Mysteries of extraterritoriality: RJR Nabisco, Inc. v European Community

This is yet another case where the US Supreme Court was called upon to determine the reach of a federal statute. It held, on the one hand, that ‘the Racketeer Influenced and Corrupt Organizations Act' (RICO) could be applied to conduct that occurs outside the United States. According to the Court, Congress intended certain provisions of RICO, such as §§1962 (b) and (c), to apply extraterritorially. This was significant, as it involved the rebuttal of the presumption against extraterritoriality in respect of those provisions. On the other hand, it also ruled that §1964(c), which provides for a private action, must prove an injury within the United States. It was, therefore, a bitter-sweet victory for the claimant, the European Community, who had brought a claim under §1964(c). As it alleged only foreign injuries, it failed to meet the test under this provision. The European Community and 26 of its Member States brought an action against RJR Nabisco and its related entities (‘Nabisco'), alleging that Nabisco participated in a global money laundering scheme in association with various organised crime groups, which violated RICO. This Act prohibits certain activities of organised crime groups, including the investing income derived from racketeering activities in an enterprise involved in interstate and foreign commerce; acquiring or maintaining an interest in an enterprise, and conducting affairs through a pattern of racketeering activity; and conspiring to violate any of these prohibitions.