Dual Criminality | Extradition Appeal | El-Khouri v USA
On 12 February 2025 the Supreme Court delivered an important judgment in the extradition appeal case of El-Khouri v Government of the United States of America.
Hamraj Kang, senior partner of KANGS delves into this judgment and provides a commentary on what it means, and how it may potentially impact extradition requests currently before the courts.
Based in our offices in Mayfair, London we regularly defend clients facing extradition proceedings before Westminster Magistrates’ Court and the High Court.
The Supreme Court judgment primarily addresses the definition of an "extradition offence" and the double criminality rule under section 137 of the Extradition Act 2003. A key aspect of this judgment is the fact that the Supreme Court clarified that subsections 137(3) and 137(4) of the Extradition Act 2003 are mutually exclusive, meaning a careful determination must be made regarding where the alleged conduct occurred - either "in" or "outside" the territory of the requesting state.
Background
This case concerned the appeal of Mr. El-Khouri, a dual UK and Lebanese national living in the UK, against his extradition to the United States on charges related to securities fraud and insider trading.
The United States sought Mr. El-Khouri's extradition to prosecute him for 17 counts of securities fraud, wire fraud, fraud in connection with a tender offer and conspiracy to commit such offences.
He was accused of insider trading, allegedly using confidential information obtained through middlemen (including UK based investment bankers) to make substantial profits by trading contracts for difference (CFDs) linked to US companies. The investigation highlighted that the key activities occurred primarily in the UK, with Mr. El-Khouri allegedly profiting nearly $2 million from these trades.
FCA Criminal Investigation & Legal Proceedings
Between November 2016 and January 2018, the UK Financial Conduct Authority (FCA) investigated Mr. El-Khouri for insider dealing contrary to section 52 of the Criminal Justice Act 1993 (CJA 1993). The FCA found insufficient evidence to prosecute him and Mr El-Khouri was not interviewed as part of the UK investigation.
On 9 September 2019 a warrant for Mr El-Khouri’s arrest was issued by the US District Court for the Southern District of New York in respect of the 17 charges referred to above. Following his voluntary surrender to UK authorities, an extradition hearing took place at Westminster Magistrates’ Court in January 2021.
Mr. El-Khouri contested the extradition on the grounds that his alleged conduct did not constitute an extradition offence under section 137 because it failed to satisfy the double criminality requirement—that is, the actions must be criminal in both the requesting and requested jurisdictions.
It was determined by Westminster Magistrates’ Court that his conduct met the criteria for extradition under the 2003 Act. Mr El-Khouri appealed to the High Court against the decision of the District Judge. The appeal was dismissed by the High Court. The Supreme Court eventually granted permission to appeal the decision.
The Supreme Court Ruling
On appeal, the Supreme Court reviewed the case, focusing on critical legal principles regarding the double criminality rule and the interpretation of conduct in extradition cases. The appeal was successful and the Extradition Order against Mr El-Khouri was quashed.
Key Findings
Double Criminality: The Supreme Court emphasised that for extradition to be valid, the conduct in question must constitute an offence under both UK law and US law.
Mutual Exclusivity of Sections 137(3) and 137(4): The Supreme Court emphasised that subsections 137(3) and 137(4) of the Extradition Act 2003 are mutually exclusive, meaning that conduct cannot simultaneously fall under both provisions.
Subsection 137(3): This subsection applies when the alleged conduct occurs within the territory of the requesting state (in this case, the United States). It requires that:
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- The conduct constitutes an offence under UK law punishable by a term of imprisonment of 12 months or more.
- The conduct is also punishable under the law of the requesting state.
Subsection 137(4): This subsection applies when the alleged conduct occurs outside the territory of the requesting state. It stipulates that:
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- The conduct must correspond to an extra-territorial offence under UK law that would be punishable by a term of imprisonment of 12 months or more.
The Supreme Court noted that the two subsections are designed to address different scenarios regarding the location of the conduct:
Subsection 137(3) focuses on acts taking place within the requesting state, which allows for a more straightforward application of the double criminality rule. If the alleged conduct occurred "in" the United States, the question becomes whether it also constitutes an offence under UK law.
Subsection 137(4) is concerned with conduct occurring outside the requesting state, necessitating a different approach to assess whether the actions would constitute an offence under UK law if they had occurred there.
In this case, the court was satisfied that all the relevant conduct of Mr El-Khouri (with the exception of some limited hotel stays in the United States) occurred outside the United States. The conditions to be satisfied for the conduct to constitute an extradition offence were those in subsection 137(4) and not those in subsection 137(3) (contrary to what the US Government had originally contended).
Statutory Intent: The court interpreted the statutory language to mean that Parliament intended for the two subsections to operate independently. The explicit wording and conditions of each subsection suggest that they are not interchangeable. If the conduct is determined to fall under one subsection, it cannot simultaneously satisfy the criteria of the other. This distinction is important for ensuring clarity in extradition proceedings.
Practical Implications
Following this Supreme Court judgment, the following points emerge as being of the utmost importance:
- The mutual exclusivity of subsections 137(3) and 137(4) ensures that extradition requests are evaluated based on where the alleged conduct occurred. In applying section 137, it is therefore necessary to decide at the outset whether the conduct of the person whose extradition is sought occurred “in” or “outside” the territory of the requesting state.
- For this purpose, the court is only concerned with where the person’s acts specified in the extradition request were physically done, ignoring in the case of both provisions mere narrative background and focusing on the substance of the alleged criminality. The court is not concerned with where any consequences of those acts occurred or were felt. (As an aside, it is to be noted that the extradition request in the El-Khouri case did not make any allegation that the acts of Mr El-Khouri were intended to (or did) cause harm to the United States).
- It is not a requirement of subsection 137(3) or 137(4) that the relevant conduct occurred exclusively in, or outside, the territory of the requesting state.
- The test for double criminality in subsection 137(4) requires the court to consider whether an offence would be committed under UK law if the alleged conduct of the requested person occurring outside the territory of the requesting state had occurred outside the United Kingdom (and vice versa).
Based on the above, in the El-Khouri case the UK offence most obviously raised by the conduct alleged in the extradition request was insider dealing (contrary to section 52(1) of the CJA 1993). The Supreme Court concluded that in corresponding circumstances equivalent conduct would not constitute an offence as such conduct would fall outside the territorial scope of the offence as defined in section 62 of the CJA 1993.
As part of the judgment the Supreme Court discussed in some detail the territorial scope of the UK offences. It also concluded that neither could the conduct of Mr El-Khouri arguably fall within the territorial scope of section 329 of the Proceeds of Crime Act.
How Can We Help?
The Supreme Court's ruling in Mr. El-Khouri's extradition case highlights the complexities of international extradition law, particularly regarding the double criminality rule and the definition of conduct.
This decision reinforces the importance of ensuring that extradition requests are grounded in clear evidence that the alleged conduct constitutes an offence in both jurisdictions involved.
We are experienced in challenging extradition requests on behalf of our international client base. We have particular expertise in relation to extradition requests from the United States.
We act for clients in relation to extradition proceedings involving all Category 1 and Category 2 territories.
Our highly experienced Extradition Defence Team can assist you with the following:
- attend, advise and guide you throughout the initial stages of the extradition proceedings including the first appearance before Westminster Magistrates’ Court and applications for bail
- collate and examine all pertinent evidence whilst preparing detailed legal submissions in opposition to the proceedings,
- carefully select and instruct a leading barrister according to the discrete requirements of your case,
- provide on-going support, advice and robust representation throughout the proceedings.
Our Extradition Team is available via:
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through live conferencing or telephone.
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