Extra-territorial investigations

In February 2021, the Supreme Court held that s.2(3) of the Criminal Justice Act 1987 (CJA 1987) does not have extra-territorial effect (R (on the application of KBR Inc) v Director of the SFO [2021] UKSC 2).  As a result, the SFO cannot use its s.2 powers to require a non-UK company to produce documents held outside the UK.  Instead, the SFO will need to rely on the mutual legal assistance (MLA) framework to request the relevant material from the authorities in the applicable overseas jurisdiction.

Whilst the Supreme Court judgment is specific to s.2(3) CJA 1987, it may also impact the reach of similar powers exercised by other UK investigating authorities, including HMRC, the FCA and the CMA.  The decision emphasises the need for corporates to exercise caution when conducting internal investigations to ensure that documents are not brought into the UK unnecessarily (or indeed inadvertently).  Doing so may limit the material that foreign companies are required to produce to investigating authorities (or at least delay the provision of such material through the more time-consuming MLA process), which material may subsequently become disclosable in parallel civil proceedings arising from similar events to those under investigation.

See our article on the practical implications of the KBR judgment here.

See our parallel proceedings microsite for further insight into the issues that arise when an incident leads to multiple legal proceedings and/or enforcement actions.