Territorial Limits to Legislation

General Rule

The general rule is that laws extended to the state’s territory, as well as to the embassies of the state abroad, to specific subjects or objects carrying the flag of the state, and to diplomats and deployed military stationed abroad.  There is a general presumption that laws made in one state do not affect another state.


Extraterritoriality extends the operation of law to nationals abroad and applies laws to non-nationals outside the territory of the legislating country.  In the first case, taxation laws often follow a citizen abroad.  In the second, it is the extension of international law that allows for the application – though it generally requires the cooperation of both jurisdictions to enforce the law.

International Law Theories

In general, a state’s borders are considered impenetrable, and it is impossible to justify legislation regulating events beyond the state’s borders. Legislation is subject to a presumption of territoriality.  Globalization has promoted a departure from this norm.  If there is a substantial effect on a state, the state may argue that the exercise of extraterritorial jurisdiction is reasonable. Generally, the criteria are that the interest has a substantial impact on national commerce, and extraterritoriality’s attempted exercise is not unreasonable.

Some cross-border crimes, such as drug or human trafficking, also extend extraterritoriality.  The unilateral claim of extraterritoriality is difficult to exercise in practice, as it impinges on the other state’s sovereignty.  However, war crimes and the exercise of extraterritoriality over citizens abroad have a long precedent and are generally accepted in international law. In the case of war crimes, the heinous nature of the crime, coupled with the low probability they will be prosecuted by the nation committing the crime, and the need for an effective deterrent drive general acceptance of the extraterritorial application practice of international law.

Oftentimes economic sanction legislation, such as the US embargo of Cuba, has an extraterritorial effect but is accepted as part of international law.  However, where there is no bilateral agreement, and it is not punitive in nature generally and is targeted particularly at individuals, is problematic. For instance, legislating against terrorism committed outside the state’s territory and giving the state the authority to enforce this legislation is potentially problematic as it will infringe on the sovereignty of a foreign power that did not necessarily commit the offense.

Legislative Drafting Challenges

Because extraterritoriality is the exception, it must be specifically planned for in the drafting of legislation. Best practice would include noting the effect in both the title and the body of the legislation.

Blocking Legislation

Blocking legislation is used to block extraterritorial effects.  States may use blocking legislation to prohibit the transfer of information or production of documents in foreign proceedings. They may pass blocking legislation to make foreign judgments ineffective or prevent their enforcement.  They may also pass legislation prohibiting cooperation with foreign authorities. The state may also pass claw-back legislation to retaliate against foreign asset seizures or pass legislation blocking compliance with foreign regulations.

In the alternative, the states may look at principles of effect, reasonableness, and comity to contain the effect of legislation, and these elements are regulated by jurisdictional conflict rule sin international law.

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