The Extraterritorial Precedent
A foreign head of state’s extradition establishes a new legal frontier for executive liability.
The Context
On 3 January 2026, Nicolás Maduro Moros, the sitting President of Venezuela, was arrested by U.S. special forces on Venezuelan soil and extradited to the United States. The superseding indictment charges him with orchestrating cocaine trafficking operations across three decades of public service. As a National Assembly member, he moved loads under state protection. As Foreign Minister, he issued diplomatic passports to traffickers. As President, he directed thousands of tons of shipments via the presidential hangar at Maiquetia Airport. Recorded DEA meetings detail his family agreeing to dispatch multi-hundred-kilogram shipments. The U.S. Department of Justice asserts he used state institutions as criminal infrastructure, placing him “at the forefront of that corruption.”
The Risk
This is not about Venezuela. It is about jurisdiction. The U.S. has demonstrated it will pursue extraterritorial criminal liability against individuals in the highest offices of foreign states for actions taken under colour of law. For a New Zealand director, this precedent is a siren. The principle of personal liability for active decision-making, not passive oversight, is mirrored in our statute book. Under the Companies Act 1993, a director’s duty to act in good faith and in the best interests of the company is non-delegable. A failure to prevent, or worse, tacitly enable, illegal activity in an overseas subsidiary may constitute a breach of this duty. The Health and Safety at Work Act 2015 imposes a positive due diligence duty on officers regarding work health and safety, which can extend to the psychosocial safety of employees in foreign operations. If a foreign jurisdiction like the U.S. establishes criminal liability for an executive’s overseas conduct, it may indicate a concurrent failure of duty under New Zealand law, exposing the director to penalties, disqualification, and personal financial ruin.
The Control
Governance must become geopolitical. Your board’s oversight framework must explicitly map and monitor extraterritorial legal exposure. This requires mandating independent, forensic-level audits of all international joint ventures, agents, and supply chain partners. Legal advice must now specifically address the criminal statutes of jurisdictions where you operate, not just local compliance. Treat any use of company assets—diplomatic channels, transport logistics, official communications—for potentially illicit purposes as a catastrophic governance failure. Institute a direct reporting line from the head of international operations to the board’s risk committee, bypassing management layers that may obscure material facts.
The Challenge
These are the critical questions you should be raising at the board table:
| Does our current due diligence process for international partners include a specific assessment against U.S. criminal statutes (e.g., the Foreign Corrupt Practices Act, narcotics trafficking laws), and who personally certifies that this assessment is complete? | |
| What is the audit trail that proves, beyond board minutes, that we have actively challenged management on the legality of all activities conducted under our brand in jurisdictions with weak rule of law? | |
| If a foreign prosecutor alleged our subsidiary’s logistics were used for illicit purposes, what evidence do we hold—right now—that would demonstrate our personal diligence under section 138 of the Companies Act 1993? |