USA Law and Practice Contributed by: Eric Bruce and Justin Simeone, Freshfields US LLP
3. Scope of Application 3.1 Limitation Period
The law continues to change in this area; some courts have found that domestic conduct is necessary, but not sufficient, to apply US law to claims that mostly arise overseas. As an initial point, US law applies on US soil – so if individu - als are visiting the US (for business or pleas - ure), they face increased US legal risk over any business they do while on their trip. Second, US law often applies to US citizens, permanent residents (ie, “green card” holders), and entities organised under US law anywhere in the world. Non-US transactions could be exposed to US legal risk because some of the personnel are US nationals. FCPA – Generally The FCPA has relatively broad extraterritorial application. Criminal conduct outside the USA could result in FCPA liability under one of four theories: issuer liability, domestic concern liabil - ity, liability as an agent of an issuer or domestic concern, and, potentially, conspiracy/accom - plice liability. FCPA – Issuers If a legal entity is an issuer of registered US securities (regardless of where the entity is headquartered), the entity may be held liable for violations of the FCPA’s anti-bribery provisions committed anywhere in the world, provided that there is a connection to the USA (eg, an email that touches the USA). If an issuer is organised under US laws, the entity may be held liable for FCPA violations, irrespective of any other con - nection to the US. Issuers are also subject to the FCPA’s account - ing provisions everywhere in the world. FCPA – Domestic Concerns US domestic concerns (ie, US nationals and businesses incorporated under US law or head -
Most federal crimes are subject to a five-year statute of limitations, although criminal violations of the FCPA’s accounting provisions are subject to a six-year limitations period. In some circum - stances, prosecutors may be legally permitted to charge defendants for conduct that pre-dates the limitations period. For example, if the con - duct is part of an ongoing scheme or conspiracy, the limitations period begins to run at the end of the scheme. However, as long as one act in furtherance of the conspiracy occurred within the five-year period, a conspiracy charge would still be timely. State statutes of limitations vary between juris - dictions. 3.2 Geographical Reach of Applicable Legislation Defendants are often prosecuted even where most of the criminal conduct was committed abroad, but extraterritorial jurisdiction varies from one statute to another. Non-US conduct may be covered by US law where either the spe - cific statute applies extraterritorially, or there is a US nexus (eg, the scheme involves a US bank account). Extraterritoriality US law on extraterritoriality is complex and changes with judicial decisions and legislative action. Different statutes apply outside the USA in different ways. US statutes are presumed not to have extraterritorial effect unless they include a “clear indication” to the contrary. Without a “clear indication”, courts examine the statute’s “focus” to determine whether an alleged viola - tion is “domestic”.
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