In context

Another US court decision against extraterritoriality

December 9, 2013
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In context

Another court decision upholds that US laws do not automatically apply to foreign conduct. The decision is the latest since Morrison v National Austria Bank.

In Morrison v National Austria Bank (2010), the U.S. Supreme Court held that US criminal securities law does not automatically apply to foreign conduct based on a presumption against extraterritoriality. See also In context October 2013. In the case Meng-Lin Liu v Siemens A.G., a former compliance officer at Siemens China’s healthcare unit accused Siemens of suspected violations of the Foreign Corrupt Practices Act (“FCPA”) based on an alleged kickback scheme on medical equipment sold in China and North Korea. When he was subsequently fired, he claimed his termination for reporting these possible FCPA violations was illegal under the Dodd-Frank Act’s anti-retaliation provision, and that his disclosures were protected under the Sarbanes-Oxley Act.

 

However, the Court held that the anti-retaliation provisions of Dodd-Frank do not apply extraterritorially and that disclosure of FCPA violations is not required or protected by the Sarbanes-Oxley Act. This decision provides clarity regarding the reach and scope of the Dodd-Frank whistleblower provisions.

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