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Chapter 10: International Legal Considerations

IN THIS CHAPTER

- U.S. regulations and compliance
- Procedures for a successful export transaction
- Programs and tax procedures to open markets
- Intellectual property considerations

SUMMARY

Exporting, or even just considering it, forces you to confront a number of international legal considerations. Many have to do with U.S. export regulations and some with foreign government import regulations. Others involve international agreements and related rules. Some of the most significant involve intellectual property.

U.S. export-related regulations come from several key sources, including:

Export Administration Regulations (EAR)

These regulations govern the export and reexport of items for reasons of national security, nonproliferation, foreign policy, and short supply.

- Antidiversion Clauses helps ensure that U.S. exports go only to legally authorized destinations, by requiring a destination control statement on shipping documents.
- Antiboycott Regulations, which, enforced through provisions of broader laws, support the U.S. policy of opposing restrictive trade practices or boycotts fostered or imposed by foreign countries against other countries friendly to the United States.
- Foreign Corrupt Practices Act (FCPA), which makes it illegal for U.S. persons or companies to offer or pay anything of value to foreign officials in order to obtain or retain business.
- Foreign governments also impose various documentation requirements and other regulations on imports, which vary from country to country. Many require consular invoices, certificates of inspection, health certification, and various other documents.

Trade-related agreements and mechanisms to be aware of, including:

- North American Free Trade Agreement (NAFTA), which provides for the elimination of tariffs on most goods originating in the United States, Mexico and Canada. (An updated version of this agreement is now awaiting approval by congress.)
- U.S. Foreign Trade Zones (FTZs), which are domestic U.S. sites that are considered outside U.S. Customs territory and are available for activities that might otherwise be carried on overseas for customs reasons. Locating in FTZs can be profitable for operations involving foreign dutiable materials and components being assembled or produced here for reexport.
- Export Processing Zones (EPZs), which countries all over the world have established, and which include free trade zones, special economic zones, bonded warehouses, free ports ,and customs zones. Many U.S. manufacturers and their distributors use EPZs for receiving shipments of goods that are reshipped in smaller lots to customers throughout the surrounding areas.
- Customs-Bonded Warehouses, which are buildings or other secured areas in which dutiable goods may be stored or manipulated, or undergo manufacturing operations, without payment of duty.

Intellectual property-related topics relevant to exporters include:

- International Agreements: There are several such agreements relating to patents, trademarks, and unfair competition. They include the Paris Convention for the Protection of Industrial Property, first signed in 1883 and with more than 160 signatories today; the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs); and the Patent Cooperation Treaty. Both NAFTA and TRIPs establish minimum standards for the protection of intellectual property and the enforcement of those standards.
- International Copyright Law: The United States abides by international copyright regulations, which are governed principally by the Bern Convention for the Protection of Literary and Artistic Works, to which about 160 other nations adhere.
- Patent Law: U.S. patent law differs from the patent laws of most other countries in several important aspects. Thus, many protections you take for granted in the U.S. might not be the same when you export. Because intellectual property (IP) law varies from the country of origin, it’s important that you consult a local lawyer. The U.S. Commercial Service, represented at embassies and consulates in over 75 countries around the world, maintains lists of qualified legal specialists.
- Trademark Law: A trademark is a word, symbol, name, slogan, or combination that identifies and distinguishes the source of sponsorship of goods and may serve as an index of quality. Service marks perform the same function for businesses dealing in services rather than goods. Even if you’re not ready to export, you need to take steps to protect your trademarks and service marks in other countries. Impostors can appear and prevent you from doing business later on.

Intellectual Property

Chapter 10 of Basic Guide to Exporting includes answers to the following set of questions that rely heavily, often verbatim, on material developed by the World Intellectual Property Organization. This is a complex, rapidly changing area of law, and you should obtain competent legal advice.

- What is a patent?
- What does a patent do?
- What kind of protection does a patent offer?
- What rights does a patent owner have?
- Why are patents necessary?
- What role do patents play in everyday life?
- How is a patent granted?
- What kinds of inventions can be protected?
- Who grants patents?
- How can a patent be obtained worldwide?
- Where can I find patent information?
- How can I find the patent laws of various countries?
- Can I obtain a patent for my software-related invention?
- Can I discuss the details of my invention with a potential investor before filing a patent application?
- How do I file in the United States?
- Can I protect my trademark in more than one country at a time?
- How can I learn more about International Intellectual Property law?
- How long does it take to get a patent granted?
- How do I file a complaint if I think my intellectual property has been stolen?