American prosecutors have recently brought a number of high-profile criminal cases against foreign citizens abroad (European bankers, business executives in Asia, etc.), but how does US criminal law apply to actions committed abroad? In this TOL Brief, Alex Spiro explains the legal principle of extraterritorial jurisdiction, what type of US-related impact is required, and where federal prosecutors are likely to act.
Alex Spiro is a litigation partner at Quinn Emanuel based in New York. Spiro is a former Manhattan prosecutor and now serves as Chairman of the Board of Harvard's criminal justice initiative—The Fair Punishment Project.
Quinn Emanuel is a 800+ attorney business litigation firm with 23 offices around the globe, each devoted solely to business litigation and arbitration.
Any time you're overseas and you stop somebody, they say to you, "What's with these Americans? How come they think their laws can affect foreign citizens and foreign places, and why is their jurisdictional arm so long?" We're here today to answer that question. My name is Alex Spiro, and I'm a partner at Quinn Quinn Emanuel Urquhart & Sullivan.
Most US crimes and the way we think of US criminal law has to do with territoriality. Meaning it happens in the United States. There is a presumption in the law against extraterritoriality. What that presumption basically says is unless Congress specifically says that this law applies outside of the US, it doesn't.
So in the United States, you can't use hard drugs—cocaine, things like this.You can use them in other countries in Europe. The question is can a US law prevent you from doing that? And the answer is no. Not unless Congress writes in that law that any US citizen, even when they are abroad, cant use narcotics.
So one example of when US law applies abroad is if you are a US citizen abroad. The US regularly regulates the conduct of its citizens, even when they are overseas. An example would be if you're in China on vacation and you commit the crime of insider trading, you can still be prosecuted in the United States. It doesn't matter that you are overseas. So one example is if you're a US citizen we can criminalize your conduct
Another example is when you are not a citizen but your conduct is against a citizen, we can also regulate your conduct. Let's say you're a foreign national and you make false statements to an America citizen to procure an investment. You are committing securities fraud against that individual and you can be prosecuted even though you are not a United States citizen.
So we had the example in which a US citizen commits a crime, we have another example in which a US citizen is the victim of a crime, but there's a third category in which the United States itself is harmed. What you see and the hook that the US will use to bring a lot of foreign conduct under their orbit is the banking laws and the chain of commerce. Let me give you a couple of examples. We see this in the Swiss banking cases where even though we have Swiss nationals, obeying Swiss law, and dealing with bank secrecy laws in Switzerland, the United States says your conduct touches our banking and our regulatory system and we can prosecute you. Another example is the FCPA.
There's one more category of laws that deals with conduct that so shocks the conscience that we say that there is just harm to everybody. And so by harming everybody, you're also harming the United States. These are things like war crimes.
If you engage in complicated financial transactions, things involving taxation, or any bribery abroad, US citizen or not, you can rest assured that the United States government believes that they can have jurisdiction over you. Thanks for watching TalksOnLaw. My name is Alex Spiro