Laws Affecting International Business and Travel Chapter 12

Intercultural Business Communication, 4th ed., Chaney & Martin

Laws Affecting Laws Affecting International International

Business and TravelBusiness and Travel

Chapter 12


TopicsTopics Home-Country and Host-Country LawsHome-Country and Host-Country Laws International LawsInternational Laws ContractsContracts Global PatentsGlobal Patents Nonwritten LawNonwritten Law Ethics and the LawEthics and the Law International Travel and LawInternational Travel and Law


The world has numerous laws The world has numerous laws that affect international that affect international

business.business.

When a company is engaged in When a company is engaged in international business, what international business, what the company representatives the company representatives can legally do is controlled by can legally do is controlled by

both their nation and the both their nation and the foreign nation with which they foreign nation with which they

wish to conduct business.wish to conduct business.


TermsTerms Act of State DoctrineAct of State Doctrine - Each country can do as it - Each country can do as it

wishes within its own boundaries.wishes within its own boundaries. Home Country LawsHome Country Laws - Laws, treaties, or acts that - Laws, treaties, or acts that

govern business within your own country (and govern business within your own country (and those governing business with other countries).those governing business with other countries).

Host Country LawsHost Country Laws - Laws, treaties, or acts that - Laws, treaties, or acts that govern business within the foreign country with govern business within the foreign country with which you wish to conduct business.which you wish to conduct business.


Legal Requirements that Govern Legal Requirements that Govern U.S. Citizens' Actions During U.S. Citizens' Actions During

NegotiationsNegotiations

Antidiversion RequirementAntidiversion Requirement - Bill of - Bill of lading and invoice must clearly lading and invoice must clearly display that the carrier cannot display that the carrier cannot divert the shipment to a country the divert the shipment to a country the U.S. government considers U.S. government considers restricted.restricted.


Antiboycott RegulationsAntiboycott Regulations - Prohibits U.S. - Prohibits U.S. companies from participating in boycotts companies from participating in boycotts between two foreign countries by refusing to between two foreign countries by refusing to do business with a friendly nation to comply do business with a friendly nation to comply with a foreign boycott.with a foreign boycott.

Antitrust LawsAntitrust Laws - Designed to ensure fair - Designed to ensure fair competition and low prices to U.S. consumers; competition and low prices to U.S. consumers; they affect exporters in such areas as mergers they affect exporters in such areas as mergers and acquisitions of foreign firms, raw material and acquisitions of foreign firms, raw material procurement agreements, knowledge licenses, procurement agreements, knowledge licenses, distribution channels, etc .distribution channels, etc .


Written Information LawsWritten Information Laws The Export Administration Act of 1985The Export Administration Act of 1985 - requires - requires

federal licensing of technical information in federal licensing of technical information in business correspondence.business correspondence.

The Arms Export Control Act of 1968 and Trading with The Arms Export Control Act of 1968 and Trading with the Enemy Act of 1917the Enemy Act of 1917 - prohibit the transfer of - prohibit the transfer of information on militaryinformation on military material or defense-related material or defense-related materials.materials.

The International Emergency Economic Powers Act of The International Emergency Economic Powers Act of 19771977 - governs information that is research oriented - governs information that is research oriented from being communicated to foreigners.from being communicated to foreigners.


Technology LawsTechnology Laws

The World Intellectual Property The World Intellectual Property Organization (WIPO)Organization (WIPO) of the United of the United Nations promotes intellectual Nations promotes intellectual property rights worldwide and property rights worldwide and currently administers 22 treaties currently administers 22 treaties for 181 member nations.for 181 member nations.


Technology LawsTechnology Laws Berne Convention Implementation Act of Berne Convention Implementation Act of

19881988 - recognized the copyrights of all - recognized the copyrights of all the signatory nations to the act; the signatory nations to the act; 157countries were signatories in 2004.157countries were signatories in 2004.

Madrid ConventionMadrid Convention - trademarks are - trademarks are protected by the 34 countries that are protected by the 34 countries that are signatories (U.S. and China, however, signatories (U.S. and China, however, are not signatories).are not signatories).


Employment LawsEmployment Laws Most nations have legislation governing Most nations have legislation governing

wages, hours, union-management wages, hours, union-management relations, residence visas, and work relations, residence visas, and work permits.permits.

Some nations require a certain ratio of Some nations require a certain ratio of nationals to foreigners.nationals to foreigners.

Legal questions that may be asked of a Legal questions that may be asked of a potential employee differ by country.potential employee differ by country.


Maquiladora LawMaquiladora Law

International maquiladora program in International maquiladora program in Mexico allows the duty-free import of Mexico allows the duty-free import of equipment, machinery, and materials equipment, machinery, and materials to assemble parts of products that are to assemble parts of products that are then returned to the home country.then returned to the home country.

Presidential Decree for the Development and Operation of the Maquiladora Industry Program of 1983


The U.S. Tariff CodeThe U.S. Tariff Code allows the final product to allows the final product to be brought into the country with only the final be brought into the country with only the final value added to the goods being taxed.value added to the goods being taxed.

An important consideration in this program is An important consideration in this program is the difference in form of law. The U.S. (except the difference in form of law. The U.S. (except Louisiana) practices common law (based on Louisiana) practices common law (based on what has been traditionally accepted as right what has been traditionally accepted as right over many years); Mexico practices civil law over many years); Mexico practices civil law (body of laws of a state or nation related to (body of laws of a state or nation related to private matters). The difference is that civil law private matters). The difference is that civil law rather than precedent is considered during rather than precedent is considered during litigation.litigation.


International LawInternational Law International Court of JusticeInternational Court of Justice (also known as the (also known as the

World Court) - body of the United Nations that World Court) - body of the United Nations that provides a way to settle international provides a way to settle international disagreements between countries rather than disagreements between countries rather than corporations. corporations.

The three legal bodies in the United Nations The three legal bodies in the United Nations are: are: United Nations Commission on United Nations Commission on International Trade Law (UNCITRAL), The International Trade Law (UNCITRAL), The International Commission, and the Sixth International Commission, and the Sixth Committee of the General Assembly.Committee of the General Assembly.


A movement by institutions concerned with A movement by institutions concerned with international business has encouraged the international business has encouraged the development of agreements and laws that are development of agreements and laws that are uniformly accepted in world trade. These uniformly accepted in world trade. These institutions are:institutions are:

International Chamber of CommerceInternational Chamber of Commerce International Commercial Terms International Commercial Terms

(Incoterms)(Incoterms) ECE Standard ConditionsECE Standard Conditions The Hague ConventionThe Hague Convention

The Vienna AgreementThe Vienna Agreement


Quasi-international LawQuasi-international Law - rules for the - rules for the relationship between legal entities and relationship between legal entities and states that do not have national status, states that do not have national status, such as private corporations.such as private corporations.

SanctionsSanctions – prohibit U.S. companies from – prohibit U.S. companies from doing business in targeted countries. doing business in targeted countries. When the U.S. government does not When the U.S. government does not approve of a country’s policies, they approve of a country’s policies, they implement sanctions to try to reform the implement sanctions to try to reform the country.country.


Macaulay's ThesisMacaulay's Thesis - considers long- - considers long-term relationship more important term relationship more important than contracts.than contracts.

ThematizationThematization - process by which a - process by which a framework for mutual framework for mutual communication and satisfaction is communication and satisfaction is reached; process could be related to reached; process could be related to the law, economies, power, or the law, economies, power, or religion.religion.


Governance StructuresGovernance Structures Market governanceMarket governance - contract based - contract based Trilateral governanceTrilateral governance - adds an arbitrator - adds an arbitrator Bilateral governanceBilateral governance - - may not spell may not spell

everything out but implies a continuing everything out but implies a continuing relationshiprelationship

Unified governanceUnified governance – no details are – no details are negotiated in advance; maximum flexibility negotiated in advance; maximum flexibility is provided - only one party sets terms for is provided - only one party sets terms for both parties; appropriate for subsidiaries of both parties; appropriate for subsidiaries of a single organization.a single organization.


ContractsContracts

Contract - an agreement between Contract - an agreement between parties to do something that is oral, parties to do something that is oral, written, or implied through conduct.written, or implied through conduct.

How are contracts viewed in the How are contracts viewed in the U.S.? Very important; oral contract U.S.? Very important; oral contract is legally enforceable.is legally enforceable.


How are contracts viewed in Japan? How are contracts viewed in Japan?

May be made verbally, in writing, or by May be made verbally, in writing, or by conduct but are always open to conduct but are always open to renegotiation.renegotiation.

How are contracts viewed by the How are contracts viewed by the Russian Federation? Russian Federation?

In the past little need existed for In the past little need existed for contracts; goods were allocated and contracts; goods were allocated and firms accepted what was sent. This firms accepted what was sent. This practice is now changing, but they still practice is now changing, but they still have problems with the concept.have problems with the concept.


Global PatentsGlobal Patents Company files patent application with the U.S. Company files patent application with the U.S.

Patent Office; limitation to file abroad is one year Patent Office; limitation to file abroad is one year from the date of the U.S. application.from the date of the U.S. application.

Patent Cooperation TreatyPatent Cooperation Treaty - when patents are filed - when patents are filed in other countries, the new patents claim priority to in other countries, the new patents claim priority to the date on the U.S. patent thus prevailing over the date on the U.S. patent thus prevailing over competing rights of other investors.competing rights of other investors.

Treaties override all other domestic laws; nations Treaties override all other domestic laws; nations need to be aware of their sovereignty and remember need to be aware of their sovereignty and remember that treaties should be based on good science, that treaties should be based on good science, rather than on wishful thinking or bad politics.rather than on wishful thinking or bad politics.


Unwritten LawUnwritten Law

Unwritten business laws are called Unwritten business laws are called drawer drawer regulationsregulations in Brazil because they operate from in Brazil because they operate from unwritten operational codes rather than laws. unwritten operational codes rather than laws. Many drawer regulations are disappearing with Many drawer regulations are disappearing with countries joining free trade markets.countries joining free trade markets.

In high-context cultures (Japan), little emphasis In high-context cultures (Japan), little emphasis is given to the written word; the situation would is given to the written word; the situation would determine whether to adhere to the law. determine whether to adhere to the law. Oral Oral agreementsagreements would be considered binding, and would be considered binding, and written contracts would be considered flexible.written contracts would be considered flexible.


Ethics and the LawEthics and the Law

profitprofit competitioncompetition justicejustice advertisingadvertising

Four motivations for unethical

conduct in business:


The three dimensions of negotiation The three dimensions of negotiation ethics are:ethics are:

Means/endsMeans/ends – measured by utility – measured by utility Relativism/absolutismRelativism/absolutism – considers two – considers two

extremes: either everything is relative or extremes: either everything is relative or everything is without deviation from the everything is without deviation from the rulerule

Truth tellingTruth telling – considers whether – considers whether concealing information, conscious concealing information, conscious misstatements, exaggeration, or bluffing misstatements, exaggeration, or bluffing during negotiations is dishonestduring negotiations is dishonest


Laws Related to Ethics in BusinessLaws Related to Ethics in Business

Foreign Corrupt Practices Act of 1977Foreign Corrupt Practices Act of 1977 - - requires U.S. companies to account for requires U.S. companies to account for and report international transactions and report international transactions accurately and prohibits bribes accurately and prohibits bribes (including gifts and entertainment) that (including gifts and entertainment) that are used to gain a business advantage.are used to gain a business advantage.


The Doctrine of Sovereign ComplianceThe Doctrine of Sovereign Compliance - an - an international legal principle that can be used as international legal principle that can be used as a defense in your home country for work carried a defense in your home country for work carried out in a host country when the two countries' out in a host country when the two countries' legal positions are different.legal positions are different.

Export Trading Company Act of 1982Export Trading Company Act of 1982 - allows - allows companies that normally would not be allowed companies that normally would not be allowed to participate in joint ventures to develop trading to participate in joint ventures to develop trading companies similar to those in Britain and Japan companies similar to those in Britain and Japan (e.g., GM, Ford, and Chrysler make parts with (e.g., GM, Ford, and Chrysler make parts with European and Japanese car manufacturers to European and Japanese car manufacturers to jointly produce and sell cars).jointly produce and sell cars).


Legal and Ethical Practices are Legal and Ethical Practices are Viewed DifferentlyViewed 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.


International Travel and LawInternational Travel and Law A PassportA Passport - your proof of citizenship; need a - your proof of citizenship; need a

copy of your birth certificate and current copy of your birth certificate and current photos.photos.

CitizenshipCitizenship - the state of being vested with - the state of being vested with certain rights and duties as a native or certain rights and duties as a native or naturalized member of a country.naturalized member of a country.

Visa Visa - gives you the right to enter and stay in - gives you the right to enter and stay in a country for a period of time for a specific a country for a period of time for a specific purpose.purpose.


ConsulateConsulate - made up of individuals sent - made up of individuals sent by the government to other countries to by the government to other countries to promote the commercial interests of promote the commercial interests of their home country.their home country.

Customs AgentsCustoms Agents - enforce export and - enforce export and import laws of the country; have the import laws of the country; have the right to search and confiscate anything right to search and confiscate anything you may have with you.you may have with you.

DutiesDuties - import taxes- import taxes

Axtell, Do's and Taboos of Hosting International Visitors

Suggestions for International Suggestions for International TravelTravel

Register with the U.S. embassy or consulate Register with the U.S. embassy or consulate when you arrive.when you arrive.

Turn to the embassy or consulate for legal, Turn to the embassy or consulate for legal, medical, or financial problems.medical, or financial problems.

Contact the American Consul for a list of Contact the American Consul for a list of attorneys, to notify your family, and to protest attorneys, to notify your family, and to protest any mistreatment. The Consul can visit you in any mistreatment. The Consul can visit you in jail but cannot get you released or provide for jail but cannot get you released or provide for bonds or fines.bonds or fines.


Remember that you are subject to the laws of Remember that you are subject to the laws of the country while you are there.the country while you are there.

Register with the local authorities if you plan a Register with the local authorities if you plan a prolonged visit. You may be asked to leave your prolonged visit. You may be asked to leave your passport overnight or to complete certain forms.passport overnight or to complete certain forms.

Use authorized outlets for cashing checks and Use authorized outlets for cashing checks and buying airline tickets; avoid the black market or buying airline tickets; avoid the black market or street money changers that you will see in many street money changers that you will see in many countries.countries.


Ask before you photograph anything to be sure it is Ask before you photograph anything to be sure it is permissible.permissible.

Avoid these common infractions of the law: trying Avoid these common infractions of the law: trying to take historical artifacts or antiquities out of the to take historical artifacts or antiquities out of the country, customs violations, immigration violations, country, customs violations, immigration violations, drunk or disorderly conduct, and business fraud.drunk or disorderly conduct, and business fraud.

Obtain an international driver’s license if you need Obtain an international driver’s license if you need to drive. Travel agents can assist with this. Many to drive. Travel agents can assist with this. Many countries require proof of insurance while driving.countries require proof of insurance while driving.


Do not deal in drugs; this is a serious Do not deal in drugs; this is a serious offense in all countries, and penalties offense in all countries, and penalties can be much more serious than in the can be much more serious than in the U.S., including death.U.S., including death.

Keep a list of credit card/traveler’s check Keep a list of credit card/traveler’s check numbers in a safe place in case they are numbers in a safe place in case they are lost or stolen.lost or stolen.

Obtain a copy of Obtain a copy of Safe Trip AbroadSafe Trip Abroad..


Make a list of such useful telephone Make a list of such useful telephone numbers as the U.S. State Department, numbers as the U.S. State Department, Amnesty International (New York), and Amnesty International (New York), and the International Legal Defense Counsel the International Legal Defense Counsel (Philadelphia).(Philadelphia).

Your health should be a concern; get a Your health should be a concern; get a copy of copy of Health Information for Health Information for International TravelInternational Travel by the Center for by the Center for Disease Control and Prevention.Disease Control and Prevention.

Be trustworthy, helpful, kind, friendly, Be trustworthy, helpful, kind, friendly, courteous, obedient, cheerful, brave, courteous, obedient, cheerful, brave, and reverent.and reverent.


Country-Specific Travel TipsCountry-Specific Travel Tips

CanadaCanada – Since 9/11/01, passports for U.S. – Since 9/11/01, passports for U.S. citizens entering from the U.S. or another citizens entering from the U.S. or another country are required. Hotel accommodations in country are required. Hotel accommodations in large cities are similar to those in the U.S. large cities are similar to those in the U.S. Public transportation systems in MontrPublic transportation systems in Montréal and éal and Québéc City are very good.Québéc City are very good.

EnglandEngland – Passport required; U.S citizens do not – Passport required; U.S citizens do not need a visa for visits up to six months; no need a visa for visits up to six months; no vaccinations are required. Continental vaccinations are required. Continental breakfast included in the room price in larger breakfast included in the room price in larger hotels. Public transportation includes the hotels. Public transportation includes the underground and taxis.underground and taxis.


Country-Specific Travel TipsCountry-Specific Travel Tips ChinaChina – U.S. citizens need a passport and a visa. Hotel – U.S. citizens need a passport and a visa. Hotel

accommodations in large cities are available. Public accommodations in large cities are available. Public transportation systems exist throughout the country. transportation systems exist throughout the country. Bicycles are the main mode of transportation.Bicycles are the main mode of transportation.

FranceFrance – Passport required, but U.S. citizens may travel – Passport required, but U.S. citizens may travel in France without a visa for up to three months. No in France without a visa for up to three months. No vaccinations are required. Hotels do not always have a vaccinations are required. Hotels do not always have a bath in the room nor are they always air conditioned. bath in the room nor are they always air conditioned. Public transportation includes the MPublic transportation includes the Métro (subway), étro (subway), buses, streetcars, taxis, and the TGV (a high-speed buses, streetcars, taxis, and the TGV (a high-speed train connecting 36 European cities). Use only train connecting 36 European cities). Use only “official” taxis; unauthorized taxis have no meters and “official” taxis; unauthorized taxis have no meters and charge whatever they wish.charge whatever they wish.



GermanyGermany – Passport required, but U.S. – Passport required, but U.S. citizens do not need a visa to travel in citizens do not need a visa to travel in Germany for up to three months. No Germany for up to three months. No vaccinations are required. Hotel price vaccinations are required. Hotel price generally includes a continental generally includes a continental breakfast, but heat may be an extra breakfast, but heat may be an extra charge. Not all hotel rooms have a bath charge. Not all hotel rooms have a bath inside the room. Public transportation inside the room. Public transportation includes buses, streetcars, subways, includes buses, streetcars, subways, trains, and taxis.trains, and taxis.



JapanJapan – – Passport needed, but no visa is Passport needed, but no visa is needed for visits of less than 90 days. needed for visits of less than 90 days. No vaccinations are required. Large No vaccinations are required. Large cities have numerous Western-style cities have numerous Western-style hotels with private baths. Restroom hotels with private baths. Restroom facilities are usually unisex. Public facilities are usually unisex. Public transportation includes trains, subways, transportation includes trains, subways, and buses. The “bullet train,” which and buses. The “bullet train,” which runs between major cities, offers regular runs between major cities, offers regular and first-class accommodations.and first-class accommodations.



MexicoMexico – Proof of citizenship needed; U.S. – Proof of citizenship needed; U.S. citizens may stay up to three months in Mexico citizens may stay up to three months in Mexico with no visa. No vaccinations are required but with no visa. No vaccinations are required but may be advisable when traveling in certain may be advisable when traveling in certain parts of the country. Resort towns and larger parts of the country. Resort towns and larger cities have numerous excellent hotel cities have numerous excellent hotel accommodations. Public transportation varies accommodations. Public transportation varies greatly from crowded buses to the subway of greatly from crowded buses to the subway of Mexico City. Driving in many parts of Mexico Mexico City. Driving in many parts of Mexico is not advisable.is not advisable.


Country-Specific Travel TipsCountry-Specific Travel Tips The Netherlands –The Netherlands – U.S. citizens need a passport but U.S. citizens need a passport but

no visa. Hotels are comfortable. Public no visa. Hotels are comfortable. Public transportation is very good.transportation is very good.

South KoreaSouth Korea – – U. S. citizens need a passport but no U. S. citizens need a passport but no visa for 30 days or less. Public transportation is visa for 30 days or less. Public transportation is very good. No vaccinations required. Both western very good. No vaccinations required. Both western and yogwan hotels are available.and yogwan hotels are available.

TaiwanTaiwan – – U. S. citizens need a valid passport and a U. S. citizens need a valid passport and a visa after 30 days. Public transportation is very visa after 30 days. Public transportation is very good. No vaccinations are required. Hotels are very good. No vaccinations are required. Hotels are very western and comfortable.western and comfortable.


Travel AdviceTravel Advice

Obey the laws of the host country. Obey the laws of the host country. Be courteous and helpful. Be courteous and helpful. Remember that it is their country. Remember that it is their country. If you cannot speak positively about If you cannot speak positively about

the country, remain silent.the country, remain silent.

Laws Affecting International Business and Travel Chapter 12

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Transcript of Laws Affecting International Business and Travel Chapter 12