Extraterritorial Enforcement Research Articles

Extraterritorial application of China’s Marine Environmental Protection Law: Towards effective marine environmental protection enforcement

In 2023, China’s Marine Environmental Protection Law was secondly revised, in which the extraterritorial provisions in marine environmental protection were evolved and highlighted. Through enforcing the extraterritorial provisions, it is possible for China to pay attention and control marine pollution or ecological damage that occurs beyond the territory and safeguard the national marine environment. However, China has not carried out any enforcement practices based on the extraterritorial provisions of the Marine Environmental Protection Law. As a responsible participant in marine environment governance and driven by the need to address marine environmental threats posed by foreign countries, China has a sufficient rationale for introducing extraterritorial enforcement in marine environment protection from a broader perspective. However, given that extraterritorial enforcement in the marine environmental protection field is not adopted universally, China’s future extraterritorial enforcement activities will face risks of excessive use, and a series of dilemmas may inevitably arise during the enforcement practices. Analyzing the potential dilemmas of China’s extraterritorial enforcement in marine environment protection, corresponding suggestions are provided to avert excessive extraterritorial enforcement and promote the effectiveness of extraterritorial enforcement activities to protect essential national marine environmental interests.

Challenges to the extraterritorial enforcement of data privacy law – EU case study

Challenges to the extraterritorial enforcement of data privacy law – EU case study

DAC8 and Extraterritoriality: How to Enforce Compliance for non-EU Operators

Directive on Administrative Cooperation (DAC8) extends its scope to non-EU operators to improve the effectiveness of the exchange of information on crypto-asset transactions. Nonetheless, it is still for the Member States to determine the nature and size of the penalties for non-compliance and address their extraterritorial enforcement. Starting from this assumption, the present article aims to explore what penalties the Member States can adopt against non-compliant operators based in third countries. Furthermore, this study focuses on the multilateral, bilateral, and unilateral instruments for the extraterritorial enforcement of such penalties. To this scope, the author conducts doctrinal research followed by a conceptual analysis of the existing literature as well as interdisciplinary research focusing on the effectiveness of DAC8 for decentralized crypto-assets. The conclusions underline that the Member States should introduce a combined set of monetary and non-monetary penalties, including internet content blocking and a ban on cryptoasset transactions with blacklisted non-EU operators assisted by a sanctions program. Besides, to ensure their extraterritorial enforcement, Member States should adopt a broader definition of tax claim within the Convention on Mutual Administrative Assistance in Tax Matters (CMAAT) and the OECD Model Tax Convention as well as appropriate dissuasive measures against noncooperative jurisdictions in the area of recovery assistance. Administrative cooperation, Tax transparency, Exchange of information, DAC8, Crypto-assets, Monetary penalties, Nonmonetary penalties, Internet content blocking, Extraterritorial enforcement, Non-EU operators

Secondary effects of financial sanctions: Bank compliance and economic isolation of non-target states

As states employ financial sanctions as a form of economic coercion, firms become the foot soldiers. This analysis bridges work on weaponized interdependence with work on extraterritorial authority to understand the de-risking behavior of these firms. Companies fearing extraterritorial enforcement are likely to limit exposure to third party jurisdictions, which may expose the firm to the sanctions regime. In particular, we identify two mechanisms – target leakage and political cascades – to understand which third-party jurisdictions are most likely to be affected. We test our hypotheses through analyses of multinational banks’ lending before and after the 2010 sanctions on Iran. Using a difference-in-differences estimator to evaluate the sanction’s impact on cross-border lending, our analysis shows that the sanction reduced multinational banks’ lending to neighboring countries of Iran and its politically aligned states by approximately 14% and 12% respectively. Moreover, we observed lender heterogeneity as banks from offshore financial centers increased their lending to the affected jurisdictions by 32% and 33%. Our findings demonstrate the broader consequences of financial sanctions in terms of the impacted countries and the potential to drive lending to less regulated spaces.

Seizing stateless smuggling vessels on the Mediterranean High Seas

AbstractThe EUNAVFOR MED anti-smuggling mission, Operation Sophia, ended in March 2020 and is largely viewed to have failed in its objective of ‘disrupting the business model’ of migrant smugglers in the Mediterranean region. The mission relied on purported enforcement powers in the 1982 United Nations Convention on the Law of the Sea and the 2000 Migrant Smuggling Protocol to seize and destroy stateless smuggling vessels on the high seas. Despite repeated claims to such powers by the European Union, neither treaty provides a strong jurisdictional basis for seizing stateless smuggling vessels outside territorial waters. However, ambiguous drafting in the Migrant Smuggling Protocol viably permits some claims to extraterritorial enforcement jurisdiction over stateless smuggling vessels on the high seas, and the European Union has relied on this ambiguity to tackle migrant smuggling. This article argues that the recent European Union anti-smuggling operations, most notably Operation Sophia, have reinterpreted the ambiguous term ‘appropriate measures’ in the Migrant Smuggling Protocol as permitting the states parties to exercise enforcement jurisdiction over stateless smuggling vessels at sea.

Extraterritorial Enforcement Jurisdiction in Cyberspace: Normative Shifts

AbstractThe most eye-catching effect of digitalization on the law of enforcement jurisdiction is the fading into irrelevance of territoriality. Insofar as the “physical” location of digital data—on a server—may be entirely fortuitous and may in fact not be known by the territorial state, it appears unreasonable for that state to invoke its territorial sovereignty as a shield against another state’s claims over such data. To prevent a jurisdictional free-for-all, however, it is key that the exercise of extraterritorial enforcement jurisdiction in cyberspace becomes subject to a stringent test weighting all relevant connections and interests in concrete cases. Introducing such a weighting test means that extraterritorial enforcement jurisdiction is no longer governed by binary rules (allowed and not allowed), but becomes a matter of degree, requiring a granular, contextual assessment. It remains the case that such a flexible attitude towards extraterritorial enforcement jurisdiction is not universally shared, and that relevant state practice and expert opinion in favor of the “un-territoriality of data” has a particular Western slant.

Foreign whistleblowing: the impact of US extraterritorial enforcement on anti-corruption laws in Europe

PurposeForeign whistleblowers are foreign citizens who help national enforcement authorities to sanction both foreign-based corporations and home-based corporations that engage in economic crime. This paper aims to investigate the expansion of US law in the area of transnational economic crime by discussing the case of foreign whistleblowers.Design/methodology/approachThis paper has been developed from a literature review carried out as part of a wider study into policing international bribery.FindingsThis paper shows that extraterritorial application of US whistleblowing laws is part of a broad trend associated with extraterritorial enforcement of US anti-corruption statutes such as the Foreign Corrupt Practices Act (FCPA). The extraterritorial reach of the FCPA and other statutes allowed the USA to become the leader in sanctioning US corporations as well as non-US corporations for economic crime. In effect, some US enforcement practices have become the standard that has influenced law and law enforcement in other countries as well as internal compliance of corporations.Originality/valueIn spite of the profound impact foreign whistleblowing has on the effectiveness of national anti-corruption enforcement, this topic has been largely neglected by academic research. To the best of the authors’ knowledge, this paper is the first to provide an overview of the role of foreign whistleblowers and the significant impact foreign whistleblowing has for legal reform in European countries and internal compliance of corporations in Europe and beyond.

Drawing a line: Digital transnational repression against political exiles and host state sovereignty

AbstractAuthoritarian regimes increasingly resort to surveillance and malware attacks to extend their coercive reach into the territory of other states and silence dissidents abroad. Recent scholarship has examined the methods of digital transnational repression and their detrimental effects on the fundamental rights and security of targeted individuals. However, the broader normative and security dimensions of these practices remain underexplored, especially with regard to the states hosting the affected exiles. Addressing this gap, our article investigates digital transnational repression as a potential violation of host state sovereignty. Mobilising emerging research on digital sovereignty and cybersecurity, we argue that digital repression can violate host state sovereignty in that it constitutes extraterritorial enforcement jurisdiction; interferes with open debate and national self-determination; impedes the host state's adherence to fundamental norms of international humanitarian law; and undermines host state authority, domestic sovereignty, and integrative capacities. We outline possible pathways to counter digital transnational repression, focusing notably on distributed cyber deterrence, punitive measures like sanctions, and norms and regulations restricting the global proliferation of offensive cyber capabilities. Building on a post-territorial notion of sovereignty that centres on the effects of state actions in and beyond cyberspace, our article contributes to reflections on a human-centric approach to cybersecurity.

Crimes of Communication: The Implications of Australian Espionage Law for Global Media

Espionage has emerged as a leading national security threat for the digital age. Far from traditional wartime spy tactics, espionage now includes actors—including journalists—accessing and publishing sensitive information online to a global audience. This threat must be addressed; however, overbroad espionage laws have the capacity to criminalize legitimate journalism and chill free expression. This article examines the implications of Australia’s expansive 2018 counterespionage framework for foreign media. It argues that this broad suite of offenses creates a complex risk environment for global media reporting on issues that impact Australia’s national interest or foreign relations. These risks are exacerbated for media organizations owned or controlled by foreign governments and their journalists, sources, and associates. We consider whether the practical and political likelihood of extraterritorial enforcement alleviates the potential impact of the laws and argue for targeted reform to protect press freedom on a global scale.

Policeman for the World: The Impact of Extraterritorial FCPA Enforcement on Foreign Investment and Internal Controls

ABSTRACTWe show that a mid-2000s increase in extraterritorial enforcement of the U.S. Foreign Corrupt Practices Act (FCPA), characterized by greater international regulatory cooperation and more frequent use of the FCPA's accounting provisions, has a significant deterrent effect on foreign direct investment in high-corruption-risk countries. The decrease in investment is at least as large for non-U.S. as for U.S. firms, suggesting that widespread extraterritorial enforcement helps to create a level foreign investment playing field. Firms under U.S. jurisdiction with fundamental characteristics that make it more difficult to maintain effective internal controls invest less in high-corruption-risk countries after the FCPA enforcement increase, suggesting regulatory compliance costs play a role in deterring investment. Consistent with investments in accounting systems being one way, firms limit enforcement risk when investing in high-corruption-risk countries, firms pursuing new investments spend more time evaluating potential targets, and firms with existing investments report fewer restatements related to unintentional errors.JEL Classifications: F50; F60; K2; M4; O1.

Competitive Harm Crossing Borders: Regulatory Gaps And A Way Forward

Abstract This article analyses the current regulatory framework governing transnational restrictive business practices. It identifies key gaps that provide room for anticompetitive practices to flourish, causing cross-border transfer of wealth, typically from less affluent states. The economic harm caused by cross-border anticompetitive conduct is significant; international cartels alone caused overcharges exceeding $1.5 trillion in the period 1990–2016. This article offers a series of pragmatic policy recommendations that could narrow existing regulatory gaps. The proposals require no international negotiations and can be implemented domestically. They call for enabling of more assertive and robust extraterritorial enforcement of domestic competition laws and facilitation of positive externalities in that context.

Competitive Harm Crossing Borders: Regulatory Gaps and a Way Forward

This article analyses the current regulatory framework governing transnational restrictive business practices. It identifies key gaps that provide room for anticompetitive practices to flourish, causing cross-border transfer of wealth, typically from less affluent states. The economic harm caused by cross-border anticompetitive conduct is significant; international cartels alone caused overcharges exceeding $1.5 trillion in the period 1990-2016. This article offers a series of pragmatic policy recommendations that could narrow existing regulatory gaps. The proposals require no international negotiations and can be implemented domestically. They call for enabling of more assertive and robust extraterritorial enforcement of domestic competition laws and facilitation of positive externalities in that context.

A Comparative Study of the Extraterritorial Enforcement of Data Protection Rules in the EU, US and Japan

Globalization and the Internet have dramatically increased the international transfer of data and information. Consequently, personal data protection has become crucial in such cross-border data transfers. Personal data collected in one’s home country but processed by foreign entities must be subjected to data protection. Such regulations and rules for the international transfer of personal data are usually carried out through the laws of each country. There are two types of data protection rules associated with the cross-border transfer of personal data: restriction of cross-border data transfers and extraterritorial application of data protection rules. This article focuses on the latter type of laws and discusses the relationship between law enforcement and sovereignty. It also provides an approach for improving the rules for extraterritorial enforcement in Japan, comparing it with analogous regulations from the EU and the US

Enforcement of European Rights on a Global Scale

This chapter reviews global enforcement of European rights and the implications for copyright. Global extra-territorial enforcement of miscellaneous rights has emerged as a consistent trend in recent online regulation, both at international and EU level. In considering this trend, this chapter focuses on case law and policy making that face the riddle of extra-territorial application of online intermediaries’ obligations. This chapter describes, first, the historical origins of global enforcement and the complex issues that internet jurisdiction brings about. It then offers a panoramic overview of emerging global enforcement at the international level. Later, this chapter reviews to which extent global enforcement has been endorsed by the European legal system, both at EU and national level, with special emphasis on recent decisions from the Court of Justice of the European Union (CJEU), such as Google v CNIL and Glawischnig v Facebook. Finally, after a review of the political complexities surrounding global enforcement, the standards that might be applied for issuing global enforcement orders are discussed alongside their relevance for copyright.

The Collapsing of the Earth’s Lungs: Could a TWAIL Understanding of Climate Change Law Breathe Air Into the Amazonian Crisis?

I will be discussing the crisis of the Amazon rainforest, and the extent to which the region can successfully stifle deforestation and limit climate change damage. I will turn to TWAIL (Third World Approaches to International Law) to see if there are any gaps that can be filled when looking for solutions for more effective climate change mitigation. I will conclude that when attempting to tackle a global issue, there has to be global cooperation, but this should not necessarily come in the form of extraterritorial enforcement of international agreements; there should be a focus on regional cooperation and localised progress. This means that all countries can not be held to the exact same standard when it comes to climate change, and TWAIL helps to contextualise climate change under a more historical and socioeconomic backdrop. TWAIL cannot solely save the Amazon, but it is worth a consideration in the grand scheme of IEL dialogue.

Sanctions and International Law

This paper demonstrates that, under modern international law, the imposition of economic sanctions is only admissible as a measure of collective security under the authority of the United Nations (UN) Security Council (multilateral) or as countermeasure when a state is either directly affected by illegal acts by another state, or acts in the defence of vital security interests under the “security exceptions” of the General Agreement on Tariffs and Trade (GATT) (unilateral). In all other cases, unilateral sanctions, and in particular their extraterritorial enforcement, are a violation of the norms of national sovereignty and non-interference in the internal affairs of other states. Against this background, the paper analyzes the notion of coercion in the context of the UN Charter, undertakes a structural comparison between multilateral and unilateral sanctions regimes, and analyzes the political use of unilateral sanctions as a major challenge to the international rule of law.

The extra-territorial enforcement of the GDPR: a genuine issue and the quest for alternatives

The extra-territorial enforcement of the GDPR: a genuine issue and the quest for alternatives

Policeman for the World: U.S. Enforcement of Foreign Corruption Regulation and Corporate Investment Policies

We show that a mid-2000s increase in extraterritorial enforcement of the US Foreign Corrupt Practices Act (FCPA), characterized by greater international regulatory cooperation and more frequent use of the FCPA’s accounting provisions, has a significant deterrent effect on foreign direct investment in high-corruption-risk countries. The decrease in investment is at least as large for non-US as for US firms, suggesting that widespread extraterritorial enforcement helps to create a level foreign-investment playing field. Firms under US jurisdiction with fundamental characteristics that make it more difficult to maintain effective internal controls invest less in high-corruption-risk countries after the FCPA enforcement increase, suggesting regulatory compliance costs play a role in deterring investment. Consistent with investments in accounting systems being one way firms limit enforcement risk when investing in high-corruption-risk countries, firms pursuing new investments spend more time evaluating potential targets and firms with existing investments report fewer restatements related to unintentional errors.

Going it alone: The causes and consequences of U.S. extraterritorial counterproliferation enforcement

ABSTRACTIn 2004, the United Nations Security Council adopted resolution 1540, which acknowledged the non-state acquisition of weapons of mass destruction as a security threat and called on member states to implement “appropriate effective” domestic trade controls. The United States, however, has both promoted the multilateral implementation of strategic trade controls but has also increasingly resorted to extraterritorial enforcement of its counterproliferation rules. How can a multilateral, norms-based international regime like 1540 contend with extraterritorial enforcement based on national interests? We argue that increased U.S. extraterritorial counterproliferation policies are a consequence of the inconsistent implementation of resolution 1540, adaptive and resilient proliferation networks, and a history of expanding legal interpretations of jurisdiction. We find that while U.S. extraterritorial enforcement can effectively disrupt networks hiding in overseas jurisdictions, doing so creates disincentives for states to implement 1540 obligations and undermines broader nonproliferation objectives.

Legal arguments used in courts regarding territoriality and cross-border production orders

This contribution reflects on recent cases involving cross-border data production orders such as Yahoo Belgium, Skype Belgium and Microsoft Ireland. Cross-border data production orders are found to generally involve conflicts regarding sovereignty and enforcement jurisdiction and to frequently include voluntary cooperation of companies for which the legal framework is lacking (Introduction). The Lotus principle, which recognizes a broad extraterritorial jurisdiction to prescribe and limits extraterritorial enforcement jurisdiction, is reconsidered concerning those issues (see the ‘International law pragmatism for jurisdiction to prescribe, but not for jurisdiction to enforce’ section) and the use of mutual legal assistances, which should be the rule, is discussed with four caveats (see the ‘Four caveats to territorial sovereignty and the need for MLAs: Unclarities and politics’ section). Twelve typical arguments are identified, which are employed in courtrooms when cross-border data production orders are discussed, for example, arguments regarding territorial sovereignty, the location of servers, the virtual presence of businesses via the Internet or the nationality of the data subject (see the ‘Arguments in courtrooms in favour or against informal-based cross-border investigations’ section). Subsequently, from fourth to seventh sections, those arguments are investigated regarding their context in the cases Yahoo! Belgium (2007–2015), Skype Belgium (2012–2017), Microsoft Ireland (2013–2018) and Google in re Search Warrant (2017). Finally, a first step to evaluate and test the strength of those arguments is undertaken (see the ‘Assessing the arguments: From logically weak, to unpractical to law enforcement utilitarianism (give us everything)’ section).