The Relentless Extraterritoriality of the Dollar

BNP Paribas, Société Générale, Crédit Agricole, ALSTOM, ALCATEL, TOTAL, Airbus, Technip, SIEMENS, ING, the Royal Bank of Scotland, and HSBC… These companies share a common feature: they are all large multinational corporations, known worldwide, endowed with historical know-how and unique technologies. Yet another common denominator brings them together. All of them have been the target of perfectly legal judicial actions, capable of placing them in serious difficulty, disrupting their commercial activity, and ultimately forcing them to take risky decisions in the face of the threats to which they are exposed.

It is the United States that, over the past twenty years, has imposed tens of billions of dollars in fines on major companies in Europe, Asia, and South America for failing to comply with the legislation in force. Which legislation? That of U.S. law, which has a particular feature largely unknown to the majority. It is partly extraterritorial and therefore applies primarily outside U.S. territory. This allows the United States to wage a discreet and silent war against Germany, France, the United Kingdom, or Japan, all signatories of historic international treaties and members of the UN, NATO, the G7, or the WTO—countries that are allies, perhaps sometimes only in appearance.

The DOJ (Department of Justice) has gradually transformed into a tool of espionage and has begun to operate in order to facilitate unparalleled commercial conquests, in the service of American companies, capable of bringing down even the strongest competitors or appropriating phenomenal quantities of sensitive data without being hindered by the authorities of other countries.

An american justice system reflecting its power

Out of sight but never out of reach, the American justice system closely monitors its largest expatriates and has found an infallible way to ensure that everyone complies with its laws, whether American or not. During the second half of the twentieth century, the rise of U.S. power previously mentioned made it possible to expand the jurisdiction of its justice system and grant it laws of a special kind, with international scope. Over time, these laws multiplied to such an extent that companies around the world have become increasingly concerned.

The first of these laws was the Trading with the Enemy Act, which prohibited American companies from trading with enemy countries such as Germany at the time of the world wars. This law still exists today, and the blacklist of new “public enemies” includes Cuba, Syria, North Korea, Iran, Sudan, and China. Sixty years later, in 1977, the United States adopted a second major law with international reach: the Foreign Corrupt Practices Act. This law allows the American justice system to prosecute any company or individual that has attempted to bribe public officials abroad, in any country whatsoever, regardless of the nationality of the accused or the official involved. In 1998, this law was reinforced by international legislation on the fight against corruption and the promotion of competition. It then prohibited any person or company, American or otherwise, from attempting to bribe or exert pressure on a public official, in any country, in order to obtain any advantage and thus engage in behaviour deemed anti-competitive.

It is therefore sufficient for a bribe to be paid in U.S. dollars, or for an email to be exchanged via an American server, for the U.S. justice system to declare itself competent and for prosecutors to begin an investigation—even if the company involved is French and the acts took place on the other side of the Atlantic, for example in Nigeria.

Uncle sam and his omniscient justice around the world

It was in Nigeria, in 2010, that the company Technip became one of the first to suffer the consequences of this new legal framework. One of its subsidiaries, the oil company TSJK, in which it held a 25% stake, was accused of having paid nearly $180 million in bribes to Nigerian political officials in order to obtain oil concessions, thereby formalising what is referred to as a “corruption pact.” The United States, despite having no connection to the case and having suffered no real harm, then declared its courts competent, since the payments were made in U.S. dollars. To put an end to the proceedings, Technip was forced to acknowledge the facts and pay $338 million to the U.S. Department of Justice.

That same year, it was the turn of another French national flagship to pay its dues. The phone manufacturer Alcatel-Lucent was prosecuted for similar acts of corruption allegedly committed in Honduras, Taiwan, and Costa Rica. Although already convicted by French courts, the transactions had been conducted in dollars—once again sufficient grounds for U.S. jurisdiction. Alcatel was fined $137 million.

Following the Technip and Alcatel cases, DOJ prosecutions against major international companies, many of them French, multiplied, and the amount of fines continued to rise. Total was fined $398 million in 2013 for corruption in Iran. In 2014, ALSTOM, found guilty of corruption in Indonesia, was forced to pay $778 million. Germany’s Siemens followed with a fine of $800 million, Sweden’s Telia lost $691 million, and Israel’s pharmaceutical group Teva, convicted of corruption, money laundering, and embargo violations, paid $519 million. According to a 2019 parliamentary report entitled “Protecting Our Companies from Laws with Extraterritorial Reach,” the United States imposed nearly $7 billion in fines on foreign companies between 2008 and 2018 under the Foreign Corrupt Practices Act alone.

The consolidation of the american legal apparatus

In 1996, the United States adopted two new laws with international reach: the Helms-Burton Act, which imposed an even stricter embargo on Cuba, and the Amato-Kennedy Act, better known as the Iran and Libya Sanctions Act. This legislation prohibited transactions with Iran and Libya, which were excluded from the international banking system, as well as with any other country considered a “rogue state,” officially suspected of supporting terrorism, seeking to acquire nuclear weapons, or attempting to obstruct Middle Eastern “peace processes.” The scope of these two laws was quickly challenged by the European Union as early as late 1996, without real success.

According to the same parliamentary report, more than $15 billion in fines were imposed on foreign companies for violating the international sanctions established by the 1996 laws between 2008 and 2018. In December 2012, HSBC was fined $1.9 billion for complicity in money laundering linked to Mexican drug cartels. In 2014, BNP Paribas violated U.S. laws and was forced to pay $9 billion for facilitating nearly $190 billion in fund transfers with Iran, Sudan, and Cuba, all under embargo. In 2015, Germany’s Commerzbank paid a $1 billion fine for transactions deemed illegal between 2002 and 2012, with Iran being particularly closely monitored by U.S. authorities under five international sanction regimes applicable to both American and non-American entities.

Chinese banks Kunlun and Dandong, as well as Iraqi banks Efaf and Islamic Bank, know this well, having been excluded from the U.S. banking system. As for Dalian Global Unity Shipping and the Chinese telecommunications giant Huawei, their right to trade with American partners was revoked.

In the following years, additional laws were adopted to complete the American legal arsenal and strengthen its commercial protectionism. Taxation, financial competition, antitrust law, espionage—the U.S. legal system contains the highest number of extraterritorial laws, and the situation has continued to grow more complex since these laws were transformed into prime economic weapons. In 2018, with the Cloud Act, the United States granted itself the right to collect data from companies targeted by legal actions, wherever they may be located, in disregard of the rules established by international judicial cooperation. This measure allows U.S. authorities to request all data stored on American servers without judicial assistance requests, and thus without any oversight by the authorities of the company concerned. Today, more than 65% of the global cloud market is controlled by American companies.

Alstom, a major national scandal

As an example, one case perfectly illustrates what the United States has become capable of doing: the sale of ALSTOM’s energy division, elevated to the status of a major national scandal. Designer of the TGV, globally recognised for its expertise, and present at one time or another in the investment portfolios of most French investors, ALSTOM is one of the pillars of the French economy. Its energy division encompassed renewable energy, thermal and nuclear power, as well as a phenomenal quantity of strategic information and French patents. In 2014, France suddenly learned that this division had been sold for $12 billion after 18 months of negotiations with the American giant General Electric. Faced with national astonishment, then-CEO Patrick Kron struggled to justify the decision before the press, stating: “I repeat that I am proud to give a future to all of our activities, even if some of them are outside the group.” According to him, this particularly successful operation would allow ALSTOM to refocus on its transport activities—its “core business”—while the group was entangled in legal proceedings.

Indeed, 2014 also marked, as previously mentioned, ALSTOM’s conviction by the DOJ for corruption activities in Indonesia, resulting in a $778 million fine. According to the latest information made public, there appears to be a link between threats of personal prosecution against group executives and the decision to sell the energy division to the Americans. In the interest of transparency, it must be stated that to date, only testimonies—sometimes anonymous—and the book The American Trap by former ALSTOM executive Frédéric Pierucci, who was imprisoned for two years during the affair, support this claim.

Investigative journalists and several French legal experts therefore suspect the use of the “Deal of Justice,” a now well-established method that would represent the application of a modern American policy of economic blackmail, carried out entirely within the bounds of legality by the world’s leading power. In 2018, French MP Olivier Marleix publicly pointed to the role of the Ministry of the Economy at the time, represented by current President Emmanuel Macron, who allegedly authorised the transaction. The MP also called for the opening of an investigation that should have begun as early as 2014 and could shed new light on the reasons behind the sale of ALSTOM and on American methods used to secure their economic sovereignty.

Ever-increasing american interventions in france

More recently, aircraft manufacturer Airbus paid $3.6 billion to avoid criminal prosecution for corruption, including $530 million to the U.S. Treasury. The American investigation lasted six years, during which thousands of sensitive pieces of information were made accessible to a foreign power. Then, in 2020, French nuclear specialist Orano was also targeted by an investigation for a corruption pact allegedly concluded with American officials. As a result, a record fine of $24 billion was discussed. The group was forced to fully comply and provide all information required for the investigation—an extraordinary opportunity for U.S. intelligence services, which gained privileged access to strategic data.

The imperative to modernise the french justice system

With laws of such reach, no transaction is truly protected from U.S. judicial action. The United States is now accused of transforming ethical battles—such as the fight against corruption or the financing of terrorism—into opportunistic pretexts facilitating espionage or attacks against major foreign companies in the service of American firms. In France in particular, it is very easy for the DOJ to intervene due to the weak legislative protection afforded to French companies. The law of 26 July 1968, known as the “blocking statute,” governing the communication of commercial, strategic, or technological information, is the only legal tool available to French companies—and it is outdated in light of contemporary challenges.

Obsolete and easily circumvented, it must be urgently modernised by introducing mandatory declarations and case monitoring by French authorities. An extension of the General Data Protection Regulation (GDPR) should also be seriously considered, according to several legal experts, in order to ensure real protection for legal entities regarding the use and transfer of data to foreign powers. To define the boundaries of international law on extraterritoriality, referral to the International Court of Justice is also being considered.

A strategy embedded in american interventionism

Despite the sense of injustice that may arise from examining the sometimes unorthodox procedures of the DOJ, it is important to remember that these fines punish crimes that should never have occurred. What difference is there between U.S. interference in the Airbus affair and its military interventions in Vietnam or Serbia? Now informed of the reprehensible practices of the DOJ, it remains worth noting that this interventionism corresponds to a long-standing American pattern which, despite occasional isolationist episodes, reflects a desire to position itself as the world’s policeman—politically, militarily, and economically. The United States sometimes imposes its vision of justice and of what constitutes a “good regime,” including in matters of financing and economic exchanges between other countries. Despite the judicial argument invoked by Uncle Sam to justify interventions related to the U.S. dollar, it remains unjust that the sums collected in fines accrue to the United States rather than to the actual victims of the harm.

Toward international legislation?

“Unity is strength.” It is perhaps in keeping with this mantra, proclaimed by Vonck during the first independence movements of 1790, that France seeks to propose common legislation within the OECD and the European Union, with the aim of restoring national judicial sovereignty and protecting the activities and financial health of companies and their shareholders. But before the adoption and implementation of such measures, operations continue. It is difficult to imagine the United States as an international blackmailer, yet the country of stock markets, oil billionaires, and modern technologies does not burden itself with maintaining good relations with its neighbours when the stakes are so high. French companies had high expectations for the French President’s visit to the White House on 30 November. Having promised to raise these protectionist measures, the restriction of American market access for French companies, and the impact of judicial decisions on their productivity with Joe Biden, Emmanuel Macron was met with an attentive president whose response was nonetheless clear: “You should just do the same.”