Decided by Central Office July 13, 1948
Citizenship — Acquisition (1917) by child born abroad, through father's naturalization, and residence here as a minor — Section 5, act of March 2, 1907 — Expatriation by residence abroad — Section 404 (c) of the Nationality Act of 1940 — Exemption under 406 (b), of the Nationality Act of 1940.
(1) A derivative citizen (1917) born in London (1908), resided in Chile from 1929 to 1934, 1935 to 1938, 1939 to June 10, 1947; he returned here on June 10, 1947, with an immigration visa; he was held to have expatriated himself (by residing continuously in a foreign state for 5 years) under the provisions of section 404 (c) of the Nationality Act of 1940, having failed to establish a claim as an exception thereto, under the provisions of section 406 (b) of the Nationality Act of 1940.
(2) The exemption under section 406 (b) ( supra) is available to persons temporarily abroad employed there as agents representing United States organizations, but if a naturalized person establishes a residence and a primary local business abroad, the mere fact that he arranges with American firms to import, sell and distribute their products (even if it is for an exclusive right), is of itself, insufficient to entitle him to the exemption provided in section 406 (b) ( supra).
BEFORE THE CENTRAL OFFICE
Discussion: The evidence of record reflects that the subject's parents were married in Russia in March 1889; that the subject was born at London, England, on August 28, 1908; that he lawfully entered the United States for permanent residence on June 24, 1911, at New York, N.Y.; and that his father became a naturalized citizen of the United States on May 18, 1917. Being a permanent lawful resident of the United States and a minor at the time of his father's naturalization, the applicant derived citizenship on May 18, 1917. The record discloses that thereafter he was absent from the United States during the following periods: from 1929 to 1934; from 1935 to 1938; from 1939 to June 10, 1947. During the aforementioned intervals, the subject resided in Chile. He claims that he traveled on American passports on each occasion with the exception of his return on June 10, 1947, when he presented a nonpreference quota immigration visa (A-6700753).
The question presented is whether the applicant lost his nationality of the United States through the operation of section 404 (c) of the Nationality Act of 1940.
Section 404 (c) of the Nationality Act of 1940 provides:
SEC. 404. A person who has become a national by naturalization shall lose his nationality by:
(c) Residing continuously for 5 years in any other foreign state, except as provided in section 406 hereof.
The portion of section 406 which is pertinent to the instant case reads:
SEC. 406. Subsections (b) and (c) of section 404 shall have no application to a person:
(b) Who is residing abroad upon the date of the approval of this act, or who is thereafter sent abroad, and resides abroad temporarily solely or principally to represent a bona fide American educational, scientific, philanthropic, religious, commercial, financial, or business organization, having its principal office or place of business in the United States, or an international agency of an official character in which the United States participates, for which he receives a substantial compensation.
Although the subject admits that he had resided continuously in Chile from 1939 to June 10, 1947, he contends that he did not lose his nationality of the United States under the provisions of section 404 (c) of the Nationality Act because he came within one of the exempt classes set forth in section 406 (b) of that act, namely, as a person who was residing abroad "temporarily solely or principally to represent a bona fide American * * * commercial * * * or business organization, having its principal office or place of business in the United States."
The record reveals that by letter dated August 21, 1946, the American Consul informed the applicant that Congress had adjourned without further extending the effective date of section 404 beyond October 14, 1946 (see sec. 409 of the Nationality Act of 1940), and that in order to avoid the loss of his citizenship it would be necessary to return to the United States to resume permanent residence before October 14, 1946. Instead of making arrangements to return to the United States, the subject sent a letter dated August 26, 1946 (copy included in the record), to the American Consul requesting registration as an American citizen as he, the subject, considered that his case came under section 406 (b)). The letter further states that the applicant had been registered with the Consulate as an American citizen continuously until October 13, 1946; that it was his intention to return to the United States in 1946 to establish residence, but because such action "would injure considerably the interests of (his) firm" it was decided that he should not proceed to the United States until 1947; and that in 1942 he became a senior partner with a 30 percent interest in the newly formed firm of R---- L. C---- C----. Ltda. which continued the activities of the original company founded in Chile in 1917.
The subject's letter to the American Consul at Santiago, Chile, continues:
Our firm owns several local industries such as a lining factory, a chemical textile sizing factory, a raincoat manufacturing factory, and a knitting mill. A large percentage of the raw materials employed by our industries are imported from the United States. We are also agents of American manufacturers, a good many on an exclusive basis. We act as agents and also import for our own account. * * * We are also exporters specializing on food products to the United States. We ship fresh fruit, garlic, vegetables, onions, tuna fish, etc.
The record reveals that on August 27, 1946, the subject executed at the American Embassy at Santiago, Chile, an application for registration as an American citizen. The applicant alleges that on or about October 8, 1946, the American Consul received a cable from the Department of State advising that the application for registration had been accepted provided that he could submit proof that he came within one of the classes specified in section 406 (b). By letter dated October 19, 1946, he furnished information to the Consul to be considered with the application for registration. For the most part, this letter contains the same particulars which were included in his previous communication of August 26, 1946. The subject claims that because he considered that his application had been acted upon favorably, he felt it unnecessary after October 8, 1946, to depart at once for the United States, and, therefore, remained in Chile.
By airgram dated April 9, 1947, the Department of State informed the Embassy at Santiago that the subject's application was disapproved. On April 10, 1947, the Consul notified the applicant of the Department's decision and on May 6, 1947, executed a Certificate of the Loss of Nationality, a copy of which was transmitted to this Service. On April 21, 1947, the subject filed an application for an immigration visa as a stateless person, and on May 6, 1947, a nonpreference visa was issued to him, charged to the British quota. On June 10, 1947, he was admitted to the United States at New York, N.Y., upon presentation of the aforementioned document.
The applicant has submitted a long list of American concerns with which his firm in Chile has been doing business. This commerce consists of importing products manufactured in the United States for resale in South America. There is evidence that in many instances the subject's company has been granted exclusive Chilean distribution rights by American concerns. On February 11, 1948, this Service requested the Department of State to furnish whatever information is contained in its records concerning the subject's loss of citizenship. The Department replied on March 29, 1948, as follows:
On April 3, 1944, Mr. C---- executed an application for registration as an American citizen at the American Embassy at Santiago, Chile, in which he stated that he had resided in Chile since 1939 for the purpose of "import and export business." The file in Mr. C----'s case shows that he has resided in Chile since 1929 and that while he has been engaged in the sale of American goods and has been the sales representative of a number of American firms he has in fact been operating a local sales agency. After an investigation in his case the Department concluded that the case did not come within the provisions of section 406 of the Nationality Act of 1940 and that Mr. C---- had lost, through operation of section 404 (c) of the Nationality Act of 1940, any claim he had to American citizenship. * * * [Italic supplied.]
The applicant's primary contentions on which he bases his claim that he did not lose his nationality of the United States under section 404 (c) by residing continuously abroad for 5 years are (1) that 60 percent of his firm's annual sales since 1940 represent the distribution of American products, and (2) that were it not for the State Department's acceptance of his application for registration he would have returned to the United States to resume permanent residence prior to October 14, 1946. With respect to the first premise, the Department of State, after considering all the evidence presented by the subject and having conducted an independent investigation in Chile, concluded that inasmuch as the subject was, in fact, operating a local sales agency, he did not come within the contemplation of section 406 (b).
In the report of the joint committee on the proposed Nationality Act of 1940 submitted to Congress, the explanatory comment on the present section 406 (b) stated:
* * * It is not intended to be applied to one who resides abroad for some other purpose and whose representation of an American organization is merely incidental. * * * As to the individuals concerned, it is believed that those who are sent abroad and continue to reside abroad solely or principally for the purpose of representing organizations which are distinctly American are likely to retain their American character, while, from the standpoint of the state, the activities of such persons are likely to promote its interest. Under this exception the individuals in question must act as the agents of the American concerns by which they are sent abroad. It is not sufficient, for example, that a person who is engaged in commercial business in a foreign country shall show that the greater part of his stock in trade is composed of American goods. [Italics added.] (House Committee print; pp. 76, 77; 1939.)
This Service has held that the exemption involved, provided by section 406 (b), is available only to persons employed as agents representing United States organizations, and that, as a consequence, independent contractors, brokers, or factors are not within the excepted categories, since they are not engaged in a representative capacity. (C.O. letter, file 500/2 sec. 404, Apr. 18, 1942.) Examining the evidence of record in light of the foregoing, it is manifest that neither the subject nor his firm was in the employ of American organizations, and that the subject was not residing abroad temporarily solely or principally to represent any American concern. As had been ascertained by the Embassy's investigation abroad, the subject had resided in Chile since 1929 and had been operating in that country a local business which, as an incident thereof, involved dealings with American companies and the sale and distribution of the latters' products. The distinctions between the circumstances in the instant matter and those in a case involving, for example, an employee of an American firm who is sent, or remains abroad temporarily as its representative are too obvious to require lengthy comment. The fact that a naturalized citizen of the United States, who has established his residence and a primarily local business in a foreign country, arranges with American firms to import, sell and distribute such firms' products, notwithstanding that exclusive franchises may be involved, is alone insufficient to entitle the individual to the exemption provided by section 406 (b).
With reference to the applicant's second claim, namely, that he would have returned to the United States prior to October 14, 1946, if he had not believed that his registration as an American citizen would be approved, it seems sufficient to point out that after he filed his application for registration he was at no time informed by the Embassy that the application had been approved. After having been forewarned by the Consul on August 21, 1946, of the consequences of not returning to the United States prior to October 14, 1946, the subject, in his letter of August 26, 1946, admitted that he had decided against departing for the United States before 1947, as to do otherwise would be contrary to the best interests of his firm and that, in lieu thereof, would apply for registration as an American citizen. In effect, the applicant, for personal reasons, was willing to risk the retention of his citizenship on the contingency that his registration would be approved. Even after having been notified on about October 8, 1946, by the Embassy that approval of his application was dependent upon presentation of proof establishing to the satisfaction of the Department of State that he came within the provisions of section 406 (b), the subject persisted in remaining in Chile and gambling on the Department's ultimate decision. There is no justification for the applicant's intimation that his determination not to return to the United States prior to October 14, 1946, was the result of a false sense of security instilled by the Embassy at Santiago. On the basis of the facts, it is immaterial whether the subject misinterpreted the information furnished by the Embassy or whether he merely guessed wrong.
Moreover, from a review of the evidence of record, it is highly questionable whether the subject was residing abroad "temporarily." By his own admissions, the subject, who is about 40 years of age, has been absent from the United States for approximately 16 years during the 30 years which have elapsed since he derived citizenship on May 18, 1917. The record discloses that he married in Chile and that both his children were born there. Between 1929 and 1947, the subject had only been in the United States from 1934 to 1935 and from 1938 to 1939, a total of about 2 years. For the purposes of sections 404 and 406, the place of a person's general abode or his principal dwelling place is deemed the place of his residence (sec. 104, Nationality Act of 1940). It is the view of this Service that once a naturalized citizen has established residence abroad, he will not be deemed to have established his residence in the United States merely by returning to this country for brief, temporary periods. (C.O. letter, files 23/69699, April 6, 1942, and 500/2 sec. 404, Nov. 1, 1941.) The return to the United States must be accompanied by the establishment of residence — the place of general abode or principal dwelling place — in this country. From 1939 to June 10, 1947, the instant applicant was at no time in the United States. In this connection, the Service view is that where a person who has reacquired residence in the United States thereafter transfers his residence to a foreign country, he then commences a new period during which he again will be subject to the penalties for protracted foreign residence (O.I. 801.2 II).
In light of all of the foregoing, it is concluded that the subject lost his nationality of the United States through the operation of section 404 (c) of the Nationality Act of 1940, he not being within the exempt categories of section 406 (b) of that act.
It is ordered that the application be denied.