USA Law and Practice Contributed by: Emily Hughes, Charles Kalil, Cori Lable and Ryan Raybould, Kirkland & Ellis
Regulators often request tolling agreements from potential subjects or targets to pause the limitation period for a specific time period. 1.4 Extraterritorial Reach and Cross-Border Co-Operation Extraterritorial reach is permitted when a federal stat - ute expressly states that it applies to conduct outside the USA. In certain limited circumstances, courts have con - strued US statutes broadly to allow cases against defendants who commit offences abroad, particularly through the Foreign Corrupt Practices Act (FCPA) (15 USC Sections 78dd-1 et seq). Other federal crimi - nal statutes with potential extraterritorial application include: • money laundering (18 USC Section 1956); • false statements (18 USC Section 1001); and • the Racketeer Influenced and Corrupt Organiza - tions Act (RICO) (18 USC Section 1961 et seq). The Department of Justice’s (DOJ) co-ordination with foreign counterparts has increased in recent years. The USA has mutual legal assistance treaties with many countries, allowing prosecutors and regulators to share information and investigative work across borders. For example, in March 2024, the commodi - ties trading company Gunvor SA pled guilty to violat - ing the FCPA. The Guvnor case also involved a parallel resolution with Swiss authorities, and the investiga - tion entailed co-operation with additional authorities in the Cayman Islands, Colombia, Curacao, Ecuador, Panama, Portugal and Singapore. The USA also has extradition agreements with many countries, though the terms of each agreement vary (eg, the USA and the European Union allow extradition for all crimes that are punishable in both jurisdictions). 1.5 Corporate and Personal Liability Criminal liability can apply to individuals or legal enti - ties. Individuals and entities may be liable for the same offence, but a separate case must be made against each. Individual directors and officers are not auto - • wire fraud (18 USC Section 1343); • conspiracy (18 USC Section 371);
matically liable for offences committed by their enti - ties. Under the doctrine of respondeat superior, an entity is liable for the acts of its directors, officers, employees and agents that are both committed within the scope of their employment and at least partially motivated by an intent to benefit the entity. Knowledge of individual directors, officers, employees or agents sometimes can be imputed collectively to the entity as a whole under the collective knowledge doctrine, although the validity of the doctrine is often controversial depending on jurisdiction. A parent enti - ty is generally not liable for the acts of its subsidiary but can be if the parent exercises sufficient control over that subsidiary. In mergers, the surviving entity is responsible for the predecessors’ liabilities under the doctrine of succes - sor liability. In acquisitions, courts consider several factors in determining whether a successor entity can be held responsible for the acquired entity’s liabilities (eg, whether the buyer is a mere continuation of the seller). Unlike the UK, the USA does not have a singular, In federal criminal courts, the United States Sentenc - ing Commission guidelines provide a uniform frame - work for recommending sentences and fines. Each offence has a predetermined level. Judges weigh aggravating and mitigating factors, including an indi - vidual defendant’s criminal history, to calculate a rec - ommended sentencing range or fine (18 USC Sec - tion 3553). The guidelines also set forth the rules for punishing entities. Restitution for identifiable victims is often mandatory (see, for example, 18 USC Section 3663A). The guidelines shape federal judges’ sentenc - ing decisions but are not binding on judges. broad “failure to prevent” offence. 1.6 Sentencing and Penalties For institutional defendants, the guidelines set forth culpability factors that determine appropriate multi - pliers applied to a base fine for determining an appli - cable fine range. Courts give due consideration to efforts to identify, disclose and remediate institutional or corporate misconduct, and consider the scope and
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