[Congressional Record (Bound Edition), Volume 149 (2003), Part 19]
[House]
[Pages 26511-26512]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  UNITED STATES CONTINUES TO BREAK LAW

  (Mr. McDERMOTT asked and was given permission to address the House 
for 1 minute and to revise and extend his remarks and include 
extraneous material.)
  Mr. McDERMOTT. Mr. Speaker, as the President announced that 
everything is fine in Iraq, the Red Cross is leaving, the Doctors 
Without Borders is leaving, and the United States continues to break 
the law. The problem there is we say we want to establish the rule of 
law, but we break it. The U.S. provisional authority in Iraq is 
breaking international law from the 1907 Hague Convention and the 
Geneva Convention.
  On September 19, the viceroy, Mr. Bremer, said anybody will now be 
permitted to have full ownership of a wide range of state-owned Iraq 
assets. That violates the 1925 constitution which has been in effect 
and has not been changed by the people which bars private ownership of 
natural resources or the means of production. It prohibits the foreign 
ownership of real estate or the establishment of companies in Iraq by 
non-Arab foreigners.
  We cannot bring democracy to a country and fail to bring the rule of 
law. The United States is talking out of both sides of its mouth.
  Mr. Speaker, I include for the Record an article from the New York 
Times, dated October 29, titled, ``Iraq Business Deals May Be Invalid, 
Law Experts Warn.''

[[Page 26512]]



                [From the New York Times, Oct. 29, 2003]

          Iraq Business Deals May Be Invalid, Law Experts Warn

                           (by Thomas Catan)

       The US-led provisional authority in Iraq may be breaking 
     international law by selling state assets, experts have 
     warned, raising the prospect that contracts signed now by 
     foreign investors could be scrapped by a future Iraqi 
     government.
       International business people attending a conference in 
     London this week heard that some orders issued by the US-led 
     Coalition Provisional Authority (CPA) may be in breach of the 
     1907 Hague Regulations and the Fourth Geneva Convention.
       ``Is what they are doing legitimate, is it legal?'' asked 
     Juliet Blanch, a partner at the London-based international 
     law firm Norton Rose. ``Most [experts] believe that their 
     actions are not legal'', she said. ``There would be no 
     requirement for a new government to ratify their [actions].''
       International law obliges occupying powers to respect laws 
     already in force in a country ``unless absolutely prevented'' 
     from doing so.
       According to international law experts, that throws doubt 
     on the legality of the CPA's September 19 order opening the 
     Iraqi economy to foreign investment. In what amounted to a 
     blueprint for transforming Iraq into a market economy, Order 
     39 permitted full foreign ownership of a wide range of state-
     owned Iraqi assets, barring natural resources such as oil.
       However, such sweeping economic reform may not be legal, as 
     the UK government was privately warned by its chief law 
     officer in the first days of the war. In his private advice, 
     later leaked to the press, Lord Goldsmith wrote that ``the 
     imposition of major structural economic reforms would not be 
     authorised by international law.''
       The British government will not now comment on the attorney 
     general's advice, which it maintains was confidential.
       Questioned in parliament by Shirley Williams, the Liberal 
     Democrat leader of the House of Lords, a minister argued that 
     the government was ``confident that their policies and 
     actions in Iraq are right and consistent with the UK's 
     international obligations.''
       However, international experts say foreign investors could 
     face a wide range of legal problems in Iraq. Not least is the 
     fact that Order 39 is ``strictly contrary to the Iraqi 
     constitution,'' according to Stephen Nelson, a partner at 
     Squire, Sanders & Dempsey, speaking before the conference on 
     Monday.
       Indeed, the Iraqi constitution--which cannot legally be 
     altered without the consent of the Iraqi people--contains a 
     wide range of other provisions that could be highly 
     troublesome for foreign investors.
       Iraqi law bans private ownership of ``national'' resources 
     or ``the basic means of production''. It also prohibits 
     foreign ownership of real estate or the establishment of 
     companies in Iraq by non-Arab foreigners.
       There is also the question of what will happen to existing 
     contracts with foreign companies, signed with the government 
     of Saddam Hussein.
       The CPA has yet to announce what will become of pre-
     existing contracts, many of which are held by Russian, 
     Chinese and French companies.
       However, international law experts have said they could be 
     enforced, raising the possibility that contracts with the 
     ousted regime might be more enforceable than those signed 
     with the CPA.

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