Extraterritoriality and business

    Prepared by the ICC commission on : Commission on Trade and Investment Policy
    Publication date : 13/07/2006 | Document Number : 103-33/5

    The International Chamber of Commerce (ICC) has prepared this policy statement to urge the international community and policy-makers, including legislators and regulators, as well as courts, to focus renewed attention on the negative impact that the extraterritorial application of national laws has on international commerce. ICC has established a task force to examine this subject and will issue a more detailed report.

    A barrier to cross-border trade and investment

    ICC is strongly committed to promoting cross-border investment and trade as indispensable elements of sustainable economic development and world growth. Clear and predictable rules of law are essential to achieve these objectives.

    The increasing globalization of business and expanding regulation of commerce by states have led to a significant rise in the extraterritorial application of national laws, with states frequently applying or seeking to apply their laws and regulations to persons or conduct outside national borders.

    Although in some instances this extraterritoriality is an outgrowth of states’ efforts to combat terrorism, crime, corruption, cartels, and other concerns on a cross-border basis, ICC believes that the extraterritorial application of national laws and attempts by states to exercise jurisdiction extraterritorially can and does have significant negative effects on international trade and investment.

    The extraterritorial application of national laws frequently subjects companies to conflicting or overlapping legal requirements, fosters unpredictability, increases the risks involved in commercial activities, exposes companies to overly burdensome litigation in foreign jurisdictions, and inflates legal and other transaction costs.

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