Law & Society

Suspects must invoke rights unambiguously; Justice Sotomayer strongly and forcefully dissents as high court narrows Miranda. Our last post dealt with the prospect that the Obama administration may modify the long-standing “public safety exception” of Miranda v. Arizona—the 1966 Supreme Court that established the following prophylactic rules for warning criminal suspects taken into police custody: 1) right to remain silent, 2) anything a suspect says can be used against him in a court of law, 3) suspect has right to have an attorney present during police questioning, and 4) if the suspect cannot afford an attorney, one will be appointed to him prior to police questioning.

In another post earlier this year, we discussed two cases handed down by the Supreme Court which seriously restricted these Miranda warnings. In that post we wrote:
“Miranda has been one of the most controversial decisions ever rendered by the Supreme Court. Law enforcement hates it, prosecutors have consistently tried to overrule it, and the High Court itself has in recent years taken every legal opportunity to undermine it. That is precisely what the Court did this session in two cases: Florida v. Powell and Maryland v. Shatzer. Both of these cases involve situations where the State’s highest courts found a Miranda violation and the Supreme Court elected to overturn those decisions. Significantly, the opinions of the Supreme Court were delivered by its most conservative and liberal justices: Justice Scalia in the Shatzer case and Justice Ginsburg in the Powell case.
“ … Kevin Dwayne Powell was arrested in Tampa, Florida in August 2004 in connection with a robbery investigation. The suspect was taken to the local police headquarters where he was read the standard Miranda rights form: right to silence and right to ‘talk to a lawyer before answering any of our questions.’ Powell signed the waiver form and agreed to talk to the officers. He thereafter told the officers the handgun found in his girlfriend’s apartment was his, and as a convicted felon, he knew it was a crime to possess it. He was charged and subsequently convicted of illegal possession of a firearm by a convicted felon.

“The trial court denied Powell’s attempt to have the statements made to the police suppressed under Miranda. Relying upon a line of Miranda-related decisions, its own decisions, and the Florida Constitution, the Florida Supreme Court overruled the trial court and reversed Powell’s conviction. The Florida high court based its reversal on the fact that a suspect has a right to be ‘clearly informed’ of his right to an attorney’s presence ‘during questioning.’ The Court concluded the advice given to Powell about his right to an attorney had been misleading and added ‘a right that has never been expressed cannot be reiterated.’

“The State appealed to the U.S. Supreme Court and the court granted certiorari review. Powell argued the High Court lacked jurisdiction in the case because the Florida Supreme Court had relied not only upon Miranda but had also upon the Florida Constitution to find a Miranda violation. The Court brushed aside this argument, saying the Florida Supreme Court had not made it ‘clear’ that Miranda was only being used ‘for the purpose of guidance’ or that its decision was grounded in the Florida Constitution. The Court added that while the Florida Supreme Court is free to attach additional Miranda-like protections under the Florida Constitution, it must do so ‘clearly and expressly.’

“The Supreme Court then turned its attention to the third Miranda warning protection: the right to consult and have an attorney present during an interrogation. The Court pointed out it had never adopted a ‘precise formulation’ or the exact words necessary to convey this right to suspects. The Court then concluded the advice the Tampa police had given to Powell was sufficient to reasonably convey to the suspect that he had a ‘right to have an attorney present, not only at the onset of the interrogation, but at all times.’

“The Shatzer case involved a situation where an inmate, Michael Blaine Shatzer, was serving time in a Maryland penal facility for a sex offense. In August 2003 the Hagerstown Police Department received information that Shatzer had sexually molested his three-year-old son prior to his incarceration. A police detective visited Shatzer at the prison to question him about the allegation concerning his son. After being apprised of his Miranda rights, Shatzer refused to talk to the detective without an attorney being present. The police closed the case. Three years later additional information was developed linking Shatzer to the sexual abuse of his son. Another detective was sent to the prison to question him about the case. This time after being read his Miranda rights Shatzer signed a waiver and agreed to speak with the detective. After about thirty minutes of questioning, Shatzer implicated himself in sexual impropriety with his son. A second interview was conducted with Shatzer during which he further incriminated himself by telling the police he didn’t force his son into the sexual impropriety. Shatzer was charged and convicted of sexual child abuse of his son.

“The U.S. Supreme Court nearly three decades ago held in Edwards v. Arizona that absent a ‘break in custody,’ the Miranda rights remain intact throughout the custodial interrogation process. Shatzer moved to suppress his 2006 statements under Edwards, arguing that his return to the general prison population did not constitute a break in the custodial interrogation process. The Maryland Court of Appeals agreed, saying ‘the passage of time alone is insufficient to [end] the protections afforded by Edwards,’ and that Shatzer’s release back into general population between the 2003 and 2006 interrogations did not constitute a break in custody within any of the Edwards exceptions.

“The State of Maryland appealed to the Supreme Court, prompting the Court to decide exactly what constitutes a ‘break in custody’ within the purview of Edwards. The Court confronted the issue with the following questions: ‘If Shatzer’s return to the general prison population qualified as a break in custody … there is no doubt that it lasted long enough (2 ½ years) to meet that durational [Edwards] requirement. But what about a break that has lasted only one year? Or only one week? It is impractical to leave the answer to that question for clarification in future case-by-case adjudication; law enforcement officers need to know, with certainty and beforehand, when renewed interrogation is lawful.’

“The Court then set a 14-day period as the precise ‘break in custody’ requirement within the Edwards custodial interrogation framework. In effect, a suspect held in actual custody on a criminal charge who invokes his right to silence and counsel is protected for 14 days. Any statement the suspect gives to the police after that 14-day period is not protected by the four Miranda rights should he elect to give the police a confession.”

On June 1, 2010 the Supreme Court in yet another decision, Berghuis v. Thompkins, took another bite out of the constitutional parameters of Miranda. Like Shazter and Power, Berghuis also involved a situation where the Supreme Court reversed a lower court decision granting Miranda relief—this time it was the Sixth Circuit Court of Appeals.

For Berghuis to be understood, the decision must be prefaced with precedent from a 1994 case in Davis v. United States in which the court ruled that a suspect must invoke his Miranda right to counsel “unambiguously;” that any “ambiguous or equivocal” statement, or no statement at all, does not require the police to stop questioning the suspect or to try and “clarify” the suspect’s intent.

Berghuis v. Thompkins
In January 2000 there was a shooting outside a mall in Southfield, Michigan. One victim died in the shooting and another survived his serious wounds. The local police developed information that Van Chester Thompkins was a suspect in the shooting. Thompkins fled the state and was eventually arrested one year later in Ohio. Two Southfield detectives went to Ohio to interrogate Thompkins who was awaiting transfer back to Michigan. The interrogation was conducted in an 8 by 10 feet room with Thompkins sitting in a desk-like chair. The interview began at 1:30 p.m. and last approximately three hours. A “Detective Helgert” gave Thompkins a “Notification of Constitutional Rights and Statement” (a Miranda rights form). The form specifically advised:

“You have the right to decide at any time before or during questioning to use your right to remain silent and your right to talk with a lawyer while you are being questioned.”

Detective Helgert had Thompkins read this warning out loud, and the suspect complied. The detective concluded that Thompkins “understood English.” Helgert then read Thompkins the other Miranda warnings on the form and asked him to sign the form “to demonstrate that he understood his rights.” Thompkins refused to sign the form. The interview began. The Supreme Court noted that “at no point during the interrogation did Thompkins say that he wanted to remain silent, that he did not want to talk with the police, or that he wanted an attorney.” Thompkins didn’t say much during the interview, responding “yeah” or “no” or “I don’t know” to questions.

“Do you believe in God?” Helgert asked about 15 minutes before the interview ended.
“Yes,” Thompkins replied with tears forming in his eyes.
“Do you pray to God to forgive you for shooting that boy down?” Helgert asked.
“Yes,” Thompkins replied, looking away.

After being returned to Michigan and indicted for first degree murder, Thompkins moved to suppress the statement made to Helgert on the ground that he had invoked his right to remain silent. He relied upon a 1975 Supreme Court decision, Michigan v. Mosley, which held that a suspect must waive his right to an attorney. This was a shaky legal issue because four years after the Mosley decision the Supreme Court in North Carolina v. Butler held that a waiver of the right to counsel did not have to be express and that police could infer a waiver of the right “based on the actions and words of the person interrogated.”

The Sixth Circuit Court of Appeals justified its reversal of Thompkins convictions despite Butler by pointing out that Thompkins’ “persistence silence for nearly three hours of questioning and repeated invitations to tell his side of the story offered clear and unequivocal message to the officers: Thompkins did not wish to waive his rights.” Although the Supreme Court had never applied the Davis rationale, that the invocation of the right to counsel be express and unambiguous, to the right to remain silent, the court found the Sixth Circuit’s anti-Butler reasoning “unpersuasive.” Saying it saw no reason to create a “different standard” than Davis with respect to the right to remain silent, the court explained its position this way:

“There is no good reason to require an accused who wants to invoke his or her right to remain silent to do so unambiguously. A requirement of an unambiguous invocation of Miranda rights results in an objective inquiry that ‘avoid[s] difficulties of proof and … provide[s] guidance to officers’ on how to proceed in the face of ambiguity. If an ambiguous act, omission, or statement could require police to end the interrogation, police would be required to make difficult decisions about an accused unclear intent and face the consequence of suppression ‘if they guess wrong.’ Suppression of a voluntary confession in these circumstances would place a significant burden on society’s interest in prosecuting criminal activity. Treating an ambiguous or equivocal act, omission, or statement as an invocation of Miranda rights ‘might add marginally to Miranda’s goal of dispelling the compulsion inherent in custodial interrogation.’ But ‘as Miranda holds, full comprehension of the rights to remain silent and request an attorney are sufficient to dispel whatever coercion is inherent in the interrogation process.’

“Thompkins did not say that he wanted to remain silent or that he did not want to talk with the police. Had he made either of those simple, unambiguous statements, he would have invoked his ‘right to cut off questioning.’ Here he did neither, so he did not invoke his right to remain silent.”

Justice Sotomayer, joined by Justices Stevens, Ginsburg and Breyer, sharply dissented from this majority view:

“The strength of Thompkins’ Miranda claim depends in large part on the circumstances of the 3-hour interrogation, at the end of which he made inculpatory statements later introduced at trial. The Court’s opinion downplays record evidence that Thompkins remained almost completely silent and unresponsive throughout that session. One of the interrogating officers, Detective Helgert, testified that although Thompkins was administered Miranda warnings, the last of which he read aloud, Thompkins expressly declined to sign a written acknowledgement that he had been advised of and understood his rights. There is conflicting evidence in the record about whether Thompkins ever verbally confirmed understanding his rights. The record contains no indication that the officers sought or obtained an express waiver.

“As to the interrogation itself, Helgert candidly characterized it as ‘very, very one-sided’ and ‘nearly a monologue.’ Thompkins was ‘[p[eculiar,’ ‘[s[sullen,’ and ‘[g]enerally quiet.’ Helgert and his partner ‘did most of the talking,’ as Thompkins was ‘not verbally communicative’ and ‘[l]argely’ remained silent. To the extent Thompkins gave any response, his answers consisted of ‘a word or two. A ‘yeah,’ or a ‘no,’ or ‘I don’t know’ … And sometimes … he simply saw down … with [his] head in [his] hands looking down. Sometimes … he would look up and make eye-contact would be the only response.’ After proceeding in this fashion for approximately 2 hours and 45 minutes, Helgert asked Thompkins three questions relating to his faith in God. The prosecution relied at trial on Thompkins’ one-word answers of ‘yes.’”

Justice Sotomayer strongly believed, and forcefully said as much, that these particular conditions were insufficient to find Thompkins had knowingly and intelligently waived his right to remain silent. Although he was read his Miranda rights and indicated he understood them, there was simply no evidence to support the unilateral decision by the majority of Court that he had implicitly waived them by not expressly and unambiguously invoking them.

Thompkins stands as yet another indication that the Supreme Court would constitutionally bless any attempt by the Obama administration and Congress to modify the “public safety exception” in terrorism cases. In three cases this year alone the high court has tightened the noose around Miranda’s neck—and as pointed out by Justice Sotomayer, the court had to walk over a number of precedents to justify that noose tightening. We believe that unless this dangerous trend is reversed soon, before the next quarter of this century has passed, Miranda will have been overruled and hang as a relic in some legal museum.

As we have said in the past, these are dangerous times in which we live with our precious constitutional freedoms under assault from every extreme. Indeed, a bad moon is rising. We are not alarmists wandering in the wilderness ringing the bell of damn and doom. We are pragmatists who clearly read the signs, not tea leaves. We hope we are wrong, but that knot of fear in our gut tells us we are right—.

Material Support of Foreign Terrorist Organizations vs. Freedom of Speech and Association Founded in 1974, the Partiya Karkeran Kurdistan (PKK) was established as a Marxist-Leninist insurgent group composed of Turkish Kurds who formed to seek Kurdish independence from Turkey. By the late 1990s the group had had morphed from a rural-based insurgent group into a full-fledged terrorist organization, sometimes using suicide bombings on civilian targets.

Founded in 1976, the Liberation Tigers of Tamil Eelam (LTTE) became one of the most lethal and well organized terrorist groups in the world that, beginning in 1983, waged an armed campaign in Sri Lanka to establish a separate Tamil homeland before the group was defeated by the Sri Lanka army in May 2009. The LTTE pioneered the use of suicide belts.
Both groups are designated as Foreign Terrorist Organizations by the U.S Department of State.

The evidence is clear that the PKK and LTTE have engaged in terrorist activities, including suicide bombings, which have harmed innocent civilians. It was these kinds of international terrorist acts and the 1995 Oklahoma City bombing that prompted the U.S. Congress to enact the Anti-Terrorism and Effective Death Penalty Act (AEDPA) which was signed into law by former President Bill Clinton in April 1996.

One of the controversial components of AEDPA was codified at 18 U.S.C. § 2339B which makes it a federal crime to provide “material support or resources to designated foreign terrorist organizations.” While Congress has amended the definition of “material support or resources” a number of times since 1996, Subsection 2339A (b) (1) offers the current definition:

“[T]he term ‘material support or resources’ means any property, tangible or intangible, or service, including currency or monetary instruments or financial securities, financial services, lodging, training, expert advice or assistance, safe houses, false documentation or identification, communications equipment, facilities, weapons, lethal substances, explosives, personnel (1 or more individuals who may be or include oneself), and transportation, except medicine or religious materials.”

Another component of AEDPA, the authority to designate an entity as a “foreign terrorist organization,” was codified at 8 U.S.C. §§ 1189(a) (1), (d) (4). This authority rests with the Secretary of State who, after consultation with the Secretary of Treasury and Attorney General, must determine whether the organization is foreign, engages in “terrorist activity” or “terrorism,” and “threatens the security of United States nationals or the national security of the United States.”

In 1997 former Secretary of State Madeleine K. Albright designated 30 groups as foreign terrorist organizations. Two of the groups on that list were PKK and LTTE.

The Humanitarian Law Project, which was founded in 1985 and is “dedicated to protecting human rights and promoting the peaceful resolution of conflict by using established international human rights law and humanitarian law,” filed a lawsuit in 1998 challenging the “material support or resources” provisions of § 2339B. The lawsuit’s long convoluted history found its way to the U.S. Supreme Court and, on June 21, 2010, that court in Holder v. Humanitarian Law Project upheld the constitutionality of the terrorism statute.

The Humanitarian Law Project (HLP) filed its lawsuit because, according to the group, § 2339B prevented it from providing support for the humanitarian and political activities of PKK. This included: (1) “training members of PKK on how to use humanitarian and international law to peacefully resolve disputes”; (2) “engage in political advocacy on behalf of Kurds who live in Turkey”; and (3) “teach PKK members how to petition various representative bodies such as the United Nations for relief.” HLP also charged that § 2339B prevented it from providing monetary contributions, legal training, and political advocacy for the LTTE. This included: (1) “train members of LTTE to present claims for tsunami-related aid to mediators and international bodies”; (2) “offer their legal expertise in negotiating peace agreements between LTTE and the Sri Lankan government;” and (3) “engage in political advocacy on behalf of Tamils who live in Sri Lanka.”

The HLP based its lawsuit on three constitutional challenges to § 2339B: 1) it violated their First Amendment freedom of speech; and 2) it violated their First Amendment freedom of association. These two challenges were premised on the theory that § 2339B criminalized their support to PKK and LTTE without the Government having to prove that HLP had a specific intent to further the unlawful ends of those groups. Finally, HLP challenged § 2339B as being unconstitutionally vague.

A central issue in the case initially focused on exactly what constituted “personnel” and training.” While the lawsuit was pending, and in the wake of the 9/11 terror attacks on the Twin Towers in New York, Congress enacted the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Patriot Act) which amended the “material support or resources” provision of § 2339B to include the term “expert advice or assistance.” The HLP filed a second lawsuit, which was ultimately consolidated with the first one, challenging this amended provision as well.

In 2004, Congress once again amended the “material support or resources” provisions of § 2339B with the Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA). This statute clarified the “mental state” necessary to violate § 2339B by requiring knowledge of a group’s designation as a terrorist organization or its commission of terrorist acts before criminal charges could be brought. IRTPA also added the term “service” to the definition of “material support or resources” and defined “training” to mean “instruction or teaching designed to support a specific skill, as opposed to general knowledge. IRTPA also defined “expert advice or assistance” as “advice or assistance derived from scientific, technical or other specialized knowledge.” And finally IRTPA clarified the reach of the term “personnel” by providing:

“No person shall be prosecuted under [§ 2339B] in connection with the term ‘personnel’ unless that person has knowingly provided, attempted to provide, or conspired to provide a foreign terrorist organization with 1 or more individuals (who may include himself) to work under that terrorist organization’s direction or control or to organize, manage, supervise, or otherwise direct the operation of that organization. Individuals who act entirely independently of the foreign terrorist organization to advance its goals or objectives shall not be considered to be working under the foreign terrorist organization’s direction and control.”

The Vagueness Issue

The Supreme Court had before it four terms central to HLR’s argument that § 2339B is impermissibly vague: “training,” “expert advice or assistance,” “services,” and “personnel.” The court two years ago in United States v. Williams held a conviction under a statute that is unconstitutionally vague does not comport with the Due Process Clause of the Fifth Amendment because it “fails to provide a person of ordinary intelligence fair notice of what is prohibited, or is so standardless that it authorizes or encourages seriously discriminatory enforcement.”

The Supreme Court pointed out that since 2001 the Government has charged approximately 150 persons with violating the provisions of § 2339B and convicted approximately half of them. Since HLP did not challenge the Government’s enforcement discretion of the statute, the court addressed only the issue whether § 2339B provides a person of ordinary intelligence with “fair notice” of what is unlawful. The court began its analysis with the observation that the four terms in question—“training,” “expert advice or assistance,” “service,” and “personnel”—did not require a subjective analysis because Congress has narrowly defined these terms over time. The Court added:

“Much of the activities in which plaintiffs seek to engage readily fall within the scope of the terms ‘training’ and ‘expert advice or assistance.’ Plaintiffs want to ‘train members of [the] PKK on how to use humanitarian and international law to peacefully resolve disputes,’ and ‘teach PKK members how to petition various representative bodies such as the United Nations for relief.’ A person of ordinary intelligence would understand the instruction on resolving disputes through international law falls within the statute’s definition of ‘training’ because it imparts a ‘specific skill,’ not ‘general knowledge.’ Plaintiffs’ activities also fall comfortably within the scope of ‘expert advice or assistance’: A reasonable person would recognize that teaching the PKK how to petition for humanitarian relief before the United Nations involves advice derived from, as the statute puts it, ‘specialized knowledge.’ In fact, the plaintiffs themselves have repeatedly used the terms ‘training’ and ‘expert advice’ throughout this litigation to describe their own proposed activities, demonstrating that these common terms readily and naturally cover plaintiff’s conduct.

“Plaintiffs respond by pointing to hypothetical situations designed to test the limits of ‘training’ and ‘expert advice or assistance.’ They argue that the statutory definitions of these terms use words of degree—like ‘specific,’ general,’ and ‘specialized’—and that is difficult to apply those definitions in particular cases … Whatever force these arguments might have in the abstract, they are beside the point here. Plaintiffs do not propose to teach a course on geography, and cannot seek refuge in imaginary cases that straddle the boundary between ‘specific skills’ and ‘general knowledge.’”

The HLP had argued that it wanted to provide “political advocacy” for Kurds living in Turkey and Tamils living in Sri Lanka but because § 2339B is so vague the group hesitated because it was concerned that this would constitute providing “personnel” or “service[s]” prohibited by the statute. The Court addressed these concerns as follows:

“As for ‘personnel,’ Congress enacted a limiting definition in IRTPA that answers plaintiffs’ vagueness concerns. Providing material support that constitutes ‘personnel’ is defined as knowingly providing a person ‘to work under that terrorist organization’s direction or control or to organize, manage, supervise, or otherwise direct the operation of that organization.’ The statute makes clear that ‘personnel’ does not cover independent advocacy: ‘Individuals who act entirely independently of the foreign terrorist organization to advance its goals or objectives shall not be considered to be working under the foreign terrorist organization’s direction and control.’

“’[S]ervice’ similarly refers to concerted activity, not independent advocacy … The statute prohibits providing service ‘to a foreign terrorist organization.’ The use of the word ‘to’ indicates a connection between the service and the foreign group. We think a person of ordinary intelligence would understand that independently advocating for a cause is different from providing a service to a group that is advocating for that cause.”

The First Amendment Issues

With respect to the speech issue, the Court pointed out that under § 2339B the “plaintiffs may say anything they wish on any topic. They may speak and write freely about the PKK and LTTE, the governments of Turkey and Sri Lanka, human rights, and international law. They may advocate before the United Nations. As the Government states: ‘The statute does not prohibit independent advocacy or expression of any kind.’ Section 2339B also ‘does not prevent [plaintiffs] from becoming members of the PKK and LTTE or impose any sanction on them for doing so. Congress has not, therefore, sought to suppress ideas or opinions in the form of ‘pure political speech,’ which most often does not take the form of speech at all. And when it does, the statute is carefully drawn to cover only a narrow category of speech to, under the duration of, or in coordination with foreign groups that the speaker knows to be terrorist organizations.”

With respect to the association issue, the HLP had argued that merely associating with the PKK and LTTE would be criminal under § 2339B. The court brushed aside this claim by pointing out that the statute “does not penalize the mere association with a foreign terrorist organization.” The Supreme Court embraced a finding by the Ninth Circuit Court of Appeals that § 2339B did not prohibit membership in a designated terrorist organization or the vigorous support and promotion of the political goals of the group. The high court concluded its opinion, written by Chief Justice John Roberts, with the following historical admonition:

“The Preamble to the Constitution proclaims that the people of the United States ordained and established that charter of government in part to ‘provide for the common defense.’ As Madison explained, ‘[s]ecurity against foreign danger is … an avowed and essential object of the American Union.’ We hold that, in regulating the particular forms of support that plaintiffs seek to provide to foreign terrorist organizations, Congress has pursued that objective consistent with the limitations of the First and Fifth Amendments.”

In his dissent, joined by Justices Ginsburg and Sotomayor, Justice Stephen Breyer stated:

In my view, the Government has not made the strong showing necessary to justify under the First Amendment the criminal prosecution of those who engage in [the training of organizations to use nonviolent means to achieve their goals]. We cannot avoid the constitutional significance of these facts on the basis that some of this speech takes place outside the United States and is directed at foreign governments, for the activities also involve advocacy in this country directed to our government and its policies.

Foreign terrorists have accomplished far more than they intended. They forced this nation to not only combat acts of terrorism but to alter its constitutional landscape in an effort to prevent those terrible deeds. A fight is confronted, it is waged on terms set by the combatants, and it is won or lost on a mixture of skill and misfortune. But the prevention of a fight entails suspicion and paranoia because you never know who the enemy really is. Madison talked about “foreign danger” but purely from a military point of view—a potential invading force. That is not the “danger” presented by terrorism: it could be a foreign national or the neighbor next door. When everyone is a potential suspect, freedom of speech and association are inevitably restricted.

In New York, Tennessee, and a host of other communities, protests are cropping up against Muslims building their places of worship. Our fear and paranoia has grown to the extent that we see “foreign danger” in other peoples’ religion—people who have been our good neighbors for years. This same fear has led our citizenry to abrogate many of its traditionally cherished, and constitutionally protected, freedoms; privacy, searches, associations and speech.

So do we really need statutes like § 2339B? Probably so, but they should be narrowly tailored and very specific in defining the actions they seek to prevent. Unfortunately, with the creation of such statutes, and our fear-inspired acquiescence, we become less of a free nation, less of a free people. And while this drastic change may arguable be necessary for our safety and survival as a nation and a people, the bitter taste it leaves going down is not easy to accept. It is incumbent on groups like Humanitarian Law Project and the American Civil Liberties Union to stand up when they feel the government has over-stepped its constitutionally imposed bounds, otherwise a slippery slope to self imposed fascism is just around the corner. While we might not agree with each stand these groups take, we salute their fortitude and courage to stand.

Located in the horn of Africa, Ethiopia is the largest country in the Easter sub-region next to the Republic of Sudan of over 1.14 million square kilometers of land area about 13.2 million hector of 12% is cultivable, 40% is pastureland and this together with seasonal rainfall and abundant water resource has made agriculture the mainstay of the country’s economy. Due to this Ethiopians, engaged on foreign trade, export are mainly dominated by agricultural products such as coffee, oilseeds & pulses, hides and skin and in manufacturing, textile and garments leather and leather products also make sizable contribution to export.
Current data shows that investment is rising and the economy is growing at an unprecedented rate and tangible progress in Ethiopia. Moreover, both local and foreign investors are in venture in business now. The number of tourist arrival is also increasing at significant rate.

Types of Business Entities
Ethiopian law recognizes six different kinds of business entities. Therefore in Ethiopia business can be carried out in one of the following six different kinds of business forms. These are Sole Proprietorships, Partnership, General Partnerships, Limited Partnerships, Share Companies, Private Limited Companies, and Joint Ventures. Let’s have a brief look at them.

Share Company
A share Company will be established as per the 1960 Commercial Code of Ethiopia and the Ethiopian Investment Laws. The purpose of the company is free but there are a few sectors limited to citizens and the public sector. The minimum number of founders of a share company is five in number. The company can be formed with a minimum capital of ETB 50,000. The share company liability is limited to the assets of the company. The cost of its incorporation is less than USD 150. Formal registration or investment certificate is required. The company’s name shall be as agreed among the share holders and shall not offend public policy nor the rights of third parties and shall include the words “share company”. Memorandum of understanding and articles of association is required. Full subscription of capital, in addition to at least 25% of the capital paid up capital. Contribution of share holder’s equity and sole of shares plus other financial sources is necessary.
Income tax of share holders is based on the amount of divides with progressive rate.

Private limited company
It will be established as per The 1960 Commercial Code of Ethiopia and the Ethiopian Investment Laws. The purpose of the company is free but there are a few sectors limited to citizens and the public sector. The minimum and maximum number of members of a private limited company is two and fifty respectively. The minimum capital requirement to establish a Private limited company is ETB 15,000. The Liability of a Private Limited Company is limited to the company’s assets. The cost of incorporation for private limited company is not less than SOUSD.

The company name shall be as agreed but with disclosing the nature of business in it and shall include the words “private limited company”

Moreover duly signed memorandum of understanding and Article of association is required.
The sources of credit of a private limited company is from contribution of share holders equity and other financial sources income tax of share holders based on amount of dividends with progressive tax rate.

Joint Venture
A foreign investor may team up with a domestic investor or company for a joint investment, usually in the form of partnership or private limited company or share company. Under the investment proc.282/2002 a minimum capital of USD 60,000, except in consultancy service and publishing, is required from a foreign investor who intends to enter into a joint venture partnership with a domestic investor. There is no restriction at all in share ownership in a joint venture. A foreign investor who wishes to invest in partnership with domestic investors in areas of engineering, architecture, accounting and auditing services, project studies or business and management consultancy services or business and management consultancy services or publishing is required to invest USD 25.000 only per project. The foreign partner can satisfy this minimum equity capital either in cash and /or in kind.

Company Registration
All foreign companies intending to invest in Ethiopia are required by law to get registered in accordance with the commercial code of Ethiopia. The Ethiopian Investment Commission, representing the Ethiopian Ministry of Trade and Industry, carries out such company registration.

Opening a Branch Office of an Overseas Company
An overseas company wishing to invest through a branch office is required to submit the essential documents to the Ethiopian Investment Commission. Foreign companies wishing to open liaison offices must submit their application to the Ministry Of Trade And Industry.

Even though, in Ethiopia, land is a public property both rural and urban lands are made available to investors at competitive price on a lease hold bases which run from 50-99 years.
Visas are required for all for all foreign visitors to Ethiopian with the exception of nationals of Kenya and the Sudan. Visas may be available before departure or upon arrival. The main department for immigration and nationality affairs issues a residence permit to a foreign investor, upon submission of an investment permit issued in his/her name.

Investment opportunities
Ethiopian’s investment code provides incentives for development related investments reduces capital entry requirements for joint ventures , permits the duty free entry of capital goods ( except computers and vehicles), opens the real estate sector to expatriate investors, extends the losses carried forward provision , cuts the capital gains tax from 40 -10% and gives priority to investors in obtaining land for lease.
The exclusive right to generate and supply electricity other than from hydropower, above 25 megawatts, air transport service using aircraft with a seating capacity of more than 20 passengers or with a cargo capacity greater than 2700 kms, rail transport services or telecommunication services including the internet only in partnership with the government are the sectors that are reserved for the government of Ethiopia.

Foreign investment in Ethiopia
A foreign investor is allowed to invest in all areas of investment except those reserved for the government, Ethiopian nationals and other domestic investors. Foreign investment in Ethiopia is regulated as described in proclamation number 280/2002. According to this proclamation a foreign investor who intends to invest on his /her own, except in consultancy services and publishing is requires investing not less than USD 100,000 in cash and/or in kind as an initial investment capital per project. The minimum capital regard of a wholly foreign investor investing in consultancy, Services or publishing USD 50,000 which may be in cash and/or in kind. a foreign investor reinvesting his/her profit or dividends or exporting 75% of his /her out puts ,however, is not required to allocate minimum capital.

Investment Incentives
To encourage private investment and promote the inflow of foreign capital and technology into Ethiopian, the following incentives are granted to both domestic and foreign investors engaged in areas eligible for investment incentives.

1. Customs Import Duty
One hundred 100% exemption from the payment of import customs duties and other taxes levied on imports is granted to an investor to import all investment capital goods such as plant machinery and equipment, construction materials as well as spare parts worth up to 15% of the value of the imported investment of capital goods provided that goods are not produced locally in comparable quantity, quality and price. Exemptions from customs duties or other taxes levied on imports are granted for raw materials nece3ssory for the production of export goods.

2. Exemption From Payment Of Export Customs Duties
Ethiopian products and services destined for export are exempted from the payment of any export tax and other taxes levied on exports.

3. Income Tax Holidays
Any income derived from an approved new manufacturing and agro-industry investment or investment made in agriculture shall be exempted from the payment of income tax. For the period ranging from 2-6 years profit tax holiday is granted subject to council of ministers regulation Number 8412003 issued on the bases investment proclamation No 280/2002 moreover, the council of Ministers may also award profit tax holiday for greater than seven years. The period of exemption from profit tax begins from the date of the commencement of production or provision of services as the case may be.

4. Loss carried forward
Business enterprises that suffer losses during the tax holiday period can carry forward such losses for half of the income tax exemption period following the expiry of the exemption period.
Taxation
The principal taxes currently in place are the Profit Tax; Turn Over Tax/Value-Added Tax (VAT), Excise Tax, Customs Duty and Income Tax from Employment. The corporate income tax (tax on profit) in Ethiopia is 30% percent.

Principal Taxes Tax rate
Corporate income tax 30%
Turnover Tax (TOT) 2% and 10%
Excise tax 10% up to 100%
Customs duties 0% up to 35%
Income tax from Employment 0% up to 35%
Export tax ---------------------
With holding taxes 2 %
Value added tax 15%

Tax treaties
Ethiopia has concluded tax treaties with a number of countries and is also ready to conclude similar treaties with other countries for the purpose of a voidance of double taxation.

Patents and Trademarks
Regulations for the registration of patents and trademarks exist in Ethiopia.

There are many different types of weapon offenses that a person can be charged with including knives, guns, bats, tasers, etc.. The potential consequences will vary depending on the weapon an individual is charged with possessing, the circumstances surrounding why he or she possessed it, and in what manner it was being used, .
ANY item can be used as a weapon. If someone hits another person with a bag of feathers without the consent of the other person, that can be considered a weapon used in the commission of an assault.

To find an individual guilty of possession of a weapon, the Crown must prove that the item seized was in fact a weapon. In the case of firearms, it must be a barreled weapon from which any shot, bullet or other projectile can be discharged and that is capable of causing serious bodily injury or death to a person.
The Crown must also prove that the individual charged had control of the firearm and had knowledge that the item was a firearm. This is not always as easy to prove as it sounds. In this case, you were charged because the police may not know whose firearm it was and so they charged everyone in the car. For this reason you should consult a lawyer to discuss your case.

The type of sentence a person can receive for a weapon offense depends on a myriad of factors. Some weapon offenses can carry a maximum penalty of life in prison. Others carry minimum sentences (which means that if the offense has a minimum sentence of one year, a judge must sentence an individual to at least one year in jail). Some of the factors considered include, but are not limited to:

i) the type of weapon (for example, weapons such as knives or uncommon weapons will generally result in lighter sentences than firearms or explosives.
ii) the manner in which the weapon was being possessed (was it simply in the person's pocket or was it being held for everyone to see)

iii) whether the person is convicted of possession, using the weapon, or possession for the purpose of trafficking or actually trafficking

iv) the criminal record of the person found guilty

v) the facts surrounding the case including whether there was a Charter violation

Many firearm related offenses have minimum sentences of three years and up depending on the firearm-related offense charged and whether the individual has any prior firearm related convictions.

Do want to know when you can validly terminate a contract of employment as per the Ethiopian Labor Law? If so here are the main points.

In Ethiopia the employment relationship between an employer and an employee is governed by The Ethiopian Labor Proclamation 377/2003. According to this proclamation the contract of employment may be terminated by the following different reasons.
1. By the initiation of the employer or worker,
2. In accordance with the provisions of the law,
3. By the collective agreement or by the agreement of the two parties.
This article is basically concerned on discussing the basic grounds of termination under Ethiopian Labor Proclamation. According to the Ethiopian Labor Proclamation, a contract of employment may be the terminated on grounds connected with the worker’s conduct, skill, objective circumstances arising out of his work or the organizational or operational requirements of the undertaking.
Now we will observe the legal grounds that give the employer the opportunity to terminate an employment contract.

A. Termination of the contract of employment with out notice
A contract of employment shall be terminated without notice on the following grounds only. If any of the following things happen the employer is entitled to terminate the employment of a worker without being required to give the employee a notice period(i.e. from one to three months period based on the workers service period).
1. Repeated and unjustified tardiness despite warming to that effect,
2. Absence from the work without good cause for a period of five consecutive working days or ten working days in any period of one month or 30 working days in a year,
3. Deceitful or fraudulent conduct in carrying out his duties having regard to the gracing of the case,
4. Misappropriation of property or fund of the employer,
5. Producing a work output below the qualities and quantities agreed which, despite the potential of the worker is persistently,
6. Responsibility for brawls or quarrels at the work place,
7. Conviction for an offense where such conviction renders him incapable for the post which he holds,
8. Responsibility for causing damage intentionally or through gross negligence to any property of the employer or to another property which is directly connected with the work of the undertaking;
9. Intentionally commit in the place of work any act which is endangers life and property
10. Take away property from the work place with out the express authorization of the employer
11. Report for work in a state of intoxication
12. Except for HIV/AIDS/ test, refuse to submit himself for medical examination when required by law or by the employer for good causes.
13. Refuse to observe safety and accident prevention rules and to take the necessary safety precautions
14. Commission of other offenses stipulated in a collective agreement as grounds for terminating a contract of employment without notice.
15. Absence from work due to a sentence of imprisonment passed against the worker for more than 30 days;

Where an employer terminates a contract of employment because of the above reasons, he shall give written notice specifying the reasons for and the date of termination with ion 30 days

B. Termination Of Contract Of Employment With Notice
The following are sufficient grounds for the termination of a contract of employment with notice.
1. The worker’s manifested loss of capacity to perform the work to which he has been assigned or his lack of skill to continue his work,
2. If the worker, for reasons of health or disability, permanently, is unable to carry out his obligations under the contract of employment,
3. The worker’s unwillingness to move to a locality to which the undertaking moves,
4. When the post of the worker is canceled for good cause and the worker cannot be transferred to another post.
The notice of termination by the employer shall be handed to the worker in person. Where it is not possible to find the worker or he refuses to receive the notice, it shall be affixed on the notice board in the work place of the worker for ten consecutive days.

Period of Notice
Period of notice means the number of days the employer should give for the worker before the termination of the contract. This Period of notice ranges from one to three months based on the period of service of the worker.
1. One month in the case of a worker who has completed his probation and has a period of service not exceeding one year,
2. Two months in the case of a worker who has a period of service a above one year to nine years,
3. Three months in the case of a worker who has a period of service of more than nine years,
4. To months in the case of a worker who completed his probation and whose contract of employment is terminated due to reduction of work force.

C. Reduction of workers
The other ground of termination of an employment contract in Ethiopia is Reduction of Workers. Reduction of workers can be made when the following requirements are fulfilled.
1. Fall in demand for the products or services of the employment resulting in the reduction of the volume of the work and profit of the undertaking & there by resulting in the necessity of the reduction of the work force,
2. A decision to alter work methods or introduce new technology with a view to raise productivity resulting in the reduction of the work force,
3. Any event which entails direct and permanent cessation of the worker’s activities in part or in whole resulting in the necessity of a reduction of the work force.
If the above grounds occur,
1. A number of workers representing at least ten percent of the number of workers employed or,
2. In the case of an undertaking where the number of employees is 20-50 a reduction of workers affecting at least 5 employees over a continuous period of not less than 10 days can be made.
The employer in consultation with the trade union or its representative shall give priority of being staying in job, for those workers having higher rate of productivity and best skills.

In the case of equal skill and rate of productivity, the workers to be affected first by the reduction shall be in the following order.
1. Those having the shortest term of service in the undertaking,
2. Those who have fewer dependants,
3. Those who are disabled due to an employment related injury in undertaking,
4. Workers’ representatives,
5. Expectant mothers,

D. Termination by the worker
The other cause for terminating the contract of employment is termination by the worker himself. With out considering his period of service, any worker who has completed his probation period may be giving 30 days prior notice to the employer terminate his contract of employment.

According to Ethiopian family law Adoption can be described as an agreement that may be created between a person and a child or between government or private orphanages and the adopted child. This idea can be found at Article 180 and 192 of The Ethiopian Family Code stated respectively. As per the Ethiopian law of adoption the adopter is required to fulfill various requirements. These requirements vary from Ethiopian Adopters and foreigner Adopters. One of such requirements is the age of the adopter and the adoptee. According to the Ethiopian Family Law the adopter must attain the age of 25 years to adopt a child.

If the adopters are spouses, one of them is required to attain the age of 25 years. As to the age of the adoptee, any child whose age is less than 18 years and under guardianship may be adopted. If a private/government orphanage is taking care of the adoption process or handing over the child to the adopters, such orphanage is required to have sufficient information about the child, his/her identity, how they received him/her and the personal, social economical status of the adopter to the government authority to follow up the well being of children. According to the Ethiopian family law, the other basic requirement for an adoption agreement to be legally acceptable is the decision of the court validating the agreement. According to Article 194(1) of the Ethiopian Family Code, unless the Ethiopian Federal First Instance courts approve the adoption agreement, the adoption agreement will not have any legal effect.
The court, in approving or refusing the contract of adoption, will apply the common yardstick of protecting the best interest of the child. If the adopter is a foreigner, in addition to the above mentioned requirements, the court requires him/her to bring documents showing the adopter's economic, social and personal position, from the empowered authority to follow the well being of child. If the information provided by the authority is insufficient the court may order the authority for further investigation. It may also order another person or organization to provide relevant information.

Further the court will take special care about the mechanism of getting information about how the adopter will be handling. The adopter for all purposes is legally expected at least to take care of the child as his own. Here are the checklists of documents required by courts in deciding adoption cases, Requirements to Be Fulfilled by Ethiopian Adoptive Parents The documents to be submitted by the applicant from his/her permanent domicile should include:
1. Proof of economic status from a recognized source
2. Police clearance of applicant/s
3. Medical certificate from recognized hospitals, clinics etc.
4. Birth and marriage certificates
5. Two passport-size photographs of the prospective adoption parent/s

Requirements to Be Fulfilled By Foreign Adoptive Parents

The documents to be submitted by the applicant from his permanent domicile should include:
1. Proof of economic status from a recognized source
2. Police clearance of applicant/s
3. Medical certificate from recognized hospitals, clinics etc.
4. Home study report prepared by an authorized institution
5. Birth and marriage certificates
6. The Agency which does the psycho-social study and recommendation on applicants must be accepted by the concerned government body of the respected countries
7. A short statement as to why an Ethiopian child is preferred
8. Two passport-size photographs of the prospective adoptive parent/s,
9. “Obligation of Adoption or Social Welfare Agency” form must be forwarded together with the psychosocial study
10. Verification by the adoption agency on qualification for naturalization under the national law of the applicant
11. All the above-mentioned documents should be authenticated by the Ethiopian Embassy or Consulate
12. All the above-mentioned documents should be authenticated by the Ministry of Foreign Affairs in Ethiopia,

Child Support
Both parents have an obligation to support a child, regardless of whether the child was born during their marriage.

Determining Parentage
Questions regarding the parentage of a child may arise when one parent seeks to obtain child support from another person alleged to be the parent. If a person denies being the parent of a child, a parentage action (traditionally called a paternity action) may be brought to determine whether the person is in fact the parent of the child.

Genetic testing is commonly used to establish parentage. In some cases, however, genetic parentage may be neither necessary nor sufficient to establish parentage. An obligation to support a child may also arise in a non-parent where that person has, by their conduct, substituted themselves for the child’s parent and allowed the real parent(s) to rely on them to provide support for the child. This occurs most commonly where a stepparent seeks to prevent a former spouse and co-parent of the child from continuing an involvement in the child's life following the stepparent’s intermarriage with the child's other parent.
Actions for Child Support
An action for child support can:
• Be part of a divorce action
• Proceed independently of any action determining the status of the parents
• In many states, be ordered in the context of a domestic violence action

Amount of Child Support
The non-primary residential (or non-custodial) parent usually pays child support to the other parent. The amount of child support is usually determined in accordance with guidelines established by each state. These guidelines are based on the respective incomes of the parents. Under federal law, most states now require some form of periodic review of child support orders to make certain that they remain adequate in light of changes of life circumstances of the parents and child.

Termination of the Support Obligation
The obligation to provide child support can be terminated for the following reasons:
• When the child becomes an adult, which in most states is age 18.
• The death of either the child or the supporting parent. A few recent cases have continued the obligation of child support after the death of the parent on the parent's estate. This remains, at present, a minority view.
• The termination of the parent’s rights by virtue of the adoption of the child by another.
• The emancipation of the child prior to the usual age of adulthood. A child may be emancipated with court permission. However, this permission is sparingly granted and usually requires that the child be clearly self-supporting. Emancipation can also take place if the child marries, or enlists in the armed forces of the United States.

Continuation of the Support Obligation
The obligation to provide child support can be continued into adulthood for following reasons:
• The child's completion of high school if it is not unreasonably delayed.
• During the child's college education if that education is completed on a substantially full-time basis. Many states require that a parent support a child in higher education, including paying the expenses of such education, if it can reasonably be concluded that the parent would have provided such support to a child in a continuing marriage.

Enforcement of the Child Support Obligation
In situations where the parents reside in different states, the following acts provide mechanisms for enforcement for the home state of the child support recipient:
• Uniform Interstate Family Support Act (UIFSA)
• Uniform Reciprocal Enforcement of Support Act (URESA), predecessors to the UIFSA
• (RURESA), the revised successor to the URESA

These same acts, in most states, also provide means for the interstate enforcement of spousal support.

While there may be very good opportunities for investment in St Lucia, there are several points which must be considered when one is purchasing property as a foreign investor. This guide highlights the top five. 1 St Lucia’s Legal System is unique

St Lucia’s legal system can best be described as hybrid because it is influenced by both the English common law and French civil law. As a result, while St Lucia has a Civil Code, it also utilizes the common law in instances where the code is silent. This unique system may have legal consequences on your property purchase. For this reason, always obtain legal advice before formally entering into any commercial transaction.

2 Not all Estate Agents are created equal

It is common practice in St Lucia for property owners and developers to list their properties with estate agents. There are a wide variety of local and international agents who can advise you about investments available on island. To ensure you have a hassle free purchase, ensure you choose a reputable agent.
At the very least, the estate agent should be a member of the local real estate association. This association will have their own vetting procedures for membership as well as a code of conduct which the members will be required to follow. Dealing with members means you can lodge a complaint to the association if they act in an unethical or illegal manner.

While the estate agent will most likely represent the seller, you want to ensure that they will act in an ethical, legal and professional manner towards you as the buyer. Do not be afraid to ask the difficult questions to clarify the extent to which they will act in your best interest.
Always ask for key points to be sent to you in writing and carefully read all documents before signing. If you are in doubt, consult a lawyer.

3 The seller owes you no duty of disclosure

Very often you will inevitably establish a relationship either with the estate agent or seller of the property you wish to purchase. In circumstances such as these, it is easy to forget that you are engaging in a serious business transaction in which the estate agent or seller are technically your adversary.

While a good agent will make every effort to find a suitable property for you, their allegiance is normally to the seller particularly if there is an agreement between them. This will affect the extent to which the agent can act on your behalf.

Firstly, while the agent cannot lie to induce you into the deal, they are not obliged to freely volunteer information about the property. For example, they are not obliged to tell you about any defects in the building or if neighbors are excessively noisy. You therefore need to carry out sufficient due diligence including asking all the important questions about the property. Trying to file claims against agent or seller after a purchase will be costly and time consuming, especially if you are relying on their oral word.

Any important facts which you base your purchase on should be set out in writing and that if there are any issues which you are concerned about, obtain independent third party advice.

4 A license is required in order to purchase property in St Lucia

In order to purchase property in St Lucia, you will need to obtain an alien land holding license. This is a document from the government giving you permission to buy property even though you are not a national of St Lucia.

Buying property in St Lucia is fairly straightforward. Once you have entered into an agreement for sale with a seller on a particular property, you can apply for the necessary license. The license will only apply to the specific property. A separate license will be required to obtain any additional property.

The administrative charge for applying for the license is approximately US$1,850 (£970).
The application process requires you to provide proof of identity as well as other information about your background and financial standing. This includes:
1. Four (4) Passport sized photos
2. Certified copy of data pages of passport
3. Bank References
4. Short form Curriculum Vitae or Resume
5. Police Certificate of Good Character or Police Report
6. Full set of certified Fingerprints from a Police Station (Can be done in St Lucia)

Applications can take as quick as 6 weeks and as long as 6 months to process. It is dependent on the complexity of your particular circumstances and the speed with which the relevant government bodies deal with the application.

Once you have obtained an Alien’s License, you will need to complete the process by executing a Deed of Sale. A Deed of Sale is the legal document prepared and signed before a lawyer, which transfer the property from the seller’s name to your name. If you are securing funding and require a mortgage to be secured against the property, your lawyer will also have to prepare and execute a deed to register the mortgage against the property.

Transactions do not always go according to plan and it is not uncommon for the alien license process to take longer than anticipated. Time can be a major consideration particularly in relation to property purchases where financing has been obtained or agreements carry deadlines. Always ensure to factor in additional time when contracting with third parties so as to avoid potential financial consequences. For example, when signing an agreement for sale, ensure it enables you to extend the time for completion if you have not obtained the required license in time.

5 Lawyers are not obliged to carry professional indemnity insurance
You will require the services of a lawyer in order to purchase property. You should note that lawyers in St Lucia do not generally carry professional indemnity insurance. This means that carrying out background checks are critical. If you fail to choose a reputable, competent firm, you may risk losing on your investment.

At the very least you should carry out the following checks:
• Ensure your lawyer has a practicing certificate and is able to practice in St Lucia.
• Ask for a CV or company profile which sets out the qualifications and experience of the lawyer including the work they do and type of clients they represent.
• Get references and follow them up.
• If you are not confident about the firm’s reputability but are prepared to take the risk nevertheless, do not hand over any substantial sums of money or alternatively insist that it be held in a joint account. The setting up of a joint account may be costly and time consuming but will provide you with some degree of protection.
• Be wary of lawyers offering substantially reduced fees. The old adage ‘You get what you pay for applies.’ Most reputable firms will not substantially reduce their fees without reason or justification, as it ultimately affects the quality of the service they provide. Furthermore, for lawyers it is unethical to do so.

Indonesia has abundant natural resources and strategic location in the international water, a large number of populations, approximately 230 million people do have the potential and capability to support the investment climate. Indonesia has also made substantial progress in the field of democracy economic reforms and security over the last decade. Indonesia is welcoming foreign capital investors. Establishment of FDI Company
This writing will focused on the procedure of Establishment of FDI Company as one of the means available to conduct direct investment in Indonesia.

In Indonesia, the core of law that regulates FDI Company are Law No. 25 of 2007 regarding Capital Investment (hereinafter referred to as “Investment Law”), and Law No. 40 of 2007 regarding Limited Liability Company (hereinafter referred to as “Company Law”).
The first thing that shall be acknowledge by foreign prospective investors is whether the business field that they wished to conduct in Indonesia is 100% open for foreign capital ownership or closed, or open with requirements. Such determination can be found in Presidential Regulation of the Republic of Indonesia No. 36 Year 2010 regarding List of Business Fields Closed ad Open with Conditions to Investment (“negative investment list”).

In event the business field that wished to conduct is apparently open with requirement, for example there exist limitation of foreign capital ownership, and foreign investor shall have Indonesian citizen and/or legal entity as another capital ownership.

It bears to note what meant by establishment of FDI Company is establishment of Limited Liability Company (Perseroan Terbatas “PT”) (hereinafter referred to as “Company”). In line with Article 7 paragraph (1) of Company Law, a Company shall be established at minimum by 2 (two) shareholders.

The process that needs to be conducted for the establishment of FDI Company may be divided into 4 (four) stages. The following are the stages, along with its general information:

Stage of prior obtaining Legal Entity Status;

At the first stage, there are several documents to be obtained:
a. Approval of the intended name of the Company;
b. Approval of Investment Plan (named Registration of Investment);

This approval is considered to be temporary license.

c. Obtain Domicile Letter From the Local Government where the company’s office will be located;
d. Deed of Establishment of the Company (Notarial Deed);
e. Minister of Law and Human Rights Approval (“MOLHR Approval”).

As regulated under Article 7 paragraph (4) Company Law, the legal entity status is obtained by approval from the Minister of Law and Human Rights to the establishment of Company through Minister Decision. is related to the responsibility of legal acts conducted by the founder and the Company. Basically, prior the obtainment of Status of Legal Entity, prospective founder of Company who conducted legal acts shall be personally liable for the cause that may arise. It bears to note that pursuant to Article 14 paragraph (4) and (5) of Company Law, such act will bind the Company if at the latest 60 (sixty) days after Company becomes a legal entity, first general Meeting of Shareholders of Company expressly states acceptance of or assumption of all rights and obligations which arise from legal acts which were undertaken by prospective founders of their proxies.

Stage of after obtaining Legal Entity Status;

At the second stage, there are several documents to be obtained:

a. Opening Bank Account;
b. Obtain Taxpayer Registration Number (“NPWP”) from the Tax Office;

Stage of obtaining Principal License;

Investment Coordinating Board requires principal license for companies with business field that obtained fiscal facility and/or in the implementation of capital investment does require fiscal facility.

The fiscal facilities that provided are:

Import duty facility of import of machines;
Import duty facility of import of goods and materials;
Proposal to obtain facility on Income Tax of Corporate.

Stage of the Company is permitted to commercially produce/operate.

At the fourth stage a Company is required to obtain:

a. Specific License (depends on the business field of the Company);
b. Permanent Business License;

It is a license that shall be possessed by a Company to commercially conduct its production/operation both production of goods and services, as an implementation of the Registration/Principle License/Capital Investment Approval, unless otherwise governed by sectored Laws and Regulations. Thus in order words, when the Company is ready to prior commercially produce or operate its Business Activity, the Company shall possess Business License

c. Company Registration Certificate. Obligation of FDI Company

As one of the means in conducting direct investment, the FDI Company has obligations arise from the Investment Law, and also obligations under the Company Law for its form of Limited Liability Company.

Herewith are some of the obligations bear by the FDI Company:
Capital Investment Activity Report (Laporan Kegiatan Penanaman Modal “LKPM”):
Reports that shall be conveyed for Company that holds Principal License;
Reports that shall be conveyed for Company that holds Company Registration Certificate.

In order to obtain legal certainty that the establishment of FDI Company and the licenses obtained is in line with the prevailing laws and regulations of the Republic of Indonesia, it is highly recommended to have consultation with Indonesian lawyers.

Indonesia, as an archipelagic state, had ratified the International Convention on Maritime Liens and Mortgages 1993. As a continuance, it also ratifies the International Convention on Arrest of Ships 1999 (“Arrest of Ships Convention”). The purposes of such ratifications are to harmonize and to converge Indonesian Shipping Laws with the other Asian countries’ laws. Such harmonization will also automatically encourage creditors in providing fund for ship procurement. The ratification of the two international instruments brings a consequences that there shall be national legislation which conform those conventions. Indonesia subsequently enacted the Law Number 17 of 2008 regarding Maritime (“Indonesian Maritime Law”). This law serves as harmonization of the two international conventions as well as a gate to the new era of Maritime Law in Indonesia. This paper will focuses itself on the arrest of ship in Indonesia. This paper will be divided into 3 (three) parts. Part I will concentrate on Indonesian Maritime Law, specifically on provisions governing the arrest of ship. This part will also describe the requirements and mechanisms set forth in Indonesian Maritime Law to arrest ship/s. Part II will give the reader general overview of the Arrest of Ships Convention. An overview is deemed important to predict future regulation concerning arrest of ship in practice. This is since the Indonesian Government has not yet issued any enforcement regulation of Indonesian Maritime Law. Part III contains conclusion and recommendation that can be derived from previous parts. II. The Arrest of Ship on Indonesian Maritime Law Indonesian Maritime Law provides that arrest of ship shall be conducted through Court-mechanism. Such mechanism is conducted without filing a lawsuit against the owner of ship. Accordingly, based on Article 222 of Indonesian Maritime Law, Port master can only arrests ship based on written Court order. Such order can be issued based on 2 (two) reasons: a. The ship is connected with criminal matter; or b. The ship is connected with civil matter. In the event that the ship is connected with civil matter, a Court order is made based on a claim known as Maritime Claim. Such claim is conducted without file a lawsuit against the ship. The law also specifically mentions several conditions in which a Maritime Claim may arise. Maritime Claim is defined as a claim arising out of one or more of the following: (a) loss or damage caused by the operation of the ship; (b) loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship; (c) salvage operations or any salvage agreement, including, if applicable, special compensation relating to salvage operations in respect of a ship which by itself or its cargo threatened damage to the environment; (d) damage or threat of damage caused by the ship to the environment, coastline or related interests; measures taken to prevent, minimize, or remove such damage; compensation for such damage; costs of reasonable measures of reinstatement of the environment actually undertaken or to be undertaken; loss incurred or likely to be incurred by third parties in connection with such damage; and damage, costs, or loss of a similar nature to those identified in this subparagraph (d); (e) costs or expenses relating to the raising, removal, recovery, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship, and costs or expenses relating to the preservation of an abandoned ship and maintenance of its crew; (f) any agreement relating to the use or hire of the ship, whether contained in a charter party or otherwise; (g) any agreement relating to the carriage of goods or passengers on board the ship, whether contained in a charter party or otherwise; (h) loss of or damage to or in connection with goods (including luggage) carried on board the ship; (i) general average; (j) towage; (k) pilotage; (l) goods, materials, provisions, bunkers, equipment (including containers) supplied or services rendered to the ship for its operation, management, preservation or maintenance; (m) construction, reconstruction, repair, converting or equipping of the ship; (n) port, canal, dock, harbour and other waterway dues and charges; (o) wages and other sums due to the master, officers and other members of the ship's complement in respect of their employment on the ship, including costs of repatriation and social insurance contributions payable on their behalf; (p) disbursements incurred on behalf of the ship or its owners; (q) insurance premiums (including mutual insurance calls) in respect of the ship, payable by or on behalf of the ship owner or demise charterer; (r) any commissions, brokerages or agency fees payable in respect of the ship by or on behalf of the ship owner or demise charterer; (s) any dispute as to ownership or possession of the ship; (t) any dispute between co-owners of the ship as to the employment or earnings of the ship; (u) a mortgage or a "hypothèque" or a charge of the same nature on the ship; (v) any dispute arising out of a contract for the sale of the ship. In relation with these conditions, Indonesian Maritime Law provides that further mechanism regarding arrest of ship will be further regulated by a Minister Regulation. Unfortunately, until the present time, such regulation has not been issued by relevant authorities. As a form of compliance, the regulation will be made in accordance with the Arrest of Ships Convention. Therefore, it is necessary to conduct an overview towards the stated Convention. III. General Overview on Arrest of Ships Convention The Convention defines arrest as any detention or restriction on removal of a ship by order of a Court to secure a Maritime Claim. However, this does not include the seizure of a ship in execution or satisfaction of a judgment or other enforceable instrument. A ship may only be arrested in respect of a Maritime Claim. This means that there exists no other claim against the ship. A ship may be arrested or released from arrest only under the authority of a Court of State in which the arrest is effected. Arrest may be conducted for the purpose of obtaining security. In this vein, Arrest of Ships Convention provides flexibilities. Arrest can be made regardless the existence of a jurisdiction clause or arbitration clause in any relevant contract. The arrest can also be made even if such arrest is to be adjudicated in a State other than the State where the arrest is effected, or is to be arbitrated, or is to be adjudicated subject to the law of another State. Release from Arrest When it comes to the question of how a ship which is arrested can be released, Arrest of Ships Convention expressly provided that a ship shall be released when sufficient security has been provided in a satisfactory form. Nevertheless, this may not be applied in cases of dispute regarding ownership or possession of the ship and dispute between co-owners of the ship as to the employment or earnings of the ship. In these cases, the Court may permit the person in possession of the ship to continue trading the ship, upon such person providing sufficient security, or may otherwise deal with the operation of the ship during the period of the arrest. Satisfactory form means that there shall be an agreement or settlement proposal agreed by both parties. In the absence of such agreement, the Court has authority to determine the nature and the amount of satisfactory form. Nonetheless, such nature and amount shall not exceed the value of the arrested ship. Once the person responsible for the ship has provided sufficient security in satisfactory form, such person may at any time apply to the Court to have that security reduced, modified, or cancelled. Right of Re-arrest and Multiple Arrest Basically, a ship cannot be arrested subsequent to sufficient security given by the person responsible to secure same Maritime Claim. Nonetheless, this is not applicable in several situations. First, the nature or amount of security is inadequate; or second, the person who has already provided the security is not, or is unlikely to be, able to fulfill its obligations; or third, the arrested ship or the security provided was released upon the consent of the Claimant (person who raise Maritime Claim) acting on reasonable grounds; or because the Claimant cannot, by taking reasonable steps, prevent the release. Protection of Owners and Demise Charterers of the Arrested Ships To arrest a ship, one shall be careful in examining the grounds. This is since the Arrest of Ships Convention provides obligation for Claimant, who (1) has been conducting wrongful or unjustified arrest; or (2) excessive security actually have been demanded or provided, to provide security for any loss or damage arisen as a result of the arrest. The amount of such security shall be imposed and determined by the Court who issues the arrest. The Court also empowered to determine the amount of compensation for the loss or damage arisen from the above two conditions. IV. Conclusion Indonesian Maritime Law provides an easier process in arresting ship/s. The law also gives advantages for the Claimant who has suffered loss caused by the ship. The arrest of ship is now can be conducted without submitting lawsuit against the person responsible. This regime makes the process of arrest more efficient and effective. Efficient since the process of arrest will take less time comparing to file a lawsuit. Effective means that the arrest may be used to compel person responsible for the ship to pay or to provide security in order to secure its debt. This is conducted without waiting final and binding decision from the Court. To this end, Indonesian Government should have issued enforcement regulation concerning arrest of ship. This is to avoid uncertainty as well as to create clarity for all Courts in Indonesia. Court in Indonesia, currently, still applying old regime in which a Claimant shall submit a lawsuit before a ship could be arrested.