Compliance with foreign law

Before exporting to a foreign country or even agreeing to sell to a customer in a foreign

country, a company should be aware of any foreign laws that might affect the sale.
However, if the customer or the distributor is mistaken in the information he gives to the
exporter, the exporter can pay for relying solely on the customer's advice. Unfortunately,
customers often overlook those things that may be of the greatest concern to the exporter.
There are some specific examples:
Industry standards
Foreign manufacturers and trade associations often promulgate industry standards that are
enacted into law or that require compliance 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.
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 Products not conforming to
these directives are subject to seizure and the assessment of fines.
Foreign customs laws
The countries of export destination may have absolute quotas on the quantity of products
that can be imported. 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.
Some countries, do not fully adhere to the GATT Valuation Code and may assess duties on
fair market value rather than invoice price and many other countries have severe penalties
for import violations
Government contracting
Sales to foreign governments, agencies, or partially state-owned private companies often
require specialized procedures and documentation. Commissions may be prohibited or
disclosure of paid may be required. Barter or countertrade may be required
Buy American equivalent
Laws Foreign government agencies often enact regulations to grant preferential treatment
to products supplied by manufacturers in their own country. Determining whether such
laws or agency regulations exist for your company’s products is mandatory if government
sales are expected to be important.
Exchange controls and import licenses
Unlike the United States, many countries in the world have exchange control systems
designed to limit the amount of their currency that can be used to purchase foreign goods.
These countries require that an import license from a government central bank be obtained
for country customers to pay for imported goods. For a U.S. exporter it is extremely
important to determine if there is a system of exchange control if an import license is
required in the country what are the time limits required for obtain these licenses.
Value-added taxes
Many countries impose value tax at the production and distribution stages. These taxes
generally apply to imported goods, so the importer, in addition to paying customs duties ,
pays a value added tax based, generally, on the customs value plus rights. When the
importer marks and resells the goods, he collects tax from the buyer, which he must remit
to the administration after deducting the taxes due on importation. the amount of value
added tax may be important, as it is generally higher than traditional sales taxes.
Specialized laws
Foreign countries often enact specialized laws prohibiting certain products except in
accordance with those laws. In the United States numerous special laws regulate the sale
importation in the home market of a wide variety of products.
In any case, such as the United States, countries often have special laws affecting certain
products or products, and the existence of such regulations must be prior to manufacture,
before entering into an agreement and even before quoting prices or delivery times to a
customer. Some U.S. laws regulate all products made in the United States; others do not
apply to products manufactured for export.

Vocabulary
1. Quoted Price: In the financial markets, a quoted price is the last price at which a
trade took place. This is the lowest price at which the holder of a security is willing
to sell it.
2. Bidding: the act of offering to pay a particular amount of money for something, by
different people
3. Barter: to exchange goods for other things rather than for money
4. Countertrade: a situation in which two countries trade goods and services for other
goods and services, not for money
5. Bid bond: an amount of money that a company that makes the lowest bid to do a
particular piece of work promises to pay if it then does not do the work
6. Antidumping: the practice of putting high taxes on imports (= goods from other
countries) in order to try to stop companies from other countries selling their
products very cheaply in your country, which damages your country's businesses
7. Duty: a tax paid on goods that are bought or imported
 8. Ad valorem duties: n ad valorem payment, rate, or tax is calculated according to the
price of a product or service, rather than at a fixed rate
9. GATT: General Agreement on Tariffs and Trade: an international agreement to end
rules that limit trade, in force from 1948 until 1994
10. Invoice: a list of things provided or work done together with their cost, for payment
at a later time
Sentences
● Imperative
Countries often have special laws affecting certain products or products, and the existence
of such regulations must be prior to manufacture
When the importer marks and resells the goods, he collects tax from the buyer, which he
must remit to the administration after deducting the taxes due on importation.
● Declarative
Foreign countries often enact specialized laws prohibiting certain products except in
accordance with those laws.
Unlike the United States, many countries in the world have exchange control systems
designed to limit the amount of their currency that can be used to purchase foreign goods.
● Conditional
if the customer or the distributor is mistaken in the information he gives to the exporter
(…) to make a reasonable profit if it resells at the current market price in that country.
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