NationStates

Glen-Rhodes wrote:So, if the Glen-Rhodes Agriculture & Consumer Protection Agency (ACPA) were to dissolve a business, including a government-owned business, then Glen-Rhodes would be required to pay for damages to other nations' government or businesses as a result? Aside from being opposed to this wholly, I'm wondering what constitutes "real property", as the extent of a government's liability to other nations rests entirely on damages to real property. Is it physical property, like buildings? Stocks? Monetary losses? It all begs the question: why should Glen-Rhodes be financially responsible for the economic decisions of some other nation and/or business, at all?

If the final proposal keeps this (and indeed, at this point, it must, otherwise it won't be doing anything at all), I would expect some kind of liability exemption when the dissolved business was "terminated" for anti-competitive practices, or other nationally or internationally proscribed practices.

Krioval wrote:Totally rewritten. That said, the goal is to protect the rights of two nations to trade with one another where they're willing. Comment and critique, as always.

Gobbannium wrote:We confess to a certain degree of puzzlement. We cannot see how this proposal is to achieve that aim. This may be a matter of our relative economic illiteracy, but in that regard all we see is a general encouragement and a clause forbidding the WA to interfere, the latter being something we are not terribly inclined to support. Attached slightly uncomfortably is requirement for compulsory purchase to actually be purchase rather than theft, which doesn't seem to have much relevance despite being a generally good idea. Could the respected ambassador be a little more detailed in his objective?

Krioval wrote:Real property would consist of any tangible asset, such as land, buildings, merchandise, business-owned vehicles, and so on. If a national government wants to nationalize an industry, it should pay out foreign investors for their stakes in any real property that is seized. Consider this part to be similar to eminent domain. I will attempt to include a clear definition of "real property" in the next day or so.

Krioval wrote:Why should this matter? If a government wants to take assets from a business, it needs to compensate those outside of its jurisdiction. If a business violates the law in a nation, foreign investors should still be compensated for seized property. Otherwise that property is effectively stolen. I should probably add language that allows for illegal goods to be confiscated without compensation, so long as all other seized assets are paid for.

Glen-Rhodes wrote:Why should governments 'pay out foreign investors'? If the investors are responsible, they will mitigate their financial loses before the nationalization of a corporation. If they are not able to gather that a corporation they have invested in is about to be nationalized, then they took a risk in investing in a business located in the jurisdiction of a non-transparent government; or they took the risk in investing in a businesses located in the jurisdiction of a government noted to nationalize industries without compensating investors. If they fail to do the former, it's due to their own ineptitude. If the latter, then they accepted the risk of financial losses. In either case, why is the government, or why should the government be, liable for the investment decisions of foreign investors? You haven't answered that question, yet.

The investor either (a) invested in a business they knew was violating competition law, (b) did not properly analyze the practices of a business before investing, or (c) accepted the inherent risk in investing in a non-transparent business. The investor is at fault for their own financial losses, in all cases. But this point is moot, if the compensation clause is exempted for this scenario.

Krioval wrote:REQUIRES national governments to compensate any individual, group of individuals, or national governments outside of its jurisdiction for any legally acquired property seized by that national government,

Grays Harbor wrote:Experts in both our Commerce Ministry and Justice Ministry have taken exception to this passage. It is entirely possible for criminal front companies to legally purchase property and assets within a nation, and then use them for illegal purposes. The wording od this seems to indicate that should assets be seized as a result of a criminal investigation, then the government would be liable to pay the criminals for their seized assed. As long as that loophole exists, we cannot support this legislation.

Krioval wrote:

Grays Harbor wrote:Experts in both our Commerce Ministry and Justice Ministry have taken exception to this passage. It is entirely possible for criminal front companies to legally purchase property and assets within a nation, and then use them for illegal purposes. The wording od this seems to indicate that should assets be seized as a result of a criminal investigation, then the government would be liable to pay the criminals for their seized assed. As long as that loophole exists, we cannot support this legislation.

That is entirely understandable. However, this compensation would not preclude a fine or civil judgment against the wrongdoers, which would likely erase some or all of the compensation paid for a property seizure. Perhaps there needs to be an addendum that would exempt compensation for the duration of a criminal investigation, but the Great Chiefdom would then need a time limit on what constitutes a temporary seizure of legally acquired property. Krioval is not opposed to nations requiring the forfeiture of property that was used in criminal enterprise on a national level, in any case, but we are unsure of whether this should be left to individual nations to decide.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

Krioval wrote:Well, I had thought fairness might be one reason, though I suppose that the argument that transparency in trade issues leads to improved trade would work as well. If an individual takes something that is legally owned by another without paying for it, most people would call that theft. When a national government takes over private property for any reason, it should pay for it as well.

Krioval wrote:Y'know, for a nation supposedly interested in maintaining competition in trade, Glen-Rhodes is surprisingly supportive of any and all government interventions into trade.

Grays Harbor wrote:Temporary is not an acceptable compromise. If convicted, there should be no compensation due at all. Fines to make up some of it is also unacceptable. Criminal organizations cannot be permitted to make illegal profit through illicit activities, and then expect the government of the nation they were commiting the criminal acts in to pay them for the priveledge, all with WA backing. Until this particular clause is either removed or modified in such a way that states "No compensation is due for assets seized as a result of criminal and/or illegal activity", then we cannot support this and will recommend to our region a no vote should it come to it. Why is it not something which can be left to each nation to decide for themselves?

Glen-Rhodes wrote:Your view of fairness is one-sided. Take, for example, the nationalization of water providers. Assume that before nationalization, this utility industry was owned by public corporations, and that foreign investors own stock in these corporations. Assume also that despite government regulations, these corporations have failed to provide water to all residents at a fair and affordable rate, and that the next best course of action is nationalization.

However, the government would have to buy the stocks of the foreign investors, on top of paying the costs of being a water provider. It is not inconceivable, and indeed it is entirely probable, that the government could not afford to do both. They must decide to either allow the incompetent corporations to continue inefficiently providing water at unaffordable rates, not even to all residents, or to drive their nation in to enormous debt. Where's the fairness in that? It would seem to me that this resolution is only concerned with protecting foreign investors' treasure vaults, even if it's at the detriment of domestic citizens and the domestic market.

I don't understand where this is coming from, considering two things: government intervention is why competition laws work, and this very resolution is requiring governments to intervene in trade. The only difference here is that this mandated intervention is about throwing money at foreigners, rather than protecting domestic and social interests. If intervention results in businesses and individuals getting richer, it's good. If it's about preventing corruption and social welfare deficits, it's bad.

Krioval wrote:Incorrect. The national government would have to pay foreign investors for the value of the land and buildings seized. They could also pass legislation compelling more strict water regulations. I will have to further clarify that the only compensation due would be for physical property or money seized. Shares in a corporation should not be included, and I apologize for not being very clear on that point earlier.

Krioval wrote:It is about providing a safer environment for trade, in that industrialists will not be concerned that their factories could be arbitrarily seized. If I specifically restrict the issue of compensation to money or physical property that is taken over, does this diminish the problem?

Krioval wrote:

Grays Harbor wrote:Temporary is not an acceptable compromise. If convicted, there should be no compensation due at all. Fines to make up some of it is also unacceptable. Criminal organizations cannot be permitted to make illegal profit through illicit activities, and then expect the government of the nation they were commiting the criminal acts in to pay them for the priveledge, all with WA backing. Until this particular clause is either removed or modified in such a way that states "No compensation is due for assets seized as a result of criminal and/or illegal activity", then we cannot support this and will recommend to our region a no vote should it come to it. Why is it not something which can be left to each nation to decide for themselves?

Is there a difference, in your mind, between seizing a factory making illegal drugs and seizing a drug dealer's house, providing that the house was not used for illegal activities? I have no problem with nations passing laws mandating that the former class of assets be seized without compensation if there is a conviction. I have no problem putting language permitting such seizures into this proposal. I would not necessarily support seizing assets unrelated to the crime, however.

The primary point of this clause is to protect individuals from seizures due to nationalization or eminent domain. I would like to protect private property rights that are in place at the execution of a trade agreement while simultaneously allowing national governments the right to reduce or eliminate those rights if their governments' economic priorities change.
I suppose that the Great Chiefdom would need to know which provisions can be altered while protecting the overall goal of the legislation. And as always, we thank you for your comments.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

Glen-Rhodes wrote:I have a feeling that we weren't on the same level in this debate. Are you seeking to protect multinationals, since you're saying that what you're really interested in doing is protecting industrialists? I've been under the assumption that this proposal was about investors, who provide monetary funds for businesses in return for a stake, but don't actually own physical property.

Anyways, concerning your previous response.. You said that real property included "any tangible asset, such as land, buildings, merchandise, [or] business-owned vehicles". Specifically concerning merchandise and other products, is there a reason why the government should pay for them? Is the business really facing a financial loss, since it's unlikely that governments are going to seize merchandise/products when dissolving a corporation? (Excepting health regulation violations and the like, which I'm assuming this proposal doesn't affect, since products that fail guidelines aren't legal products.) At least in Glen-Rhodes, the corporation is granted time to liquidate those assets. Even if it doesn't work that way elsewhere, wouldn't it be most likely that the corporation retain its merchandise and sell it at other branches?

Grays Harbor wrote:True, that may be the intent of your proposal, but that is not the result as it is far to open to interpretation and twisting. Because you did not intend for a loophole to appear does not negate the existance of the loophole. As WA legislation apparently takes precedence over national legislation, the intent needs to be clear, not ambiguous.

The provision that requires altering is the one we have been discussing. Either altered or removed completely, because as it stand it has loopholes large enough to fly the Jupiter 2 through it.

NOTES that this legislation does not affect economic protective devices or domestic taxation,

Krioval wrote:

National Economic Freedoms
Free Trade: Strong

RECOGNIZING that industry and commerce are vital to national and international prosperity,

NOTING that capitalist, socialist, communist, and other economic systems are fully capable of providing for industrial and commercial development,

DEFINES "commerce" to include the sale, production, and consumption of a product or service,

FURTHER DEFINES "jurisdiction" as the reach of a national government's authority, including any internationally recognized land, sea, space, or other material claims,

ENCOURAGES individuals, groups of individuals, and national governments to engage in commerce with other willing individuals, groups of individuals, and national governments as allowed in their respective jurisdictions,

ALLOWS national governments to regulate commerce within their jurisdiction,

REQUIRES national governments to compensate any individual, group of individuals, or national governments for any physical property or money seized by that national government, excepting those assets used for criminal enterprise,

MANDATES any fees levied by national governments on commerce be no higher than that required for oversight, and that these fees be applied fairly based on the size and type of commercial organizations operating within its jurisdiction,

CREATES the Impartial Revaluing System to investigate, mediate, and arbitrate any conflicts that arise,

NOTES that this legislation does not affect economic protective devices or domestic taxation,

REQUIRES that no commerce be generally restricted by the WA unless:

1. Restricted by prior legislation, or
2. The enterprise causes an extreme hazard to national populations

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Totally rewritten. That said, the goal is to protect the rights of two nations to trade with one another where they're willing. Comment and critique, as always.

I am working on the clause on compensation. It has been altered fairly significantly.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

Bears Armed wrote:OOC: What about 'intellectual property'? If a government seizes control of a patent, in a nation where these exist, shouldn't it owe the previous owners compensation for that too?

Grays Harbor wrote:These two seem somewhat contradictory. It is specifically mentioned that the legislation does not effect pretective tariffs, however, fees can be construed to be the same or similar. I am not against tariffs, but in this a government may be able to reclassify fee's as tariffs as what these fee's are is not defined.

Krioval wrote:Was there anything else that should be changed?

Krioval wrote:OOC: I left the two clauses here in blue for reference. /OOC

MANDATES any fees levied by national governments on commerce be no higher than that required for oversight, and that these fees be applied fairly based on the size and type of commercial organizations operating within its jurisdiction,

NOTES that this legislation does not affect economic protective devices or domestic taxation,

Grays Harbor wrote:These two seem somewhat contradictory. It is specifically mentioned that the legislation does not effect pretective tariffs, however, fees can be construed to be the same or similar. I am not against tariffs, but in this a government may be able to reclassify fee's as tariffs as what these fee's are is not defined.

For fees, Krioval is referring to any licensing costs or administrative fees that might be charged to set up or maintain a business. We figure that making these costs uniform on the national level should make the trade a bit freer and fairer, without telling nations that they must abandon protective devices, or even trade with foreigners. If you can think of a better way to word this, or if you think it might kill the proposal once it is submitted, please do not hesitate to let me know.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

Glen-Rhodes wrote:On a different matter, yes. I'm unsure what your intentions are with the last two clauses of this proposal:

REQUIRES that no commerce be generally restricted by the WA unless:

1. Restricted by prior legislation, or
2. The enterprise causes an extreme hazard to national populations

It reads to me like blocker text whose main exemption clause is impossible to functionally determine. It seems, under my interpretation, that the entire Gambling (Outlaw), Advancement of Industry (Protective Tariffs), and Environmental categories would be impossible to use, along with some traditionally fair-trade-leaning areas of the Social Justice category. I'm unsure if this entire section is even legal, but I can't readily recall any universal rule on legislative blocking.

From the proposal:

NOTES that this legislation does not affect economic protective devices or domestic taxation,