article 4 on the satisfaction of Article 17 bis\nor other unnamed articles. Cf., e.g., 1 Oppenheim\xe2\x80\x99s International Law\n\xc2\xa7 633, at 1279 (Robert Jennings & Arthur Watts eds., 9th ed. 1992) (\xe2\x80\x9cThe\nmaxim expressio unius est exclusio alterius has been followed in the\ninterpretation of treaties by international tribunals in a number of cases[.]\xe2\x80\x9d). Article 4 also does not refer to the \xe2\x80\x9csocial dimension\xe2\x80\x9d or \xe2\x80\x9clabour\nstandards\xe2\x80\x9d discussed in Article 17 bis, or suggest that either of these\nfactors may be considered independently of Article 4\xe2\x80\x99s enumerated requirements in granting an authorization. 4 Thus, on its face, Article 4\nmandates that Parties issue appropriate authorizations and permissions to\nair carriers of other Parties once the three specific conditions enumerated\nin Article 4 are satisfied, and none of these conditions references Article\n17 bis or the factors it describes. This straightforward reading of Article 4\nstrongly suggests that Article 17 bis does not provide an independent\nbasis for denying an air carrier\xe2\x80\x99s application for a permit where the carrier\nis otherwise qualified to receive one under the Agreement.\nIt is true that the Agreement does not expressly define the \xe2\x80\x9cappropriate\nauthorisations and permissions\xe2\x80\x9d that must be granted. Agreement art. 4. In\ncontext, however, we think it clear that this phrase refers to the authorizations and permissions necessary to enable a foreign air carrier to operate\nwithin a particular jurisdiction\xe2\x80\x94in the case of the United States, a permit\nissued by DOT. See 49 U.S.C. \xc2\xa7 41301 (providing that a foreign air carrier may provide foreign air transportation only if it holds a relevant permit); id. \xc2\xa7 41302 (providing the Secretary of Transportation authority to\nissue such permits); see also State Legal Analysis at 3 (\xe2\x80\x9cArticle 4 imposes\nan obligation to issue a permit provided that the criteria in Article 4 are\nmet.\xe2\x80\x9d); DOT Legal Analysis at 5 (once fitness and safety criteria under\nthe Agreement are satisfied, \xe2\x80\x9cDOT is legally required to grant\xe2\x80\x9d a carrier\xe2\x80\x99s\napplication to provide services in the United States). The phrase \xe2\x80\x9cauthorisations and permissions\xe2\x80\x9d is naturally read to refer back to the \xe2\x80\x9coperating\nauthorisations and technical permissions\xe2\x80\x9d mentioned earlier in the same\nsentence; i.e., the kinds of authorizations and permissions necessary to\n\xe2\x80\x9coperat[e]\xe2\x80\x9d an airline in the relevant jurisdiction. See Agreement art. 4\n4 Because we assume that Article 4\xe2\x80\x99s enumerated requirements are satisfied, we do not\nconsider whether the principles discussed in Article 17 bis could ever be relevant in\ndetermining whether those requirements are met.\n\n32\n\n\x0cArticle 17 Bis of the Air Transport Agreement with the European Union\n\n(\xe2\x80\x9cOn receipt of applications from an airline of one Party, in the form and\nmanner prescribed for operating authorisations and technical permissions,\nthe other Party shall grant appropriate authorisations and permissions with\nminimum procedural delay[.]\xe2\x80\x9d).\nThe term \xe2\x80\x9cappropriate,\xe2\x80\x9d considered in isolation, might be taken to indicate that the Parties retain the discretion to deny authorizations or permissions if they conclude that issuing them would be \xe2\x80\x9c[in]appropriate,\xe2\x80\x9d a\nreading that might suggest that the considerations set forth in Article 17\nbis could independently be taken into account in deciding whether to issue\na permit. In context, however, this is an implausible reading of that term.\nSee E. Airlines, Inc. v. Floyd, 499 U.S. 530, 534 (1991) (\xe2\x80\x9c[W]e begin with\nthe text of the treaty and the context in which the written words are used.\xe2\x80\x9d\n(internal quotation marks omitted)). As noted above, Article 4 mandates\nthat authorizations and permissions be granted \xe2\x80\x9cwith minimum procedural\ndelay, provided\xe2\x80\x9d that certain conditions are satisfied. Agreement art. 4. It\nthen enumerates and describes each condition, and subsequent articles\ndiscuss in great detail the specific requirements and procedures related to\nsafety (Article 8) and security (Article 9). It would be fundamentally at\nodds with this explicit enumeration for the Parties to have indicated, with\na single open-ended adjective inserted outside the enumerated list of\nconditions, that the Parties were also free to deny permits as not \xe2\x80\x9cappropriate\xe2\x80\x9d for other unspecified reasons. Cf. Whitman v. Am. Trucking\nAss\xe2\x80\x99ns, 531 U.S. 457, 468 (2001) (\xe2\x80\x9cCongress . . . does not, one might say,\nhide elephants in mouseholes.\xe2\x80\x9d). It is far more natural in context\xe2\x80\x94and far\nmore consistent with the text of Article 4 and the rest of the Agreement\xe2\x80\x94\nto read the phrase \xe2\x80\x9cappropriate authorisations and permissions\xe2\x80\x9d to refer to\nthose particular authorizations and permissions a carrier needs to operate\nin a specific jurisdiction. Agreement art. 4 (emphasis added). The Agreement gives qualified carriers of each Party the opportunity to offer services in the jurisdiction of any other Party, provided the listed conditions\nare met. Id. The specific authorizations and permissions necessary for\nthem to do so may vary according to each Party\xe2\x80\x99s relevant laws and regulations. Referring to \xe2\x80\x9cappropriate authorisations and permissions\xe2\x80\x9d is a\nconvenient way to capture, in a single phrase, whatever authorizations and\npermissions a carrier needs in a given jurisdiction to enable it to provide\nservices consistent with the Agreement. Cf. United Sav. Ass\xe2\x80\x99n of Tex. v.\nTimbers of Inwood Forest Assocs., 484 U.S. 365, 371 (1988) (\xe2\x80\x9cA provi33\n\n\x0c40 Op. O.L.C. 26 (2016)\n\nsion that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme . . . because only one of the permissible\nmeanings produces a substantive effect that is compatible with the rest of\nthe law.\xe2\x80\x9d).\nThe text of Article 17 bis likewise fails to suggest that it provides a basis for denying a permit if the requirements referenced in Article 4 are\nsatisfied. Paragraph 1 of Article 17 bis provides that the Parties \xe2\x80\x9crecognise\xe2\x80\x9d the importance of the social dimension of the Agreement \xe2\x80\x9cand the\nbenefits that arise when open markets are accompanied by high labour\nstandards,\xe2\x80\x9d and then states that \xe2\x80\x9c[t]he opportunities created by the Agreement are not intended to undermine labour standards or the labour-related\nrights and principles contained in the Parties\xe2\x80\x99 respective laws.\xe2\x80\x9d Agreement art. 17 bis, \xc2\xb6 1. Paragraph 1 is thus, on its face, simply a statement of\nthe Parties\xe2\x80\x99 recognitions and intentions, and does not create any affirmative rights, obligations, or authorities. Paragraph 2 explains that the \xe2\x80\x9cprinciples in paragraph 1 shall guide the Parties as they implement the\nAgreement, including regular consideration by the Joint Committee,\npursuant to Article 18, of the social effects of the Agreement and the\ndevelopment of appropriate responses to concerns found to be legitimate.\xe2\x80\x9d\nId. \xc2\xb6 2. DOT suggests that this provision is \xe2\x80\x9cessentially hortatory,\xe2\x80\x9d and\nthat the statement that the principles in paragraph 1 \xe2\x80\x9cshall guide\xe2\x80\x9d the\nParties\xe2\x80\x99 implementation of the Agreement does not impose any obligation\non the Parties. DOT Legal Analysis at 5. The State Department suggests\nthat, under paragraph 2, if a Party had \xe2\x80\x9cconcerns about some aspect of\nlabor rights regarding its own implementation or the implementation of\nthe Agreement by another Party,\xe2\x80\x9d the Party \xe2\x80\x9ccould consider on its own\nwhat, if any, action is appropriate (and consistent with the Agreement) or\ncould potentially raise the issue with some or all other Parties.\xe2\x80\x9d State\nLegal Analysis at 3. But, in State\xe2\x80\x99s view, paragraph 2 \xe2\x80\x9cdoes not authorize actions that would run counter to express legal obligations of the\nParties under other provisions of the Agreement\xe2\x80\x94such as the obligation\nat issue here, to grant a permit where Article 4\xe2\x80\x99s requirements are satisfied.\xe2\x80\x9d Id. \xe2\x80\x9cIn that context,\xe2\x80\x9d State explains, \xe2\x80\x9c[p]aragraph (2) at most provides for the Joint Committee to consider labor-related concerns raised by\nthe Parties.\xe2\x80\x9d Id. We need not attempt to determine the precise meaning of\nparagraph 2, because in our view, no plausible reading of that provision\nwould provide a basis for denying a permit to an air carrier otherwise\n34\n\n\x0cArticle 17 Bis of the Air Transport Agreement with the European Union\n\nqualified under Article 4. As explained above, once the requirements\nenumerated in Article 4 are satisfied, Article 4 does not leave the Parties\nwith any discretion to deny a permit, or to condition the grant of a permit\non requirements that are not enumerated or referenced in Article 4 itself.\nSee supra pp. 31\xe2\x80\x9334. Thus, even if Article 17 bis were read more expansively than DOT or State suggests, as not simply authorizing but also\nrequiring the Parties to take all possible actions consistent with the\nAgreement to respond to labor concerns whenever feasible, such actions\ncould not include denying a permit when the requirements of Article 4 are\nmet, because the Agreement does not allow the Parties to take such an\naction. 5\nThis conclusion is reinforced by the amendment history of the Agreement. Article 17 bis was added to the Agreement in 2010. If the drafters\nhad intended Article 17 bis to affect the permitting process described in\nArticle 4, they could have said so expressly. Indeed, they included precisely such a clarification in Article 6 bis, which was also added in 2010.\nArticle 6 bis sought to streamline the permit approval process in Article 4\nby providing that, in many circumstances, Parties are required to accept\nthe fitness and citizenship determinations made by the aeronautical authorities of other Parties. Consistent with this purpose, Article 6 bis expressly references Article 4 and makes clear that it is intended to affect\nthe way applications under Article 4 are reviewed. See Agreement art. 6\nbis (\xe2\x80\x9cUpon receipt of an application for operating authorisation, pursuant\nto Article 4, from an air carrier of one Party, the aeronautical authorities\nof the other Party shall recognise any fitness and/or citizenship determination made by the aeronautical authorities of the first Party . . . as if such a\ndetermination had been made by its own aeronautical authorities and not\nenquire further into such matters,\xe2\x80\x9d with certain limited exceptions). This\nexpress reference to Article 4 suggests that when the drafters of the 2010\namendments intended the new provisions in the Agreement to affect the\nimplementation of Article 4, they said so explicitly. Article 17 bis, however, does not mention Article 4. Nor does it expressly indicate\xe2\x80\x94as other\narticles do\xe2\x80\x94that it is intended to override other provisions in the Agreement. Cf. Agreement art. 6 (\xe2\x80\x9cNotwithstanding any other provision in this\n5 To be clear, we express no view on whether Article 17 bis can be interpreted in this\nmore expansive manner.\n\n35\n\n\x0c40 Op. O.L.C. 26 (2016)\n\nAgreement, the Parties shall implement the provisions of Annex 4 in their\ndecisions under their respective laws and regulations concerning ownership, investment and control.\xe2\x80\x9d); id. art. 10, \xc2\xb6 10 (\xe2\x80\x9cNotwithstanding any\nother provision of this Agreement . . . .\xe2\x80\x9d); id. annex 1, \xc2\xa7 3 (\xe2\x80\x9cNotwithstanding Article 3 of this Agreement . . . .\xe2\x80\x9d). Thus, like the text of Article 4, the\ntext of Article 17 bis fails to indicate that it provides any basis for denying a permit if the requirements in Article 4 are satisfied.\nThis conclusion is also consistent with the general purposes of the\nAgreement. See, e.g., Abbott, 560 U.S. at 9\xe2\x80\x9310 (noting that a treaty interpretation inquiry is shaped by, inter alia, the text and purposes of the\ntreaty); id. at 28\xe2\x80\x9329, 46 (Stevens, J., dissenting) (interpreting a treaty by\nlooking to the treaty\xe2\x80\x99s text and purpose); Application of the Federal Water\nPollution Control Act to the Former Panama Canal Zone, 5 Op. O.L.C.\n80, 81 (1981) (\xe2\x80\x9cPanama Canal Opinion\xe2\x80\x9d) (noting that \xe2\x80\x9c[t]reaties are to be\nconstrued with the highest good faith with an eye to the manifest meaning\nof the whole treaty,\xe2\x80\x9d and construing provisions \xe2\x80\x9cconsistently and in keeping with the purpose of the Treaty\xe2\x80\x9d (internal quotation marks omitted));\nVienna Convention art. 31(1), 1155 U.N.T.S. at 340. The State Department, which led the negotiation of the Agreement on behalf of the United\nStates, has indicated that \xe2\x80\x9c[t]he central purpose of the Agreement was to\nincrease opportunities to provide air services between the Parties.\xe2\x80\x9d State\nLegal Analysis at 4; see also Sumitomo Shoji Am., Inc. v. Avagliano, 457\nU.S. 176, 184\xe2\x80\x9385 (1982) (negotiating agency\xe2\x80\x99s views get \xe2\x80\x9cgreat weight\xe2\x80\x9d);\nPanama Canal Opinion, 5 Op. O.L.C. at 82 (\xe2\x80\x9cIn interpreting a treaty and\nother international agreements, the construction placed upon it by the\nDepartment charged with supervision of our foreign relations should be\ngiven much weight.\xe2\x80\x9d). This view is confirmed by the preamble of the\nAgreement, which states that, in entering into the Agreement, the Parties\ndesired \xe2\x80\x9cto promote an international aviation system based on competition\namong airlines in the marketplace with minimum government interference\nand regulation,\xe2\x80\x9d and intended to \xe2\x80\x9copen[] access to markets and maximis[e] benefits for consumers, airlines, labour, and communities on both\nsides of the Atlantic[.]\xe2\x80\x9d 2007 ATA pmbl.; see also 2010 Protocol pmbl.\nat 4 (noting that Parties intended \xe2\x80\x9cto build upon the framework established by [the 2007 ATA], with the goal of opening access to markets and\nmaximising benefits for consumers, airlines, labour, and communities on\nboth sides of the Atlantic\xe2\x80\x9d). The purpose of promoting open access by\n36\n\n\x0cArticle 17 Bis of the Air Transport Agreement with the European Union\n\nairlines of one Party to the markets of the other Parties is served by the\nclear procedures set forth in Article 4, which limit each Party\xe2\x80\x99s discretion\nto deny permits to carriers of the other Parties, thereby ensuring that\ngovernment interference with competition is \xe2\x80\x9cminim[ized].\xe2\x80\x9d To be sure,\nbenefits to labor were relevant to the Parties and explicitly mentioned in\nthe preamble, but these references, read in light of the preamble as a\nwhole, suggest only that the Parties believed benefits to labor were among\nthe benefits that flowed from open access to markets. See generally\nAgreement pmbl.; see also 2010 Protocol art. 6 (\xe2\x80\x9cThe Parties commit to\nthe shared goal of continuing to remove market access barriers in order to\nmaximise benefits for consumers, airlines, labour, and communities on\nboth sides of the Atlantic[.]\xe2\x80\x9d (emphasis added)). 6\nFinally, we also considered whether a provision concerning Article 17\nbis in the current DOT appropriations bill, which is identical to a provision in the previous year\xe2\x80\x99s bill, alters our analysis. See Consolidated\nAppropriations Act, 2016, Pub. L. No. 114-113, div. L, \xc2\xa7 413, 129 Stat.\n2242, 2906 (2015); Consolidated and Further Continuing Appropriations\nAct, 2015, Pub. L. No. 113-235, div. K, \xc2\xa7 415, 128 Stat. 2130, 2765\n(2014). That provision states that \xe2\x80\x9c[n]one of the funds made available by\nthis Act may be used to approve a new foreign air carrier permit . . . or\nexemption application . . . of an air carrier already holding an air operators certificate issued by a country that is party to the [Agreement] where\nsuch approval would contravene United States law or Article 17 bis\xe2\x80\x9d of\nthe Agreement. Pub. L. No. 114-113, div. L, \xc2\xa7 413(a), 129 Stat. at 2906.\nIt then clarifies that \xe2\x80\x9c[n]othing in this section shall prohibit, restrict or\notherwise preclude the Secretary of Transportation from granting a foreign air carrier permit or an exemption to such an air carrier where such\n6 Because we conclude that the text of the Agreement is clear, and consistent with the\ncentral purpose of the Agreement, we need not inquire into the negotiating history. Cf.\nChan v. Korean Air Lines, Ltd., 490 U.S. 122, 134 (1989) (\xe2\x80\x9cWe must . . . be governed by\nthe text . . . whatever conclusions might be drawn from the intricate drafting history . . . .\nThe latter may of course be consulted to elucidate a text that is ambiguous. But where the\ntext is clear, as it is here, we have no power to insert an amendment.\xe2\x80\x9d (citations omitted));\nsee also Vienna Convention art. 32, 1155 U.N.T.S. at 340. Nevertheless, the State Department has informed us that it \xe2\x80\x9cbelieves that the negotiating history of the treaty confirms the conclusion that Article 17 bis does not constitute a basis for a Party to unilaterally deny a permit to an otherwise qualified carrier of another Party.\xe2\x80\x9d State Legal\nAnalysis at 4.\n\n37\n\n\x0c40 Op. O.L.C. 26 (2016)\n\nauthorization is consistent with the [Agreement] and United States law.\xe2\x80\x9d\nId. \xc2\xa7 413(b). Whatever the meaning or effect of this provision as a matter\nof domestic law, it does not affect our interpretation of the Agreement\nitself. As discussed above, the text of the Agreement is clear. The Departments of State and Transportation\xe2\x80\x94the principal government entities\ninvolved in negotiating and implementing the Agreement on behalf of the\nUnited States\xe2\x80\x94agree that Article 17 bis does not provide an independent\nbasis upon which a Party to the Agreement may deny an application for a\npermit from an otherwise qualified carrier, and those views are entitled to\ngreat weight. See Avagliano, 457 U.S. at 184\xe2\x80\x9385 (\xe2\x80\x9cAlthough not conclusive, the meaning attributed to treaty provisions by the Government\nagencies charged with their negotiation and enforcement is entitled to\ngreat weight.\xe2\x80\x9d); Kolovrat v. Oregon, 366 U.S. 187, 194 (1961) (\xe2\x80\x9c[T]he\nmeaning given to [treaties] by the departments of government particularly\ncharged with their negotiation and enforcement is given great weight.\xe2\x80\x9d).\nAnd in any event, we do not read the DOT appropriations provision as\npurporting to alter the meaning of the Agreement itself.\nIII.\nFor the foregoing reasons, we conclude that Article 17 bis does not\nprovide an independent basis upon which the United States may deny a\npermit to an air carrier of a Party to the Agreement if that carrier is otherwise qualified to receive such a permit.\nKARL R. THOMPSON\nPrincipal Deputy Assistant Attorney General\nOffice of Legal Counsel\n\n38\n\n\x0c'


b'Whether Missouri Municipalities May Tax the Portion of\nFederal Salaries Voluntarily Contributed to the\nThrift Savings Plan\n\nIntergovernm ental tax im m unity does not p reclu d e m unicipalities in M issouri from levying an earnings\ntax on the voluntary contributions of federal em ployees to the T hrift Savings Plan.\nN o v e m b e r 10, 1993\n\nM e m o r a n d u m O p in io n f o r t h e G e n e r a l C o u n s e l\nD e p a r t m e n t o f A g r ic u l t u r e\n\nY o u have requested our opinion on the following question: Must the National\nFinance Center (\xe2\x80\x9cNFC\xe2\x80\x9d) o f the Department of Agriculture (\xe2\x80\x9cUSDA\xe2\x80\x9d) withhold and\nremit local earnings taxes levied by the municipalities of St. Louis and Kansas\nCity, Missouri, upon that portion o f federal employees\xe2\x80\x99 salaries voluntarily con\xc2\xad\ntributed to the Thrift Savings Plan (\xe2\x80\x9cTSP\xe2\x80\x9d)?1 The Financial Management Service\n(\xe2\x80\x9cFMS\xe2\x80\x9d) of the Department of the Treasury (\xe2\x80\x9cTreasury\xe2\x80\x9d) has taken the position\nthat NFC should not withhold the Kansas City earnings taxes on TSP contributions\nof FMS employees because similar payments made by municipal employees are\nnot subject to the earnings tax.2 As we explain in further detail below, we disagree\nwith this approach because TSP contributions, which are held in trust for the con\xc2\xad\ntributors, can be distinguished from the deferred compensation plan payments that\nare exempt \xe2\x80\x94 by a court ruling \xe2\x80\x94 from earnings taxes. Thus, intergovernmental\ntax immunity does not preclude the Missouri municipalities from levying an earn\xc2\xad\nings tax on voluntary TSP contributions. The St. Louis and Kansas City earnings\ntaxes should be withheld and remitted.\n\nI.\nThe Thrift Savings Plan, 5 U.S.C. \xc2\xa7\xc2\xa7 8431-8440d, which was established as\npart of the Federal Employees\xe2\x80\x99 Retirement System (\xe2\x80\x9cFERS\xe2\x80\x9d), 5 U.S.C. \xc2\xa7\xc2\xa7 84018479, enables each federal employee covered by FERS to elect to contribute, in\nany pay period, as much as ten percent of the employee\xe2\x80\x99s \xe2\x80\x9cbasic pay\xe2\x80\x9d to the em\xc2\xad\nployee\xe2\x80\x99s TSP retirement account. 5 U.S.C. \xc2\xa7 8432(a). All TSP contributions are\n1 L etter for D aniel K offsky, Acting A ssista n t A ttorney G en eral, O ffice o f Legal C ounsel, from Jam es S\nG illila n d , G en eral C ounsel, Department o f A g ricu ltu re (Ju ly 12, 1993).\n2 N eith er FM S n or any o th e r unit of T rea su ry has su b m itted a b rie f in response to the U SD A request, but\nthe p o sitio n o f T reasu ry is set forth in a m em o ran d u m w ritten by A ttom ey-A dvisor Elton A E llison o f the\nO ffice o f C h ie f C o u n sel d a te d M ay I, 1990, an d a letter d rafted by A ssistant C om m issioner B land T. B rocke n b o ro u g h d ated January 2, 1992\n\n142\n\n\x0cThe N eed To W ithhold and R em it Local E arnings Taxes\n\nchanneled into a Thrift Savings Fund in the Treasury of the United States.3 Id.\n\xc2\xa7 8437(b). These contributions are then held in the Fund in trust for the employees\nwho made the contributions. Id. \xc2\xa7 8437(g). By law, the Thrift Savings Fund is\n\xe2\x80\x9ctreated as a trust described in section 401(a) of [the Internal Revenue] Code\nwhich is exempt from taxation under section 501(a) of such Code,\xe2\x80\x9d id.\n\xc2\xa7 8440(a)(1), and contributions to the Thrift Savings Fund are \xe2\x80\x9ctreated in the same\nmanner as contributions to\xe2\x80\x9d such a trust. Id. \xc2\xa7 8440(a)(2).\nII.\n\nTwo cities in Missouri \xe2\x80\x94 St. Louis and Kansas City \xe2\x80\x94 have adopted ordi\xc2\xad\nnances that impose a tax on salaries, wages, and other compensation earned or re\xc2\xad\nceived by city residents and nonresidents who work in the cities. Kansas City,\nMo., Code 32.141(a)(1) & (2); St. Louis, Mo., Code \xc2\xa7 5.22.020(A) & (B). Kansas\nCity imposes \xe2\x80\x9ca one per centum (1 .0%) per annum\xe2\x80\x9d municipal tax:\n(1)\n\nOn all salaries, wages, commissions and other compensation earned\nor received by resident individuals of the city for work done or services per\xc2\xad\nformed or rendered.\n\n(2)\n\nOn all salaries, wages, commissions and other compensation earned or re\xc2\xad\nceived by nonresident individuals of the city for work done or services per\xc2\xad\nformed or rendered in the city.\n\nKansas City, Mo., Code \xc2\xa7 32.141(a). Similarly, St. Louis imposes an earnings tax\n\xe2\x80\x9cfor general revenue purposes of one percent\xe2\x80\x9d on all \xe2\x80\x9csalaries, wages, commissions\nand other compensation\xe2\x80\x9d earned by its residents and by nonresidents for \xe2\x80\x9cwork\ndone or services performed\xe2\x80\x9d in the city. St. Louis, Mo., Code \xc2\xa7 5.22.020(A) & (B).\nIn 1989, however, the Missouri Court of Appeals determined that the City of\nKansas City could not levy its municipal earnings tax upon sums paid at the direc\xc2\xad\ntion of an employee of the Board of Police Commissioners to the Kansas City Po\xc2\xad\nlice Department Deferred Compensation Plan. Whipple v. City o f Kansas City, 779\nS.W.2d 610 (Mo. Ct. App. 1989). The Whipple court reasoned that, because all\nsums paid to the Deferred Compensation Plan were exchanged for nothing more\nthan \xe2\x80\x9cthe unsecured promise of the board to pay the employee whatever balance\nmay be in the account at the employee\xe2\x80\x99s retirement or separation from the depart\xc2\xad\nment,\xe2\x80\x9d id. at 611, such sums were not subject to the municipal earnings tax. Id. at\n613-14. As the court explained: \xe2\x80\x9cThe city\xe2\x80\x99s position that it may extract a tax from\nemployees based on sums they have not received and may never receive is simply\nuntenable.\xe2\x80\x9d Id. at 614.\n3\nThe T h rift Savings Fund also co n tain s other assets such as contributions m ade by governm ent agencies\nthat em ploy the federal w orkers w ho participate in the T S P 5 U S C \xc2\xa7 8437(b), see also id. \xc2\xa7 8479(b)\n\n143\n\n\x0cO pinions o f the O ffice o f L eg a l C ounsel\n\nThe Whipple court, of course, did not address the validity of municipal earnings\ntaxes imposed upon federal employees who partake of the TSP program. Never\xc2\xad\ntheless, as your letter points out, under the Supreme Court\xe2\x80\x99s ruling in Davis v.\nMichigan Department o f the Treasury, 489 U.S. 803 (1989), neither states nor\nmunicipalities may differentiate between similarly situated federal employees and\nstate or municipal employees in levying state and local taxes. This restriction\nflows from the constitutional principle of intergovernmental tax immunity and 4\nU.S.C. \xc2\xa7111, which states:\nThe United States consents to the taxation of pay or compensation\nfor personal service as an officer or employee of the United States\n. . . by a duly constituted taxing authority having jurisdiction, if the\ntaxation does not discriminate against the officer or employee be\xc2\xad\ncause o f the source o f the p a y or compensation.\n\n4 U.S.C. \xc2\xa7 111 (emphasis added). Interpreting this provision in conjunction with\nthe constitutional conception of intergovernmental tax immunity, see Davis, 489\nU.S. at 813 (characterizing \xc2\xa7 111 and modern constitutional doctrine as\n\xe2\x80\x9ccoextensive\xe2\x80\x9d), the Supreme Court concluded that intergovernmental tax immunity\nprecludes taxation of federal employees \xe2\x80\x9cto the extent that such taxation discrimi\xc2\xad\nnates on account of the source of the compensation.\xe2\x80\x9d Id. at 810. Applying this\nrule, the Court held that the State of Michigan could not levy an income tax on\nretirement benefits paid by the federal government while exempting from taxation\nretirement benefits paid by the state or its political subdivisions. Id. at 814-17.\nSimply put, the Michigan taxation scheme failed because the inconsistent treatment\nof state and federal employees was not \xe2\x80\x9cdirectly related to, and justified by,\n\xe2\x80\x98significant differences between the two classes.\xe2\x80\x99\xe2\x80\x9d Id. at 816 (quoting Phillips\nChem. Co. v. Dumas Indep. Sch. D ist., 361 U.S. 376, 383 (I960)).\nThe Supreme Court applied this understanding of the rule of intergovernmental\ntax immunity in Barker v. Kansas, 503 U.S. 594 (1992), where the Court struck\ndown a Kansas scheme that levied taxes on the benefits paid to military retirees but\nexempted benefits received by retired state and local government employees.\nAgain, the Court emphasized that it \xe2\x80\x9cevaluate[s] a state tax that is alleged to dis\xc2\xad\ncriminate against federal employees in favor of state employees by inquiring\n\xe2\x80\x98whether the inconsistent tax treatment is directly related to, and justified by,\n\xe2\x80\x9csignificant differences between the two classes.\xe2\x80\x99\xe2\x80\x9d \xe2\x80\x9d Id. at 598 (quoting Davis, 489\nU.S. at 816) (quoting Philips Chem., 361 U.S. at 383). Not surprisingly, the Court\ninvalidated the Kansas taxation scheme by applying this basic principle. Id. at\n598-605.\n\n144\n\n\x0cThe N eed To W ithhold and R em it L ocal E arnings Taxes\n\nIII.\nThe issue raised by your inquiry must be resolved through the application of the\nprinciple set forth in Davis and Barker. By judicial decision, the sums paid to the\nMissouri Police Department Deferred Compensation Fund are exempt from the\nKansas City earnings tax. See Whipple, 779 S.W2d 610 (Mo. Ct. App. 1989). In\ncontrast, the voluntary TSP contributions of federal employees historically have\nbeen subject to the Kansas City earnings tax. The validity of the taxation of vol\xc2\xad\nuntary TSP contributions turns on \xe2\x80\x9cwhether the inconsistent tax treatment is di\xc2\xad\nrectly related to, and justified by, \xe2\x80\x98significant differences between the two\nclasses.\xe2\x80\x99\xe2\x80\x9d Davis, 489 U.S. at 816 (quoting Philips Chem., 361 U.S. at 383); a c\xc2\xad\ncord Barker, 503 U.S. at 598. We believe that a significant difference between\nvoluntary TSP contributions and sums paid to the Missouri Police Department De\xc2\xad\nferred Compensation Fund justifies the existing disparity in tax treatment.\nVoluntary TSP contributions are held in trust for the benefit of the employees\nwho participate in the plan. See 5 U.S.C. \xc2\xa7 8437(g). The legal nature of the Thrift\nSavings Fund creates a legitimate and enforceable expectation of the return of\ncontributions to TSP participants. Indeed, this is precisely what Congress antici\xc2\xad\npated. See S. Rep. No. 99-166, at 14 (1985), reprinted in 1986 U.S.C.C.A.N.\n1405, 1419 (\xe2\x80\x9cEmployees are immediately vested in their own contributions and\nearnings attributable to them. . . . At retirement an employee may withdraw the\naccount balance either in a lump sum . . . or in installments.\xe2\x80\x9d); H.R. Conf. Rep. No.\n99-606, at 134-135 (1986), reprinted in 1986 U.S.C.C.A.N. 1508, 1517-1518\n(adopting provision for full and immediate vesting of both employer and employee\ncontributions, and discussing options for withdrawal of contributions).\nIn comparison, the return of any sums paid to the deferred compensation plan at\nissue in Whipple is essentially speculative. As the Whipple court explained:\n[A participating employee\xe2\x80\x99s] account reflects the current status of\nthe employee\xe2\x80\x99s prospective benefits, but the account is the property\nof the board . . . . The sole interest of the employee in his deferred\ncompensation is the unsecured promise of the board to pay the em\xc2\xad\nployee whatever balance may be in the account at the employee\xe2\x80\x99s\nretirement or separation from the department.\nWhipple, 779 S.W.2d at 611. Indeed, the deferred compensation plan included\nlanguage that qualified each participant\xe2\x80\x99s claim to any sums paid at a participant\xe2\x80\x99s\ndirection to the plan:\n\nAll amounts of Compensation deferred under this Plan, all property\nand rights which may be purchased by the Employer with such\namounts and all income attributable to such amounts, property or\n145\n\n\x0cOpinions o f the O ffice o f L egal C ounsel\n\nrights to property shall remain the sole property and rights of the\nEmployer without being restricted by the provisions of this Plan\nsubject only to the claims of the Employer\xe2\x80\x99s general creditors. The\nobligation of the Employer under this Plan is purely contractual and\nshall not be funded or secured in any way.\nId. Based on these provisions, the court of appeals concluded that an \xe2\x80\x9cemployee\nhas no guarantee that any payment o f deferred compensation will be made.\xe2\x80\x9d Id. at\n\n612.\nThe provisions of the deferred compensation plan discussed in Whipple, which\nsignificantly qualified the claims of participants to payments made at their direc\xc2\xad\ntion, render sums paid to the plan in Whipple readily distinguishable from volun\xc2\xad\ntary TSP contributions. Thus, Kansas City and St. Louis cannot be forbidden, by\neither the constitutional principle of intergovernmental tax immunity or by 4\nU.S.C. \xc2\xa7 111, to impose a municipal earnings tax upon voluntary TSP contribu\xc2\xad\ntions. Unless a Missouri court rules that earnings taxes cannot be levied upon vol\xc2\xad\nuntary TSP contributions as a matter of state law, the Kansas City and St. Louis\nearnings taxes should be withheld and remitted for voluntary TSP contributions.4\nIV.\nYour request for an opinion on the validity of earnings taxes levied by Missouri\nmunicipalities necessitated a comparison of voluntary TSP contributions and sums\npaid to a specific deferred compensation plan that are exempted, by a judicial rul\xc2\xad\ning, from the earnings tax. Our analysis turns upon a material distinction between\nthe two types of contributions. We find, based upon this material distinction, that\nintergovernmental tax immunity does not foreclose the imposition of an earnings\n4\nY o u r in q u iry a ssu m es that voluntary T S P contributions \xe2\x80\x9c are not included in an em p lo y ee\xe2\x80\x99s gross w ages\nfor Federal incom e tax p u rposes \xe2\x80\x9d This fact, how ever, does not affect o u r analysis o f the intergovernm ental\nlax im m u n ity issue A s a g en eral matter, sta te s and m u n icip alities may tax earnings that are exem pt from\ntaxation u n d e r the Internal R ev en u e Code, an d the earnings tax es levied by K ansas C ity and St. Louis appar\xc2\xad\nently sw eep m ore bro ad ly than the federal in co m e lax law s S e e W hipple, 77 9 S W .2d at 613 n 3\nT o be sure, a T S P p artic ip a n t could ch allen g e, under M isso u n law, the application o f the earnings tax to\nT S P co n trib u tio n s by filing a declaratory ju d g m e n t action in state court. Indeed, the W hipple decision\nstrongly su g g ests th at such an action would be successful. Id. at 613-14 & n 3. As the W hipple court o b \xc2\xad\nserved, a M isso u ri statu te pro scrib es the tax atio n o f any p ay m en t m ade to a deferred com pensation program\n\xe2\x80\x9c \xe2\x80\x98to the sam e e x ten t as it is ex em p t from in c o m e tax im posed by the U nited S t a t e s . Id. at 613 (quoting and\ninterp retin g M o. A nn Stat. \xc2\xa7 105.900.2) T h is statute, w hen read in conjunction with lim itations im posed by\nM issou ri law u p o n the tax in g authority o f m u n icip alities, p ro m p ted the W hipple court to opine that K ansas\nC ity lack ed the cap a c ity u n d e r state law to tax such paym ents as earnings. Id. at 613-14 & n 3\nT his arg u m en t m ight w ell be persuasive m a d eclaratory ju d g m e n t action sn a M issoun court, but u is not\nthe p ro v in ce o f this O ffice to issue authoritative in terp retatio n s o f state law s and m unicipal codes. See\nL e tte r for H on W endell H. Ford from M ary C . L aw ton ai 3 (A p r. 5, 1976) (explaining that \xe2\x80\x9cwe o f course are\nnot in a p o sitio n to g iv e an authoritative in terp retatio n o f State law \xe2\x80\x9d); cj. P ennhurst S ta te Sch. & H osp. v\nH a ld e rm a n , 465 U S. 89, 106 (1984) (noting im propriety o f federal courts instructing stale officials \xe2\x80\x9con how\nto c o n fo rm th eir c o n d u ct to state law\xe2\x80\x9d). H ence, o ur opinion d o es not address the validity o f ihe m unicipal\nearn in g s ta x e s as a m atter o f M issoun law.\n\n146\n\n\x0cThe N eed To W ithhold and R em it L ocal E arnings Taxes\n\ntax by the Missouri municipalities. Therefore, we anticipate that the NFC will\nwithhold and remit earnings taxes for TSP contributions.\n\nWALTER DELLINGER\nAssistant Attorney General\nOffice o f Legal Counsel\n\n147\n\n\x0c'


b'D ecem ber 14, 1977\n\n77-70\n\nMEMORANDUM OPINION FOR THE\nGENERAL COUNSEL OF THE DEPARTMENT\nOF HEALTH, EDUCATION, AND WELFARE\nEffect of Agency Interpretation of Regulations\xe2\x80\x94\nConfidentiality of Alcohol and Drug Abuse Patient\nRecords\n\nYour letter states that your Office has provided the Civil Service\nCommission with authoritative advice on the applicability and effect of\ncertain provisions o f your Departm ent\xe2\x80\x99s regulations, 42 CFR \xc2\xa72.1, et\nseq., governing the confidentiality of alcohol and drug abuse patient\nrecords. In addition, you point out that the statutes authorizing these\nregulations provide that any disclosure o f records in violation of the\nregulations is subject to a criminal penalty. See 21 U.S.C. \xc2\xa7 1175(0; 42\nU.S.C. \xc2\xa7 4582(b).1 The question posed is w hether your official opinions\nconstruing the regulations \xe2\x80\x9c have any binding precedential effect\xe2\x80\x9d in a\nprosecution for violation of the regulations.\nThere are actually two issues: (1) w hether your official interpretation\ncan make conduct a violation of the regulations that would not other\xc2\xad\nwise be so, and (2) whether your official interpretation that conduct\ndoes not violate the regulations would serve as a defense to an other\xc2\xad\nwise valid prosecution.\nW ith respect to the first issue, the basic law is to be found in M.\nKraus and Brothers v. United States, 327 U.S. 614, 621-22 (1946). Brief\xc2\xad\nly, that case holds that where a criminal penalty is provided for violat\xc2\xad\ning a regulation, the regulation is to be construed strictly in the same\nmanner as a criminal statute. While publicly made administrative inter\xc2\xad\npretations may aid a court in construing a regulation, it cannot fill gaps\n1 W e concur that the statutes provide criminal and not civil penalties. The use o f the\nterm \xe2\x80\x9cfine\xe2\x80\x9d rather than \xe2\x80\x9cpenalty\xe2\x80\x9d in the body o f the statute indicates that Congress\nintended a criminal sanction. See 18 U.S.C. \xc2\xa7 1. This is confirmed by the strong emphasis\nthat the legislative history of 21 U.S.C. \xc2\xa7 1175(f) places on maintaining the confidentiality\no f patient records. See H.R. Rep. 92-920, 92d Cong., 2d Sess., at 33. See, generally,\nKennedy v. Mendoza Martinez, 372 U.S. 144 (1963); Helvering v. Mitchell, 303 U.S. 391,\n399-406(1938).\n\n280\n\n\x0cin the regulation or make vague language certain. The text o f the\nregulation controls. The principle laid down in Kraus has never been\nquestioned or modified by the Supreme Court. We agree that your\nadministrative interpretation that certain conduct is prohibited by the\nregulation would not bind a court in a prosecution unless the interpreta\xc2\xad\ntion were duly promulgated as part of the regulation.\nWith respect to the second issue, the Supreme Court has held that\ngood faith reliance upon an authorized official construction of a crim i\xc2\xad\nnal statute is a valid defense to a prosecution for violating it. United\nStates v. Pennsylvania Chemical Co., 411 U.S. 655, 674 (1973); United\nStates v. Laub, 385 U.S. 475, 487 (1967); Cox v. Louisiana, 379 U.S. 559,\n571 (1965); Raley v. Ohio, 360 U.S. 423, 437-38 (1959). As expressed in\nUnited States v. Laub, supra, 385 U.S., at 488, the principle is that:\nOrdinarily, citizens may not be punished for actions undertaken in\ngood faith reliance upon authoritative assurances that punishment\nwill not attach.\nThe defense is akin to entrapment and is based on consideratons of due\nprocess. Cox v. Louisiana, supra; Raley v. Ohio, supra, 360 U.S., at 438.\nThe question whether a particular statement is an \xe2\x80\x9cauthoritative\nassurance\xe2\x80\x9d may be one of fact. However, the Court has ruled that\ninterpretative regulations published by the Agency primarily responsi\xc2\xad\nble for enforcement are such assurances. United States v. Pennsylvania\nChemical Co., 411 U.S., at 673-75. Moreover, in United States v. Laub\n(at 485-486), the Court held that the Government was bound by a\nconstruction expressed by the responsible enforcement Agency in press\nreleases, congressional testimony, and other official albeit informal\npublic statements.\nOn the basis of these cases, we believe that a treatment program\nofficial who released patient records in good faith reliance upon one of\nyour interpretations could not be successfully prosecuted. To that\nextent, they would have a binding effect upon the Government.\nBecause your official constructions of the regulations may have an\nexculpatory effect, we believe that it would be desirable to coordinate\nthe issuance of these constructions with the Narcotics and Dangerous\nDrugs Section of the Criminal Division, which supervises prosecutions\nin this area. In addition, such coordination would provide authoritative\nguidance to United States Attorneys with respect to the effect of the\nregulations on the conduct of drug cases. While the Office of Legal\nCounsel does not have any responsibility for criminal law enforcement,\nwe would be happy to arrange for a meeting between your office and\nthe Narcotics and Dangerous Drugs Section to discuss an arrangement\nsuitable to both divisions.\nM a ry C. L a w to n\n\nDeputy Assistant Attorney General\nOffice o f Legal Counsel\n281\n\n\x0c'


b"Proposed Commission on Deregulation of\nInternational Ocean Shipping\nIndividuals who serve on a purely advisory Com mission on the Deregulation of International\nO cean Shipping need not be officers o f the United States. Appointment of M embers of\nC ongress to such a Commission does not implicate the Incompatibility Clause, U.S. Const,\nart. I, \xc2\xa7 6, cl. 2. A provision authorizing the congressional leadership to make recommenda\xc2\xad\ntions for appointm ents to the Com m ission does not limit the President\xe2\x80\x99s ultimate responsibil\xc2\xad\nity for such appointm ents.\nThe proposed C om m ission may not hold a witness in contem pt for failure to comply with a\nC om m ission subpoena or to testify. Rather, the Com mission should be required to seek a\ncourt order com pelling compliance.\n\nDecember 21, 1983\nM\n\nem orandum\n\nO p in io n\nO f f ic e\n\nfor th e\nof\n\nA s s is t a n t A t t o r n e y G e n e r a l ,\n\nL e g is l a t iv e A f f a ir s\n\nThis responds to your request of December 5, 1983 for our comments on\n\xc2\xa7 17 of S. 47, the Shipping Act of 1983. Section 17 would establish a Commis\xc2\xad\nsion on the Deregulation of International Ocean Shipping (Commission). The\nCommission would be comprised of twenty-two members drawn from both the\nExecutive and Legislative Branches and from the private sector. The Executive\nBranch would be represented by the President, the Secretary of State, the\nAttorney General, the Secretary of Transportation, the Chairman of the Federal\nTrade Commission, and the Chairman of the Federal Maritime Commission or\ntheir designees. Proposed \xc2\xa7 17(a)(2)(A), (B). The Legislative Branch would be\nrepresented by eight Members of Congress, four from the House of Represen\xc2\xad\ntatives and four from the Senate, chosen by the President from members of\nparticular committees. Id. \xc2\xa7 17(a)(2)(C), (D). The majority leader of the Senate\nand the Speaker of the House of Representatives would make recommenda\xc2\xad\ntions on these appointments. The private sector would be represented by eight\ncitizens chosen by the President. Id. \xc2\xa7 17(a)(2)(E).\nAn examination of the bill indicates that the Commission\xe2\x80\x99s functions, id.\n\xc2\xa7 17(c), are purely advisory: the Commission is to make a comprehensive\nstudy of particular issues involved in deregulation of ocean shipping and\nsubmit a report making recommendations to Congress and the President. Id.\n\xc2\xa7 17(e). Thus, individuals who serve on this Commission will possess no\nenforcement authority or power to bind the Government and therefore need not\n202\n\n\x0cbe officers of the United States. Buckley v. Valeo, 424 U.S. 1, 126, 141 (1976).\nTherefore, appointment of Members of Congress does not implicate the Incom\xc2\xad\npatibility Clause of the Constitution. U.S. Const, art. I, \xc2\xa7 6, cl. 2. We also read\n\xc2\xa7 17(a)(4), pursuant to which the Senate Majority Leader and the Speaker of\nthe House of Representatives make recommendations for appointments under\n\xc2\xa7 17(a)(2)(C) & (D), as in no way limiting the President\xe2\x80\x99s ultimate responsibil\xc2\xad\nity for the selection of the members of the Commission. That ultimate responsi\xc2\xad\nbility must include the power to refuse to appoint any person recommended and to\nrequest the submission of another recommendation if a nominee appears unsuitable.\nWe must object, however, to \xc2\xa7 17(d), which provides that failure of a witness\nto comply with a Commission subpoena or to testify when summoned will be\npunishable under 2 U.S.C. \xc2\xa7\xc2\xa7 192- 194. These are the provisions applicable to\ncontempt of Congress, and they provide for summary process. Whoever fails to\ncomply with a request for information is \xe2\x80\x9cdeemed guilty of a misdemeanor\xe2\x80\x9d\nand the matter is referred to the appropriate United States Attorney for prosecu\xc2\xad\ntion. Id. \xc2\xa7\xc2\xa7 192, 194. By contrast, under the numerous provisions for enforce\xc2\xad\nment of Executive Branch agency and independent regulatory commission\nsubpoenas, the agency or commission must apply, usually through the Attorney\nGeneral, to a court for an order directing the subpoenaed individual to comply\nand it is the court order that an individual must comply with, not the agency\nrequest. The individual is punished for contempt of court, not contempt of the\nagency.\nThis distinction is rooted in both constitutional and policy concerns. In 1894,\nthe Supreme Court stated that the Interstate Commerce Commission could not,\nconsistent with due process, enforce its own subpoenas by being given the\npower to commit or fine people for disobedience:\nThe inquiry whether a witness before the Commission is bound\nto answer a particular question propounded to him, or to pro\xc2\xad\nduce books, papers, etc., in his possession and called for by that\nbody, is one that cannot be committed to a subordinate adminis\xc2\xad\ntrative or executive tribunal for final determination. Such a body\ncould not, under our system of government, and consistently\nwith due process of law, be invested with authority to compel\nobedience to its orders by a judgment of fine or imprisonment.\nExcept in the particular instances enumerated in the Constitu\xc2\xad\ntion, and considered in Anderson v. Dunn, 6 Wheat. 204, and in\nK ilboum v. Thompson, 103 U.S. 168, 190, of the exercise by\neither house of Congress of its right to punish disorderly behav\xc2\xad\nior upon the part of its members, and to compel the attendance of\nwitnesses, and the production of papers in election and impeach\xc2\xad\nment cases, and in cases that may involve the existence of those\nbodies, the power to impose fine or imprisonment in order to\ncompel the performance of a legal duty imposed by the United\nStates, can only be exerted, under the law of the land, by a\n203\n\n\x0ccompetent judicial tribunal having jurisdiction in the premises.\nSee W hitcom b\xe2\x80\x99s Case, 120 Mass. 118, and authorities there\ncited.\nIC C v. Brimson, 154 U.S. 447, 485 (1894). Since then, Congress has \xe2\x80\x9cnever\xe2\x80\x9d\n\nconferred the power to enforce a subpoena on an issuing agency. L. Jaffe & N.\nNathanson, Administrative L aw 439 (1976). Thus, there has been no occasion\nfor the Court to reexamine Brimson. Although there has been continuing debate\nover B rim son\xe2\x80\x99s analysis,1the fact remains that Brimson is the Supreme Court\xe2\x80\x99s\nlast word on the subject, and in that case the Court distinguished Congress\xe2\x80\x99\ncontempt power as being rooted in the Constitution and historical precedent,\nand which the Court has recognized is subject to limits. See, e.g., M arshall v.\nGordon, 243 U.S. 521 (1917). Although modem legal theory is less hostile to\ncoercive agency action than when Brimson was decided, there is at the same\ntime more sensitivity to arguments that due process requires that the prosecutor\nnot also be the judge.2 It is not clear to which branch of the government the\nCommission belongs. If Congress intends the Commission to be part of the\nExecutive Branch, we are reluctant to approve the use of 2 U.S.C. \xc2\xa7\xc2\xa7 192 and\n194, and would urge rather that the power to enforce subpoenas be modeled on\nthat traditionally given agencies. See, e.g., 7 U.S.C. \xc2\xa7 2717. This is especially\ntrue when there is no need to press for this extraordinary power. Other advisory\ncommissions, charged with equally important tasks, have been able to rely on\nthe courts to enforce their subpoenas. Likewise, federal agencies have func\xc2\xad\ntioned to Congress\xe2\x80\x99 satisfaction for decades without this power. If, on the other\nhand, the Commission is meant to be part of the Legislative Branch, similar to\nthe Commission on Security and Cooperation in Europe, 22 U.S.C. \xc2\xa7 3007(b),\nthe bill should be amended to say so specifically.\nL a r r y L . S im m s\n\nD eputy Assistant Attorney General\nOffice o f Legal Counsel\n\n1 See K. D avis, Administrative Law Treatise 21 4 -1 5 (1958); Note, Use o f Contempt Power to Enforce\nSubpoenas and Orders o f Administrative Agencies, 71 Harv. L. Rev. 1541 (1958). See also Federal Maritime\nComm'n v. New York Terminal Conference, 373 F.2d 424, 426 n.2 (2d Cir. 1967).\n2See, e.g.. Ward v. Village o f Monroeville, 409 U.S. 57 (1972); Morrissey v. Brewer, 408 U.S. 4 7 1 ,4 8 5 -8 6\n(1972).\n\n204\n\n\x0c\x0c\x0c"


b'Presidential Power Concerning Diplomatic Agents and Staff\nof the Iranian Mission\nW h ile th e re is a u th o rity fo r im posing som e tra v e l re stric tio n s on Iranian dip lo m atic\np erso n n el u n d e r th e V ien n a C o n v e n tio n on D ip lo m atic R e la tio n s an d c u sto m a ry in te r\xc2\xad\nn atio n al law , as w ell as u n d e r d o m e stic law , th o se so u rc e s o f law g e n e ra lly sta te that\nd ip lo m ats m ay not be p laced in c irc u m sta n c e s ta n ta m o u n t to ho u se a rre st, o r barred\nfrom leav in g th e c o u n try , ev e n as an a c t o f reprisal for b re a c h e s o f d ip lo m atic im m u\xc2\xad\nn ity b y Iran .\nS u b jectin g Iran ian d ip lo m a tic p erso n n el to p ro secu tio n u n d e r the crim in al p ro v isio n s o f\nth e In te rn a tio n a l E m e rg e n c y E c o n o m ic P o w e rs A c t, e v e n if d o n e in reprisal for\nIran ian b re a c h e s o f in tern atio n a l law an d acco m p a n ie d by all ap p licab le p ro te c tio n s\naffo rd ed by th e U n ited S tates C o n s titu tio n , w o u ld raise serio u s q u estio n s u n d er in te rn a \xc2\xad\ntional law .\n\nJanuary 8, 1980\nM EM ORANDUM O PIN IO N FOR T H E A TTORNEY G EN ER A L\nOn November 14, 1979, you asked this Office to review certain\nquestions relating to the situation in Iran, and during the last few weeks\nwe have provided you our views on a number of these questions orally.\nIn this memorandum we summarize the central legal issues involved in\ntaking actions against Iranian diplomatic personnel in this country, and\nset forth our reasoning and conclusions. We address, principally, the\nfollowing questions:\n1) May the President restrict the movement of Iranian diplomatic\nagents and staff personnel within the United States, including, if\nnecessary, confinement to embassy grounds;\n2) May he prevent these persons from departing the country;\n3) May he subject these persons to prosecution for violations of the\nInternational Emergency Economic Powers Act, 50 U.S.C.\n\xc2\xa7 1705?\nWe conclude that although the President may possess constitutional\nand statutory power to take any or all of these actions, each of them\nraises serious international law questions.\nI. Restricting the Movement of Members of the Iranian Mission\nA. International Law\n\nThe rights of diplomatic personnel are governed by the Vienna\nConvention on Diplomatic Relations, Apr. 18, 1961, 23 U.S.T. 3227,\n174\n\n\x0cT.I.A.S. No. 7502, ratified by Iran, the United States, and all major\ncountries of the world. Any doubts that may have existed concerning\nwhether the Treaty automatically became part of our domestic law\nupon its ratification have been removed by the recent passage of the\nDiplomatic Relations Act, 22 U.S.C. \xc2\xa7\xc2\xa7 254a-256, a major purpose of\nwhich was to codify the Convention\xe2\x80\x99s immunity provisions as part of\nour law. See generally S. Rep. No. 958, 95th Cong., 2d Sess. (1978).\nAs an introductory matter, the Convention and the Act establish\ncategories of diplomatic personnel, and grant them varying degrees of\nimmunity. Under Articles 1, 31, and 37 of the Convention and 22\nU.S.C. \xc2\xa7\xc2\xa7254a and 254d, diplomatic agents and their families enjoy\ncomplete criminal immunity and nearly complete civil immunity. Mem\xc2\xad\nbers of the administrative and technical staff and their families enjoy\ncomplete criminal immunity and civil immunity for acts in the course of\ntheir duties. Service staff of the mission enjoy immunity for acts per\xc2\xad\nformed in the course of their duties. The Act implements these immuni\xc2\xad\nties by providing that actions brought against individuals who are\nentitled to immunity in respect to them under the Convention or the\nAct shall be dismissed (\xc2\xa7 254d).\nThe Convention has a number of substantive provisions that are\nrelevant here. First, Article 22 provides unconditionally that the prem\xc2\xad\nises of the mission shall be inviolable, and places a special duty on the\nreceiving state to protect the premises against intrusion and to refrain\nfrom searching it. Iran is clearly in massive breach of this A rticle.1\nArticle 26 requires the receiving state to guarantee members of the\nmission 2 freedom of movement in the country, subject to regulations\nestablishing national security zones. This Article was adopted against a\nbackground of longstanding travel restrictions imposed by nations on a\nreciprocal basis. (For example, after World War II the Soviet Union\nlimited travel by members of diplomatic missions in Moscow to 50\nkilometers from the capital, absent special permission. The United\nStates and others retaliated by imposing reciprocal restrictions on the\nSoviet Union and other offending nations.) An amendment to the A rti\xc2\xad\ncle that would have stated that prohibited zones must not be so exten\xc2\xad\nsive as to render freedom of movement illusory failed of passage. This\ndoes not constitute an affirmative endorsement of highly restrictive\ntravel zones, however, since a statement to the same effect as the failed\namendment was already in the commentary to the Article. At any rate,\ntravel restrictions have continued on a more or less restrictive basis\nsince adoption of the Convention. See generally E. Denza, Diplomatic\n\'T h e U nited Slates could confine m em bers o f the Iranian Mission to the premises w ithout violating\nthis A rticle, although such an action could violate A rticle 29\xe2\x80\x99s prohibition o f arrest.\n2U nder 22 U.S.C. \xc2\xa7254a, the term \xe2\x80\x9c m em bers o f a mission" includes diplom atic agents, adm inistra\xc2\xad\ntive and technical staff, and service staff, as defined in A rticle 1 o f the C onvention.\n\n175\n\n\x0cLaw, Commentary on the Vienna Convention on Diplomatic Relations,\n115-18 (1976).\nOur own legislative history of the Convention suggests that \xe2\x80\x9cprotec\xc2\xad\ntive custody\xe2\x80\x9d of diplomatic personnel could be justified under Articles\n26 and 29. The State Department\xe2\x80\x99s Legal Adviser testified before the\nSenate Foreign Relations Committee that these provisions could be\nused in situations involving armed conflict to justify placing diplomats\nin protective custody. He pointed out that while Article 29 prohibits\narrest, it also provides that the receiving state shall take appropriate\nsteps to prevent attacks on a diplomat\xe2\x80\x99s person. 7 M. Whiteman, Digest\nof Int\xe2\x80\x99l Law 442 (1970).\nThis argument, however, is subject to two rejoinders. First, reconcil\xc2\xad\ning Article 26, allowing travel restrictions, with Article 29, forbidding\narrest, requires a legal and practical distinction at some point between\ntravel restrictions and arrest. The practice of travel restrictions against\nwhich the Convention was drafted had never reached the level of\nhouse arrest. Second, in the Convention the United States opposed a\nprovision now found in Article 39.2, stating that immunities such as\nthose against arrest continue even in case of war. We argued that it was\nnecessary to intern enemy diplomats at the outbreak of war, citing the\nWorld War II experience. We proposed an amendment that failed,\nwhich would have allowed the receiving state in time of national\nemergency, civil strife, or armed conflict to institute appropriate meas\xc2\xad\nures of control of mission personnel and their property, including pro\xc2\xad\ntective custody to insure their safety. See 7 M. Whiteman, supra, at 441.\nThe history of the failed American amendment is ambiguous enough\nthat it does not necessarily preclude limited imposition of protective\ncustody relying directly on the duty in Article 29 to \xe2\x80\x9ctake all appropri\xc2\xad\nate steps to prevent any attack on\xe2\x80\x9d a diplomat\xe2\x80\x99s person, but a protective\ncustody theory would be very hard to reconcile with an accompanying\nban on departure from the country. Indeed, Article 44 provides that\neven in case of armed conflict, the receiving state must allow mission\npersonnel an opportunity to leave the country at the earliest possible\nmoment. In short, house arrest of mission personnel accompanied by a\nban on their return to Iran cannot fairly be argued to be within the\nsubstantive terms of the Convention.\nArticle 47 of the Convention provides that a state may discriminate\nagainst another state by applying any of the provisions of the Conven\xc2\xad\ntion restrictively \xe2\x80\x9cbecause of a restrictive application of that provision\nto its Mission in the sending state.\xe2\x80\x9d The background to this provision\nindicates that it authorizes reciprocally unfavorable treatment only to\nan extent that is not clearly contrary to the terms of the Convention.\nDenza, supra, at 283-84. This means that relatively restrictive travel\nzones imposed by another country would allow us to impose restrictive\n176\n\n\x0ctravel zones on a reciprocal basis, but would not justify our breach of\nthe Convention, for example by invading their mission.\nThe Convention\xe2\x80\x99s preamble affirms \xe2\x80\x9cthat the rules of customary\ninternational law should continue to govern questions not expressly\nregulated\xe2\x80\x9d by its provisions. Customary international law allows repris\xc2\xad\nals, which are breaches of a treaty\xe2\x80\x99s terms in response to a breach by\nanother party. To be legal, reprisals must respond in a proportionate\nmanner to a preceding illegal act by the party against whom they are\ntaken. See G. Schwarzenberger, A Manual of International Law 184\n(5th ed. 1967).3 Identical reprisals are the easiest to justify as propor\xc2\xad\ntionate, because subjective comparisons are not involved. Thus, in the\ncurrent crisis, the taking of Iranian diplomats as \xe2\x80\x9chostages\xe2\x80\x9d (or a lesser\nrestriction on their freedom of movement that approaches imprison\xc2\xad\nment) would clearly be a proportionate response; reducing the immu\xc2\xad\nnity of Iranian diplomats from criminal prosecution would be more\ndifficult to justify.\nAt this point a special difficulty arises. International law scholars\nhave identified an exception to the law of reprisals: \xe2\x80\x9cdiplomatic envoys\nmay not be made the object of reprisals, although this has occasionally\nbeen done in practice.\xe2\x80\x9d H. Lauterpacht, 2 Oppenheim\xe2\x80\x99s International\nLaw 140 (7th ed. 1952), citing Grotius. Customary international law\noften has no firmer basis than the opinions of the scholars, bolstered by\ntheir own reputations and the precedent they can summon. This excep\xc2\xad\ntion to the reprisals doctrine can claim the support of some highly\nreputable scholars.\nIt is unclear whether this exception is meant to refer only to the\nillegality of taking reprisals against diplomats in response to unrelated\nbreaches by the sending state (e.g., a blockade), or whether it is meant\nto extend to a ban on reprisals against diplomats even when the sending\nstate commits a breach of diplomatic immunity. The former interpreta\xc2\xad\ntion has the evident merit of preventing routine harassment of diplo\xc2\xad\nmats, and would leave a role for reprisals in such extreme circum\xc2\xad\nstances as the present Iranian actions.\nNevertheless, the exception is stated in terms suggesting that reprisals\nagainst diplomats are never legal. As a result, if the United States were\nto take action amounting to a breach of the Vienna Convention, such as\narresting Iranian diplomats or barring their departure from the country,\na reputable argument could be made that our action was illegal, despite\nmajor previous breaches by the other side. Here it can be argued that\nArticle 47 of the Vienna Convention means to forbid full-scale reprisals\nagainst diplomats, no matter the provocation. It would be pointed out\n3 This principle is also codified in the V ienna C onvention on the Law o f Treaties, A rticle 60, Senate\nExec. L., 92d Cong., 1st Sess. (1971), w hich allow s suspending the operation o f a treaty in w hole o r in\npart upon the material breach o f an o th er party, but w hich is not yet in force and has not been ratified\nby the United Stales.\n\n177\n\n\x0cthat economic reprisals (blocking assets, boycotts, or even blockade)\nstand as substitute remedies.\nThere may be added support for the view that reprisals against\ndiplomats are never legal in the World Court\xe2\x80\x99s recent order granting an\n\xe2\x80\x9cindication of Provisional Measures\xe2\x80\x9d in United States o f America v.\nIran. For the Court ordered release of the hostages, including diplo\xc2\xad\nmatic personnel, despite Iran\xe2\x80\x99s argument that the hostage-taking should\nbe viewed as \xe2\x80\x9csecondary\xe2\x80\x9d to \xe2\x80\x9c25 years of continual interference by the\nUnited States in the internal affairs of Iran, . . . and numerous crimes\nperpetrated against the Iranian people, contrary to . . . all interna\xc2\xad\ntional and humanitarian norms.\xe2\x80\x9d The seriousness of these allegations did\nnot convince the Court that imprisoning diplomats was a fit reprisal.\nStill, the Iranian action was not presented as a reprisal for breaches of\ndiplomatic immunity, and the Court did not speak to that issue. It\nordered release \xe2\x80\x9cin accordance with the treaties in force between the\ntwo States, and with general international law.\xe2\x80\x9d\nIn any event, it is our judgment that international law casts consider\xc2\xad\nable doubt on the legality of any reprisal against diplomats.\nB. Dom estic L aw Im plem enting International L aw\n\nIt seems clear that the Vienna Convention and surrounding principles\nof customary international law have been incorporated as part of our\ndomestic law. First, Article VI of the Constitution makes treaties part\nof the supreme law of the land, along with the Constitution and stat\xc2\xad\nutes. The Vienna Convention, ratified by the United States, includes an\naffirmation in its preamble that rules of customary law should govern\nquestions not expressly regulated by the terms of the Convention.\nMoreover, the Supreme Court has recognized customary interna\xc2\xad\ntional law as part of our domestic law. See L. Henkin, Foreign Affairs\nand the Constitution 221 (1972). In The Paquete Habana, 175 U.S. 677,\n700 (1900), the Supreme Court held that under international law, fishing\nvessels belonging to enemy nationals were exempt from capture and\ncondemnation by American vessels:\nInternational law is part of our law, and it must be\nascertained and administered by the courts of justice of\nappropriate jurisdiction, as often as questions of right de\xc2\xad\npending upon it are duly presented for their determina\xc2\xad\ntion.\nA principal purpose of the Diplomatic Relations Act of 1978, 22\nU.S.C. \xc2\xa7 254a et seq., was to \xe2\x80\x9ccodify the privileges and immunities\nprovisions of the Vienna Convention as the sole United States law on\nthe subject,\xe2\x80\x9d S. Rep. No. 958, supra, at 1, and to repeal inconsistent\nstatutes. The Act also provides, in \xc2\xa7 254c:\n178\n\n\x0cThe President may, on the basis of reciprocity and under\nsuch terms and conditions as he may determine, specify\nprivileges and immunities for members of the mission,\ntheir families, and the diplomatic couriers of any sending\nstate which result in more favorable treatment or less\nfavorable treatment than is provided under the Vienna\nConvention.\nThe Report of the Senate Foreign Relations Committee, No. 958, supra,\nat 5, explains that this provision \xe2\x80\x9creflects article 47 of the Convention\nwhich allows such treatment.\xe2\x80\x9d The Report goes on:\nThe conditions under which U.S. diplomatic personnel\ncarry out their official functions and lead their lives in\ncertain hardship areas dictate their enjoyment of increased\nprotection from harassment as a result of arbitrary appli\xc2\xad\ncation of local law. This provision permits less favorable\ntreatment than the Vienna Convention and covers those\ncases where certain nations restrict the privileges and\nimmunities of U.S. diplomatic personnel abroad. Any use\nof the discretion described in this section must be on a\nreciprocal basis with the nations involved.\nIt is unclear whether this section means to go further than to codify\nArticle 47 of the Convention, which allows only restrictive applications\nof the Convention\xe2\x80\x99s terms. It can be read to provide domestic authority\nto exercise the international law of reprisals, which would, however,\npresumably include the exception for reprisals against diplomats. The\nlegislative history is barren of guidance except for the discussion quoted\nabove, which refers to Article 47 and which seems to contemplate\nreciprocally restrictive travel provisions.\nThere is explicit authority for travel regulations in the Foreign Rela\xc2\xad\ntions Authorization Act of 1979; Pub. L. No. 95-426, 22 U.S.C. \xc2\xa72691\nnote:\nFor the purpose of implementing general principles of the\nFinal Act of the Conference on Security and Cooperation\nin Europe (signed at Helsinki on August 1, 1975) empha\xc2\xad\nsizing the lowering of international barriers to the free\nmovement of people and ideas and in accordance with\nprovisions of the Vienna Convention on Diplomatic Rela\xc2\xad\ntions establishing the legal principles of nondiscrimination\nand reciprocity, it shall be the general policy of the\nUnited States to impose restrictions on travel within the\nUnited States by citizens of another country only when\nthe government of that country imposes restrictions on\ntravel by United States citizens within that country.\n179\n\n\x0cThe legislative history of this provision refers to it as \xe2\x80\x9cselfexplanatory,\xe2\x80\x9d and is otherwise unilluminating. H.R. Rep. No. 1160, 95th\nCong., 2d Sess. (1978).\nThus there is ample international and domestic authority for travel\nrestrictions on Iranian diplomatic personnel. But the line must be drawn\nat that point\xe2\x80\x94anything amounting in substance to holding them hostage\nwould entail a possible breach of international law. Instead, the tradi\xc2\xad\ntional remedy against diplomats has been to declare them persona non\ngrata and to expel them, even in cases of espionage.4 There is even a\npossibility that internment of Iranian diplomatic personnel would run\nafoul of 18 U.S.C. \xc2\xa7 112, which makes it a federal crime to assault or\nimprison a foreign diplomat. This provision, passed in response to\nterrorism at the Munich Olympics and elsewhere, focuses on ordinary\ncriminal activity, but it is not in terms inapplicable to governmental\nabuse of diplomatic privileges and immunities.\nC. Presidential Power Over D iplom atic Personnel\nThe President\xe2\x80\x99s authority over foreign diplomatic personnel derives\nfrom his constitutional power in Article II to \xe2\x80\x9creceive Ambassadors\nand other Public Ministers.\xe2\x80\x9d From this derives the President\xe2\x80\x99s power to\ngrant or withdraw recognition to foreign governments and their minis\xc2\xad\nters, a power regarded as textually committed to the Executive alone.\nSee Jones v. United States, 137 U.S. 202, 212 (1890); Baker v. Carr, 369\nU.S. 186, 212-13 (1962); see generally 2 B. Schwartz, The Powers of the\nPresident 104-09 (1963). The President\xe2\x80\x99s well-established power to rec\xc2\xad\nognize foreign governments without the participation of the other\nbranches is a greater power than that involved in receiving a particular\nAmbassador of a recognized government, although it may flow logi\xc2\xad\ncally enough from that power. As a consequence, the President\xe2\x80\x99s power\nto accept or reject a particular envoy has been beyond serious question\nsince President Washington demanded the recall of Citizen Genet, the\nFrench Minister. As early as 1855, the Attorney General gave an\nopinion that the right of reception extends to \xe2\x80\x9call possible diplomatic\nagents which any foreign power may accredit to the United States,\xe2\x80\x9d 7\nOp. A tt\xe2\x80\x99y Gen. 186, 209 (1855).\nThe legal status of foreign diplomatic personnel in the United States\nhas its roots in these constitutional considerations and was well-defined\nlong before the Vienna Convention codified it. In effect, persons with\nfull diplomatic status bear the same relation to the United States as the\ngovernment they serve; they are not subject to domestic law, and our\nrights and remedies with respect to them are diplomatic only. See\n4T his is not the case for individuals w ith only a qualified im m unity from crim inal jurisdiction. T he\nU nited States does not recognize violation o f the espionage laws as part o f a foreign em ployee\'s\nofficial function, and the lim ited im m unity is no bar to prosecution for such violations. See United\nStates v. Egorov, 222 F. Supp. 106, 107-08 (E .D .N .Y . 1963); Untied States v. Melekh, 190 F. Supp. 67,\n87-89 (S.D . N.Y. 1960).\n\n180\n\n\x0cSchooner Exchange v. McFaddon, 11 U.S. (7 Cranch) 116, 138-39 (1812)\n\n(Marshall, Ch. J.), for a classic statement of this. The first American\nstatutes granting immunity from our domestic law to diplomatic person\xc2\xad\nnel date from 1790, and since the Citizen Genet affair, Presidents have\ndeclared foreign diplomatic personnel persona non grata, expelling them\nwithout explanation or process. Neither expulsion without procedural\nprotections nor travel restrictions of the sort familiar both before and\nafter ratification of the Vienna Convention would be tolerable for\nAmerican citizens or nondiplomatic aliens. Professor Henkin concludes\nthat \xe2\x80\x9cforeign governments, however, and probably foreign diplomats in\ntheir official capacity, have no constitutional rights, and there are no\nconstitutional obstacles, say, to tapping wires of foreign embassies.\xe2\x80\x9d\nHenkin, supra, at 254. (Professor Henkin\xe2\x80\x99s example regarding wiretap\xc2\xad\nping presages a position taken by the Office of Legal Counsel in\nresponse to a request of the Permanent Select Committee on Intelli\xc2\xad\ngence in April, 1978.)\nAt the same time, aliens within our international jurisdiction are\nsubject to our laws and are entitled to claim constitutional protections\nwhen the government has not granted them immunity. See M athews v.\nDiaz, 426 U.S. 67, 77 (1976); Wong Wing v. United States, 163 U.S. 228,\n237-38 (1896).\nA consistent pattern emerges from these authorities. Diplomatic per\xc2\xad\nsonnel, standing as surrogates for the nation they represent, are without\nthe constraints of our domestic law and its protections as well. For\nexample, no one would suggest that a diplomat has a First Amendment\nright to disparage the President without suffering expulsion as a conse\xc2\xad\nquence. But to the extent that immunity does not hold, with the expo\xc2\xad\nsure to our domestic law comes equally an opportunity to take advan\xc2\xad\ntage of its protections. Thus, no one would suggest that an alien may be\ntried for espionage without the observance of due process guarantees.\nSee A bel v. United States, 362 U.S. 217 (1960).\nIn addition to these constitutional sources, the President can draw\nauthority over diplomats from the provisions of the Diplomatic Rela\xc2\xad\ntions Act and the Foreign Relations Authorization Act that are summa\xc2\xad\nrized above. Finally, there is a little-known 1868 statute, now 22 U.S.C.\n\xc2\xa7 1732:\nWhenever it is made known to the President that any\ncitizen of the United States has been unjustly deprived of\nhis liberty by or under the authority of any foreign gov\xc2\xad\nernment, it shall be the duty of the President forthwith to\ndemand of that government the reasons of such imprison\xc2\xad\nment; and if it appears to be wrongful and in violation of\nthe rights of American citizenship . . . , the President\nshall use such means, not amounting to acts of war, as he\nmay think necessary and proper to obtain or effectuate\n181\n\n\x0cthe release; and all the facts and proceedings relative\nthereto shall as soon as practicable be communicated by\nthe President to Congress.\nThis provision appears never to have been invoked; at least it has\nnever been relied on in litigation to support presidential action. It was\npassed in response to a dispute with Great Britain after the Civil War,\nin which that nation was trying its former subjects, who had become\nnaturalized Americans, for treason. A rejected amendment to the bill\nwould have authorized the President to suspend all commerce with the\noffending nation, and to round up foreign citizens found in this country\nas hostages; even this harsh provision, however, excepted diplomatic\npersonnel. Cong. Globe, 40th Cong., 2d Sess. 4205, 4445 (1868). There\xc2\xad\nfore, if this provision is to be relied on, it should be invoked for actions\nnot involving diplomats.\nIn conclusion, the President has plenary powers to control the pres\xc2\xad\nence and movement in this country of foreign diplomatic personnel,\nshort of violations of international law.\nII. Departure Controls\n\nThe Immigration and Nationality Act, 8 U.S.C. \xc2\xa7 1185(a), provides\nUnless otherwise ordered by the President, it shall be\nunlawful\xe2\x80\x94\n(1) for any alien to depart from . . . the United States\nexcept under such reasonable rules, regulations, and\norders, and subject to such limitations and exceptions as\nthe President may prescribe. . . .\nIt is clear from the structure of the statute that the term \xe2\x80\x9calien\xe2\x80\x9d as used\nin \xc2\xa71185 includes diplomatic personnel. The definitions section of the\nAct, \xc2\xa7 1101(a), defines alien as any person not a citizen of the United\nStates (3), and includes diplomatic personnel among nonimmigrant\naliens (15). Section 1102 of the Act makes the provisions on exclusion\nor deportation inapplicable to diplomatic personnel, except as otherwise\nprovided. There is no parallel section exempting diplomatic personnel\nfrom departure controls.\nRegulations implementing \xc2\xa7 1185 have been issued by the Department\nof State, but are implemented by the departure control officers of the\nImmigration and Naturalization Service (INS). 22 C.F.R. \xc2\xa746. The\nregulations provide in \xc2\xa746.2 that no alien (defined in the statute\xe2\x80\x99s terms)\nshall depart, or attempt to depart, from the United States if his depar\xc2\xad\nture would be prejudicial to the interests of the United States under the\nprovisions of \xc2\xa746.3. Departure control officers, having reason to be\xc2\xad\nlieve that \xc2\xa746.3 applies, are instructed to serve the alien with a written\ntemporary order directing him not to depart. In turn, \xc2\xa746.3 defines\ncategories of aliens whose departure shall be deemed prejudicial to the\n182\n\n\x0cinterests of the United States, and includes: fugitives from justice; aliens\nneeded as witnesses or parties to criminal cases under investigation or\npending in our courts; aliens needed in connection with investigations\nor proceedings being conducted by any official executive, legislative, or\njudicial agency in the United States; and aliens who may disclose\ndefense information, engage in activities impeding our national defense,\nwage war against the United States, or help to deprive the United\nStates of sources of supplies or materials vital to our national defense.\nThere is also a final catchall category (k) for any alien whose case does\nnot fall within any of the specified categories, \xe2\x80\x9cbut which involves\ncircumstances of a similar character rendering the alien\xe2\x80\x99s departure\nprejudicial to the interests of the United States.\xe2\x80\x9d Any of a number of\nthese provisions would seem adaptable to the present situation.\nSection 46.7 of the regulations provides that in the absence of appro\xc2\xad\npriate instructions from the State Department\xe2\x80\x99s Bureau of Security and\nConsular Affairs, departure control officers shall not exercise their\nauthority to bar exit in the case of aliens seeking to depart in the status\nof diplomatic personnel (within a definition in \xc2\xa7 1101(a)(15) that closely\nresembles those in the Diplomatic Relations Act). It goes on to provide,\nhowever, that in \xe2\x80\x9ccases of extreme urgency, where the national security\nso requires,\xe2\x80\x9d a departure control officer may preliminarily exercise\nauthority to bar exit pending the outcome of consultation with the\nAdministrator, \xe2\x80\x9cwhich shall be undertaken immediately. In all cases\narising under this section, the decision of the Administrator shall be\ncontrolling: Provided, That any decision to prevent the departure of an\nalien shall be based upon a hearing and record as prescribed in this\npart.\xe2\x80\x9d The regulations provide that an alien served with a notice of\ntemporary prevention of departure may within 15 days request a hear\xc2\xad\ning before a Special Inquiry Officer of the INS. If a hearing is re\xc2\xad\nquested, the alien is entitled to appear, to be represented by counsel of\nhis choice, and to have a trial-type hearing. The Special Inquiry Officer\nrecommends disposition, and the record and any written appeals are\ntransmitted to the Regional Commissioner, whose decision is adminis\xc2\xad\ntratively final.\nIII. Restricting Criminal Immunity of Diplomatic Personnel\n\nUnder the Vienna Convention, diplomatic agents and administrative\nand technical staff are entitled to complete immunity from the criminal\njurisdiction of the host state. However, the exercise of criminal jurisdic\xc2\xad\ntion over foreign diplomatic personnel might, as a matter of interna\xc2\xad\ntional law, be justified as a reprisal for Iranian breaches of the Conven\xc2\xad\ntion. As noted above, there is a substantial argument that all reprisals\nagainst diplomatic personnel are illegal.5 Moreover, reprisals become\n5Support for such an argum ent in this application m ight be found in the W orld C o u rt\'s o rd e r to\nIran to afford o u r diplom ats \xe2\x80\x9c im m unity from any form o f crim inal jurisdiction."\n\n183\n\n\x0cmore difficult to justify as they become less clearly reciprocal in terms\nof nature or severity to the breach that has occurred. See\nSchwarzenberger, supra, at 184. Thus, house arrest of Iranian diplo\xc2\xad\nmats, because of its similarity to the imprisonment of our personnel, is\neasier to justify than criminal prosecution of a sort not yet imposed\nupon our hostages. There is also a serious danger that a reprisal of this\nsort might be thought to justify the exercise of Iranian criminal jurisdic\xc2\xad\ntion, in particular regarding espionage, over our personnel. Therefore,\nif any criminal jurisdiction is asserted over Iranian diplomatic person\xc2\xad\nnel, it is particularly important to specify the aspects of the criminal\nlaw to which they are being subjected. This could be done by notifica\xc2\xad\ntion that violations of Executive Order No. 12,170 and the criminal\nprovisions of the IEEPA , 50 U.S.C. \xc2\xa7 1705, will result in criminal\nprosecution.\nMoreover, as a matter of American constitutional law, it is clear from\nthe preceding analysis that Iranian personnel subjected to criminal\nprosecution would be entitled to due process protections. Before\nencountering criminal liability, they would need to be placed on notice\nthat we regard their conduct as subject to our domestic criminal law, in\nparticular the provisions of the IEEPA.\nAlthough there is some basis in law for subjecting Iranian diplomatic\npersonnel to our criminal statute enforcing the freeze order, assertion of\nour criminal jurisdiction over these persons is fraught with danger.\nMoreover, since the existence of the freeze should prevent those deal\xc2\xad\ning with the affected governmental instrumentalities from distributing\nproperty to them, it is not apparent that serious violations are likely to\noccur. We urge strongly against any formal assertion that Iranian diplo\xc2\xad\nmatic personnel are subject to this aspect of our criminal law.\nL\n\narry\n\nA. H\n\nam m ond\n\nD eputy Assistant A ttorney General\nOffice o f L egal Counsel\n\n184\n\n\x0c'