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In recent years, the U.S. Supreme Court has increasingly engaged in what Professor Mary Ann Glendon of Harvard Law School has termed “judicial tourism,” using international norms, at times selectively, to inform the resolution of U.S. constitutional issues. Mary Ann Glendon, “Judicial Tourism,” Wall St. J., Sept. 16, 2005, at A14. This past term, the court may have gravitated toward what might be termed “judicial smuggling” when it upheld the importation of Canadian tax law into a prosecution under the federal wire fraud statute. This development is cause for some concern among corporate counsel. In Pasquantino v. U.S., 125 S. Ct. 1766 (2005), several Americans smuggled liquor into Canada to avoid Canadian import taxes that were, according to one estimate, approximately double the liquor’s purchase price in Maryland. A federal court convicted the petitioners under the wire fraud statute, 18 U.S.C. 1343, based on communications within the United States about the scheme. The wire fraud statute forbids schemes to obtain “money or property.” If no property or money is involved, the statute does not reach the conduct in question. For example, a scheme to illicitly receive a license was not a scheme to defraud in Cleveland v. U.S., 531 U.S. 12 (2000), because the license did not become property until issued. The unissued licenses had no legal force, so there was no property right of which to deprive the issuing state. The petitioners in Pasquantino argued that uncollected Canadian taxes were likewise not “property” for purposes of the wire fraud statute. The court disagreed, however, concluding that because the petitioners would have paid taxes had they declared the liquor to border officials, their failure to pay taxes inflicted economic injury on Canada “no less than had they embezzled funds from the Canadian treasury.” Pasquantino, 125 S. Ct. at 1772. Court held that ‘revenue rule’ was not implicated The court likewise rejected the argument that the prosecution in Pasquantino violated the long-standing “revenue rule,” prohibiting enforcement in domestic courts of foreign tax laws. That rule, the court concluded, is not implicated when the government seeks to enforce a domestic law to punish domestic criminal conduct. Id. at 1775. Lastly, the court rejected the contention, embraced by the dissent, that a domestic prosecution for a scheme to evade Canadian tax laws gave the wire fraud statute “extraterritorial effect.” The court was not concerned that the object of the scheme was to derogate foreign, rather than domestic, property rights. Because the wire fraud statute “punishes the scheme, not its success,” the court stated, the convictions rested solely on the petitioners’ use of domestic, interstate wires. Id. at 1780. The court’s decision in Pasquantino is troubling for several reasons. Such a prosecution requires, as the court admitted, that a domestic court enforce foreign revenue law in at least “an attenuated sense.” Id. at 1778. Addressing the petitioners’ contention that the revenue rule “avoids giving domestic effect to politically sensitive and controversial policy decisions embodied in foreign revenue laws,” the court stated that because the prosecution in question was the result of policy choices by the executive and by Congress, such concerns were not an issue. Id. at 1780. The court also rejected the contention that assessing unfamiliar foreign tax schemes might present a problem for domestic courts in this context-the court below encountered no such difficulty, it reasoned. Id. at 1781. In spite of the court’s rejection of these concerns, they may prove substantial in future prosecutions. It is not difficult to envision unfortunate implications of the Pasquantino decision. Foreign laws may be unclear, for instance, failing to provide notice of the conduct proscribed or required-a basic requirement of due process under our system. Similarly, interpreting foreign law, particularly foreign tax law, may prove difficult for domestic courts. Judicial interpretation of our own law is sometimes uncertain, even though U.S. judges are familiar with U.S. legal culture and political processes. How well, then, can judges apply the law of foreign countries with inadequate or inconsistent written laws? Or law created by, and subject to, dictatorial fiat? Further, foreign law may be subject only to lax enforcement, or be ignored altogether. Individuals and corporations used to assessing foreign transactions or activities in light of incomplete or unreliable understandings of foreign law, or relying on lax enforcement in a foreign country, must reassess their potential criminal exposure in the United States. The manner in which the sentences were imposed in Pasquantino, which was part of the record before the Supreme Court, illustrates some of the problems with the importation of foreign law into U.S. criminal proceedings. Although the Supreme Court suggested that the district court had no trouble using foreign law, the government never established the exact Canadian tax rate or cited to any Canadian law or regulation. Instead, the government relied on the general experience of a Canadian customs official, not qualified as an expert, that Canadian taxes on $56 of liquor would be approximately $100. The district court used this testimony to calculate the amount of Canadian taxes avoided and used the resulting figure to depart upward from the base level of zero to six months to 57 months for two defendants and to 21 months for a third defendant. Despite its troubling aspects, the decision in Pasquantino does not provide prosecutors carte blanche to pursue corporations or individuals for wire fraud in connection with any alleged violation of foreign tax law. As in any prosecution for wire fraud, intent to defraud remains an element that must be proven beyond a reasonable doubt. While the government may attempt to prove intent using circumstantial evidence, such proof will likely be more difficult when business judgments are in question-when, for example, a corporation makes a judgment regarding the requirements of foreign tax law in connection with an acquisition of assets in a foreign country-than in a case such as Pasquantino, where trucks full of liquor were driven across a border and none of the liquor was declared. Further, a potentially even more troubling prospect raised by the Pasquantino decision-that an instance of “wire fraud” such as those in Pasquantino could serve as a predicate act in a Racketeer Influenced and Corrupt Organization Act (RICO) action by, for example, a foreign sovereign seeking to recover allegedly lost tax revenue from an individual or corporation-may not be sanctioned by the courts. The 2d U.S. Circuit Court of Appeals recently held that precisely such a RICO claim, brought by the European Community against RJR Nabisco Inc., among others, was barred by the revenue rule. See The European Community v. RJR Nabisco Inc., 424 F.3d 125 (2d Cir. 2005). The 2d Circuit’s decision reinstated a holding that the Supreme Court had vacated and remanded for reconsideration in light of Pasquantino. The decision therefore suggests that courts will not extend the holding in Pasquantino to further weaken the revenue rule. No treaties covered the activities at issue In light of the difficulties presented by the Pasquantino decision, some reform is called for. As noted above, a lack of clarity regarding what is proscribed or required under foreign laws may present problems when such laws are used in domestic criminal prosecutions. Further, the policy judgments underlying foreign laws may not be ones to which our government would subscribe. One particularly troubling aspect of the Pasquantino decision was that, had the petitioners consulted American laws and treaties, they would have had no reason to believe that smuggling liquor into Canada was criminal: A bilateral treaty does not allow enforcement of foreign tax judgments against domestic citizens, and the federal anti-smuggling statute only prohibits smuggling into countries that reciprocate by criminalizing smuggling from their country into the United States, which Canada does not. Were the Supreme Court inclined to revisit the issue, it might limit the “attenuated” enforcement of foreign law via the mail and wire fraud statutes now possible to circumstances in which a treaty agreeing to the enforcement of the foreign law in question has been entered into by the United States. The existence of a treaty would at least suggest that the Senate has considered the foreign law in question and found it generally to be clear and consistent with domestic constitutional principles. The Pasquantino decision also suggests that the Federal Rules of Criminal Procedure need to be amended. Rule 26.1 currently allows a judge to decide issues of foreign law without regard to the Federal Rules of Evidence. If foreign law is to be imported into the elements of domestic crimes, prosecutors should be required to prove the existence and particulars of such law pursuant to more stringent standards. Justice Antonin Scalia accused the court of “looking over the heads of the crowd and picking out [its] friends” when the court selectively referenced international norms in holding that Missouri could not execute a 17-year-old murderer. Roper v. Simmons, 125 S. Ct. 1183 (2005) (Scalia, J., dissenting). The use of foreign law has been subject to criticism, even in a case like Roper, when such use can only inure to the benefit of the defendant. The use of foreign law as a necessary predicate to a defendant’s conviction arguably has the potential to subject Americans to criminal liability based on laws made in foreign countries without the protection of the political and legal checks and balances that characterize domestic lawmaking. George J. Terwilliger III is a partner in the Washington office of White & Case. He was the deputy attorney general of the United States from 1991 to 1992 and served for 15 years as a federal prosecutor. John C. Wells and Michael H. Huneke, associates at the firm, assisted in the preparation of this article.

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