Below is the handout I prepared for my November 15, 2007, presentation at the World Trade Center Illinois’ “Breaking Down Trade Barriers” conference. You can view it in PowerPoint by clicking on the link below or just view the text version.

My part of the panel discussion concerning legal, accounting and cultural considerations for international trade was a general overview and discussion of factors to consider for assessing the legal and cultural environments of countries, regions, provinces, etc.

Presentation Handout: Legal & Cultural Considerations for International Trade (PowerPoint)

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
  • 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

Legal & Business Climate

  • Must understand the differences in their legal system versus ours
    • Is it a common law nation?
    • Do they have a uniform code of commercial
    • Do they respect property rights/ownership?
      • Real property
      • Intellectual property
    • 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?

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?

Protect Yourself in Writing-If Possible

  • 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.
  • 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