Winning the Battle but Losing the War? Reflections on Extraterritorial Jurisdiction in U.S. Export Control Laws

For the past quarter century, the United States has asserted extraterritorial prescriptive jurisdiction over U.S. origin goods and technologies that are already located abroad. Moreover, this jurisdictional claim under U.S. export control laws has been based on the origin of the goods and technologies themselves, and not on the nationality of the parties involved. This unprecedented claim of item-based (as opposed to person-based) jurisdiction is one of international law's more intractable jurisdictional issues in recent years. While the genesis of this jurisdictional claim - U.S. efforts to thwart construction of a trans-Siberian Soviet pipeline in the early 1980s - is long gone, to this day the United States continues to assert item-based extraterritorial jurisdiction under its export control laws. The validity of this extraordinary claim of extraterritoriality was debated at length by scholars in the 1980s and early 1990s. During that time, a general scholarly consensus emerged that extraterritorial U.S. export controls were difficult to justify at best, and unjustifiable at worst. Yet the extraterritorial nature of U.S. export controls has remained firmly in place, and over time attention on the subject has waned somewhat, perhaps due to the lack of another galvanizing, headline-grabbing event such as the trans-Siberian pipeline controversy. The subject of item-based extraterritorial jurisdiction is worth revisiting now for two key reasons. First, there has been a dramatic upsurge in global trade in the past two decades, and increasingly both production and research and development activities are transborder in nature. This means there are more foreign activities in which U.S.-origin goods and technologies are being used - and this in turn means there are exponentially more foreign activities over which the United States claims item-based extraterritorial jurisdiction. Moreover, the growth of e-commerce and electronic communications means that today there are many transborder transfers of software technology that were not possible two decades ago - transfers that are considered exports or reexports by the United States, but not necessarily reflected in official U.S. export statistics. Second, the current U.S. national security and foreign policy landscape is vastly different from that of the Cold War and the pre-9/11 era. During the Cold War, item-based controls served as a proxy for destination-based controls, and in that sense they acted largely in the same manner as trade sanctions or embargoes on destinations of concern. In contrast, modern export controls are much more geared toward trade facilitation than trade restriction, and those restrictions that remain in place are increasingly focused on the end use or end users of the items involved (e.g., concerns over proliferation or terrorism) instead of on the geographic destinations in question. In other words, these are changes in both degree and kind, and there are now far more activities entirely outside the territory of the United States that fall within the claimed jurisdictional ambit of U.S. export controls. While twenty years ago such claims of extraterritorial jurisdiction could be correctly characterized as subtle questions, today they are of central importance. It is thus time to re-address them. This Article presents a two-part thesis. First, it argues that item-based extraterritorial jurisdiction in fact can be justified under existing international law doctrine, and that these justifications are consistent with the national security goals of both the United States and its major trading partners. Second, however, the Article's exploration of these traditional, doctrinal justifications for extraterritoriality reveals that justifiable does not mean ideal, or perhaps even close to it - and that the very national security goals pursued by the United States through item-based extraterritorial jurisdiction could be better served by a departure from the item-based model. Stated differently, the Article contends that item-based extraterritorial export controls are legally adequate but strategically imperfect. In exploring the first part of this thesis, the Article will review the historical background of U.S. export controls. It then will analyze prior scholarship relevant to extraterritorial export control jurisdiction and discuss how changes to the modern global landscape point to the validity of these extraterritorial claims. The Article also will discuss more recent (and broader) scholarly inquiries relevant to extraterritoriality, including the development of inter-governmental networks and mutual recognition regimes, as well as the effect of unilateral state efforts on the evolution of multilateral cooperation in international law. In discussing the second part of the aforementioned thesis - that justifiable does not mean ideal - the Article will explore how U.S. export controls might be reformulated. Reconsideration of the primary national security purposes of these controls suggests that these purposes could be better served by a departure from item-based jurisdiction. Such a change would have the dual benefit of making any extraterritoriality in the revamped controls both more easily justifiable and less objectionable to major U.S. trading partners. It also might lead to greater multilateral cooperation in the area of export controls - which in turn could lead to greater consensus, and thus even stronger legal justifications for these controls under international law. This Article will conclude by discussing how such changes to U.S. export controls might be achieved, either with or without changes to the underlying statutory structure of U.S. export controls.