usak yearbook of international politics and law 2009, volume 2

8/9/2019 USAK Yearbook of International Politics and Law 2009, Volume 2

1/550

86$.


2/550

3XEOLVKHGE\WKH86$.,QWHUQDWLRQDO6WUDWHJLF5HVHDUFK2UJDQL]DWLRQ

'LVFODLPHU7KHYLHZVH[SUHVVHGLQWKHDUWLFOHVUHFHQWGHYHORSPHQWVDQGRWKHUFRQWULEXWLRQVZKLFKDSSHDUVLQWKLV


3/550

86$.


4/550

(GLWRULDO$GYLVRU\%RDUG

,Q$OSKDEHWLFDO2UGHU

5DILV$%$=29&HQWUHIRU6RFLDO5HVHDUFKWKH1DWLRQDO$FDGHP\RI6FLHQFHRI.\UJ\]VWDQ.\UJ\]VWDQ)LUG|YVL\\H$+0('29$$FDGHP\RI6WDWH$GPLQLVWUDWLRQ$]HUEDLMDQ3QDU$.d$/,0LGGOH(DVW7HFKQLFDO8QLYHUVLW\6KLULQ$.,1(58QLYHUVLW\RI/RQGRQ62$68.


5/550

*UHJRU\*/($6218QLYHUVLW\RI1HZ0H[LFR86$0HKUGDG+$*+$


6/550

5HJLRQDO5HSUHVHQWDWLYHV

,Q$OSKDEHWLFDO2UGHU

8QLWHG.LQJGRP'DPOD$5$68QLYHUVLW\RI/RQGRQ.LQJV&ROOHJH

.D]DNKVWDQ%DKWL\DU1XUXPRY$6,/.$129d$O)DUDEL.D]DNL6WDWH8QLYHUVLW\7KH1HWKHUODQGV1HUPLQ$


7/550

3UHIDFH

$OWKRXJK WKH86$. ,QWHUQDWLRQDO6WUDWHJLF 5HVHDUFK2UJDQL]DWLRQLV D\RXQJWKLQNWDQNLWKDVEHFRPHRQHRIWKHOHDGLQJRUJDQL]DWLRQVRI7XUNH\

ZLWKLQ RQO\IRXU\HDUV0RUHRYHU86$. KDVDOVREHFRPH DQRUJDQL]DWLRQZKLFKLV VHOHFWLYHFRQILGHQWDQGXQELDVHGLQIRUPDWLRQVRXUFHIRUGHFLVLRQPDNHUVLQZLGHUDQJHDUHDVVXFKDV7XUNLVK)RUHLJQ3ROLF\7XUNH\VUHODWLRQVZLWK(XURSH0LGGOH(DVW&HQWUDO$VLDDQGWKH86)RULQVWDQFHLWLVZRUWK\FRQVLGHULQJWKDW7XUNH\VILJKWDJDLQVWWHUURULVPZLWKLQODVWIRXU\HDUVFDQQRWEHZULWWHQZLWKRXWUHIHUULQJ86$.

86$. GLG QRW RQO\ VLJQLILFDQWO\ DIIHFWHG GHFLVLRQ PDNHUV EXW DOVRXQLYHUVLWLHV PHGLD DQG EXVLQHVV FLUFOHV5HJDUGLQJ WR WKLV PRVW UHJLRQDODQGJOREDOSRZHUVLQWHUHVWHGLQ7XUNH\DQGDOVRLWVUHJLRQEHQHILWHGIURPWKHSURGXFWVDFWLYLWLHVDQGSXEOLFDWLRQVRI86$.$WWKHHQGRIIRXU\HDUV86$.UHDFKHGWRDPRUHVWURQJDQGHIIHFWLYHOHYHOZLWKLWVIXOOWLPHVWDIIDQGRYHUH[SHUWVDQGDFDGHPLFLDQV

m86$.


8/550

CONTENTS

Articles

,QIRUPDWLRQ6RFLHWLHV1HZ7HUURULVP,WV,PSDFWRQ,QWHUQDWLRQDO3ROLWLFV

0HOWHP0)7/(5%$&

6HFXULW\DQG*OREDOL]DWLRQLQWKH&RQWH[WRI,QWHUQDWLRQDO

7HUURULVP

1LOIHU.$5$&$68/8

:DURQ7HUURULQWKH86DQG8.$Q(YDOXDWLRQZLWK5HJDUGWR&LYLO/LEHUWLHV

7XED785$1

3HQGXOXP6ZLQJVLQ EHWZHHQ&LYLO 5LJKWV DQG 6HFXULW\ (83ROLFLHVDJDLQVW7HUURULVPLQ/LJKWRIWKH315&DVH

0HKPHW=&$1r)DWPD


9/550

7KH,&-(PSLULFDO)LQGLQJVDERXWLWV3HUIRUPDQFHDQG5HFRPPHQGDWLRQVIRUDQ,PSURYHPHQWRILWV(IILFLHQF\

(UZLQ0//(53DWULFLD6&+1(,'(5

$Q2YHUYLHZRIWKH,&&&RPSOHPHQWDULW\5HJLPH

'UDJDQD5$'26$9/-(9,&

7KH&XOWXUHRI5HVWUDLQWRUWKH4XHVWIRU1RUPDOLW\*HUPDQ)RUHLJQDQG6HFXULW\

0XUDW*/

7KH&RQFHSWRI&RQFHUWHG3UDFWLFHDQGLWV6FRSHIURPWKH3HUVSHFWLYHRI7XUNLVKDQG(XURSHDQ&RPSHWLWLRQ/DZ

0HWLQ72382/8

(QMR\DEOH5LJKWVRI7XUNV:KR/LYH,Q%XOJDULDRU5HWXUQHGWR7XUNH\LQ(86RFLDO6HFXULW\/DZ

.DPXUDQ5(%(5%DU='$/

7KH3UHYHQWLYH'LSORPDF\&RQIOLFW3UHYHQWLRQDQG(WKQLF&RQIOLFWVLQWKH%ODFN6HD5HJLRQ7KH&DVHRIWKH&ULPHDQ7DWDUV

GLO3HPEH=05/6H]DL=(/.

5HGXFLQJ9LROHQFH$SSO\LQJWKH+XPDQ1HHGV7KHRU\WRWKH&RQIOLFWLQ&KHFKQ\D

+DYYD..

,QWURGXFLQJ0XOWL(WKQLF3ROLFLQJLQ0DFHGRQLD

7KH5ROHRIWKH26&(

$OL'.&

%RVQLDWKH%DONDQV(XURSHDQG$PHULFD

7LPHR(XURSHRVHWGRQDIHUHQWHV

']HPDO62.2/29,&


10/550

7KH:HVW5XVVLDDQG&KLQDLQ&HQWUDO$VLD

:KDW.LQGRIJDPHLVEHLQJSOD\HGLQWKHUHJLRQ"

,JRU725%$.29

(FRQRPLFDQG6HFXULW\9DOXHVRI&DVSLDQ(QHUJ\IRU

$]HUEDLMDQ

*QHU=.$1

7ULEDO&RQQHFWLRQVZLWKLQWKH3ROLWLFDO3URFHVVHV7KH&DVHRI.\UJ\]KVWDQ

6HLOg5$=

5XVVLDV5HODWLRQVZLWK*HRUJLDZLWKLQWKH&RQWH[WRI7KH5XVVLDQ1DWLRQDO,QWHUHVWVWRZDUGVWKH6RXWK&DXFDVXVLQWKH3RVW6RYLHW(UD

PHU.2&$0$1

7KH 1H[XV EHWZHHQ (XURSHDQ 6HFXULW\ DQG 'HPRFUDWL]DWLRQ DQG WKH

0HGLWHUUDQHDQ0XVOLP6WDWHV'HPRFUDF\%RQSRXUO2ULHQW $OL5HVXO868/

&RQVWUXFWLYLVPDQG,GHQWLW\)RUPDWLRQ$Q,QWHUDFWLYH

$SSURDFK


11/550

Discussion Platform

&RPEDWDJDLQVW5HOLJLRQLVW7HUURULVP

/HVVRQVIURPWKH7XUNLVK&DVH

6HGDW/$d,1(5

&ULWHULRQ5HIHUHQFHIRU'73'HPRFUDF\RU7HUURULVP"

KVDQ%$/

'73SUR.XUGLVK3DUW\6XFFHHGLQ7XUNH\"

KVDQ%$/

(87XUNH\&\SUXV7ULDQJOH3ROLWLFVRI7HQVLRQ

0HKPHWg=&$1

7KH(8DQG,VRODWLQJ$UPHQLD

)DWPD


12/550

86,QWHOOLJHQFH5HSRUWVDQG%LJ4XHVWLRQ0DUNV

$U]X&(/$/)(5(.1&

,V'LDORJXH3RVVLEOHIRU8QLWHG6WDWHVDQG,UDQ"

$U]X&(/$/)(5(.1&

5XVVLDQ([SHGLWLRQ7R7KH1RUWK3ROH$QG(QHUJ\3ROLF\

,V7KHUH$Q\/LQN"

5RYVKDQ,%5$+,029

$IWHUWKH(QGRIWKH.RVRYR6WDWXV1HJRWLDWLRQ

:D\WRWKH3HDFHIXO'LVVROXWLRQ

0LU]HW08-(=,129,&

*HRUJLDQ'HPRFUDWL]DWLRQ3URFHVVDQGWKH/DWHVW

'HYHORSPHQWV

+DVDQ6HOLPg=(57(0

7KH5LVLQJ6WDURI&HQWUDO$VLD.D]DNKVWDQ

+DVDQ6HOLPg=(57(0

$ERXWWKH$XWKRUV

,QGH[


13/550

8 6 $ . < ( $ 5 % 2 2 .

9RO


14/550

,1)250$7,2162&,(7,(61(:7(5525,60

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

ZKHUHWKHVWDWHLVFRQFHSWXDOL]HGDVVWLOOVWURQJDQGFDSDEOHRIVXUYLYLQJE\WUDQVIRUPLQJ LWV SRZHU DQG FDSDFLWLHV LQ RUGHU WR GHDO ZLWK WKH FKDOOHQJHVFRPLQJIURPLQIRUPDWLRQVRFLHWLHV

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

,QWHUQDWLRQDO6WXGLHV4XDUWHUO\9ROQR-XQHS -RVHSK 1\H 7KH ,QIRUPDWLRQ 5HYROXWLRQ DQG WKH 3DUDGR[ RI $PHULFDQ 3RZHU

$PHULFDQ 6RFLHW\RI ,QWHUQDWLRQDO /DZ3URFHHGLQJV RIWKH $QQXDO 0HHWLQJ:DVKLQJWRQ'&$SULOS

0RQURH(3ULFH0HGLDDQG6RYHUHLJQW\7KH*OREDOLQIRUPDWLRQUHYROXWLRQ &DPEULGJH0,73UHVV

-LP $\UHV )URP WKH 6WUHHWV WR WKH ,QWHUQHW 7KH &\EHU 'LIIXVLRQ RI &RQWHQWLRQ$QQDOVRIWKH$PHULFDQ$FDGHP\RI3ROLWLFDODQG6RFLDO6FLHQFHVYRO1RYHPEHUSS


15/550

86$.


16/550

,1)250$7,2162&,(7,(61(:7(5525,60

XQZLOOLQJO\ WKH LQIRUPDWLRQ VRFLHWLHV EHFRPH WKH PDLQ WRRO LQGHPRQVWUDWLQJVWDWHVLQFDSDFLW\LQGHDOLQJZLWKWKHQHZWKUHDWV

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

WKH %ULWLVK 'HIHQFH 0LQLVWHU -RKQ 5HLG VXJJHVWHG WR UHYLVH WKH *HQHYDFRQYHQWLRQV RQ ZDU , EHOLHYH ZH QHHG WR FRQVLGHU ZKHWKHU ZHWKHLQWHUQDWLRQDO FRPPXQLW\ LQ LWV ZLGHVW VHQVHQHHG WR UHH[DPLQH WKHVH&RQYHQWLRQVLIZHGRQRWWKHQZHULVNFRQWLQXLQJWRILJKWDVWFHQWXU\FRQIOLFWZLWKWKFHQWXU\UXOHV

7KHULVNRIILJKWLQJZLWKD VWFHQWXU\FRQIOLFWEDVHGRQWKFHQWXU\UXOHV DQG WKHRULHV KDV EHFRPH PRVW DSSDUHQW ZLWK 6HSWHPEHU 7KHDWWDFNVDJDLQVWWKH86$DOHUWHGWKHZRUOGWKDWDQHZW\SHRIZDUIDUHKDVHPHUJHGDQGWKH86PLOLWDU\FDSDELOLWLHVGLGQRWSURWHFWWKHPDJDLQVWDWWDFNV SDUWLFXODUO\ EHFDXVH WKHVH DWWDFNV ZHUH RUJDQL]HG WR XVH WKHLQWHUQDOG\QDPLFVZLWKLQWKH$PHULFDQVRFLHW\7KHDWWDFNVLQ/RQGRQLQ-XO\LQ0DGULGRQ0DUFKDQGLQ,VWDQEXORQ1RYHPEHU

DQGZHUHDOVRLQWKHVDPHUHDOP7KHVHDWWDFNVZHUHDOVRVLPLODULQWKHLUPHWKRGVZKHUHWKHWHUURULVWVXVHGFHOOSKRQHVWRGHWRQDWHWKHH[SORVLYHV 7KXV WKH QHZWHUURULVPUHOLHG RQ WKH WHFKQRORJLFDO FKDQJHVWKDW ZHUH GHYHORSHG ZLWKLQ WKH SUHPLVHV RI LQIRUPDWLRQ UHYROXWLRQ WKDW

ZHUHWKHQXVHGDVZHDSRQVE\WHUURULVWV,QWHUHVWLQJO\LWZDVWKURXJKDFHOOSKRQHWKDWZDVIRXQGLQRQHRIWKHEDJVWKDWIDLOHGWRH[SORGHGXULQJWKH 0DGULG DWWDFNV WKDW WKH 6SDQLVK SROLFH ZDV DEOH WR WUDFNGRZQ WKHDWWDFNHUVFRXSOHRIZHHNVODWHU

:KDW LV SDUWLFXODUO\ GLIIHUHQW LQ WKH QHZ WHUURULVP LV WKDW WHUURULVPFRQGXFWHG E\ JURXSV OLNH $O4XHGD GLIIHUV IURP WUDGLWLRQDO IRUPV RIWHUURULVPLQWHUPVRIWKHLUWUDQVQDWLRQDOFKDUDFWHUDQGLQWKHLUWDUJHWVWKDWPRVWRIWKH(XURSHDQFRXQWULHVIDFHGLQWKHSDVW1HZWHUURULVPGRHVQRWDLPWRLQFUHDVHRQHVRZQSRZHURQWKH QHJRWLDWLQJWDEOHEXWWRGHVWUR\WKHRSSRQHQWE\LQWHQVHYLROHQFH

$IWHUWKH&ROG:DUWHUURUPXWDWHGIURPWKHORJLFRIGHWHUUHQFHEDVHGRQDQXFOHDUEDODQFHRIWHUURULQWRDQHZLPEDODQFHRIWHUURUEDVHGRQDPLPHWLF IHDU DQG DV\PPHWULFDO ZLOOLQJQHVV DQG FDSDFLW\ WR GHVWUR\ WKH

'DQLHO+HQQLQJHU:RQGHUODQGWK&HQWXU\5XOHVZLOOQRW:LQDVW&HQWXU\:DU

:DOO6WUHHW-RXUQDO$SULOS


17/550

86$.


18/550

,1)250$7,2162&,(7,(61(:7(5525,60

,17(51$7,21$/5(6758&785,1*$1'52/(2),17(51$7,21$/62&,(7,(6

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

ZKLFKLOOXVWUDWHVWKDWVWDWHEDVHGLQWHUDFWLRQVKDYHEHFRPHOHVVLPSRUWDQWLQ

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

7KH XVH RI IRUFH DJDLQVW $IJKDQLVWDQ LQ DQG ,UDT LQ ZHUHMXVWLILHGZLWKLQWKHJHQHUDOIUDPHZRUNRIZDUDJDLQVWWHUURULVP7KHZDULQ

$IJKDQLVWDQ2SHUDWLRQ(QGXULQJ)UHHGRPOHGWRWKHHOLPLQDWLRQRI7DOLEDQDQ H[WUHPH UHOLJLRXV JURXS IURP SRZHU DQG WKH UHVWRUDWLRQ RI PRGHUDWH

UXOHLQ$IJKDQLVWDQHYHQWKRXJKWKHPDLQDLPRIWKHZDUFDSWXULQJ2VDPH

7RP/DQVIRUGDQG-DFN&RYDUUXELDV2VDPDELQ/DGHQ5DGLFDO,VODPDQGWKH86$

LQ$PHULFDnV:DURQ7HUURU3DWULFN+D\GHQHWDOHGV$OGHUVKRW$VKJDWHS

5LFKDUG0DWWKHZDQG*HRUJH6KDPEDXJK7KH/LPLWVRI7HUURULVP$1HWZRUN 3HUVSHFWLYH,QWHUQDWLRQDO6WXGLHV5HYLHZYROS -1\HS


19/550

86$.


20/550

,1)250$7,2162&,(7,(61(:7(5525,60

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

ZLWK PDGFRZ GLVHDVH 7KH %ULWLVK PHGLD VXSSRUWLQJ WKH $PHULFDQSRVLWLRQEHJDQLWVDVVDXOWRQ)UDQFHE\DUJXLQJWKDW-DFTXHV&KLUDFLVD/H

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

7KLV LV VLPLODU WR WKH LPSDFW RI WKH LQIRUPDWLRQ VRFLHWLHV RQ 7XUNH\GXULQJWKH,UDTLFULVLV$WWKHHQGRI7XUNH\ZDVIDFHGZLWKDGHPDQGIURPWKH86$WRRSHQLWVEDVHVDQGWHUULWRU\IRU$PHULFDQWURRSVWRVWDJH

6DEDK7XUNLVK'DLO\1HZVSDSHU-DQXDU\ %%&QHZV2XWUDJHDWROG(XURSHUHPDUNV-DQXDU\ 7KH*XDUGLDQ%ULWLVK'DLO\1HZVSDSHU/RQGRQ)HEUXDU\ 7KH:DVKLQJWRQ3RVW)HEUXDU\ 7KH6XQ%ULWLVK'DLO\1HZVSDSHUDV UHSRUWHGE\+XUUL\HW7XUNLVK'DLO\1HZVSDSHU

)HEUXDU\ &KULVWRSKHU+LWFKHQV7KH:DOO6WUHHW-RXUQDO)HEUXDU\ 5REHUW 3XWQDP 'LSORPDF\ DQG GRPHVWLF SROLWLFV WKH ORJLF RI WZROHYHO JDPHV

,QWHUQDWLRQDO2UJDQL]DWLRQYROQRSS


21/550

86$.


22/550

,1)250$7,2162&,(7,(61(:7(5525,60

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

&21&/86,21

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

(TXDOO\LPSRUWDQWLQIRUPDWLRQVRFLHWLHVOHGWRWKHHPHUJHQFHRIDPDMRUFKDOOHQJHWRVWDWHDXWKRULW\DQGVRYHUHLJQW\E\LQWHQVLI\LQJWKHUROHSOD\HGE\QRQVWDWH DFWRUV LQ LQWHUQDWLRQDO SROLWLFV 8QIRUWXQDWHO\ WKLV UROH KDV QRWDOZD\VEHHQEHQLJQDVWHUURULVWQHWZRUNVHPHUJHGDVDQLPSRUWDQWSOD\HULQ

ZRUOG SROLWLFV 7KH LQFUHDVHG UROH SOD\HG E\ QRQVWDWH DFWRUV KDV LQ WXUQFUHDWHGQHZFKDOOHQJHVWRVWDWHDQGVWDWHFDSDELOLWLHV7KLVUHYHODWLRQFRXOG

HQDEOH XV WR FRQFOXGH WKDW WKH UROH SOD\HG E\ LQIRUPDWLRQ VRFLHWLHV LQWRGD\V LQWHUQDWLRQDO SROLWLFV WKHRUHWLFDOO\ FKDOOHQJHV WKH VWDWHFHQWULFH[SODQDWLRQVRILQWHUQDWLRQDOUHODWLRQV

0HOWHP0IWOHU%Do7XUNH\DQGWKH86$DWFURVVURDGV7KH,PSDFWRIWKH:DULQ

,UDT,QWHUQDWLRQDO-RXUQDOYROLVVXH:LQWHUSS


23/550

8 6 $ . < ( $ 5 % 2 2 .

9RO


24/550

6(&85,7


25/550

86$.


26/550

6(&85,7


27/550

86$.


28/550

6(&85,7


29/550

86$.


30/550

6(&85,7


31/550

86$.


32/550

6(&85,7


33/550

86$.


34/550

6(&85,7


35/550

86$.


36/550

6(&85,7


37/550

86$.


38/550

6(&85,7


39/550

86$.


40/550

6(&85,7


41/550

86$.


42/550

6(&85,7


43/550

8 6 $ . < ( $ 5 % 2 2 .

9RO


44/550

:$5217(5525,17+(8.$1'8.

EDVLFULJKWVRIWKHLUFRPSRQHQWVE\DGRSWLQJGHPRFUDWLFYDOXHVDQGVLJQLQJWR KXPDQ ULJKWV FRQYHQWLRQV )RU WKHVH UHDVRQV PHDVXUHV WDNHQ LQGHPRFUDWLF VWDWHV LQ WKH ZDU DJDLQVW WHUURULVP KDYH EHHQ FKRVHQ DV DGLVFXVVLRQWRSLFLQWKLVHVVD\

,QWKHZDUDJDLQVWWHUURUDIWHU6HSWHPEHUPDQ\VWDWHVLQWKHZRUOGWRRN PHDVXUHV DJDLQVW SRWHQWLDO WHUURU DWWDFNV RQ WKHLU VRLO 7KHUH ZHUHDOUHDG\DQWLWHUURUOHJLVODWLRQVLQVWDWHVOLNHWKH8.*HUPDQ\DQG7XUNH\

ZKLFK KDG IDFHG LQWHUQDO WHUURU WKUHDWV IRU PDQ\ \HDUV %XW ZKDWGLVWLQJXLVKHV WKH QHZ DQWLWHUURU PHDVXUHV LQ WKH 8. DQG 86 IURP WKHSUHYLRXV RQHV DUH ILUVW RI DOO WKDW WKH QHZ PHDVXUHV KDYH EHHQ WDNHQSULPDULO\ DJDLQVW LQWHUQDWLRQDO WHUURULVW JURXSV HVSHFLDOO\ DJDLQVW $O

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

DXWKRULWLHVWKHPVHOYHVEHOLHYHWKHLUDUJXPHQWVEHIRUHDFRXUWRIODZZLOOQRWEHHQRXJKWRLQFDUFHUDWHWKRVHSHUVRQV7KHPRWLYDWLRQEHKLQGWKHVHLQFHQWLYHV RI VWDWH DXWKRULWLHV FDQ EH VDLG WR GHULYH IURP VWDWHV

ZLOOLQJQHVVWR DGDSW WKHSUHFDXWLRQDU\SULQFLSOH RIHQYLURQPHQWDOODZWRWKHVRFLDOOLIHZKLFKLQWKHHQGDUJXDEO\ZLOOFDXVHPRUHHYLOWKDQJRRGXQOLNHLQWKHHQYLURQPHQWDOODZVSKHUH

7KHUHKDYHEHHQVRPHSHULRGVWKDWVWDWHVKDGWDNHQPHDVXUHVEDVHGRQH[DJJHUDWHG

SHUFHSWLRQRIWKHWHUURUWKUHDWDQGZLGHQHGWKHUHDVRQVIRUVXVSHFWLQJRILQGLYLGXDOVEHLQJWHUURULVWV)RUIXUWKHUGHWDLOVHHFKDSWHU,,,DQG,9

7KH SUHFDXWLRQDU\ SULQFLSOH HYROYHG LQ LQWHUQDWLRQDO HQYLURQPHQWDO ODZ 7KHSUHFDXWLRQDU\ SULQFLSOH SUHVXSSRVHV WDNLQJ SUHYHQWLYH PHDVXUHV LQ RUGHU WR DYRLGSUREDEOHHQYLURQPHQWDOGLVDVWHUVHYHQLIWKHUHLVDODFNRIIXOOVFLHQWLILFFHUWDLQW\7KHFUXFLDO SRLQW LV WKDW WKHUH PXVW EHWKUHDWVRI VHULRXV RU LUUHYHUVLEOH GDPDJH

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


45/550

86$.


46/550

:$5217(5525,17+(8.$1'8.

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

ZRXOGDOLHQDWHSHRSOHZLWKLWVFUXHOW\DQGWKXVKDYHQHJDWLYHLPSDFWVRQSRSXODU VXSSRUW WKDW UHYROXWLRQLVWV QHHG 2Q WKH RWKHU KDQG VWDWHVSROLFLHVFDQDOVRDOLHQDWHSHRSOHDQGGRPHVWLFLQWHUQDWLRQDOWHUURUFDQQRWEH GHIHDWHG PHUHO\ E\ PLOLWDU\ PHDQV XQOHVV RQH LV UHDG\ WR DFFHSW D3\UUKLF YLFWRU\ $V +RIIPDQQ SRLQWV RXW VWDWHV PXVW DOZD\V EHDULQWHUQDWLRQDOKXPDQULJKWVREOLJDWLRQVDQGKXPDQLWDULDQODZLQPLQGZKLOHILJKWLQJDJDLQVWWHUURULVPZKHUHUHVRUWHGWRIRUFHDQGZKHUHGHWDLQHHVDUHLQYROYHG

0RUHRYHU RQH VKRXOG DFFHSW WKH IDFW WKDW HLWKHU LQWHUQDWLRQDO RUGRPHVWLF WHUURULVWV KDYH DQ LQKHUHQW DGYDQWDJH 7KH\ FDQ DWWDFNDQ\ZKHUHDQ\WLPH$QG\RXFDQQRWSURWHFWHYHU\WKLQJHYHU\ZKHUHDOOWKH

$V&KRPVN\SXWLWWHUURULVPLVWKHZHDSRQRIWKHVWURQJEHFDXVHWKHLUWHUURUGRHV

QRW DWWUDFW DWWHQWLRQ DV RSSRVHG WR WKH ZHDNV 0RUHRYHU ZLWKLQ WKH DQWLWHUURUGLVFRXUVHWKHFUXHOPHDQVRIWKHZHDNMXVWLILHGPRUHKDUVKDQGGUDFRQLDQPHDVXUHVDJDLQVW LWVHOI ,Q RWKHU ZRUGV WKH ZHDSRQ RIWKH ZHDN ZDV WXUQHG DJDLQVW LWDQGUHQGHUHGWKHVWURQJHYHQPRUHSRZHUIXO6HH&KRPVN\LELG

0DMRU -DFNLH . &ODUN &KH *XHYDUD )XQGDPHQWDOV RI *XHUULOOD :DUIDUHDYDLODEOH DW KWWSZZZJOREDOVHFXULW\RUJPLOLWDU\OLEUDU\UHSRUW&-.KWP /DVWYLVLWHG

,ELG 6HH DOVR 0LFKDHO ,JQDWLHII 7KH /HVVHU (YLO 3ROLWLFDO (WKLFV LQ DQ $JH RI 7HUURU(GLQEXUJK(GLQEXUJK8QLYHUVLW\3UHVVS

%RWK XQGHU WHUURULVPDQGXQGHUKDUVKFRXQWHUWHUURUSROLFLHVSRSXODWLRQVVXIIHULQWKHHQG7KHVHLVVXHVDUHJRLQJWREHGLVFXVVHGLQWKHIROORZLQJFKDSWHUV

3DXO +RIIPDQQ+XPDQ5LJKWVDQG 7HUURULVP +54SSDW7KHVWDWXVDQGFRQGXFWRI*XDQWDQDPR%D\SULVRQHUVZLOOQRWEHHODERUDWHGLQWKLVHVVD\ $OWKRXJKWKHVH SULVRQHUVDUH NHSWLQFRPPXQLFDGR DQGEURXJKWNHSW WKHUHXQGHUTXHVWLRQDEOHFRQGLWLRQVWKHFRQWH[W RIWKLVHVVD\LVOLPLWHG ZLWKWKHZDURQWHUURUDQGGRPHVWLFOHJLVODWLRQVDQGWKHLUHIIHFWRQFHUWDLQQRQFLWL]HQVDQGFLWL]HQV

ZLWKUHJDUGWRFLYLOOLEHUWLHV)RUIXUWKHUGHWDLODERXW*XDQWDQDPR%D\SULVRQHUVVHH+RIIPDQQSSDQG


47/550

86$.


48/550

:$5217(5525,17+(8.$1'8.

PLJKWQRWEHHIIHFWLYHHQRXJKLQWKHILJKWDJDLQVWWHUURULVPEHFDXVHDV,JQDWLHIIHQXPHUDWHVWKHUHDUHVL[ W\SHV RI WHUURULVPDQG DOO RIWKHPUHTXLUHLWVRZQSROLWLFDOUHVSRQVHDQGDEURDGDQGJHQHUDOGHILQLWLRQRIWHQIDLOVWRDGGUHVVVSHFLDOQHHGV

,Q WKH ZDNH RI 6HSWHPEHU PDQ\ FRXQWULHV WLJKWHQHG WKH UHJXODWLRQVUHODWHGWRWKHLPPLJUDWLRQUHIXJHHDQGLQWHULRUVHFXULW\LVVXHV6RPHGUDFRQLDQPHDVXUHVUDLVHG TXHVWLRQV ZKHWKHU FLYLO OLEHUWLHV VKRXOG EH VDFULILFHG DW WKHH[SHQVHRIPRUHVHFXULW\1RZ,VKDOOORRNDWWKHPHDVXUHVWDNHQIRUFRPEDWLQJWHUURULVPDQGWKHLUHIIHFWVRQLQGLYLGXDOVOLEHUWLHVLQWKH86DQG8.

$17,7(55250($685(67$.(1,17+(86$1'8.

7KH86$3DWULRW$FW

6LQFHVKRFNDQGDZHLVWKHPDLQDLPRIWKHPRVWWHUURULVWDFWVZLWKPRUHRUOHVVGHYDVWDWLQJFLYLOLDQFDVXDOWLHVWDFNOLQJWHUURULVPQHFHVVLWDWHVSXUVXLQJWKHSUHYHQWLRQ RI WHUURULVP LQ WKH VHQVH WKDW WHUURULVW DFWV DUH DYHUWHG 7KLVSUHYHQWLYHDSSURDFKLVQRYHOLQLQWHUQDWLRQDOFULPLQDOODZZKLFKWUDGLWLRQDOO\GHDOV ZLWK FULPLQDO DFWV RQO\ DIWHU WKHLU RFFXUUHQFH DQG VHWV RXW UXOHV IRUSXQLVKLQJFULPHV)RUWKHSXUSRVHRISUHYHQWLRQVL[ZHHNVDIWHUWKH6HSWHPEHULQFLGHQWVWKH86HQDFWHGWKH3$75,27$FW LQWKHILJKWDJDLQVWWHUURULVP

$VWKH863UHVLGHQW%XVKDUWLFXODWHGWKHPDLQREMHFWLYHRIWKHQHZUXOHVVHWRXWLQWKH3$75,27$FWDUHWRKHOSODZHQIRUFHPHQWWRLGHQWLI\WRGLVPDQWOH

WRGLVUXSWDQGWRSXQLVKWHUURULVWVEHIRUHWKH\VWULNH 2QHRIWKHRWKHUDLPVRI WKH 3$75,27 $FW LV WR LPSURYH GRPHVWLFVHFXULW\ E\ FHQWUDOL]LQJ WKH ODZHQIRUFHPHQWDXWKRULW\LQWRWKH-XVWLFH'HSDUWPHQW$V&ROHFRQYH\VZLWKWKHKHOSRIWKLVQHZUHJXODWLRQVDERXWSHRSOHZHUHGHWDLQHGPRVWO\WKURXJKDGPLQLVWUDWLYH UDWKHU WKDQ FULPLQDO SURFHGXUHV DQG ODUJHO\ EHFDXVH RI WKHLUHWKQLFLGHQWLW\DIWHU7KHUHDVRQIRUZKLFKWKH86JRYHUQPHQWLQYRNHG

,JQDWLHIIRSFLWS 86$ 3$75,27 $FW LV DQ DEEUHYLDWLRQ IRU 8QLWLQJ DQG 6WUHQJWKHQLQJ $PHULFD E\

3URYLGLQJ $SSURSULDWH 7RROV 5HTXLUHG WR ,QWHUFHSW DQG 2EVWUXFW 7HUURULVP+HUHLQDIWHU3$75,27$FW

&ROH FULWLFL]HV WKH VKRUW WLPH WDNHQ IRU HQDFWLQJVXFK D FRPSUHKHQVLYH OHJLVODWLRQ'DYLG &ROH 7KHLU /LEHUWLHV 2XU 6HFXULW\ 'HPRFUDF\ DQG 'RXEOH 6WDQGDUGV,QWHUQDWLRQDO-RXUQDORI/HJDO,QIRUPDWLRQSSDWS

KWWSZZZOLIHDQGOLEHUW\JRYGRFVBUHSRUWBIURPBWKHBILHOGSGI S /DVWYLVLWHG

6KDZQ%R\QH7KH)XWXUHRI/LEHUDO'HPRFUDFLHVLQD7LPHRI7HUURU$&RPSDULVRQRIWKH,PSDFWRQ &LYLO/LEHUWLHVLQ WKH )HGHUDO5HSXEOLFRI*HUPDQ\DQGWKH8QLWHG6WDWHV 7XOVD-RXUQDORI&RPSDUDWLYHDQG,QWHUQDWLRQDO/DZSSDWS

'DYLG &ROH 7KH 1HZ 0F&DUWK\LVP 5HSHDWLQJ +LVWRU\ LQ WKH :DU RQ 7HUURULVP+DUYDUG &LYLO5LJKWV&LYLO /LEHUWLHV /DZ 5HYLHZ SS DW $YDLODEOHDW


49/550

86$.LQJ@ RU DGG>LQJ@ ODQJXDJH WR WKH H[LVWLQJ IHGHUDOVWDWXHV0DLQO\E\ DGGLQJ QHZ ODQJXDJHWRWKHSURYLVLRQVWKHDLP LVWRIDFLOLWDWHLQFRQQHFWLQJWKHGRWVE\HOLPLQDWLQJWKHEDUULHUVZKLFKXVHGWRKLQGHU FRRSHUDWLRQ DQG LQIRUPDWLRQ VKDULQJ DPRQJ VHSDUDWH DXWKRULWLHVUHVSRQVLEOH ZLWK WKH QDWLRQDO VHFXULW\ DV 6HFWLRQ RI WKH $FW QRZHQDEOHV$VVDLGLQWKHILUVWFKDSWHUHYHU\VWDWHKDVWKHULJKWWRGHVLJQDWHWKH QHFHVVDU\ VHFXULW\ UHJXODWLRQV IRU LWV QDWLRQDO VXUYLYDO DQG WKHUH LV

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

IURP WKLV VWDWHPHQW RQH FDQ LQIHU WKDW WKHVH VXVSHFWHG WHUURULVWV DUHFDSWXUHGZLWKRWKHUYLRODWLRQVUDWKHUWKDQWHUURULVWDFWVEXWZDQWHGWREHNHSWLQMDLOZLWKWKHDFFXVDWLRQRIEHLQJWHUURULVWVDVORQJDVSRVVLEOHDQG

ZLWKRXW WULDO 7KH RQO\ H[SODQDWLRQ IRU DYRLGLQJ WKHVXVSHFWV WKH ULJKW WRFRQWHVW WKH DOOHJDWLRQVEHIRUH FRXUWV FDQ EHWKH ODFNRIHYLGHQFH DJDLQVWWKHPIRUWKDWUHDVRQWKLVTXHVWLRQDEOHZD\LVFKRVHQ

KWWSZZZODZKDUYDUGHGXVWXGHQWVRUJVFUFOYROBFROHSKSIQ% /DVW YLVLWHG

&ROH7KH1HZ0F&DUWK\LVPLELGS -HIIUH\)$GGLFRWW/HJDODQG3ROLF\,PSOLFDWLRQVIRUD1HZ(UD7KH:DURQ7HUURU

7KH6FKRODU6W0DU\V/DZ5HYLHZRQ0LQRULW\,VVXHVSSDWS KWWSZZZOLIHDQGOLEHUW\JRYSDWULRWBRYHUYLHZBSYHUVLRQSGIS $GGLFRWRSFLWDW )RU WKH 86 $WWRUQH\ *HQHUDO -RKQ $VKFURIWV VWDWHPHQW VHH $QWKHD 5REHUWV

5LJKWLQJ :URQJV RU :URQJLQJ 5LJKWV" 7KH 8QLWHG 6WDWHV DQG +XPDQ 5LJKWV 3RVW6HSWHPEHUEJILSSDWSS

2QHFDQ DOVRFULWLFL]HWKLVVWDQFHEHFDXVH LWPHUHO\ZDUQV LPPLJUDQWV ,WDVVXPHVWHUURULVWVFDQRQO\EHURRWHGLQWKHLPPLJUDQWJURXSV7KLVDSSURDFKRYHUORRNVWKDWDOVR D QDWLYHERUQ FLWL]HQ FRXOG EH D WHUURULVW 7KHUHIRUH LW FDQ EH VHHQ DV DQH[SUHVVLRQ RI [HQRSKRELD DQG DV D GLVFULPLQDWLYH VWDQFH DJDLQVW WKH RWKHU RUGLIIHUHQW


50/550

:$5217(5525,17+(8.$1'8.

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

KWWSZZZFGWRUJVHFXULW\XVDSDWULRWFUVSGIS 7KHQHZUHJXODWLRQDOORZV,PPLJUDWLRQDQG1DWXUDOLVDWLRQ6HUYLFHWRKROGSHUVRQVIRU

KRXUVZLWKRXWFKDUJHDQG XQGHU HPHUJHQF\ RUH[WUDRUGLQDU\FLUFXPVWDQFHDQDGGLWLRQDOUHDVRQDEOHSHULRGRIWLPH)RUGHWDLOVHH5REHUWVRSFLWSS

0DUMRULH &RKQ +XPDQ 5LJKWV &DVXDOW\ RIWKH:DURQ 7HUURU7KRPDV-HIIHUVRQ/DZ5HYLHZSSDWS

6HFWLRQDXWKRUL]HVWKHJRYHUQPHQWWRLQWHUFHSWLQWHUQHWDFWLYLW\DQG6HFWLRQDOORZV WKH DXWKRULWLHV WRPRQLWRUSKRQHFDOOV ZLWKRXW ZDUUDQW LIFODLPHGWR EH IRUVLJQLILFDQWSXUSRVH)RUIXUWKHUGHWDLOVHH%R\QHRSFLWQDWS

7KLV VHFWLRQDOORZVWKH VRFDOOHGVQHDNDQG SHHN VHDUFK PHWKRGE\ SURYLGLQJ WKHDXWKRULWLHV WKH RSWLRQ RI JLYLQJ D GHOD\HG QRWLFH WR WKH VHDUFKHGSHUVRQV DQG LIIRXQGQHFHVVDU\HYHQZLWKRXWDQ\QRWLILFDWLRQ)RUIXUWKHUGHWDLOVHHKWWSZZZFGWRUJVHFXULW\XVDSDWULRWFUVSGISS)RUWKHFRQVHTXHQFHVDQGFULWLFVRIWKH $FW VHH KWWSZZZDPQHVW\XVDRUJZDURQWHUURUSDWULRWDFW /DVW YLVLWHG

7KHULJKWWRSULYDF\XQGHU$UWLFOHRI,&&35 $V2&RQQRU DQG5XPDQTXRWH VXFK GUDFRQLDQSROLFLHVDUH UHIHUUHGDV EHLQJWKH

EHVW UHFUXLWLQJ WRROV WKH ,5$ HYHU KDG 6HH 0LFKDHO 32&RQQRU DQG &HOLD 05XPDQ ,QWR WKH)LUH +RZ WR $YRLG *HWWLQJ%XUQHG E\ WKH 6DPH0LVWDNHV 0DGH)LJKWLQJLQ1RUWKHUQ,UHODQG&DUGR]R/DZ5HYLHZSSQRWHDWS7KHVDPHDVVHUWLRQFRXOG EHPDGHIRUWKH7XUNLVKFDVH$V *UVHVVWDWHVRQH RI WKH IDFWRUV EHKLQG WKH 3..V VXFFHVV RI UHFUXLWLQJ QHZ FRQYHUWV ZDV WKHFHQWUDO JRYHUQPHQWVKDUGOLQHVWDQFH 6HH (PLQ *UVHV$\UON7HUUQ$QDWRPLVL,5$(7$3.. ,VWDQEXO%DODP


51/550

86$.


52/550

:$5217(5525,17+(8.$1'8.

SDUDQRLDWKDWPLJKWGHULYHIURP6HFWLRQRIWKH$FWZKLFKH[SDQGVWKHQRWLRQ RI GRPHVWLF WHUURULVP WR WKH H[WHQW WKDW LW PD\ LQFOXGH DFWV RIDFWLYLVWV RI 1*2V OLNH *UHHQSHDFH DQG GHSULYH WKHP RI IUHHGRP RIH[SUHVVLRQDQGDFWLRQZLWKLQOHJDOOLPLWV

'RPHVWLFOHJLVODWLRQZLWKUHJDUGWRWHUURULVPLQWKH86LVDVXEMHFWPDWWHU RILQWHUQDWLRQDOODZ GLVFLSOLQHV EHFDXVHPDQ\ VWDWHVIROORZWKH86E\DFFHSWLQJVLPLODUWRXJKRUVRPHWLPHVGUDFRQLDQLQWHUQDOVHFXULW\SURYLVLRQVZKLFKVWUHQJWKHQWKHLUH[HFXWLYHSRZHUV$V+XPDQ5LJKWV

:DWFKDFFXVHVJRYHUQPHQWVDUHRSSRUWXQLVWLFLQWKHIDFHRIWUDJHG\DQGRQHFDQSUHGLFWWKDWWKH\ZLOOEHUHOXFWDQWWRJLYHXSWKRVHSRZHUVRQFHJDLQHGHYHQLIWKH86ZRXOGDPHQGWKRVHFRQWUDGLFWRU\SURYLVLRQV

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

ZLWKRXW WULDO QRQFLWL]HQ GLVFULPLQDWLRQJDWKHULQJ VHFUHW HYLGHQFH DQGKLQGHULQJWKHULJKWWRFRQIURQWDOOHJDWLRQVDQGZLWQHVVHVSKRQHWDSLQJ

ZLWKLQLWVERUGHUVRWKHUVWDWHVZRXOGHDVLO\HYDGHFULWLFLVPDERXWWKHLUKXPDQ ULJKWV DEXVHV VLPSO\ EHFDXVH WKH FULWLFV RI D VWDWH WKDW LWVHOI

YLRODWHVWKRVHULJKWVLVQRWLQDSRVLWLRQWRLPSRVHWKHFRQWUDU\1H[WFKDSWHUZLOOORRNDWDQRWKHUVWDWHZKLFKKDVEHHQIRUFHQWXULHVWKHLGRORI OLEHUWLHV WKDW KDV WDNHQ FRQWURYHUVLDO VHFXULW\ PHDVXUHV DJDLQVWWHUURULVPUHFHQWO\

$QWL7HUURU/HJLVODWLRQLQWKH8.

,QWKH8.LQWKHZDNHRI6HSWHPEHULQFLGHQWVWKH$QWL7HUURULVP&ULPH DQG 6HFXULW\ (PHUJHQF\ %LOO EHFDPH DQ $FW LQ 'HFHPEHU $VD VWDWHVWUXJJOLQJ ZLWK ,5$ WHUURU IRU D ORQJ WLPHVWULFW DQWL )RUIXUWKHUGHWDLOVHHKWWSZZZDFOXRUJ1DWLRQDO6HFXULW\1DWLRQDO6HFXULW\FIP",'

F/DVWYLVLWHG &RKQRSFLWS +XPDQ5LJKWV:DWFK2SSRUWXQLVPLQWKH)DFHRI7UDJHG\ KWWSZZZKUZRUJFDPSDLJQVVHSWHPEHURSSRUWXQLVPZDWFKKWP /DVW YLVLWHG

,Q )HEUXDU\ WKH -XVWLFH 'HSDUWPHQW RI WKH 86 SUHSDUHG D GUDIW OHJLVODWLRQ

H[SDQGLQJ WKH H[HFXWLYH SRZHUV RI ODZ HQIRUFHPHQW E\ IXUWKHU MHRSDUGL]LQJ FLYLOOLEHUWLHV XQGHU WKH QDPH RI 3$75,27 $FW ,, IRU IXUWKHU GHWDLO VHHKWWSZZZDFOXRUJ6DIHDQG)UHH6DIHDQG)UHHFIP",'F /DVW YLVLWHG


53/550

86$.


54/550

:$5217(5525,17+(8.$1'8.

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

$SSHOODWH&RPPLWWHHRIWKH+RXVHRI/RUGVLQ'HFHPEHUZKLFKSRLQWHGRXWWKDWWKHWK3DUWRIWKH$FWLVGLVFULPLQDWRU\DQGDOVRGLVSURSRUWLRQDWHWRWKH WKUHDW SRVHG E\ WHUURULVP ,Q RUGHU WR UXOH RXW VXFK FULWLFLVP LQ WKH3UHYHQWLRQRI7HUURULVP$FWWKHJRYHUQPHQWUHSHDOHGWKHGLVFULPLQDWRU\SDUWVRIWKHSUHYLRXV$FWDQGHPSRZHUHGWKHH[HFXWLYHEUDQFKWRDSSO\KDUVKSROLFLHVHTXDOO\WRDOO8.DQGQRQ8.QDWLRQDOV $FWXDOO\WKH3UHYHQWLRQRI

%LQGPDQ RSFLW S(YHQLI WKLVFRPPHQW ZDVWREHWDNHQDFFXUDWHRQHFDQQRW

FRQWLQXHWRDVVHUWWKLVDUJXPHQWDIWHUWKH$FWZKLFKZLOOEHHODERUDWHGEHORZ &DUO /HY\ 7KH (XURSHDQ 8QLRQ DIWHU 7KH 'HPLVH RI D /LEHUDO 'HPRFUDWLF

$V\OXP5HJLPH*RYHUQPHQWDQG2SSRVLWLRQDW6LU'DYLG:LOOLDPV7KH8QLWHG.LQJGRPV5HVSRQVHWR,QWHUQDWLRQDO7HUURULVP ,QGLDQD,QWHUQDWLRQDODQG&RPSDUDWLYH/DZ5HYLHZSSDWS6HH$UWLFOHRI,&&35

:LOOLDPVLELG ,QWKH6SHFLDO5DSSRUWHXUIRUWKH3UHYHQWLRQRI'LVFULPLQDWLRQDQGWKH5LJKWV

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

ZURQJWRDUJXHWKDWWKLVRYHUVXVSLFLRXVVWDQFHDQGPHDVXUHVWRZDUGVQRQFLWL]HQVLVQRWSURSRUWLRQDOZLWKWKHWKUHDWSUHVHQW

%ULFH'LFNVRQ/DZYHUVXV7HUURULVP&DQ/DZ:LQ(+5/5SSDW 6HH IRU WKH $FW KWWSZZZKPVRJRYXNDFWVDFWVHKWP /DVWYLVLWHG

6KDPL&KDNUDEDUWLDYDLODEOHDW KWWSQHZVEEFFRXNKLXNBSROLWLFVVWP-RQHV/DVWYLVLWHG

8QGHUWKHQHZOHJLVODWLRQ3DUWSRZHUVDUHUHSODFHGE\QHZFRQWURORUGHUVHQWLWOHGWRWKHDXWKRULWLHV$XWKRULWLHVKDYHEHHQGRQDWHGZLWKWKHSRZHUWRHQDFWFXUIHZUHVWULFWLRQ RQ PRYHPHQWV ZKLFK +RPH 2IILFH UHMHFWV WR FDOO KRXVH DUUHVW RUUHVWULFWLRQV RQ FHUWDLQ VHUYLFHV VXFK DV LQWHUQHW DQG SKRQH )RU IXUWKHU GHWDLO VHHKWWSZZZKRPHRIILFHJRYXNGRFVWHUURULVPBELOOSGI/DVWYLVLWHGDQG


55/550

86$.


56/550

:$5217(5525,17+(8.$1'8.

NLOOLQJRIDQLQQRFHQW%UD]LOLDQEHFDXVHKHORRNHGOLNHD3DNLVWDQLDQGWKHUHFHQWDQWLWHUURUUDLGVLQ)RUHVW*DWH(DVW/RQGRQ%ULHIO\SXWJLYHQWKHHPSOR\HGDQWLWHUURUPHDVXUHVLWFDQEHVDLGWKDWWKH8.JRYHUQPHQWKDVFKRVHQWRGHYLDWHIURPDPRUHHVVHQWLDORSWLRQQDPHO\WKHULJKWRIOLEHUW\LQVWHDGRIFKRRVLQJWKHOHVVHUHYLORSWLRQ)XUWKHUPRUHDV%XUNHDUJXHVWKHSHUFHSWLRQRI$O4DHGDWKUHDWRIWKHJRYHUQPHQWLQWKH8.LVQRWVROLGHQRXJKWRMXVWLI\WKHFRQWURYHUVLDODQWLWHUURUPHDVXUHV

29(55,'(&,9,//,%(57,(6251$7,21$/6(&85,7


57/550

86$.


58/550

:$5217(5525,17+(8.$1'8.

8.WKHGLVFULPLQDWRU\DQGH[FHSWLRQDOPHDVXUHVWDNHQLQ1RUWKHUQ,UHODQGEHWZHHQ DFFRUGLQJ WR FRPPHQWDWRUV KDG WKH VDPH HIIHFW

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

7HUURU$Q$OWHUQDWLYH"RSFLW)XUWKHUPRUHDV/DoLQHUSRLQWVRXWKDUPGRQHE\WKHVWDWHWRRQHSHUVRQPHDQVWRWXUQWKDWSHUVRQVIDPLO\DQGIULHQGVDJDLQVWWKHVWDWH6HH 6HGDW /DoLQHU$SULO 7HU|UOH 0FDGHOHGH 6LKLUOL


59/550

86$.%@\ FKDOOHQJLQJ WKHIUDPHZRUN RI LQWHUQDWLRQDO KXPDQ ULJKWV DQG KXPDQLWDULDQ ODZ VRSDLQVWDNLQJO\GHYHORSHGRYHUWKHODVWVHYHUDOGHFDGHVWKHZDURQWHUURULVPXQGHUPLQHVRXUVHFXULW\PRUHWKDQDQ\WHUURULVWERPELQJ

3XQLVKPHQWRU3UHYHQWLRQ"

$V WKH 8. DQG WKH 86 DQWLWHUURU PHDVXUHV LQGLFDWH WKH PHQWDOLW\ LQWDFNOLQJ WHUURULVP LV PRUH WKDQ HYHU IRFXVHG RQ SUHYHQWLRQ UDWKHU WKDQUHJXODU FULPLQDO ODZ SURFHGXUH RI SXQLVKLQJ DIWHU FULPHV KDYH EHHQFRPPLWWHG7KHUHLVQRWKLQJZURQJZLWKVHHNLQJWRDQWLFLSDWHWKHFUXHOWLHVDQG WU\LQJ WR SUHYHQW WKHP IURP RFFXUULQJ &ULPLQDO ODZ LV WKHUH IRUSURYLGLQJ MXVWLFH DQG ZKHUH QHFHVVDU\ DQG SRVVLEOH SURYLGLQJ UHPHGLHV

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

%LQGPDQRSFLWS ,ELG +RIPDQQ RS FLW S +RIIPDQQ DOVR REVHUYHV WKDW WKH H[DJJHUDWHG WKUHDW

SHUFHSWLRQRYHUVKDGRZVWKHVHULRXVQHVVRI WKHKXPDQULJKWV FRQVHTXHQVHV RIWKHPHDVXUHVWDNHQE\VWDWHV

&ROH 7KHLU /LEHUWLHV 2XU6HFXULW\'HPRFUDF\DQG 'RXEOH6WDQGDUG LELGS0D\EH WKLVH[DPSOHLV DQH[WUHPH DQG ROG RQH EXW VWLOOLW LVD JRRGH[DPSOHIRUHVWDEOLVKLQJ D FOHDU XQGHUVWDQGLQJ RI VHFXULW\ VHUYLFHV ZD\ RI ZRUNLQJ $OWKRXJKVHFUHW LQWHOOLJHQW DJHQFLHV LQ UHFHQW \HDUV DUH UHFUXLWLQJ PRUH DQG PRUH QDWLYHVSHDNHUVVWLOOWKHSUHVXPSWLRQRIJXLOWE\HYHU\VPDOOIDFWGXHWRKHLJKWHQHGWKUHDW


60/550

:$5217(5525,17+(8.$1'8.

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

SHUFHSWLRQDVD VLJQRIEHLQJWHUURULVWFRQVWLWXWHVWKHSUREOHPDWLFDQG GRHVKDUPFLYLOOLEHUWLHV

,ELGS 7KLV VWDQFH LQGLFDWHV WKDW DXWKRULWLHV WDUJHW LQGLYLGXDOV LQ UHVSHFW WR WKHLU

HWKQLFLW\UHOLJLRQHWKQLFSURILOLQJZKLFK LVSURKLELWHG XQGHU$UW RI,&&356HH&RKQS

&RKQRSFLWS 6HWWLQJJXLOWE\ DVVRFLDWLRQRU HYHQJXLOWE\PDWHULDOVXSSRUWZLWKRXWWKHLQWHQGRI

IXUWKHULQJWHUURULVWDFWVLVDFFRUGLQJWR&ROHDTXHVWLRQDEOHDSSURDFKVLQFHQRWHYHU\PHPEHU VXSSRUWV WKHPHDQV WKDW SDUWLFXODURUJDQL]DWLRQV XVHV 0RUHRYHU PDWHULDOVXSSRUWLVQRWDOZD\VJLYHQIRUWHUURULVWHQGV$FFRUGLQJWR&ROHHYHQSHUFHQWRIWKH WHUURULVW RUJDQL]DWLRQ +DPDV IXQGV LV XVHG IRU VRFLDO VHUYLFHV 6HH &ROH0F&DUWK\LVP SS $FFRUGLQJ WR ,JQDWLHII SHUVRQV VKRXOG EH GHWDLQHG RQO\

ZKDWWKH\KDYHGRQH QRW IRU ZKR WKH\DUH ZKDW WKH\WKLQN SURIHVV RU EHOLHYH,JQDWLHIIRSFLWS

&RKQRSFLWS 6HH $UWLFOH RI 81 &RQYHQWLRQ DJDLQVW 7RUWXUH DQG 2WKHU &UXHO ,QKXPDQ RU

'HJUDWLQJ7UHDWPHQWRU3XQLVKPHQWRIDQG$UWLFOHRI,&&35 5HFHQWO\ WKH&DVH'DVFKQHULQ *HUPDQ\ FDXVHG FRQWURYHUVLHV LQWKHSXEOLF7KH

TXHVWLRQZKHWKHUWRUWXUHIRUH[WUDFWLQJLQIRUPDWLRQWRVDYHKXPDQOLYHVVKRXOGEH


61/550

86$.


62/550

:$5217(5525,17+(8.$1'8.

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p (VSHFLDOO\ WKH VWHSV WDNHQ LQ D GLVFULPLQDWLYH PDQQHU VKRXOG EH SDLGDWWHQWLRQDQGVKRXOGEHHOLPLQDWHGLPPHGLDWHO\VLQFHWKLVLQWKHHQGPLJKWDIIHFWWKHSHDFHLQVRFLHWLHVDQGLQWKHZRUOG

$GGLFRWRSFLWS(PSKDVLVDGGHG $VXUYH\VKRZVWKDW0XVOLPVZLWKSHUFHQWIHDUWKDWWKH\DUHJRLQJWREHODEHOOHG

DVWHUURULVW7KLVIDFWDVDUHVXOWRIDQWLWHUURUPHDVXUHVWDNHQLQWKHZDNHRILVVKRZLQJ WKDW WKH VRFLDO FRKHUHQFHRIVRFLHWLHV LVLQ GDQJHU+XQWLQJWRQVWKHVLVRIFODVKRIFLYLOL]DWLRQVFDQEHVDLGZLOOEHFRPHPRUHFKDQFHVWRPDWHULDOL]HLQDZRUOG

ZKHUH VRPH JURXSV RI SHRSOH RI GLIIHUHQW UHOLJLRQ KDV DOLHQDWHG 7KH VXUYH\ LVDYDLODEOHDWKWWSRWWDZDFEFFDUHJLRQDOVHUYOHW9LHZ"ILOHQDPHRWBPXVOLP/DVWYLVLWHG0DUFK


63/550

8 6 $ . < ( $ 5 % 2 2 .

9RO


64/550

3(1'8/806:,1*6,1%(7:((1&,9,/5,*+76$1'6(&85,7


65/550

86$.


66/550

3(1'8/806:,1*6,1%(7:((1&,9,/5,*+76$1'6(&85,7


67/550

86$.


68/550

3(1'8/806:,1*6,1%(7:((1&,9,/5,*+76$1'6(&85,7


69/550

86$.


70/550

3(1'8/806:,1*6,1%(7:((1&,9,/5,*+76$1'6(&85,7


71/550

86$.


72/550

3(1'8/806:,1*6,1%(7:((1&,9,/5,*+76$1'6(&85,7


73/550

86$.


74/550

3(1'8/806:,1*6,1%(7:((1&,9,/5,*+76$1'6(&85,7


75/550

86$.


76/550

3(1'8/806:,1*6,1%(7:((1&,9,/5,*+76$1'6(&85,7


77/550

86$.


78/550

3(1'8/806:,1*6,1%(7:((1&,9,/5,*+76$1'6(&85,7


79/550

86$.


80/550

3(1'8/806:,1*6,1%(7:((1&,9,/5,*+76$1'6(&85,7


81/550

86$.


82/550

3(1'8/806:,1*6,1%(7:((1&,9,/5,*+76$1'6(&85,7


83/550

86$.


84/550

3(1'8/806:,1*6,1%(7:((1&,9,/5,*+76$1'6(&85,7


85/550

8 6 $ . < ( $ 5 % 2 2 .

9RO


86/550

&,7,=(16+,35,*+76,1$*/2%$/(5$

VHQVH FLWL]HQVKLS LV D OHJDO FRQFHSWFRQIHUULQJQDWLRQDOLW\XSRQSHRSOH ZKRKDYHIXOILOOHGWKHOHJDOUHTXLUHPHQWVRIEHORQJLQJWRDSDUWLFXODUFRPPXQLW\DQGWKHULJKWVFRQVHTXHQWWRWKLVLQFOXGLQJWKHULJKWVWRKROGDSDVVSRUWDQGYRWH

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

&,7,=(16+,35,*+76

,QKLVNH\ZRUNHQWLWOHG&LWL]HQVKLSDQG6RFLDO&ODVVDQG2WKHU(VVD\V0DUVKDOOGHILQHGFLWL]HQVKLSDVWKHERG\RIULJKWVDQGGXWLHVWKHVWDWXVZKLFKJRHV

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

SS 5XEHQVWHLQ . $XVWUDOLDQ&LWL]HQVKLS /DZLQ &RQWH[W 6\GQH\/DZERRN&R

:HHNOH\ . ,QWURGXFWLRQ LQ 'DYLGVRQ $ :HHNOH . HGV *OREDOLVDWLRQ DQG&LWL]HQVKLSLQWKH$VLD3DFLILF/RQGRQ0DF0LOODQ3UHVVSS

5XEHQVWHLQ.ES ,VLQ() DQG:RRG3. &LWL]HQVKLSDQG,GHQWLW\/RQGRQ 6DJH 3XEOLFDWLRQV

+XGVRQ : DQG .DQH - 5HWKLQNLQJ $XVWUDOLDQ &LWL]HQVKLS SS LQ+XGVRQ:DQG.DQH-HGV5HWKLQNLQJ$XVWUDOLDQ&LWL]HQVKLS0HOERXUQH&DPEULGJH8QLYHUVLW\3UHVV

0DUVKDOO7+&LWL]HQVKLSDQGVRFLDOFODVVDQGRWKHUHVVD\V&DPEULGJH&833 5RFKH 0 5HWKLQNLQJ &LWL]HQVKLS :HOIDUH,GHRORJ\ DQG &KDQJH LQ 0RGHUQ

6RFLHW\3ROLW\3UHVV&DPEULGJHS 0DUVKDOO&LWL]HQVKLSDQGVRFLDOFODVVDQGRWKHUHVVD\VS 0DUVKDOO 7 + &LWL]HQVKLS DQG VRFLDOFODVV DQG RWKHU HVVD\V &DPEULGJH &83

%DUEDOHW-09DJDULHVRI6RFLDO&DSLWDO&LWL]HQVKLS7UXVWDQG/R\DOW\SSLQ9DVWD(HG&LWL]HQVKLS&RPPXQLW\DQG'HPRFUDF\ /RQGRQ0DF0LOODQ3UHVV/WG


87/550

86$.


88/550

&,7,=(16+,35,*+76,1$*/2%$/(5$

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

,17(51$7,21$/5()8*((/$:

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

0F0DVWHU'$V\OXP 6HHNHUV $XVWUDOLDnV 5HVSRQVH WR 5HIXJHHV 0HOERXUQH 0HOERXUQH

8QLYHUVLW\3UHVVS ,W]RJVRKQ-,PPLJUDWLRQDQGWKH%RXQGDULHV RI&LWL]HQVKLS7KH,QVWLWXWLRQV

RI,PPLJUDQWV3ROLWLFDO7UDQVQDWLRQDOLVP,QWHUQDWLRQDO0LJUDWLRQ5HYLHZ9ROXPH:LQWHUSS,VLQ()DQG:RRG3./RQGRQ6DJH3XEOLFDWLRQV&LWL]HQVKLSDQG,GHQWLW\

&DUWHU$7KH3ROLWLFDO7KHRU\RI*OREDO&LWL]HQVKLS/RQGRQ5RXWOHGJH 0DOH\:0XOWLFXOWXUDOLVP5HIXJHHVDQG'XWLHV%H\RQG%RUGHUVLQ.XNDWKDV

& 0XOWLFXOWXUDO &LWL]HQV 7KH 3KLORVRSK\ DQG 3ROLWLFV RI ,GHQWLW\ &,6 5HDGLQJV 0XOWLFXOWXUDO 5HVHDUFK 3URJUDP 7KH &HQWUH IRU ,QGHSHQGHQW 6WXGLHV /LPLWHG

$XVWUDOLDQ3ULQW*URXSS +DUYH\&-5HIXJHHV5LJKWVDQG+XPDQ6HFXULW\5HIXJH9ROXPH)HEUXDU\

SS6DVVHQ6 /RVLQJ&RQWURO"6RYHUHLJQW\LQDQ$JHRI*OREDOLVDWLRQ 1HZ


89/550

86$.


90/550

&,7,=(16+,35,*+76,1$*/2%$/(5$

SULQFLSOH RI QRQUHIRXOHPHQW LV WKH FRUQHUVWRQH RI WKH LQWHUQDWLRQDOUHJLPH RI UHIXJHH SURWHFWLRQ 5HIRXOHPHQW UHIHUV WR WKH UHWXUQ E\ DFRXQWU\ LQ DQ\ PDQQHU RI DQ LQGLYLGXDO WR WKH WHUULWRU\ RI DQRWKHUFRXQWU\LQZKLFKKHRUVKHPD\EHSHUVHFXWHGRUIDFHWKHULVNRIWRUWXUH5HIRXOHPHQW LQFOXGHV DQ\ DFWLRQ KDYLQJ WKH HIIHFW RI UHWXUQLQJ WKHLQGLYLGXDO WR D 6WDWH LQFOXGLQJ H[SXOVLRQ GHSRUWDWLRQ H[WUDGLWLRQUHMHFWLRQ DW WKH IURQWLHU H[WUDWHUULWRULDO LQWHUFHSWLRQ DQG SK\VLFDOUHWXUQ *RRGZLQ*LOO KLJKOLJKWV WKDW FRQFHUQ E\ VWDWHV RYHU WKHLUVRYHUHLJQW\UHVXOWHGLQWKHHQDFWPHQWRIWKHVHFRQGSDUDJUDSKRI$UWLFOH UHJDUGLQJ WKH LQDELOLW\ RI SHRSOH ZKR DUH VHFXULW\ ULVNV RU ZHUHFRQYLFWHGRIFHUWDLQFULPLQDORIIHQFHVIURPEHLQJDEOHWRPDNHDFODLPXQGHUWKHUHIRXOHPHQWSULQFLSOH

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

5HIXJHH &RQYHQWLRQ WKH QRQ UHIRXOHPHQW REOLJDWLRQ XQGHU WKH ,&&35DQGWKH7RUWXUH&RQYHQWLRQDUHDEVROXWH

7KH 5HIXJHH &RQYHQWLRQ DOVR LPSRVHV RWKHU REOLJDWLRQV RQ VWDWHSDUWLHV$UWLFOHRIWKH815HIXJHH&RQYHQWLRQIRUELGVDVWDWHIURPSHQDOL]LQJUHIXJHHVRQDFFRXQWRIWKHLUXQDXWKRUL]HGHQWU\$UWLFOHLPSRVHVDQREOLJDWLRQRQVWDWHVWRQRWLPSRVHUHVWULFWLRQVRQWKHIUHHPRYHPHQWRIUHIXJHHV%\YLUWXHRI$UWLFOHRIWKH&RQYHQWLRQWKH

RI5HIXJHHV5HIXJHH&RQYHQWLRQ2IILFHRIWKH+LJK&RPPLVVLRQHUIRU+XPDQ5LJKWV81+&5ZZZXQKFUFKKWPOPHQXERBFBUHIKWP

0DU[1RQ5HIRXOHPHQW$FFHVVWR3URFHGXUHVDQG5HVSRQVLELOLW\IRU'HWHUPLQLQJ5HIXJHH&ODLPVS

*RRGZLQ*LOO*67KH5HIXJHHLQ,QWHUQDWLRQDO/DZ6HFRQG(GLWLRQ2[IRUG&ODUHQGRQ3UHVVS

,QWHUQDWLRQDO &RYHQDQW RQ &LYLO DQG 3ROLWLFDO 5LJKWV 2IILFH RI WKH +LJK&RPPLVVLRQHUIRU+XPDQ5LJKWV81+&5ZZZXQKFUFKKWPOPHQXEDBFFSUKWP

&RQYHQWLRQ DJDLQVW 7RUWXUHDQG 2WKHU &UXHO ,QKXPDQ RU'HJUDGLQJ 7UHDWPHQW RU3XQLVKPHQW 2IILFH RI WKH +LJK &RPPLVVLRQHU IRU +XPDQ 5LJKWV 81+&5

ZZZXQKFUFKKWPOPHQXEKFDWKWP +HDUQ-DQG(DVWPDQ.+XPDQ5LJKWV,VVXHVIRU$XVWUDOLDDWWKH8QLWHG1DWLRQV

$XVWUDOLDV 1RQ 5HIRXOHPHQW 2EOLJDWLRQV XQGHU WKH 7RUWXUH &RQYHQWLRQ DQG WKH,&&35$XVWUDOLDQ-RXUQDORI+XPDQ5LJKWV9ROXPHSS


91/550

86$.


92/550

&,7,=(16+,35,*+76,1$*/2%$/(5$

WRIUHHPRYHPHQWWKHSURYLVLRQRIDGPLQLVWUDWLYHDVVLVWDQFHZKLFKWKH\QR ORQJHU FDQ UHFHLYH IURP WKHLU FRXQWU\ RI RULJLQ DQG WKH LVVXLQJ RILGHQWLW\ GRFXPHQWV DQG WUDYHO GRFXPHQWV )XUWKHU 81+&5 JXLGHOLQHVUHTXLUHWKDWLQGHWHUPLQLQJUHIXJHHVWDWXVSURYLVLRQEHPDGHIRUTXDOLILHGLQWHUSUHWHUVOHJDODVVLVWDQFHDQGUHDVRQDEOHWLPHWRSUHSDUHIRUFDVHV7KHSURYLVLRQRISURSHUULJKWVRIDSSHDOLVDOVRWREHDIIRUGHG

&,7,=(16+,3$1'%(/21*,1*,1$*/2%$/(5$

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

&DVWOHV DQG 'DYLGVRQ DUH FULWLFDO RI6R\VDOV PRGHORQ WKH EDVLV WKDWGHVSLWH WKH H[LVWHQFH RI LQWHUQDWLRQDO ODZ XQLYHUVDO HQWLWOHPHQWV DQG

$UWLFOH&RQYHQWLRQ5HODWLQJWRWKH6WDWXVRI5HIXJHHV5HIXJHH&RQYHQWLRQ

2IILFH RI WKH +LJK &RPPLVVLRQHU IRU +XPDQ 5LJKWV 81+&5 ZZZXQKFUFKKWPOPHQXERBFBUHIKWP

$UWLFOH&RQYHQWLRQ5HODWLQJWRWKH6WDWXVRI5HIXJHHV5HIXJHH&RQYHQWLRQ2IILFH RI WKH +LJK &RPPLVVLRQHU IRU +XPDQ 5LJKWV 81+&5 ZZZXQKFUFKKWPOPHQXERBFBUHIKWP

$UWLFOHV &RQYHQWLRQ 5HODWLQJ WR WKH 6WDWXV RI 5HIXJHHV 5HIXJHH&RQYHQWLRQ 2IILFH RI WKH +LJK &RPPLVVLRQHU IRU +XPDQ 5LJKWV 81+&5

ZZZXQKFUFKKWPOPHQXERBFBUHIKWP &DVWOHV6SRRQOH\S 6R\VDO


93/550

86$.


94/550

&,7,=(16+,35,*+76,1$*/2%$/(5$

KXPDQ ULJKWV 0RVW VRFLHWLHV FRQWLQXH WR EH ERXQG E\ WKH QRWLRQV RIFLWL]HQVKLSDWWKHQDWLRQVWDWHOHYHO &ROHPDQDQG+LJJLQVSRLQWRXWWKDW VRYHUHLJQW\DQG FLWL]HQVKLSDUH QRWGLPLQLVKLQJ LQ LPSRUWDQFH DQG WKDWWKHVHPDWWHUVQRWRQO\HQMR\XQSUHFHGHQWHGVDOLHQFHEXWZLOOFRQWLQXHLQWRWKHIRUHVHHDEOHIXWXUH,WLVTXLWHFOHDUWKDWWKHVWDWHLVWKHGHFLVLYHDFWRURQTXHVWLRQV RI HQWU\ DGPLVVLRQ H[SXOVLRQ DQG UHVLGHQFH XQGHU LQWHUQDWLRQDOODZ

$OWKRXJKWKH &RQYHQWLRQ KDV SODFHG VRPH UHVWULFWLRQV RQWKH DELOLW\ RIVWDWHV WR UHJXODWH UHIXJHHV DQG DV\OXP VHHNHUV D IXQGDPHQWDO SULQFLSOH RILQWHUQDWLRQDOODZLVWKHVWDWHVULJKWWRFRQWUROHQWU\UHVLGHQFHDQGH[SXOVLRQ7KH DELOLW\ RI VWDWHV WR UHJXODWH LPPLJUDWLRQ DQG DFFRUGLQJO\ H[WHQG

PHPEHUVKLSULJKWVEDVHGRQWKHQDWLRQVSHUFHLYHGQHHGVLVDOVRUHLQIRUFHGE\LQWHUQDWLRQDOUHIXJHHODZ:DWVRQQRWHVWKLVUHDOLW\DQGVWDWHVWKDW

UHVSRQVLELOLW\ IRU WKH GHWHUPLQDWLRQ RI UHIXJHH VWDWXV DQGLPSOHPHQWDWLRQRIUHIXJHHODZZKLOVWLQWHUWZLQHGZLWKLQWHUQDWLRQDOQRUPVUHPDLQV WKH SUHURJDWLYH RI VWDWHV DV VRYHUHLJQ ,URQLFDOO\ WKHQ WKRVHLQVWUXPHQWVZKLFKZHUHFUHDWHGWRSURYLGHSURWHFWLRQDQGDV\OXPIRUWKHVWDWHOHVVGRVRWKURXJKWKHVHOILQWHUHVWRIVWDWHV

7KLVWHQVLRQLVQHDWO\VXPPDULVHGE\*RRGZLQ*LOO

7KHUHIXJHHLQLQWHUQDWLRQDOODZRFFXSLHVDOHJDOVSDFHFKDUDFWHULVHGRQWKH RQH KDQG E\ WKH SULQFLSOH RI VWDWH VRYHUHLJQW\ DQG WKH UHODWHGSULQFLSOHVRIWHUULWRULDOVXSUHPDF\DQGVHOISUHVHUYDWLRQDQGRQWKHRWKHUKDQG E\ FRPSHWLQJ KXPDQLWDULDQ SULQFLSOHV GHULYLQJ IURP JHQHUDO

LQWHUQDWLRQDOODZ$QGIURPWUHDW\

*RRGZLQ*LOOIXUWKHUQRWHV

5HIXJHH ODZ UHPDLQV DQ LQFRPSOHWH OHJDO UHJLPH RI SURWHFWLRQLPSHUIHFWO\ FRYHULQJ ZKDW RXJKW WR EH D VLWXDWLRQ RI H[FHSWLRQ ,W JRHVVRPHZD\WRDOOHYLDWHWKHSOLJKWRIWKRVHDIIHFWHGE\EUHDFKHVRIKXPDQULJKWVVWDQGDUGVRUE\WKHFROODSVHRIDQH[LVWLQJVRFLDORUGHULQWKHZDNH

,VLQ:RRG&LWL]HQVKLSDQG,GHQWLW\S &DVWOHV'DYLGVRQ&LWL]HQVKLSDQG0LJUDWLRQ*OREDOLVDWLRQDQGWKH3ROLWLFVRI%HORQJLQJ

&DVWOHV&LWL]HQVKLSDQGWKHRWKHULQWKH$JHRI0LJUDWLRQ ,W]RJVRKQ ,PPLJUDWLRQDQGWKH%RXQGDULHV RI &LWL]HQVKLS %DXERFN 7UDQVQDWLRQDO &LWL]HQVKLS 0HPEHUVKLS DQG 5LJKWV LQ,QWHUQDWLRQDO0LJUDWLRQ

:DUQHU' 7KH 5HIXJHH6WDWH DQG6WDWH3URWHFWLRQ SSLQ 1LFKROVRQ )DQG 7ZRPH\ 3 HGV 5HIXJHH 5LJKWV DQG 5HDOLWLHV (YROYLQJ ,QWHUQDWLRQDO &RQFHSWV DQG5HJLPHV0HOERXUQH&DPEULGJH8QLYHUVLW\3UHVVS

6WRUH\ + ,QWHUQDWLRQDO /DZ DQG +XPDQ 5LJKWV 2EOLJDWLRQV SS LQ6SHQFHU 6 HG 6WUDQJHUV DQG &LWL]HQV $ 3RVLWLYH $SSURDFK WR 0LJUDQWV DQG 5HIXJHHV/RQGRQ5LYHUV2UDP3UHVVS

:DWVRQ9,QWHUSUHWLQJ$V\OXP5HLQWHUSUHWLQJ5HIXJHHV$Q$XVWUDOLDQ&DVH6WXG\$XVWUDOLDQ-RXUQDORI6RFLDO,VVXHV9ROXPH0D\SS

*RRGZLQ*LOO7KH5HIXJHHLQ,QWHUQDWLRQDO/DZ


95/550

86$.


96/550

&,7,=(16+,35,*+76,1$*/2%$/(5$

IRFXVLQJPRUHRQEXVLQHVVDQGVNLOOHGPLJUDWLRQ$V:KLWHZHOOKDVQRWHGLQUHODWLRQWRWKHOLQNEHWZHHQLPPLJUDWLRQODZDQGWKHSHUFHLYHGQHHGVRIWKHQDWLRQVWDWH

%HFDXVHVWDWHVKDYHIRUPXODWHGLPPLJUDWLRQSROLFLHVZKLFKVHHNWRDGPLW RQO\ WKRVH PLJUDQWV WKDW WKH VWDWH FRQVLGHUV GHVHUYLQJ RIDGPLVVLRQ LWEHFRPHVQHFHVVDU\WR FRQVWUXFWDQHODERUDWHV\VWHPRIFDWHJRULVDWLRQ WKDW VHHNV WR GHILQH ZKLFK PLJUDQWV IDOO ZLWKLQ WKHGHVHUYLQJ DQG WKHUHE\ OHJDO FDWHJRULHV DQG ZKLFK IDOO ZLWKLQ WKHXQGHVHUYLQJ DQG WKHUHE\ LO OHJDO FDWHJRULHV 7KHVH FDWHJRULHVHPEUDFLQJDZLGHVSHFWUXPRISRVVLEOHVFHQDULRVWHPSRUDU\PLJUDWLRQIDPLO\ UHXQLILFDWLRQ HWF ZLOO RI QHFHVVLW\ EH DUELWUDU\ EOXUUHG DW WKH

HGJHV DQG LQ DOO OLNHOLKRRG ZLOO FRQWDLQ LQFRQVLVWHQFLHV DQGFRQWUDGLFWLRQV 7KH GLIILFXOW\ RI GLVWLQJXLVKLQJ D UHIXJHH IURP DQHFRQRPLF PLJUDQW IRU H[DPSOH LV SUREDEO\ QR PRUH GLIILFXOW WRGD\WKDQLWZDVDFHQWXU\DJRWKHGLIIHUHQFHWRGD\LVWKDWWKHQHHGWRWU\WRPDNHWKDWGLVWLQFWLRQLVGHHPHGWREHLPSRUWDQW

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

7KH$XVWUDOLDQJRYHUQPHQWVDWWLWXGHDQGVWDQFHWRZDUGVXQDXWKRULVHGDUULYDOVDQGFRQVHTXHQWO\ZKRPLWFKRRVHVWRH[WHQGFLWL]HQVKLSULJKWVWRZDVFOHDUO\DUWLFXODWHGE\3ULPH0LQLVWHU+RZDUGIROORZLQJWKH7DPSDLQFLGHQWLQ

(YHU\QDWLRQKDVDULJKWWRHIIHFWLYHO\FRQWUROLWVERUGHUVDQGWRGHFLGHZKRFRPHVKHUHDQGXQGHUZKDWFLUFXPVWDQFHVDQG$XVWUDOLDKDVQR LQWHQWLRQRIVXUUHQGHULQJRU FRPSURPLVLQJ WKDW ULJKW:H KDYHWDNHQWKLVDFWLRQLQIXUWKHUDQFHRIWKDWYLHZ

&RPSDUHG WR WKH KXUGOHV WKDW LPPLJUDQWV DQG UHIXJHHV KDYH WRRYHUFRPHXQGHUWKHLPPLJUDWLRQODZVRIHDFKFRXQWU\EHFRPLQJDFLWL]HQ ,ELGS :KLWHZHOO& 1HZ0LJUDWLRQLQWKHV$5HWURVSHFWLYH6XVVH[0LJUDWLRQ:RUNLQJ

3DSHU1R6XVVH[&HQWUHIRU0LJUDWLRQ5HVHDUFK6XVVH[ .LQJ - $XVWUDOLD DQG &DQDGD &RPSDUHG 7KH 5HDFWLRQ WR WKH .RVRYDU &ULVLV

$XVWUDOLDQ-RXUQDORI+XPDQ5LJKWV9ROXPHSS &RPPRQZHDOWKRI$XVWUDOLD3DUOLDPHQWDU\'HEDWHVSS


97/550

86$.


98/550

&,7,=(16+,35,*+76,1$*/2%$/(5$

DVDSURFHVVRIVRFLDODQGHFRQRPLFH[FOXVLRQIURPWKHZRUOGRUGHU7KLVLVFHUWDLQO\WUXHRI$XVWUDOLDVLPPLJUDWLRQSROLFLHV,QWKHJRYHUQPHQWLQFUHDVHG$XVWUDOLDVVNLOOHGPLJUDWLRQSODFHVE\DQDGGLWLRQDOSODFHV'HSDUWPHQW RI ,PPLJUDWLRQ &LWL]HQVKLS DQG KDV V\VWHPDWLFDOO\ EHHQFULWLFDO RI DV\OXP VHHNHUV ZKR DUULYH RQ $XVWUDOLDV VKRUHV ,Q HIIHFW WKHJOREDOLVHG ZRUOG SULRULWLVHV WKH IUHHGRPV DQG ULJKWV RI WUDQVQDWLRQDOFRUSRUDWLRQVDQGWKHSRZHUIXOHOLWHUDWKHUWKDQWKHGHPRFUDWLFDQGKXPDQULJKWVRILQGLYLGXDOV

7KH SROLWLFDO DQG HFRQRPLF UHDOLWLHVXSRQ ZKLFK WKH ZRUOG LV IRXQGHGUHVXOWVLQWKHHQDFWPHQWRIUXOHVRIDGPLVVLRQDQGQRQDGPLVVLRQDQGUXOHVWKDW UHJXODWH PHPEHUVKLS DQG UHVXOW LQ XQLYHUVDO KXPDQ ULJKWV EHFRPLQJ

VXEVLGLDU\$V9RQ%UHGRZQRWHV 1DWLRQDOERUGHUVVWLOOIXQFWLRQDVIHQFHVDQGWKHLUJDWHVDUHVWLOORSHQHGDQGFORVHGDFFRUGLQJWRSROLWLFDOGHFLVLRQVRIQDWLRQDOSROLWLFDOV\VWHPV ,Q DQ HUD ZKHUH WKH LQWHUQDWLRQDO FRPPXQLW\ FRQWLQXHV WR EHGLYLGHG LQWR VWDWHV D KXPDQH DSSURDFK WR DV\OXP DQG UHIHUHQFH WR DERUGHUOHVVZRUOGLVODUJHO\LOOXVLYH

*LYHQWKDWJOREDOFKDQJHVDUHEHLQJSHUFHLYHGDVFULVHVRIWKHQDWLRQDOHFRQRP\ DQG VRFLDO UHODWLRQV SROLFLHV KDYH IRFXVHG RQ WKH GHQLDO RISROLWLFDOFLWL]HQVKLSDQGRWKHUFLWL]HQVKLSULJKWVVXFKDVZHOIDUHHOLJLELOLW\7KHSUHVFULEHGOLPLWVRIFLWL]HQVKLSGLPLQLVKWKHH[WHQWRIFLWL]HQVKLSDQGEHORQJLQJ0F0DVWHUQRWHVWKHUHDVRQIRUWKLVVWDWLQJWKDW5HIXJHHVDQGDV\OXPVHHNHUVUHVLGHLQWKHVKDGRZODQGVZKHUHWKHDEVWUDFWFRQVWUXFWRIFLWL]HQVKLSLVFKDQJLQJEXWWKHOHJDOSROLWLFDOFRQVWUXFWVDUHQRW ,QHIIHFW

UHIXJHHVDQGHVSHFLDOO\DV\OXPVHHNHUVDUHYXOQHUDEOHWRWKHJRRGZLOORIWKHKRVW VWDWH WKDW FRQWLQXHV WR FRQWURO DQG GHWHUPLQH ZKR HQWHUV WKHLUWHUULWRU\ZLWKLQWHUQDWLRQDODUHQDVDQGLQVWLWXWLRQVFXUUHQWO\EHLQJZHDNDQGLQHIIHFWLYH

&21&/86,21

7KHQDWLRQVWDWHLQDJOREDOLVHGZRUOGLVLQFUHDVLQJO\XQGHUSUHVVXUHIURPWKHLQWHUQDWLRQDOIRUFHVRIHFRQRPLFJOREDOL]DWLRQSXVKLQJDQDJHQGDWKDWEHQHILWV WKH ULFK DQG PDUJLQDOL]HV WKH SRRU :KLOH VWDWH ERUGHUV KDYHEHFRPHLQFUHDVLQJO\SHUPHDEOHWRWKHIORZVRIILQDQFHVDQGFRPPRGLWLHVWKH\FRQWLQXHWRIXQFWLRQDVDoGHPDUFDWLRQEHWZHHQWKRVHZKROLYHZLWKLQWKHVH

+HOG ' 0F*UHZ $ *ROGEODWW ' 3HUUDWRQ - *OREDO 7UDQVIRUPDWLRQV 3ROLWLFV

(FRQRPLFVDQG&XOWXUH&DPEULGJH3ROLW\3UHVV5LFKPRQG$+*OREDO$SDUWKHLGr5HIXJHHV5DFLVPe

+DUYH\5HIXJHHV5LJKWVDQG+XPDQ6HFXULW\,W]RJVRKQ,PPLJUDWLRQDQGWKH%RXQGDULHVRI&LWL]HQVKLS

9RQ%UHGRZ :7KH &KDQJLQJ&KDUDFWHU RI1DWLRQDO %RUGHUVLQ &LWL]HQVKLS 6WXGLHV9ROXPH&DUIDF3XEOLVKLQJ/WGSSS

+DUYH\5HIXJHHV5LJKWVDQG+XPDQ6HFXULW\S 0F0DVWHU'$V\OXP6HHNHUV$XVWUDOLDnV5HVSRQVHWR5HIXJHHV ,ELGS


99/550

86$.


100/550

&,7,=(16+,35,*+76,1$*/2%$/(5$

%R


101/550

8 6 $ . < ( $ 5 % 2 2 .

9RO


102/550

7+(352%/(05(/$7,1*727+(0$5*,1

GRFWULQHRIPDUJLQRIDSSUHFLDWLRQLVIRXQGLQ$UWLFOHRIWKH&RQYHQWLRQ7KHGRFWULQHXQGHUUHYLHZVWDWHVWKDWWKHDXWKRULWLHVRIHDFKVWDWHSDUW\WRWKH &RQYHQWLRQ VKRXOG EH DOORZHG WR H[HUFLVH D FHUWDLQ PHDVXUH RIGLVFUHWLRQ LQ LPSOHPHQWLQJ WKH VWDQGDUGV FRQWDLQHG LQ WKH &RQYHQWLRQ

$UJXDEO\LWLVGHVLJQHGWREDODQFHWKHVRYHUHLJQW\RIWKHVWDWHSDUWLHVZLWKWKH QHHG WR HQVXUH WKH REVHUYDQFH RI WKH HQJDJHPHQWV XQGHUWDNHQ E\6WDWHV3DUWLHVWRWKH&RQYHQWLRQ

+RZHYHULWVKRXOGILUVWEHQRWHGWKDWDJUHHPHQWVDQGWUHDWLHVHQVXULQJSURWHFWLRQRIKXPDQULJKWVIUHTXHQWO\DOORZGHURJDWLRQVIURPWKHULJKWVLQWLPHVRIVXFKH[WUDRUGLQDU\VLWXDWLRQVDVSXEOLFHPHUJHQFLHVZDUDQGWKHOLNH7KH6WDWHV3DUWLHVDUHJLYHQDZLGHUDQJHRIDSSUHFLDWLRQWRGHWHUPLQH

ZKHWKHUVXFKDFLUFXPVWDQFHH[LVWVLQWKHLUMXULVGLFWLRQV7KH(XURSHDQ&RQYHQWLRQRQ+XPDQ5LJKWVLVQRWWKHRQO\DJUHHPHQW

DOORZLQJVXFKGHURJDWLRQV,QDGGLWLRQWRWKH&RQYHQWLRQWKH ,QWHUQDWLRQDO&RYHQDQWRQ&LYLODQG3ROLWLFDO5LJKWV$UWLFOHWKH&RQYHQWLRQ5HODWLQJWRWKH6WDWXVRI6WDWHOHVV3HUVRQV$UWLFOHWKH&RQYHQWLRQ5HODWLQJWRWKH6WDWXVRI5HIXJHHV$UWLFOHDQGWKH(XURSHDQ6RFLDO&KDUWHU$UWLFOHDVZHOOFRQWDLQGHURJDWLRQFODXVHV

0HDQZKLOH LW VKRXOGDOVR EH QRWHG WKDW WKH OLPLWDWLRQV WR GHURJDWLRQXQGHUWKH,QWHUQDWLRQDO&RYHQDQWDUHPXFKEURDGHUWKDQWKRVHVHWE\WKH(XURSHDQ&RQYHQWLRQ:KLOHXQGHUWKH&RYHQDQWQRGHURJDWLRQLVDOORZHGIURP WKH ULJKWV SURWHFWHG E\ $UWLFOHV DQG WKHOLPLWDWLRQVWRGHURJDWLRQVXQGHUWKH(XURSHDQ&RQYHQWLRQLQFOXGH$UWLFOHVDQGRQO\

$VXSHUILFLDOH[DPLQDWLRQRIWKHULJKWVIURPZKLFKERWKOHJDOGRFXPHQWVVHWOLPLWDWLRQVWRGHURJDWLRQZRXOGUHVXOWLQWKDWWKH,QWHUQDWLRQDO&RYHQDQWLV VXSHULRU WR WKH (XURSHDQ &RQYHQWLRQ %RWK GRFXPHQWV SURKLELWGHURJDWLRQ IURP DUWLFOH JXDUDQWHHLQJ ULJKW WR OLIH DQG IURP DUWLFOHVSURKLELWLQJWRUWXUHDQGVODYHU\+RZHYHULWVKRXOGEHQRWHGWKDWWKHDUWLFOHSURWHFWLQJ WKH ULJKW WR OLIH XQGHU WKH &RYHQDQW DOVR SURKLELWV JHQRFLGH

ZKLFKLVQRWFRYHUHGE\WKHUHVSHFWLYH&RQYHQWLRQDUWLFOH0RUHRYHUZKLOH$UWLFOH RI WKH &RQYHQWLRQ SURKLELWV VODYHU\ RQO\ WKH ,QWHUQDWLRQDO&RYHQDQW SURKLELWV VODYH WUDGH DV ZHOO ,Q DGGLWLRQ WKH (XURSHDQ&RQYHQWLRQ GRHV QRW SURYLGH DQ\ OLPLWDWLRQ WR GHURJDWLRQ IURP ULJKWVFRQWDLQHG LQ $UWLFOHV DQG IRU ZKLFK WKH ,QWHUQDWLRQDO

&RYHQDQWSURKLELWVGHURJDWLRQ

$UWLFOH SURKLELWV LPSULVRQPHQW IRU IDLOXUH WR IXOILOO FRQWUDFWXDOREOLJDWLRQ

,ELGS 0DORQH/ $,QWHUQDWLRQDO /DZ QGHG1HZ


103/550

86$.


104/550

7+(352%/(05(/$7,1*727+(0$5*,1

&RXQFLORI(XURSHZKHQVXFKPHDVXUHVKDYHFHDVHGWRRSHUDWHDQGWKHSURYLVLRQVRIWKH&RQYHQWLRQDUHDJDLQEHLQJIXOO\H[HFXWHG

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

IURP H[HUFLVLQJ $UWLFOH WR WDNH H[FHVVLYH PHDVXUHV RU WR PDLQWDLQHPHUJHQF\SRZHUVRULQVWLWXWLRQVPRUHWKDQLVQHFHVVDU\VLQFHWKLVZRXOGEH FRQWUDU\ WR WKH SULPDU\ REMHFWLYHV RI WKH &RQYHQWLRQ ZKLFK LV WKHSURPRWLRQDQGSURWHFWLRQRIEDVLFULJKWVDQGIUHHGRPV

,WLVDOVRHVVHQWLDOXQGHU$UWLFOHWKDWDWOHDVWIRXUFULWHULDQHHGWREHPHWE\6WDWHV3DUWLHVVHHNLQJWRGHURJDWHIURP&RQYHQWLRQSURYLVLRQV

7KHSXEOLFHPHUJHQF\PXVWEHDFWXDORULPPLQHQW ,WVHIIHFWVPXVWEHIHOWE\WKHZKROHQDWLRQ 7KH FRQWLQXDQFH RIWKHRUJDQL]HGOLIHRI WKH FRPPXQLW\ PXVWEH LQGDQJHU 7KH FULVLV RU GDQJHU PXVW EH H[FHSWLRQDO LQ WKDW WKH QRUPDO

PHDVXUHV RU UHVWULFWLRQV SHUPLWWHG E\ WKH &RQYHQWLRQ IRU WKHPDLQWHQDQFH RI SXEOLF VDIHW\ KHDOWK DQG RUGHU DUH SODLQO\LQDGHTXDWH

$33/,&$7,212)7+('2&75,1($681'(56722'%


105/550

86$.


106/550

7+(352%/(05(/$7,1*727+(0$5*,1

XQGHU $UWLFOH WR HQVXUH WKDW WKH 0HPEHU 6WDWHV REVHUYH WKHLUHQJDJHPHQWV$V D UHVXOW >W@RR OLEHUDO DQDSSOLFDWLRQRI WKHGRFWULQHLQIDYRURIWKHUHVSRQGHQW6WDWHZLOOLQWKHORQJUXQXQGHUPLQHWKH&RXUWVFODLPWREH WKHDXWKRULWDWLYH LQVWLWXWLRQIRULQWHUSUHWDWLRQDQGDSSUHFLDWLRQRIWKH&RQYHQWLRQ

,QIDFWWKHGRFWULQHLVDORJLFDOFRQVHTXHQFHRIWKHVXEVLGLDULW\SULQFLSOHHPERGLHG LQ WKH (XURSHDQ &RQYHQWLRQ 6LQFH WKH UROH RI WKH &RQYHQWLRQV\VWHPLVVXEVLGLDU\WRGRPHVWLFOHJDOV\VWHPVLWLVWKHVWDWHVSDUWLHVWRWKH&RQYHQWLRQ WKDW IXQFWLRQ DV WKH SULPDU\ SURWHFWRUV RI KXPDQ ULJKWV

$FFRUGLQJO\ WKH &RXUWV FRQWURO DQG VXSHUYLVLRQ LV DOVR WR EH VHHQ DVVXEVLGLDU\WRWKHSULPDU\WDVNRIVWDWHV7KHUHIRUHWKHGRFWULQHRIPDUJLQRI

DSSUHFLDWLRQVKRXOGEHVHHQDVWKHUHIOHFWLRQRIWKHVXEVLGLDULW\DQGFXOWXUDOGLYHUVLW\,QDVHQVHWKH&RQYHQWLRQV\VWHPDVVXPHVWKDWQDWLRQDODXWKRULWLHVDUH LQ D EHWWHU SRVLWLRQ WKDQ WKH &RXQFLO RUJDQV WR HIIHFWLYHO\ UHFRQFLOHLQGLYLGXDOULJKWVZLWKQDWLRQDOLQWHUHVWV,WVHHPVWKHUHIRUHWKDWWKH&RXQFLORUJDQV FOHDUO\ UHFRJQL]H WKH VRYHUHLJQ ULJKW RI 6WDWHV 3DUWLHV DQG WKHLUGRPLQDQWSRVLWLRQLQJOREDOSROLWLFV

7KH GRFWULQH ZDV EHLQJ DSSOLHG WR $UWLFOH W\SH RI TXHVWLRQV DW WKHEHJLQQLQJ +RZHYHU RYHU WKH WLPH WKH &RXUW DQG WKH &RPPLVVLRQ KDYH

ZLGHQHGWKHVFRSHRIWKHDSSOLFDWLRQRIWKHGRFWULQHVRDVWRFRYHUVRPHRWKHUFHUWDLQSURYLVLRQVRIWKH&RQYHQWLRQ%RWKRUJDQVEHJDQDSSO\LQJWKHGRFWULQHWR$UWLFOHVDQG7KHULJKWVJXDUDQWHHGXQGHUWKH$UWLFOHVIRUZKLFKWKHXVHRIWKHGRFWULQHKDVEHHQDOORZHGDUHWKRVHWKDWKDYHWREHSURWHFWHGLQ

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

JURXQGV RI PRUDOLW\ ZLOO ILQG D PXFK ZLGHU PDUJLQ RI DSSUHFLDWLRQ ,Q RWKHUZRUGVLWFRXOGEHDUJXHGWKDWDGHPRFUDWLFVRFLHW\FDQQRWUHVWULFWWKHSXUHHQMR\PHQW RI GHPRFUDF\ KRZHYHU LW FDQ GHFLGH ZLWKLQ UHDVRQ ZKHUH DUW

,ELGS *URVVDQG$RODLQS :HVWRQHWDOS 5HWULHYHGIURPKWWSZZZOHHGVDFXNODZKDPO\QHFKUKWPRQ


107/550

86$.


108/550

7+(352%/(05(/$7,1*727+(0$5*,1

PDUJLQ RI DSSUHFLDWLRQWRQDWLRQDO JRYHUQPHQWV LQ UHVWULFWLQJ KXPDQ ULJKWVDQGIXQGDPHQWDOIUHHGRPV

7KHILUVWFDVHWREHUHYLHZHGLQWKLVUHJDUGLV%URJDQY8QLWHG.LQJGRP ,QWKH 8. WKH 3UHYHQWLRQ RI 7HUURULVP $FW LQWURGXFHG LQ DXWKRUL]HG DFRQVWDEOHV DUUHVW ZLWKRXW ZDUUDQW RI D SHUVRQ ZKR LV VXVSHFWHG WR EHLQYROYHGZLWKDFWVRIWHUURULVPLQ1RUWKHUQ,UHODQG

)RXUSHUVRQVZKRZHUHDUUHVWHGDQGGHWDLQHGLQDQGXQGHUWKH $FW ILOHG D FRPSODLQW DJDLQVW WKH 8. ZLWK WKH &RPPLVVLRQ 7KHDSSOLFDQWV DUJXHG EHIRUH WKH &RPPLVVLRQ WKDW WKH 8. KDG YLRODWHG WKHSURYLVLRQVRI$UWLFOHRIWKH&RQYHQWLRQ7KH&RPPLVVLRQLQLWVUHSRUWLQ FRQFOXGHG WKDW WZR SURYLVLRQV RI $UWLFOH KDG EHHQ YLRODWHG ,W

IRUZDUGHGWKHFDVHWRWKH(XURSHDQ&RXUWRI+XPDQ5LJKWV7KH%ULWLVK*RYHUQPHQWKDVGUDZQDWWHQWLRQWR WKHH[LVWHQFH RIGLIILFXOW

FLUFXPVWDQFHVLQ1RUWKHUQ,UHODQGLQSDUWLFXODUWKHWKUHDWSRVHGE\WHUURULVP6XEVHTXHQWO\WKHJRYHUQPHQWLQIRUPHGWKH6HFUHWDU\*HQHUDORIWKH&RXQFLORI(XURSHRQ$XJXVWWKDWLWZDVZLWKGUDZLQJLWVQRWLFHRIGHURJDWLRQXQGHU$UWLFOHRIWKH(XURSHDQ&RQYHQWLRQIRUWKH3URWHFWLRQRI+XPDQ5LJKWVDQG)XQGDPHQWDO)UHHGRPV

7KHDSSOLFDQWVDUJXHGWKDWWKH\ZHUHQHLWKHUFKDUJHGQRUEURXJKWEHIRUHDFRXUWGXULQJWKHLUGHWHQWLRQDQGWKDW$UWLFOHKDGEHHQYLRODWHGE\WKH8.*RYHUQPHQW7KH\DOVRQRWHGWKDWWKH\KDGEHHQGHWDLQHGIRUVHYHQGD\VDQGWKHUHZDVQRDFFHSWDEOHUHDVRQIRUWKDWORQJGHWHQWLRQDQGFODLPHGWKDWWKH\KDYHEHHQWKHYLFWLPVRI$UWLFOHDVZHOO

,QLWVFRQFOXVLRQWKH&RXUWVWDWHGWKDWQRQHRIWKHDSSOLFDQWVZDVQHLWKHUEURXJKWSURPSWO\EHIRUHDMXGLFLDODXWKRULW\RUUHOHDVHGSURPSWO\IROORZLQJKLVDUUHVW$OWKRXJKLWZDVXQGRXEWHGWKDWWKHDUUHVWDQGGHWHQWLRQRIWKHDSSOLFDQWVZHUH LQVSLUHGE\WKH OHJLWLPDWHDLPRISURWHFWLQJWKHFRPPXQLW\IURPWHUURULVPLWZDVQRWVXIILFLHQWWRHQVXUHFRPSOLDQFHZLWKWKHSURYLVLRQVRI$UWLFOH7KXVWKHUHKDVEHHQDEUHDFKRI$UWLFOHLQUHVSHFWRIDOOIRXUDSSOLFDQWV

7KH&RXUWDOVRFRQVLGHUHG$UWLFOHRIWKH&RQYHQWLRQVWDWLQJWKDWLQHYHQWRIYLRODWLRQLIWKHLQWHUQDOODZRIDUHVSRQGHQWVWDWHDOORZVRQO\SDUWLDOUHSDUDWLRQWKH&RXUWVGHFLVLRQVKDOODIIRUGMXVWVDWLVIDFWLRQWRWKHLQMXUHGSDUW\7KHDSSOLFDQWVVRXJKWH[HPSODU\GDPDJHVEHFDXVHRIWKHFRQVFLRXVDQG IODJUDQW FKDUDFWHU RI WKH EUHDFKHV RI WKH &RQYHQWLRQ VXJJHVWLQJ

DVVHVVPHQWRQWKHEDVLVRIVWHUOLQJVSHUKRXUIRUHDFKKRXURIZURQJIXOGHWHQWLRQ )ROORZLQJ WKH GHFLVLRQ RI WKH &RXUW UDWKHU WKDQ UHYLVLQJ WKH3UHYHQWLRQ RI 7HUURULVP $FW RU WKH SUDFWLFH RI QRQMXGLFLDO VXSHUYLVLRQ RIH[WHQGHGGHWHQWLRQWKH8.*RYHUQPHQWORGJHGGHURJDWLRQXQGHU$UWLFOHRIWKH&RQYHQWLRQRQJURXQGVRISXEOLFHPHUJHQF\7KH&RXUWKHOGWKDWWKH

$NOOROX77HU|UYHQVDQ+DNODU>7HUURUDQG+XPDQ5LJKWV@QVDQ+DNODU0HUNH]L

'HUJLVL9RO1RSS


109/550

86$.


110/550

7+(352%/(05(/$7,1*727+(0$5*,1

,QSDUWLFXODUFDVHVFRQFHUQLQJHPHUJHQFLHVUHODWHGWRWHUURULVWDFWVDUHXVHGE\6WDWHV3DUWLHVWRPDNHGHURJDWLRQVXQGHU$UWLFOH7KHMXULVSUXGHQFHRIWKH &RXUW LQ WKLV UHJDUG HYROYHG DURXQG SHWLWLRQV EURXJKW DJDLQVW WZRFRXQWULHV WKH8QLWHG .LQJGRP DQG 7XUNH\ %RWK KDYH ORQJ VXIIHUHG IURP

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

$UWLFOHRIWKH&RQYHQWLRQDQGUHFRJQL]HGWKHFRPSXOVRU\MXULVGLFWLRQRIWKH (XURSHDQ &RXUW 7KH LQWHUHVWLQJ SRLQW LV WKDW 7XUNH\ DSSOLHG IRU IXOOPHPEHUVKLS WR WKH (8 YHU\ VRRQ +RZHYHU WKH (XURSHDQ &RPPXQLW\UHMHFWHG 7XUNH\V DSSOLFDWLRQ LQ 6KRUWO\ DIWHU 7XUNH\ UHLQYRNHGGHURJDWLRQVXQGHU$UWLFOH

7KHUH DUH D QXPEHU RI FDVHV FRQFHUQLQJ IUHHGRP RI H[SUHVVLRQIUHHGRP RI DVVRFLDWLRQ DQG IUHHGRP RI WKRXJKW ZLWK UHJDUG WR WKHDSSOLFDWLRQ RI WKH PDUJLQ RI DSSUHFLDWLRQ GRFWULQH ,Q LQ 2WWR3UHPLQJHU,QVWLWXWH Y $XVWULDWKH&RXUWGHFLGHGE\YRWHVWRWKDWWKH

VHL]XUHDQGIRUIHLWXUHRIDEODVSKHPRXVILOPGLGQRWYLRODWHWKHIUHHGRPRIH[SUHVVLRQ

7KH ILOP ZDV SUHVHQWHG E\ WKH DSSOLFDQW DVVRFLDWLRQ DV D VDWLULFDOWUDJHG\7ULYLDOLPDJHU\DQGDEVXUGLWLHVRIWKH&KULVWLDQFUHHGDUHWDUJHWHGLQDFDULFDWXUDOPRGHDQGWKHUHODWLRQVKLSEHWZHHQUHOLJLRXVEHOLHIVDQG

ZRUOGO\PHFKDQLVPRIRSSUHVVLRQLVLQYHVWLJDWHGLQWKHSOD\

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

*URVVDQG$RDOLQSS


111/550

86$.LW@LVZHOOHVWDEOLVKHGWKDWWKH&RXUWVFDVHODZXQGHU$UWLFOHRIWKH&RQYHQWLRQWKDW LQGHPRFUDWLFVRFLHWLHV LQZKLFKVHYHUDO UHOLJLRQVFRH[LVW ZLWKLQRQHDQGWKHVDPH SRSXODWLRQ LW PD\ EH QHFHVVDU\ WR SODFH UHVWULFWLRQV RQ WKH IUHHGRP WRPDQLIHVWRQHVUHOLJLRQRUEHOLHIVLQRUGHUWRUHFRQFLOHWKHLQWHUHVWVRIWKHYDULRXVJURXSVDQGHQVXUHWKDWHYHU\RQHVEHOLHIVDUHUHVSHFWHG7KH&RXUWGRHVQRWFRQVLGHUWKDWWKHUHVWULFWLRQLQTXHVWLRQWKHREMHFWRIZKLFKLVWRDYRLGGLVFULPLQDWLRQFDQEHVDLGWREHDUELWUDU\RUWRIDOORXWVLGHWKH6WDWHVPDUJLQRIDSSUHFLDWLRQ

,Q 6KHIILHOGDQG+RUVKDPYWKH8QLWHG.LQJGRP WZRWUDQVVH[XDOVERWKRIZKRPKDGEHHQUHJLVWHUHGPDOHDWELUWKEXWKDGVXFFHVVIXOO\XQGHUJRQHVH[UHDVVLJQPHQW VXUJHU\ DQG WUHDWPHQW DOOHJHG WKDW W

usak yearbook of international politics and law 2009, volume 2

Documents