Subject to s 403, a state has jurisdiction to prescribe law with respect to
(1) (a) conduct that, wholly or in substantial part, takes place within its territory;
(b) the status of persons, or interests in things, present within its territory;
(c) conduct outside its territory that has or is intended to have substantial effect within its territory;
(2) the activities, interests, status, or relations of its nationals outside as well as within its territory; and
(3) certain conduct outside its territory by persons not its nationals that is directed against the security of the state or against a limited class of other state interests.
a. Bases of jurisdiction to prescribe. International law recognizes links of territoriality, Subsection (1), and nationality, Subsection (2), as generally justifying the exercise of jurisdiction to prescribe. But these links are not sufficient in all cases: not all activities within a state's territory, nor all activities of a state's nationals, may reasonably be subjected to its legislation. See s 403. The links indicated in this section are universally recognized. Other links may also be sufficient to support jurisdiction in limited circumstances. See, e.g., Comment g to this section and s 414.
Subsection (3) recognizes a special basis of jurisdiction to prescribe which permits a state to safeguard a limited class of state interests, Comment f. For exceptional universal jurisdiction by all states, see s 404.
b. Overlap of bases of jurisdiction. Territoriality and nationality are discrete and independent bases of jurisdiction; the same conduct or activity may provide a basis for exercise of jurisdiction both by the territorial state and by the state of nationality of the actor. Territoriality is considered the normal, and nationality an exceptional, basis for the exercise of jurisdiction. In some situations the existence of both links may be important to make the exercise of jurisdiction reasonable. An exercise of jurisdiction on the basis of effect in the territory (Subsection (1)(c)), for example, may be more acceptable with respect to nationals of the state exercising jurisdiction than with respect to nonresident aliens. The exercise of jurisdiction both by the state of nationality and by the territorial state may result in overlap or conflict, actual or potential, and may call for evaluation of the competing interests by a standard of reasonableness, as set forth in s 403(3) and Comment e to that section.
c. The principle of territoriality. The territorial principle is by far the most common basis for the exercise of jurisdiction to prescribe, and it has generally been free from controversy. However, in some circumstances there may be controversy as to whether a person or property can properly be deemed present in the state's territory for purposes of jurisdiction, or whether the territorial principle can be satisfied without the physical presence of the person or thing being subjected to jurisdiction. Some states, including the United States, have asserted jurisdiction over goods or technology located abroad on the basis of their origin in the state exercising jurisdiction. See, e.g., s 431, Reporters' Note 3. States have sometimes exercised jurisdiction with respect to foreign companies outside their territory on the basis of the state's control over affiliates present in the territory. See, e.g., s 412, Comment e and Reporters' Note 7; s 414, Comment a and Reporters' Note 2. For the effects principle as an aspect of territoriality, see Comment d.
d. Effects principle. Jurisdiction with respect to activity outside the state, but having or intended to have substantial effect within the state's territory, is an aspect of jurisdiction based on territoriality, although it is sometimes viewed as a distinct category. The effects principle is not controversial with respect to acts such as shooting or even sending libelous publications across a boundary. It is generally accepted with respect to liability for injury in the state from products made outside the state and introduced into its stream of commerce. Controversy has arisen as a result of economic regulation by the United States and others, particularly through competition laws, on the basis of economic effect in their territory, when the conduct was lawful where carried out. This Restatement takes the position that a state may exercise jurisdiction based on effects in the state, when the effect or intended effect is substantial and the exercise of jurisdiction is reasonable under s 403.
Cases involving intended but unrealized effect are rare, but international law does not preclude jurisdiction in such instances, subject to the principle of reasonableness. When the intent to commit the proscribed act is clear and demonstrated by some activity, and the effect to be produced by the activity is substantial and foreseeable, the fact that a plan or conspiracy was thwarted does not deprive the target state of jurisdiction to make its law applicable. See cases cited in s 403, Reporters' Note 8.
e. Nationality, domicile, and residence. International law has increasingly recognized the right of a state to exercise jurisdiction on the basis of domicile or residence, rather than nationality, especially in regard to "private law" matters such as the law of wills and succession, divorce and family rights, and, in some cases, liability for damages for injury. See, for example, s 411 (jurisdiction to tax) and s 484 (divorce).
The nationality principle is applicable to juridical as well as to natural persons. For the purposes of this section, the nationality of a corporation or comparable juridical entity is that of the state under whose law it is organized. See s 213. Exercise by a state of jurisdiction over foreign corporations owned or controlled by its nationals, by extension of or by analogy to the nationality principle, is addressed in s 414.
f. The protective principle. Subsection (3) restates the protective principle of jurisdiction. International law recognizes the right of a state to punish a limited class of offenses committed outside its territory by persons who are not its nationals--offenses directed against the security of the state or other offenses threatening the integrity of governmental functions that are generally recognized as crimes by developed legal systems, e.g., espionage, counterfeiting of the state's seal or currency, falsification of official documents, as well as perjury before consular officials, and conspiracy to violate the immigration or customs laws. The protective principle may be seen as a special application of the effects principle, Comment d, but it has been treated as an independent basis of jurisdiction. The protective principle does not support application to foreign nationals of laws against political expression, such as libel of the state or of the chief of state.
The protective principle of jurisdiction is to be distinguished from "diplomatic protection," which refers to the right of a state to intercede on behalf of its nationals through diplomatic channels or to bring an international claim on their behalf before an international forum. See s 902.
g. The passive personality principle. The passive personality principle asserts that a state may apply law--particularly criminal law--to an act committed outside its territory by a person not its national where the victim of the act was its national. The principle has not been generally accepted for ordinary torts or crimes, but it is increasingly accepted as applied to terrorist and other organized attacks on a state's nationals by reason of their nationality, or to assassination of a state's diplomatic representatives or other officials. See Reporters' Note 3.
h. Regulation of activities aboard vessel, aircraft, or spacecraft. A state may apply its law to activities, persons, or things aboard a vessel, aircraft, or spacecraft registered in the state, as well as to foreign vessels or aircraft in its territorial waters or ports or airspace. See s 502. The application of law to activities on board a state's vessels, aircraft, or spacecraft has sometimes been supported as an extension of the territoriality principle but is better seen as an independent basis of jurisdiction. See s 502(2) and Comment d to that section. Serious offenses aboard a foreign vessel or aircraft "in the commerce of the United States" may be within the jurisdiction of the United States as a special application of the effects principle, Subsection (1)(c). See s 403, Reporters' Note 9.
i. Exercise of jurisdiction to prescribe by courts and regulatory agencies in the United States. As noted in the Introductory Note to this Part, jurisdiction to prescribe is exercised not only by legislatures, but also by regulatory agencies and by courts. To the extent that regulatory agencies in the United States exercise jurisdiction to prescribe, they do so pursuant to statute; this is usually true for courts as well. Since it is presumed that Congress does not intend to violate international law, s 114, statutes should, where fairly possible, be interpreted consistently with this section and s 403. However, when the intent of Congress to apply United States law in particular circumstances is clear, courts and agencies will apply that law notwithstanding any inconsistency with the rules of this section and s 403. See also s 403, Comment g.
j. United States jurisdiction to prescribe and powers of Congress. Apart from the constraints of international law, the jurisdiction of the United States to prescribe is governed by the Constitution, and is limited by the Bill of Rights and other constitutional provisions. See ss 721-22. The powers of Congress are also limited by principles of federalism, and some of the jurisdiction that the United States has under international law may be exercised under the Constitution only by the States. See generally s 1, Reporters' Note 5.
k. Exercise of jurisdiction by a State of the United States. Since international and other foreign relations law are the law of the United States, under the Supremacy Clause of the Constitution an exercise of jurisdiction by a State that contravenes the limitations of ss 402-403 is invalid. See s 111 and Comment d to that section. A contention that an exercise of jurisdiction by a State violates international or other foreign relations law raises a federal question. See s 111 and Comment e and Reporters' Notes 3 and 4 thereto.
International law normally is not concerned with how authority to exercise jurisdiction is allocated within a state's domestic constitutional order. Whether a State may exercise jurisdiction that the United States is entitled to exercise under international law is, therefore, generally a question only of United States law. Subject to constitutional limitations, a State may exercise jurisdiction on the basis of territoriality, including effects within the territory, and, in some respects at least, on the basis of citizenship, residence, or domicile in the State.