Chapter 9 International Contracts & Legalities Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved

Contracts  Write as though someone else will interpret  Nothing is assumed  Criteria  Basic provisions  Definitions & expectations differ  Language written (certified translation)  Country of jurisdiction Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved

Legalities  Laws of the host country may differ  Consult NTO  Check local protocol  Governed by civil or common law  Keep a paper trail  Retain local counsel  Arbitration or mediation options Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved

Contract Terms  Deposits –100% in advance is the norm –Interest bearing escrow accounts or irrevocable letters of credit  Termination or Cancellation –Actual or Liquidated Damages  Force Majeure –Definition varies Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved

US Tax Implications  IRS Guidelines –Reasonability test –Beneficiary countries  Sarbanes-Oxley (SOX) –International impact for multinational companies –Accurate & honest accounting of funds Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved

Legalities  Host Government Regulations –Duty In or Customs Out –Passports & Visas –Health Regulations –Inoculations  Law Enforcement –Subject to the laws of that country –Law consulate may not be helpful –Common vs Napoleonic Law basis Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved

Negotiations  Negotiations –In some cultures one’s “word” is binding –Bargaining can be seen as an affront –Standard costs are higher –Adapt to local business practices Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved