© 2007 Charles A. Krugel 1

Legal & Cultural Considerations for International Trade

Charles A. KrugelHuman Resources Attorney & Counselor

Labor & Employment Law on Behalf of Managementwww.charlesakrugel.com

Breaking Down Trade Barriers World Trade Center Illinois

November 15, 2007

© 2007 Charles A. Krugel 2

Due Diligence (DD) is Key to Addressing Legal & Cultural Considerations

• No matter which resources you use, whether people or documents, verify credibility.

• Create an alliance or relationship with a trustworthy foreign based contact or contacts– Do due diligence on those contacts

• Invest at least 1-3 hours of research on each contact– Research name, addresses, legal actions, property ownership,

how many other people have that name in that nation, region, province, city, etc., talk to references and ask those references for additional references.

– Use Lexis/Nexis, Westlaw, ProQuest, Factiva, FirstSearch, ERIC, any other legal, news, property databases.

– If possible, meet contacts in person

© 2007 Charles A. Krugel 3

Due Diligence Continued

• But, conducting DD doesn’t always mean hours spent researching & analyzing

• More specifically, if you have a trusted resource that makes recommendations for you, then that could = DD– Use the WTCs, chambers of commerce, government

agency or private company resources, matchmakers, databases, etc.

– Let others conduct the DD for you

• Do DD on contractors & subcontractors

© 2007 Charles A. Krugel 4

Legal & Business ClimateSlide 1/2

• Must understand the differences in their legal system versus ours– Is it a common law nation? – Do they have a uniform code of commercial

regulations?– Do they respect property rights/ownership?

• Real property• Intellectual property

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Legal & Business Climate Slide 2/2

– If you use overseas human resources/human capital then what laws apply to your treatment of them?

– Does our system of business entity designation mean the same there as is does here?

• I.e., is a corporation, partnership, trust, etc., treated the same there as here

– Does the country, state, region or province honor/uphold/enforce contracts between individuals or businesses?

• How are contracts or agreements honored, upheld, enforced or terminated?

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Government Structure

• Must understand the differences in their government structure and bureaucracies– How long does it take to obtain the needed

recognition or licensing to legally conduct business?– What agencies/bureaus license?– What licenses, certifications, etc. are required?– What are the fees? When are fees due?– What paperwork is required?– What are the penalties for mistakes, unethical or

illegal conduct? – Are bribes necessary?

© 2007 Charles A. Krugel 7

Protect Yourself in Writing-If Possible

Slide 1/2

• It’s impossible to document everything• There’s no such thing as an impenetrable

contract or agreement• But, IF POSSIBLE you want to capture your

intentions is as much detail as possible– And you want the other party to acknowledge your

intentions in writing too—initialize, signature, notarized (increasingly becoming antiquated), signed agreements, side agreements, etc.

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Protect Yourself in Writing-If Possible

Slide 2/2

• IF POSSIBLE, include language for exiting or terminating the agreement or contract

• IF POSSIBLE means does that country, province, region, state, etc., treat oral agreements or contracts the same as written agreements; what takes priority?

END