

                  UNITED STATES COURT OF APPEALS                            UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT                                FOR THE FIRST CIRCUIT

                                             

No. 96-2001

                    UNITED STATES OF AMERICA,
                            Appellant,

                                v.

            NIPPON PAPER INDUSTRIES CO., LTD., ET AL.,
                      Defendants, Appellees.

                                             

           APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

           [Hon. Joseph L. Tauro, U.S. District Judge]                                                               

                                             

                              Before

                      Selya, Circuit Judge,                                                    

                  Coffin, Senior Circuit Judge,                                                        

                    and Lynch, Circuit Judge.                                                      

                                             

     Mark  S. Popofsky, Attorney,  Antitrust Division, U.S. Dep't                                
of  Justice,  with  whom  Anne K.  Bingaman,  Assistant  Attorney                                                     
General, Joel  I. Klein, Deputy Assistant  Attorney General, John                                                                           
J.  Powers, III, Robert B.  Nicholson, David A.  Blotner, Lisa M.                                                                           
Phelan, and Reginald K.  Tom, Attorneys, Antitrust Division, were                                      
on brief, for the United States.
     Richard G.  Parker, with whom  Geoffrey D.  Oliver, Alan  M.                                                                           
Cohen,  O'Melveny &amp; Myers LLP, William H. Kettlewell, and Dwyer &amp;                                                                           
Collora were on brief, for Nippon Paper Industries Co., Ltd.                 
     John  G.  Roberts,  Jr.,  David G.  Leitch,  H.  Christopher                                                                           
Bartolomucci, and Hogan &amp; Hartson L.L.P. on  brief for Government                                                  
of Japan, amicus curiae.

                                             

                          March 17, 1997
                                             

          SELYA, Circuit  Judge.  This case  raises an important,                    SELYA, Circuit  Judge.                                         

hitherto unanswered question.  In  it, the United States attempts

to convict a foreign corporation under the Sherman Act, a federal

antitrust  statute, alleging  that price-fixing  activities which

took place entirely in Japan  are prosecutable because they  were

intended  to have, and did  in fact have,  substantial effects in

this  country.   The  district court,  declaring that  a criminal

antitrust   prosecution   could   not    be   based   on   wholly

extraterritorial conduct,  dismissed the indictment.   See United                                                                           

States  v. Nippon  Paper Indus.  Co., 944  F. Supp. 55  (D. Mass.                                              

1996).  We reverse.

I.  JUST THE FAX          I.  JUST THE FAX

          Since the district court granted the defendant's motion

to dismiss for failure  to state a prosecutable offense,  we draw

our account of the  pertinent events from the well-pleaded  facts

in  the indictment itself.   See United States  v. National Dairy                                                                           

Prods. Corp., 372 U.S. 29, 33 n.2 (1963).                      

          In 1995, a  federal grand jury handed  up an indictment

naming  as a defendant Nippon Paper Industries Co., Ltd. (NPI), a

Japanese  manufacturer  of  facsimile  paper.1    The  indictment

alleges that in 1990 NPI and certain unnamed  coconspirators held

a number of meetings in Japan which culminated in an agreement to
                                                  

     1The  grand jury  also named another  Japanese manufacturer,
Jujo  Paper  Co.,  Ltd. (Jujo),  as  a  codefendant.   Two  years
earlier,  however,  NPI  had  been  formed  and,  the  government
alleges, had assumed Jujo's assets and  liabilities.  Because the
issue of successor liability is not before us, we treat NPI as if
it were the sole defendant  and as if it, rather than  Jujo, were
alleged to have committed the acts described in the indictment.

                                2

fix the price of thermal fax paper throughout North America.  NPI

and other manufacturers who were  privy to the scheme purportedly

accomplished their  objective by selling  the paper  in Japan  to

unaffiliated trading  houses on condition that  the latter charge

specified  (inflated) prices for the paper when they resold it in

North  America.   The trading  houses then  shipped and  sold the

paper to their subsidiaries in the United States who in turn sold

it to  American  consumers at  swollen  prices.   The  indictment

further relates that, in  1990 alone, NPI sold thermal  fax paper

worth  approximately  $6,100,000  for  eventual import  into  the

United States; and  that in order  to ensure  the success of  the

venture, NPI  monitored the paper  trail and  confirmed that  the

prices  charged to  end users  were those  that it  had arranged.

These  activities,  the  indictment  posits,  had  a  substantial

adverse effect  on commerce in the United States and unreasonably

restrained  trade in violation of Section One of the Sherman Act,

15 U.S.C.   1 (1994).

          NPI  moved  to  dismiss  because, inter  alia,  if  the                                                                 

conduct attributed to NPI occurred at all, it took place entirely

in Japan, and,  thus, the  indictment failed to  limn an  offense

under Section One  of the  Sherman Act.   The government  opposed

this initiative on two  grounds.  First, it claimed that  the law

deserved a less grudging reading and that, properly read, Section

One  of the  Sherman  Act applied  criminally  to wholly  foreign

conduct as long as that conduct produced substantial and intended

effects  within the United States.   Second, it  claimed that the

                                3

indictment,  too,  deserved a  less  grudging  reading and  that,

properly  read,  the  bill   alleged  a  vertical  conspiracy  in

restraint  of   trade  that   involved  overt  acts   by  certain

coconspirators within the United States.  Accepting a restrictive

reading of  both  the statute  and the  indictment, the  district

court dismissed the case.  See United States v. NPI, 944 F. Supp.                                                             

at 64-66.  This appeal followed.

II.  ANALYSIS          II.  ANALYSIS

          We  begin     and  end     with  the  overriding  legal

question.2     Because   this  question   is  one   of  statutory

construction, we review de  novo the holding that Section  One of

the Sherman Act does not cover wholly extraterritorial conduct in

the criminal context.  See United States v. Gifford, 17 F.3d 462,                                                             

471-72 (1st Cir. 1994).

          Our analysis  proceeds in  moieties.  We  first present

the historical  context in which this  important question arises.

We move next to the specifics of the case.

                  A.  An Historical Perspective.                            A.  An Historical Perspective.                                                         

          Our  law   has  long  presumed   that  "legislation  of

Congress, unless  a contrary  intent appears,  is meant  to apply

only within  the territorial jurisdiction of  the United States."

EEOC  v. Arabian  American  Oil Co.,  499  U.S. 244,  248  (1991)                                             
                                                  

     2Inasmuch as we hold  that activities committed abroad which
have a substantial and  intended effect within the United  States
may form the basis  for a criminal prosecution under  Section One
of  the  Sherman  Act,  we  need  not  address  the  government's
alternative  argument that  the indictment  in this  case alleges
that  some  overt acts  in  furtherance  of  the conspiracy  were
perpetrated in the United States.

                                4

(citation  omitted).   In  this  context, the  Supreme  Court has

charged inquiring  courts with  determining whether  Congress has

clearly expressed an affirmative  desire to apply particular laws

to conduct that occurs  beyond the borders of the  United States.

See id.                 

          The earliest  Supreme  Court  case  which  undertook  a

comparable  task in  respect to  Section One  of the  Sherman Act

determined  that the presumption  against extraterritoriality had

not been  overcome.  In American Banana  Co. v. United Fruit Co.,                                                                          

213  U.S. 347 (1909), the Court considered the application of the

Sherman Act in  a civil action concerning  conduct which occurred

entirely  in Central America and which  had no discernible effect

on  imports to  the United  States.   Starting with  what Justice

Holmes  termed "the  general and  almost universal  rule" holding

"that the  character of  an act  as  lawful or  unlawful must  be

determined wholly  by the  law of  the country  where the  act is

done," id. at 356,  and the ancillary proposition that,  in cases                    

of  doubt, a  statute should  be "confined  in its  operation and

effect to  the territorial  limits  over which  the lawmaker  has

general  and legitimate power," id.  at 357, the  Court held that                                             

the defendant's actions abroad were not proscribed by the Sherman

Act.

          Our  jurisprudence is  precedent-based, but  it is  not

static.  By 1945, a different court saw a very similar problem in

a  somewhat softer light.   In United  States v.  Aluminum Co. of                                                                           

Am., 148 F.2d  416 (2d  Cir. 1945) (Alcoa),  the Second  Circuit,                                                   

                                5

sitting  as  a  court  of  last  resort,  see  15  U.S.C.      29                                                       

(authorizing designation of a court of appeals as a court of last

resort  for  certain  antitrust  cases), mulled  a  civil  action

brought under Section One against a Canadian corporation for acts

committed  entirely abroad  which,  the government  averred,  had

produced  substantial anticompetitive  effects within  the United

States.    The Alcoa  court read  American Banana  narrowly; that                                                           

case, Judge Learned Hand wrote, stood only for the principle that

"[w]e should not impute to Congress an intent to punish  all whom

its  courts  can catch,  for  conduct which  has  no consequences

within  the  United  States."   Id.  at  443.    But a  sovereign                                             

ordinarily can  impose liability for conduct  outside its borders

that  produces consequences within them, and while considerations

of  comity argue against  applying Section  One to  situations in

which no  effect within the  United States has  been shown    the

American  Banana scenario    the  statute, properly  interpreted,                          

does  proscribe  extraterritorial acts  which  were  "intended to

affect imports  [to the United States] and did affect them."  Id.                                                                           

at  444.   On  the facts  of  Alcoa, therefore,  the  presumption                                             

against  extraterritoriality had  been overcome, and  the Sherman

Act had been violated.  See id. at 444-45.                                         

          Any perceived tension between American Banana and Alcoa                                                                           

was eased by the  Supreme Court's most recent exploration  of the

Sherman Act's  extraterritorial reach.  In Hartford Fire Ins. Co.                                                                           

v. California, 509 U.S. 764 (1993), the Justices endorsed Alcoa's                                                                         

core holding, permitting civil antitrust claims under Section One

                                6

to go forward despite  the fact that the actions  which allegedly

violated Section  One occurred entirely  on British soil.   While

noting   American  Banana's   initial   disagreement  with   this                                   

proposition, the Hartford Fire  Court deemed it "well established                                        

by now that  the Sherman Act applies to foreign  conduct that was

meant  to produce and did in fact produce some substantial effect

in  the United  States."   Id. at  796.   The conduct  alleged, a                                        

London-based conspiracy  to alter the American  insurance market,

met that benchmark.3  See id.                                       

          To sum  up, the  case law now  conclusively establishes

that civil antitrust actions predicated on wholly foreign conduct

which has an intended and substantial effect in the United States

come  within Section One's jurisdictional  reach.  In arriving at

this conclusion, we take no view of the government's asseveration

that  the  Foreign  Trade  Antitrust  Improvements  Act  of  1982
                                                  

     3As  NPI reminds  us,  four Justices  dissented in  Hartford                                                                           
Fire.    This  is  cold  comfort,  however,  for  the  dissenters              
expressed  complete  agreement  with   the  majority's  view   on
extraterritoriality.  See Hartford Fire, 509 U.S. at 814 (Scalia,                                                 
J., dissenting).  By the same token, NPI's attempt to distinguish
Hartford Fire on  the ground that  the defendants there  conceded                       
the United  States' jurisdiction over their conduct fails for two
reasons.
      In the first place, the assertion is no more than a play on
words.  The  majority opinion  in Hartford Fire  stated that  the                                                         
district court  "undoubtedly"  had jurisdiction  over  the  civil
claims, "as the  London reinsurers apparently  concede."  Id.  at                                                                       
795.   It is obvious, therefore, that jurisdiction did not depend
on   the  concession;   to  the   contrary,  jurisdiction   would
"undoubtedly"  have existed in any  event.  In  the second place,
one  of the  London  defendants did  not  join in  this  apparent
concession,  but the  Court  nonetheless  held  that  defendant's
foreign conduct to be within the Sherman Act's proscriptive ambit
because it was part of a scheme which "was intended to and did in
fact  produce  a substantial  effect  on  the American  insurance
market."  Id. at 795 n.21.                       

                                7

(FTAIA), 15  U.S.C.   6a (1994), makes  manifest Congress' intent

to  apply  the Sherman  Act  extraterritorially.   The  FTAIA  is

inelegantly phrased  and the court  in Hartford Fire  declined to                                                              

place any weight on it.  See Hartford Fire, 509 U.S. at 796 n.23.                                                    

We emulate this example  and do not rest our  ultimate conclusion

about Section One's scope upon the FTAIA.

                         B.  The Merits.                                   B.  The Merits.                                                 

          Were  this a civil case, our journey would be complete.

But  here the  United States  essays a  criminal prosecution  for

solely extraterritorial conduct rather than a civil action.  This

is  largely  uncharted terrain;  we  are  aware of  no  authority

directly on point, and the parties have cited none.

          Be that as  it may,  one datum sticks  out like a  sore

thumb:  in both criminal and civil cases,  the claim that Section

One applies extraterritorially is  based on the same language  in

the  same  section  of  the  same   statute:    "Every  contract,

combination  in the form of trust or otherwise, or conspiracy, in

restraint  of trade or commerce among the several States, or with

foreign nations,  is declared  to be  illegal."   15 U.S.C.    1.

Words may sometimes be chameleons, possessing different shades of

meaning in  different contexts, see,  e.g., Hanover  Ins. Co.  v.                                                                       

United States, 880 F.2d 1503, 1504 (1st Cir. 1989), cert. denied,                                                                          

493 U.S.  1023  (1990), but  common  sense suggests  that  courts

should interpret the  same language  in the same  section of  the

same  statute uniformly,  regardless of  whether the  impetus for

interpretation is criminal or civil.

                                8

          Common sense  is usually a good  barometer of statutory

meaning.  Here, however,  we need not rely on common sense alone;

accepted  canons  of statutory  construction  point  in the  same

direction.    It is  a  fundamental  interpretive principle  that

identical words or terms used in  different parts of the same act

are  intended  to have  the same  meaning.   See  Commissioner of                                                                           

Internal  Revenue v. Lundy, 116 S. Ct. 647, 655 (1996); Gustafson                                                                           

v. Alloyd  Co., 115 S. Ct.  1061, 1067 (1995).   This principle                          

which the  Court recently  called "the  basic canon  of statutory

construction," Estate of Cowart v. Nicklos Drilling Co., 505 U.S.                                                                 

469,  479 (1992)     operates not  only  when particular  phrases

appear in different sections of the same act, but also when  they

appear in different  paragraphs or sentences of a single section.

See Russo  v. Texaco, Inc., 808 F.2d 221, 227 (2d Cir. 1986) ("It                                    

is a  settled principle of statutory construction that [w]hen the

same word  or phrase is used in  the same section of  an act more

than once, and the meaning is clear as used in one place, it will

be  construed to  have  the same  meaning  in the  next  place.")

(citations and  internal quotation marks  omitted); United States                                                                           

v.  Gertz,  249 F.2d  662,  665 (9th  Cir.  1957) (similar).   It                   

follows,  therefore,   that  if  the  language   upon  which  the

indictment rests were the  same as the language upon  which civil

liability  rests  but  appeared  in a  different  section  of the

Sherman Act, or in a different part of the same section, we would

be under great pressure to  follow the lead of the Hartford  Fire                                                                           

Court   and  construe   the  two   iterations  of   the  language

                                9

identically.  Where,  as here, the tie binds  more tightly   that

is,  the  text under  consideration  is  not merely  a  duplicate

appearing  somewhere else  in  the statute,  but is  the original

phrase in the original  setting   the pressure escalates  and the

case for reading the language in  a manner consonant with a prior

Supreme Court interpretation is  irresistible.  See United States                                                                           

v.  Thompson/Center  Arms  Co., 504  U.S.  505,  518 n.10  (1992)                                        

(plurality  op.) (flatly  rejecting  the  idea, while  construing

language   from  a   statute   with  both   civil  and   criminal

implications, that a court should "refrain in criminal cases from

applying statutory language that would have been held to apply if

challenged in civil litigation").

          The  Supreme Court confronted an analogous situation in

Ratzlaf v. United States, 510 U.S. 135 (1994).   There, the court                                  

dealt with  a single  criminal penalty  clause,  contained in  31

U.S.C.      5322(a)  (1994),  which  authorized   punishment  for

individuals "willfully violating" a number  of separate statutory

provisions.    The  defendant  was charged  under  one  of  these

provisions.    After noting  that  identical  terms appearing  at

multiple  places  within  a  single statute  customarily  have  a

consistent meaning, the Court said:  "We have even stronger cause

to  construe a single formulation,  here   5322(a),  the same way                               

each time it  is called into  play."   Id. at 143.   The  Ratzlaf                                                                           

Court proceeded to interpret  the phrase "willfully violating" to

incorporate the same mens rea requirement that had been read into

the  phrase when section  5322(a) was applied  in other contexts.

                                10

See id.  at 136-37,  141.   In  so doing  the  Court quoted  with                 

approval  our statement in United States v. Aversa, 984 F.2d 493,                                                            

498 (1st Cir. 1993) (en banc):  "Ascribing  various meanings to a

single  iteration . . .    reading the  word differently for each

code section  to which it applies   would open Pandora's jar.  If

courts  can render  meaning  so malleable,  the  usefulness of  a

single penalty provision  for a  group of  related code  sections

will be eviscerated."

          Ratzlaf  is not  our  only teaching  aid.   This  court                           

recently  confronted  a  situation  that,  putting  together  its

successive stages, throws light upon the problem at hand.  Having

found  an  ambiguity  in  the  phrase  "cost  of producing  self-

employment income," 7  U.S.C.   2014(d)(9) (1994), we deferred to

a  reasonable  administrative  regulation interpreting  it.   See                                                                           

Strickland v.  Commissioner, Me. Dep't  of Human Servs.,  48 F.3d                                                                 

12, 21 (1st  Cir.), cert. denied,  116 S. Ct.  145 (1995).  In  a                                          

subsequent  suit  involving the  same  parties,  we debunked  the

plaintiffs' contention, advanced in a somewhat  different context

and in connection with  a neoteric legal theory, that  the phrase

in  question  had a  plain meaning.    We explained:   "Statutory

ambiguity does not flash on and  off like a bank of strobe lights

at a discotheque, shining brightly at the time of one lawsuit and

then vanishing mysteriously in the interlude before the next suit

appears."  Strickland v. Commissioner, Me. Dep't of Human Servs.,                                                                          

96  F.3d 542,  547 (1st Cir.  1996).   Read in  the ensemble, the

Strickland  opinions  stand for  the  proposition  that the  same                    

                                11

phrase, appearing in the same portion of the same statute, cannot

bear divergent interpretations in different litigation contexts.

          The  shared  rationale of  the  Ratzlaf  and Strickland                                                                           

cases reinforces  the basic  canon of  construction and gives  us

confidence that  we should follow the  canon here.  The  words of

Section  One have not changed since the Hartford Fire Court found                                                               

that they clearly  evince Congress' intent  to apply the  Sherman

Act  extraterritorially  in  civil   actions,  and  it  would  be

disingenuous  for us  to pretend  that the  words had  lost their

clarity simply  because this  is  a criminal  proceeding.   Thus,

unless some special  circumstance obtains in this  case, there is

no principled way in which we can uphold the order of dismissal.

          NPI and its  amicus, the Government of Japan, urge that

special  reasons   exist  for   measuring  Section  One's   reach

differently  in  a  criminal context.    We  have  reviewed their

exhortations and found  them hollow.   We discuss  the five  most

promising theses below.  The rest do not require comment.

          1.  Lack of Precedent.  NPI and its amicus make much of                    1.  Lack of Precedent.                                         

the fact that this appears to be the first criminal case in which

the  United States  endeavors  to extend  Section  One to  wholly

foreign conduct.   We are not  impressed.  There is  a first time

for everything, and  the absence of  earlier criminal actions  is

probably more  a demonstration of the  increasingly global nature

of  our economy than proof  that Section One  cannot cover wholly

foreign conduct in the criminal milieu.

          Moreover,   this  argument   overstates  the   lack  of

                                12

precedent.  There is, for example, solid authority for applying a

state's criminal  statute to  conduct occurring  entirely outside

the state's borders.  See Strassheim v. Daily,  221 U.S. 280, 285                                                       

(1911)  (Holmes,  J.) ("Acts  done  outside  a jurisdiction,  but

intended to produce and  producing detrimental effects within it,

justify a State in punishing  the cause of the harm as if  he had

been  present at  the  effect, if  the  State should  succeed  in

getting him within its power.").  It is not  much of a stretch to

apply  this  same  principle  internationally,  especially  in  a

shrinking world.  See, e.g., Chua  Han Mow v. United States,  730                                                                     

F.2d 1308, 1311-12 (9th Cir. 1984) (applying Strassheim principle                                                                 

to conduct in Malaysia  involving drugs intended for distribution

in the United States), cert. denied, 470 U.S. 1031 (1985); United                                                                           

States  v. Hayes, 653  F.2d 8, 11 (1st  Cir. 1981) (similar); cf.                                                                           

John  Donne, Devotions  Upon  Emergent Occasions,  no. 17  (1624)                                                          

(warning that "no  man is an island, entire of  itself; every man

is a piece of the continent, a part of the main"). 

          2.  Difference  in Strength of Presumption.   The lower                    2.  Difference  in Strength of Presumption.                                                              

court and  NPI both  cite United  States v.  Bowman, 260  U.S. 94                                                             

(1922),  for  the   proposition  that  the   presumption  against

extraterritoriality operates with greater  force in the  criminal

arena than in civil  litigation.  This misreads the opinion.   To

be sure, the Bowman  Court, dealing with a charged  conspiracy to                             

defraud, warned that if  the criminal law "is  to be extended  to

include  those   [crimes]   committed  outside   of  the   strict

territorial jurisdiction, it is natural for Congress to say so in

                                13

the statute, and failure  to do so  will negative the purpose  of

Congress in this  regard."   Id. at 98.   But this  pronouncement                                          

merely  restated  the  presumption   against  extraterritoriality

previously established  in civil cases like  American Banana, 213                                                                      

U.S.  at  357.    The  Bowman  Court  nowhere  suggested  that  a                                       

different, more resilient presumption arises in criminal cases.4

          Nor does United States v. United States Gypsum Co., 438                                                                      

U.S. 422 (1978),  offer aid and succor to NPI.   Recognizing that

"the behavior proscribed by the  [Sherman] Act is often difficult

to distinguish  from the  gray  zone of  socially acceptable  and

economically  justifiable business conduct,"  id. at  440-41, the                                                           

Gypsum  Court held that criminal intent  generally is required to                

convict  under  the  Act.    See  id.  at  443.    Although  this                                               

distinguishes some  civil antitrust  cases (in which  intent need

not be proven) from their criminal counterparts, the Gypsum Court                                                                     

made  it plain  that  intent  need  not  be  shown  to  prosecute

criminally "conduct  regarded as  per se illegal  because of  its                                                  

unquestionably  anticompetitive  effects."   Id.  at  440.   This                                                          

means,   of  course,   that  defendants   can  be   convicted  of

participation   in   price-fixing   conspiracies    without   any

demonstration  of  a  specific  criminal intent  to  violate  the

antitrust  laws.   See, e.g.,  United States  v. Brown,  936 F.2d                                                                
                                                  

     4Indeed, the  Bowman Court stated that  it regarded American                                                                           
Banana as  an appropriate  analogy because the  antitrust statute                
"is criminal  as well as civil."  260 U.S.  at 98.  This seems to
support  the  notion that  the presumption  is  the same  in both
instances and leaves little  room to argue that the  Bowman Court                                                                     
was attempting  to  craft  a  special,  more  rigorous  rule  for
criminal proceedings.

                                14

1042,  1046 (9th Cir. 1991);  United States v.  Society of Indep.                                                                           

Gas.  Marketers, 624 F.2d 461, 465 (4th Cir. 1980), cert. denied,                                                                          

449 U.S. 1078 (1981); United States v. Gillen, 599 F.2d 541, 544-                                                       

45  (3d Cir.), cert. denied,  444 U.S. 1078  (1979).  Because the                                     

instant case falls within that rubric, Gypsum does not help NPI.                                                       

          We add  that even if Gypsum  had differentiated between                                               

civil and criminal price-fixing cases, NPI's reliance on it would

still be problematic.  Reduced to bare essence, Gypsum focuses on                                                                

mens rea, noting that centuries of Anglo-American legal tradition

instruct that criminal liability ordinarily should be premised on

malevolent intent, see id. at 436-37, whereas civil liability, to                                    

which less stigma and  milder consequences commonly attach, often

requires  a lesser  showing  of  intent.    There  is  simply  no

comparable tradition  or rationale  for drawing a  criminal/civil

distinction with  regard to extraterritoriality, and  neither NPI

nor its amicus have alluded to any case which does so.

          3.  The Restatement.   NPI and the district  court, 944                    3.  The Restatement.                                       

F. Supp.  at 65, both sing the praises of the Restatement (Third)

of Foreign  Relations Law  (1987),  claiming that  it supports  a

distinction  between civil  and criminal  cases on  the issue  of

extraterritoriality.   The passage to which  they pin their hopes

states:

          [I]n the case of regulatory statutes that may
          give   rise  to   both  civil   and  criminal
          liability,   such   as   the  United   States
          antitrust and securities  laws, the  presence
          of   substantial    foreign   elements   will
          ordinarily   weigh  against   application  of
          criminal law.    In such  cases,  legislative
          intent to subject conduct outside the state's

                                15

          territory to its criminal law should be found
          only  on the  basis  of express  statement or
          clear implication.

Id.  at    403 cmt.  f.   We believe  that this  statement merely             

reaffirms the classic  presumption against extraterritoriality   

no  more,  no less.    After  all, nothing  in  the  text of  the

Restatement proper contradicts the government's interpretation of

Section One.   See, e.g.,  id. at    402(1)(c) (explaining  that,                                        

subject  only to a general requirement of reasonableness, a state

has jurisdiction to proscribe "conduct outside its territory that

has  or  is  intended  to  have  substantial  effect  within  its

territory");5 id.  at    415(2) ("Any  agreement in  restraint of                           

United States trade that is made outside of the United States . .

. [is] subject  to the  jurisdiction to prescribe  of the  United

States, if a principal purpose of the conduct  or agreement is to

interfere  with the  commerce  of  the  United  States,  and  the

agreement or conduct has  some effect on that commerce.").   What

is more,  other comments  indicate that a  country's decision  to

prosecute wholly  foreign conduct  is discretionary.   See, e.g.,                                                                          

id. at   403 rep. n.8.             

          4.  The Rule of Lenity.  The next arrow which NPI yanks                    4.  The Rule of Lenity.                                          

from  its quiver  is the  rule  of lenity.   The  rule itself  is

venerable;  it  provides  that,  in the  course  of  interpreting

statutes  in criminal  cases,  a reviewing  court should  resolve

                                                  

     5We note in passing that, by their use of the disjunctive in
this section, the drafters  of the Restatement seem to  suggest a
more permissive standard then we, and other American courts, see,                                                                          
e.g., Alcoa, 148 F.2d at 444, would deem meet.                     

                                16

ambiguities affecting a statute's scope in the defendant's favor.

See, e.g., Hughey  v. United  States, 495 U.S.  411, 422  (1990);                                              

Crandon v. United States, 494 U.S. 152, 158 (1990); United States                                                                           

v.  Gibbens, 25  F.3d 28,  35 (1st Cir.  1994); United  States v.                                                                        

Ferryman,  897 F.2d 584, 591  (1st Cir.), cert.  denied, 498 U.S.                                                                 

830  (1990).   But  the rule  of  lenity is  inapposite unless  a

statutory ambiguity looms,  and a  statute is  not ambiguous  for

this  purpose simply  because  some courts  or commentators  have

questioned its proper interpretation.6  See Reno v. Koray, 115 S.                                                                   

Ct. 2021, 2029 (1995); Moskal v. United States, 498 U.S. 103, 108                                                        

(1990).  Rather,  "[t]he rule  of lenity applies  only if,  after

seizing everything from which  aid can be derived, [a  court] can

make  no more than a guess as  to what Congress intended."  Reno,                                                                          

115 S.  Ct.  at 2029  (citations, internal  quotation marks,  and

certain  brackets omitted);  accord United  States v.  O'Neil, 11                                                                       

F.3d 292, 301 n.10 (1st Cir. 1993) (describing the rule of lenity

as "a background principle that properly comes into play when, at

the end  of a thorough inquiry, the meaning of a criminal statute

remains obscure").   Put bluntly,  the rule of  lenity cannot  be

used to create ambiguity when  the meaning of a law, even  if not

readily apparent, is, upon inquiry, reasonably clear.

                                                  

     6Leaving aside the lower court's  decision in this case,  no
reported opinion  has questioned  the  applicability of  Hartford                                                                           
Fire's  exercise  in  statutory  construction  to  the  precincts              
patrolled  by the  criminal law.   Nevertheless,  Hartford Fire's                                                                         
rendition of the  statute has drawn  criticism from the  academy.
See,  e.g., Kenneth  W.  Dam, Extraterritoriality  in  an Age  of                                                                           
Globalization:  The Hartford  Fire Case, 1993 Sup. Ct.  Rev. 289,                                                 
307-13 (1993).

                                17

          That ends the matter  of lenity.   In view of the  fact

that the Supreme  Court deems it "well  established" that Section

One  of  the  Sherman  Act  applies  to  wholly foreign  conduct,

Hartford Fire,  509 U.S.  at 796,  we effectively are  foreclosed                       

from trying to tease an ambiguity  out of Section One relative to

its extraterritorial  application.    Accordingly,  the  rule  of

lenity plays no part in the instant case.

          5.   Comity.   International comity is  a doctrine that                    5.   Comity.                               

counsels  voluntary  forbearance when  a  sovereign  which has  a

legitimate  claim  to   jurisdiction  concludes  that  a   second

sovereign  also  has a  legitimate  claim  to jurisdiction  under

principles  of   international  law.     See  Harold   G.  Maier,                                                      

Extraterritorial Jurisdiction at  a Crossroads:   An Intersection                                                                           

Between Public and Private  International Law, 76 A. J.  Int'l L.                                                       

280, 281 n.1  (1982).  Comity is more an  aspiration than a fixed

rule, more a matter of grace than a matter of obligation.  In all

events,  its growth in the  antitrust sphere has  been stunted by

Hartford Fire, in which the  Court suggested that comity concerns                       

would operate  to defeat  the  exercise of  jurisdiction only  in

those  few  cases  in which  the  law  of  the foreign  sovereign

required a defendant  to act  in a manner  incompatible with  the

Sherman  Act  or in  which  full compliance  with  both statutory

schemes was impossible.   See Hartford Fire, 509 U.S.  at 798-99;                                                     

see  also Kenneth  W.  Dam,  Extraterritoriality  in  an  Age  of                                                                           

Globalization:  The Hartford  Fire Case, 1993 Sup. Ct.  Rev. 289,                                                 

306-07 (1993).   Accordingly, the Hartford Fire Court  gave short                                                         

                                18

shrift to the  defendants' entreaty that  the conduct leading  to

antitrust liability  was perfectly  legal in the  United Kingdom.

See Hartford Fire, 509 U.S. at 798-99.                           

          In  this case the  defendant's comity-based argument is

even more attenuated.   The conduct with which NPI  is charged is

illegal  under   both  Japanese   and   American  laws,   thereby

alleviating any founded concern about NPI being whipsawed between

separate sovereigns.  And, moreover, to the extent that comity is

informed by general principles of reasonableness, see Restatement                                                               

(Third)  of Foreign  Relations Law    403, the  indictment lodged

against  NPI  is well  within the  pale.   In it,  the government

charges  that the  defendant orchestrated  a conspiracy  with the

object of rigging prices in the United States.  If the government

can  prove these charges, we see no tenable reason why principles

of comity should shield NPI from  prosecution.  We live in an age

of international commerce, where  decisions reached in one corner

of  the world can reverberate around  the globe in less time than

it takes  to tell the tale.  Thus,  a ruling in NPI's favor would

create  perverse incentives  for  those who  would use  nefarious

means to influence  markets in the United  States, rewarding them

for erecting  as many  territorial firewalls as  possible between

cause and effect.

          We  need go  no  further.   Hartford Fire  definitively                                                             

establishes that Section One of the Sherman Act applies to wholly

foreign conduct which has  an intended and substantial  effect in

the United States.  We  are bound to accept that holding.   Under

                                19

settled principles  of statutory construction, we  also are bound

to  apply  it  by interpreting  Section  One  the same  way  in a

criminal case.  The combined force of these  commitments requires

that we  accept the  government's cardinal argument,  reverse the

order of the district court, reinstate the indictment, and remand

for further proceedings.

Reversed and remanded.          Reversed and remanded.                               

         Concurring Opinion follows                     Concurring Opinion follows  

                                20

            LYNCH,  Circuit  Judge  (concurring). The  question                      LYNCH,  Circuit  Judge  (concurring).                                             

  presented  in this case is whether Section One of the Sherman

  Act authorizes criminal prosecutions of defendants for  their

  actions  committed  entirely   outside  the  United   States.

  Judicial precedents,  culminating  with the  Supreme  Court's

  decision  in Hartford Fire Insurance Co.   v. California, 509                                                                    

  U.S. 764  (1993), conclusively  establish that  Section One's

  jurisdictional reach extends,  in civil  actions, to  foreign

  conduct that is meant  to produce, and does in  fact produce,

  substantial effects in the United States.   The next question

  to  be asked  is whether  there is  any persuasive  reason to

  believe that, with regard  to wholly foreign conduct, Section

  One in the criminal context is not co-extensive with  Section

  One in the civil context.

            In answering this  second question, courts must  be

  careful to  determine  whether this  construction of  Section

  One's   criminal   reach   conforms   with    principles   of

  international  law.   "It  has  been  a  maxim  of  statutory

  construction  since the  decision in  Murray v.  The Charming                                                                         

  Betsy, 2 Cranch 64, 118, 2 L. Ed. 208 (1804), that 'an act of                 

  congress  ought never to be  construed to violate  the law of

  nations,   if  any  other  possible  construction  remains.'"

  Weinberger v.  Rossi, 456 U.S.  25, 32 (1982).   In the Alcoa                                                                         

  case,  Judge Learned  Hand found  this canon  of construction

  relevant to determining the  substantive reach of the Sherman

                                21

  Act,  observing that "we are not to read general words [i.e.,                                                                        

  Section  One]  .  .  .  without  regard  to  the  limitations

  customarily observed  by nations  upon the exercise  of their

  powers."  United States v. Aluminum Co. of Am., 148 F.2d 416,                                                          

  443 (2d Cir. 1945);  see also Hartford Fire, 509 U.S. at 814-                                                       

  15 (Scalia, J., dissenting). 

            The task of construing  Section One in this context

  is not the usual one  of determining congressional intent  by

  parsing the  language or legislative history  of the statute.

  The broad, general language of the federal antitrust laws and

  their  unilluminating  legislative  history  place  a special

  interpretive responsibility  upon the judiciary.  The Supreme

  Court has called the  Sherman Act a "charter of  freedom" for

  the courts, with "a generality and adaptability comparable to

  that found . . . in constitutional provisions."   Appalachian                                                                         

  Coals, Inc. v.  United States, 288  U.S. 344, 359-60  (1933).                                         

  As Professors Areeda and Turner have said, the federal courts

  have been invested "with a jurisdiction to create and develop

  an 'antitrust law' in  the manner of the common  law courts."

  I Areeda &amp; Turner, Antitrust  Law   106, at 15 (1978).7   The                                             

  courts  are  aided  in  this  task  by  canons  of  statutory

  construction,  such  as  the  presumption  against  violating

                                                      

  7.  Professors  Areeda  and  Turner also  note  that  "judges
  sometimes  talk  as  if  Congress  has  already  decided  the
  question before them.  This is usually a misconception."  Id.                                                                         

                                22

  international law, which serve  as both guides and  limits in

  theabsence of more explicit indicia of congressional intent. 

            Here,  we are  asked  to determine  the substantive

  content  of Section  One's inexact  jurisdictional provision,

  "commerce  . .  .  with foreign  nations."   15  U.S.C.    1.

  Because of  the "compunctions against the  creation of crimes

  by judges rather than by legislators," II Areeda &amp; Hovenkamp,

  Antitrust   Law     311b,   at  33   (1995  rev.   ed.),  the                           

  constitution-like  aspects  of  the  antitrust  laws must  be

  handled particularly carefully in criminal prosecutions.

            As  the antitrust laws give the federal enforcement

  agencies  a   relatively  blank  check,  the  development  of

  antitrust law has been  largely shaped by the cases  that the

  executive branch chooses  - or  does not choose  - to  bring.

  Accordingly it has been said that:

            novel  interpretations  or  great  departures  have
            seldom, if ever, occurred  in criminal cases, which
            prosecutors  have  usually reserved  for defendants
            whose   knowing   behavior   would   be   generally
            recognized as appropriate for criminal sanctions.

  Id. at 34.  This case does present a new  interpretation.  We               

  are  told this is the  first instance in  which the executive

  branch has chosen to interpret the criminal provisions of the

  Sherman Act  as reaching conduct wholly  committed outside of

  this country's borders.

            Changing economic conditions,  as well as different

  political  agendas, mean  that antitrust policies  may change

                                23

  from   administration   to  administration.      The  present

  administration  has  promulgated  new  Antitrust  Enforcement

  Guidelines   for   International   Operations  which   "focus

  primarily on  situations in which the Sherman  Act will grant

  jurisdiction and  when the  United States will  exercise that

  jurisdiction"   internationally.      Brockbank,   The   1995                                                                         

  International  Antitrust  Guidelines:   The  Reach  of   U.S.                                                                         

  Antitrust  Law Continues to Expand, 2 J. Int'l Legal Stud. 1,                                              

  *22  (1996).     The   new  Guidelines  reflect   a  stronger

  enforcement stance  than earlier versions  of the Guidelines,

  and  have been described as a "warning to foreign governments

  and  enterprises that  the  [antitrust enforcement]  Agencies

  intend  to  actively  pursue restraints  on  trade  occurring

  abroad  that  adversely  affect American  markets  or  damage

  American exporting opportunities."  Id. at *21.   The instant                                                   

  case is likely a result of this policy.

            It  is  with  this  context in  mind  that  we must

  determine if  the exercise of jurisdiction  occasioned by the

  decision  of  the executive  branch of  the United  States is

  proper in this case.  While courts, including this one, speak

  of   determining   congressional  intent   when  interpreting

  statutes,  the  meaning of  the  antitrust  laws has  emerged

  through   the  relationship  among   all  three  branches  of

  government.  In this criminal case, it is  our responsibility

  to ensure that the  executive's interpretation of the Sherman

                                24

  Act does not conflict  with other legal principles, including

  principles of international law.

            That  question  requires  examination   beyond  the

  language  of  Section One  of  the Sherman  Act.   It  is, of

  course,  generally true  that,  as a  principle of  statutory

  interpretation, the same language should be read the same way

  in all contexts  to which the language applies.   But this is

  not  invariably true.   New content is  sometimes ascribed to

  statutory  terms depending  upon  context.   Cf. Robinson  v.                                                                     

  Shell  Oil  Co., 117  S. Ct.  843,  847 (1997)  (depending on                           

  context,  statutory  term  may  have  different  meanings  in

  different   sections  of   single  statute);   3  Sutherland,

  Statutory Construction   60.04  (5th ed. 1995) (statutes with                                  

  both remedial and penal provisions may be construed liberally

  in remedial context and  strictly in penal context).   As NPI

  and  the Government of Japan point out, the Supreme Court has

  held  that Section One of the Sherman Act, which defines both

  criminal and  civil  violations  with  one  general  phrase,8

  "should  be construed as including intent as an element" of a

  criminal violation.   United  States v. United  States Gypsum                                                                         

  Co., 438 U.S. 422,  443 (1978).  Where Congress  intends that               

  our   laws   conform  with   international  law,   and  where

  international  law  suggests  that  criminal  enforcement and

                                                      

  8.  "Every  contract, combination  in  the form  of trust  or
  otherwise, or conspiracy, in restraint of trade or commerce .
  . . is declared to be illegal . . . ."  15 U.S.C.   1.

                                25

  civil  enforcement  be viewed  differently,  it  is at  least

  conceivable that  different content could be  ascribed to the

  same language  depending on whether  the context is  civil or

  criminal.  It  is then worth  asking about the effect  of the

  international  law which  Congress presumably  also  meant to

  respect.

            The content of international  law is determined "by

  reference 'to  the customs  and usages of  civilized nations,

  and,  as evidence  of  these, to  the  works of  jurists  and

  commentators.'"  Hilao v. Marcos, 103 F.3d 789, 794 (9th Cir.                                            

  1996) (quoting The Paquete Habana, 175 U.S. 677, 700 (1900));                                             

  see  also Kadic v. Karadzic, 70  F.3d 232 (2d Cir. 1995). The                                       

  Restatement  (Third)  of the  Foreign  Relations  Law of  the

  United  States restates  international law,  as derived  from

  customary international law and from international agreements

  to  which the United States is a  party, as it applies to the

  United  States.    See  Restatement (Third)  of  the  Foreign                                                                         

  Relations  Law   of  the  United  States      1,  101  (1987)                                                    

  [hereinafter   Restatement].   The United States  courts have                                      

  treated the Restatement as an illuminating outline of central

  principles of international law.  See Hartford Fire, 509 U.S.                                                               

  at 799  (citing Restatement); Hartford Fire, 509  U.S. at 818                                                       

  (Scalia, J.,  dissenting) ("I  shall rely on  the Restatement

  (Third) of Foreign Relations  Law for the relevant principles

  of international law.   Its standards appear fairly supported

                                26

  in  the  decisions  of  this Court  construing  international

  choice-of-law principles  . . . and in the decisions of other

  federal courts . . . ."); In re Maxwell Communications Corp.,                                                                        

  93 F.3d 1036, 1047-48 (2d Cir. 1996).

            The  Restatement  articulates  principles,  derived

  from  international  law,  for determining  when  the  United

  States  may  properly exercise  regulatory  (or prescriptive)

  jurisdiction  over  activities  or  persons   connected  with

  another state.  It serves as a useful guide to evaluating the

  international  interests  at stake.    Sections  402 and  403

  articulate general principles.   See Restatement    402, 403.                                                            

  Section  415  applies  these principles  to  "Jurisdiction to

  Regulate Anti-Competitive Activities."  Id.   415.                                                       

            Restatement Section 402(1)(c) states  that "Subject

  to     403," a  state has  jurisdiction  to prescribe  law to

  "conduct outside  its territory  that has  or is intended  to

  have  substantial  effect  within  its  territory."    Id.                                                                         

  402(1)(c).  Section 403(1) states that, even when Section 402

  has been satisfied, jurisdiction  may not be exercised  if it

  is  "unreasonable."  Id.     403(1).   Section  403(2)  lists                                    

  factors  to be  evaluated in  determining if  jurisdiction is

  reasonable:

            (a)  the link  of the activity to  the territory of
                 the  regulating state,  i.e.,  the  extent  to                                                        
                 which  the  activity  takes place  within  the
                 territory,  or  has  substantial, direct,  and
                 foreseeable effect upon or in the territory; 

                                27

            (b)  the   connections,    such   as   nationality,
                 residence, or economic  activity, between  the
                 regulating  state  and the  person principally
                 responsible  for the activity to be regulated,
                 or  between  that  state  and  those  whom the
                 regulation is designed to protect; 

            (c)  the character of the activity to be regulated,
                 the importance of regulation to the regulating
                 state,   the  extent  to  which  other  states
                 regulate  such activities,  and the  degree to
                 which  the desirability of  such regulation is
                 generally accepted; 

            (d)  the existence of  justified expectations  that
                 might be protected or hurt by the regulation; 

            (e)  the  importance  of  the  regulation   to  the
                 international  political,  legal, or  economic
                 system;

            (f)  the   extent  to   which  the   regulation  is
                 consistent   with   the   traditions  of   the
                 international system; 

            (g)  the extent to which  another state may have an
                 interest in regulating the activity; and

            (h)  the likelihood of  conflict with regulation by
                 another state. 

  Id.   403(2).9               

            Comment f to Section 403 states that the principles

  of Sections  402 and  403 "apply  to criminal  as well as  to

  civil  regulation."   Id.    403 cmt.  f.   But, specifically                                     

  naming  the United  States antitrust  laws, the  comment also

  says  that for  statutes  that give  rise  to both  types  of

  liability, "the presence of substantial foreign elements will

                                                      

  9.  Section  403(3) is not applicable here.  See id.   403(3)                                                                
  cmt. e.

                                28

  ordinarily weigh against  application of  criminal law."  Id.                                                                         

  The  comment argues  that legislative  intent to  apply these

  laws criminally should only be found on the basis of "express

  statement or clear implication."  Id.                                                   

            While  the majority opinion  accurately states that

  this comment  is an expression  of the clear  statement rule,

  the  comment also  implies  that there  are special  concerns

  associated  with  the  imposition  of criminal  sanctions  on

  foreign  conduct.  See  also id.   403  n.8 ("In applying the                                            

  principle  of reasonableness,  the  exercise of  criminal (as

  distinguished  from civil)  jurisdiction in relation  to acts

  committed in  another state may be  perceived as particularly

  intrusive.").   Indeed, most  people recognize  a distinction

  between civil and criminal liability; that the law of nations

  should do so as well is not surprising.10  And while Hartford                                                                         

  Fire  and  earlier judicial  decisions  have  found that  the                

  antitrust  laws do apply,  in the  civil context,  to foreign

  conduct,  this  antitrust  common  law  is  not  the  express

  statement of legislative intent that the Restatement suggests

  may be appropriate in the criminal context.

                                                      

  10.  Enforcement of criminal  laws against foreign  nationals
  for  conduct  on  foreign  soil  may  affect  this  country's
  relationship with the foreign  country in somewhat  different
  ways than would  a civil  action.  Congress  could choose  to
  provide  more  explicit guidance  to  the  executive and  the
  courts  in this area if it is concerned about such impacts on
  foreign relations.

                                29

            Also relevant to the present inquiry is section 415

  (2), which states that:

            Any  agreement  in  restraint  of  United
            States trade that is  made outside of the
            United   States,   and  any   conduct  or
            agreement in restraint of such trade that
            is carried out  predominantly outside  of
            the  United  States, are  subject  to the
            jurisdiction to prescribe  of the  United
            States, if  a  principal purpose  of  the
            conduct or agreement is to interfere with
            the commerce of the United States and the
            agreement  or conduct has  some effect on
            that commerce.

  Restatement   415(2).   Comment a to Section 415  states that                       

  the reasonableness principles articulated in Section 403 must

  still be satisfied.  See id cmt. a.                                       

            Application  of these principles  to the indictment

  at  issue here leads to  the conclusion that  the exercise of

  jurisdiction  is  reasonable in  this  case.   Here,  raising

  prices in the United States and Canada was not only a purpose                                                                 

  of  the   alleged  conspiracy,   it  was   the purpose,  thus                                                          

  satisfying  Section  415's  "principal purpose"  requirement.

  Moreover,  Section  415's  requirement  of "some  effect"  on

  United  States markets  is  amply met  here.   The indictment

  alleges that NPI  sold $ 6.1  million of fax  paper into  the

  United States during   1990, approximately the period covered

  by the charged conspiracy.  In 1990, total sales of fax paper

  in  North America  were  approximately $100  million.   NPI's

  price increases  thus affected  a not insignificant  share of

  the United States market.

                                30

            These same factors weigh heavily in the Section 403

  reasonableness analysis.  Because only North American markets

  were  targeted,   the United  States' interest  in combatting

  this  activity  appears  to  be  greater  than  the  Japanese

  interest, which may only  be the general interest of  a state

  in having  its industries  comport with foreign  legal norms.

  Japan  has no  interest in  protecting Japanese  consumers in

  this case as they were unaffected by  the alleged conspiracy.

  The United  States, in  contrast, has  a  strong interest  in

  protecting United States consumers,  who were affected by the

  increase in prices.   In this situation, it may  be that only

  the  United States  has  sufficient incentive  to pursue  the

  alleged wrongdoers, thereby providing the necessary deterrent

  to similar anticompetitive behavior.   In another case, where

  the  consumers of the situs nation were injured as well, that

  state's  interest in regulating anticompetitive conduct might

  be stronger than it is here.

            Other Section 403 factors  also counsel in favor of

  the exercise of  jurisdiction here.   The  effects on  United

  States markets  were foreseeable and direct.   The Government

  of Japan  acknowledges that  antitrust regulation is  part of

  the  international  legal system,  and  NPI  does not  really

  assert that it  has justified expectations that  were hurt by

                                31

  the regulation.11 The only factor  counseling against finding

  that  the United States' antitrust laws apply to this conduct

  is the fact that the situs  of the conduct was Japan and that

  the    principals   were   Japanese   corporations.      This

  consideration is inherent in the nature of jurisdiction based

  on effects of conduct, where the situs  of the conduct is, by

  definition, always a  foreign country.   This alone does  not

  tip the balance against jurisdiction.

            For these  reasons, I agree with  the majority that

  the district court erred in dismissing the indictment.

                                                      

  11.   While  criminal prosecution may come as a surprise, NPI
  should  have  known  that  civil  antitrust  liability  could
  include  treble  damages.   A corporation  found guilty  of a
  criminal  violation of Section One  is subject to  a fine not
  exceeding $ 10 million.   See 15 U.S.C.   2.   Treble damages                                         
  obviously do not include a similar cap.   

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