Ms. Meng Wanzhou, the CFO of Huawei, was temporarily detained by the Canadian authorities on behalf of the United States government while transitioning in Canada. The United States is seeking the extradition of Ms. Meng and faces charges from the Federal Court for the Eastern District of New York that she is violating U.S. export controls and financial fraud. It is clear to all that the United States is suppressing China's high-tech enterprises, the "the Belt and Road" initiative proposed by China, and China's backbone in the new round of economic globalization. However, based on this repression, it is commonly believed that countries under the rule of law are carrying out it in the guise of law - the United States led "regulation" is ubiquitous through its special "long arm jurisdiction". Many enterprises are facing the issue of ex post litigation relief, and therefore are in a very passive position. In the new situation where the United States is implementing its trade protectionism on a large scale, compliance risk management for all Chinese enterprises will eventually move towards legal risk management. In order for Chinese enterprises to become bigger and stronger, it is important to systematically learn and understand the long arm governing laws of the United States in addition to being filled with righteous indignation. The Chinese government should also reasonably control compliance risks and accelerate its participation and leadership in the construction of the rule system in the new era of globalization.

 

1、 The Origin of "Long Arm Jurisdiction"

 

Before discussing the response methods, it is necessary to clarify what the concept of "long arm jurisdiction" in the United States we are discussing is.

 

"Long arm jurisdiction" originally appeared in the civil procedure law of the United States, specifically referring to the fact that when the defendant's domicile is not in the state where the court is located, but there is a certain minimum connection with the state, and the generation of the proposed claim is related to this connection, for this right, the state has personal jurisdiction over the defendant (although his domicile is not in the state), and can issue a subpoena against the defendant outside the state.

 

The basis of long arm jurisdiction is the so-called "effect principle", which advocates that as long as an act committed abroad produces a so-called "effect" within the domestic territory, regardless of whether the perpetrator has the nationality or domicile of the country, and regardless of whether the act complies with local law, as long as the nature of the effect or influence makes it not entirely unreasonable for the United States to exercise jurisdiction, United States courts can exercise jurisdiction.

 

2、 The Continuous Development of "Long Arm Jurisdiction"

 

With the establishment of the concept of long arm jurisdiction in the United States, the content has become increasingly rich through continuous development and change. Backed by strong economic strength, the United States has shown a trend of continuous expansion in its long arm jurisdiction, applying it to different fields such as infringement, contracts, business operations, family relations, and the Internet.

 

At this stage, the "long arm jurisdiction" of the United States in a broad sense is essentially a kind of "extraterritorial jurisdiction", including the extraterritorial jurisdiction of United States courts, the extraterritorial effect of United States domestic legislation, and the extraterritorial effect of United States administrative measures. Specifically, the United States uses the dominant position of US dollar settlement in international settlement to impose jurisdiction, economic sanctions, or legal obligations on enterprises, institutions, and individuals from other countries.

 

Typical measures for "long arm jurisdiction" include:

 

1. The field of justice.

 

Litigation jurisdiction: exercising personal jurisdiction over non residents based on "minimum contact", etc.

 

Property preservation: This includes both the property of the person subjected to enforcement in the United States and the property of the person subjected to enforcement in other countries around the world.

 

Service: It includes service within and outside the United States. The documents to be served mainly include judicial documents such as subpoenas, attachment orders, and judgments. In addition to service by judicial authorities, service also includes service by administrative authorities.

 

Investigation and evidence collection: For institutions and individuals outside the United States, the main focus is on information disclosure, including the disclosure of the requested institution's own information, as well as the disclosure of other third-party information stored by the requested institution. In addition to domestic institutions in the United States, there are also overseas accredited institutions, and civil society organizations affiliated to government agencies.

 

Enforcement: This includes the enforcement of property and personal rights, mostly in civil cases, but also in criminal cases. Some other countries will cooperate with the United States for various reasons.

 

2. Sanctions Act.

 

The sanctions bill of the United States mainly includes: congressional bills; The executive authority represented by the President directly issues executive orders, etc. The main law enforcement departments involved include the Ministry of Commerce, the State Council, the Office of Foreign Assets Control (OFAC) of the Ministry of Finance, etc. The sanctions measures include "blockade sanctions" and "industry sanctions" against the sanctions targets on the sanctions blacklist; Particular attention should be paid to the "third party sanctions" imposed by the United States on foreign financial institutions, which prohibit foreign financial institutions from conducting financial transactions or providing financial services to sanctioned persons outside the United States, and impose sanctions on foreign financial institutions that violate the prohibitions.

 

3. Export Controls.

 

The export control laws of the United States mainly include the "Export Management Act" passed by Congress, the "Export Management Regulations" formulated by the United States Department of Commerce, and the "Economic Sanctions Regulations" formulated by the United States Department of Finance. The core of this system is that no enterprise is allowed to export controlled equipment (such as military equipment) produced by the United States to countries prohibited by the United States (refer to the EAR list, such as Iran, North Korea, etc.). Organizations that violate the export control law will be punished by one or more of the following measures: deprivation of export rights, prohibition of engaging in related industries, imposition of fines for each violation, and even criminal accountability of corporate entities.

 

4. Anti corruption.

 

The introduction of the US Foreign Corrupt Practices Act (FCPA) originated from a 1977 investigation by the US Securities Regulatory Commission, which found that more than 400 US listed companies admitted to engaging in "improper payments" overseas. As a result, the FCPA was quickly passed by both houses of Congress against the backdrop of public hatred of the corruption scandal, and was signed into force by President Carter on December 7th of that year. The scope of its jurisdiction includes companies listed on any stock exchange or over-the-counter trading institution in the United States, any U.S. national, citizen, or resident, any entity subject to U.S. federal or state law, and any company with its principal place of business in the United States, resulting in a large number of foreign enterprises being subject to regulatory oversight. The FCPA defines bribery parties very broadly. For example, employees of state-owned enterprises with a majority of foreign government holdings will be considered "foreign government officials", greatly extending the boundaries of United States jurisdiction.

 

3、 Countermeasures for Chinese enterprises

 

The principle of long arm jurisdiction is a manifestation of the economic strength of the United States and an inevitable outcome of the development of production technology. With the increasingly complex and volatile flow of social resources, mechanical laws are no longer fully competent, and it is necessary to develop a flexible and variable rule to adapt to the complex social pattern. The strong economic backing of the United States provides a solid backing for the implementation and expansion of the long arm jurisdiction of the United States. The emergence of long arm jurisdiction has more effectively protected the interests of state residents, especially in tort cases.

 

Long arm jurisdiction is a manifestation of the expansion of American jurisdiction, which has been strongly criticized by other countries because it threatens their jurisdiction. With the enhancement of the common interests of mankind, the coordinated development of international law and the priority of international interests have become a prominent trend. In the context of international economic integration, the use of long arm jurisdiction means the expansion of "extraterritorial jurisdiction", which may lead to the proliferation of jurisdictional conflicts in international civil and commercial cases. This not only undermines national judicial sovereignty, but also is not conducive to protecting the legitimate rights and interests of both parties, even triggering international disputes. Moreover, such extraterritorial jurisdiction is rarely recognized by other countries.

 

1. Countermeasures for corporate compliance.

 

First, accelerate the establishment of an integrated domestic and foreign compliance management system in accordance with or with reference to the "Guidelines for Compliance Risk Management of Central Enterprises". Branches in the United States should, in particular, establish a compliance system that complies with local laws to continuously identify high-risk businesses and customers; The second is to analyze the legitimacy of long arm jurisdiction and resolutely resist the exercise of long arm jurisdiction beyond one's authority. The exercise of long arm jurisdiction by United States courts requires two requirements: first, there is a clear legislative basis for jurisdiction; second, the application of long arm jurisdiction is restricted by the "due process principle" and "forum non conveniens principle"; and, based on the principle of international comity, generally, courts will strictly restrict the application of long arm jurisdiction. The exercise of long arm jurisdiction beyond one's authority should be resolutely resisted. Fully applying the restrictions of long arm jurisdiction can effectively counter the expansion of foreign courts' application of long arm jurisdiction in specific cases, and timely protect the legitimate rights and interests of Chinese enterprises. The third is to strengthen the defense against long arm jurisdiction. According to Chinese law, it is pointed out that there is a conflict of laws between the two countries, and it is necessary to defend the requirements of the United States courts or administrative agencies.

 

2. Counter long arm jurisdiction through legislative means.

 

As jurisdiction is a prerequisite for a country's courts to exercise jurisdiction in international civil litigation, national legislation will strive for more jurisdiction for their courts in legislation, or expand the jurisdiction of their courts, on the premise of complying with general international rules.

 

China's foreign-related civil litigation system generally adopts the traditional principle of combining general personal jurisdiction and territorial jurisdiction, including agreement jurisdiction and response jurisdiction. Most of these provisions are in line with international norms regarding the jurisdiction of civil cases. However, China's jurisdiction system as a whole lacks flexible flexibility and complementary mechanisms, let alone a clear long-term jurisdiction system, making it difficult to take corresponding countermeasures against foreign long-term jurisdiction from the institutional level. Therefore, at the institutional level, we should strengthen the research on the long arm jurisdiction of Europe and the United States and related systems and precedents, especially actively strengthen the research on the transnational civil litigation system and related precedents of intellectual property rights in developed countries in Europe and the United States. Based on the actual situation of intellectual property protection in China, we should reasonably draw on the successful experience of judicial protection of intellectual property rights in developed countries, and actively explore the establishment of overseas protection mechanisms for intellectual property rights, Timely remedy the shortcomings of China's relevant legal systems, promote the formation of an institutional environment and policy and legal system that meet the requirements of innovation driven development, provide intellectual property protection for technological innovation and enterprises' "going global" through diverse channels, and promote the implementation of innovation driven development strategies.

 

Specifically, the first is to legislate to block requests from U.S. judicial and administrative agencies for assistance in investigation and evidence collection, property preservation, and enforcement from Chinese funded institutions and individuals, providing a legislative basis for Chinese funded institutions and individuals to defend the long arm jurisdiction of the United States. The second is to add extraterritorial jurisdiction provisions for Chinese courts in legislation to prevent the absence of jurisdiction in Chinese courts, providing convenience for American courts to exercise long-arm jurisdiction. The third is to encourage people's courts to boldly innovate under the current legal system, comprehensively consider various factors such as national sovereignty, international situation, and intellectual property policies, and actively take countermeasures in specific cases using the existing legal system to better safeguard China's national interests and create space for China's innovative development. The fourth is to establish a comprehensive system and mechanism for the application of extraterritorial laws in China. As the pace of RMB internationalization is accelerating, this work is becoming increasingly urgent.

 

(This article is translated by software translator for reference only.)