‘OUR RIGHT TO VOTE’: HOW COVID-19 IS INFECTING DEMOCRACY AROUND THE WORLD

By Audrey Bimbi, Associate Editor

COVID-19 has caused disruptions in more ways that many could have anticipated. Now added to the list of disruptions is the virus’ threat to democracy and the right to vote. As of April 15, 2020, several countries have postponed their elections to avoid putting people’s lives at risk, with South Korea currently standing out as an exception. With approximately 14,000 disinfected voting stations, South Korea is carrying out its elections in the strictest form, requiring voters to wear masks and stand about 3 feet from each other. Even those who are infected can vote by mailing the ballots. Regardless of whether countries will continue to hold elections or postpone them, the crisis brought by COVID-19 is creating several problems for the people’s right to vote all around the world.

The first problem, and perhaps the most disturbing is the dilemma of voters in countries with state-owned media. For example, several countries, including Brazil and India, have cut both the freedoms of press and expression as part of their response to the COVID-19 crisis. This increases the limits to opposition parties in the means by which they can reach people who are in lockdown and gives the incumbents an even bigger advantage than they normally have.

The difficulty in reaching the voters also leads to another problem: The fact that the lockdown has affected the meetings that would have allowed candidates to meet with their voters and appeal for their vote through other means of communication. Gestures that people seemed to take for granted until now – hugs and handshakes – have been relied on by candidates on the campaign trails because they can convey so much more than words. Being unable to communicate with voters in person becomes a significant problem when one considers that there are some voters who are being marginalized right now because of lack of internet access. Without the establishment of other means and measures to reach such voters, their marginalization could worsen.

The third problem affects both candidates and voters: There is little to no room to discuss anything but the virus on the campaign trails. Instead of discussing the variety of topics that make each candidate appealing, the discussions seem to be limited to how well they will be able to handle this crisis. For voters who are already dissatisfied with their current administrations’ response, anyone who promises better might seem like a good candidate. However, this also raises the question of whether the elected candidate is well-equipped to handle the state of affairs in the life after COVID-19.

These are just a few of the problems that COVID-19 is creating for democracy around the world. In some unfortunate situations, leaders will probably opt to hold elections in hopes that low voter-turnout will work in their favor, while others will indefinitely postpone elections as a means of holding on to power. Regardless of the choices made by these leaders, the crisis surrounding COVID-19 is proving just how important the people’s right to vote is and raises concerns as to how it can be protected.

References

Dave Lawler, Countries grapple with how to hold elections during coronavirus, Axios (Apr. 13, 2020) available at https://www.axios.com/elections-coronavirus-2020-postoned-a662197b-89b7-4c26-8927-aef8c3d2529a.html

Hyonhee Shin, S.Korea holds parliamentary election under strict safety measures amid pandemic, Reuters (Apr. 14, 2020, 9:23 PM) available at https://www.reuters.com/article/health-coronavirus-southkorea-election/s-korea-holds-parliamentary-election-under-strict-safety-measures-amid-pandemic-idUSL3N2C3098

Julia Hollingworth and Yoonjung Seo, South Korea is holding an election during the coronavirus crisis. Other countries are postponing theirs. Either way, democracy may suffer, CNN (Apr. 14, 2020 10:30 PM ET) available at https://www.cnn.com/2020/04/13/asia/elections-coronavirus-pandemic-intl-hnk/index.html

Kylie MacLellan and Guy Faulconbridge, Britain was too slow to act on COVID-19, opposition leader says, Reuters(Apr. 15, 2020, 3:34 AM) available at https://www.reuters.com/article/us-health-coronavirus-britain/britain-was-too-slow-to-act-on-covid-19-opposition-leader-says-idUSKCN21X0SV

Laura Bicker, Coronavirus: South Korea holds elections in masks and clinics, BBC (Apr. 15, 2020) available athttps://www.bbc.com/news/world-asia-52275993

Maria Ressa, COVID-19: We Can’t Let the Virus Infect Democracy, Time (Apr. 14, 2020) available at https://time.com/5820620/maria-ressa-coronavirus-democracy/

Yen Nee Lee, Singapore may have to hold elections during the coronavirus outbreak, says minister, CNBC (Mar. 18, 2020 3:58 PM EDT) available at https://www.cnbc.com/2020/03/18/coronavirus-singapore-could-hold-elections-during-outbreak-minister-says.html

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Global Mask Treasure Hunt Ensues Amid Rapid COVID-19 Spread

By Elena Delella, Associate Editor

As of April 7th, 2020, the number of confirmed coronavirus disease (COVID-19) cases has risen to 1,280,000, while the global death toll has reached 72,780. COVID-19’s rapid spread has led to a global scramble for personal protective equipment (PPE). N-95 masks are one specific type of PPE that is hardest to find. These masks and other PPE are so difficult to obtain that the French are referring to the global race as “guerre des masques” – the war of the masks.

Countries are not the only opponents in this war. Individuals are also fighting to amass masks as the World Health Organization (WHO) and the Center for Disease Control (CDC) begin to reevaluate their position on individual mask use in public. New research conducted by the Massachusetts Institute of Technology (MIT) found coughs can project liquid up to 6m away, while sneezes can reach up to 8m. These findings cast concern on what is an actual “safe distance” in the age of COVID-19. Additionally, this study could have implications on advice regarding daily mask use because in certain situations wearing masks, especially in poorly ventilated rooms, would reduce the risk of contracting COVID-19. As of recently, the CDC recommends that Americans use non-medical grade cloth face masks to prevent the spread of COVID-19. While the WHO is still considering whether to change its guidance on face mask use in public.

The United States (US) is accused of being the biggest offender in this war. Both French and German officials have accused the US of seizing masks intended for distribution to their countries and diverting their shipments to the US. Andreas Geisel, a senior state official in Berlin, has gone so far as alleging that the US is committing acts of “modern piracy.”

Geisel alleges that 200,000 3M respirator masks destined for Berlin were diverted by the US in Bangkok. 3M, which is a US-owned company, denies such diversion, stating that there is “no record of an order of respirators from China for Berlin,” let alone that those masks had been seized by the US. While in France two region presidents, Renaud Muselier and Jean Rottner, claim that American customers tried to divert medical supplies by paying up to four times the typical price. Muselier alleged that an order of supplies destined to France ended up going to the US when Americans purchased the order for cash. While Rottner alleges that Americans are arriving on airport tarmacs in China and paying three to four times more for orders the French already made. The US entity responsible for these suspected hijackings is currently unknown. Although, the US Embassy in France, said that the US Federal government was not responsible for purchasing masks scheduled for delivery to France from China.

In response to an extreme shortage of masks and other PPE, countries have begun hoarding PPE manufactured in their country. In March, the French government began seizing all masks produced in their country. For example, Valmay SAS, a French company, was blocked from delivering an order of PPE to the UK National Health Service, who is a regular customer of the company.

In comparison, President Trump invoked the Defense Production Act (DPA) to address shortages of PPE in the US. A section in the DPA authorizes the president to control the production and distribution of scarce materials “essential to the national defense.” PPE equipment, which includes masks, was cited as essential to national defense in Trump’s executive order. Under the DPA the US government can prioritize the production of essential scarce goods, provide guaranteed loans or directly lend money to targeted industries, and if all else fails, the government has priority over other consumers to purchase firm’s products. The executive branch’s power under the DPA applies to US companies wherever they operate.

On May 2nd, President Trump employed his power under the DPA ordering Chad Wolf, Homeland Security Secretary, to “acquire, from any appropriate subsidiary or affiliate of 3M company, the number of N-95 respirators that the Administrator determines to be appropriate.” Additionally, Trump’s administration requested that 3M cease exporting masks made in the US to Canada and Latin America. Following the Trump administration’s request, 3M warned that stopping the exportation of respiratory masks could make the product less available in the US due to retaliation by other countries.

As countries and individuals scramble to secure PPE, the market for this equipment has become increasingly competitive. The market is so aggressive that countries are employing “wild west methods” to ensure that they come out on top. This competition is unlikely to end any time soon as countries around the globe begin to invoke DPA like policies. 

Anna Swanson, Zolan Kanno-Youngs, and Maggie Haberman, Trump Seeks to Block 3M Mask Exports and Grab Masks From Its Overseas Customers, The New York Times (Apr. 3, 2020), available athttps://www.nytimes.com/2020/04/03/us/politics/coronavirus-trump-3m-masks.html

Coronavirus (COIVD-19), World Health Organization (Apr. 8, 2020) available at https://who.sprinklr.com

Coronavirus: US Accused of ‘Piracy’ Over Mask ‘Confiscation,’ BBC, (Apr. 4, 2020), available athttps://www.bbc.com/news/world-52161995

David Welna, Trump Invokes a Cold War Relic, The Defense Production Act, For Coronavirus Shortages, NPR (Mar. 18, 2020), available at https://www.npr.org/2020/03/18/818069722/trump-invokes-a-cold-war-relic-the-defense-production-act-for-coronavirus-shorta

Kevin Breuniger, 3M Warns Trump: Halting Exports Under Defense Production Act Would Reduce Number of Masks Avaliable to US, CNBC (Apr. 3, 2020), available at https://www.cnbc.com/2020/04/03/coronavirus-3m-tells-trump-halting-exports-would-reduce-number-of-masks.html

Tim Lister, Sebastian Shukla, and Fanny Bobille, Coronavirus Sparks a ‘War for Masks” in Desperate Global Scramble for Protection, CNN World (Apr. 5, 2020), available at https://www.cnn.com/2020/04/04/europe/coronavirus-masks-war-intl/index.html

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Governments Across the World Race to Buy Medical Equipment in order to Respond to COVID-19’s Increasing Reach

By Gabriel Diaz, Associate Editor 

On March 11, 2020, the World Health Organization designated coronavirus disease (COVID-19) a global pandemic. With nearly 700,000 confirmed cases and 34,000 deaths globally COVID-19 has quickly become the only topic of conversation. Cities around the world are almost completely deserted as measures to tackle the pandemic continue. Governments have halted flights, locked down towns and urged people to stay at home.

Healthcare professionals internationally on the other hand are not given the same advice. Medical workers and first responders are on the frontline fighting against the global pandemic. Some of which are doing so without the luxury of proper equipment and safeguards to protect themselves against the virus. The World Health Organization (WHO) in early March, warned of a shortage of protective equipment that would hamper the response to the outbreak.

WHO Director-General Tedros Adhanom estimated that each month, about 89 million medical masks, 76 million examination gloves and 1.6 million goggles will be required globally for health care workers to adequately respond to the outbreak. This does not include the millions of ventilators, resuscitators and other machines that are also at an extreme deficit worldwide. Shortages are leaving doctors, nurses and other front-line health care workers dangerously ill-equipped and forcing governments to spend big in order to try and combat the issue.

As the coronavirus outbreak rattles the global economy and disrupts supply chains, global commerce for medical equipment increases to combat the lack of supplies.

Planes in the Czech republic landed from China early last week, with 1.9 million face masks and 100,000 respirators. The Czech Republic wants to spend over three billion crowns on the purchase of health equipment to battle the coronavirus outbreak ($1 = 25.629 crowns).

A German based medical supply company Draegerwerk, said that the German government placed an order for 10,000 ventilators, the medical gear maker’s largest order ever and equivalent to a normal year of production.

Italy on the other hand, who have been one of the hardest hit countries tendered for 5,000 ventilators and other desperately needed medical equipment. Privately owned Hamilton Medical, a Swiss company which usually makes 15,000 ventilators a year, has ramped up its production by 30-40% in order to meet the demand from countries globally.

A hospital-grade ventilator is a costly machine running between $25,000 and $50,000 each, illuminating the costs countries are willing to spend to try and hinder the virus.

In New York, an aircraft landed carrying 80 tons of gloves, masks, gowns and other medical supplies from Shanghai, China, which is reported to be the first of 22 scheduled flights. The plane delivered 130,000 N95 masks, 1.8 million face masks and gowns, 10 million gloves and thousands of thermometers for distribution.

Even still, the United States is urging foreign countries to ramp up production of masks, ventilators, and other coronavirus items and is seeking to buy any quantities they can spare. Due to a historic surge in patients seeking care for COVID-19, President Trump stated that the U.S. is willing to explore a mutually beneficial exchange of other materials to address COVID-19 related supplies that we have in excess.

The overwhelming demand has set off a race among foreign countries, American officials at all levels of government, and private individuals to acquire protective gear, ventilators and other much-needed goods from China. Most global commerce has come to definitive stand still, while on the other hand medical supply companies are churning out supplies in order to meet the global demand.

 

References:

Joshua Berlinger, WHO warns of global medical equipment shortage as world braces for coronavirus spread, CNN (March 4, 2020) available at https://www.cnn.com/2020/03/04/asia/novel-coronavirus-covid-19-intl-hnk/index

Megan L. Ranney, Valerie Griffeth, and Ashish K. Jha, Critical Supply Shortages: The Need for Ventilators and Personal Protective Equipment during the Covid-19 Pandemic, THE NEW. ENG. J. of MED. (March 25, 2020) available athttps://www.nejm.org/doi/full/10.1056/NEJMp2006141

Josh Lederman, U.S. diplomats urging nations to ramp up PPE production, seeking to buy supplies, NBC, (March 25, 2020) available at https://www.nbcnews.com/politics/white-house/u-s-diplomats-urging-nations-ramp-ppe-production-seeking-buy-n1168421

World Health Organization, Corona Virus Disease COVID-19) Outbreak; Rights, Roles, and Responsibilities of Health Workers, Including Key Considerations for Occupational Safety and Health, WHO (March 4, 2020) available at https://www.who.int/docs/default-source/coronaviruse/who-rights-roles-respon-hw-covid-19.pdf?sfvrsn=bcabd401_0

The NY Times, Coronavirus Outbreak Deepens Its Toll on Global Business, NY TIMES, (Feb. 21, 2020) available at https://www.nytimes.com/2020/02/21/business/coronavirus-global-business.html

John Miller, Germany, Italy rush to buy life-saving ventilators as manufacturers warn of shortages, REUTERS (MARCH 13, 2020) available at https://www.reuters.com/article/us-health-coronavirus-draegerwerk-ventil/germany-italy-rush-to-buy-life-saving-ventilators-as-manufacturers-warn-of-shortages-idUSKBN210362

Ana Swanson, White House Airlifts Medical Supplies From China in Coronavirus Fight, NY TIMES (March 29, 2020) available at https://www.nytimes.com/2020/03/29/business/economy/coronavirus-china-supplies.html

CTK National News Wire, Another aircraft from China brings coronavirus equipment, LEXIS (March 24, 2020) available at https://advance.lexis.com/document/?pdmfid=1000516&crid=ffcf2f35-189a-405f-a0d6-b0f52ad57885&pdactivityid=2f08122d-8357-481b-8cf4-366b857bbb99&pdtargetclientid=-None-&ecomp=9f__k

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COV-19: China Leads Global Pandemic Containment – International Commerce Delayed

By: Kenneth D. Knight, Associate Editor 

On December 31, 2019 the World Health Organization (WHO) was notified by the China Country Office that there were multiple cases of pneumonia with an unknown source, originating from Wuhan City, Hubei Province of China.  In their first situation report, dated January 20, 2020, 282 total cases had been reported, resulting in six deaths, spanning across seven countries and territories.  Although these reports cover a short period of time to date, the results recorded have changed drastically over time.  On March 13, 2020, President Trump declared COV-19, or informally referred to as Coronavirus, a global pandemic and announced a national state of emergency in the United States.  Recently, in the March 31, 2020 submission, the WHO reported an outstanding 750,890 total cases globally have been reported to date, increasing the death count to 36,405 deaths.  This pandemic spans across 202 countries at this time, with the United States leading the current results with 140,640 confirmed cases.  The WHO Director-General, Dr. Tedros Adhanom Ghebreyesus, stated in early March that the danger of this virus stemmed from findings of “difficulty in identifying cases due to non-specific symptoms and the potential of undetected transmission,” as well as the “potential for major impact on healthcare systems in some affected and potentially affected countries.”  With no clear foresight as to how this outbreak would affect the world, countless economies have been paralyzed by the lack of clarity.

A White Paper created by the American Chamber of Commerce in South China detailed the impact of COV-19 on the supply chains that operate through the Chinese market.  From March 9 to 14, 2020, 237 random companies were tested to determine the scope of this disease on multinational commerce.  From this study, the United States was identified as representing more than half of the lion share of the market, while the European Union and Asia-Pacific Economic Cooperation (APEC) make up the remainder.  One third of the companies surveyed have already reported a shortage of necessary inventory, while 15% have reported their current supplies are depleted.  All companies surveyed have realized a detrimental impact to their supply chains, and 80% believe there will be a lasting effect for one to three months.  These effects on production and access to available supplies will inevitably correlate with the impact on employment globally.

Ironically, this pandemic comes on the heels of recent tensions between the United States and China seeking to “decouple” their trade markets.  The United States cannot continue to over-rely on the Chinese market, because this overreliance has historically led to economic consequences.  These economies and trade markets are intertwined; however, this current situation has highlighted the necessity for the United States to seek diverse investment opportunities.  If the findings above are accurate, the current impact of COV-19 to the Chinese supply chain will cause drastic effects in international commerce –– and in ­the United States directly.

In order to help contain this outbreak and protect international commerce, the current Administration must do more than direct the States to unilaterally mitigate the spread of COV-19.  To protect these multinational supply chains and the overall health and safety of the people, a more vigorous approach must be taken.  China, where the disease originated, through various techniques, has reported a steady decline, and a “zeroing out” of new cases recently.  These results are due to the implementation of strict laws to possibly punish individuals who fail to disclose their travel to areas where outbreaks are prominent and by shifting jobs and the current economic infrastructure to support the nation’s overall healthcare.

COVID-19 is a global pandemic with the expansion rate to cause significant economic stress.  Due to a lack of healthy employees, a shortage of suitable equipment, and a lack of testing, these strains have generated more than a financial burden.  Without proper order, the effect on multinational commerce will continue to expand across various nations.  The health and safety of the people must be the primary concern if any international commerce can be maintained.

 

References

Coronavirus disease (COVID-2019) situation reports, WHO (Jan. 21, 2020), available at https://www.who.int/emergencies/diseases/novel-coronavirus-2019/situation-reports (last updated Apr. 1, 2020).

Coronavirus disease (COVID-19) Situation Dashboard, WHO Health Emergencies Programme (Feb. 4, 2020 18:00 CET), available at https://experience.arcgis.com/experience/685d0ace521648f8a5beeeee1b9125cd.

Donald J. Trump, Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak, White House (Mar. 13, 2020), available at https://www.whitehouse.gov/presidential-actions/proclamation-declaring-national-emergency-concerning-novel-coronavirus-disease-covid-19-outbreak/.

Xinhua, WHO raises global risk of COVID-19 for two reasons: WHO chief, China Daily, available at http://www.chinadaily.com.cn/a/202003/01/WS5e5b317ba31012821727b522.html (last updated Mar. 1, 2020).

Xubinghui, Special Report on the Impact of COVID-19 on Supply China, Now Shenzhen (Mar. 25, 2020), available athttps://www.nowshenzhen.com/business/special-report-on-the-impact-of-covid-19-on-supply-china/#site-header.

Weizhen Tan, Coronavirus outbreak will speed up US-China ‘decoupling’ more than the trade war, Milken Institute analyst says, CNBC (Feb. 11, 2020 7:41 EST), available at https://www.cnbc.com/2020/02/12/coronavirus-effect-on-us-china-decoupling-versus-trade-war-milken.html.

Hilary Brueck, Anna Medaris Miller and Shira Feder, China took at least 12 strict measures to control the coronavirus. They could work for the US, but would likely be impossible to implement., Business Insider, available at https://www.businessinsider.com/chinas-coronavirus-quarantines-other-countries-arent-ready-2020-3.

Lauren Frias, China reported no new local coronavirus cases for the first time during the outbreak, Business Insider (Mar 18, 2020 9:48 PM), available at https://www.businessinsider.com/china-no-new-local-coronavirus-cases-first-time-during-outbreak-2020-3?r=US&IR=T.

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The COVID-19 Pandemic: Are the PHEIC Protocols Doing Their Job?

By Kara Rockey, Associate Editor

Since the first reported case of COVID-19 emerged in China in December 2019, there have been over 416,000 confirmed cases and over 18,000 confirmed deaths, all spurring from 197 affected countries. Ultimately, the rapid spread of the virus has highlighted a global vulnerability to the spread of novel infectious diseases, particularly ones spread easily through close proximity and social interaction.

The World Health Organization (WHO) has been at the forefront of global efforts to combat the COVID-19 pandemic by providing leadership and guidance to many affected countries, contributing to research efforts, and setting global standards and monitoring their implementation.

The IHR is a binding instrument of international law enacted in 2007, which aims to “prevent, protect against, control and provide a public health response to the international spread of disease in ways that are commensurate with and restricted to public health risks.” Further, the IHR provides that the WHO’s Director General, with the advice of an Emergency Committee, may declare an event Public Health Emergency of International Concern (PHEIC).

The WHO defines a PHEIC as an “extraordinary event” that “constitute[s] a public health risk to other States through the international spread of disease” and “potentially require[s] a coordinated international response. Generally, a PHEIC is meant to mobilize an international response to an infectious disease outbreak. Through the declaration of a PHEIC, the WHO may implement “non-binding but practically and politically significant measures that can address travel, trade, quarantine, screening, treatment.”

In the context of COVID-19, many have been left wondering if such international regulations are enough to address an infectious disease outbreak of this magnitude. Critics of PHEIC question the effectiveness of the regulation’s underlying procedure. To meet the required criteria for declaring a PHEIC, the public health situation must be serious, unusual, or unexpected; carry implications for public health beyond the affected State’s national border, and; have the potential to require immediate international action.

Many believe that these criteria are overly broad, thus rendering determinations of a PHEIC arbitrary and potentially drawing out the decision-making process during times of crisis. In the context of COVID-19, on January 22, 2020, despite the situation rapidly evolving, the WHO’s Director-General determined COVID-19 not to be a PHEIC due to the limited spread of the virus outside of China. It was only a few days later, on January 30th, that COVID-19 was officially declared a PHEIC. Given the disease’s high rate of infection, in the span of just a few days, there were more than 7,800 confirmed cases of COVID-19, with fewer than 100 coming from China. Some critics believe that this delayed decision is partly responsible for a spike in cases internationally, as the delay in response also postponed international coordination for a more unified response to the virus globally.

Further, the overall procedure for determining a PHEIC has even been criticized by Tedros Adhanom Ghebreyesus the Director-General of WHO, who has communicated his belief that the decision to declare a situation as a PHEIC is a binary decision. A situation is either classified as a PHEIC or not. Tedros further expressed his desire to revise this, noting that it would be good to have “something in between…There could be some intermediate situation,” in which WHO recommendations could be provided.

Ultimately, when trust is missing in a community relationship, there will be minimal chance of solving a community-health related issue. It is essential that the WHO work to regain the trust of the international community in the context of both the COVID-19 pandemic, as well as future disease outbreaks. While given the complexity of global pandemics it is unrealistic to expect a perfect system, however, the WHO should start by addressing the ambiguities within its PHEIC protocols.

 

 

References

Coronavirus Disease (COVID-19) Pandemic, WHO, available at https://www.who.int/emergencies/diseases/novel-coronavirus-2019 (last visited Mar. 25, 2020).

Lauren M. Sauer, M.S., What is Coronavirus?, John Hopkins Medicine, available athttps://www.hopkinsmedicine.org/health/conditions-and-diseases/coronavirus (last visited Mar. 25, 2020).

See The Role of WHO in Public Health, WHO, available at https://www.who.int/about/role/en/ (last visited Mar. 25, 2020).

Gian Luca Burci, The Outbreak of COVID-19 Coronavirus: Are The International Health Regulations Fit for Purpose?, EJIL Talk (Feb. 27, 2020), available at https://www.ejiltalk.org/the-outbreak-of-covid-19-coronavirus-are-the-international-health-regulations-fit-for-purpose/ (last visited Mar. 25, 2020).

Lawrence O. Gostin, What Questions Should Global Health Policy Makers Be Asking About the Novel Coronavirus?,Health Affairs (Feb. 3, 2020), available at https://www.healthaffairs.org/do/10.1377/hblog20200203.393483/full/ (last visited Mar. 25, 2020).

IHR Procedures Concerning Public Health Emergencies of International Concern (PHEIC), WHO, available athttps://www.who.int/ihr/procedures/pheic/en/ (last visited Mar. 25, 2020).

Pedro A. Villarreal, International Law and the 2018-2019 Ebola Outbreak in the Democratic Republic of Congo, EJIL Talk (Aug. 1, 2019), available at https://www.ejiltalk.org/public-international-law-and-the-2018-2019-ebola-outbreak-in-the-democratic-republic-of-congo/ (last visited Mar. 25, 2020).

Andrew Joseph, WHO Declares Coronavirus Outbreak a Global Health Emergency, Stat News (Jan. 30, 2020), available at https://www.statnews.com/2020/01/30/who-declares-coronavirus-outbreak-a-global-health-emergency/ (last visited Mar. 25, 2020).

Lisa Schnirring, WHO Decision on nCoV Emergency Delayed as Cases Spike, CIDRAP (Jan. 22, 2020), available athttp://www.cidrap.umn.edu/news-perspective/2020/01/who-decision-ncov-emergency-delayed-cases-spike (last visited Mar. 25, 2020).

 

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As Coronavirus Cases Rise Globally So Too Do Risks for International Businesses and Transactions

By Cody Lind, Associate Editor

Coronavirus (COVID-19) has captured the world’s attention and concern as it continues to spread globally – leaving the international community with more questions than answers. As of March 3, 2020, The Word Health Organization has confirmed 91,783 cases of the virus worldwide, totaling 3,123 deaths. The virus has been confirmed in 74 countries, including China (80,303) where it was first detected, South Korea (4,812), Iran (2,336), Italy (2,036), and the United States (64).

While the virus’s human impact is clear, the coronavirus’s impending threat to the global economy cannot be understated. In the past week, stocks in Europe and Asia have plummeted. In the US, the stock market saw seven consecutive days of declines and the market’s largest loss since the beginning of the 2008 financial crisis.

For companies reliant on international transactions and supply, the illness represents a substantial risk of lost revenue, breached contracts, and mounting questions of what liability and relief is available for unmet obligations. A primary source of concern for companies are force majeure clauses that continue to be invoked by businesses who are unable to perform under their contracts due to the spreading virus. The China Council for the Promotion of International Trade (CCPIT) is reported to have issued more than 1,600 force majeure certificates to Chinese companies seeking to avoid legal claims for contracts totaling $15 billion and spanning all sectors of the economy.

Generally, force majeure clauses seek to cover unexpected or unforeseeable events outside of a contracting party’s control that have impacted the company in a way that prevents it from carrying out its contractual obligations. The concept has been recognized as a general principle of international law and varies in application across domestic law. In some countries like China, force majeure is an implied term in any contract, while under English law there is no general concept for force majeure, instead requiring explicit force majeure clauses that are subject to party negotiation, making force majeure a creature of contract and often strictly interpreted by English courts.

For these reasons, companies should first carefully review the terms of existing contracts to determine whether the current event is sufficient to invoke force majeure at all. Force majeure events have traditionally been understood to cover acts of God, extreme weather events, war, government regulatory action and/or even the imposition of an embargo. However, examples of force majeure within the language of the contract may have a controlling effect on whether the clause will protect against claims of nonperformance. For example, if “disease” or “epidemic” are not included under party provisions, the term “act of God” may or may not be sufficient upon further consideration. This said, force majeure clauses that expressly consider health emergencies or epidemics are less common and parties invoking force majeure risk incorrect declarations, potentially resulting in damages.

If the outbreak counts as a force majeure event, the invoking party must generally show:

  1. an event that is beyond the party’s reasonable control;
  2. which has prevented, hindered or delayed its performance;
  3. with no fault or negligence of the affected party; and
  4. that the affected party has taken reasonable measures to avoid or mitigate the event or its consequences.

Additionally, force majeure clauses will usually specify notification requirements and consequences following a declaration of force majeure to which invoking parties must follow to properly assert the liability exception. These obligations, again, are highly dependent on the drafted provisions contained in individual contracts.

As companies face concerns prompted by the coronavirus, they should be diligent in recognizing situations of government restrictions, like quarantine, and the impact it may have in creating unforeseeable impediments to performance under the contract. Further, companies may consider questions of whether orders of quarantine originated from the Chinese government, local authorities, or non-governmental entities in analyzing support, or lack of support, for force majeure claims.  In contemplating arguments against justifications for force majeure declarations, it may be noteworthy that governments like China have made reassuring statements on the minimal impact the virus is having.  China itself has acknowledged that even where force majeure certificates have been awarded, they only serve to help indicate force majeure and do not prove its occurrence.

With new outbreaks of the virus surfacing around the globe, there is good reason to believe that global supply chains and contractual arrangements will remain impacted. Accordingly, force majeure claims will continue to surface. With such widespread uncertainty, it is critical that companies take action to know the obligations and requirements under their current agreements while modifying drafting processes to better mitigate risk in the future.

 

References:

Michael Corkery, Coronavirus Fears Reverberate Across Global Economy, The New York Times (Feb. 28, 2020) available athttps://www.nytimes.com/2020/02/28/business/economy/coronavirus-economy.html

World Health Organization, Novel Coronavirus (COVID-19) Situation, WHO (Mar. 3, 2020) available athttps://experience.arcgis.com/experience/685d0ace521648f8a5beeeee1b9125cd

Simon Hentrei and Ximena Soley, Force Majeure, Oxford Public International Law (April 2011), available athttps://opil.ouplaw.com/view/10.1093/law:epil/9780199231690/law-9780199231690-e1042

Marisa Iati, Derek Hawkins, Adam Taylor, Siobhán O’Grady and William Wan, Live updates: Second coronavirus case of unknown origin confirmed in California, indicating virus is spreading in the state, The Washington Post (Feb. 28, 2020) available athttps://www.washingtonpost.com/world/2020/02/28/coronavirus-live-updates/

Huileng Tan, Coronavirus outbreak in China spurs supply chain shifts that began during trade war, CNBC (Feb. 20, 2020) available at https://www.cnbc.com/2020/02/20/coronavirus-outbreak-spurs-supply-chain-shifts-started-by-us-china-trade-war.html

Jingzhou Tao, Breaking contracts over coronavirus is harder than it sounds, Financial Times (Feb. 25, 2020) available athttps://www.ft.com/content/8e644cbe-5719-11ea-abe5-8e03987b7b20

Lillian Hardy, Benjamin Kostrzewa and Byron Phillips, Coronavirus Crisis Management, LAW.COM (Feb. 26, 2020) available athttps://www.law.com/international-edition/2020/02/26/coronavirus-crisis-management-378-135434/

Sue Reisinger, China Is Making Force Majeure Claims, Leaving General Counsel with Many Questions, LAW.COM, (Feb. 12, 2020) available at https://www.law.com/international-edition/2020/02/12/general-counsel-pondering-how-to-handle-chinas-force-majeure-claims-378-134237/?kw=China%20Is%20Making%20Force%20Majeure%20Claims%2C%20Leaving%20General%20Counsel%20with%20Many%20Questions&utm_source=email&utm_medium=enl&utm_campaign=intnewsalert&utm_content=20200213&utm_term=lawint

HFW and 20 Essex Street, Force Majeure(June 2018) available at http://www.hfw.com/downloads/Force-Majeure-Pack-by-HFW-and-20-Essex-St-June-2018.pdf

HFW, Coronavirus: Can it Be A Force Majeure Event?, Briefings (Feb. 2020) available athttps://www.hfw.com/Coronavirus-Can-it-be-a-Force-Majeure-event-Feb-2020

Norton Rose Fulbright, Coronavirus outbreak: The legal implications(Feb. 2020) available athttps://www.nortonrosefulbright.com/en/knowledge/publications/29747bbb/coronavirus-outbreak-the-legal-implications

Tom Fotheringham and Natalie Caton, Coronavirus COVID-19: The legal impact on force majeure events, DLA Piper (Feb. 12, 2020) available at https://www.dlapiper.com/en/us/insights/publications/2020/02/coronavirus-covid19-the-legal-impact-on-force-majeure-events/

Mark Clarke, Dr. Markus Burianski, Christian M. Theissen, Dr. Maximilian Clasmeier and James Hart, Suspending contractual performance in response to the coronavirus outbreak, White & Case (Feb. 18, 2020) available athttps://www.whitecase.com/publications/alert/suspending-contractual-performance-response-coronavirus-outbreak

Skadden, Arps, Slate, Meagher & Flom LLP, Coronavirus/COVID-19: Implications for Commercial and Financial Contracts, Skadden (Feb. 26, 2020) available at https://www.skadden.com/insights/publications/2020/02/coronavirus-covid19-implications

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Crypto Hub of Asia Has First Legal Battle Decided

By Greg Browne, Associate Editor 

Singapore’s Court of Appeals just ruled on its first legal dispute involving cryptocurrency.  Four out of five judges concluded that Quoine Exchange, one of the world’s major bitcoin exchange operators, should pay damages for wrongfully reversing seven transactions on its platform in April of 2017.  What is most interesting about this case is that the actors of both parties were a bunch of algorithms; there was no human error involved.

In April 2017, B2C2, an electronic market maker, successfully sold 309 ether for 3,092 bitcoins, generating a profit of $3.7 million.  Quoine claimed a glitch arose as it was reconfiguring passwords for its hacker defense systems that severely disrupted its ability to retrieve actual market prices for bitcoin and ethereum.  Specifically, Quoine, which operates by deriving its price from other crypto exchanges, was unable to aggregate prices for both cryptocurrencies because of the glitch.  Reacting to this, B2C2’s trading software initiated an emergency fail-safe price of 10 bitcoins for 1 ether.  The $3.7 resulting profit attracted the attention of Quoine, which cancelled the transactions the next day.

Citing the terms of its trading contract with the exchange, B2C2 claimed Quoine acted “fraudulently” because orders were supposed to be “irreversible” once filed.  Conversely, Quoine claimed B2C2 was being “opportunistic and seeking to profit from a technical glitch.”  Quoine also argued that the trades “were inadvertently” executed at the “abnormal rate of…10 bitcoins for one ethereum, which was approximately 125 times higher than the actual market price of ethereum.”

In March of 2019, the Singapore International Commercial Court found that Quoine was liable for “breach of contract and breach of trust.”  Quoine subsequently filed for an appeal.

The Court of Appeal focused their analysis on how the legal doctrine of “mistake” should be applied when contracts were drawn up and executed by computer systems with limited human involvement.  Under the doctrine of mistake, if one or both parties enter into a contract under a misapprehension of its basis, or of an important aspect of the transaction, the contract may be either completely void or voidable.  In rejecting Quoine’s argument, four out of five judges reasoned that it is the programmer’s state of knowledge that is relevant in the context of digital agreements between a computer system and a participant on the platform.  The majority opined that there was no mistake in the terms of the trading contract between B2C2 and Quoine, and even if there was a flaw, B2C2’s trading software was unaware of it when executing the orders.

In 2018, Singapore became the crypto hub of Asia when it allowed any firm using technology in an innovative way to provide financial services to apply for a three year regulatory sandbox.  As Su Zhu, CEO of Three Arrows Capital and partner to Deribit Exchange, stated in a tweet, this decision “has some implications…for any other crypto exchanges who may believe they can reverse customer trades if necessary.”

References

Selina Lum, Cryptocurrency exchange operator ruled in breach of contract, Straits Times (Feb. 25, 2020, 5:00 AM SGT)available athttps://www.straitstimes.com/singapore/courts-crime/cryptocurrency-exchange-operator-ruled-in-breach-of-contract(last visited Feb. 25, 2020).

Nivesh Rustgi, First Cryptocurrency Court Case in Singapore rules Exchange to pay for a Glitch, CoinGape (Feb. 25, 2020) available at https://coingape.com/first-cryptocurrency-court-case-singapore/(last visited Feb. 25, 2020).

Grace Leong, Bitcoin exchange operator sued in Singapore, Strait Times (Jul. 31, 2017, 5:00 AM SGT) available at https://www.straitstimes.com/business/companies-markets/bitcoin-exchange-operator-sued-in-spore(last visited Feb. 25, 2020).

Sebastian Sinclair, Singapore’s Court of Appeals Rules Against Quoine Exchange in Landmark Crypto Case, coindesk (Feb. 25, 2020 at 08:00 UTC) available athttps://www.coindesk.com/singapores-court-of-appeals-rules-quoine-exchange-in-breach-of-contract-in-landmark-crypto-case(last visited Feb. 25, 2020).

Chapter 08 – The Law of Contract, Singapore Law Watch available at https://www.singaporelawwatch.sg/About-Singapore-Law/Commercial-Law/ch-08-the-law-of-contract(last visited Feb. 25, 2020).

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Coronavirus: The International Outbreak

By Conor Bowers, Associate Editor

On the final day of 2019, the Chinese government reported a few cases of pneumonia that stemmed from a seafood market in Wuhan, a large inland city of around 11 million people.  Initially, both local and national Chinese governments were reluctant to announce publicly the outbreak. These suspicious pneumonia cases ultimately became what we know today as the coronavirus, 2019-nCoV. This specific coronavirus has never been identified before, and unlike many coronaviruses that only cause moderate illness, such as the common cold, this respiratory virus has become lethal. On Thursday, January 29, the virus had become so widespread that the World Health Organization declared the outbreak to be a public health emergency of international concern.

As of Friday, January 30 the confirmed cases had totaled at nearly 12,000. The large majority of these cases existing in China, however, 26 other countries also had reports of confirmed cases. Included among these 26 countries with confirmed cases are the United States and Canada.  The cases have been lethal for a number of people within China, and on Friday, February 1, it claimed the life of the first person outside of China, a 44-year-old man in the Philippines, who was from Wuhan. Cases such as this have led governments internationally to question what actions would be adequate precaution for the people they represent.

On Friday, January 31, the United States announced that they would impose a 14-day travel ban on all visitors from China. US citizens who were traveling from Wuhan would have to undergo a 14-day quarantine upon arrival, and those traveling from other parts of China would have to undergo mandatory screening. The Chinese government did not approve of the travel ban, and issued a statement through their Foreign Ministry spokeswoman Hua Chunying condemning the action saying it directly went against the World Health Organization’s recommendation. The United States was not the only country to take action as Singapore has banned all visitors from the Chinese mainland for 14-days. The fear of these governments comes after a report that nearly 5 million people had left the city of Wuhan before it became quarantined.

The fear of an outbreak has become more than a political disturbance and has begun to  effect business and trade as well. Major US airline companies: Delta, United, and American have suspended travel to China until as late as March.  The Dow Jones Industrial Average has also seen some regression amidst fears of virus and posted losses of 600 points on Friday, January 31.

With the globalization of the world and the easy travel from one country to another public health is now effected from a much larger radius. Governments have to work together on potential threats in order to best mitigate outbreaks. The Chinese government operated with inaction at the beginning of this virus and kept the world in the dark. As the virus became a global emergency it put Washington in a position where they have had to issue the highest levels of awareness for traveling to China and screening and quarantining those who enter our borders. For these two countries that have experienced rift with the tensions of a trade war, the effects of how both deal with the coronavirus could hinder diplomatic relations between them as we progress.  As an international community we can only hope that the virus is contained quickly.

 

References:

James Griffiths, Cases of Wuhan coronavirus continue to rise rapidly as US bans travel from China, CNN (Feb. 1, 2020) available at https://www.cnn.com/2020/01/31/asia/wuhan-coronavirus-update-intl-hnk/index.html

Stephanie Young, and Feliz Solomon, Coronavirus Kills Its First Victim Outside China as Toll Grows, The Wall Street Journal (Feb. 2, 2020) available at https://www.wsj.com/articles/first-coronavirus-death-reported-outside-china-11580614333

Ashley Collman, 5 million peole left Wuhan before China quarantined the city to contain the coronavirus outbreak, Business Insider (Jan. 27, 2020) available at https://www.businessinsider.com/5-million-left-wuhan-before-coronavirus-quarantine-2020-1

2019 Novel Coronavirus, Center for Disease Control (Jan. 31, 2020) available at https://www.cdc.gov/coronavirus/2019-ncov/faq.html

Chris Buckley, and Steven Lee Myers, As New Coronavirus Spread, China’s Old Habits Delayed Flight, New York Times (Feb. 2, 2020) available at https://www.nytimes.com/2020/02/01/world/asia/china-coronavirus.html

Brianna Abbott, Katie Camero, and Erin Mendell, Coronavirus Is Declared a Global Health Emergency as Threat Rises Outside China, The Wall Street Journal (Jan. 30, 2020) available at https://www.wsj.com/articles/coronavirus-triggers-damage-control-from-governments-companies-11580396657

Eric Werner, Yasmeen Abutaleb, Lenny Bernstein, and Lena H. Sun, Trump administration announces mandatory quarantines in response to coronavirus, The Washington Post (Jan. 31, 2020) available at https://www.washingtonpost.com/us-policy/2020/01/31/trump-weighs-tighter-china-travel-restrictions-response-coronavirus/

 

Posted in Blog

Brexit as Force Majeure – Boris Johnson’s Act of God?

By Audrey Fick, Associate Editor

Britain must negotiate a trade deal with Europe regarding future commercial relations by the end of 2020, or face expensive disruption with its largest trading partner.  That deadline may be impossible, however, considering that recent European trade deals with Canada and Japan took seven years, and only further complicated by Johnson’s intent to break from European regulatory rules concerning labor, environment, and product safety.  In moving UK commitments to abide by EU standards regarding tax, labor rights, and environment out of the legally binding portion of the Brexit deal into a separate, non-binding political deal, Johnson arranged for increased freedom to diverge from EU norms post-Brexit.  The greater the divergence, the greater the restrictions imposed on the UK’s access to the European marketplace.

Britain and Europe will either strike a narrow deal governing some manufactured goods, or Britain will “crash out” with no deal at all.  In the latter event, companies on both sides of the English Channel will resort to further stockpiling goods in anticipation of choked ports and customs issues, with inability to deliver goods, perform services, or otherwise meet contractual obligations resulting in non-performance.  Concerns regarding allocation of additional costs resulting from time on docks, duties, tariffs, customs, and additional certifications by notifying bodies will give rise to further litigation.

Non-performing parties may seek characterization of Brexit as a force majeure event in order to avoid contractual liability.  The party seeking to invoke suchdefenseneed show that the precipitating event is within the scope of the contract’sforce majeure clause, and establish but-for causation between that event and non-performance.

When determining whether the event is within the clause’s scope, courts look to parties’ intent, specific language, and course of dealing.  Sweep-up or catch-all language, such as “any other cause beyond the Seller’s reasonable control”, will be read in the context of the entireclause to determine whether any of the specifically stated events are reasonably connected to the type of event to which the party now seeks the clause’s application.  While no common law rule maintains that an event need be wholly unforeseeable at time of drafting, an argument for force majeure will be weakened if the event is reasonably foreseeable or reasonably within the party’s control such that they could have made relevant provisions.

Courts typically construe force majeure clauses narrowly, and English law has long maintained that economic changes affecting a contract’s profitability or ease of performance are not force majeure events.  Yet Professor David L. Reed cautions against outright dismissal of Brexit as such, urging consideration that courts have never had to deal with this type of “event” and may weigh contract age, product type, potential mitigation, and history of the parties as influencing factors.

In conjunction with the age of contract analysis, attention will be paid to express inclusion of such an event during drafting.  Particular emphasis will be placed on whether time of contracting occurred during or after the UK’s 26 June 2016 vote to leave the EU and / or 29 March 2017 formal notice of intention to leave under TEU Art. 50(2), either of which would cut against drafters who failed to include relevant Brexit-contemplative provisions.

Omission from the contract’s contingencies of express Brexit-related trigger events reasonably foreseeable at time of drafting bodes poorly for the party arguing for force majeure characterization.  Absence of such an express clause may result in application of the common law doctrine of frustration, but frustration applies only in restricted circumstances and provides limited relief.  Parties currently negotiating contracts would do better to include express Brexit termination provisions now than to attempt later reliance on force majeureor frustration.

Predictions: A post-Brexit spike in litigation relating to interpretation of existing contracts, drafting of new language, and allocation of additional costs will result in the practical damage of Brexit being borne predominantly by small- and medium-sized enterprises (SMEs) unable to afford the expense of protracted litigation.  As such, SMEs and local businessowners will be less likely to survive Brexit’s fallout and its accompanying uncertainty, resulting in disparate impact on the middle- and working-classes and further wealth stratification.  Prevailing large-scale enterprises and newer agile enterprises will absorb their market share.

 

References:

Simon Beasley, Force Majeure and Brexit, Bolt Burdon Solic.: Blog, available athttps://www.boltburdon.co.uk/blogs/force-majeure-brexit/ (last visited Jan. 29, 2020).

Amanda Cowell & Daisy Wetherill, How to predict the unpredictable: Force Majeure clauses in changing political landscapes, PLC Mag.(Apr. 1, 2019), available athttps://www.whitecase.com/publications/article/how-predict-unpredictable-force-majeure-clauses-changing-political-landscapes (last visited Jan. 29, 2020).

E-mail from David L. Reed, Adjunct Professor of International Business Transactions, Syracuse U. Coll. of Law, to author (Jan. 29, 2020, 12:38 EST) (on file with author).

Edward Evans, What Brexit Will and Won’t Change on Jan. 31: QuickTake, The Wash. Post(Jan. 27, 2020), available athttps://www.washingtonpost.com/business/what-brexit-will-and-wont-change-on-jan-31-quicktake/2020/01/27/01ddec7a-4105-11ea-99c7-1dfd4241a2fe_story.html (last visited Jan. 29, 2020).

Peter S. Goodman, Brexit Is Finally Happening, but the Complicated Part Is Just Beginning, The N.Y. Times(Jan. 29, 2020), available at https://www.nytimes.com/2020/01/29/business/brexit-scotland-trade-eu.html (last visited Jan. 29, 2020).

Practical Law’s Contracts: force majeure, Practical Law UK Practice Note 7-380-6134 (2019).

UNIDROIT Principles, art. 7.1.7.

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Nike’s International Shipping Ban on Retailers Means Trouble for “Sneakerheads”

By Imani Deas, Associate Editor 

YOU GOT EM!— Every sneakerheads favorite thing to see. If you are familiar with the Nike brand or the Nike SNKRS app, then you know that “you got em” means that you just secured the sneakers you’ve been dying to get your hands on, or better yet your feet in. What is a sneakerhead, you might ask? A sneakerhead is an individual who collects limited, rare, original, or flat out exclusive sneakers.

The collection usually consists of Nike Air Jordan’s but is not limited to such category. Moreover, a sneakerhead has a passion and knowledge of specific sneakers. Those who purchase limited or rare sneakers for clout are considered hype beasts. Hype beasts are typically individuals who do not have any knowledge about the sneaker or its significance. They simply purchase the sneaker in order to be a part of the latest fashion trends. Throughout the 2010s, the sneaker culture exploded from exclusive collectors to the mainstream masses. As a result, uniformity became a problem amongst wearers and the mainstream attraction of exclusive footwear catered to a much more global market.

Following the mainstream market, a secondary market was created. The secondary market also known as the resale business, flourished into a billion-dollar business. Furthermore, the resale arena produced more opportunities for consumers and more product overall. Through the sneaker resale company, people frequently buy and sell footwear for thousands of dollars. This precious business allows certain resellers to determine legitimate sneakers from fake ones. Quality and legitimacy are critical for resellers and has helped to authenticate the secondary market.

However, starting this year Nike’s reported retailer ban on international shipping will significantly affect sneaker culture. Nike believes that reselling takes a large amount of power away from brands to control demand and create the buildup leading up to a sneaker release. As a result of this ban, Nike accounts will not be able to send products to buyers in other countries.

If a retailer is caught shipping or selling shoes internationally, they could lose their Nike account. Without a Nike account means that the retailer would no longer have access to releases, and they would not be able to secure any future releases. The international reselling business has allowed many hype beasts to thrive, while making it difficult for true sneakerheads to claim exclusive sneaker deals. This could be a detrimental blow to the glorious sneaker culture.

The possibility of a ban leaves sneakerheads questioning, how will it affect the sneaker culture moving forward? Ultimately, Nike wants to strengthen their business model and have more control of the market, especially surrounding more popular sneakers. Fundamentally, reselling gives everyone access to sneaker releases, whether they are stateside or internationally based. On a practical level, this ban will allow for the reemergence of exclusivity. Furthermore, the ban would enable sneakerheads to obtain limited editions with more ease because the releases will be more regionally based. However, a drawback to the regional release would be that the individual may need to live in a major city to access specific sneakers.

Additionally, certain sneakers are tied specific cities. Those sneakers will only release in that city as a surprise release. In those instances, sneakerheads know that their location settings must be turned on, on their mobile devices so that they can receive the exact location in the city where the sneaker “drop” (also known as pick-up) will occur. For example, the “What the NYC” Air Force 1 will only release in New York. Normally, hype beasts buy the popular sneaker online or in-store and can resell it internationally above retail price. That purchase and resell then undercuts against the individual who actually wants the sneaker for themselves.

The new ban will force those who want that particular Air Force 1 to be in New York at the time of the release. Those who live in England or Paris will miss out. More specifically, the international ban means that resale prices will substantially increase. Prior to this ban, those in search of an exclusive European exclusive Air Max could purchase them from other online retailers, such as StockX or JDsports. Due to the timing of the release location, StockX becomes the customer’s ONLY option. Normally, StockX allows the market to set the resale value of exclusive sneakers. Being that StockX would be the customers the only outlet, the resale value of the sneaker would inevitably surpass whatever the market may set for the base resale price. That value would depend on the particular sneaker, simply due to its demand and exclusivity.

While this noteworthy ban on international shipping may be helpful for Nike, it has the potential to crush the retailer market, causing some to go out of business. Similarly, this marketing tactic could backfire, and not have a major “chilling” effect on consumers and retailers as Nike planned. Nike’s goal to influence more online shoppers to their SNKRS App, is it worth the cost of shrinking a billion-dollar market? Despite the move Nike made, sneakerheads and resellers alike will have to wait and see what is next for the sneaker culture.

References

Steve Cameron, A Pair of Air Jordans can Resell for up to $2000. Here’s why these iconic Nike sneakers are so expensive, BUSINESS INSIDER (Jan. 27, 2020) available at https://www.businessinsider.com/nike-air-jordans-sneaker-culture-basketball-collectible-expensive-2019-6

Can I Ship My Nike.com Order Internationally?, NIKE (Jan. 27, 2020) available athttps://www.nike.com/help/a/international-shipping

Fabian Gorsler, How Will Nike’s New International Shipping Policy Affect Independent Retailers, HIGHSNOBIETY (Jan. 13, 2020) available athttps://www.highsnobiety.com/p/nike-retailer-international-shipping-ban-response/

Nicolaus Li, Copped Hyped Kicks May Get Harder: Nike Reminds Retailers Not to Ship Internationally, HYPEBEAST (Jan. 26, 2020) available athttps://hypebeast.com/2020/1/nike-retailers-international-shipping-policy-restrictions

Ian Stonebrook, How Nike’s Reported Retailer Ban on International Shipping Affects Sneaker Culture, NICEKICKS (Jan. 27, 2020) available at https://www.nicekicks.com/how-nikes-reported-retailer-ban-on-international-shipping-affects-sneaker-culture/

Cam Wolf, How a Single Pair of Sneakers Explains the Booming Billion-Dollar Sneaker Resale Industry, GQ (Jan. 28, 2020) available at https://www.gq.com/story/stadium-goods-tracking-a-sneaker

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