Because the client had never been to this part of the world, he was concerned that he would inadvertently “commit some cultural faux paus” and do something that would potentially blow the deal.

I assured the client that this would not happen and that everything would turn out fine as long as he remembered the time-tested axiom:

When in Rome, do as the Romans do.”

It’s simple but it works.

Sure enough, the client returned with a signed distribution deal and several new business contacts.

Additional Reading

One resource I recently discovered that picks-up on the simple but effective “when in Rome” principle  is the book Global Dexterity.

The book does a great job of explaining why it’s important to match your behavior to a new cultural setting.

It’s an excellent resource to help anyone reach across cultures–and succeed in international business

The preview video below highlights the book’s author, Andrew Molinsky.  The full video is available at http://s.hbr.org/106Yuui

The post, Improving The Global Supply Chain: Create.Org highlights Create.org, “a non-profit organization dedicated to helping companies and their suppliers and business partners reduce counterfeiting, piracy, trade secret theft and corruption.”

One way Create.org is helping companies protect the integrity of their global supply networks is by providing  insightful white parers and reports on their website.

There’a  lot of great information available for download including  Trade Secret Theft: Managing the Growing Threat in Supply Chains and The Impact of Intellectual Property Theft on the Economy.

Be sure to check it out!

If there is no jurisdictional basis for a lawsuit in the U.S., then– if you’re on the plaintiff side– the case is referred out to our network of international lawyers.

If we’re defending you, then there’s a good chance the case will be dismissed in the absence of a valid jurisdictional nexus.

Over the years, I’ve seen creative ways in which U.S. lawyers have attempted to assert jurisdiction over international defendants.

The most recent attempt raises the bar in what’s state-of-the-art.

As reported in this ABA Law Journal article, U.S. Attorney Neil MacBride of the Eastern District of Virginia is claiming that the location of computer servers in his district is enough to confer jurisdiction on international defendants.

According to MacBride, he has jurisdiction in most securities fraud cases because the servers for the EDGAR database of the Securities and Exchange Commission are located in his district.

And because the backbone of the Internet runs through northern Virginia, MacBride has pursued many other types of international actions with increasing regularity.

While this tactic is not without its controversy, the U.S. has a good record of bringing foreign defendants to the U.S. to face trial, according to MacBride.

That may be true.

But only time will tell whether jurisdiction-by-computer-server will continue to gain traction as  a valid basis  to assert jurisdiction over international defendants.

Over the years, we’ve amassed a high volume of  content aimed at international legal practitioners and business owners.

We were recently approached by a highly regarded publisher to publish a book on a topic that our readers have been most interested in.

By and large, the one topic that dominated the conversation was international litigation.

And that’s no surprise.

With the ever-changing landscape and sheer competitiveness of international business, more and more companies find themselves in U.S. courts litigating over discreet issues potentially worth billions of dollars.

Last year’s globe trotting legal battle between tech titans Apple and Samsung is one prime example of this trend.

With that, I’m thrilled to announce our new book deal:

The International Litigation Playbook: 10 Winning Strategies for Tackling International Opponents.

The book is designed to serve as a trusted resource for in-house counsel, C-Level executives and individuals owners of small and medium-sized companies.

The book chapters will provide winning strategies for tackling issues concerning  jurisdiction, causes of action, defenses, immunity and the enforcement of awards.

Please look out for it in early 2014!

I told this person that forming a business in Brazil can be a real headache, particularly if you do not have a Brazilian partner.

It’s a crazy dynamic and I just don’t understand it–with all the economic advances Brazil has made in the past decade, it’s hard to see why its bloated bureaucracy continues to resemble the early days of post-cold war Russia.

I bring this up because my good friend Greg Barnett has a great post, Forming a Company in Brazil Just Got Quicker and Easier.

In the post Greg details how Brazil’s largest city, São Paulo, has streamlined the formation and registration process for new companies.

This is great news for foreign investor looking to do business in Brazil’s booming economy.

As Greg explains:

In the past, companies would first file with the commercial registry to get their company registration number.  Then, they would file for their tax identification number with the federal tax authorities.  And finally, they would file for their state registration.  But according to the news release, these three filings will now happen simultaneously and all registrations will be handled by JUCESP.

Under the new plan, a process that normally took up to two months can now be completed in as little as one week.

It’s great to see Brazil’s notoriously slow bureaucracy finally start to catch up with its dynamic economy.

For more on Brazil law, head on over to Greg Barnett’s The Brazil Law Blog.

UPDATE:  The Cyprus parliament unanimously rejected the proposed European bailout, raising the possibility of a messy default.

***

The firestorm over the Eurozone bailout of Cyprus, a small Mediterranean metropolis, continues to rock financial markets.

Under the terms of the bailout deal, everyone with a bank account on the island has to pay a one-time tax on their deposits — 6.75 percent on everything up to 129,000 and 9.9 percent on anything more.

Russians are particularly irate over the proposal as these articles illustrate: Why Russia is irate about the Cyprus bank tax, Russia Sees Cyprus Plan as ‘Unfair’ Plot to Seize Money of Its Citizens and Russian money in Cyprus: Why is there so much?

Russians have reason to be upset– they hold up to a third of all Cyprus bank deposits or an estimated $31 billion dollars.

Assuming most Russians are large depositors, a 9.9 percent tax would cost the Russians as much as $3.1 billion.

Russian president Vladimir Putin decried the proposal as “unfair, unprofessional and dangerous,” while Prime Minister Dmitry Medvedev called it “just like a confiscation of someone else’s money.”

Look to the Governing Bilateral Investment Treaty

Assuming the proposal is approved by the Cyprus Parliament, what action can a foreign investor take to recover their expropriated funds?

As with any investor-State dispute, the first thing to check for is whether there is a bilateral investment treaty (BIT) in place that may govern the dispute.

For illustrative purposes, I’ll focus on Russian investors here because they simply have the most to lose from the Cyprus bailout.

Bilateral Investment Treaty between Russian and Cyprus

Fortunately for Russian investors, there is a Bilateral Investment Treaty in force between Russia and Cyprus.

Like most BITs, the definition covering “investment” is very broad.

Under Article 1 of the Russia-Cyprus BIT, the term “investments” means “all kinds of assets invested by investors of one Contracting Party in the territory of the other Contracting Party in accordance with its legislation.”

The next provision to look out for in the BIT is the provision governing protection of investments.

In the Russia-Cyprus BIT, this provision is found in Article 2, and states:

  Article 2

Promotion and Mutual Protection of Investments

1. Each Contracting Party shall encourage investors of the other Contracting Party to make investments in its territory and admit such investments in accordance with its legislation.

2. Each Contracting Party shall guarantee, in accordance with its legislation, full and unconditional legal protection of investments made by investors of the other Contracting Party.

Other key provisions are Article 4 Expropriation and Article 9 Arbitration.  These provisions set forth what “taking” will be deemed an expropriation and the dispute resolution mechanism that will govern the dispute.

In this case, the dispute will be governed by an international arbitration panel.

Unlike many, BITs, however, this particular arbitration provision leaves open the basic constitution of the international arbitration claim. i.e. arbitration authority, rules, location etc.

The  Russia-Cyprus Bilateral Investment Treaty is provided in full detail below:

Bilateral Investment Treaty Between Russia and Cyprus.

In just a few years, the company has wildly exceeded its expectations.

The company’s success can be attributed to zealous commitment to learning.

By this, I mean that the company understood that it had to abandon deeply entrenched legal and cultural assumptions to overcome the steep learning curve associated with finding success in the U.S. market.

I mention this because over at Forbes,  Russell Flannery has an excellent guest post Seven Dos Andon’ts For Chinese Investors In The U.S.

The post does a fine job of summarizing some key points that helped my client find success in the U.S.

While the post covers 7 basic considerations Chinese companies should know before entering into the U.S. market, I’ve taken what I think are the 5 most important.

1.  Draft Contracts in English

As the post points out, traditionally Chinese companies have drafted contracts in Chinese when doing business in the U.S.

This is a tactical mistake.

Because U.S. courts require that contracts be written in English, nuances in translating the Chinese contract to English often cause ambiguity.

For savvy U.S. attorneys, these ambiguities provide loopholes to exploit.

Just one loophole can potentially blow your case.

2. Know U.S. Labor Law.

While most Chinese companies understand that U.S. labor laws provide substantially more protection to employees than Chinese labor law, there are some U.S. labor laws that are often overlooked because they seem trivial.

One such “triviality” is employee meal breaks.  In California, for example, employers must allow employees one uninterrupted 30 minute meal break for every five hours of work.

Just several months ago, one Chinese company paid a $200,000 settlement because it was unaware of the uninterrupted meal break requirement.

3. Alter Ego Doctrine and Personal Liability

A big misconception that many foreign investors have about corporate liability in the U.S. is that they can’t be held personally liable for the debts of the corporation.

However, most U.S. states follow the alter ego doctrine. This legal principal states that individual owners can be held personally liable for a companies’ debt or other liabilities.

This determination depends on a variety of factors including: “whether the company follows corporate formalities, whether the company shares common control of the same individuals or entities, and whether the company and the individual co-mingle funds.”

4. Discovery Requirements

In U.S. litigation, parties are required to respond to the other parties’ discovery requests.  That is, each party is obligated to produce evidence to the opposing parties, even if the evidence is against themselves.

If you’re a Chinese owner and refuse to produce evidence that may not be in your favor, you will be in violation of U.S. state and/or federal law.

If a court finds that evidence was withheld, you risk losing your case.

5.  But We Shook Hands

In China, business is done with handshakes and verbal agreements. Of course, this is completely different than the U.S. where written documentation is required.

While Chinese companies prefer to do business informally, in the U.S. even a small dispute such as an incorrect invoice or missing batch of orders will require written documentation.

No matter how many years that your Chinese company has been in business with the U.S. company, written documentation will be required.

While it may be a small point, a document confirming, for example, that “your invoice has been corrected to account for the substitution of X for Y” will ultimately save on costly litigation expenses.

Conclusion

Follow the 5 key points above, and you’ll be well on your way to becoming more familiar with the legal and cultural nuances of the U.S. market place.

This coincides with a recent Gallup poll that found Americans are also feeling better about international trade.

According to the excellent International Economic Law and Policy blog, the latest trend can be attributed to the much talked about U.S. – E.U. free trade agreement that’s currently in the works.

After all, trade with the E.U. is less frightening than trade with China.

That’s one theory, at least.

Here in Florida, international trade is a concept familiar to most businesses.

That’s because Florida is a key international trade hub.

Florida companies act as key suppliers to buyers in dozens of countries worldwide, shipping goods made locally in Florida (“Florida-origin exports”), elsewhere in the United States, or in another country.

Florida is also an excellent gateway for non-U.S. companies selling their goods to the vast United States market.

I mention all this because there are a great variety of resources that businesses here in Florida can utilize to maximize their international business outreach.

One such resource is the Enterprise Florida International Trade Leads program.

Florida manufacturers, distributors, exporters, and professional services providers can connect with companies from around the world through the international Trade Leads program.

Every month Enterprise Florida identifies and qualifies foreign companies interested in sourcing goods and services, creating export opportunities for Florida companies.

For any business looking to maximize international business opportunities, the Enterprise Florida International Trade Leads program is a great place to start.

With the stock market reaching record highs and international trade near the top of the Obama administration’s economic agenda now is the perfect time tap international markets.

And for international investors looking to invest in Florida,  Florida’s EB-5 Regional Centers offer foreigners the opportunity to obtain their permanent U.S. residency while investing in Florida through the EB-5 Investor Visa program.

The sheer amount of FCPA material out there is staggering.

Just Google “FCPA” and you’ll see what I mean (over 1,200,000 results generated).

For anyone trying to keep up with the latest FCPA developments, it can all get overwhelming.

I mention this because Mike Koehler over at the  FCPA Professor blog (h/t Corporate Compliance Insight blog) just posted an extraordinary compendium of FCPA articles published in the latest volume of the Ohio State Law Journal.

The compendium includes the following articles:

Professor Peter Henning (Wayne State University School of Law) presented a keynote titled “Be Careful What You Wish For:  Thoughts on a Compliance Defense Under the Foreign Corrupt Practices Act.”

“The Story of the Foreign Corrupt Practices Act.” by Mike Koehler.

Professor Chow published “The Interplay Between China’s Anti-Bribery and the Foreign Corrupt Practices Act.”

Carter Stewart (U.S. Attorney, Southern District of Ohio) published “The FCPA Is Just As Relevant and Necessary Today As Thirty-Five Years Ago.”

D. Michael Crites (Dinsmore & Shohl) published “The Foreign Corrupt Practices Act at Thirty-Five: A Practitioner’s Guide.”

Professor Paul Rose (Ohio State) published “State Capitalism and the Foreign Corrupt Practices Act.”  See herefor his previous guest post on the topic titled “Foreign Official and the Missing Link.”

Professor Barbara Black (Cincinnati) published “The SEC and the Foreign Corrupt Practices Act:  Fighting Global Corruption Is Not Part of the SEC’s Mission.”

Professor David Hess (Michigan) published “Enhancing the Effectiveness of the Foreign Corrupt Practices Act Through Corporate Social Responsibility.”

Philip Urofsky (Shearman & Sterling) was the lead author of “How Should We Measure the Effectiveness of the Foreign Corrupt Practices Act?  Don’t Break What Isn’t Broken – The Fallacies of Reform.”

Professor Peter Alldridge (Queen Mary, University of London) published “The U.K. Bribery Act: ‘The Caffeinated Younger Sibling of the FCPA.”

Professor Amy Deen Westbrook (Washburn) published “Double Trouble:  Collateral Shareholder Litigation Following Foreign Corrupt Practices Act Investigations.”

Professor Roger Alford (Notre Dame) published “A Broken Windows Theory of International Corruption.”

Professor Eric Chaffee (Dayton) published “The Role of the Foreign Corrupt Practices Act and Other Transnational Anti-Corruption Laws in Preventing or Lessening Future Financial Crisis.”

Professor Michael Van Alstine (Maryland) published “Treaty Double Jeopardy  The OECD Anti-Bribery Convention and the FCPA.”

There are two additional articles posted on-line at the Ohio State Law Journal website:

Michael Diamant (Gibson Dunn) was the lead author of “Don’t You Forget About Me: The Continuing Viability of the FCPA’s Facilitating Payments Exception”

Professor Bruce Bean (Michigan State) published “Further to Professor Alldridge’s “Caffeinated” Article: What “Stuff” Did the Professor Have in Mind?“

The new rules allow shareholders at Swiss-listed companies a binding vote each year on the total compensation of boards of directors and senior management, as well as a total ban on “golden parachutes” and executives being paid compensation in advance.  Those who violate the rules face criminal penalties.

Critics of the new plan have claimed that it will leave Swiss-listed companies unable to compete for top talent with the rest of the world, or even non-Swiss listed companies within Switzerland.

However, those behind the plan clearly see it as the beginning of a global trend.

The UK is also introducing reforms to give shareholders a binding vote on pay in October, as well as measures to make remuneration packages more transparent.

It’s easy to see why. Excessive executive pay has been a lightning rod for public anger across the world since the financial crisis.

The EU is already capping bankers’ bonuses and now the Swiss people has spoken very clearly as well