Legal Forces Chapter 11
Be aware of complex legal forces International trade is affected by thousands of laws issued by hundreds of countries and states can make cross border and international business very difficult
Alternate purposes of taxes Can be used for several different reasons: redistribution of income discourage use of specific imported goods encourage use of domestic goods discourage investment in other countries Taxes also differ from country to country
Antitrust Laws Most strictly enforced in the U.S. often try to enforce them extraterritorially Germany comes second in enforcement EU is working on more stringent enforcement Japan’s enforcement in almost non-exixtent
Tariffs, Quotas & other obstacles International businesses must be aware of things such as: tariffs on imports quotas on specified imports to hinder competition others include standards, VER’s and VRA’s
Product Liability “Sue the bastards!” In the U.S. this is the easiest place in the world to sue a company for product liability Many other countries don’t have laws allowing a person to sue a company for liability other countries even have a cap on the amount that can be awarded
Price&Wage Controls, labour laws & currency exchange All of these factors differ in each country Almost all countries have currency exchange laws. These usually put a cap on the amount of currency that can be bought or exchanged Watch out for price ceilings and floors What is min. wage? Max. hours in a shift?
Local Laws Be wary of local laws what is normal in one country may be illegal in another do careful research on local customs possibly hire an advisor in potential trading country to help you be aware of local and miscellaneous laws
International Assistance Be aware of the institutions that are there to help The CISG was formed by the UN and it’s laws apply to all international sales unless expressly excluded in contract The EU also has laws to govern trades between it’s members some countries negotiate arbitration as part of their contract
Protect your Intellect Patents, trademarks, trade names, copy rights and trade/company secrets are all examples of intellectual properties these are some of the hardest things to protect can cost a company $$ if stolen/used by other company
Industrial Espionage Beware of industrial espionage!!! This is when a competing company tries to get trade secrets or privileged information from another company by illegal or unethical means
Terms to Know Antitrust laws extraterritorial product liability arbitration intellectual properties industrial espionage