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      Proskauer on International Litigation and Arbitration:
       Managing, Resolving, and Avoiding Cross-Border Business or Regulatory Disputes
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  1. What is the presumption? Although the U.S. Congress has the authority to regulate the conduct of U.S. citizens and nationals outside the territorial boundaries of the United States, there is a general presumption against extraterritorial application of U.S. law. Unless a contrary intent appears, it is presumed that U.S. legislation applies only within the territorial jurisdiction of the United States. E.E.O.C. v. Arabian American Oil Co., 499 U.S. 244 (1991). This canon of construction guards against inadvertent clashes between U.S. laws and those of other nations and recognizes that the U.S. Congress generally legislates with domestic concerns in mind. Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285 (1949).
  2. Whose burden it is to overcome the presumption? The burden of overcoming the above presumption lies with the party asserting application of U.S. law to events that occurred abroad. Labor Union of Pico Korea, Ltd. v. Pico Prods., Inc., 968 F.2d 191, 194 (2d Cir.), cert. denied, 506 U.S. 985 (1992).
  3. Overcoming the Presumption Against Extraterritoriality: The presumption against extraterritoriality can be overcome only by a clear expression of Congress’s intention to extend the reach of federal law beyond those places where the United States has sovereignty or has some measure of legislative control. U.S. v. Gatlin, 216 F.3d 207, 211-12 (2d Cir. 2000) In determining whether “clear evidence” exists, the Courts are permitted to consider “all available evidence” about Congress’ intent, including:
    1. The text of the relevant statute;
    2. The structure of the statute; and
    3. The legislative history of the statute.
  4. Exception for Criminal Statutes: There is no presumption against extraterritoriality when dealing with statutes prohibiting crimes against the U.S. government. U.S. v. Bowman, 260 U.S. 94 (1922); but see Kollias v. D & G Marine Maintenance, 29 F.3d 67, 71 (2d Cir. 1994), cert. denied, 513 U.S. 1146 (1995) (holding that Bowman should be read narrowly, such that “only criminal statutes, and perhaps only those relating to the government’s power to prosecute wrongs committed against it, are exempt from the presumption [against extraterritoriality]”). Criminal statutes are deemed not to be dependent upon the locality of their government’s jurisdiction, but on the right of the government to defend itself against obstruction and fraud committed by its own “citizens, officers or agents.” Bowman, 260 U.S. at 98.

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