The UK Refusal to Extradite El-Khouri to the US Conflicts with the Australian Decision on Duggan

The 12 February 2025 decision of five justices of the UK Supreme Court to refuse to extradite dual British and Lebanese citizen Joseph El-Khouri to the US stands in stark contrast to the decision of the NSW Local Court to greenlight the extradition of Australian citizen Dan Duggan on 24 May 2024, with the key element the decision to extradite either man turned upon being ‘dual criminality’.

The US made a request to the UK to extradite El-Khouri on 17 October 2019, in relation to a 9 September 2019 US Southern District of New York grand jury indictment, charging him with 17 criminal offences related to insider trading, and it alleges he was part of a conspiracy that involved confidential information about New York-listed companies being acted upon to make sizable profits.

Meanwhile, in NSW, Duggan has been held in maximum-security facilities for over 900 days at the behest of a US extradition request, without any local charges. Rather the father-of-six Australian children has four US charges laid against him that relate to unlawfully exporting US defence services to China, which are contained in a 2017 US District of Columbia grand jury indictment.

Both the Act covering extradition in this country, along with that in the UK, require dual criminality to progress an extradition request. Dual criminality means that the charges a foreign government seeks to extradite an individual over, must be reflected in the extraditing nation’s own law books.

The general gist of the UK Supreme Court decision is that dual criminality was not made out because all El-Khouri’s alleged criminal behaviour took place on British soil, and this outcome refutes US claims of extraterritoriality, while the NSW Local Court decision, which has since been seconded by attorney general Mark Dreyfus, was based on dual criminality made out in a very dodgy manner.

UK shows mettle on US extradition request

The US case against El-Khouri alleges that an analyst in the London office of a global bank was passing confidential information on to friends of El-Khouri, regarding merger negotiations involving at least six New York-listed companies and he then used this to made successful deals relating to contracts of difference (CFDs), which translated into more than $2 million in profits.

El-Khouri is said to have supplied the source of the information with gifts to thank them, which included a yacht in Greece, a chalet in France and a hotel room in New York. However, following the issuing of the indictment against El-Kouri, the UK Financial Conduct Authority investigated the allegations over 2016 to 2018, and concluded there wasn’t enough evidence to prosecute him.

The UK Extradition Act 2003 requires dual criminality for extradition. The US argued that El-Khouri’s offending did take place in the US because it impacted local markets there. The UK High Court initially agreed with the US, however the Supreme Court pointed out that all the offending occurred on UK soil, and the UK offence of insider trading doesn’t capture behaviour outside of the UK.

Insider trading is the illegal practice of buying or selling a company’s stocks based on non-public, confidential information. The UK judges further pointed out that CFDs aren’t even traded in the United States. And dual criminality was further not made out, as if El-Khouri’s behaviour involved UK stocks traded outside the UK, British law books would not capture it.

Australia bends over backwards on US extradition request

Duggan was a US Marine pilot over the 12 years to 2002, at which point he first moved to Australia and became naturalised in 2012. The District of Columbia charges him with having violated a US arms embargo via the export of defence services in the form of flight training, as well as conspiring to defraud and money laundering.

Duggan taught Chinese nationals to fly at the Test Flying Academy of South Africa in 2012. The US claims the trainees were Chinese military personnel, while Duggan is clear that this was not the case. But AG Dreyfus gave his final seal of approval on extradition right on Christmas last year.

But truth be told, at the time the indictment was sealed, Duggan had not broken the law in Australian regardless of the corresponding scenario.

During the indictment process in 2016, the Columbia grand jury requested a tolling period, or a pause to the five-year statute of limitations relating to the alleged crimes, so that it could request evidence from the Australian government, and it was provided with a 629 day pause.

Duggan’s legal team asserts that as there’s no explanation for the tolling period, the “reasonable inference” is the pause was to ensure dual criminality was met under Australian law, and dual criminality has been made out via section 83.3 of the Criminal Code Act 1995 (Cth), which holds the crime of providing military-style training involving a foreign principal, and it carries up to 20 years.

However, this crime was not enacted into local law until 28 June 2018, when the National Security Legislation Amendment (Espionage and Foreign Interference) Bill 2018 was passed into law, which was long after the sealing of the 2017 US secret indictment. And the tolling period commenced on 8 August 2016, while Australia provided its response on 14 March 2018, again after indictment sealing.

Curbing US claims of extraterritoriality

The recent UK finding regarding El-Khouri reversed the nonbinding 2005 UK House of Lords statement on Cando Armas, which found that an extradition defendant didn’t have to be physically in a territory to commit an offence if the criminal behaviour ultimately impacted in the other country. But the recent finding requires the presence of an individual in a territory for dual criminality to hold.

Leading UK extradition lawyer Edward Grange told the Financial Times in February that the decision would send shockwaves through the US Department of Justice, and he added that it would lead to the need to reconsider past UK cases where dual criminality would no longer have been made out.

The UK Supreme Court decision also serves to lessen US claims on extraterritoriality, which featured prominently over the yearslong US attempt to extradite WikiLeaks founder Julian Assange over his having published confidential US papers leaked to him, as all of Assange’s alleged criminal behaviour took place outside of the US.

Assange ultimately pleaded guilty to one count of conspiracy to violate the US Espionage Act of 1917, after he’d spent five years on remand in London’s notorious Belmarsh Prison, which allowed him to return to Australia to live freely in the community.

Duggan is currently appealing the NSW Local Court and Australian attorney general decision to greenlight his extradition to the United States, and the case is set to be heard in the second half of 2025.

And while it’s uncertain whether the ruling in the El-Kouri case might have any impact on the outcome of the Duggan appeal, what is certain is that there’s definitely “something rotten in the state of” Australia.