To Infinity and Beyond: U.S. Dollar-Based Jurisdiction in the U.S. Sanctions Context

The power to print the world’s dominant currency gives the United States enormous leverage in pursuing its geopolitical objectives. This is particularly evident in the sanctions context, where the mere “use” of the U.S. financial system will pull parties into U.S. jurisdiction even if they are located outside the United States. This article highlights the recent extensions of jurisdictional assertion by the U.S. authorities. It will then focus on the mechanics of an international U.S. dollar transaction in order to explain how these transactions, as a matter of principle, involve conduct inside the United States. It will then explore whether there are viable alternatives to break the territorial nexus of U.S. dollar payments – the answer to this question being negative.