Us Laws Abroad: When Do They Apply?

US laws can apply in another country in several ways. US citizens are subject to US laws, including those on taxes, bribes, and corruption, regardless of where they are in the world. However, the US government can do little to help US citizens who get into legal trouble abroad, and they will be dealt with according to the legal system of the country in question. US companies doing business abroad must comply with local financial regulations and laws affecting local employees, which may differ from US laws. In addition, US criminal laws can be applied extraterritorially in certain circumstances, such as crimes committed on the high seas or offences against the law of nations.

US citizens abroad are liable for US taxes

US citizens living abroad are liable to pay US taxes on their worldwide income, regardless of where they live and work. This is because US taxes are based on citizenship rather than residence. The only way to avoid this requirement is to renounce US citizenship, though this can be a costly choice and is rarely wise.

US citizens living abroad who fail to file US taxes risk passport denial, penalties, and even criminal charges. The IRS charges penalties for both late filing and late payments. If the lack of filing is willful—meaning a citizen knowingly avoided their US tax requirements while living abroad—then more serious legal consequences may apply.

The failure to file a penalty can be up to 25% of the unpaid taxes for each month the tax return is late. If over 60 days late, there is a minimum penalty of either $450 or 100% of the tax shown as due on the return, whichever is less. The failure to pay a penalty is 0.5% of the unpaid taxes for each month the tax payment is late, up to 25%.

There are, however, tax benefits provided by the IRS to help US citizens living abroad reduce their taxes. These include:

• Foreign Earned Income Exclusion (FEIE): This benefit allows citizens to exclude a certain amount of foreign earned income from US taxation. For 2024, the FEIE is capped at $126,500 per person.
• Foreign Tax Credit: This is a dollar-for-dollar credit on any income taxes paid to a foreign government.
• Foreign Housing Deduction (or Exclusion): When renting a home in another country, the IRS lets citizens deduct certain expenses from their US taxes.

Most US citizens living abroad don't end up owing anything due to tax treaties and certain expat tax benefits. However, even if they don't owe anything, they are still required to file an annual tax return.

US citizens can be prosecuted for breaking US laws while on foreign soil

The Constitution does not directly address geographic limitations on federal criminal law. Several Constitutional clauses imply that federal power was intended to apply outside the country in certain circumstances, such as crimes committed on the high seas or offenses against the law of nations. Congress has wide latitude to enact laws that govern conduct occurring in other countries.

The US government can and has passed laws that include jurisdiction outside of the US. For example, the "PROTECT Act of 2003" makes it illegal for a US citizen to partake in illicit sexual conduct abroad with someone under the age of 18. The US Foreign Corrupt Practices Act (FCPA) also applies extraterritorially, making it illegal for US citizens to bribe foreign officials.

Additionally, the US maintains embargoes against several countries, which include travel restrictions. US citizens are also liable for taxes, regardless of where they live.

However, there are also limitations to the extraterritorial application of US law. For instance, the Fourth Amendment does not apply to the search and seizure of property owned by a non-resident foreign national located in a foreign country. Furthermore, the US Supreme Court has held that there is a presumption against the extraterritorial applicability of US law unless there is explicit language in the law indicating otherwise.

In conclusion, while US citizens can be prosecuted for breaking some US laws while on foreign soil, it depends on the specific law in question and the circumstances of the case. The extraterritorial application of US law is a complex issue that requires careful consideration by legal professionals.

US citizens can be prosecuted for breaking foreign laws that contradict US laws

The Constitution does not directly address geographic limitations on federal criminal law, and several Constitutional clauses imply that federal power was intended to apply outside the country in certain circumstances, such as crimes committed on the high seas or offences against the law of nations.

There are many federal criminal statutes that expressly apply outside US borders, including crimes in US territorial waters or vessels, implementing treaties and international agreements, and foreign commerce-related crimes with a US nexus.

Additionally, US citizens are subject to US laws while abroad, such as the Foreign Corrupt Practices Act, which prohibits bribing foreign officials, and the PROTECT Act of 2003, which makes it illegal for US citizens to partake in illicit sexual conduct abroad with minors. US citizens are also generally liable for taxes to the US government, regardless of where they live and work.

Furthermore, US laws governing international activities, such as antiboycott laws and export control regulations, must be adhered to by US citizens and organisations, even when they are outside the country. Failure to comply can result in financial and criminal penalties.

Therefore, US citizens should be aware of the complexities involved when criminal statutes cross international borders and seek legal counsel to understand their rights and obligations when facing potential extraterritorial charges.

US citizens can be extradited to the US for prosecution

US citizens can be extradited to the US from another country for prosecution. Extradition is the formal process by which a fugitive found in one country is surrendered to another country for trial, punishment, or rehabilitation. In the US, extradition is generally regulated by treaty, and the specifics of each treaty vary by country. Some treaties may include a political-offense exception, against extradition for purely political crimes.

The US has extradition treaties with over 116 countries, and while some of these treaties address the extradition of US citizens, others do not require the extradition of US citizens. However, the US may still turn over US citizens to another country even if it is not required by the extradition treaty. According to 18 U.S.C. § 3196:

> "If the applicable treaty or convention does not obligate the United States to extradite its citizens to a foreign country, the Secretary of State may, nevertheless, order the surrender to that country of a United States citizen whose extradition has been requested by that country if the other requirements of that treaty or convention are met."

The extradition process for US citizens is similar to that of non-citizens. When the Office of International Affairs (OIA) receives a foreign extradition request, the request is reviewed for sufficiency and forwarded to the appropriate district where the fugitive is located. An Assistant US Attorney is assigned to the case and obtains a warrant to arrest the fugitive, who is then brought before a magistrate or district judge. The individual will then have a hearing before a judge to evaluate the evidence of criminality. If the judge deems the evidence sufficient to sustain the charge under the extradition treaty, the judge will certify that the evidence is sufficient and provide a copy of the testimony to the Secretary of State. A warrant may then be issued for the commitment of the individual to jail, where they will remain until custody is surrendered to the requesting country.

It is important to note that extradition hearings are not appealable, but the individual may petition for a writ of habeas corpus as soon as the order for extradition is issued. The district court's decision on the writ of habeas corpus can be appealed.

US citizens can be prosecuted for bribing foreign officials

The FCPA is enforced by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), which apply criminal and civil penalties, respectively. Individuals found guilty of violating the FCPA may face prison time, fines, or both. For example, in 2012, Eli Lilly and Company, a US pharmaceutical firm, settled an FCPA case involving improper payments made through its subsidiaries to foreign officials. The company agreed to pay a total of $29,398,734 in disgorgement, prejudgment interest, and penalties.

In addition to the FCPA, the Foreign Extortion Prevention Act (FEPA) was passed by Congress in 2023 as part of the National Defense Authorization Act (NDAA). FEPA makes it a crime for foreign officials to demand or accept bribes from Americans or American companies, anywhere in the world. This law empowers the US government to criminally prosecute foreign officials who engage in corrupt practices, even if the bribery occurs outside the United States.

Therefore, US citizens should be aware that bribing foreign officials is prohibited by US law and can result in legal consequences, regardless of whether the act occurs within or outside US territory.

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