Law

Introduction

Health care provision is essential for all citizens. The insurance companies and health institutions must adhere to the health care act to provide excellent services to all citizens. The new program has its gains and disadvantages.

The Major Positives in the PPACA

The Patient Protection and Affordable Care Act provide millions of uninsured Americans with direct means to access medical care. It is affordable. The services are also of high quality through the Medicaid expansion. Employers and health care insurance providers also benefit from the services (Diaz, 2015).

The uninsured Americans, who are over half the population on the continent, can get free or low-cost health insurance. Some can also get the same quality service from out of the pocket costs. The state’s Health Insurance Marketplace is also accessible to more people than it was before the passing of the act.

It gave rise to more private coverage options. All the major medical coverage options also had to provide the minimum essential coverage (Regulations and Guidance, 2010). Therefore, it enhanced the rate and speed of service delivery to many citizens. Clients enjoy many protections. The insurance companies cannot drop anyone from coverage when one gets sick or makes honest mistakes on the application.

The Major Negatives in the PPACA

The plan encourages more taxing of the population so that the government can get more money to ensure all the people. The individual mandate and the employer mandate affect the individual citizens directly (Lee, Casalino, Fisher, & Wilensky, 2010). The individual mandate requirement makes all citizens who can afford health insurance to apply for health coverage, get an exemption, or pay a fee. One has to use a lot of energy when looking for better coverage for an individual or the family (Shafrin, 2010). It can lead to overbuying or under buying of the available packages. It still leads to the same problem where better services are very expensive.

Emerging Accountable Care Options

Accountable Care Organizations are those organizations that have come together for the purpose of offering better services to the people (Lee et al., 2010). They provide coordinated care, measure performance, and reform their payment systems. The main aim is to support physicians in doing their work of improving care.

Such organizations can influence the current healthcare system by providing accurate performance measurement reports. It will become an assurance to the public and insurance payers that the health care systems have improved greatly. It is not enough to reform health care and not change the caregivers. It has always been the norm that better care will automatically lead to high costs.

The new model has changed the whole scenario for primary physicians. The hospitals have rushed in to hire the primary doctors and other qualified personnel at all stages of their careers. The practice medicine is losing out to the more organized hospital institutions (Shafrin, 2010). The physicians also have the option of forming formidable groups to gain from this new system.

However, most of the primary care practices are losing business because of the initiative. Another challenge is how to identify the best physicians. It is because of the gain from the system and offering service to a greater percentage of the population. Rather than specializing in a field that is profitable, the physicians begin to think about the quality and how many people they can serve.

The health care act has both benefits and constraints. The managers of the initiative can provide better services for the American people. The Accountable Care Organizations need to embrace primary care physicians.

References

Diaz, F. (2015). How obamacare will affect you.” Neurosurgery, 62(3), 81-91. Web.

Lee, T., Casalino, L., Fisher, E., & Wilensky, G. (2010). Creating accountable care organizations. New England Journal of Medicine, 363(15), 23. Web.

Regulations and Guidance. (2010). Web.

Shafrin, J. (2010). What are accountable care organizations. Web.

Introduction

For different countries, the concept of international peace and security implies different meanings. Every country assesses security challenges from its own unique geostrategic and political viewpoints. The United Nations introduced Chapter VII of its Charter to help it to address issues associated with international peace and security. As such, these threats, real and imagined, have been largely debated on the meetings of the Security Council and the General Assembly. In the modern world, civil wars, terrorism, organized crimes, biological and nuclear weapons, small arms and light weapons, cyber-attacks, bio-threats, and climate change are now considered as serious threats to international peace and security.

Since these security threats are not limited to a specific nation, today more than ever, the UN faces numerous challenges in sustaining international peace and security, as nations become more aggressive and not willing to cooperate. This situation undermines its role and potential regional and international multilateral cooperation. From the academic perspective, combating such threats is not simple, and a multidisciplinary strategy is necessary to comprehend factors responsible for and effects of such threats to national, regional, and international peace, security, and stability. Thus, there exists a real concern as these threats continue to escalate, for instance, the case of North Korea’s nuclear weapons program. From a critical viewpoint, the UN has, however, largely failed in its mandate to ensure global peace and security when the case of North Korea is evaluated. Concerning the operation of Chapter 7 and instances of threats to international peace and security, this paper analyzes the UN’s role in international peace and security.

The UN Security Council

The UN created the Security Council to ensure international peace and stability, and the Security Council must determine what constitutes a danger to security and peace. The Security Council is made up of 15 member states in which five are permanent and the rest ten members are subjected to change after two years. The US, the UK, Russia, France, and China are the permanent members. These nations and other rotating members ensure global peace and security. They ensure that member states handle any disputes peacefully and provide technical advice on security issues. However, when threats to peace and security escalate, the Security Council resorts to sanctions where member states are expected to punish the culpable state using nonmilitary actions. For instance, the Security Council has imposed several economic and diplomatic sanctions on North Korea because of its nuclear weapons program. However, if these sanctions fail to yield any desired results, then the Security Council adopts the use of military force to guarantee international peace and security. All member states are expected to adhere to the resolutions of the Security Council. Permanent member states are entitled to a veto and, thus, all permanent member states must adopt a common stand to pass a resolution. The rest of the member states have one vote. To date, the Security Council has adopted many resolutions to ensure international peace through peacekeeping and peace-building missions.

The Charter of the United Nations: Chapter VII

Under Chapter VII of the UN Charter, the UN Security Council has well-defined powers to ensure global peace. In this respect, the UN Security Council has the mandate to ascertain the existence of any forms of threats to security, security breach, or acts of aggression to use military or nonmilitary interventions to ensure international peace and security. The Security Council has also the power to coordinate the UN security forces. Additionally, the Charter does not allow a member state to attack another member state with the ultimate goal of preventing wars. Thus, the UN does not support any crime against peace by ensuring that no country can start or wage war against political autonomy, territorial integrity of other countries, or violate international treaties.

As it is today, it is observed that many broad resolutions under the Charter of the UN aim to give the Security Council wide-ranging powers to ensure international peace and security relative to the previous League of Nations that failed to deal with the World Wars. As such, the powers and responsibilities contained under Chapter VII of the UN Charter are critical for sustaining international peace and stability by preventing or ending ongoing wars and threats. Once the Security Council determines “the existence of any threats to the peace, breaches of the peace, or acts of aggression”,¹ it finds opportunities in Chapter VII to deter threats. The Security Council can adopt interventions that do not necessarily involve military actions, such as economic and diplomatic sanctions, but it may still apply military actions to ensure peace and stability. However, it is now observed that despite these wide-ranging powers, the UN Security Council has largely failed to act in some instances, giving rogue states, such as North Korea and Iran, opportunities to advance their agenda and pose serious threats to international peace and security.

The North Korea Nuclear Weapons Program

Today, many national and global leaders agree that North Korea (the Democratic People’s Republic of Korea or DPRK) is “the most pressing threat to international peace and security” and “the most urgent and dangerous threat to peace and security”² because of its increased nuclear weapons development endeavors. North Korea presents the possibility of a nuclear war compared with the Cuban missile crisis of 1962.

In the past century, all the leaders of the Hermit Kingdom have focused on developing nuclear weapons. They all comprehended the need for nuclear weapons. It is believed that the idea of possessing nuclear weapons emanated from the experiences of the Korean War.³ The Korean War saw North Korea and its ally China face heavily nuclear-armed US. As such, it was extremely obvious for the first Kim and other later Kims that nuclear weapons were powerful deterrent.⁴ Kim II Sung (1948-1994) was responsible for establishing North Korea and putting the country’s nuclear program on the path of development. However, he died before North Korea could carry out its first test of a nuclear weapon. Kim Jong II (1994 to 2011) took over, and he was much more focused on advancing the country’s nuclear weapons program. This supreme ruler denied that its country had any nuclear weapons program.

In the era of Kim Jong Un (2011 to present), the nuclear weapons program of North Korea is now considered a threat to international peace and security. The current dictator is largely responsible for accelerating his country’s agenda to develop nuclear weapons since the period of the Obama administration. Consequently, many world leaders have openly criticized the Hermit Kingdom than in the past.

Further, Kim Jong Un is determined to proceed with the program irrespective of the consequences. For instance, in 2017, the dictator was openly threatening the US and its allies with an intercontinental ballistic missile (ICBM) and a nuclear war at any moment. While Kim Jong Un was celebrating its successful launch of a missile on the Japanese territory, world leaders were not amused. The US Defense Secretary, for instance, condemned the test and warned that the US and Japan would be ready for any future missile threats. For Kim Jong Un, the launch provided an opportunity to move toward an ‘equilibrium’ with the US concerning military force.

In the recent past, Kim Jong Un’s frequent and aggressive missile launches have been noted, and these have reinforced the idea that North Korea is dangerous, capable, and closer than ever before to building ICBM arsenal that could hit the mainland of the US or any of its allies in the Asian continent.

These tests have confirmed that the country possesses nuclear weapons. North Korea previously warned the US allies of retaliation if they take part in military interventions with the US, promising a nuclear war at any moment.

Experts have not agreed if indeed North Korea can deliver ICBM to the US mainland and no consensus on the precise stage where the country is in with regards to miniaturizing nuclear weapons for possible attacks using nuclear missile heads. Based on some vague sources, the US intelligence team now perhaps believes that North Korea has acquired technologies for miniaturizing nuclear devices and can use nuclear warheads.⁵ Japanese also sees this scenario as a possibility. North Korea recently tested ICBM it claimed could hit the US mainland. Although some analysts do not believe the secretive country, most experts see this claim as a possibility.

Consequently, the US and its allies are more alerts, and they have dropped their blasé attitude. Since North Korea tested the ICBM into the Pacific close to Japan and Guam, and further went ahead to threaten Guam, the US and its allies are no longer taking any threats lightly. They have installed anti-missile defense systems to intercept missiles launched from North Korea. Kim Jong Un’s end goal, as previously noted, is to attain the equilibrium of actual military strength with the US and deter the US from possible military interventions.

Efforts of the Global Community

Currently, other states have recognized that North Korea is the immediate threat to international peace and security, and the country has increased its speed and scope of its nuclear weapons program.⁶

Previously, the US, China, Russia, South Korea, and Japan involved North Korea in what was referred to as the Six-party Talks to get it to abandon its nuclear weapons program. These talks aimed toward disarmament failed to work, and Pyongyang seemed to have increased its scale and speed.

In 2005, Pyongyang agreed to adopt a deal that would ensure it abandoned its nuclear ambitions and in return would get political concessions and economic sanctions lifted and further get aid from the US. The country destroyed its Yongbyon plant as a part of the deal in 2008. However, the deal implementation failed in 2009 and talks collapsed. The US believed that North Korea never fully disclosed its nuclear facilities and program. In 2010, this situation was compounded when the country disclosed its uranium enrichment plant located at Yongbyon, which it claimed was meant for electricity generation. In 2012, Pyongyang surprised the world when it declared that it would stop its nuclear weapons program and stopped all missile tests to get food aid from the US. However, this was a ploy since North Korea attempted to launch a missile in April of the same year. Following a war of words with the US and subsequent UN sanctions because of another third test conducted in March 2013, North Korea declared that it would restart all its nuclear activities at Yongbyon plant. By 2015, it appeared that the plant was running its normal activities. The tests conducted in 2016 drew international condemnation, even from China – the country’s main ally and a major trading partner.

Today, experts tend to agree that North Korea could have acquired some of the former Soviet missile systems through underground means in the Ukrainian black market. Thus, Pyongyang scientists now demonstrate capabilities never witnessed before in their missile tests. A clear test to demonstrate that the country has developed warhead vehicles that could withstand excessive heat and atmospheric velocity of re-entry remains one of the obstacles.

In 2017, North Korea tests have become bigger, and many experts believe that the country could miniaturize its nuclear bombs to produce deadly weapons. The latest tests suggested stronger bombs based on the records of the triggered earthquakes with as high as 6.3 magnitudes. Pyongyang claimed it was a hydrogen bomb, but no one could certainly verify and confirm this claim. Nonetheless, the magnitude of the explosion made this claim extremely likely because it was noted that it was huge than the atomic bombs used on Hiroshima and Nagasaki in World War II.⁷ Following these new developments, the UN adopted new sanctions against the Hermit Kingdom. Moreover, the US President, Donald Trump warned Pyongyang of ‘fire and fury’ should it continue with its never-ending threats against the US and its allies. This stern warning failed, though and North Korea vowed to develop new weapons with capabilities to strike the US mainland and Guam, the US territory in the Western Pacific.

The UN Security Council Sanctions Have Largely Failed against North Korea

All have agreed that international sanctions have not yielded the desired results on North Korea’s missile program.⁸ In fact, these sanctions have led to more elaborate and sophisticated methods of procuring materials.

As previously noted, in 2017, North Korea demonstrated its nuclear weapons capabilities to the world. For the past two decades, the international community has concentrated on stopping the Hermit Kingdom from attaining such a level of capabilities. It is believed that the country tested a hydrogen bomb and two ICBMs in September 2017. The US intelligence agencies also determined that Pyongyang had about 60 weapons and there was some manufactured warhead, which could be mounted on a missile.⁹ Despite the UN sanctions, North Korea has been able to acquire technologies and materials for this new nuclear weapons program.

Sanctions Targeting Technologies

In 2006, the UN Security Council adopted sanctions that outlawed the sale, supply, or transfer of any items, materials, equipment, goods, and technology that could help North Korea to advance its nuclear weapons program. The UN imposed these sanctions following the first nuclear test. Since 1990s, the US and other nations have strived to stop North Korea from obtaining technologies that could support its nuclear weapons program. The UN Security Council sanctions further supported these efforts by introducing legal conditions on all states to stop North Korea’s nuclear weapons program.

The UN Security Council sanctions are general and apply to all countries globally. Thus, every member state is responsible for the execution of the sanctions within its borders. Countries have national export control systems to regulate and monitor movements of the missile, military, and nuclear technologies. Hence, governments must provide export licenses for such products and technologies as a means of risk assessments through tracking all involved entities and final usages. As such, they intend to avoid any illegal or unintended usages, particularly to develop weapons of mass destruction or to abuse a population.

In short, all nations have export control measures and, thus they should be able to implement the UN sanctions that target technologies delivered to North Korea. The UN Security Council passed a resolution 1540 in 2004 for a compulsory export control systems for all member states. However, several years after this resolution was adopted, many countries are still facing challenges associated with the implementation and execution. This situation has resulted in uneven implementation and execution of sanctions on North Korea. To this end, it can be asserted that the UN sanctions are shaky because it is difficult to ascertain that any single component of the sanctions list has robust global implementation and execution.

North Korea somehow still manages to obtain missile technologies. In fact, the country now launches more advanced weapons, which reflect its sophisticated missile technologies. Thus, the nuclear weapons program has evolved with technologies. Initially, Pyongyang started by purchasing full missile systems and focusing on reverse engineering or redoing them. In 1970s, for instance, the country acquired some short-range Scud missiles from Egypt and concentrated on reverse engineering in the 1980s. Consequently, by 1990s, the country started developing an improved version of Scud missiles. Further, it was able to experiment with other forms of long-range missiles in the 1990s and 2000s. Its Taepodong missiles were mainly short-range while the subsequent Taepodong-2 was alleged to be long-range, but it was never demonstrated successfully.

As previously mentioned, significant achievements in North Korea’s nuclear weapons program have been noted since 2011 when Kim Jong Un assumed power. It continues to test new missiles and develops nuclear warheads. The current leader has shown accelerated efforts to develop highly sophisticated nuclear weapons.

Additionally, North Korea has also focused on the production of components at home rather than relying on sourced parts. While the program remains opaque and highly guarded, some critical insights could provide a clue on exactly how North Korea has acquired technologies to support its ambition.

Some recovered debris from the sea after it launched a satellite in December 2012 showed that the parts were sourced from international markets. In fact, the 2013 UN report stated that the components were modern and originated from the US, the UK, China, and Switzerland, as well as other improved Scud parts obtained from antique Soviet technologies of 1980s. Reviews of file photos captured during Kim’s visits to the factories suggested manufacturing equipment and technologies for a nuclear weapons program that were more advanced. In fact, North Korea now seems to possess wound filament, which is lighter and stronger relative to aluminum, demonstrating a major step in the program. To this end, experts view Russia and Ukraine as possible sources, but some refute such claims. This now captures the wider discourse concerning the sources behind the most recent success of North Korea. One must ask whether such achievements are linked to imported technologies or North Korea’s homegrown technologies by its scientists.¹⁰

The UN Security Council and Veto

In most instances, critics have often cited the veto power as a major hindrance to the UN resolutions. The specific claim is that the five permanent members are no longer the most objective, stable, and responsible states in the UN. As such, they have used veto power to hinder critical decisions that could help to advance international peace and security.¹¹ The most recent case shows the power of veto.

The UN managed to pass the harshest sanctions package against North Korea following the country’s sixth test of the largest nuclear bombs. However, the US only succeeded in pushing through the sanctions after eliminating some major proposals, including a complete ban on shipments of oil into the country with the end goal of getting Russia and China to support the sanctions. “China and Russia are North Korea’s chief sanctions enablers and used their veto power to water down the UN sanctions”.¹² Chinese and Russian representatives made certain that the sanctions were watered down prior to the vote¹³ because they are more focused on their national interests when it comes to reining in North Korea’s nuclear power ambitions.¹⁴ China appears to be worried about the potential collapse of North Korea and millions of refugees moving across into China.

Besides, China also fears that the US would significantly boost its military presence in the region to handle the aftermath of the collapse and to secure nuclear weapons and facilities. China is not ready for the US military near its border. Thus, it strives for a stable North Korea to act as a buffer. Russia, on the one hand, is a minor player in North Korea’s affairs. Nonetheless, Russia has real concerns regarding regional stability and restricting the US presence in the region. Further, analysts believe that Russia is also using this opportunity to become a major power player in any negotiations involving the Hermit Kingdom in the future, specifically outside the UN Security Council. Obviously, the Security Council has adopted a lukewarm approach to North Korea, as national interests become the priority for the five permanent member states.¹⁵ Political mismanagement associated with poorly defined policies or failure to act by the US administrations is also cited as a source of problem in managing North Korea.¹⁶

The cases of Syria and Crimea show instances in which the UN Security Council has largely failed to deal with situations that undermine international peace and security.¹⁷ In such cases, some critics have blamed the Security Council for focusing on “national interests and short-term geopolitical considerations over intolerable human suffering and grave breaches of international peace and security”.¹⁸ As such, it is observed that the UN Security Council is no longer effective in its role and needs reforms.¹⁹

North Korea is Evading Sanctions

As the US focuses on efforts to destroy North Korea’s economy through hard-hitting sanctions, Pyongyang has proved that it is an expert in evading the most elaborate sanctions regime and finding adequate funds to pay for its nuclear weapons program. In fact, the UN experts observe that “as the sanctions regime expands, so does the scope of evasion”.²⁰ This is an observation by a UN panel of experts monitoring enforcement of UN sanctions against North Korea, and the panel further notes that “lax enforcement of the sanctions regime coupled with the DPRK’s evolving evasion techniques is undermining the goals of the resolutions that the DPRK abandon all WMD (weapons of mass destruction)”.²¹

North Korea has been able to advance its nuclear weapons program simply by evading sanctions and wider scrutiny of the global community. The country employs some illicit procurement methods, including the use of front firms, disguising the end-user, using fake documentation, and mislabeling of cargo. The 2017 UN report has concluded that the country’s evasion approaches are expanding in scale, scope, and complication. It appears that North Korea has established a global network to procure technologies, equipment, and materials for its nuclear weapons program.

The geographical closeness, wider trading networks, and historic relationship of North Korea and China all make China an important, unequaled player in the country’s networks of activities. Majorities of middlemen, wheeler-dealers, and procurement experts have established their bases in China. Consequently, many private sector players in China, to some extent, have benefited North Korea’s manufacturing technologies. In fact, a series of events in the past years have shown that Chinese-North Korean businesses and Chinese industrialists have been extremely important in aiding North Korea’s nuclear weapons program.²² The country sources components, machine tools, and other materials from China.

As critics and observers ponder whether sanctions have largely failed, new complicated developments are noted, specifically on the impacts of the sanctions regime. The main objectives of these sanctions have been to slow down and eventually stop North Korea from attaining its nuclear weapons ambition. Recent tests conducted show that sanctions have failed in their primary objectives, and now experts believe that sanctions will not likely alter the behavior of North Korea.

Additionally, these sanctions have also proved that North Korea has developed more intricate procurement techniques as Chinese wheeler-dealers seek to monetize the perceived risks. The US considers North Korea as an inward-looking, economically isolated country with no global networks. However, the Hermit Kingdom has created multiple illicit networks, which are international, adaptive, and resilient to support its trade and missile program. Today, the world has acknowledged that it is difficult to disrupt these illicit networks.

Conclusion

Given the national interests of the permanent member states, the UN Security Council can no longer deal with the case of North Korea since sanctions are no longer effective.²³ As such, world leaders must find other necessary means to end the impasse through a peaceful resolution or military action because failure to act could be catastrophic. Member states must uphold international peace and security by ratifying any treaty abolishing nuclear weapons. They have recognized that North Korea’s nuclear weapons program is an obvious present danger to all nations, and the constant provocative behaviors of Pyongyang have not slowed down despite the sanctions. Hence, a war could be inevitable, but it would be a war like no other witnessed before, which could claim millions of lives.²⁴ That is, the Security Council would have failed in its mandate to uphold international peace and security.²⁵ It will be a nuclear World War III.

Reference List

Aleem, Z 2017, Why Russia and China watered down the UN’s new North Korea sanctions, Web.

Ali, I & Stone, M 2017, ‘North Korea ‘most urgent’ threat to security: Mattis’, Reuters, Web.

Anwar, MA 2014, ‘UN Security Council’s failure stretches from Syria to Crimea’, The Conversation, Web.

Beuge, A, Gutiérrez, P, Levett, C, Sheehy, F & Torpey P 2017, ‘A guide to North Korea’s advance toward nuclear weapons – in maps and charts’, The Guardian, Web.

Carswell, AJ 2013, ‘Unblocking the UN Security Council: the uniting for peace resolution’, Journal of Conflict and Security Law, vol. 18, no. 3, pp. 453–480. Web.

Fisher, M 2017, ‘Remote textile plant may secretly fuel North Korea’s weapons’, The New York Times, Web.

Kasperowicz, P 2017, ‘US splits with China, Russia on North Korea solution at UN’, The Washington Examiner, Web.

Klein, JA 2017, UN’s failure on North Korea, Web.

Kristof, N 2017, ‘Trump’s Scary Strategy on North Korea’, The New York Times, Web.

Lopez, CM 2017, North Korean crisis a decades-long failure of political will, Web..

Lynch, C 2017, U.N. report: sanctions aren’t stopping North Korea’s nuclear program, Web.

Murphy, R 2015, ‘Is the UN Security Council fit for purpose?’ Politics Review, vol. 24, no. 4, pp. 1-4.

Park, J-M & Kim, S 2017, ‘These are the scientists behind North Korea’s nuclear weapons programme bringing country to brink of war’, Mirror, Web.

Remshardt, K 2010, Under what Conditions has the UN been able to use its Chapter VII Powers?, Web.

Salisbury, D 2017, Why U.N. sanctions against North Korea’s missile program failed, Web.

Sang-Hun, C 2017, ‘North Korean leader hails nuclear arsenal as ‘powerful deterrent’, The New York Times, Web.

Scarborough, R 2017, ‘North Korea has 30 warheads and is quickly expanding its nuclear arsenal’, The Washington Times, Web.

Schallhorn, K 2017, North Korea’s nuclear weapons program has grown with each Kim regime, Web.

Sehgal, E 2017, ‘Failures of UN bring us further toward third world war’, Asia Times, Web.

Sevastopulo, D & Manson, K 2017, ‘UN agrees stronger sanctions against North Korea’, Financial Times 12 September, Web.

Simic, I 2012, Failure of international law and tyranny at the Security Council, Web.

Warrick, J, Nakashima, E & Fifield, A 2017, ‘North Korea now making missile-ready nuclear weapons, U.S. analysts say’, The Washington Post, Web.

Footnotes

1. Remshardt, K 2010, Under what Conditions has the UN been able to use its Chapter VII Powers?, Web.
2. Ali, I & Stone, M 2017, ‘North Korea ‘most urgent’ threat to security: Mattis’, Reuters, Web.
3. Schallhorn, K 2017, North Korea’s nuclear weapons program has grown with each Kim regime, Web.
4. Sang-Hun, C 2017, ‘North Korean leader hails nuclear arsenal as ‘powerful deterrent’, The New York Times, Web.
5. Warrick, J, Nakashima, E & Fifield, A 2017, ‘North Korea now making missile-ready nuclear weapons, U.S. analysts say’, The Washington Post, Web.
6. Scarborough, R 2017, ‘North Korea has 30 warheads and is quickly expanding its nuclear arsenal’, The Washington Times, Web.
7. Beuge, A, Gutiérrez, P, Levett, C, Sheehy, F & Torpey P 2017, ‘A guide to North Korea’s advance toward nuclear weapons – in maps and charts’, The Guardian, Web.
8. Salisbury, D 2017, Why U.N. sanctions against North Korea’s missile program failed, Web.
9. Scarborough, R 2017, ‘North Korea has 30 warheads and is quickly expanding its nuclear arsenal’, The Washington Times, Web.
10. Park, J-M & Kim, S 2017, ‘These are the scientists behind North Korea’s nuclear weapons programme bringing the country to the brink of war’, Mirror, Web.
11. Simic, I 2012, Failure of international law and tyranny at the Security Council, Web.
12. Sevastopulo, D & Manson, K 2017, ‘UN agrees stronger sanctions against North Korea’, Financial Times 12 September, Web.
13. Kasperowicz, P 2017, ‘US splits with China, Russia on North Korea solution at UN’, The Washington Examiner, Web.
14. Aleem, Z 2017, Why Russia and China watered down the UN’s new North Korea sanctions, Web.
15. Remshardt, K 2010, Under what Conditions has the UN been able to use its Chapter VII Powers?, Web.
16. Lopez, CM 2017, North Korean crisis a decades-long failure of political will, Web.
17. Anwar, MA 2014, ‘UN Security Council’s failure stretches from Syria to Crimea’, The Conversation, Web.
18. Murphy, R 2015, ‘Is the UN Security Council fit for purpose?’ Politics Review, vol. 24, no. 4, pp. 1-4.
19. Carswell, AJ 2013, ‘Unblocking the UN Security Council: the uniting for peace resolution’, Journal of Conflict and Security Law, vol. 18, no. 3, pp. 453–480. Web.
20. Lynch, C 2017, U.N. report: sanctions aren’t stopping North Korea’s nuclear program, Web.
21. Ibid.
22. Fisher, M 2017, ‘Remote textile plant may secretly fuel North Korea’s weapons’, The New York Times, Web.
23. Klein, JA 2017, UN’s failure on North Korea, Web.
24. Kristof, N 2017, ‘Trump’s Scary Strategy on North Korea’, The New York Times, Web.
25. Sehgal, E 2017, ‘Failures of UN bring us further toward third world war’, Asia Times, Web.

Summary of the Article

The article written by Tani (2015) dwells on the issue of administrative constitutionalism. She reviews the history of the Equal Protection Clause and states the key events of the movement. Her research provides the reader with the core steps that have been made on the way to the creation of the Social Security Act and enumerates the effects of the policy on the citizens. The article dwells on the misunderstanding between the federal agencies and the essential postulates of the US legislation which originally presuppose equality regardless of the social status, race, and religious conviction. The issue of administrative constitutionalism is considered to be the focus of the studied article. The author’s interpretation of the US federalism is linked to the constitutional interpretation of the former (Beard, 2012). In this article, the author successfully describes the way that administrative equal protection functions and connects it to the incentives of the federal agencies (including welfare grants).

Tani (2015) presents evidence concerning the history of the administrative equal protection and the rights of the poor. She believes that equal protection may be considered a standard constitutional model that is currently exposed to unfair treatment and legal misunderstandings. The author claims that the major problem consists in the constitutional concepts that were elaborated and employed by the federal agencies to deal with plausible claims (Smith, 2012). The author of the article discusses how the Equal Protection Clause is perceived outside the courts and how this can benefit the poor. Nonetheless, Tani (2015) is convinced that the problems of constitutionality and administrative equal protection are not handled efficiently, and the current approaches to these issues should be reconsidered promptly.

Key Findings and Issues

The key findings of the article support the fact that public safety is in danger and it directly relates to the governmental initiatives regarding equal protection. The Equal Protection Clause should be seen as the main assistant of the legislation when the issue of the rights of the poor comes up (Tani, 2015). The constitutionality of this decision is also supported by the idea that current criminal justice policies are affected by federal agencies and not the courts. The author of the article discusses the misbalance inherent in the current legislative apparatus and proposes several measures that should be taken to mitigate the meddling of federal agencies.

Recommendations

The author of the article recommends re-evaluating the way the three major areas of the US legal system are perceived. Tani (2015) identifies them as administrative law, constitutional law, and federalism. She supports the idea that modern incentives that correspond to the flexibility of the legal system should replace the outdated legislature and assist in adapting the Social Security Act to the essential needs of US citizens. Another recommendation is based on the idea that cooperative benefit programs are controlled by the government and should be reformed in compliance with the Equal Protection Clause (Collins & Ringhand, 2013).

Based on the recommendations found in Tani’s (2015) article, it is safe to say that the current state of the US criminal justice system may be positively influenced by these improvements. All these recommendations also reflect the idea that constitutional activities are inextricably linked to the incentives of several federal agencies (Marion & Oliver, 2012). Overall, the author of the article recommends paying close attention to the impact of administrative constitutionalism and emphasizes the idea that the Equal Protection Clause may be an instrument of pivotal importance when it comes to the protection of the rights of the poor.

Discussion Summary

The articles reflect the issues inherent in the current US legislation and underline the significance of the dynamic changes that are made by the government. As the real issue is embodied by the approaches to the legislative process, the authors recommend re-evaluating the current state of the legal apparatus. Therefore, the issues of civil rights and the rights of the minorities can be defined as the two major problems that cannot be solved irrevocably at the current stage of the constitutional and democratic development of the United States.

Analysis of the Article

The author of the article did a great job describing the premises that led to the current state of affairs in the field of the rights of the poor and administrative equal protection. Tani (2015) dwells on the influence of federalism on the citizens of the United States. She also believes that standardized legislation is key to the problem of the unfairness of the state welfare laws. Nonetheless, the recommendations provided by the author are broad, and their impact on social justice is unpredictable. The conflict of interests can be resolved by amending the Equal Protection Clause and the way it is applied to real-life examples (Gaines, 2014). This would ultimately trigger positive outcomes and transform the way that the Equal Protection Clause is currently perceived by the legislative bodies within the framework of the US legal system.

References

Beard, C. A. (2012). An economic interpretation of the Constitution of the United States. New York, NY: The Macmillan Company.

Collins, P. M., & Ringhand, L. A. (2013). Supreme Court confirmation hearings and constitutional change. New York, NY: Cambridge University Press.

Gaines, L. K. (2014). Homeland security: A new criminal justice mandate. In S. L. Mallicoat & C. L. Gardiner (Eds.), Criminal justice policy (pp. 67-87). Thousand Oaks, CA: Sage Publications.

Marion, N. E., & Oliver, W. M. (2012). The public policy of crime and criminal justice (2nd ed.). Upper Saddle River, NJ: Prentice Hall.

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Introduction

After the global financial crisis, there has been a growing need for companies in the US and UAE to develop stringent corporate regulations to ensure transparency and accountability. Many companies have adopted new corporate governance that ensures that directors and management perform their duties according to laid down rules and regulations. When a corporation is formed, it becomes a legal entity of its own because it can be able to sue and be sued.

A company is a separate legal entity that has legal rights of its own. Therefore, directors cannot be held accountable for the liabilities of the company. In both jurisdictions, directors act as agents of the shareholders. They must make their decisions for the best interest of shareholders. This raises a paramount issue about the veil of incorporation. The veil of incorporation states that a company has a separate personality of its own from the personality of shareholders and directors.

The veil of incorporation prevents shareholders and directors from being personally liable for the liabilities of the company. However, the veil of incorporation has raised heated debate over the personal responsibilities of the director when they commit fraud and mismanagement. Lord Neuberger while presiding over the case of Prest v Petrodel Resources Ltd argued that the veil of incorporation could not be used as a shield against the personal responsibilities of a director on fraud and mismanagement. To maintain clarity, the judge noted that companies must have a clear limit, which must be ‘as clear as possible’ to prevent directors from escaping personal responsibility for fraud and mismanagement.

The primary objective of this paper is to identify precisely the individual liabilities of directors in the US and UAE. This study seeks to provide critical analysis of potential liabilities of directors both in the US and UAE jurisdictions for the acts of fraud and mismanagement. Specifically, this study will focus on the personal liabilities of directors under both jurisdictions. The liabilities of directors can result from fraud, security law, insolvency law, Penal Code, and Anti-trust law. Finally, the study will critically analyze parties who are responsible for taking legal action against directors.

Personal responsibility of directors in the United Arab Emirates

Under the United Arab Emirates jurisdiction, the director is personally liable for fraud when he/she signs a document in the name of the company containing misleading information. The director is held personally liable and is subject to a fine or jail sentence as the judge may deem proper depending on the matter at hand. Andrew noted that the magnitude of liability is a matter of the court to decide which has a direct impact on the duration and fines imposed by the court.

Moreover, the judge must also consider the magnitude of misrepresentation and the intention of the director¹. Moreover, a director can be held liable for giving false information especially if the director had prior knowledge that the information is false. Giving false information attracts similar charges to that of signing and issuing a document with false information. Also, directors can be held accountable for disclosing confidential information to their benefit or third parties that attract similar penalties.

Under the Penal Code, a director is personally liable for the embezzlement of funds, property, fraud, and legal rights. The Penal Code was introduced to prevent directors who might think of taking advantage of their position to abuse their powers for their benefit. Moreover, the UAE Penal Code explicitly states that when a director acts ultra vires by disclosing confidential information of a company they can hold personally liable and charged in court.

More specifically, the UAE Penal Code states that directors are criminally liable for drawing a cheque with prior knowledge that the company does not have enough money to meet that obligation. Under this liability, the judge must consider the knowledge of the director before drawing the cheque. The director can personally be charged in court or serve a jail term for less than five years.

A director is personally liable for making a public offer in a limited liability company. Under the UAE’s company law Act, a director cannot be allowed to make personally a public offer because it contravenes the Companies Act, which provides circumstance and procedure under which shares should be issues². Moreover, a director can be held personally liable for misrepresenting a company’s value. This occurs when a director having prior knowledge of the value of the company decides to price the shares above or below their real value. UAE Capital Market Security law expects directors to act in good faith when valuing a company’s shares to ensure the price represents the true value of the business. If a director is found guilty, he/she can be charged in court for a maximum of two years in prison or a maximum of $27,000 in fine, whichever the judge may deem fit.

Under the UAE Insolvency Law, a director is personally liable for embezzling the properties of a company. This includes a deliberate action of a director during insolvency to enter into fraudulent agreements with creditors and suppliers of a company. This includes the act of false director misrepresentation of information and the company’s capital position to defraud the company. When a director receives money that is above what is stipulated under the Companies Act in the form of bonuses, compensation and false misrepresentation of a company’s debt, he/she is personally liable for misrepresentation and fraud. However, under the UAE, the law does not specifically mention the magnitude of liability that can be imposed on directors if they commit such acts.

Under the UAE Anti-Trust Law, the director can be held personally liable if he/ she induce unfair competition in the industry that harms other companies in the same industry. Specifically, if a director approaches an employee of another company (competitor) to acquire confidential information is personally liable. The law clearly states that if a director tries to acquire confidential information from a competitor whether for his/her gain or in the interest of the company, is personally liable, and that can attract a penalty of two years in prison. Similarly, is a director conspire in the distribution of deceptive good to deceive consumer attract the same penalty.

Also, a director is personally liable for damages caused by the publication or distribution of defamatory information about a competition that results in financial losses is personally liable for and attracts similar penalties. Nonetheless, to succeed in a defamation case, the competitor must be able to prove that the statements made by the director were defamatory and that the statements were directed to the company, which resulted in financial losses. In this case, the director issued under the law of tort for defamation.

Personal liability of a director for mismanagement in the UAE

Under the UAE Company’s Act, a director is personally liable for mismanagement for any action that leads to the deterioration performance of the company as a result of mismanagement. The UAE company law Act article 186 states that directors should be held personally liable for losses incurred by the company as a result of their decisions. Although this article does not specify the action that should be taken by a shareholder against the director, the act of mismanagement in itself attracts personal responsibility.

However, Article 111 gives any shareholder the right to sue directors for losses incurred because of the director’s neglect and misjudgment in decision-making³. For instance, if shareholders do not receive a share of the profit of the company due to management neglect, the can bring a lawsuit against the directors.

Under the jurisdiction of the UAE Civil Code, a director is personally liable to his/her action of resignation when the company is in a crisis thus resulting in huge financial losses. However, the director cannot be held liable if he had given a 6-month notice of his intention to resign. The company must also be able to prove that the losses resulted from the lack of special skills of the director. Moreover, they must prove that the director acted intentionally which resulted in financial losses.

Under Article 23 of the company’s Act, companies should not include any provision in the memorandum of association that exempts directors from personal liability as a result of fraud and mismanagement⁴. Indeed, Article 23 clearly states that any provision that exempts directors from personal liability for fraud and mismanagement shall be deemed rendered void and inapplicable. Both in the US and UAE, it is a common practice for companies to grant money in defense of a director, although it is treated as a loan which is later paid back. However, this provision has not been applied in the United Arab Emirates, and there is a doubt that courts will make any sense of this provision in the long run as they do with exception liability.

Under the law of insolvency, a director is personally liable for damages caused as a result of their failure to file bankruptcy within 30 days after the company losses half of its initial capital. Specifically, Article 289 stipulates that directors can be held accountable for losses incurred as a result of the failure of the director to file insolvency it is obvious. Article 289 requires directors to be responsible as the closely monitor financial statements to establish the status of the company.

Directors can also be held liable for breach of other laws mentioned above. In fact, in most cases, a director is liable in criminal law for all breaches of law that involve fraud and mismanagement⁵. Directors must ensure they have observed due diligence when dealing with company affairs to ensure they do not breach this law. Most of the laws that identify liabilities of directors for fraud and mismanagement overlap with criminal law, which exposes directors to high chances of being held liable for, mistake the commit when dealing with the organization.

In summary, even though this study does not effectively cover all aspects of the director’s responsibilities and liabilities for fraud and mismanagement is has raised critical instances when a director can be held personally accountable for acts of fraud and mismanagement. The director can be personally liable under the Penal Code, insolvency law, security law, and criminal law. Various stakeholders can bring a lawsuit against a director for personal liabilities. For instance, a shareholder has a right to sue directors for fraud and mismanagement if they incur losses as a result of the director’s decisions⁶.

However, for shareholders to be able to sue directors, UAE laws require that a shareholder be elected by other directors during a general meeting. However, if the company for fraud and mismanagement sues the director, any shareholder can be able to sue the directors for personal losses incurred as a result of their decisions. This lawsuit is specifically preferred when a company has failed to sustain a case against a director for fraud and mismanagement. However, only parties that have suffered financial losses as a result of the director’s action can be able to raise such a proceeding against the directors.

Personal liability of a director in the United States

According to the US Company’s Act, a director is personally liable for mismanagement as a result of negligence. According to Boyer and Tennyson, there is a concept in the US that directors are merely gratuitous has led to a growing perception that the responsibility of directors involves fiduciary relation. This relationship then imposes liability on directors if they break their duties to the shareholder. However, although this perception is held by many in the US, it is difficult for a stakeholder to be able to identify the equity of jurisdiction when this trust is invoked. Director is agents of shareholders, and they are expected to act in good faith to ensure they shareholders do not incur losses.

These losses can be as a result of mismanagement when directors act negligently without taking due care in major decision making. The liability for mismanagement arises due to the quasi-trusteeship that exists between shareholders and directors. Kevin noted that directors are personally liable for mismanagement, which is well stipulated in the case of Spring’s appeal in the case of Philadelphia bank⁷.

In this case, the director used all the resources of the company to try to save the company from going into receivership. The directors used the money in reckless and irrational investments such as giving out unsecured loans in anticipation they would gain huge profit to normalize the bank. The directors sacrificed loan collateral to save the bank from going into a financial crisis. However, their action was a reckless move that exposed stakeholders to huge losses. The directors were held personally responsible for their actions since it did lead to financial losses. However, on appeal, the judge overturned the first ruling when Justice Sharswood argued that no matter how absurd the director’s decision was, as long as they acted within their powers, it was their duty to ensure the bank does not go into receivership.

Under the US insolvency law, a director is personally liable for the deliberate action of a director during insolvency to enter into fraudulent agreements with creditors and suppliers of a company⁸. This includes the act of false director misrepresentation of information and the company’s capital position to defraud the company. When a director receives money that is above what is stipulated in the Companies Act in the form of bonuses, compensation and false misrepresentation of a company’s debt, it is personally liable for misrepresentation and fraud.

A director is personally liable under the Common law for fraud and misappropriation of organizational assets and other properties. This includes a deliberate action of a director during insolvency to enter into fraudulent agreements with creditors and suppliers of a company. This includes the act of false director misrepresentation of information and the company’s capital position to defraud the company. Peter argued that when a director receives money that is above what is stipulated in the Companies Act in the form of bonuses, compensation and false misrepresentation of a company’s debt, it is personally liable for misrepresentation and fraud.

The liability of a director is determined by the duties and responsibilities of directors. They include the duty of care, duty of obedience and duty of loyalty. If a director breaches any of the duties, they are held personally liable. Moreover, directors are expected to act in good faith as they exercise corporate responsibilities. For instance, in the US, a shareholder can raise a derivative action against directors on behave of the company against any director. In essence, the director depends on business practices and knowledge to make decisions. They use the business judgment rule as the best defense mechanism.

In this case, the business directors use the business judgment as to the presumption that they acted in the best interest of the company. However, judges in the US do not take into account the notion of business judgment. A shareholder can be able to sue directors when they mismanage the company leading to losses. However, a shareholder who raises such a case must be able to prove that suffered financial losses. Moreover, when these damages are awarded, they are recovered by the company and not the shareholder who sued the directors. For instance, in 2011, the Delaware Court ruled that directors were personally liable for mismanagement when they decided to sell Grupo Mexico to Southern Peru Copper. The directors were held liable for mismanagement, and they were charged $300 million that was awarded to the company.

In many instances, the US courts have held a director personally liable due when the results of their actions breach the duty of loyalty, due care and duty of obedience. For instance, David argued that in the case of Aronson v. Lewis, the presiding judge ruled that the director was personally liable for ratifying a transaction without due consideration. Under the United States law, a director can be personally liable for breach of the duty of loyalty.

Directors are expected to observe and practice ethical business practices in the best interest of the company. Directors should not use their position for their gains in usurping corporate opportunities that expose the company to a legal suit. For instance, directors should not approach any employee of another company to acquire confidential information from a competitor whether for his/her gain or in the interest of the company, is personally liable and that can attract a penalty of two years in prison. Similarly, is a director conspire in the distribution of deceptive good to deceive consumer attract the same penalty.

Conclusion

The extent to which directors can be personally held accounts depends on the jurisdiction of the country they operate. However, in most cases, directors are personally liable for fraud and mismanagement as a result of the quasi-trusteeship relationship. In the UAE, directors are liable under the Penal Code for embezzlement of funds, property, fraud, and legal rights. Moreover, a director can be held personally liable under the Civil Code by his/her action of resignation when the company is in a crisis thus resulting in huge financial losses.

Under Article 186 of the UAE, company law, directors should be held personally liable for losses incurred by the company as a result of their decisions. Although this article does not specify the action that should be taken by a shareholder against the director, the act of mismanagement in itself attracts personal responsibility.

In the US, a director is held responsible if he/she breaches the duty of obedience, trust, and due care. Directors can also be held accountable by the deliberate action of a director during insolvency to enter into fraudulent agreements with creditors and suppliers of a company. This includes the act of false director misrepresentation of information and the company’s capital position to defraud the company. In conclusion, directors can be personally held accountable under the Penal Code, insolvency law, security law, and criminal law. Moreover, various stakeholders can bring a lawsuit against a director for personal liabilities.

Bibliography

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Footnotes

1. Bainbridge, The Management of Limited Liability Companies and Directors’ duties in the UAE. Web.
2. Boustany, Combating Fraud And Money Laundering In The UAE – Criminal Law – United Arab Emirates. Web.
3. Ibrahim, Piercing the Corporate Veil Under the UAE Companies Law. Web.
4. Hodgins, Directors’ Liabilities and Insurance in the UAE. Web.
5. Smith, Directors’ Duties in the UAE – What Are the Potential Personal Liabilities. Web.
6. Terblanche, UAE Company Law Overview – Corporate/Commercial Law – United Arab Emirates. Web.
7. LaCroix, Personal Liability for Corporate Officials Under U.S. Import Laws. Web.
8. Street, Director & Officer Liability: 8 Tips for Protecting Your Personal Assets. Web.