1. The legal and regulatory environment: how does it affect global business expansion? Group C: Aimee Churchill Georgiana Murariu Adrian Ruse OksanaZaborska
5. departure from the nation state with closed borders, migration is necessary for survival
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7. A brief overview of some legal bodies The International Court of Justice, situated in The Hague, Holland has been seen as being the key place for international disputes. Other bodies include:
8. What types of commercial legal systems are there? Common Law Civil/code law Islamic Law
9. Common Law Also called Anglo-American law, having originated in England in the Middle Ages. Used in the UK, the United States, New Zealand, and other countries previously part of the British Commonwealth, as well as some Asian countries (Malaysia, Pakistan). (Encyclopaedia Britannica, 2010) Disputes are settled based on past judicial decisions/cases. (Keenan & Green, 2010)
10. Civil/code law Used by some European and Latin American countries: France, Germany, Italy, Chile, Brazil, as well as some Asian countries – Japan, China, Thailand. (Merryman and Perdomo, 2007) Older and more widely distributed than common law. (Merryman & Perdomo, 2007) This system reflects the concepts and principles of the Roman Empire in the 6th century. (Keegan & Green, 2010) Judge actively participates in examining witnesses and seeking evidence.
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12. Marketing implications A country’s commercial legal system can have an impact on several aspects of marketing. Business Freedom Investment Freedom Property Rights Trade Freedom
13. BUSINESS FREEDOM “The overall freedom to start, operate, and close a business…” – (The Heritage Foundation, 2010) Average duration of opening a business: 35 days Variables: Time, cost, minimum capital, number of procedures, obtaining a licence, recovery rate when closing a business. -(2010 INDEX OF ECONOMIC FREEDOM)
15. INVESTMENT FREEDOM Questions to be asked: Are foreign investors treated equally? Are investment laws transparent and efficiently implemented? Are foreign purchases of real estate allowed? To what extent? Are foreign exchange controls tightly regulated?
16. Investment freedom cont. People (human beings) and companies (artificial persons) invest their capital on a multinational level. Democratic states are more the attractive option for investment There is a separation of powers: judiciary (Court), legislative (Parliament) and executive (Minister) and any investment will be more secure.
19. Intellectual Property rights continued It is widely accepted that intellectual property rights should be strengthened. For every $2 worth of software purchased, $1 worth of software is obtained illegally. (Bird & Jain, 2008) The Paris Convention, The Berne Convention and ‘TRIPS’ were put in place to protect intellectual property rights internationally. (Bird & Jain, 2008) Examples: Tom Waits (singer/songwriter) “Champagne only comes from Champagne, France.”
20. TRADE FREEDOM Terms of access: Refers to all of the conditions that affect the importation of goods. These conditions include the following: Tariff systems: there are two types of systems. These are: Single column tariff - the simplest type of tariff, the rate applies to imports from all countries on the same basis. Two column tariff- duties is supplemented by a second column of "conventional" duties which show reduced rates agreed through tariff negotiations with other countries
21. Terms of Access continued A custom duty is a tariff or tax on the importation of goods Types of Duty- there are two types: Ad Valorem Duties - This duty is expressed as a percentage of the value of goods. Specific Duties - Expressed as a specific amount of currency per unit of weight, volume, length or number of other units of measurements
22. ‘Red tape’ Origin : In 17th century legal documents were covered in red cloth By 19th century red tape was used as a term for any legal complications The administration of government paperwork and procedures that are time consuming and costly to businesses Seen as meaningless and unnecessary Average cost of red tape to business is around £3 billion / year. Highest contributors of these costs is Data Protection costing £600 Million. Provides protection against arbitrary, regulates aspects of business activities that citizens do not trust, and ensures fairness and equity in treatment of bureaucratic clients
29. Sharia Law (analysis and case study) Adherence varies from region to region Example: Instead of paying interest, banks may share profits with the borrower in an agreed proportion Young Muslims are a desirable market for mainstream brands as they are loyal and becoming more progressive (Marketing Week, 2010)
30. A brief case study :hsbcamanah Mohammed Ismaeel, Head of Global Marketing - HSBC Amanah - Marketing Week, 2010
31. NAFTA North American Free Trade Agreement: free trade between the USA, Canada and Mexico, signed in 1992. (www.naftaworks.org) Helped eliminate some non-tariff measures affecting agricultural trade between the US and Mexico. Ensures that North American producers receive the primary benefits of recently established tariff preferences. (US Department of Agriculture, 2008) Example: only American/Mexican milk can be used to make dairy products traded under NAFTA preferential rates. (US Department of Agriculture, 2008)
32. EEA Stands for European Economic Area Members today: the 27 EU countries + 3 EFTA countries (Iceland, Liechtenstein, Norway) (www.efta.int, 2009) 4 freedoms: I. freedom of movement of goods II. Freedom of movement of capital III. Freedom of movement of persons IV. Freedom of movement of services
33. In conclusion… Legal aspects need to be planned when planning the marketing mix (ahead of time) and legal advice needs to be sought well in advance. Better consumer education is a measure that can benefit businesses, as it teaches consumers why they should not buy fake goods, or download illegally, etc.
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35. Ally: avoid risk of government actions by seeking strategic alliances
Dumping= refers to the sale of a product at a price lower than that normally charged in a domestic market or country of origin
Japan’s economic freedom score is 72.9. Japan is ranked 5th out of 41 countries in the Asia–Pacific region.Foreign investment is officially welcomed.Need for government approval in many sectors: agriculture, forestry.few controls on the holding of foreign exchange accounts Russia’s economic freedom score is 50.3. Russia is ranked 41st out of 43 countries in the Europe region The 1999 Investment Law codifies the principle of national treatment for foreign investors.A list of 42 “strategic-sectors” that must be approved by the government.Residents and non-residents may hold foreign exchange accounts, subject to restrictions.
Patent = formal legal document giving an inventor the exclusive right to make, use and sell his/her invention (has to be renewed). (Keenan & Green, 2010)Trademark = distinctive mark or motto that manufacturers attach to a particular product to differentiate it from other goods. (Keenan & Green, 2010)Copyright = Ownership of a written, recorded, or performed creative work. (Keenan & Green, 2010)
Examples of licences that may be needed: PRINT OFFCommon Agricultural Policy (CAP) Licences, Department for Business, Innovation and Skills (BIS) Licences, Department for Environment, Food & Rural Affairs (DEFRA) Documents, Convention for the International Trade in Endangered Species of Wild Fauna and Flora (CITES) Permits, European Commission Licences, Office for Civil Nuclear Security (OCNS) Licences, Forestry Commission Licences and Office of Communications (Ofcom) Licences. Infromation on these licences can be found on http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageImport_ShowContent&propertyType=document&resetCT=true&id=HMCE_PROD_008051
Commodity Code-The code is an eight-digit number for exports outside the EU or goods moving within the EU, but is a ten-digit number for imports from outside the EU.