international seen 19.11.10

7/30/2019 International Seen 19.11.10

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INTERNATIONALPROCUREMENT &

CONTRACTING

ERNEST G. GABBARD,

J.D., C.P.M., CPCM

ALLEGHENY TECHNOLOGIES, INC.

FFDD


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INTERNATIONAL BUSINESSI. COMPARISON WITH DOMESTIC

A. SIMILARITIESB. DIFFERENCES

II. CULTURAL CONSIDERATIONSA. LANGUAGE

B. CUSTOMS

C. MONETARY


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INTERNATIONAL BUSINESS(contd)

III. LEGAL CONSIDERATIONSA. U.S. LAW (DOES APPLY!)

B. FOREIGN LAW

C. UNCISG

IV. TERMS AND CONDITIONS

A. MINIMUMS

B. DRAFTING

C. USING CHECKLISTS

V. ADDITIONAL RESOURCES AVAILABLE


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COMPARISON WITH DOMESTIC

PURCHASING/SALES

SIMILARITIES

BASIC REQUIREMENTS OF SALE/PURCHASETimely Delivery

Conforming Product

Documentation

SOME T & C SIMILAR (NOT SAME)

CONSIDER TOTAL COSTProduct

Delivery

Quality

ETC.


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COMPARISON WITH DOMESTIC

PURCHASING/SALES (contd)

DIFFERENCES

Packing/Transportation

Payment/Currency

Cultures

LanguageLaw/Regulation

Political Risk

InflationTaxation

Exportation

Importation?

Response Time


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TOTAL COST OF SALE

INTERNATIONAL

Product Cost

Export Licensing/Permits

Export Packing/PackagingFreight to P.O.E.

Insurance

Import Licenses

Customs DutiesPort/Terminal Costs

Brokerage Fees

Freight to Destination

Added Inventory (PAD)Cost of Quality

HIDDEN COSTS - Communications

Currency FluctuationsTranslation Costs

Etc.

DOMESTIC

Product Cost

Freight & Insurance

Cost of Quality


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LETTERS OF CREDIT

COMMERCIAL LETTER OF CREDIT - METHOD OF PAYMENT FOR GOODS OR

SERVICES

TYPES:

REVOCABLE - CAN BE REVOKED UNILATERALLY

IRREVOCABLE - CANNOT BE REVOKED WITHOUT CONSENT OF ALL

PARTIES

CONFIRMED - PAYMENT ASSURED BY BANK

PARTIES:

BUYER

BUYERS BANK

SELLER

SELLERS BANK

THIRD PARTIES?


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LETTERS OF CREDIT

BUYER P.O. SELLER

(BENEFICIARY)

BUYER

BANK L/C BENEFIC.

($) BANK

(USUALLY)

GOODS


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EXPORT?

EVEN IF PURCHASING (IMPORT)

TECHNOLOGY PROTECTION

EXPORT ADMINISTRATION ACT

EXAMPLE/DISCUSSION


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WHAT IS AN EXPORT?

EXAMPLE:

Your supervisor asks you to set up a tour of your manufacturing facility for some

engineers from a Japanese company? Is this an export? YES or NO

If so, why?

a. Tour members could take products back to Japan

b. Tour members could be exposed to technical data

If not, why?

a. The country involved is allied with the U.S.

b. No products are transferred to a foreign personc. No knowledge or technical data is transferred to a foreign

person

d. No tangible information (photos, plans, etc.) is transferred to a

foreign person


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CULTURAL CONSIDERATIONS CUSTOMS

- Greeting

- Eye Contact

- Business Cards

- Social/Drinking

- Negotiating

- Fine Print vs Trust

MONETARY/ETHICAL

- Gifts- Gratuities

- Bribes

LANGUAGE- Contracts/Documents in English?

- Translation can impact meaning

KNOWLEDGE - PREPARATION - PATIENCE - FLEXIBILITY - RESPECT


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LEGAL CONSIDERATIONS

U.S. LAW (Does Apply!)1. Anti-Boycotts Legislation

2. Foreign Corrupt Practice Act

3. Buy American Act

4. U.S. Customs (Importation)

5. Export Administration Act (Technology)

6. Other

FOREIGN LAW1. Contract

2. Import Control

3. Currency Control

4. Criminal Law?

INTERNATIONAL LAW (e.g. Maritime Laws)

INTERNATIONAL LEGAL SPECIALISTS


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U.N. CONVENTION ON CONTRACTS

FOR INTERNATIONAL SALE OF GOODSBuyer and Seller conduct transaction under Rules of

Convention, rather than under law of either country

Generally applicable to companies in ratifying nations

Can be utilized any time by contractual agreement

Not a body of law (like UCC isnt)Many provisions parallel to UCC

Benefits:

Excellent checklist for applicable contractual issues

Provides compromise for negotiation of Applicable

Law

Like UCC, provides coverage for some omittedterms


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TERMS AND CONDITIONS

Careful Drafting for Specific Transaction

- Not Domestic T&C

Not Conducive to Forms

Consider cultural perspective

Transaction complexity?

Use a Checklist

Minimum to Supplement Domestic


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TERMS AND CONDITIONS

MINIMUM TO SUPPLEMENT DOMESTIC ISSUES

Paym ent I ssues

N Cur rencyN E x c h a n g e R a teN Paym ent Secur ity

G o v e rn in g L a w

T axa t ion A lloca tion

Transpor ta t ion/Logis t ics

Pro pr ie tary Righ ts

D ispu tes R eso lu tion

N F o r m a tN SiteN L a n g u a g e

R e v ie w In c o te rm s ( IC C )

N P a y m e n t T e rm s

N R isk o f Loss

C on trac t In terpre ta t ion

N L a n g u a g eN Precedence

C O N S ID E R C U L T U R A L P E R S PE C T IV E !


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ADDITIONAL RESOURCES AVAILABLE

Commercial Banks Foreign Consulates

U.S. Department of Commerce

U.S. Small Business Administration

U.S. Chamber of Commerce

U.S. State Department (Embassy)

Other Contracting or Purchasing Departments

Educational Institutions/Libraries

Publications

e.g.; Going International by Copland & Briggs

Kiss, Bow, or Shake Hands by T. Morrison

International Sourcing by Business Laws Inc.