IO540
Article 12 of the Chicago Convention is relevant to your question. It requires that:
Each contracting State undertakes to adopt measures to insure that every aircraft flying over or manoeuvring within in it territory and that every aircraft carrying its nationality mark, wherever such aircraft may be, shall comply with the rules and regulations relating to the flight and manoeuvre of aircraft there in force. Each contracting State undertakes to keep its own regulations in these respects uniform with those established from time to time under this Convention. Over the high seas, the rules in force shall be those established under this Convention. Each Contracting State undertakes to insure the prosecution of all persons violating the regulations applicable.
As I read this places an equal obligation on the State of Registry and the State in which the incident occurred to ensure that offenders are prosecuted.
Whopity has suggested that the CAA has no power to take action in respect of offences committed overseas in G registered aircraft. It was not clear to me whether this comment was just in respect of TRA infringements or it covered all offence. As you are no doubt aware, the majority of the provisions of the Air Navigation Order, Rules of the Air Regulations etc have extra territorial application and apply to aircraft registered in the UK wherever they may be. The CAA therefore have the power to prosecute incidents which happen abroad if such incidents constitute a breach of the ANO.