Clifford Chance

The US Supreme Court recently decided in USAID v. Alliance for Open Society International that an HIV/AIDS funding condition requiring foreign NGOs to adopt an anti-prostitution policy was constitutional.

On 29 June 2020, the US Supreme Court held 5-3 in USAID v. Alliance for Open Society International that an HIV/AIDS funding condition requiring recipients to adopt a policy explicitly opposing prostitution and sex trafficking was constitutional when enforced against foreign organizations -even though those foreign organizations are closely affiliated with US organizations that the US government cannot apply the funding condition against.

The decision has broad implications for the extraterritorial application of the US Constitution. In particular, the Court held that foreign organizations operating abroad "do not possess rights under the US Constitution", including the First Amendment's free speech protection. The Court noted that this principle was "long settled" and that holding otherwise would "throw a constitutional wrench into American foreign policy".

The decision has implications on two fronts. In terms of foreign aid, it means that the US government could be free to impose restrictions or requirements on the non-US affiliates of global NGOs that may be inconsistent with their missions or with which they may be uncomfortable. And more broadly, the blanket statement that non-US entities operating abroad lack US constitutional rights could have implications for NGOs and for-profit organizations alike.

These implications are certain to be litigated further. More on this case can be found in our previous post.