1. University of Southern Mississippi
MISSISSIPPI DISTRICT EXPORT COUNCIL & EXPORT UNIVERSITY Exporting 201-Intermediate Series International Legal Considerations
University of Southern Mississippi
Gulf Coast Campus
March 23, 2010
Edward T. Hayes, Esq.
Partner, Leake & Andersson, L.L.P.
1100 Poydras Street, Suite 1700
New Orleans, LA 70163
Tel: (504)

2. International Legal Considerations
3. Primary Legal Issues/Areas
International Trade & Investment Agreements
2. Rules Governing International Cross-Border Transactions (Contracts)
3. Dispute Settlement
Leake & Andersson, L.L.P.

3. International Legal Considerations
International Trade & Investment Agreements
Macro level view of international law impacting international transactions
Always start international business project with an understanding of how particular international agreements help your business
International agreements require non-discriminatory treatment of foreign goods and investments—your goods are guaranteed non-discriminatory treatment!
How?
Leake & Andersson, L.L.P.

4. International Legal Considerations
Importing country must treat your goods no differently than the same domestic product or the same product being imported from another country
Must apply similar taxation, regulatory requirements, etc
Problems arise when foreign governments protect domestic goods
Examples: Free Trade Agreements
Provide widespread trade liberalization by eliminating tariffs and significantly reducing other non-tariff barriers
Your goods enter free trade country markets duty free
Leake & Andersson, L.L.P.

5. International Legal Considerations
NAFTA (US, Mexico and Canada); CAFTA (U.S., Costa Rica, El Salvador, Guatemala, Nicaragua, Honduras, and Dominican Republic)
Always consider marketing your products to FTA countries
US-Australia, Chile, Bahrain, Israel, Jordan, Malaysia, Singapore
Pending US Free Trade Agreements with Panama, Colombia and South Korea
Free Trade Agreements provide “free” benefits to your goods so pay attention and consult with counsel to make sure you take advantage of these benefits
Leake & Andersson, L.L.P.

6. International Legal Considerations
2. Rules Governing International Cross Border Transactions
Micro level view of domestic laws that apply to your business transactions
Absolutely imperative that you have a valid and enforceable international contract not just to secure payment, but to avoid potential liability
3 primary areas of concern for international contracts:
A. Mandatory Laws of Foreign Jurisdiction
These are systems of law that apply as of right in the jurisdiction and your transaction needs to comply with them or null and void
Know the applicable legal system because some preclude freedom of contract in certain important areas and fields
Examples: Common law, Civil law or Sharia law systems
Examples: Mandatory lifetime distributor contracts, no mutual indemnity allowed, no interest allowed on finance
Leake & Andersson, L.L.P.

7. International Legal Considerations
B. Contractual Choice of Law Provisions
You can contractually decide which law applies to your transaction
Usually seller/exporter has bargaining power to insist on the law of its jurisdiction
You don’t want to have to litigate disputes under foreign law
Make sure the foreign country’s legal system recognizes party autonomy to select choice of law
If your trading partner’s country is a member of the Convention for the International Sales of Goods (CISG), the terms of that treaty apply to your contract unless you exclude
CISG imposes some significant warranty obligations that most sellers/exporters do not like so most parties always exclude CISG
Leake & Andersson, L.L.P.

8. International Legal Considerations
C. Specific Contractual Provisions
ALWAYS require defense and indemnity obligations for third party claims arising out of other party’s negligence or fault
Provides you contractual legal protection if your good or product causes damage through misuse or negligence of others that you are not responsible for
Always require that they name you as an additional insured under their liability policies to cover their defense and indemnity obligations in case of bankruptcy
Force Majeure clauses account for natural disasters and other business interruptions
Leake & Andersson, L.L.P.

9. International Legal Considerations
Dispute Settlement
Proactively prepare for potential disputes
Add contractual arbitration provision in contract
Maintain clear choice of venue/jurisdiction
Consider liquidated damages provisions for failure to pay or perform
Leake & Andersson, L.L.P.

10. International Legal Considerations
CONCLUSION
International trade and business is a key component to the US economy and President Obama has pledged to double exports in 5 years
Minimal amount of preparation can ensure smooth export process and decrease risk and increase benefits
Leake & Andersson, L.L.P.