Here is why Israel's annexations are legal, from a paper by Professor Eugene Kontorovich: (Italics his, bold emphasis mine.)
Whatever the current status of an absolute prohibition on territorial change resulting from war, there was certainly no such blanket prohibition in 1967, when the territory came under Israeli control. At the time, international law only prohibited acquisition of force in illegal or aggressive wars. This is evident from the source of the prohibition in the UN Charter, post-Charter state practice, and the understandings of international jurists at the time. There is simply no precedent or authoritative source for forbidding defensive conquest in 1967.
The U.N. Charter prohibits war for most purposes. When the use of force is illegal, it is natural to conclude that any territorial gains from such aggression cannot be recognized as well. Thus the illegality of conquest arises from the presumptive illegality of the use of force. But crucially, the U.N. Charter does not make all war illegal. Indeed, it expressly reaffirms the legality of a defensive war. Since defensive war is not illegal, it follows that the defender’s territorial gains from such a war would not be illegal.The fundamental legal question is whether the law as it stood in 1967 clearly barred territorial changes resulting from the legal use of force. To answer that, we must see how the state practice, and leading jurists, answered that question after the adoption of the U.N Charter and before 1967.1. The International Law Commission and leading scholarsThe legality of defensive conquest was endorsed by the International Law Commission, a body created by the General Assembly, and tasked with providing fuller explanations of the legal significance of the U.N. Charter and related documents. Composed of some of the most distinguished jurists of the time, its work in the immediate post-War period is seen as providing highly authoritative explanations of the UN Charter. In the ILC’s drafting of their influential Draft Convention on the Rights and Duties of States (1949) and Draft Code of Offenses Against the Peace and Security of Mankind (1954), the question of the permissible scope of territorial conquest came up repeatedly. The ILC repeatedly recognized that not all territorial changes in war are illegitimate. Not all annexations were bad, the U.S. delegate argued. All agreed that post-war frontier adjustments were justified to help protect the victim of aggression. There was broad consensus territorial change was only impermissible in a war of “aggression.” Thus the final document provided that states have a duty “to refrain from recognizing any territorial acquisition by another State acting in violation” of the U.N. Charter or other international law rules. But Israel’s use of force in 1967 was defensive – certainly the U.S. is entitled to view it as such – and thus explicitly lawful under the Charter. Thus there is no obligation to refrain from recognizing it.Furthermore, the leading international law treatises immediately prior to 1967 reveal a disagreement between leading authorities such as Hersch Lauterpacht and Robert Jennings on whether defensive conquest was proper under the UN Charter. The majority opinion seems to side with the permissive view, but both sides acknowledged that the matter was disputed, and a clear rule had not emerged.2. State practice, 1945-67The views of the U.N’s International Law Commission and most scholars in finding defensive conquest as lawful under the U.N. Charter should not be surprising given that it simply reflected broad state practice under the Charter. In the years immediately following the adoption of the Charter, many of the victorious Allies took territory of the defeated nations. All these annexations have been recognized, without controversy by the U.S. and international community. To mention only a few of these instances, Holland unilaterally annexed parts of Germany in 1949; Greece and Yugoslavia took parts of Italy; the U.S.S.R and Poland annexed large parts of Germany. The ILC in its deliberations specifically addressed the legal basis for these annexations: because the underlying use of force was lawful (defensive), the acquisition of territory can be permitted.... An examination of state practice and international legal opinion shows that international law did not prohibit, and may even have affirmatively sanctioned, defensive conquest as of 1967. The lack of clarity is itself important, because in international law there is a meta-principle dealing with situations where it is not clear whether a rule has emerged. Known as the Lotus Principle, the rule is that when it is not clear whether an international law rule has emerged, states remain free to act. That is, the burden of proof is on those seeking to demonstrate the existence of a rule that would limit sovereign action. That which is not clearly prohibited is permitted. It is not necessary to consider whether any norm prohibiting defensive conquest emerged subsequently to Israel’s actual conquest of these territories. Under the doctrine of intertemporal law, subsequent developments in international law do not change the status of developments that occurred before those changes. That is, international law is non-retroactive, and this is most emphatically true for questions of territorial sovereignty and conquest, where any other principle would lead to chaos in international relations.
Policy Arguments...The policy arguments for allowing for defensive conquest are compelling. Without such a possibility, an attempted aggressor is insured against significant negative consequences. Territorial expansionism becomes a no even. In short, the lack of any self-- lose game, because aggressors will always at least break help sanctions serves as a license and inducement to aggressors, especially in the absence of a unified international security regime of the kind the Charter originally envisaged.
Of course, no one is addressing the actual international law aspects of the situations - they just make up a facile analogy and assume that the audience is too ignorant to know otherwise.
See also "International Law and the Arab-Israel Conflict" by Julius Stone, edited by Ian Lacey, which concludes that Israel's capture of Jerusalem is legal:
For those who disagree with this analysis, the question remains - who has a better legal right to Jerusalem than Israel? It cannot be Jordan (who gave up its own legal claim,) it cannot be the UN for the reasons given above and it cannot be a nonexistent Palestinian Arab state or entity which didn't even exist when Israel captured it.
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