Learning Activity 11

Evidence 7: Compliance with foreign law

File: 1966038

María Emilcen Sanchez Uribe

Eison Deimer Gil Manyoma
Viviana Martina Alfonso
Amine Davis Smith

Servicio nacional de aprendizaje SENA

Bogotá, October 2020
Evidencia 7: Compliance with foreign law

Para continuar enriqueciendo su aprendizaje en el idioma inglés, grabe un audio

en el formato de su preferencia, con el fin de afianzar la pronunciación, el uso de
las preposiciones y la práctica del vocabulario.

Desarrolle esta evidencia teniendo en cuenta los siguientes pasos:

Lea y analice el texto que encuentra a continuación:

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
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 Service of the
Department of Agriculture, www.fas.usda.gov, and the American National
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 exportingProcedures 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
license.

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

.
• Elabore un vocabulario como mínimo de 10 términos técnicos en inglés, con su
respectivo significado en español.
 Elabore un resumen del texto utilizando los diferentes tipos de oración.
 Grabe el audio en inglés, con el resumen elaborado en el punto anterior.
 Identifique y clasifique las frases en sus diferentes tipos.
 Elabore un gráfico con el cual explique los diferentes ejemplos de
cumplimiento con las leyes extranjeras, utilizando las preposiciones de
lugar.
 Compile el vocabulario, el resumen, los tipos de frases y el gráfico en un
documento.
 Elabore un vocabulario como mínimo de 10 términos técnicos en inglés, con
su respectivo significado en español.

1. Manufacture: Fabricación

2. Export: Exportation

3. Standards: Estándares

4. Merchandise: Mercancía

5. Commissions: Comisiones

6. Licenses: Licencias

7. Tax: Impuestos

8. Purchaser: Comprador

9. Regulating: Regulación

10. commercial invoices: Factura

  Elabore un resumen del texto utilizando los diferentes tipos de oración

Compliance with foreign law

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

foreign country, a US business must be aware of the foreign laws that may affect
the sale.
Incorrect information on foreign law may result in the prohibition on the
importation of the exporter's product, or it may mean that the customer cannot
resell the product at the expected profitability. Unfortunately, customers often
overlook those things that may be of greatest concern to the exporter. As a result,
it may be necessary for the US exporter to confirm their client's advice with third
parties, including lawyers, banks, or government agencies, to feel confident that
they adequately understand the requirements of foreign law. Some specific
examples are as follows:
1. Industry Standards: Foreign manufacturers and trade associations often
enact industry standards that are enacted into law or require compliance in
order to successfully sell there. 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 related 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.

ISO 9000 quality standards are increasingly important for European sales.
A useful source of information in the United States is the National Center
for Standards and Certification Information, a part of the Department of
Commerce's National Institute of Standards and Technology, www.nist.gov,
which maintains collections of foreign government standards by product.
2. Foreign customs laws: The export destination countries may have
absolute quotas on the quantity of products that can be imported. The
importation of products that exceed 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 imply 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 assess whether a distributor will be able
to make a reasonable profit by reselling to the current market price in that
country,Many countries impose severe penalties for import violations; For
example, France applies a fine of twice the value of the merchandise, India
applies a fine of five times the value of the merchandise, and China seizes
the merchandise.

3. Government contracting: Laws Foreign government agencies often enact

regulations that are designed to give preferential treatment to products
supplied by manufacturers.

4. Buy American equivalent: Foreign government agencies often enact

regulations that are designed to give preferential treatment to products
supplied by manufacturers. Determining whether such agency laws or
regulations exist for your company's products is mandatory if government
sales are expected to be significant.

5. Exchange controls and import licenses: For a US exporter who wants to

be paid, it is extremely important to determine (1) if an exchange control
system exists and an import license in the foreign country is necessary, (2)
what periods of time are required to obtain such licenses, and (3) the
conditions that must be met and the documentation that must be provided
for the importer to obtain such licenses.

6. Value added taxes: Many countries impose a value added tax at the
production and distribution stages. These taxes are usually applied to
imported goods, so the importer, in addition to paying customs duties, must
pay a value added tax that is generally based on customs value plus
duties. (Exporters are often exempt from value added tax.)

7. Specialized Laws: Foreign countries often enact specialized laws that

prohibit the importation of certain products, except in compliance with those
laws. In the United States, there are many special laws that regulate the
domestic sale and import of a wide variety of products. Some US laws
regulate all products made in the United States; others do not apply to
 products that are manufactured for export. Foreign countries often have
special laws that affect certain products or classes of productos, and the
existence of such regulation must be determined before manufacturing,
before entering into a sales agreement and even before listing. prices or
delivery dates to a customer.

 Identifique y clasifique las frases en sus diferentes tipos

Simple Sentences
1. Prior to exporting to a foreign country or even agreeing to sell to a customer
in a foreign country

2. Such taxes usually apply to imported goods

3. This may consist of an absolute preference, or it may be a certain price

differential preference

Complex Sentences

4. 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

5. Unfortunately, customers often overlook those things that may be of the

greatest concern to the exporter

6. Products not conforming to these directives are subject to seizure and the
assessment of fines

7. France assesses a penalty of two times the value of the merchandise

8. Government purchases may qualify for customs duty, quota, or import

license exemptions. Barter or countertrade may be necessary
9. Information about foreign law often can be obtained from the customer or
distributor to which the U.S. company intends to sell

Compound-Complex Sentences

10. 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.
 The ‘‘CE’’ mark required for the
importation of certain products
into the European Community.

Industry standards

The ISO 9000 quality standards

are becoming increasingly
important for European sales

The countries of export

COMPLIANCE WITH destination may have
FOREIGN LAW absolute quotas on the
quantity of products that can
EXAMPLES Foreign customs be imported.
laws

Many countries have

severe penalties for
import violations

Government purchases
may qualify for customs
Government duty, quota, or import
contracting license exemptions. Barter
or countertrade may be
necessary

Promulgate regulations
that are

Buy American designed to give

equivalent preferential treatment
to products supplied by
 Exchange control
systems

Import license from

a central bank or the
government be
obtained in order for
Exchange controls customers in that
and import licenses country to pay for
imported products.

the conditions that

must be fulfilled
and documentation
that must be
provided in order
for the importer to
obtain such license.

Many countries
impose a value-
added tax on the
stages of
production and
distribution
Value-added taxes

Exporters are
often exempt
from the value
added tax

United States,