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Extraterritoriality and the Corporate Governance Law

Published online by Cambridge University Press:  27 February 2017

Detlev F. Vagts
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Editorial Comments
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American Journal of International Law , Volume 97 , Issue 2 , April 2003 , pp. 289 - 294
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Copyright © American Society of International Law 2003

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References

1 Sarbanes-Oxley Act of 2002, Pub. L. No. 107–204, 116 Stat 745 (2002) (principally codified in titles 15 and 18 U.S.C.).

2 Laurent, Cohen-Tanugi, La Chronique de Gouvernement d’entreprise sous pavilion americain, Les Echos, Aug. 20, 2002, at 35 Google Scholar (my trans.).

3 Securities Exchange Act of 1934, §12 (codified at 15 U.S.C. §78l(g)). The SEC has increased the exemption to $10 million in assets.

4 17 C.F.R. §240.12g3–2 (2002). The exemption is conditioned on the issuer’s furnishing the SEC with information the firm has filed with the authorities at home.

5 Jackson, Howell & Pan, Eric, Regulatory Competition in International Securities Markets: Evidence from Europe in 1999—Part II, 58 Bus. Law. (forthcoming 2003)Google Scholar. The authors discuss informal offerings under Rule 144A, 17 C.F.R. §230.144A (2002), and note that many U.S. investors prefer to deal in the stock of European issuers directly on European exchanges.

6 The regulation is 17 C.F.R. §§205.1–205.7 (2003). The exemption appears in §205.2(a) (2) (ii), and the term is defined in §205.2(j).

7 Pub. L. No. 107–204, §106 (to be codified at 15 U.S.C. §7216).

8 Fruehauf Corp. v. Massardy, CA Paris, 14e ch., Gaz. Pal. 1965, 2, pan. jurispr. 86, trans, in 5 ILM 476 (1966).

9 See Restatement (Third) of the Foreign Relations Law of the United states §414 reporters’ note 8 (1987).

10 22 U.S.C. §§6021–6091 (2000).

11 Compare Lowenfeld, Andreas F., Congress and Cuba: The Helms-Burton Act, 90 AJIL 419 (1996)CrossRefGoogle Scholar, with Clagett, Brice M., Title III of the Helms-Burton Act Is Consistent with International Law, 90 AJIL 434 (1996)CrossRefGoogle Scholar.

12 United States v. Aluminum Co. of America, 148 F.2d 416 (2dCir. 1945). The most recent Supreme Court pronouncement is Hartford Fire Ins. Co. v. California, 509 U.S. 764 (1993).

13 Brit. Nylon Spinners, Ltd. v. Imperial Chem. Indus., Ltd., [1952] 2 All E.R. 780 (C.A.).

14 For a summary, see Steiner, Henry J., Vagts, Detlev F., & Harold, Hongju Koh, Transnational Legal Problems 977–81 (4th ed. 1994)Google Scholar.

15 Lowe, A. V., Blocking Extraterritorial Jurisdiction: The British Protection of Trading Interests Act, 75 AJIL 257 (1981)CrossRefGoogle Scholar.

16 Vagts, Detlev F., A Turnabout in Extraterritoriality, 76 AJIL 591 (1982)CrossRefGoogle Scholar.

17 For representative articles, see La Loi Sarbanes-Oxley inquiéte les sociétés, Les Echos, Sept. 19, 2002, at 17 Google Scholar; Weitgehende Auswirkungen der Sarbanes Oxley Act, Neue Zürcher Zeitung, Sept. 17, 2002, at 31 Google Scholar; EU-Einwände gegen Sarbanes-Oxley Act, id., Aug. 30, 2002, at 29; Cohen-Tanugi, supra note 2; Industrie für Ausnahmen vom amerikanischen Börsengesetz, Frankfurter Allgemeine Zeitung, Aug. 20, 2002, at 11 Google Scholar; Bundesregierung gegen Bilanzschwur in Vereinigten Staaten, id., Aug. 19, 2002, at 11.

18 For a helpful recent summary of German law affecting public corporations, see Oppenhoff, Walter & Verhoeven, Thomas, The Stock Corporation, in 3 Business Transactions in Germany, ch. 24 (Campbell, Dennis ed., 2002)Google Scholar.

19 Federal Law on the Legal Profession §43a(2); StGB §203 (Penal Code). The possible penalties for breaching a client’s secrecy include a year’s imprisonment. On the law on the legal profession, see Henssler, Martin & Hans, Prütting, Bundesrechtsanwaitsordnung Kommentar §43a (1997)Google Scholar.

20 Vagts, Detlev F., Professional Responsibility in Transborder Practice: Conflict and Resolution, 13 Geo. J. Legal Ethics 677 (2000)Google Scholar. The present American conflicts rule on professional discipline is found in Rule 8.5, Model Rules of Prof’l Conduct (1983). Recently, changes in that rule have been proposed.

21 For comparisons, see Beveridge, Norwood P. Jr., The Internal Affairs Doctrine: The Proper Law of a Corporation, 44 Bus. Law. 693 (1989)Google Scholar; Latty, Elwin R., Pseudo-Foreign Corporations, 65 Yale L.J. 137 (1955)CrossRefGoogle Scholar. The Supreme Court said that the “free market system depends at its core upon the fact that a corporation—except in the rarest situations— is organized under, and governed by, the law of a singlejurisdiction, traditionally the corporate law of the State of its incorporation.” CTS Corp. v. Dynamics Corp. of America, 481 U.S. 69, 90 (1987).

22 Centros v. Erhvervs-og Selskabsstyrelsen, 1999 ECR I–1459. A case that may shed further light on Centros, Ŭberseering BV v. NCC Nordic Construction Co. Baumanagement Gmbh, is due to be argued in the European Court of Justice. Omar, Paul, Centros Redux: Conflict at the Heart of European Company Law, 2002 Int’l Company & Com. L. Rev. 448 Google Scholar.

23 Ebke, Werner, Centros—Some Realities and Some Mysteries, 48 Am. J. Comp. L. 625 (2000)Google Scholar.

24 Barcelona Traction, Light & Power Co. (Belg. v. Spain), Second Phase, 1970 ICJ Rep. 5 (Feb.5).

25 European Communities, Comments on the U.S. Regulations Concerning Trade with the U.S.S.R., reprinted in 21 ILM 891 (1982).

26 Zaring, David, International Law by Other Means: The Twilight Existence of International Financial Regulatory Organizations, 33 Tex. J. Int’l L. 281 (1998)Google Scholar.

27 For a review of current issues in the world of international accounting, see Nobes, Christopher & Parker, R. H., Comparative International Accounting (6th ed. 2000)Google Scholar.