Cross-Border and Jurisdictional Issues
Domain overview
This domain tests how laws travel across borders: licensing perimeters, extraterritorial reach, sanctions, data transfers, tax nexus, and enforcement cooperation. The exam expects you to identify the jurisdiction whose rules apply and the mechanism by which they apply, not merely list countries.
Core concepts
- Jurisdictional hooks: territorial activity, targeting or marketing to residents, effects doctrine, nationality, and establishment. A licence in one country does not passport globally.
- Extraterritorial regimes: EU MiCA and GDPR Article 3, US federal securities and sanctions rules, and local VASP registration can reach offshore providers serving local customers.
- Sanctions: screen customers, wallets, and jurisdictions; sanctions are often strict-liability and apply regardless of intent.
- Data and disputes: cross-border transfers need a lawful mechanism, such as adequacy or SCCs; contracts should specify governing law, forum, arbitration, and judgment recognition.
Worked example
A Singapore-based exchange markets to EU and US retail customers. The exam answer should map EU MiCA authorisation and marketing rules, US federal and state licensing and securities analysis, sanctions screening, and GDPR or CCPA data duties. Being offshore is not a defence if the platform targets those customers.
Traps that cost marks
Assuming one global licence. Ignoring customer targeting and local marketing. Treating sanctions screening as optional. Transferring personal data without a mechanism. Choosing a forum without checking enforceability.