International Business Transactions Research Articles

Managing Compliance with U.S. Treasury Department OFAC Obligations: Even If Your Business Is Exclusively Outside the U.S.

The U.S. has long used trade and economic sanctions as elements of its national security and foreign policy. These sanctions target individuals and countries that represent national security threats to the U.S. and affect a wide range of transactions, both within the U.S. and beyond borders. Understanding these regulations and the transactions they cover is critical to anyone participating in international business transactions. Indeed, if you engage in international business from outside the U.S., there is a good chance that your work will involve U.S. companies, subsidiaries of U.S. companies, U.S. banks, or U.S. citizens and permanent residents. Or you may yourself be a U.S. citizen, U.S. permanent resident or an employee of a U.S. subsidiary located outside the U.S. In these cases, some of your activities may be regulated by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). These regulations have a surprisingly broad reach, even covering certain activities that take place entirely outside the U.S. For the international business and legal representative, it is essential to understand the scope and coverage of the OFAC regulations and recognize how they can apply to transactions outside the U.S. Failure to comply with the regulations can result in personal liability as well as U.S. sanctions on your company or organization, limiting your ability to transact business in the U.S. and with U.S. companies. In general, the OFAC regulations serve to restrict certain types of trade with countries or entities of concern. OFAC has a variety of country-specific regulations. Two of the most well known are the Cuban Assets Control Regulations (31 C.F.R. Part 515) and the Iranian Transaction Regulations (31 C.F.R. Part 560). These regulations restrict trade with Cuba and Iran in many significant ways. Another well-known set of restrictions are those imposed on individuals or organizations of concern to the U.S., the so-called “Specially Designated Nationals” (SDNs). The names of these individuals and entities appear on OFAC’s SDNs list. The list includes organizations such as al-Qaeda, Hezbollah, and Hamas, as well as particular individuals, including known terrorists, supporters of weapons of mass destruction programs, and drug kingpins. This article highlights ten key aspects of the OFAC regulations for the international business representative operating predominantly outside the U.S. Our list focuses on the particular risks to non-U.S. persons, and U.S. persons operating outside the U.S.

Uniform Application of the International Sales Law/Understanding Uniformity, the Global Jurisconsultorium and Examination and Notification Provisions of the CISG

As a student at the University of Pittsburgh School of Law, my favorite courses were International Sales and International Business Transactions. The former I appreciated for nourishing my academic interest in the United Nations Convention on Contracts for the International Sale of Goods (CISG), while the latter I appreciated for instilling in me the tools to be a responsible transactions attorney. Learning from professors like Professor Harry Flechtner and Professor Ronald Brand, my profound interest in the CISG grew, and I realized a deep appreciation for scholarly commentary on the CISG. Herein, I discuss a book about the uniform application of the CISG, including obstacles to uniform application of the CISG.

Accounting Management by International Standards

This paper traces the benefits of international accounting standards – their contribution to harmonization andglobalization by purposing and tasking for accounting management. Measuring in details their pros and conseffects on the division of labour, financial innovation, company transactions and cost of capital it could beauthor’s recommendation for the business management inside and outside of one country’s border. Especiallythe multinational companies whose subsidiaries had to report for some purposes (e.g. tax, local borrowing,benchmarking) using national accounting rules convert and consolidate their different framework for unifiedfinancial statement where they were listed. With the growth of international business transactions by private andpublic entities, organizations the need to coordinate different investment decisions has increased. A suitableaccounting information system can help multinational enterprises accomplish their managerial functions on aglobal basis. In this viewpoint the adoption of international accounting standards can promote and support forthe business management.

Harmonizing International Commercial Law Through Codification

The growing trend toward trade liberalization and the The growing trend toward trade liberalization and the switch from protectionist to open market economies in the late twentieth century has resulted in the breaking down of discrete markets domestically and internationally, and in the worldwide integration of these markets generally. Correspondingly, there have been attempts at integrating the laws governing international business transactions to make it easier for persons to engage in cross-border transactions. Despite these efforts, national domestic laws often continue to compete with similar laws of other nations and with a plethora of international agreements and understandings to which different countries may be parties. The resulting inconsistency inevitably increases the legal risk associated with these transactions, causing uncertain outcomes and an increase in the costs associated with these transactions. This article suggests that the disparate range of laws currently applicable to cross-border commercial transactions should be further harmonized. As much of the inconsistency in the applicable law is the product of interest group rent seeking than the result of attempts to deliver efficient and equitable legal systems in competition with each other, the article suggests that such harmonization be achieved by way of codification of the applicable laws. Such codification can be achieved by nations modifying their domestic commercial laws to accommodate international conventions that are already in existence or to be developed for this purpose, at both the regional and international levels.

Trends in the International Fight Against Bribery and Corruption

Over the past decade, we have witnessed some early signs of progress in the battle against international bribery and corruption, a problem that throughout the history of commerce had previously been ignored. We present a model that we then use to assess progress in reducing bribery. The model components include both hard law and soft law legislation components and enforcement and compliance components. We begin by summarizing the literature that convincingly argues that bribery is an immoral and unethical practice and that the economic harm it causes falls most heavily on those least able to absorb it. The next section summarizes the main provisions of anti-bribery legislation including the Foreign Corrupt Practices Act (FCPA), the Organization for Economic Development’s Convention on Combating Bribery of Foreign Officials in International Business Transactions, the United Nations Convention Against Corruption and the laws of selected countries. We conclude this section with a discussion of the “moral imperialism” argument for not imposing Western laws and values on other cultures. The next section focuses on the roles played by NGOs including Transparency International (TI), the World Economic Forum (WEF), and the International Chamber of Commerce. We review trends in enforcement and prosecution, including a review of the United States’ enforcement processes, mechanisms for cross-border legal assistance, a discussion of the distinctive nature of FCPA cases, and an assessment of what the future holds for enforcement. The final section focuses on compliance processes for corporations aimed at reducing the risk of FCPA and related violations. This section also addresses the ethics of gift giving and “grease” payments. The article concludes with a summary and suggestions for further research. Throughout the article, we reference important bribery cases and include comments from several authorities who are on the front lines of the battle against international bribery.

Global Anti‐Corruption Regimes: Why Law Schools May Want to Take a Multi‐Jurisdiction Approach

The legal fight against bribery and corruption has evolved from the solitary effort of the United States with its Foreign Corrupt Practices Act (FCPA) to a global legal endeavor. Corporations are frequently engaged in transnational deals that require them to understand their obligations under a web of anti-corruption regulations with penalties ranging from fines in the tens of millions of dollars to life imprisonment. Although the market for legal services has changed to match client needs, the curriculum at most U.S. law schools has not. This paper explores the relationship between transnational business and legal services and legal education in the United States. First, the article offers a comparative analysis of the main anti-corruption regimes, including the Foreign Corrupt Practices Act, The Organization for Economic Co-Operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, United Nations Convention Against Corruption, The Organization of American States Inter-American Convention Against Corruption, Council of Europe Criminal and Civil Law Conventions on Corruption and The African Union Convention on Preventing and Combating Corruption. Second, this paper analyzes how the legal market in the United States has responded to the global regulatory environment and provides an empirical study of the what anti-corruption legal services the twenty-five largest U.S. law firms provide their clients. Finally, the paper presents a rough outline of a possible curriculum change and suggests that U.S. law schools would be well-advised to allow interested students to pursue multi-jurisdictional specialization in certain regulatory practice areas.

INFORMATION TECHNOLOGY CAPACITIES AND THE BORN GLOBAL COMPANIES <BR> DOI: 10.5585/riae.v8i1.1629

International business transactions have increased in recent years, triggered by the opening up of markets and the development of information technologies and communications, especially in the cases of small and medium enterprises. In this context, a new type of company is emerging: the so-called 'born global' companies. These organizations have an international profile since their birth, and have not gone through the traditional evolutionary pattern of internationalization. This article describes the theories that explain this new phenomenon, the main features of these new companies and their relationship with information technology (IT), which allows them to generate competitive advantages when entering the international market.

Direct offsets in international trade as a remedy for asymmetric information

PurposeThe main purpose of this paper is to investigate whether purchases of capital goods through direct offset transactions (OTs) could be a more beneficial form of trade than conventional market transactions (MTs).Design/methodology/approachAn original model of trade is offered where a company from a less‐developed country plans to acquire an advanced technology embodied in capital goods from a developed country's firm. The quality of technology is unknown to the buyer. The model is used to analyse the choice of transactional form made by the purchasing firm.FindingsIt is shown that, in the case of substantial uncertainty about the quality of the acquired technology, direct offsets could be the preferred form of exchange. Direct OTs serve as an insurance against the technology of low quality. They become a credible signal of capital goods' quality in the situation of asymmetric information between the seller and the buyer. It is a rational reaction to market imperfections.Practical implicationsThe findings imply that, under asymmetric information about the quality of acquired technology, the rational decision makers should replace the conventional MTs with the direct offsets.Originality/valueThe results of the paper contribute to the discussion on the motivation for the use of direct offsets as a transactional form of international trade. The paper should be of interest to practitioners as well as to academics specialising in international business transactions.

Bribery in International Business Transactions

Globalization leads to cross-border business transactions between societies with very different norms and regulations regarding bribery. Bribery in international business transactions can be seen as a function of not only the demand for such bribes in different countries, but the supply, or willingness to provide bribes by multinational firms and their representatives. This study addresses the propensity of firms from 30 different countries to engage in international bribery. The study incorporates both domestic (economic development, culture, and domestic corruption in the supplying country) and international factors (those countries’ patterns of trade and involvement in international accords) in explaining the willingness to bribe abroad. The propensity to provide bribes was the lowest when corruption was not tolerated in the multinational firms’ home countries, when the firms’ countries were signatories of the Organization for Economic Cooperation and Development (OECD) anti-bribery convention, and when those countries traded heavily with wealthier nations. Further, these findings are maintained when controlling for levels of economic development and cultural values in the supplying country. In terms of culture, firms from high power distance countries showed a somewhat greater propensity for providing bribes in transactions with less-developed nations.

PENYALAHGUNAAN LETTER OF CREDIT DALAM PERDAGANGAN EKSPOR IMPOR UNTUK MELAKUKAN TRADE BASED MONEY LAUNDERING STUDI TERHADAP KASUS L/C FIKTIF BNI

AbstrakThis article gives elaboration by analysis onfake letter of credit issuance atEN!. The letter of credit in false issued is categorized as trade based moneylaundering. The false is done by mark up method for export-import invoicesas conditioned document of letter of credit why resulted increased goodsprice become more expensive. More of misuse of letter of credit that is aimedto money laundering practice known as predicate offences by countelfeitdocuments like truly international business transaction has been executed.The author does analysis to prove the using of false letter of credit washappened in EN!. The author opinion in EN! case can be regarded as tradebased money laundering on letter of credit misused by made false of leller ofcredit documents and more the export import transaction itself

Role playing in teaching international business transaction law

Role playing in teaching international business transaction law

Impact of Terrorism and Security Measures on Global Business Transactions: Some International Business Guidelines

Terrorism is likely to continue well into the future, presenting a new type of risk for companies that engage in international business transactions. Worldwide, government policymakers have introduced a variety of security measures to contain terrorism while trying not to reduce/distract global trade and investment. For international business (IB) scholars, this opens a new field of inquiry. This paper outlines different streams of research relative to terrorism, related security measures, and international business. Suggestions are made regarding the unique role that multinational enterprises can play in abating terrorism, for example, by taking steps to reduce global poverty and hatred, directly negotiating with terrorists, and developing new technology to counter terrorism.

Judicial Services for Global Commerce – Made in Germany?

International business disputes rarely go to court, but sometimes they do. By virtue of the internationally accepted principle of party autonomy, business partners involved in cross-border transactions are entitled to select their forum of choice for any dispute which may arise from their commercial relationship. Party autonomy entails the right to opt out of the nation state's court systems. In fact, arbitration clauses often refer disputes to a non-state institution for commercial arbitration such as the International Court of Arbitration of the ICC in Paris. In a choice of court agreement, however, parties may also choose between the different forums for dispute resolution provided by the nation states. In the era of economic globalization when the demand for cross-border dispute resolution services is growing, the provision of legal services for international commerce becomes big business. As a result, national business lawyers develop a natural interest in channeling international disputes to their domestic courts. A very effective way to broaden their market share is to submit as many contracts as possible to their own national law. Once a choice of law clause, English law for example, is agreed on, a corresponding choice of court agreement comes quasi naturally, since the courts of other nations have a lack of experience in applying foreign law. Thus, when international business transactions are negotiated, the involved lawyers engage in what is appropriately described as a ‘fight for the applicable law'.

Working Paper 7: The political economy of asset recovery processes

Since the mid-1990s, the fight against corruption has become an integral part of the international development agenda. Along with the growing concern about corruption, the problem of assets stolen by public officials came to the fore of the agenda. This is evidenced by a steady increase in international agreements, such as the Organisation for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions adopted in 1997, and the United Nations Convention against Corruption (UNCAC) signed in 2003. The UNCAC, in particular, includes specific mechanisms that facilitate repatriation of stolen public assets.
 Since political will is the concentrated expression of powerful political and economic interests in a country, more attention must be paid to these interests when it comes to asset recovery measures. This is the aim of the working paper.
 By using the political economy framework, the paper identifies the political and institutional obstacles to effective policy implementation. The focus will be on the factors involved in the process of international recovery of stolen assets, although this process can and should not be analysed separately from the broader challenge of the fight against corruption. Both these issues are interrelated and can have a significant impact on each other.

The effectiveness of laws against bribery abroad

This paper analyzes the effectiveness of laws against bribery abroad in inducing foreign investors to reduce their investments in corrupt countries. The laws are designed to reduce the supply of bribes by foreign investors by increasing the costs of bribing abroad. Such increase in costs will make foreign investors more sensitive to corruption, and induce them to reduce their investments in corrupt countries. However, the paper argues that these laws need to be implemented and coordinated in multiple countries to become effective. Otherwise, investors in a country will have incentives to bypass them when competitors from other countries are not bound by similar legal constrains. The empirical analysis shows that investors from countries that implemented the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 1997 reduced their investments in corrupt countries. Investors from the US, which were bound by the Foreign Corrupt Practices Act of 1977, also reduced investments in corrupt countries, but only after the OECD Anti-Bribery Convention was in place.

Lawyers as Sanctifiers: The Role of Elite Law Firms in International Business Transactions

Globalization has fundamentally accelerated and altered business transactions. The search for low labor costs and cheap raw materials has led to a proliferation of international transactions, and large, international law firms are called on to participate in complex transactions helping business tap into sources of finance around the world for investment. This article first examines the theoretical underpinnings of international legal practice, taking into account the historiography of U.S. and U.K. law firms. Part II describes the economic and political factors behind law firms' rise. Part III analyzes the success of the common law, as expressed through contract, at the expense of civilian codes. Part IV examines how international law firms have capitalized on their growth and success. Part V draws upon Luhmann's sociology of law to begin to explain how law firms achieve their aims by creating supporting and enabling structures for business. Part VI highlights a case study of the creation of a legal investment device, the U.K. Pfandbriefe. The conclusion suggests some ways of bringing these diverse strands together that explain law firms' roles in international business transactions through the management of uncertainty and stabilization of expectations.

Who cares about corruption?

This paper examines the impact of corruption on foreign direct investment (FDI). It argues that corruption results not only in a reduction in FDI, but also in a change in the composition of country of origin of FDI. It presents two key findings. First, corruption results in relatively lower FDI from countries that have signed the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. This suggests that laws against bribery abroad may act as a deterrent against engaging in corruption in foreign countries. Second, corruption results in relatively higher FDI from countries with high levels of corruption. This suggests that investors who have been exposed to bribery at home may not be deterred by corruption abroad, but instead seek countries where corruption is prevalent.

Harmonizing International Commercial Law Through Codification

The growing trend toward trade liberalization and the The growing trend toward trade liberalization and the switch from protectionist to open market economies in the late twentieth century has resulted in the breaking down of discrete markets domestically and internationally, and in the worldwide integration of these markets generally. Correspondingly, there have been attempts at integrating the laws governing international business transactions to make it easier for persons to engage in cross-border transactions. Despite these efforts, national domestic laws often continue to compete with similar laws of other nations and with a plethora of international agreements and understandings to which different countries may be parties. The resulting inconsistency inevitably increases the legal risk associated with these transactions, causing uncertain outcomes and an increase in the costs associated with these transactions. This article suggests that the disparate range of laws currently applicable to cross-border commercial transactions should be further harmonized. As much of the inconsistency in the applicable law is the product of interest group rent seeking than the result of attempts to deliver efficient and equitable legal systems in competition with each other, the article suggests that such harmonization be achieved by way of codification of the applicable laws. Such codification can be achieved by nations modifying their domestic commercial laws to accommodate international conventions that are already in existence or to be developed for this purpose, at both the regional and international levels.

How to be a good global communicator

AbstractAre you a good global communicator? With the rise in global mergers, outsourcing, and crossborder business, this issue can be critical to your success. We don't all “speak the same language,” even if we're all using English. Each country has a different culture, with different expectations and customs. The authors look at how culture, decision styles, and technology can affect your international business transactions—and how to avoid problems. © 2005 Wiley Periodicals, Inc.

La Convention des Nations Unies sur les contrats de vente internationale de marchandises : Étude comparative des dispositions de la Convention et des règles de droit québécois en la matière

On April 11, 1980, the U.N. Diplomatic Conference held in Vienna approved the Convention on contracts for the International Sale of Goods. This paper deals with the most interesting aspects of the Convention, comparing them with the rules of the Civil Code and the Draft Civil Code of Quebec on this matter. The provisions of this international uniform law are quite close to the rules and remedies existing in civil law juridictions. The major differences between the Convention and the Quebec Law are more technical than substantial. The differences between the uniform law and the national law can also be explained by particular circumstances of international trade which require more celerity and security in the field of international business transactions.