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NIMC_2013_Compromis

NIMC_2013_Compromis

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Published by Omar Ha-Redeye

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Published by: Omar Ha-Redeye on Mar 02, 2013
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07/19/2013

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 1
Niagara International Moot Court Competition2012-2013Canada (Applicant)v.United States (Respondent)The Case Concerning
“The Terrorist List”
 
Competition organizers
’ 
note: The
“ 
 facts
set forth below are purely fictional and are designed only for educational use in the context of the Niagara Moot Court Competition.
1. Founded in 1990, Hamoukar, LLC. (in Arabic, ) is a Syrian corporation, principally engaged in the manufacture and sale of surgical and other hospital supplies. Whileall of its factories are located in Syria, Hamoukar maintains sales offices and warehouses inEgypt, Iraq, Jordan, and Saudi Arabia. In fiscal year 2009, Hamoukar employed over 15,000workers in Syria and about 500 abroad, and reported sales in excess of US$150 million.2. Hamoukar 
s founder, president and chief executive officer is Mr. Hadi Kuzbari (
 
 
). Born in Damascus, Syria, in 1963, Kuzbari received a medical degree from theUniversity of Damascus and a Masters in Business Administration from Wilfrid Laurier University in Waterloo, Ontario. All equity shares of Hamoukar are owned by Kuzbari andmembers of his immediate family.
 
3. Founded in 1993, Purcell Operations Corporation (POCo) is an Ontario corporation, principally engaged in the sale of medical equipment to private hospitals and clinics. Purcell
sfounder and chief executive officer is Steven Purcell, a Canadian citizen, who was a friend andclassmate of Kuzbari at WLU; the two men have worked closely together since graduation.4. In 1995, POCo and Hamoukar entered a business arrangement whereby POCo sellsHamoukar-manufactured equipment to Canadian hospitals. Under this arrangement, Hamoukar receives 70 percent of the proceeds of any Hamoukar goods sold by POCo. Hamoukar bears theexpenses of shipping and importing the goods into Canada, while POCo bears expenses relatedto marketing and storage in Canada. The arrangement has been very profitable for bothcompanies; in 2005, POCo sold over Can$20 million of Hamoukar merchandise to Canadian purchasers.
 
 25. POCo stores its inventory
 – 
including Hamoukar-manufactured equipment
 – 
in leasedwarehouse space in three locations: one in Port Coquitlam, British Columbia; one in Sainte-Julie, Quebec; and one in Detroit, Michigan. POCo leases the facilities in its own name fromlocal owners under year-to-year leases.6. On October 21, 2006, the Al-Qaida and Taliban Sanctions Committee announced that ithad added Hamoukar, LLC, and Mr. Hadi Kuzbari to the consolidated list (Al-Qaida section) of the list of sanctioned individuals and entities associated with Al-Qaida established andmaintained pursuant to Security Council Resolution 1267 (1999) and subsequent resolutions (the
UN Sanctions List.
). Both Hamoukar and Kuzbari remain on the list to this date.7. According to the Committee
s official Narrative Summary of Reasons for Listing(subsequently made public pursuant to paragraph 19 of Security Council Resolution 1989(2011),
Hamoukar, LLC, had significant financial ties to Al-Qaida financier Wa
el Hamza Abdal-Fatah Julaidan (QI.J.79.02) and provided financial support to several Al-Qaidaassociated entities included on the [UN Sanctions List]. Hamoukar, LLC, was one of the principal for-profit corporations active in Syria and Egypt providing support for the Al-Qaida network. Hamoukar customarily received funds intended for Al-Qaida associatedentities in the form of fraudulent payments for goods and services, intermingled thesefunds with its own capital accounts, and then disbursed the funds to Al-Qaida associatedentities in the form of fraudulent payments for consulting services. In addition,Hamoukar routinely hired and employed individuals included on the [UN Sanctions List]under assumed names in order to facilitate their travel, ostensibly for business purposes,across international borders.
Hamoukar and its founder and CEO, Mr. Hadi Kuzbari, have provided financial,material, and/or technological support to the Al-Qaida network. Associated entitiesreceived funding from Hamoukar and used Hamoukar as a front for fundraising andoperational activities.
 8. On October 22, 2006, the U.S. Office of Foreign Assets Control announced that it hadadded Hadi Kuzbari and Hamoukar, LLC, to its Specially Designated Nationals (SDN) list.Pursuant to Executive Order 13224, this action had the effect of blocking all property andinterests in property of Kuzbari and Hamoukar 
that are in the United States, or that hereafter come within the possession or control of United States persons
and of prohibiting
anytransaction or dealing by United States persons or within the United States
in such blocked property. As of January 1, 2011, OFAC had received no reports of property or transactionsinvolving Kuzbari or Hamoukar.9. On October 23, 2006, the Office of the Superintendent of Financial Institutions Canadaissued a press release notifying Canadian financial institutions that Kuzbari and Hamoukar had been added to the UN Sanctions List, and directing all recipients to:
Freeze any assets of Kuzbari or Hamoukar in their possession or control;
 
 3
Report immediately to the Anti-Terrorist Financing Group of the Royal CanadianMounted Police (RCMP) and to the Financing Unit of the Canadian SecurityIntelligence Service (CSIS) any property of Hamoukar or Kuzbari in their  possession or control that has been frozen; and
Report monthly to the relevant regulator, which, in the case of federally regulatedfinancial institutions, is the Office of the Superintendent of Financial Institutions(OSFI) on the aggregated value of frozen property in its possession.
 10. Toronto-Dominion Bank, a federally-regulated Canadian bank which is headquartered inToronto, promptly reported that it held one account in the name of Hamoukar, LLC. It promptlyfroze the account, allowing neither deposits nor withdrawals from any of the accounts.Hamoukar and POCo accountants have explained that the account, which was opened in 1997,was used in connection with the long-standing Hamoukar/POCo sales arrangement. Once amonth, POCo would deposit Hamoukar 
s share of the proceeds of sales into the account;Hamoukar officials would then transfer most of the money to company accounts elsewhere in theworld, leaving some balance to pay for local expenses relating to customs and importation. Atthe time of the freezing of the account, it contained Can$35 million.11. On October 25, 2006, Public Safety Minister Stockwell Day announced that Canada haddesignated Hamoukar, LLC, as a terrorist group pursuant to the Criminal Code of Canada. In aPublic Safety Canada press release, it was explained:
The objective of the listing is to help combat terrorist activities, including impedingterrorist financing. For example, the listing prohibits all persons in Canada as well asevery Canadian abroad from knowingly dealing with assets owned or controlled by theHamoukar, LLC. In addition, it is an offence to knowingly participate in, contribute to,or facilitate certain activities of a listed entity. Other related offences are set out in theCriminal Code.
 12. At Mr. Purcell
s request, on October 27, 2006, POCo
s attorney contacted Public SafetyCanada. He described the Hamoukar/POCo sales arrangement, and explained that POCocurrently held approximately $25 million worth of inventory subject to the agreement in its threewarehouses. He then forwarded to Public Safety Canada, the RCMP, and the CSIS an itemizedlist of all inventory in POCo
s warehouses subject to the Hamoukar/POCo sales arrangement.13. On October 30, 2006, Purcell contacted Kuzbari and informed him that POCo wouldneed to terminate the Hamoukar/POCo sales arrangement. On advice of counsel
 – 
and withKuzbari
s permission
 – 
Purcell recorded the conversation. The transcript in part reads asfollows:
KUZBARI: What about my inventory that you already have? Canyou send it back to me?PURCELL: My counsel says no. That would be an illegal export.KUZBARI: Can you sell it, and then hold onto my share until thisall blows over?PURCELL: [laughing] Nope. I can
t sell it, I can
t use it,I can
t transfer you any proceeds. I can
t even destroyit.

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