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From The Economist
FOR EUROPEAN firms operating in Asia, or Latin American and Asian firms hustling in Africa or the Middle East, business risks abound. Surprisingly high on the list of things that keep bosses awake with cold sweats at night is falling foul of America’s Department of Justice (DOJ) or its Treasury Department.
The United States leads the world in punishing corruption, money-laundering and sanctions violations. In the past decade it has increasingly punished foreign firms for misconduct that happens outside America. Scores of banks have paid tens of billions of dollars in fines. In the past 12 months several multinationals, including Glencore and ZTE, have been put through the legal wringer. The diplomatic row over Huawei, a Chinese telecoms-equipment firm, centres on the legitimacy of America’s extraterritorial reach (see article).
America has taken it upon itself to become the business world’s policeman, judge and jury. It can do this because of its privileged role in the world economy. Companies that refuse to yield to its global jurisdiction can find themselves shut out of its giant domestic market, or cut off from using the dollar payments system and by extension from using mainstream banks. For most big companies that would be suicidal.
Wielding a stick is often to be applauded. Were it not for America’s tough stance against FIFA, for instance, the dodgy officials who ran world football would not have been brought to book. But as the full extent of extraterritorial legal activity has become clearer, so have three glaring problems.
COMMENT:-
It appears that "trying to do 'the right thing'" in the "wrong way" can have negative consequences.
Who knew international relations could be so complicated?
The trouble with America’s extraterritorial campaign against business
FOR EUROPEAN firms operating in Asia, or Latin American and Asian firms hustling in Africa or the Middle East, business risks abound. Surprisingly high on the list of things that keep bosses awake with cold sweats at night is falling foul of America’s Department of Justice (DOJ) or its Treasury Department.
The United States leads the world in punishing corruption, money-laundering and sanctions violations. In the past decade it has increasingly punished foreign firms for misconduct that happens outside America. Scores of banks have paid tens of billions of dollars in fines. In the past 12 months several multinationals, including Glencore and ZTE, have been put through the legal wringer. The diplomatic row over Huawei, a Chinese telecoms-equipment firm, centres on the legitimacy of America’s extraterritorial reach (see article).
America has taken it upon itself to become the business world’s policeman, judge and jury. It can do this because of its privileged role in the world economy. Companies that refuse to yield to its global jurisdiction can find themselves shut out of its giant domestic market, or cut off from using the dollar payments system and by extension from using mainstream banks. For most big companies that would be suicidal.
Wielding a stick is often to be applauded. Were it not for America’s tough stance against FIFA, for instance, the dodgy officials who ran world football would not have been brought to book. But as the full extent of extraterritorial legal activity has become clearer, so have three glaring problems.
COMMENT:-
It appears that "trying to do 'the right thing'" in the "wrong way" can have negative consequences.
Who knew international relations could be so complicated?
