1. Arizona Technology Council
Council Connect, March 2012
Karen Dickinson Lisa Duran
Partner – Quarles & Brady LLP Partner – Quarles & Brady LLP
Karen.dickinson@quarles.com Lisa.duran@quarles.com
602-230-5511 602-229-5225

2. Agenda
 Q&B 80-20 Rule
 International Implications
 Immigration Issues
 Other Scary Legal Stuff
 Lessons Learned

3. Global Contracting
Principles
• Q&B 80-20 Rule of Global
Contracting
80% is the Same – industry
sector, business goals,
negotiation skills, common
contracting issues
20% is Different – culture, laws,
regulations, enforcement,
government structure
The 20% makes a difference!

4. International Implications -
Culture
• Understand cultural and ideological
influences
– formal v. informal
– high context v. low context
– high emotion v. use of “reason”
– high sensitivity to time v. low sensitivity to time
– general agreement terms v. specific agreement terms
– high v. low level of risk taking
– relationship building v. contract creation
– negotiating as a unified team v. a collection of
individuals

5. Immigration Issues

6. Business Visitor
• Visa Waiver Program
(ESTA)
• Admitted for 90 days
• B-1 Visa
• Admitted for up to 6 months

7. Permissible B-1 Business
Activities (Not Work)
• Meetings
• Training
• Negotiating contracts
• Assisting with litigation
• Independent research
• Commercial
transactions

8. Meaningful Ties To Home
Country: Required
• Permanent employment
• Meaningful business or
financial connections
• Close family ties or social or
cultural associations

9. NAFTA Professional
(TN) Visa
• Canadian Citizens apply at a U.S. Port of
Entry
− Admitted in TN -1 status for 3 years
• Mexican Citizens apply at a U.S.
Consulate
− TN-2 Visa issued for 1 year; admitted in
TN-2 status for 3 years
• Extendible for as long as U.S. employer
wants to employ the TN professional and
as long as TN professional has non-
immigrant intent

10. NAFTA Professionals
• TN available where job opportunity
requires the services of one of the
professions listed in NAFTA, for example:
– Accountants
– Architects
– Computer Systems Analysts
– Engineers
– Land Surveyors
– Librarians
– Nurses
– Pharmacists

11. E-2 Investor Visa
• Non-Immigrant
• Treaty-Based
• Individual or Corporate Investor
• Invest in Existing or New
Enterprise
• Investment Must Be
− Active
− Substantial
− Not Marginal

12. Investment Opportunities
• Existing Business: Document
stock or ownership interest.
Compile records reflecting
financial and operations
history of existing business
• New Business: Incorporate
business, request Federal tax
ID number. Identify rental
space. Prepare business plan

13. Process
• Submit E-2 Visa Application to U.S.
Consulate
− To Develop and Direct the Enterprise
or
− Essential Employee
• Family Members
− Spouse Entitled to Employment
Authorization
− Children under 21
• 5-year visa with 2-year admissions

14. H-1B Specialty
Occupation Visa
• The offered position must require a
bachelor's degree in a particular
field (or equivalent education and
experience)
AND
• The beneficiary must have a
bachelor's degree in that field (or
equivalent education and
experience)

15. Annual Caps
• 65,000 new H-1B visas per year
• 20,000 additional new H-1B visas for
people with advanced degrees from U.S.
colleges or universities
• USCIS' fiscal year begins on October 1 of
each year; may file petitions for new H-1B
visas on or after April 1 of each year (180
days before the effective date of the H-1B
visa)

16. H-1B Filing
Requirements
• Employer must agree to pay the higher of the
actual or prevailing wage as determined by the
Department of Labor (DOL)
• Employer must obtain a certified Labor
Condition Application (LCA) from the DOL
• Employer files a petition with the USCIS service
center having jurisdiction over the place of
employment
• Employer agrees that it will be liable for the
reasonable costs of return transportation for the
H-1B worker if the worker is terminated before
the end of the period of authorized H-1B status

17. H-1B Fees
• Employer required to pay all filing and
attorneys' fees except for the premium
processing fee
• Fees: $325 base filing fee
− $500 fraud detection and prevention fee
− $1,500 education and training fee ($750
for employers with 25 employees or less)
• Premium processing (expedite) fee:
$1,225

18. Deemed Export Issues
• In its petition, employer discloses if
the beneficiary will have access to
technology or technical data that
requires a "deemed export license"
pursuant to the Export Administration
Regulations (EAR) or the International
Traffic in Arms Regulations (ITAR)
• If so, employer certifies that the
beneficiary will not have access to
such technology or technical data
until the deemed export license is
received

19. Other Scary Legal Stuff

20. Scary Legal Issue #1.1: Export
Controls
• Exporting is a privilege, not a right - regulations govern legal
way to export, and require a "license" to export all goods
• No Export to certain countries
• No Export for use in nuclear or biological weapons – watch out
for multi-use products
• No Export to "Denied Parties" – watch out if . . .
– Customer or purchasing agent is reluctant to offer information about the end-
use of the product
– Product’s capabilities do not fit the customer line of business
– Product ordered is incompatible with the technical level of the country to
which the product is being shipped
– Routine installation, training or maintenance are declined by the customer
– Customer is willing to pay cash when financing would be more appropriate
– Delivery dates are vague, or deliveries are planned for out-of-the-way
destinations
– A freight forwarding firm is listed as the product’s final destination
– When questioned, the customer is evasive or unclear whether the purchased
product is for domestic use, export or reexport

21. Scary Legal Issue #1.2:
ITAR
• International Traffic in Arms Regulations
govern export of defense related materials
and technologies
• Companies may only share these items with
U.S. persons and organizations — unless
they receive authorization from the
Department of State or qualify for a special
exemption
• If your company is in the aerospace and
defense sector, you must pay attention

22. Scary Legal Issue #1.2:
ITAR
• Becoming ITAR compliant:
– Register with the State Department
– Establish a written Company Export Compliance Policy
and Procedure Manual
– Submit license applications for all exports of
controlled items well in advance of the shipments
– Export classify all your part numbers — products,
parts, supplies
– Know whether any party you do business with is not a
U.S. person (as defined by the ITAR)
– Ensure you have a Technology Control Plan in place
– Screen for denied parties
– Keep accurate records on all activity against State
Department licenses and agreements

23. Scary Legal Issue #1.3:
Boycott Regulations
• U.S. Regulations prohibit honoring any boycott
formed by foreign countries against nations that
are friendly to the United States
• Currently, the Arab Boycott of Israel
• Boycott requests found in Contractual
Documents, Shipping Instructions and Letters of
Credit
• Example: requests that products are not:
– of Israeli origin
– do not contain Israeli-origin parts
– were not produced by Israeli firm or with Israeli
labor
– Israeli certificate of origin will not be acceptable

24. Scary Legal Issue #2:
FCPA
• Foreign Corrupt Practices Act - U.S. law
designed to prevent bribery of foreign
governmental officials by U.S.
companies in order to influence the
official’s acts or decisions if this is done
to obtain, retain or direct business to
anyone
• Exceptions – Routine Governmental
Actions
• Cultural Issue – Gift-giving!

25. FCPA Prohibitions
What Who Purpose
Offer/Promise/ to  Foreign Government Influence
Authorization of either Official Official Act/
Payment  Political Party Official Decision
 Candidate for Foreign
Political Office
with
Agent / Foreign
Representative Official
Money/ Obtain/Retain
Anything of Value Business

26. FCPA Warning Signs
• Watch out if . . .
– The contracting party has a reputation for offering
bribes or violating other laws
– A decision maker asks for a lavish trip to see the demo
product
– The contracting party, or one of its
directors, shareholders or employees, is a close relative
or business associate of senior foreign government
officials
– The contracting party is getting paid unusually high
commissions in relation to its scope of work and
contractual obligations
– The contracting party requests payments in an account
outside the country of its residence
– The contracting party has undisclosed
principals, associates, or subcontractors with whom it
splits fees
– A decision maker asks for a ―personal favor‖ for their
child

27. FCPA Compliance Tips
• Look before you leap: know your
business associates, partners,
consultants and sales representatives
– STEP 1 - Conduct a Background Check
– STEP 2 - Contractual Representations
– STEP 3 - Opinion of Counsel if Necessary

28. Scary Legal Issue #3:
Protecting Your Crown Jewels
• Intellectual property laws vary from country to country
– but are still important protection!
• Contracts only form of protection for intellectual
property that offers protection in every country
• Confidentiality provisions necessary to preserve trade
secret rights in “know how”
• Can use “bundle of rights” to negotiate flexible
arrangements that meet both parties’ needs
• But Remember - file U.S. trademark and copyright
registrations with U.S. Customs & Border Protection

29. Lessons Learned
• Need to understand the culture and the
political, legal and economic system – Get help
with the 20%
• Intellectual property protection is just as critical
outside U.S. as domestically
• Written contracts maximize protection
• Have fun – it brings people together and makes for
good business!