Outline of Memorandum.
Name
Institution
Memorandum outline
To: Brookboard organization supervisor.
From: Legal compliance officer for Brookboard organization.
Date: July 14, 2020
Subject: The Analyzing Potential Compliance for Business in Mexico
Introduction:
This analysis sums up the company situation and the suitability of Mexico in legal compliance basis as proposed entry destination. As the legal compliant working for a U.S. corporation which intends to expand its globally reach, I was tasked with the obligation of assessing the two international markets and reviewing the market entry situations. Upon analysis, I have narrowed my search to Mexico whose legal business environment seems favorable to the organization. This memo analyzes the potential compliance issues that relate to critical law and ethics aspects that are specific to the country of Mexico. I believe this will help the executive reach to a conclusive and advised decision on why they should consider Mexico as the best country to invest.
Background feasibility information on the organization
This Brookboard organization business strategy plan is based on the market analyses as the organization seeks to make an entry in the foreign market if Mexico. An estimation of the resources required to facilitate the investment is made as well as a forecast of expected market share. This plan is crafted based on the marketing strategy, financial projections, as well as a strategy implementation plan for the company to market a new product in Mexico. The international business plan maps the expansion of the organization and create to guide the company’s operations in Mexico and grows the business within the health care industry subsector. The plan is based on consideration of potential customers, business operations, financial projections, and implementation metrics. Upon market assessment conducted previously, it was established that the organization’s idea of venturing in Mexico will be feasible.
Pertinent U.S. law that the company should be aware of
All companies are required by law to comply with all national compliance laws in their operations. Upon entry into the international arena, business are further bound to comply with the set international regulations (Bradley, 2005). This memorandum summarizes the most important of the numerous international requirements for this organization. Upon entry analysis, it was discovered that the legal framework governing business operations in Mexico is the best.
The organization must comply with applicable intellectual property laws, including copyrights and trademarks, when selling internationally. Foreigners are entitled to export original branded goods to other geographic regions or to import them from other geographic regions. When operating internationally, the organization is subject to the legal provisions of home country and the countries to which they want to sell. They therefore need to find out more on the regulations in the new country and, if necessary, consult your lawyer and a tax advisor (August, Mayer & Bixby, 2009). Industrial property rights, copyrights and trademarks must be considered before starting operations. I addition, the organization should understand the following law statutes governing international business;
1. Foreign Corrupt Practices Act (FCPA)
This regulation came into force in 1977 as the United States anti-corruption law. It also requires the FCPA by foreign companies be observed in business activities, which are directly or indirectly linked to the US.
2. Financial Action Task Force on Money Laundering (FATF)
This regulation is a working group aimed at combating money laundering and terrorist financing internationally. The risk-based approach is based on the fact that the measures to be taken must always be adapted to certain risk classes.
3. USA Patriot Act
This regulation was passed after the September 11, 2001 attacks. The regulation accounts for regulations to curb money laundering and terrorist financing. Some parts of the USA Patriot Act were replaced in 2015 by provisions of the USA Freedom Act
4. The Bribery Act
This regulation regulates bribery offenses among companies. The Bribery Act was established in 2010, according to which companies are punishable if they have failed to create suitable structures to combat corruption (Schaffer, Agusti, Dhooge, & Earle, 2011). Companies can face unlimited fines if they are not observed as well as personal prison terms of up to ten years.
5. ISO 19600
The ISO 19600 Compliance regulations was established in 2014 by the International Organization for Standardization (ISO). This contains guidelines for implementation, maintenance and the development of compliance management systems for organizations.
6. Tax compliance regulations abroad
This regulation governs legal compliance behavior in terms of compliance and requires companies to determine and regulate all contractual conditions before the employee’s departure abroad.
7. Employees Acts abroad – good preparation is essential
This regulation requires Companies to have a statutory duty of care to prepare and advise employees working abroad for them comprehensively. Companies are required to meet all the conditions that require proper work. .
Other related Legal implications for entry in Mexico
The International Business Law is the legal regime for international economic relations, for example by Governments, international organizations and private transport of goods and services. Characteristic of international commercial law is a comprehensive view of the interaction of national and international law, private and public law norms. The functions basically correspond to the principles of national commercial law, i.e. order, justice, governance, pacification, and there is also harmonization for the purpose of reducing transaction costs and ensuring minimum standards (e.g. wages and quality) and liberalization (LAW, 2004). Just like domestic law, international commercial law distinguishes between public and private law.
Entry into the international market is always an advantage for a company. By moving the business to the new location of Mexico, the organization will serve a larger market which will translate to more revenue. Brookboard organization will act as a corporation in this entry. As a corporation, it will have a separate entity from its owners with legal rights to own and sell property or the rights of ownership. Under types of corporations, it will act as a corporations owned by shareholders but taxed as a separate entities (Eisenberg, 1976). As a corporations the organization will be able to sell shares and stock and secure additional funding.
Ethical implications involved in this business decision
In the business practice, ethical dilemma arise and which evoke the moral decision-making need to be regulated. (Lurie & Albin, 2007). For BrokeBoard, ethical guidelines should be at the focal point of this foreign entry. This is because countries are very keen on the ethical charter of a foreign company. The first thing is to ensure that all their practices and operations are ethical. In line with the CSR concept the company will voluntarily integrate social and environmental concerns into their business activities and into the interactions with stakeholders. This will require that decision first be examined more closely.
Governance under CSR will involve three types of decisions: decisions under certainty, decisions under risk and decisions under uncertainty (Garriga & Melé, 2004). The concept of responsibility will be linked to that of the decision to the extent that the normative claim to the acting person is linked to a decision to justify this action. This suggests that there is a widespread feeling in society that a person is responsible for the decisions they make. Responsibility can also extend to unconscious actions as well as decisions and actions of other people. This means that it can go beyond individual decisions
How domestic companies comply with U.S. laws
Domestic companies are not subjected to international business regulations and only operate within the guidelines of internal laws. This therefore makes their operation effective. The question of how they organize compliance in international business concerns all US companies with foreign branches or subsidiaries, as well as suppliers, sales and trading partners outside of US. Compliance in international business involves different countries and different customs. The knowledge of country-specific laws and regulations is essential for US companies to liability risks for the entire company to avoid. A holistic, cross-border compliance management system with a comprehensive international legal register can solve this problem. In addition to the general jurisdiction at international level, these topics have particular relevance and therefore also have to be considered in a legal or statutory cadaster (Picciotto, & Mayne, 2016).
Compliance in international business is a requirement for any business. In the US apparently, the business regulations are strict and businesses must adhere to them to be allowed to operate. As a survey from last year shows, US companies are often sufficiently prepared for the compliance risks in international business (Picciotto, & Mayne, 2016). Almost all businesses have a clear overview of the national laws of the countries. Most companies consider it necessary to open up new markets in order to secure their competitive position in international sales and purchase markets. However, they are unsure how to handle the numerous laws and regulations abroad.
How companies address the potential compliance issues
Companies have taken the initiative of training their employees of the regulations so that they can stay of the right side of the law. Due to the international legal heterogeneity, it is important that company employees are familiar with the international regulations on compliance. Compliance in international business requires foresight and foresight. Adherence to the set regulations is the only way out here. All compliance risks in the respective country must be known in the relevant areas and assessed on a company-specific basis. The aim is to fully prevent fines and / or loss of image on the market.
References
August, R., Mayer, D., & Bixby, M. (2009). International Business Law: text, cases and readings. Pearson education.
August, R., Mayer, D., & Bixby, M. (2009). International Business Law: text, cases and readings. Pearson education.
Bradley, F. (2005). International marketing strategy. Pearson Education.
Eisenberg, M. A. (1976). The structure of the corporation: A legal analysis. Beard Books.
Garriga, E., & Melé, D. (2004). Corporate social responsibility theories: Mapping the territory. Journal of business ethics, 53(1-2), 51-71.
LAW, C. (2004). International Business Law.
Picciotto, S., & Mayne, R. (Eds.). (2016). Regulating international business: beyond liberalization. Springer.
Schaffer, R., Agusti, F., Dhooge, L. J., & Earle, B. (2011). International business law and its environment. Cengage Learning.
