Impact & Consequences to Submarine Cable Systems Submarine Networks World - 10 September 2013

Transcription

1 Maritime Jurisdictional Creep Impact & Consequences to Submarine Cable Systems Submarine Networks World - 10 September 2013

2 Kent Bressie Kent is a partner with the law firm of Wiltshire & Grannis LLP in Washington, D.C.. An expert on telecommunications regulation and international trade and investment, he represents undersea cable operators, suppliers, and investors in a wide range of legal and regulatory matters, including: national security and investment reviews; telecoms licensing; environmental permitting; export controls and economic sanctions; WTO and market access; corporate and commercial transactions; and the law of the sea. He holds degrees from Stanford and the University of Chicago. Partner Head of International Practice Wiltshire & Grannis LLP kbressie@wiltshiregrannis.com

3 Causes of Jurisdictional Creep Coastal states assert jurisdiction over submarine cables beyond the territorial sea for a variety of reasons. To manage and counteract jurisdictional creep, it s helpful to understand why coastal states make excessive jurisdictional claims affecting submarine cables.

4 Security Some coastal states and state agencies claim security zones beyond the territorial sea or mischaracterize the EEZ as a security zone. These states often invoke security justifications to hide other motivations, particularly protectionism. China asserts permitting jurisdiction for installation and repair of submarine cables in the Chinese EEZ. Saudi Arabia asserts general security jurisdiction in its contiguous zone, compounding general uncertainty given absence of clear or published straight baselines.

5 Revenue maximization and project funding Coastal states and state agencies assess customs duties, ad valorem taxes, and right-of-way fees assessed on infrastructure installed or services provided. Coastal states and state agencies demand funding of specific projects. These are often unrelated to submarine cables, sometimes benefit particular politicians, and raise corruption concerns. States budgetary problems can encourage this practice.

6 Revenue and funding examples India: Central Board of Excise and Customs has assessed Indian Service Tax on installation services provided in Indian EEZ and customs duties on both the value of submarine cable infrastructure imported into Indian EEZ and on value of installation services provided in Indian EEZ. United States: National Oceanic and Atmospheric Administration has imposed per-mile fair market value fees for commercial submarine cables transiting national marine sanctuaries in order to fund public educations programs and sanctuary visitors centers. Malta: Resources Authority sought to impose tax on cables transiting the Maltese EEZ.

7 History and Geography Some coastal states and state agencies assert expansive jurisdiction in response to boundary disputes, in rejection of colonial experiences, or in response to nationalist political sentiments. Some coastal states and state agencies assert expansive jurisdiction given the importance of marine areas to a national economy or identity. Peru and Ecuador claim 200 nm territorial seas. Canada asserts straight baselines around its Arctic islands to mimic archipelagic baselines.

8 Protectionism Some coastal states and state agencies seek to create or reserve economic opportunities for domestic companies and individuals. Oman: Visa policy requires employment visa for cable ship crews (including those with only a fleeting presence in Omani territory) and imposes qualification (e.g., university degree) requirements for all cable ship crew, including ordinary seamen. India: Visa policy requires employment visas for cable ship crews (including those with only a fleeting presence in Indian territory) and imposes numerical limits on number of visas and percentage of project work force.

9 One-size-fits-all permitting regime Some coastal states and state agencies impose a single permitting regime for offshore infrastructure, conflating differential treatment under national laws and UNCLOS. United States: Certain Army Corps of Engineers offices assert jurisdiction over submarine cables extends to the edge of the U.S. continental shelf by conflating U.S. jurisdiction under the Rivers and Harbors Act (covering offshore infrastructure and dredging out to 3 nm under Corps regulations) with jurisdiction over the Outer Continental Shelf Lands Act (covering artificial islands, installations, and other devices erected for the purpose of energy exploration or exploitation).

10 Environmental Protection Some coastal states and state agencies assert that the need for environmental protection justifies assertion of regulatory jurisdiction beyond the territorial sea or more aggressive definition of internal waters and territorial seas. United States: NOAA asserts that the presence of commercial submarine cables in national marine sanctuaries poses a particular environmental threat. Olympic Coast sanctuary has effectively prohibited installation of new commercial cables.

11 Factors Aggravating Jurisdictional Creep Absence of systematic objections to excessive jurisdictional assertions over submarine cables. Time-to-market concerns lead system owners, suppliers, and survey companies to acquiesce or compromise, rather than object or seek state espousal of a claim. UNCLOS does not create a private right of action for submarine cable operators. Legally or practically, only a state party may: Pursue dispute settlement and enforcement under UNCLOS; Lodge diplomatic protests; or Conduct operational assertions challenging excessive jurisdictional claims.

12 Aggravating factors (cont d) Inartful or vague language in UNCLOS regarding: Submarine cables (no definition) and language distinguishing them from installations and structures Survey activities.

13 Session 3B Marine Jurisdictional Creep Countermeasures Submarine Networks World - 10 September 2013

14 Strategies for Countering Jurisdictional Creep Jurisdictional creep is unavoidable in the submarine cable business. While project requirements often force operators, suppliers, and surveyors to acquiesce or compromise, there are still opportunities for rolling back the creep.

15 Challenge proposed coastal state laws and regulations before they are enacted or adopted It s easier to challenge a prospective law or regulation without particular project deadlines looming. Such challenges often afford ample opportunities for advocacy re: Importance of submarine cables to economy and security. Environmentally-benign nature of submarine cable equipment and installation and repair activities Submarine cable operators, suppliers, and survey companies do have standing to pursue such challenges.

16 Challenge coastal state actions that violate domestic laws and regulations Many excessive jurisdictional assertions violate a coastal state s domestic laws and regulations as well as its treaty obligations. Submarine cable operators, suppliers, and survey companies do have standing to pursue such challenges.

17 Don t rely solely on UNCLOS Although UNCLOS affords critical and unique protections to submarine cables, UNCLOS protections are sometimes insufficient or unavailing. In the case of protectionist measures, consider remediation through bilateral and multilateral trade agreements.

18 A challenge for the industry to think creatively How might industry obtain an international tribunal decision interpreting submarine cable freedoms of UNCLOS without jeopardizing implementation of a particular project? The North American Submarine Cable Association has considered using a challenge under U.S. law to state regulations imposing cable removal conditions. Are there similar opportunities at the international level?