[Tai-Heng Cheng is Associate Professor of Law at New York Law School. His most recent book is State Succession and Commercial Obligations.]
I am grateful to Roger Alford for inviting me to share some thoughts on the recent developments in Kosovo.
On February 17, 2008, Kosovo’s parliament voted to declare independence from Serbia. This unilateral declaration accelerated the international decision-making process on the status of Kosovo, and requires a collective international response.
As Julian Ku noted on Opinio Juris earlier this week, decision-makers and scholars should examine their “policy preferences” regarding whether to support the succession of Kosovo from Serbia. I would add that should the international community decide to accept Kosovo’s succession claim, international actors should manage the consequences of succession to minimize disruptions to world public order and protect the human rights of all parties involved.
Appraising Kosovo’s Succession Claim. Chris Borgen has accurately pointed out that states have to decide whether or not to recognize Kosovo as an independent state. If I understand Professor Borgen’s post, in his view such recognition is merely declarative and not constitutive. If Kosovo meets the criteria for statehood, then non-recognition does not invalidate its statehood. This view might find some support in the Convention on Rights and Duties of States, concluded on December 26, 1933 in Montevideo. Article 1 of the Montevideo Convention suggests the criteria for statehood: “The state as a person of international law should possess the following qualifications: a ) a permanent population; b ) a defined territory; c ) government; and d) capacity to enter into relations with the other states.” None of these four criteria explicitly depend on recognition.
As a practical matter, however, if a substantial number of states reject Kosovo’s succession claim by withholding recognition, these states would be hard pressed (although not absolutely precluded, if the unique status of Taiwan provides any indication) to enter into diplomatic relations with Kosovo, to conclude treaties with it, or to grant it sovereign immunity independently of Serbia. In such a situation, regardless of whether scholars think Kosovo has become a state, it would not be able to fully function as a state in the international system. The reality is therefore that recognition serves a key constitutive function in the process of succession.
Policy-makers in each state should consider the consequences of granting or denying recognition to Kosovo. The Security Council reaffirmed in Resolution 1244, a Chapter VII decision, an international commitment to “substantial autonomy and meaningful self-administration for Kosovo.” Withholding recognition might encourage Serbia to resist this international decision. Granting recognition would compress the time frame for a negotiated settlement on the international consequences of Kosovo’s succession, thereby probably precluding seamless transition like the disintegration of Czechoslovakia in 1991, or the transfers of Hong Kong and Macau to China in 1997 and 1999, respectively. But it would achieve the policy-goal of providing Kosovo with autonomy and self-administration.
Managing the Impact of Kosovo’s Succession. Should the world community generally accept Kosovo’s claim to statehood, the international community must manage the disruptions to preexisting international arrangements.
There are currently few, if any, crystallized rules regarding the effects of state succession on preexisting international obligations. Every succession has unique variables and intense political pressures that have precluded the formation of customary law through consistent state practice and opinio juris. The Vienna Convention on Succession in Respect of Treaties of 1978 has entered into force, but lacks widespread ratification and binds only its handful of signatories. The Vienna Convention on Succession in Respect of State Property, Archives and Debts of 1983 was so controversial that it never entered into force.
Human Rights. In the absence of international legal rules on succession, Kosovo should rapidly accede to preexisting multilateral treaties, especially constitutive human rights treaties. This would minimize disruptions to the international human rights program, affirm Kosovo’s commitment to prevent the repetition of human rights abuses inflicted on Kosovars, reassure its Serbian minority, and, importantly, confirm its capacity to enter into treaties and its status as a state.
Investment Treaties. Serbia’s Investment and Export Protection Agency reports that Serbia has entered into 34 bilateral investment treaties, including with the USA, UK, Germany, France, Austria, Italy, and Greece. In 2007, it also ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. Kosovo should rapidly confirm through bilateral exchanges of diplomatic notes that Serbia’s BITs bind Kosovo, subject to modifications that may be necessary to accommodate Kosovo’s economic circumstances. If the World Bank will permit it, Kosovo should also confirm the continuity of the ICSID Convention. This strategy will help to further consolidate Kosovo’s attainment of statehood, and help minimize disruptions to the international economy.
External Debt. There is also the thorny issue of Serbia’s debt, estimated at $25 billion in November 2007. In the current volatile global economy, markets will need reassurance that this debt will be repaid. In past successions, such as the dissolutions of the Soviet Union and the Socialist Federal Republic of Yugoslavia, creditors have initially proposed that the successor states assume joint and several liabilities for preexisting debt. Eventually, however, they accepted in negotiated settlements proportional allocations of debt among successor states, and substantial debt reduction or rescheduling to accommodate the limited economic capacities of the new states.
Annex VI of the Ahtisaari Plan, to which Professor Borgen has referred in his prior blog post, proposes a negotiated settlement between Kosovo and Serbia. Under this negotiated settlement, “allocated external debt shall become a liability of Kosovo where the final beneficiary is located in Kosovo; non-allocated external debt shall be apportioned to the parties according to a proportional key to be established by agreement between the parties, in cooperation with the International Monetary Fund.” In a statement before the House Committee on Foreign Affairs, U.S. Under Secretary for Political Affairs Nicholas Burns assumed that Kosovo would share a burden of Serbia’s debt. He also noted that that the President’s 2008 budget included $151 million in aid to Kosovo, and anticipated three times that amount in international contributions from other donors.
Kosovo would be well-served by commencing debt negotiations with Serbia’s creditors immediately, regardless of whether Serbia is willing to negotiate with Kosovo at this point in time. This would signal to capital markets that Kosovo is a responsible sovereign state and help ensure access to further funds, which will be critical for Kosovo’s sustainable development. The risk that Serbia’s debts will debilitate Kosovo is limited by the availability of substantial international aid, as well as the trend in recent successions to negotiate debt repayment on reasonable terms. Creditors ultimately have no interest in imposing such onerous conditions that the successor state defaults.
In making these recommendations, I acknowledge Robert Sloane’s warning, in his thoughtful essay, “The Policies of Self-Determination: Harmonizing Self-Determination and Global Order in the Twenty-First Century, 30 Fordham Journal of International Law 1288, 1316 (2007), that policy-makers should not allow a focus on the global commercial dimensions in state succession to “obscure or minimize other fundamental values at stake.” The analysis here of next steps in the Kosovo situation is necessarily preliminary. Nonetheless, I hope I have outlined what Henry Perritt has described in 25 Wisconsin International Law Journal 129 (2007) as “a constructive approach to working out the complicated succession issues embedded in a decision over the final status of Kosovo.”