Doing Business in High-Risk Jurisdictions: Litigation Risks in US Courts

As global instability intensifies, companies increasingly find themselves operating in or considering entry into high-risk jurisdictions. These areas are not limited to places in active war; they also include high-risk environments where instability—whether political, social, or economic—poses serious challenges for businesses. Entry by companies into such high-risk jurisdictions is driven by a combination of rising global conflict, which has nearly doubled in the last five years,[1] and the potential for long-term investment opportunities and high returns in volatile regions during periods of transformation. Conducting business in these jurisdictions may expose companies to a complex web of legal risks, including significant litigation risks in the United States. These risks are present even for the companies that are not based in the United States and operate primarily overseas.

What are the Litigation Risks in the United States?

Litigation risks in US courts stem from a variety of statutes that extend the reach of US laws beyond the US borders to conduct overseas. Moreover, US courts have broad powers to assert jurisdiction over foreign conduct if it is sufficiently connected to the United States. This is true even for defendants who are incorporated outside the United States and do not maintain offices here.  Recently the US courts have shown a willingness to entertain claims with even tenuous connections to the US, especially in cases involving human rights, terrorism, and corruption.

Litigation risks in the US include claims under: 

1. The Anti-Terrorism Act (ATA)

The ATA grants a private right of action to US nationals injured in acts of international terrorism to sue both the principal wrongdoers and those aiding and abetting or conspiring alongside them. Companies operating in high-risk jurisdictions may find themselves accused of having facilitated terrorism even if their involvement was indirect. 

Defendants in ATA cases face treble damages and attorneys’ fees—which can lead to tremendous exposure, since hundreds of victims often sue simultaneously. Even if ATA claims against a company are eventually dismissed, such proceedings are likely to subject a company to years of costly litigation and widespread reputational damage. Plaintiffs have been filing ATA lawsuits for decades, but their frequency and magnitude has exploded in recent years. 

Plaintiffs increasingly use the ATA to sue “mainstream” businesses, including financial institutions, social-media companies, pharmaceutical companies, telecommunications companies, and industrials. In these cases, plaintiffs typically allege that the companies have provided services or sold goods to other companies or individuals linked to terrorist organizations.

2. The Alien Tort Statute (ATS) 

The ATS provides US courts with original jurisdiction over actions by foreign nationals for violation of the law of nations or a treaty of the United States. Claims under the ATS typically allege violations of modern international human rights.[2] Recently the Ninth Circuit held that corporations—not just natural persons—can be held liable under the ATS, and that those corporations can be liable for “aiding and abetting” human rights abuses even when they did not commit the abuses directly.[3]

3. The Torture Victim Protection Act (TVPA)

The TVPA allows both US and foreign nationals to bring civil actions in US courts against anyone who, under actual or apparent authority or under color of law of any foreign nation, subjects any individual to torture or extrajudicial killing. Like those above, this statute also extends liability to those who aid and abet such conduct.  

4. Tort Liability 

While rare, companies operating in high-risk jurisdictions may also be sued in the United States under the laws of those jurisdictions. For example, in 2024, a federal jury found a major US corporation liable for human rights abuses in Colombia and awarded a bellwether group of plaintiffs $38.3 million in damages.[4] The court decided these claims under Colombian law. 

In another case, US residents sued an international bank for allegedly aiding and abetting the Sudanese genocide by providing banking services that violated US sanctions.[5] The claims are brought under Swiss law but in a US court because the alleged relevant money transfers passed through the US banking system. 

Key Takeaways

Litigation risks in US courts are an often-overlooked consequence of operating in high-risk jurisdictions. These risks are not limited to companies with a direct US presence; they can extend to any business with financial, contractual, or operational ties to the US. The ATA, the ATS, the TVPA, and tort liability are just a few ways in which businesses operating in high-risk jurisdictions can be exposed to liability in the United States. To navigate these challenges successfully, resilient compliance frameworks, ongoing due diligence of business relationships, and constant vigilance over the shifting legal landscape is essential.

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This blog post is part of an ongoing series exploring the legal, commercial, and strategic complexities of operating in conflict zones and high-risk jurisdictions. Contributors to this series include Freshfields attorneys Timothy Harkness, Kate Cooper, Joshua Kelly, Sylvia Noury, Alexandra van der Meulen, Carsten Wendler, Piusha Bose, Maria Slobodchikova, Paige von Meheren and Heather Cameron.  Stay tuned for upcoming posts, and please reach out with topics, questions, or experiences you’d like us to cover as part of this ongoing conversation. 

For a collection of related previous posts and webinars, please click this link.