Extraterritoriality in the application of economic sanctions

Abstract

The article covers the issue of extraterritoriality in the application of unilateral economic sanctions.
 The article considers the relationship between the theoretical principles of state jurisdiction and legal acts and practice of states in respect of imposing economic sanctions. The jurisdiction of the state imposing sanctions may be territorial, i.e. extend to its territory and to persons who are in it, or extraterritorial, i.e. extend beyond its territory. In the field of economic sanctions, extraterritorial jurisdiction can be exercised on the active nationality, protective, and universality principles. The active nationality principle, i.e. regulation by the state of the conduct of its citizens and legal entities registered in it, is generally accepted and does not cause any objections. The protective principle, based on the need to protect national interests, is actively used by the United States, which provokes criticism. Recently, the universality principle, the imposition of sanctions on persons violating human rights, has become important.
 The lawful exercise of extraterritorial jurisdiction requires a link between the state and the object of its jurisdiction. In the EU, there is a concept of the “links existing with the EU”, and in the US, there is a concept of the “American element”. The US greatly expands its jurisdiction in respect of economic sanctions by insisting on the existence of the “American element” in cases of foreign legal entities owned or controlled by US persons, using the US financial system, and possessing goods, technologies, or services originating from the US. In the sanctions issue, the EU bases itself solely on the territoriality and active nationality principles and has consistently rejected the US position on the extraterritorial expansion of US sanctions.
 It is concluded that despite the opposition, in fact, the United States expands the scope of extraterritorial jurisdiction by national legislation and national practice of its application in the field of economic sanctions.