Limits on the Extraterritoriality of United States Export Control and Sanctions Legislation

Abstract

The sovereignty of states is reflected in the notion of jurisdiction, empowering them to enact and enforce laws and regulations, and to adjudicate disputes in court. The jurisdiction of states and the exercise thereof is primarily territorial, limiting the exercise of state authority to their respective national territories except in specific situations. However, in an increasingly globalized and interconnected world, it would be hard to maintain that a state should be denied the right to exercise its sovereign powers beyond national borders when there are reasonable grounds for doing so. Consequently, the exercise of extraterritorial legislative jurisdiction has become more accepted, although it is limited to particular situations and circumstances. These have to do with the exercise of jurisdiction over nationals, vessels and aircraft registered in or pertaining to the legislating state, as well as certain activities aimed at undermining the state’s security or solvency or which constitute crimes under international law. However, in principle it is not allowed to regulate activities of foreign nationals or entities operating wholly outside the legislating state’s territory. One area where this has become increasingly prevalent is through the exercise of export controls over foreign nationals and legal persons. The United States (US) has long been engaged in the exercise of this type of extraterritorial jurisdiction and is, without doubt, the state that is most proactive in doing so. This chapter considers US extraterritorial claims with respect to its export control and sanctions legislation and explores the limits of this practice under public international law.

The Extraterritorial Reach of US Export Control Law

“…87 The AECA and the ECA, both enacted by US Congress, are exceptions to this rule as they are clearly intended to apply extraterritorially, focusing on the control of the export of US-origin items, which explicitly includes the regulation of reexports. 88 Consequently, specific extraterritorial legislation such as the ITAR's 'see-through' rule and the EAR's foreign direct product rules are permissible under US law.…”