The Extraterritorial Reach of US Export Control Law

In recent years, the United States (US) has dramatically expanded a set of extraterritorial rules, known as the ‘foreign direct product rules’. The rules subject certain items to the jurisdiction of the Export Administration Regulations that are produced outside the US with the use of specific types of US technology, software, or equipment, but contain no US-origin content and are traded between parties outside the US without ever touching US territory. As such extraterritorial rules may breach other States’ sovereign rights, they are only permissible under international law when there is a genuine nexus between the regulating State and the object of regulation. This article argues that, in principle, the foreign direct product rules do not breach international law as US national security concerns, in principle, can justify the rules under the protective principle. The US should, however, better substantiate its decisions to exert its extraterritorial legislative powers to increase acceptance of the rules among affected states.