Compulsory Document Production Powers In Criminal Investigations – Do They Have Extraterritorial Effect?

The past year has produced some fascinating US case law concerning the extent to which US search warrants have extraterritorial effect. In July 2016, a US appellate court held that a US based service provider (Microsoft) served with a search warrant did not have to produce data stored on servers located in Ireland.1 Earlier this year, however, a US district court declined to apply the same reasoning when it ordered Google's US service provider to hand over foreign-stored account data pursuant to a search warrant.2 A number of US lawyers have argued that the question of whether search warrants have extraterritorial effect is now ripe for examination by the US Supreme Court.

What is the equivalent position under UK law?

This article considers whether compulsory document production powers available in UK criminal investigations have extraterritorial effect.3 All major criminal law enforcement bodies (including the SFO, FCA, NCA, HMRC, CMA and police) are vested with a statutory power to compel a person, upon receipt of a notice issued pursuant to the power, to produce documents relevant to the subject matter of an investigation.4 These notices compel the production of documents held inside the UK. But do the powers compel the production of documents outside the UK? In assessing extraterritoriality, does it matter whether the overseas documents sought under the notice exist in hard or soft copy?

These questions may be unimportant to a company which, on receiving a notice, seeks to cooperate with an investigation. Subject to foreign laws restricting disclosure (such as data protection or banking confidentiality laws), a cooperating company intent on securing the most lenient outcome in a criminal investigation may well be willing to comply with the notice, regardless of whether it is obliged to do so. However, for the company that wishes to comply only insofar as the relevant statute requires, resolving these questions is necessary.

Why wouldn't the powers have extraterritorial effect?

At first blush, it may seem implausible to contend that these powers do not operate extraterritorially. Organised crime crosses borders. So does the evidence. Many offences, such as those under the Fraud Act 2006, are triable as long as a single "relevant event" occurs in the UK.5 Moreover, Parliament has created offences which can be committed entirely extraterritorially – such as offences under the Bribery Act 20106 and the substantive money laundering offences under the Proceeds of Crime Act 2002 ("POCA 2002").7 If a UK law enforcement body is investigating a suspected offence the evidence of which is located overseas, it might seem counter-intuitive to suggest that it could not compel a person to produce that evidence.

Furthermore, if the notice is served on the UK office of a multinational company, the company, by virtue of its international presence, arguably "possesses" or "controls" the overseas documents sought under the notice. The company could easily bring those documents into the UK – indeed they are probably accessible via its computers in the UK. In this digital age, it might seem anachronistic to suggest that the company could not be compelled to produce this overseas evidence.

The presumption against extraterritoriality

The problem with these arguments is that they ignore the legal axiom that English criminal jurisdiction is territorial. Reflecting this is a principle of statutory construction that, in the absence of clear words to the contrary, conduct occurring overseas is incapable of being tried as an offence by an English court.8 This presumption against extraterritoriality also applies to court orders made in English criminal proceedings. In deference to international law and the comity of nations, such orders are ordinarily of no legal effect outside the jurisdiction – whether the order is made in personam (i.e. against a person) or in rem (i.e. against property).

For example, domestic restraint orders, which prevent a suspect from dealing with his assets at a pre-conviction stage, are in personam orders. Under Part 2 of POCA 2002, they typically apply to "any realisable property" held by the addressee of the order.9 The location of such property is immaterial; the order applies to property "wherever situated."10 This statutory language displaces the presumption against extraterritoriality, but only to the extent that it permits the court to exercise a worldwide in personam jurisdiction over the addressee of the notice in his dealings with his assets. Thus, if he breaches the order by dissipating his overseas assets, or by failing to comply with an obligation to repatriate his overseas assets, he is in contempt of court. But restraint orders are not extraterritorial in the sense that they restrain the overseas assets. The order is only capable of restraining overseas assets to the extent that it is recognised by the authorities in the foreign country where the assets are located. This is why Part 2 of POCA 2002 provides for a mechanism designed to secure its enforcement in other jurisdictions.11

Now consider an in rem order. In Perry and others v Serious Organised Crime Agency [2012] UKSC 35, the Supreme Court examined the jurisdictional scope of SOCA's (now the NCA's) powers under Part 5 of POCA 2002 to make property freezing orders ("PFOs"). At first instance, SOCA obtained...