Coming to America: the extraterritorial reach of US judicial process
| Published date | 08 May 2009 |
| DOI | https://doi.org/10.1108/13590790910951795 |
| Date | 08 May 2009 |
| Pages | 115-124 |
| Author | Frank P. Cihlar |
| Subject Matter | Accounting & finance |
Coming to America:
the extraterritorial reach
of US judicial process
Frank P. Cihlar
United States Department of Justice, Washington, DC, USA
Abstract
Purpose – The purpose of this paper is to explore situations in which US Federal Courts may impose
severe fines and sanctions to compel the disclosure of information maintained outside the territorial
limits of the USA by enforcing either a grand jury subpoena or an Internal Revenue Service
administrative summons.
Design/methodology/approach – The paper presents a memorandum of law summarizing and
analyzing relevant US legal precedents, including In Re Grand Jury Proceedings (Bank of Nova Scotia),
740 F.2d 817 (11th Cir. 1984), a case that has come to be eponymous for any US judicial process calling
for the production of foreign records: “Bank of Nova Scotia subpoenas.”
Findings – The paper finds that, in appropriate circumstances, US Federal Courts have been willing
to impose coercive fines and sanctions on individuals or entities that have failed to produce records
and other information that is outside the territorial jurisdiction of the USA.
Research limitations/implications – The analysis is focused on two US legal precedents that
exemplify the factors considered by US Federal Courts in arriving at a decision. Many other cases are
cited but not examined in depth.
Practical implications – Thepaper is of interest to anyone engaging in cross-border activitieswith
the USA, particularly multi-national financial organizations.
Originality/value – The paper provides an insight into the US law enforcement tools that may be
deployed against multi-national organizations.
Keywords Disclosure, Law,Law courts, Legal decisions, Law enforcement, UnitedStates of America
Paper type Case study
The long arm of US judicial process
Touching the shores of the USA can have varying consequences, many or most of which
are positive. For example, for a Cuban expatriate landing in South Florida, the mere act
of setting foot on the beach carries with it an array of immigration rights denied other
national groups, the most important of which is entitlement to permanent residency in
the USA. But for other sojourners to our shores, the most salient consequence of coming
to America may be something that is a far cry from asylum: liability to judicial process
in the courts of the USA. A physical presence in the USA gives rise to judicial
jurisdiction over the person, be that person an individual or a legal entity. And it is
this jurisdiction, based upon physical presence, that brings me to one way in which the
US Department of Justice can function as a type of international bank “regulator.”
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1359-0790.htm
The author would like to thank Ms Deanna Rice, a student at the Harvard Law School, for her
assistance in drafting this paper. The views expressed in this paper are the views of the author
alone and do not represent the views of the US Tax Division, the US Justice Department, nor the
US Government.
Reach of
US judicial
process
115
Journal of Financial Crime
Vol. 16 No. 2, 2009
pp. 115-124
qEmerald Group Publishing Limited
1359-0790
DOI 10.1108/13590790910951795
To continue reading
Request your trial