Agenda Q&B 80-20 Rule International Implications Immigration Issues Other Scary Legal Stuff Lessons Learned
Global ContractingPrinciples• Q&B 80-20 Rule of Global Contracting 80% is the Same – industry sector, business goals, negotiation skills, common contracting issues 20% is Different – culture, laws, regulations, enforcement, government structure The 20% makes a difference!
International Implications -Culture• Understand cultural and ideological influences– formal v. informal– high context v. low context– high emotion v. use of “reason”– high sensitivity to time v. low sensitivity to time– general agreement terms v. specific agreement terms– high v. low level of risk taking– relationship building v. contract creation– negotiating as a unified team v. a collection of individuals
Business Visitor• Visa Waiver Program (ESTA)• Admitted for 90 days• B-1 Visa• Admitted for up to 6 months
Permissible B-1 Business Activities (Not Work)• Meetings• Training• Negotiating contracts• Assisting with litigation• Independent research• Commercial transactions
Meaningful Ties To Home Country: Required• Permanent employment• Meaningful business or financial connections• Close family ties or social or cultural associations
NAFTA Professional(TN) Visa• Canadian Citizens apply at a U.S. Port of Entry − Admitted in TN -1 status for 3 years• Mexican Citizens apply at a U.S. Consulate − TN-2 Visa issued for 1 year; admitted in TN-2 status for 3 years• Extendible for as long as U.S. employer wants to employ the TN professional and as long as TN professional has non- immigrant intent
NAFTA Professionals• TN available where job opportunity requires the services of one of the professions listed in NAFTA, for example: – Accountants – Architects – Computer Systems Analysts – Engineers – Land Surveyors – Librarians – Nurses – Pharmacists
E-2 Investor Visa• Non-Immigrant• Treaty-Based• Individual or Corporate Investor• Invest in Existing or New Enterprise• Investment Must Be − Active − Substantial − Not Marginal
Investment Opportunities• Existing Business: Document stock or ownership interest. Compile records reflecting financial and operations history of existing business• New Business: Incorporate business, request Federal tax ID number. Identify rental space. Prepare business plan
Process• Submit E-2 Visa Application to U.S. Consulate − To Develop and Direct the Enterprise or − Essential Employee• Family Members − Spouse Entitled to Employment Authorization − Children under 21• 5-year visa with 2-year admissions
H-1B SpecialtyOccupation Visa• The offered position must require a bachelors degree in a particular field (or equivalent education and experience) AND• The beneficiary must have a bachelors degree in that field (or equivalent education and experience)
Annual Caps• 65,000 new H-1B visas per year• 20,000 additional new H-1B visas for people with advanced degrees from U.S. colleges or universities• USCIS fiscal year begins on October 1 of each year; may file petitions for new H-1B visas on or after April 1 of each year (180 days before the effective date of the H-1B visa)
H-1B FilingRequirements• Employer must agree to pay the higher of the actual or prevailing wage as determined by the Department of Labor (DOL)• Employer must obtain a certified Labor Condition Application (LCA) from the DOL• Employer files a petition with the USCIS service center having jurisdiction over the place of employment• Employer agrees that it will be liable for the reasonable costs of return transportation for the H-1B worker if the worker is terminated before the end of the period of authorized H-1B status
H-1B Fees• Employer required to pay all filing and attorneys fees except for the premium processing fee• Fees: $325 base filing fee − $500 fraud detection and prevention fee − $1,500 education and training fee ($750 for employers with 25 employees or less)• Premium processing (expedite) fee: $1,225
Deemed Export Issues• In its petition, employer discloses if the beneficiary will have access to technology or technical data that requires a "deemed export license" pursuant to the Export Administration Regulations (EAR) or the International Traffic in Arms Regulations (ITAR)• If so, employer certifies that the beneficiary will not have access to such technology or technical data until the deemed export license is received
Scary Legal Issue #1.1: ExportControls• Exporting is a privilege, not a right - regulations govern legal way to export, and require a "license" to export all goods• No Export to certain countries• No Export for use in nuclear or biological weapons – watch out for multi-use products• No Export to "Denied Parties" – watch out if . . . – Customer or purchasing agent is reluctant to offer information about the end- use of the product – Product’s capabilities do not fit the customer line of business – Product ordered is incompatible with the technical level of the country to which the product is being shipped – Routine installation, training or maintenance are declined by the customer – Customer is willing to pay cash when financing would be more appropriate – Delivery dates are vague, or deliveries are planned for out-of-the-way destinations – A freight forwarding firm is listed as the product’s final destination – When questioned, the customer is evasive or unclear whether the purchased product is for domestic use, export or reexport
Scary Legal Issue #1.2:ITAR• International Traffic in Arms Regulations govern export of defense related materials and technologies• Companies may only share these items with U.S. persons and organizations — unless they receive authorization from the Department of State or qualify for a special exemption• If your company is in the aerospace and defense sector, you must pay attention
Scary Legal Issue #1.2:ITAR• Becoming ITAR compliant: – Register with the State Department – Establish a written Company Export Compliance Policy and Procedure Manual – Submit license applications for all exports of controlled items well in advance of the shipments – Export classify all your part numbers — products, parts, supplies – Know whether any party you do business with is not a U.S. person (as defined by the ITAR) – Ensure you have a Technology Control Plan in place – Screen for denied parties – Keep accurate records on all activity against State Department licenses and agreements
Scary Legal Issue #1.3:Boycott Regulations• U.S. Regulations prohibit honoring any boycott formed by foreign countries against nations that are friendly to the United States• Currently, the Arab Boycott of Israel• Boycott requests found in Contractual Documents, Shipping Instructions and Letters of Credit• Example: requests that products are not: – of Israeli origin – do not contain Israeli-origin parts – were not produced by Israeli firm or with Israeli labor – Israeli certificate of origin will not be acceptable
Scary Legal Issue #2:FCPA• Foreign Corrupt Practices Act - U.S. law designed to prevent bribery of foreign governmental officials by U.S. companies in order to influence the official’s acts or decisions if this is done to obtain, retain or direct business to anyone• Exceptions – Routine Governmental Actions• Cultural Issue – Gift-giving!
FCPA ProhibitionsWhat Who PurposeOffer/Promise/ to Foreign Government InfluenceAuthorization of either Official Official Act/Payment Political Party Official Decision Candidate for Foreign Political Officewith Agent / Foreign Representative OfficialMoney/ Obtain/RetainAnything of Value Business
FCPA Warning Signs• Watch out if . . . – The contracting party has a reputation for offering bribes or violating other laws – A decision maker asks for a lavish trip to see the demo product – The contracting party, or one of its directors, shareholders or employees, is a close relative or business associate of senior foreign government officials – The contracting party is getting paid unusually high commissions in relation to its scope of work and contractual obligations – The contracting party requests payments in an account outside the country of its residence – The contracting party has undisclosed principals, associates, or subcontractors with whom it splits fees – A decision maker asks for a ―personal favor‖ for their child
FCPA Compliance Tips• Look before you leap: know your business associates, partners, consultants and sales representatives – STEP 1 - Conduct a Background Check – STEP 2 - Contractual Representations – STEP 3 - Opinion of Counsel if Necessary
Scary Legal Issue #3:Protecting Your Crown Jewels• Intellectual property laws vary from country to country – but are still important protection!• Contracts only form of protection for intellectual property that offers protection in every country• Confidentiality provisions necessary to preserve trade secret rights in “know how”• Can use “bundle of rights” to negotiate flexible arrangements that meet both parties’ needs• But Remember - file U.S. trademark and copyright registrations with U.S. Customs & Border Protection
Lessons Learned• Need to understand the culture and the political, legal and economic system – Get help with the 20%• Intellectual property protection is just as critical outside U.S. as domestically• Written contracts maximize protection• Have fun – it brings people together and makes for good business!
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