© 2007 Charles A. Krugel1 Legal & Cultural Considerations for International Trade Charles A. Krugel Human Resources Attorney & Counselor Labor & Employment Law on Behalf of Management Breaking Down Trade Barriers World Trade Center Illinois November 15, 2007

© 2007 Charles A. Krugel2 Due Diligence (DD) is Key to Addressing Legal & Cultural Considerations No matter which resources you use, whether people or documents, verify credibility. Create an alliance or relationship with a trustworthy foreign based contact or contacts –Do due diligence on those contacts Invest at least 1-3 hours of research on each contact –Research name, addresses, legal actions, property ownership, how many other people have that name in that nation, region, province, city, etc., talk to references and ask those references for additional references. –Use Lexis/Nexis, Westlaw, ProQuest, Factiva, FirstSearch, ERIC, any other legal, news, property databases. –If possible, meet contacts in person

© 2007 Charles A. Krugel3 Due Diligence Continued But, conducting DD doesn’t always mean hours spent researching & analyzing More specifically, if you have a trusted resource that makes recommendations for you, then that could = DD –Use the WTCs, chambers of commerce, government agency or private company resources, matchmakers, databases, etc. –Let others conduct the DD for you Do DD on contractors & subcontractors

© 2007 Charles A. Krugel4 Legal & Business Climate Slide 1/2 Must understand the differences in their legal system versus ours –Is it a common law nation? –Do they have a uniform code of commercial regulations? –Do they respect property rights/ownership? Real property Intellectual property

© 2007 Charles A. Krugel5 Legal & Business Climate Slide 2/2 –If you use overseas human resources/human capital then what laws apply to your treatment of them? –Does our system of business entity designation mean the same there as is does here? I.e., is a corporation, partnership, trust, etc., treated the same there as here –Does the country, state, region or province honor/uphold/enforce contracts between individuals or businesses? How are contracts or agreements honored, upheld, enforced or terminated?

© 2007 Charles A. Krugel6 Government Structure Must understand the differences in their government structure and bureaucracies –How long does it take to obtain the needed recognition or licensing to legally conduct business? –What agencies/bureaus license? –What licenses, certifications, etc. are required? –What are the fees? When are fees due? –What paperwork is required? –What are the penalties for mistakes, unethical or illegal conduct? –Are bribes necessary?

© 2007 Charles A. Krugel7 Protect Yourself in Writing- If Possible Slide 1/2 It’s impossible to document everything There’s no such thing as an impenetrable contract or agreement But, IF POSSIBLE you want to capture your intentions is as much detail as possible –And you want the other party to acknowledge your intentions in writing too—initialize, signature, notarized (increasingly becoming antiquated), signed agreements, side agreements, etc.

© 2007 Charles A. Krugel8 Protect Yourself in Writing- If Possible Slide 2/2 IF POSSIBLE, include language for exiting or terminating the agreement or contract IF POSSIBLE means does that country, province, region, state, etc., treat oral agreements or contracts the same as written agreements; what takes priority? END