Analyzing Claims of Sovereignty in International Economic Disputes

Waller, Spencer Weber, Simon, Alan M. | January 1, 1985

The extraterritorial application of national laws has become a battle ground over the last forty years for both private parties and states, who are either seeking to enforce their laws or to protect their nationals and their own interests. The conflicts have been most intense over the application of economic regulation to international business conduct where the situs and the effects of the conduct may be quite difficult to locate within the borders of any single state. Often, the United States has sought to enforce its laws when conduct abroad by foreign nationals adversely affected its interests. The intention of this paper is to develop an objective framework within which to analyze the opposing claims of states embroiled in international economic disputes, wherever they arise. This paper presents a framework which departs from the traditional analysis of extraterritorial jurisdiction. Instead, it focuses on the assertion of sovereignty claims as the more fruitful avenue of inquiry. The paper proposes a set of criteria to assess: 1) the validity of claims that the extraterritorial application of national law constitutes an infringement of sovereignty; and 2) the propriety of states using such claims as a basis of intervention to protect their nationals.