International Seen 19.11.10
Transcript of International Seen 19.11.10
-
7/30/2019 International Seen 19.11.10
1/16
INTERNATIONALPROCUREMENT &
CONTRACTING
ERNEST G. GABBARD,
J.D., C.P.M., CPCM
ALLEGHENY TECHNOLOGIES, INC.
FFDD
-
7/30/2019 International Seen 19.11.10
2/16
INTERNATIONAL BUSINESSI. COMPARISON WITH DOMESTIC
A. SIMILARITIESB. DIFFERENCES
II. CULTURAL CONSIDERATIONSA. LANGUAGE
B. CUSTOMS
C. MONETARY
-
7/30/2019 International Seen 19.11.10
3/16
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
-
7/30/2019 International Seen 19.11.10
4/16
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.
-
7/30/2019 International Seen 19.11.10
5/16
COMPARISON WITH DOMESTIC
PURCHASING/SALES (contd)
DIFFERENCES
Packing/Transportation
Payment/Currency
Cultures
LanguageLaw/Regulation
Political Risk
InflationTaxation
Exportation
Importation?
Response Time
-
7/30/2019 International Seen 19.11.10
6/16
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
-
7/30/2019 International Seen 19.11.10
7/16
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?
-
7/30/2019 International Seen 19.11.10
8/16
LETTERS OF CREDIT
BUYER P.O. SELLER
(BENEFICIARY)
BUYER
BANK L/C BENEFIC.
($) BANK
(USUALLY)
GOODS
-
7/30/2019 International Seen 19.11.10
9/16
EXPORT?
EVEN IF PURCHASING (IMPORT)
TECHNOLOGY PROTECTION
EXPORT ADMINISTRATION ACT
EXAMPLE/DISCUSSION
-
7/30/2019 International Seen 19.11.10
10/16
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
-
7/30/2019 International Seen 19.11.10
11/16
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
-
7/30/2019 International Seen 19.11.10
12/16
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
-
7/30/2019 International Seen 19.11.10
13/16
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
-
7/30/2019 International Seen 19.11.10
14/16
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
-
7/30/2019 International Seen 19.11.10
15/16
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 !
-
7/30/2019 International Seen 19.11.10
16/16
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.