Commentary by the ICC Chairmanship
Department of Policy and Business Practices
Dec 2002

Extra-territorial application of national laws

The International Chamber of Commerce (ICC), on behalf of its member companies and business associations around the world, has consistently drawn the attention of governments to the dangers inherent in laws that purport to grant national courts universal jurisdiction.

Over the last 10 years, a growing number of United States companies have been sued in US federal courts under an 18th century law - the Alien Tort Claims Act of 1789 - for alleged violations outside the United States of human rights, labour rights and environmental standards.

Originally intended to ensure that legal action could be taken against violators of the "Law of Nations" - which in those days covered piracy and "violation of the status of protected persons" (largely diplomats) - the statute is now being used by anti-business groups against companies. In the last few years non-U.S. companies have begun to be targeted.

As a result, the threat now applies equally to any non-US company that has some link to the United States, such as a US subsidiary or even a listing of its shares on a US stock exchange. For instance, a large number of non-US multinational companies are being sued under the statute in an action against more than 1,000 companies alleging complicity in, or "vicarious liability" for apartheid in South Africa.

ICC urges the US government and Congress to take steps to curb the misuse of this long-standing statute against private companies, whether U.S. or from other countries. We appeal to other governments to raise the issue with the US government. Other governments should also guard against any tendency to use new or existing laws to assert extra-territorial jurisdiction.

The practice of suing companies in the US, whether domestic or foreign, for alleged events occurring in third countries is an unacceptable extraterritorial extension of US jurisdiction. Other countries, and especially developing countries, are justified in fearing that such interpretation of the law would result in a growing reluctance by US companies to invest abroad. It could also have the effect of reducing investment by foreign companies in the United States if one of the consequences of such investments would be exposure to the Alien Tort Claims Act of 1789.

The members of the ICC Chairmanship are:

• Richard D. McCormick, ICC Chairman; former Chairman and Chief Executive Officer, U S WEST Inc.
• Jean-René Fourtou, ICC Vice Chairman; Chairman and Chief Executive Officer, Vivendi Universal.
  
• Adnan Kassar, ICC Past Chairman; Chairman and Chief Executive Officer, Fransabank.
  

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