Extra-territorial Application of Domestic Law ... ?

The Obama Administration is preparing to announce that it will file criminal charges against Chinese officials for cyber-espionage, conducted against mostly private-sector firms in the United States and, I guess, military targets within the U.S. It is worth stopping to think about the implications for international law.

I am preparing for a webinar in series hosted by the Canadian Bar Association, with the administrative leadership of Marc McAree, partner at the Toronto law firm of Willms and Shier, on Cross-Border environmental disputes. My old friend and co-author, Austen Parrish (now Dean at IU-Maurer), will be on hand, and he will lament the breakdown of reliance on international institutions in favor of unilaterial measures, such as domestic litigation. In Austen's previous work, he has outlined his view of the problem, which is that this leads to a breakdown of the implicit norms of international comity, and will lead to an unproductive tit-for-tat world of international diplomacy. In Austen's view, courts are even creatively redefining extra-territoriality out of existence, essentially making almost everything into a "domestic matter." Austen politely (he is Canadian after all) presses a disagreement with "sovereigntists" such as Eric Posner, Jack Goldsmith, and Curtis Bradley for advocating for a world less dependent on international institutions than say, domestic litigation or economic sanctions.

But I think Dean Parrish's cautionary notes ring hollow in several contexts, and the cyber-security threat is a good example of why. Austen's worry is about a breakdown in international legal institutions, and an over-reliance on litigation as a means of settling cross-border disputes. But let's stop and wonder here: what is the endgame? Is it true that this tit-for-tat world will give rise to a breakdown in international cooperation altogether? Surely trade between China and the United States will not suffer too much as a result of this spat over cyber-security. What exactly will bring Russia to heel over its regional ambitions to re-create some subset of the former Soviet Union? I think the U.N. is not up to it, especially with Russia and China on the Security Council. Being unable to use VISA or MasterCard -- now that sounds scary! International institutions, while not dead, are not going to be the sole bulwark against international lawlessness in the future. The deep economic interdependencies among nations will be important, and markets will play a role in disciplining both international lawlessness, and the running amok of domestic litigation. The difficulty of enforcement in areas such as cyber-security also limits the capacity of international institutions to police.

Fundamentally, the effects test as a basis for jurisdiction over foreign entities has fallen on hard times, and perhaps that is the problem. But if there is going to be some resurgence in the role of international institutions, some grappling with extra-territorial effects is going to have to take place. Without a more complex discussion of extra-territorial effects, both the "sovereigntist" and the "internationalist" positions in the abstract sound unrealistic and overbroad.