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Beyond All Boundaries: The Extraterritorial Grasp Of Anti-Bribery Legislation

Today’s post is from Bruce Bean (here – Michigan State University College of Law)


“The American Branch of the International Law Association held its Annual Law Weekend in New York City this past weekend. As a member of the ABILA Extraterritoriality Committee, I organized an expert panel to highlight how the UK Bribery Act 2010 takes an even more aggressive view of its jurisdictional scope than the Justice Department’s well documented, extraordinarily expansive view of the global reach of the FCPA.  The panel included Visiting Professor Alexander Domrin, Oklahoma City University Law School, Philip Urofsky, former DoJ FCPA prosecutor and partner at Shearman & Sterling, Robert Buehler, partner at Hogan Lovells and former Assistant U.S. Attorney for the Southern District of NY, and Jeremy Carver, President of the UK Branch of the ILA as well as a partner for three decades at Clifford Chance.

The provocative title of the panel discussion, “Beyond All Boundaries: The Extraterritorial Grasp of Anti-Bribery Legislation,” attracted an animated crowd.  I shared my opinion that a hyper-aggressive DoJ had expanded the reach of the FCPA far beyond the language of the law and the intent of Congress.  I pointed out that this overreaching had been exceeded by the egregious extraterritorial grasp of Section 7 of the Bribery Act, which imposes strict criminal liability on a company for failing to prevent a bribe, even a facilitation payment by a non-UK person who is not employed by that company.  And the guilty-until-proven-innocent company need not be a UK company, or have a place of business in the UK.  The statutory nexus of the Bribery Act is merely that the company once conducted “a part of a business, in any part of the UK.”

Philip Urofsky, the long-time DoJ FCPA prosecutor, began his presentation by announcing that he “strongly disagreed” with everything I had said.  In practice, he noted, the commerce clause nexus of the FCPA is met when a dollar wire transfer between two offshore jurisdictions clears through a New York money center bank, even though there was no “intent” by either of the parties involved to have any connection with the U.S.

Bob Buehler pointed out that the jurisdiction of the Southern District’s U.S. Attorney’s office is its statutory jurisdiction which includes Manhattan and its “contiguous waters.”  I innocently asked if that extended to the Atlantic Ocean.  The response was, perhaps not, but driving over the Verrazano Bridge between two boroughs not within the Southern District can bring jurisdiction to the “Sovereign District.”

Jeremy Carver, now President of Transparency International UK, testified regularly before Parliamentary and other Committees during the ten years of deferral and delay which finally produced the Bribery Act with its seriously aggressive overseas reach.  More than once Carver accused the UK government of misleading Parliament about the adequacy of UK laws applicable to overseas bribery.  A speech he gave at the Commonwealth Club in February 2007 was entitled “Is the UK Government Serious about Fighting International Corruption?”  In later testimony he announced that the “government has done its utmost to undermine the efforts that so many others have been making to combat foreign bribery.”

As finally effective on July 1, 2011, the UK’s Bribery Act has enormous extraterritorial reach.  Carver pointed out that it could have been worse.  During the reign of Queen Elizabeth I, as Sir Francis Drake roamed the Seven Seas, the suggestion was made that the overwhelming dominance of British Navy meant that the Queen Elizabeth’s jurisdiction should extend over all the oceans.  This suggestion was not accepted at the time, although I remain convinced that the UK Bribery Act 2010 is an attempt to do just that.

In whatever ways the Bribery Act evolves, few will forget last weekend’s ABILA panel discussion.”

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