Ius Gentium

University of Baltimore School of Law's Center for International and Comparative Law Fellows discuss international and comparative legal issues


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Embargo-ing Going but Not Quite Gone: Smoke Begins to Dissipate Between Cuba and the U.S.

Margie Beltran

[I], John F. Kennedy, President of the United States of America, acting under the authority [of the] Foreign Assistance Act of 1961, as amended, do hereby proclaim an embargo upon trade between the United States and Cuba…of all goods of Cuban origin and all goods imported from of through [Cuba].”[1]

President John F. Kennedy, February 3, 1962, Proclamation 3447 – Embargo on All Trade with Cuba

And thus ended the free flow of the forbidden fruits that were Cuba’s earthy, intense cigars and premium rum.  To prevent supporting a communist-run country in the midst of the Cold War and months before the Cuban Missile Crisis, President John F. Kennedy announced the United States would put an indefinite halt on any trade with Cuba.[2]  The embargo against Cuba prevented Americans from bringing home the coveted cigars and alcohol, even if they were purchased in third countries.[3]

Fast forward about a half a century later to October 17, and the White House has released a directive to lift more sanctions against Cuba.[4]  Note the word sanctions.  The embargo has not been lifted in full.

In 2014, President Barack Obama announced that his administration would begin working to re-establish a diplomatic relationship with Cuba by changing travel and trade restrictions set forth in Proclamation 3447.[5]  On April 11, 2015, President Obama and President Raul Castro of Cuba met in there face to face.[6]  Both have joined efforts to normalize the long-standing negative relationship between the two countries.

In March 2016, Obama was the first U.S. president to visit Cuba in nearly 90 years.[7]  In a press conference following their meeting on the island, Obama announced that they were on a track to ending the embargo, but provided no projected date.[8]  Castro agreed with the projected outcome of ending the embargo because he believed it would help Cuba and the U.S. make more progress.[9]  The two leaders continue to hold vastly different views on human rights and political freedoms.[10]

However, following Obama’s announced intentions of mending the relationship, Congress denied to support his decision.  Congress members and other political leaders felt that this change in trade relations with Castro is not benefitting the U.S., but merely benefitting Cuba.[11]  They are concerned that merely lifting trade sanctions will not incentivize Castro to improve political freedoms and human rights for the citizens of Cuba.

Now, in the final three months of Obama’s presidency, he has been working to change the U.S. policy, which would allow trade and commerce to grow exponentially between the two countries.[12]  While this olive branch approach in which the U.S. was to change their policies in the areas of medical and scientific research, the Cuban citizens feel differently.[13]

 

According to Josefina Vidal, head of the U.S. Department at the Cuban Foreign Ministry while speaking at a rally held at the University of Havana, “Obama is finishing his term, but the blockade remains.”  Vidal explained during the rally, that while it is a nice attempt, the embargo has not been lifted.  The sanctions are easing the tension between the country’s; however, there is still a lot of limitation brought forth by the embargo.[14]

The Cuban people are under the belief that the island will not and cannot commit themselves in full to restoring diplomatic and normalized partnerships with the U.S. so long as the U.S. does upholds the embargo.[15]

It will be interesting upon the start of a new presidential term how the U.S. relationship with Cuba continues to develop, if it develops at all.  Both candidates have stated that they are in favor of developing diplomatic relationships with Cuba.

 

Democratic candidate, Hillary Clinton believes the U.S. should increase their influence of human rights policy on Cuba.[16]  She also stated that if Congress prevented her efforts, she would impose her executive authority to make it easier for the American people to visit the island and support small businesses in Cuba.[17]  GOP candidate, Donald Trump believes 50 years has been long enough for an embargo and supports Obama.[18]  This opinion strays from some of the other major influencers of the GOP such as Florida politicians, Senator Marco Rubio and Governor Jeb Bush.[19]  Senator Rubio referred to the diplomatic olive branch as “a lifeline for the Castro regime that will allow them to become more profitable…and allow them to become a more permanent fixture.”[20]

As one of the longest embargos in the world, it seems best the U.S. works towards a more amicable resolution and to eventually achieve their human rights goals around the world.  Based on the current candidate stances, the increased diplomatic relationship between the U.S. and Cuba will continue to grow.

Margery Beltran is a third year law student at the University of Baltimore School of Law (Candidate for J.D., May 2017).  She holds a Bachelor of Science in Family Science with a minor in Psychology from Towson University.  Her interests include mental health and disability law and international alternative dispute resolution. Margie currently serves as the Volume V Comments Editor for the University of Baltimore’s Journal of International Law. She participated in the 2016 Summer Abroad Program at the University of Aberdeen School of Law in Aberdeen, Scotland.  She is currently an intern in Washington D.C. for the U.S. Department of Health and Human Services, Alternative Dispute Resolution Division.

[1] http://www.presidency.ucsb.edu/ws/?pid=58824

[2] http://www.history.com/topics/cold-war/cold-war-history

[3] http://www.cnn.com/2016/10/14/americas/cuba-cigars-us-embargo-lifted/index.html

[4] http://money.cnn.com/2016/10/14/pf/cuban-cigar-rum-sanctions/index.html

[5] http://www.nytimes.com/interactive/2014/12/17/world/americas/cuba-sanctions.html

[6] Id.

[7] http://www.usnews.com/news/articles/2016-03-21/obama-castro-call-for-trade-embargo-on-cuba-to-be-lifted

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] http://latino.foxnews.com/latino/politics/2016/10/19/cuba-official-reaction-to-obama-easing-embargo-restrictions-protests/

[13] Id.

[14] Id.

[15] Id.

[16] https://www.hillaryclinton.com/post/remarks-miami-cuba-embargo/

[17] Id.

[18] http://www.cnn.com/2015/09/08/politics/donald-trump-cuba-diplomatic-opening/

[19] Id.

[20] Id.

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Renunciations on the Rise: U.S. Natural Status Is Dangerous Under FATCA

 

Julia Brent

On March 18, 2010, President Obama signed a “jobs” bill into law, paid for by the revenue raising Foreign Tax Compliance Act (FATCA).  Execution of FATCA would access a deep pocket: there is an estimated $40 billion per year in international tax evasion.[i]  Thus far, the U.S. Treasury has taken in $800 million in FATCA-related revenue.[ii]  FATCA doesn’t change the obligations of U.S. taxpayers to pay their taxes on overseas earnings, but creates an enormous reporting obligation on 200,000 foreign financial institutions (FFIs) worldwide to pass on information from accounts of U.S. citizens to the IRS. [iii]  Failure to do report results in a 30% penalty on payments into the account, payable to the IRS.[iv]

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The simple solution is to take advantage of one of several U.S. Tax amnesty programs, and many are struggling to pay their taxes before the reporting begins.  However, the legislation has created complex problems for both the institutions and for taxpayers.  For example, an FFI to merely register its own company with the IRS (much less implement the giant reporting scheme) must master a 135-page guide of registration details.  Similarly, taxpayers face multiple forms and banker’s-box size submissions. For many, hiring an accountant to handle compliance is prohibitively expensive.[v] Some foreign individuals who were born in the U.S. but raised overseas by foreign parents don’t realize they have U.S. citizenship.  Some are “accidental Americans” because their parent was born in the U.S.  Staff at the IRS report that they have been overwhelmed by calls from Americans overseas regarding what they are supposed to furnish under FATCA.[vi]

The result of this high-consequence complexity is that many individuals overseas are eliminating their U.S. citizenship. Those that hold dual citizenship often are nationals with a quality country the EU, Canada, Australia, or New Zealand and are allowed travel without a visa through much of the world (including to the United States).[vii]  In the face of accessing the value of their U.S. passport, the conclusion by many is that there is a real danger.  Many institutions are ill-equipped to handle FATCA compliance, much less retracing steps to correct an error.  Already, the IRS has extended reporting deadlines because foreign governments and FFI’s haven’t finished developing IT systems, and aren’t prepared.  Some believe the scale of implementation is so large that the cost of implementing FATCA will “far outweigh the revenues.”[viii] Scotia Bank in Canada, alone, has already spent $100 million.[ix]  There is a high likelihood of a taxpayer getting caught between the cracks of an imperfect system, and being the victim of incorrect reporting, which comes with significant consequences.  An account holder does not have to be a U.S. citizen for their FFI to report them based on U.S. indicia the distinguishing information on their account.  U.S. indicia can mean as little as a U.S. telephone listed as contact information.  One would hope that if an account held by a true non-U.S. citizen was incorrectly reported as that of a U.S. citizen, the false report would be quickly corrected.  However, the sheer size of the players the IRS, state governments, and FFIs – creates a likelihood that corrections will take months, even years, to sort out in litigation against the IRS or a foreign tax administrator.

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In addition to imperfect reporting, those with American only or dual citizenship are concerned that FACTA requirements compromise privacy and the right to data protection as a taxpayer.  Many governments have executed Intergovernmental Agreements (IGAs), either without considering the rights of the individuals affected or complying by means of what is essentially coercion.[x]  Privacy issues for Canadians have been raised by former Canadian Finance Minister, Jim Flaherty.  His concern is the “far reaching and extraterritorial implications” of FATCA which, in effect, mandate that Canadian banks become extensions of the IRS and jeopardize Canadians’ privacy rights.[xi] Banks in Canada are not required to know the nationality of their clients, and, to conform to FATCA, Canada would have to change its privacy laws.[xii]  All the countries under the Model 2 International Governmental Agreements (IGA’s) have laws which either prevent disclosure or require individual consent.[xiii]  The difficulty with consent is that in many cases it is logistically impossible.  For example, Japanese banks have several hundred million bank accounts, not digitized, all with opening forms in Japanese.[xiv]

FATCA has changed Americans into outsiders in the international financial world.[xv]  As one officer of a global bank reported, the banks are ridding themselves of the “U.S. Person pollution!”[xvi] American Citizens Abroad (ACA) has received multiple testimonies from Americans abroad who have had their foreign bank accounts closed, been refused entry into a foreign pension fund, or who cannot enter into insurance contracts overseas.[xvii]  Some claim that “American citizens are being denied savings accounts, investment accounts, mortgages, credit cards and many of the basic financial services required to live and work in modern society, raise a family and to save for retirement.”[xviii] This is due to the fact that, while there are 780 million American bank clients overseas,[xix] this number is a drop in the bucket for banks who serve a much higher number of non-Americans.

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These difficulties explain why the amount of renunciations since FATCA was implemented has quadrupled.[xx]  Renunciations have caused such a backlog of paperwork that, in November last year, the fee for renunciation was increased by 400%.[xxi] The U.S. response has been inadequate:  Robert Stack, Treasury Deputy Assistant Secretary of International Tax Affairs, described the claim that Americans living abroad will give up their U.S. citizenship because of liabilities and burdens created by FATCA as Myth No. 3.[xxii]  Meanwhile, the New York Times reports, “The bureaucratic burden of identifying, verifying and reporting has caused many banks to regard American clients, particularly those of moderate means, as more trouble than they are worth.”[xxiii]

There is currently a push to make renunciation “easy and harmless,” financially and mentally, since new regulatory burdens on non-resident US citizens make living with that status nearly impossible.[xxiv]  Recently, a “renunciation meeting” was held in Canada, the first of its kind, to permit 22 Americans together to renounce their U.S. Citizenship, in spite of the $2,350 fee and paperwork. Tara Ferris, then Senior Counsel at Chief Counsel IRS, and others did an outstanding job in drafting the internal revenue rules and regulations of FATCA, an unprecedented behemouth of legislation.  However, the code implements policies that have significant unintended consequencesMass renunciations, a sort of reverse of our naturalization ceremonies, may become a thing of the future.[xxv]

[i] http://www.fas.org/sgp/crs/misc/R40623.pdf, Summary

[ii] Id.

[iii] http://www.acfcs.org/fatca-may-identify-tax-cheats-but-its-dragnet-for-financial-criminals-may-produce-an-even-bigger-yield/

[iv] http://fatca.thomsonreuters.com/about-fatca/

[v] http://cnsnews.com/news/article/gabrielle-cintorino/tax-laws-pushing-americans-living-abroad-renounce-their-us

[vi] http://www.bloomberg.com/news/features/2015-04-08/an-emotional-audit-irs-workers-are-miserable-and-overwhelmed

[vii] http://opiniojuris.org/2012/01/08/fatca-fallout-mass-renunciations/

[viii] http://www.acfcs.org/fatca-may-identify-tax-cheats-but-its-dragnet-for-financial-criminals-may-produce-an-even-bigger-yield/

[ix] http://business.financialpost.com/news/fp-street/electronic-spying-a-big-issue-for-banks-scotia-ceo-waugh-says

[x] http://www.keepcalmtalklaw.co.uk/accidental-americans-the-us-citizenship-conundrum/

[xi] http://sundominica.com/articles/fatca-and-you-1462/

[xii]http://web.archive.org/web/20130601041733/http://americansabroad.org/issues/fatca/fatca-is-bad-for-america-why-it-should-be-repealed/

[xiii] https://www.irs.gov/Businesses/Corporations/FATCA-Governments

[xiv] http://web.archive.org/web/20130601041733/http://americansabroad.org/issues/fatca/fatca-is-bad-for-america-why-it-should-be-repealed/

[xv] Id.

[xvi] http://www.finance.senate.gov/imo/media/doc/Republicans%20Overseas,%20Inc.1.pdf, page 3

[xvii] Id.

[xviii] http://www.finance.senate.gov/imo/media/doc/Republicans%20Overseas,%20Inc.1.pdf

[xix] http://money.cnn.com/2016/02/08/news/americans-citizenship-renunciation/

[xx] http://intltax.typepad.com/intltax_blog/2016/02/new-expatriate-record-2015-nearly-4300-expatriations.html

[xxi] http://www.bbc.com/news/35383435

[xxii] https://www.treasury.gov/connect/blog/Pages/Myth-vs-FATCA.aspx

[xxiii] http://www.nytimes.com/2015/05/14/opinion/an-american-tax-nightmare.html?_r=0

[xxiv] http://www.keepcalmtalklaw.co.uk/accidental-americans-the-us-citizenship-conundrum/

[xxv] http://opiniojuris.org/2012/01/08/fatca-fallout-mass-renunciations/


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Pope Francis: The Diplomatic, Modern Catholic Reformer

Suzanne De Deyne

The Catholic Church is a global entity with over a billion members and at the head of the Catholic Church is Pope Francis. The Catholic Church is arguably the world’s oldest diplomatic service and, due to its vast network of humanitarian aid organizations, it has a unique ability to shape foreign policy in a way no other institution can. This blog post seeks to describe how Pope Francis’ mission to change the world and the overall perception of the Catholic Church rises to a level of international significance.

splash-mission

Pope Francis is the sovereign leader of the Catholic Church. The Catholic Church (‘Holy See’) is recognized as a Permanent Observer at the United Nations. It does not meet the required elements of statehood but has acquired an international legal personality. The mission of both the UN and the Catholic Church is to assist in the protection and promotion of peace, equality, and human rights.[1] As a Permanent Observer, the Catholic Church has the right to participate in the UN’s General Assembly debates and contribute to proposals, position papers, and draft resolutions and decisions.[2] If the Catholic Church acts as a promoter of peaceful transnational cooperation under the rule of law, there is an argument to be made that the Catholic Church’s input is merely a symbolic gesture that seeks to set an example, even if it is left unnoticed by others (i.e. the P5). This allows the Pope to guide world powers toward a particular vision of justice and peace.[3]

As head of the Catholic Church, Pope Francis acts as a moral legislator and an ecclesiastical regulator where his influence extends to all countries. So how much power does Pope Francis have over religious souls? A few decades ago, the Catholic Church mandated a firm commitment to its positions and straying with the Church’s policies meant committing a moral sin, inflicting the fear of hell in its followers. Today, (American) Catholics are more educated and the Church has allowed Catholics to draw independent conclusions. This transition is particularly relevant on a political spectrum. When John F. Kennedy ran for President, Protestant leaders challenged that he would be a tool of the Vatican and concerns about Catholic leaders demanding political loyalty on issues involving church doctrine were widespread.[4] Today, the question is whether Catholic voters and Catholic politicians still give deference to Vatican views when it comes to pronouncements politicians make on key issues?[5]

During a morning homily, Pope Francis stated, “the church asks all of us to change certain things.”[6] Throughout his papacy, he has attacked the narrow-mindedness of the Catholic hierarchy for focusing too much on dogma and “spiritual worldliness,” and too little on ordinary people. Pope Francis frequently speaks deeply in personal terms on topics such as how people are discarded by the global economy, refugees who have drowned at sea, women forced into prostitution, and critiques of environmental destruction.[7] Recently, he publically alluded to a more welcoming attitude toward homosexual by saying, “Who am I to judge?”.[8] Pope Francis has also refuted capitalism as a false ideology that focuses on excess and is inadequate for fully addressing the needs of the poor. For Pope Francis, the answers are found with the Gospel, not with Adam Smith or Karl Marx.[9] Chancellor of the Pontifical Academy of Sciences, Monsignor Sánchez Sorondo stated, “the pope, of course, doesn’t have a solution — the economic solution but the pope is like a light on the street to say: ‘This is not the way.”[10]

19FRANCIS-SS-slide-0W6G-superJumbo

To be recognized as an exemplary and a transformative leader, one must model the way, encourage the heart, enable others to act, embody a shared vision, and challenge the process and the status quo.[11] Pope Francis has been immensely revolutionary and transformative in all of these regards.[12] He is remaking modern Catholicism by concentrating the church’s core competence on helping the poor, rebranding the church by changing the message communicated by prioritizing deeds over words, and restructuring the church across all levels of influence.[13] Pope Francis’ push to change the Catholic Church has created anxiety and hope. Guzmán Carriquiry Lecour, secretary of the Pontifical Commission for Latin America and a longtime friend of the pope stated, “He is very critical of ideology because ideologies come from intellectuals and politicians who want to manipulate the hearts of the people. For him, ideologies hide and defame reality.”[14] Yet through gestures and words, Pope Francis has repeatedly challenged elites, both inside the church and out. His humble persona has made him immensely popular and his mission of helping the poor seems to exceed the religious limitations of the Catholic Church – Pope Francis wants to reach the people of the world.

Suzanne De Deyne is a third year student at the University of Baltimore School of Law (candidate for J.D., May 2016) concentrating in International Law. Suzanne graduated cum laude from the University of Massachusetts-Amherst with a Bachelor of Arts in Political Science and a minor in Economics. She also received a  Honor’s International Relations Certificate from Mount Holyoke College. Currently, Suzanne is the Managing Editor on the Journal of International Law and is President of the International Law Society. As a CICL Fellow, Suzanne has conducted legal research for International Rights Advocates on human rights and corporate accountability. She is also a member of the Women’s Bar Association and Phi Alpha Delta. This past summer Suzanne was a legal intern at Gibson, Dunn, & Crutcher in the firm’s Brussels office, which is focused on Competition Law practice in Europe.

[1] Discover the Mission, The Permanent Observer Mission of the Holy See to the United Nations (2015), http://www.holyseemission.org/contents//mission/discover-the-mission.php

[2] Id.

[3] Edward Pentin, The Pope as Diplomat, Foreign Affairs (Feb. 27, 2013), https://www.foreignaffairs.com/articles/2013-02-27/pope-diplomat

[4] Tom Gjelten, Modern Catholics Test the Pope’s Infallible Authority, NPR (Sept. 4, 2015), http://www.npr.org/2015/09/04/437597038/modern-catholics-test-the-popes-infallible-authority

[5] Id.

[6] Jim Yardley, A Humble Pope, Challenging the World, N.Y. Times, Sept. 18, 2015, http://www.nytimes.com/2015/09/19/world/europe/pope-francis.html?_r=1

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] Stan Chu Ilo, Pope Francis and the Remaking of Modern Catholicism, Huffington Post (Mar. 12, 2015), http://www.huffingtonpost.com/stan-chu-ilo/pope-francis-and-the-remaking-of-modern-catholicism_b_6852468.html

[12] Id.

[13] Id.

[14] Supra note 6.


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The Israeli Parliamentary Elections & What They Mean For Israel-United States Relations

Yasmine Akkad

On March 17, 2015 Israeli parliamentary elections were held, resulting in the re-election of Prime Minister Benjamin Netanyahu of the center-right Likud party.  Despite Mr. Netanyahu’s eventual victory, the parliamentary race was a close one.  A poll from March 13, just a few days before the election, showed the center-left Zionist Union party in the lead.  Furthermore, comments made by Netanyahu in the days leading up to the elections, have stirred public debate.  Most notably, U.S. officials have publically denounced Netanyahu’s statements, highlighting the changing nature of U.S.-Israeli relations.

Israel Vote

Election Breakdown

Israel has a parliamentary system with the 120-seat parliament commonly referred to as the Knesset.   This system is based on nation-wide proportional representation, which means that voters elect nationally registered political factions—like Netanyahu’s Likud party—and not local candidates.  For Americans, who, unlike Israelis, vote for individual candidates, this type of electoral system is foreign.

Knesset elections must be held once every four years, though many coalitions do not survive a full term due to political instability.  Such was the case recently, when in December of 2014, the Israeli government collapsed.

Election turnout this year was 72.3%.  Netanyahu’s Likud party gained the most Knesset seats, with the Zionist Union party coming in second.  The Joint List, which is an Arab Israeli coalition, came in third.

Controversy

Prior to the elections, the Netanyahu Administration’s stance concerning Palestine was that a two-state solution was possible.  However, in the days leading up to the election, and in the face of unfavorable poll numbers, Netanyahu said he would not allow the creation of a Palestinian state if re-elected.  Furthermore, in order to mobilize more supporters, Netanyahu warned, “The Arabs are voting in droves.”  Arab Israelis make up about 20 percent of Israel’s population and 15 percent of the country’s eligible voters.

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Such remarks by Mr. Netanyahu were met with harsh criticism, particularly from U.S. President Barack Obama.  In an interview with the Huffington Post, Obama said Netanyahu’s remarks upended the Israeli-Palestinian peace process and ran counter to the very nature of Israeli democracy.  According to Obama, Netanyahu’s statements will discourage people from thinking negotiations are possible.  In regards to the comments about Arab voters “coming in droves” Obama said “we indicated that that kind of rhetoric was contrary to what is the best of Israel’s traditions—that although Israel was founded based on the historic Jewish homeland and the need to have a Jewish homeland, Israeli democracy has been premised on everybody in the country being treated equally and fairly.”  Obama warned that if people were not treated equally and fairly, democracy in the country would be undermined.

What This Means

Netanyahu has since apologized for his remarks and said he had not meant to offend Israeli Arab voters.  Mr. Netanyahu also softened his stance saying that he wanted a two-state solution, but that “circumstances have to change.”

Some may call Netanyahu’s apology progress, while others may call it back-pedaling.  Regardless, such public denouncements by Mr. Obama are not only harsh, but also indicative of the strained relationship between the two world leaders.  For example, earlier in the month, Netanyahu addressed Congress in a passionate speech about Iran.  The only problem was that U.S. House of Representatives Speaker John Boehner invited Netanyahu without consulting with President Obama first.  Ouch.

Netanyahu Congress

So, what does this mean?  The strained relationship between Obama and Netanyahu is undoubtedly tense.  But a lack of support for Netanyahu in the White House is not indicative of a lack of support for Netanyahu—after all, the Israeli leader was invited to address Congress.  So, despite what some may call a departure from normal U.S.-Israeli relations, the bond between the two countries will not be broken.  The United States has always been, and I think will continue to be, Israel’s biggest ally.

Yasmine Akkad is a second year law student at the University of Baltimore School of Law J.D. Candidate (’16).  She holds a Bachelors of Science in Law and American Civilization and a minor in English from Towson University.  Her primary interests include international law and international human rights law.  In addition to being a CICL Fellow, she competed in the 2014-2015 Jessup International Moot Court Competition, Mid-Atlantic Region. 

Sources

http://www.bbc.com/news/world-middle-east-31968676

http://www.ibtimes.com/israel-election-results-2015-what-does-future-hold-arab-political-power-1851294

http://www.israelelection2015.org/blog/2015/3/13/march-13-smithreshet-bet-poll

http://www.bbc.com/news/world-middle-east-32026995

http://www.nytimes.com/2015/03/22/world/middleeast/obama-says-he-told-netanyahu-that-campaign-talk-hurt-the-peace-process.html

http://www.bbc.com/news/world-us-canada-32044016

http://www.nytimes.com/2015/03/04/world/middleeast/netanyahu-congress-iran-israel-speech.html