Evidencia_3_test-compliance_with_foreign_law.docx

Actividad de aprendizaje 11 Evidencia 3: Compliance with foreign law Para continuar enriqueciendo su aprendizaje en el idioma inglés, lea el siguiente artículo sobre cumplimiento de leyes extranjeras. Desarrolle esta evidencia teniendo en cuenta los siguientes pasos: Lea y analice el texto que encuentra a continuación y posteriormente conteste las preguntas que se encuentran al final de la lectura. Envíe sus respuestas por el test que encuentra en plataforma. Compliance with foreign law Prior to exporting to a foreign country or even agreeing to sell to a customer in a foreign country, a U.S. company should be aware of any foreign laws that might affect the sale. Information about foreign law often can be obtained from the customer or distributor to which the U.S. company intends to sell. However, if the customer or distributor is incorrect in the information that it gives to the exporter, the exporter may pay dearly for having relied solely upon the advice of the customer. Incorrect information about foreign law may result in the prohibition of importation of the exporter’s product, or it may mean that the customer cannot resell the product as profitably as expected. Unfortunately, customers often overlook those things that may be of the greatest concern to the exporter. As a result, it may be necessary for the U.S. exporter to confirm its customer’s advice with third parties, including attorneys, banks, or government agencies, to feel confident that it properly understands the foreign law requirements. Some specific examples are as follows: 1. Industry standards Foreign manufacturers and trade associations often promulgate industry standards that are enacted into law or that require compliance in order to sell successfully there. It may be necessary to identify such standards even prior to manufacture of the product that the company intends to sell for export or to modify the product prior to shipment. Or, it may be necessary to arrange for the importing customer to make such modifications. Sometimes compliance

with such standards is evidenced by certain marks on the product, such as ‘‘JIS’’ (Japan), ‘‘CSA’’ (Canada), and ‘‘UL’’ (Underwriters Laboratories - U.S.). One type of foreign safety standard that is becoming important is the ‘‘CE’’ mark required for the importation of certain products into the European Community. The European Community has issued directives relating to safety standards for the following important products: toys, simple pressure vessels and telecommunications terminal equipment, machinery, gas appliances, electromagnetic compatibility, low voltage products, and medical devices (see www.newapproach.org.). Products not conforming to these directives are subject to seizure and the assessment of fines. The manufacturer may conduct its own conformity assessment and self-declare compliance in most cases. For some products, however, the manufacturer is required (and in all cases may elect) to hire an authorized independent certifying service company to conduct the conformity assessment. The manufacturer must maintain a technical construction file to support the declaration and must have an authorized representative located within the European Community to respond to enforcement actions.

The ISO 9000 quality standards are becoming increasingly important for European sales. One helpful source of information in the United States is the National Center for Standards and Certification Information, a part of the Department of Commerce National Institute of Standards and Technology, www.nist.gov, which maintains collections of foreign government standards by product. The National Technical Information Service, www.ntis.gov, the Foreign

Agricultural

www.fas.usda.gov,

Service

and

the

of

the

American

Department National

of

Agriculture,

Standards

Institute,

www.ansi.org, which maintains over 100,000 worldwide product standards on its NSSN network, also collect such information. Canada has the 20 exporting:

Procedures and Documentation Standards Council, www.scc.ca, and Germany has the Deutsches Institut für Normung (DIN), http://www.din.de/de/

2. Foreign customs laws The countries of export destination may have absolute quotas on the quantity of products that can be imported. Importation of products in excess of the quota will be prohibited. Similarly, it is important to identify the amount of customs duties that will be assessed on the product, which will involve determining the correct tariff classification for the product under foreign law in order to determine whether the tariff rate will be so high that it is unlikely that sales of the product will be successful in that country, and to evaluate whether a distributor will be able to make a reasonable profit if it resells at the current market price in that country. It is especially important to confirm that there are no antidumping, countervailing, or other special customs duties imposed on the products. These duties are often much higher than regular ad valorem duties, and may be applied to products imported to the country even if the seller was not subject to the original antidumping investigation.

Some

countries,

such as

Ethiopia,

Belarus,

Cambodia,

Yugoslavia,

Kazakhstan, Lebanon, Liberia, Saudi Arabia, and Ukraine, do not fully adhere to the GATT Valuation Code and may assess duties on fair market value rather than invoice price. Another problem is ‘‘assists.’’ If the buyer will be furnishing items used in the production of merchandise, such as tools, dies, molds, raw materials, or engineering or development services, to the seller, the importer of record (whether that is the buyer or the seller through an agent) may be required to pay customs duties on such items, and the seller may be required to identify such items in its commercial invoices.

Many countries have severe penalties for import violations; for example, France assesses a penalty of two times the value of the merchandise, India assesses a penalty of five times the value of the merchandise, and China confiscates the merchandise. See appendix K listing web sites for foreign customs agencies and tariff information. In any case, where there is doubt as to the correct classification or valuation of the merchandise, duty rate, or existence of assists, the importer (whether buyer or seller) may wish to seek an administrative ruling from the foreign customs agency. This will usually take some period of time, and the seller and buyer may have to adjust their production and delivery plans accordingly. (A more thorough understanding of the types of considerations that the buyer may have to take into account under its customs laws can be gained by reviewing the similar considerations for a U.S. importer discussed in chapter 6, section F).

3. Government contracting Sales to foreign governments, government agencies, or partially government owned private businesses often involve specialized procedures and documentation. Public competitive bidding and compliance with invitations to bid and acquisition regulations, and providing bid bonds, performance bonds, guarantees, standby letters of credit, and numerous certifications may be required. Commissions may be prohibited, or the disclosure of commissions paid may be required. Government purchases may qualify for customs duty, quota, or import license exemptions. Barter or countertrade may be necessary.

4. Buy American equivalent Laws Foreign government agencies often promulgate regulations that are designed to give preferential treatment to products supplied by manufacturers

in their own country. This may consist of an absolute preference, or it may be a certain price differential preference. Determining whether such laws or agency regulations exist for your company’s products is mandatory if government sales are expected to be important.

5. Exchange controls and import licenses Unlike the United States, many nations of the world have exchange control systems designed to limit the amount of their currency that can be used to buy foreign products. These nations require that an import license from a central bank or the government be obtained in order for customers in that country to pay for imported products. For a U.S. exporter who wishes to get paid, it is extremely important to determine (1) whether an exchange control system exists and an import license is necessary in the foreign country, (2) what time periods are necessary to obtain such licenses, and (3) the conditions that must be fulfilled and documentation that must be provided in order for the importer to obtain such licenses.

6. Value-added taxes Many countries impose a value-added tax on the stages of production and distribution. Such taxes usually apply to imported goods, so that the importer, in addition to paying customs duties, must pay a value-added tax based, usually, on the customs value plus duties. When the importer marks up and resells the goods, it will collect the tax from the purchaser, which it must remit to the tax authorities after taking a credit for the taxes due on importation. (Exporters are often exempt from the value added tax) the amount of valueadded tax can be significant, as it is usually higher than traditional sales taxes, and, therefore, whether the product can be priced competitively in the foreign market is a matter of analysis.

7. Specialized laws Foreign countries often enact specialized laws prohibiting the importation of certain products except in compliance with such laws. In the United States, there are many special laws regulating the domestic sale and importation of a wide variety of products (see chapter 6, section A). Some U.S. laws regulate all products manufactured in the United States; others do not apply to products being manufactured for export. In any case, like the United States, foreign countries often have special laws affecting certain products or classes of products, and the existence of such regulation should be ascertained prior to manufacture, prior to entering into an agreement to sell, and even prior to quoting prices or delivery dates to a customer. (Johnson y Bade, 2010) 1

Responda las siguientes preguntas, en el encabezado de la pregunta encuentra el párrafo en donde está la respuesta. 1. Introduction Incorrect information about foreign law may result in ________________________ 2. Industry standards The European Community has issued directives relating to safety standards for the following important products: _____________________________ 3. Foreign customs laws The countries of export destination may have absolute quotas on the quantity of products that can be imported. Importation of products in excess of the quota will be _______________ 4. Exchange controls and import licenses Unlike the United States, many nations of the world have exchange control systems designed to limit the amount of their currency that can be used to buy foreign products. These nations require ___________________________________________ in order for customers in that country to pay for imported products.

Johnson, T. y Bade, D. (2010). Export/import procedures and documentation. Estados Unidos: American Management Association. 1

5. Value-added taxes Many countries impose a _________________on the stages of production and distribution. Una vez tenga las respuestas, conteste el test que encuentra en plataforma.

Pasos para enviar la evidencia: 1. Clic en el título de la evidencia. 2. Clic en Comenzar 3. Responder cada pregunta 4. Clic en Enviar. Nota: esta evidencia es de carácter individual. Recuerde revisar la guía de aprendizaje con el fin de verificar que ha realizado todas las evidencias propuestas, saber cómo desarrollarlas y entregarlas correctamente. Criterios de evaluación Plantea, explica y contesta hipótesis técnicas.