Laws Affecting International Business and Travel Chapter 12
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Laws Affecting International Business and Travel Chapter 12

Laws Affecting International Business and Travel Chapter 12

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Laws Affecting International Business and Travel Chapter 12 Laws Affecting International Business and Travel Chapter 12 Presentation Transcript

  • Chapter 12 Laws Affecting InternationalBusiness and Travel Intercultural Business Communication, 4th ed., Chaney & Martin
  • Topics Home-Country and Host-Country Laws International Laws Contracts Global Patents Nonwritten Law Ethics and the Law International Travel and Law Intercultural Business Communication, 4th ed., Chaney & Martin
  • The world has numerous laws that affect international business.When a company is engaged in international business, what the company representativescan legally do is controlled by both their nation and theforeign nation with which they wish to conduct business. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Terms Act of State Doctrine - Each country can do as it wishes within its own boundaries. Home Country Laws - Laws, treaties, or acts that govern business within your own country (and those governing business with other countries). Host Country Laws - Laws, treaties, or acts that govern business within the foreign country with which you wish to conduct business. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Legal Requirements that Govern U.S. Citizens Actions During Negotiations Antidiversion Requirement - Bill of lading and invoice must clearly display that the carrier cannot divert the shipment to a country the U.S. government considers restricted. Intercultural Business Communication, 4th ed., Chaney & Martin
  •  Antiboycott Regulations - Prohibits U.S. companies from participating in boycotts between two foreign countries by refusing to do business with a friendly nation to comply with a foreign boycott. Antitrust Laws - Designed to ensure fair competition and low prices to U.S. consumers; they affect exporters in such areas as mergers and acquisitions of foreign firms, raw material procurement agreements, knowledge licenses, distribution channels, etc . Intercultural Business Communication, 4th ed., Chaney & Martin
  • Written Information Laws The Export Administration Act of 1985 - requires federal licensing of technical information in business correspondence. The Arms Export Control Act of 1968 and Trading with the Enemy Act of 1917 - prohibit the transfer of information on military material or defense-related materials. The International Emergency Economic Powers Act of 1977 - governs information that is research oriented from being communicated to foreigners. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Technology Laws The World Intellectual Property Organization (WIPO) of the United Nations promotes intellectual property rights worldwide and currently administers 22 treaties for 181 member nations. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Technology Laws Berne Convention Implementation Act of 1988 - recognized the copyrights of all the signatory nations to the act; 157countries were signatories in 2004. Madrid Convention - trademarks are protected by the 34 countries that are signatories (U.S. and China, however, are not signatories). Intercultural Business Communication, 4th ed., Chaney & Martin
  • Employment Laws Most nations have legislation governing wages, hours, union- management relations, residence visas, and work permits. Some nations require a certain ratio of nationals to foreigners. Legal questions that may be asked of a potential employee differ by country. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Maquiladora LawPresidential Decree for the Developmentand Operation of the MaquiladoraIndustry Program of 1983 International maquiladora program in Mexico allows the duty-free import of equipment, machinery, and materials to assemble parts of products that are then returned to the home country. Intercultural Business Communication, 4th ed., Chaney & Martin
  •  The U.S. Tariff Code allows the final product to be brought into the country with only the final value added to the goods being taxed. An important consideration in this program is the difference in form of law. The U.S. (except Louisiana) practices common law (based on what has been traditionally accepted as right over many years); Mexico practices civil law (body of laws of a state or nation related to private matters). The difference is that civil law rather than precedent is considered during litigation. Intercultural Business Communication, 4th ed., Chaney & Martin
  • International Law International Court of Justice (also known as the World Court) - body of the United Nations that provides a way to settle international disagreements between countries rather than corporations. The three legal bodies in the United Nations are: United Nations Commission on International Trade Law (UNCITRAL), The International Commission, and the Sixth Committee of the General Assembly. Intercultural Business Communication, 4th ed., Chaney & Martin
  • A movement by institutions concerned withinternational business has encouraged thedevelopment of agreements and laws that areuniformly accepted in world trade. Theseinstitutions are:  International Chamber of Commerce  International Commercial Terms (Incoterms)  ECE Standard Conditions  The Hague Convention  The Vienna Agreement Intercultural Business Communication, 4th ed., Chaney & Martin
  •  Quasi-international Law - rules for the relationship between legal entities and states that do not have national status, such as private corporations. Sanctions – prohibit U.S. companies from doing business in targeted countries. When the U.S. government does not approve of a country’s policies, they implement sanctions to try to reform the country. Intercultural Business Communication, 4th ed., Chaney & Martin
  •  Macaulays Thesis - considers long- term relationship more important than contracts. Thematization - process by which a framework for mutual communication and satisfaction is reached; process could be related to the law, economies, power, or religion. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Governance Structures Market governance - contract based Trilateral governance - adds an arbitrator Bilateral governance - may not spell everything out but implies a continuing relationship Unified governance – no details are negotiated in advance; maximum flexibility is provided - only one party sets terms for both parties; appropriate for subsidiaries of a single organization. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Contracts Contract - an agreement between parties to do something that is oral, written, or implied through conduct. How are contracts viewed in the U.S.? Very important; oral contract is legally enforceable. Intercultural Business Communication, 4th ed., Chaney & Martin
  •  How are contracts viewed in Japan? May be made verbally, in writing, or by conduct but are always open to renegotiation. How are contracts viewed by the Russian Federation? In the past little need existed for contracts; goods were allocated and firms accepted what was sent. This practice is now changing, but they still have problems with the concept. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Global Patents Company files patent application with the U.S. Patent Office; limitation to file abroad is one year from the date of the U.S. application. Patent Cooperation Treaty - when patents are filed in other countries, the new patents claim priority to the date on the U.S. patent thus prevailing over competing rights of other investors. Treaties override all other domestic laws; nations need to be aware of their sovereignty and remember that treaties should be based on good science, rather than on wishful thinking or bad politics. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Unwritten Law Unwritten business laws are called drawer regulations in Brazil because they operate from unwritten operational codes rather than laws. Many drawer regulations are disappearing with countries joining free trade markets. In high-context cultures (Japan), little emphasis is given to the written word; the situation would determine whether to adhere to the law. Oral agreements would be considered binding, and written contracts would be considered flexible. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Ethics and the LawFour motivations for unethical conduct in business:  profit  competition  justice  advertising Intercultural Business Communication, 4th ed., Chaney & Martin
  • The three dimensions of negotiation ethics are:  Means/ends – measured by utility  Relativism/absolutism – considers two extremes: either everything is relative or everything is without deviation from the rule  Truth telling – considers whether concealing information, conscious misstatements, exaggeration, or bluffing during negotiations is dishonest Intercultural Business Communication, 4th ed., Chaney & Martin
  • Laws Related to Ethics in Business  Foreign Corrupt Practices Act of 1977 - requires U.S. companies to account for and report international transactions accurately and prohibits bribes (including gifts and entertainment) that are used to gain a business advantage. Intercultural Business Communication, 4th ed., Chaney & Martin
  •  The Doctrine of Sovereign Compliance - an international legal principle that can be used as a defense in your home country for work carried out in a host country when the two countries legal positions are different. Export Trading Company Act of 1982 - allows companies that normally would not be allowed to participate in joint ventures to develop trading companies similar to those in Britain and Japan (e.g., GM, Ford, and Chrysler make parts with European and Japanese car manufacturers to jointly produce and sell cars). Intercultural Business Communication, 4th ed., Chaney & Martin
  • Legal and Ethical Practices are Viewed Differently The word "contraband" in the U.S. suggests breaking the law by smuggling. In Latin America, however, the Spanish word is contrabando (from the word contrabandido, which means "against the bandits,") and is viewed in a positive way. Intercultural Business Communication, 4th ed., Chaney & Martin
  • International Travel and Law A Passport - your proof of citizenship; need a copy of your birth certificate and current photos. Citizenship - the state of being vested with certain rights and duties as a native or naturalized member of a country. Visa - gives you the right to enter and stay in a country for a period of time for a specific purpose. Intercultural Business Communication, 4th ed., Chaney & Martin
  •  Consulate - made up of individuals sent by the government to other countries to promote the commercial interests of their home country. Customs Agents - enforce export and import laws of the country; have the right to search and confiscate anything you may have with you. Duties - import taxes Intercultural Business Communication, 4th ed., Chaney & Martin
  • Suggestions for International Travel Register with the U.S. embassy or consulate when you arrive. Turn to the embassy or consulate for legal, medical, or financial problems. Contact the American Consul for a list of attorneys, to notify your family, and to protest any mistreatment. The Consul can visit you in jail but cannot get you released or provide for bonds or fines. Axtell, Dos and Taboos of Hosting International Visitors
  •  Remember that you are subject to the laws of the country while you are there. Register with the local authorities if you plan a prolonged visit. You may be asked to leave your passport overnight or to complete certain forms. Use authorized outlets for cashing checks and buying airline tickets; avoid the black market or street money changers that you will see in many Axtell, Dos and Taboos of Hosting International Visitors
  •  Ask before you photograph anything to be sure it is permissible. Avoid these common infractions of the law: trying to take historical artifacts or antiquities out of the country, customs violations, immigration violations, drunk or disorderly conduct, and business fraud. Obtain an international driver’s license if you need to drive. Travel agents can assist with this. Many countries require proof of insurance while driving. Axtell, Dos and Taboos of Hosting International Visitors
  •  Do not deal in drugs; this is a serious offense in all countries, and penalties can be much more serious than in the U.S., including death. Keep a list of credit card/traveler’s check numbers in a safe place in case they are lost or stolen. Obtain a copy of Safe Trip Abroad. Axtell, Dos and Taboos of Hosting International Visitors
  •  Make a list of such useful telephone numbers as the U.S. State Department, Amnesty International (New York), and the International Legal Defense Counsel (Philadelphia). Your health should be a concern; get a copy of Health Information for International Travel by the Center for Disease Control and Prevention. Be trustworthy, helpful, kind, friendly, courteous, obedient, cheerful, brave, and reverent. Axtell, Dos and Taboos of Hosting International Visitors
  • Country-Specific Travel Tips Canada – Since 9/11/01, passports for U.S. citizens entering from the U.S. or another country are required. Hotel accommodations in large cities are similar to those in the U.S. Public transportation systems in Montréal and Québéc City are very good. England – Passport required; U.S citizens do not need a visa for visits up to six months; no vaccinations are required. Continental breakfast included in the room price in larger hotels. Public transportation includes the underground and taxis. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Country-Specific Travel Tips China – U.S. citizens need a passport and a visa. Hotel accommodations in large cities are available. Public transportation systems exist throughout the country. Bicycles are the main mode of transportation. France – Passport required, but U.S. citizens may travel in France without a visa for up to three months. No vaccinations are required. Hotels do not always have a bath in the room nor are they always air conditioned. Public transportation includes the Métro (subway), buses, streetcars, taxis, and the TGV (a high-speed train connecting 36 European cities). Use only “official” taxis; unauthorized taxis have no meters and charge whatever they wish. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Country-Specific Travel Tips Germany – Passport required, but U.S. citizens do not need a visa to travel in Germany for up to three months. No vaccinations are required. Hotel price generally includes a continental breakfast, but heat may be an extra charge. Not all hotel rooms have a bath inside the room. Public transportation includes buses, streetcars, subways, trains, and taxis. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Country-Specific Travel Tips Japan – Passport needed, but no visa is needed for visits of less than 90 days. No vaccinations are required. Large cities have numerous Western-style hotels with private baths. Restroom facilities are usually unisex. Public transportation includes trains, subways, and buses. The “bullet train,” which runs between major cities, offers regular and first-class accommodations. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Country-Specific Travel Tips Mexico – Proof of citizenship needed; U.S. citizens may stay up to three months in Mexico with no visa. No vaccinations are required but may be advisable when traveling in certain parts of the country. Resort towns and larger cities have numerous excellent hotel accommodations. Public transportation varies greatly from crowded buses to the subway of Mexico City. Driving in many parts of Mexico is not advisable. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Country-Specific Travel Tips The Netherlands – U.S. citizens need a passport but no visa. Hotels are comfortable. Public transportation is very good. South Korea – U. S. citizens need a passport but no visa for 30 days or less. Public transportation is very good. No vaccinations required. Both western and yogwan hotels are available. Taiwan – U. S. citizens need a valid passport and a visa after 30 days. Public transportation is very good. No vaccinations are required. Hotels are very western and comfortable. Intercultural Business Communication, 4th ed., Chaney & Martin
  • Travel Advice Obey the laws of the host country. Be courteous and helpful. Remember that it is their country. If you cannot speak positively about the country, remain silent. Intercultural Business Communication, 4th ed., Chaney & Martin