The extradition of the Natwest Three and the ongoing attempts to extradite Ian Norris to face cartel charges in the US (now going to the House of Lords) recently heightened boardroom concern over the risks of extradition.

The Extradition Act 2003 governs the extradition of individuals present in the UK. It creates two different frameworks, depending on the territory making the request. Provisions relating to so-called Category 1 territories are designed primarily to give effect to the European Arrest Warrant Scheme, a simplified procedure applying, at present, to all EU Member States. Category 2 territories include countries with which the UK has a mutual extradition arrangement, such as the US.

The Extradition Act generally permits extradition where dual criminality is satisfied; that is, the offence is an offence under both the law of the UK and the requesting territory, and is punishable in both jurisdictions by a custodial sentence of at least one year. The increased use of criminal sanctions in relation to corporate activity in the UK and abroad (such as antitrust law, overseas corruption, misrepresentation and fraud) may increase the scope (although not necessarily the actual number) of extradition requests against executives.

Although the risks for executives are obviously difficult to manage, companies must remain vigilant and ensure that internal policies and procedures comply internationally and that good governance by such international standards exists. Once a criminal investigation commences, a proactive and, sometimes co-operative, strategy with the prosecutor is usually a prudent step, together with ensuring that all potentially relevant documents and emails are preserved.

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In addition to the complex regulatory regimes that directors must comply with, they also have to get to grips with the Companies Act 2006. Its far-reaching provisions cannot be ignored. The largest UK statute ever passed, the new Act replaces the Companies Act 1985 and represents the most significant change to company law in over 20 years. Directors must bear these changes in mind while ensuring compliance with the maze of legal regimes affecting their business – not least the newly codified directors duties which they owe to the company, which came into force on October 1, 2007.

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