Article 113-7 of the French Penal Code: The Passive Personality Principle

Abstract:     
The exercise of extraterritorial jurisdiction is necessarily invasive of some other sovereign's power and so inevitably leads to conflict, or at least, controversy. In the Western world, where international legal, economic, and political norms seem to be converging towards relative harmony, the natural tendency of governments has been to restrict the extraterritorial reach of sovereign power and rely instead on international cooperation. France has been particularly outspoken in its resistance to the exercise by any other country of jurisdictional rights perceived by France as extraterritorial. For example, since the adoption in July 2002 of the Sarbanes-Oxley Act, French market regulators and commentators have criticized the Act as an overextension of United States law, in its application to foreign private issuers whose securities are traded in the United States. Yet, while the Sarbanes-Oxley Act sets rules for businesses that have chosen to operate in the United States, France itself adopted rules of criminal jurisdiction in the 1990s that extend the reach of French criminal law not only to foreign businesses operating in France, but also to any foreign persons interacting with French nationals abroad. The passive personality jurisdiction is widely regarded as the most aggressive basis for extraterritorial jurisdiction. It is typically applied only to the most egregious criminal actions, such as terrorism and violent crimes, and even then, it is strictly limited by procedural safeguards and the requirements of reasonableness and dual criminality. This article discusses France's uniquely broad approach to passive personality jurisdiction and its incompatibility in the economic sphere, and particularly in connection with international financing transactions, with international principles of comity among nations.

Number of Pages in PDF File: 16

Keywords: extraterritorial, jurisdiction, international, financial, france, passive personality, extraterritorial

JEL Classification: K10, K14, K20, K33

Accepted Paper Series