The impact of the U.S. Supreme Court’s decision this year limiting the extraterritorial application of U.S. securities laws in Morrison v. National Australian Bank has extended to another area of the law. The 2nd U.S. Circuit Court of Appeals has ruled that the reach of the Racketeer Influenced and Corrupt Organization Act was limited in a case alleging several foreign entities engaged in a widespread racketeering and money laundering scheme to try and seize control over most of the Russian oil industry.

The court ruled in Norex Petroleum Limited v. Access Industries, 97-4553-cv, that the “slim contacts” with the United States alleged by Norex Petroleum Limited “are insufficient to support extraterritorial application of the RICO statute.” Applying Morrison, 130 S.Ct. 2869 (2010), Judges Rosemary Pooler, Robert Katzmann and, sitting by designation, Judge Loretta A. Preska of the U.S. District Court for the Southern District of New York, said in an unsigned opinion, “We hold that this issue is properly considered a question of whether the complaint states a claim for which a United States federal court can provide relief, not as a question of whether the court possesses subject matter jurisdiction to hear the claim.” Absent an express statement by Congress that a statute has extraterritorial reach, the court said, that statute only applies domestically, and RICO is silent on the question of extraterritorial application.

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