Companies will be deterred from trading with the United States if controversial extradition rules are not successfully challenged, according to business leaders.

Their comments come as three British businessmen last week lost the chance to appeal to the House of Lords against their extradition and now have until Wednesday to appeal to the European Court of Human Rights to avoid being sent to face charges in America.

Rod Armitage of the CBI said: "This might be a good reason for a company saying it's not going to make a jump across the pond to America."

Ian Norris, a former chief executive of Morgan Crucible, has been charged with price fixing in the US, while three former NatWest bankers are accused of fraud. All deny the claims and none has been charged in Britain, but they face extradition without the issues being aired in a UK court.

James Walsh of the Institute of Directors said: "Many UK businesses work across many jurisdictions and may not know every dot and comma of the law, but even if they act in a responsible way they may find themselves accused. There is a risk of companies being deterred from doing business in the US. It's certainly a concern being expressed by our members."

Many of the charges relate to "wire fraud", which includes any electronic communication and can therefore involve businesspeople outside America or who have never been there.
 

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