Territorial jurisdiction is one of the basic characteristics of state sovereignty. "[T]erritorial jurisdiction is ... the jurisdiction of the State over individuals living on its territory, over things which are on this territory and over facts which occur there."1 But public international law recognizes that limits must be placed on territorial jurisdiction in order to extend diplomatic courtesy and recognize reciprocal rights of other nations. This policy requires states to "take into consideration the representation of the foreign state by its agents, and [therefore it] must 'liberalize' the application of the theory of territorial sovereignty."2 This principle also extends to certain international organizations such as the North Atlantic Treaty Organization (NATO), which enjoys a broad array of treaty privileges. Application of these privileges within a host nation can result in complex conflicts of law challenges. Thus, when an international organization is faced with circumstances that appear to conflict with a host nation's federal law, problems arise for the entity following accepted and approved international legal principles. Recently the Headquarters of the North Atlantic Treaty Organizations' Strategic Command in the United States experienced this particular problem regarding the importation and resale of limited quantities of duty-free goods to eligible members of its force.3 IMAGE FORMULA5
This Essay explores the foundation of the Headquarters of the Supreme Allied Commander Atlantic's (HQ SACLANTS) importer tion authority under international and domestic agreements and the basis of its juridical personality as an international entity. It also discusses the historical basis regarding eligibility of its military force and civilian component to purchase duty-free goods. Part II provides a brief explanation of the conflict between HQ SACLANT and the local U.S. Customs office. Part III begins with a brief historical overview of the establishment of NATO and its international military headquarters. It addresses NATO's founding purpose and the international treaties that provide the framework for it to implement its Strategic Command Headquarters in North America. Part IV examines the fundamental principles of international authority in relation to national law. Additionally, this section considers the concept of pacta sent servanda, and the authority that treaties have in light of U.S. Federal regulations and legislative silence regarding territorial jurisdiction and state sovereignty. Part V explains how international and domestic agreements have vested NATO with its own juridical authority and examines the basis of its importation authority under these documents. It also examines HQ SACLANT's importation practice for more than forty five years based on the approval of the U.S. Customs Commissioner in 1955. Part VI discusses the eligibility of HQ SACLANT's U.S. military personnel and civilian component to purchase duty-free merchandise from its facility. Finally, Part VIII concludes that providing duty/ tax-free merchandise to eligible personnel is legally validated under international and domestic law, and why it may be considered fundamental to the success of NATO's overall mission of common defense.
II. U.S. AGENCY CHALLENGES INTERNATIONAL ORGANIZATION
After HQ SACLANT and the local Customs office dealt with initial matters relating to U.S. Custom's procedures within the NATO IMAGE FORMULA7
compound, it soon became apparent that there were other issues that could not be resolved. The basis of this discord is the interpretation and application of specific treaty language to foreign and U.S. forces, civilians, and dependents either assigned or attached to HQ SACLANT. The following sets forth the essential facts of the conflict and identifies specific issues that are currently unresolved. …