International Sales Transaction Checklist

I. Introduction: How to Use This Checklist

The increasingly borderless world in which many companies regularly conduct business can pose serious problems for commercial lawyers. Clients selling goods and services across national borders can trigger a variety of legal issues with which the lawyer will be expected to have familiarity but which may have subtleties and complexities beyond the experience of many practitioners.

Committees M and X of the International Bar Association Section on Business Law have developed this Checklist to help ease the anxiety of lawyers engaged in such transactions. The essential concept underlying the Checklist is that, when drafting contracts for the international sale of goods, each attorney will, because of the increasing convergence of applicable treaties, laws, regulations, conflicts of law principles and business practices, encounter common legal, business and financial issues, regardless of the place of sale or destination of the subject goods. Through organization and a brief description of these issues, as well as cross-referencing to relevant web-based and other source materials, the Checklist should serve as a useful tool for the drafting and negotiation of international sales contracts.

The Checklist organizes and briefly summarizes many of the topics typically encountered in an international sales transaction. The major topic headings of the Checklist are as follows:

■ Are you/your client ready to export?

■ Relationship issues such as the establishment of a franchise, distributorship, agency or vendor-vendee relationship.

■ The substantive law of sales, including the U.N. Convention on the International Sale of Goods, the U.S. Uniform Commercial Code, title retention devices and competition laws.

■ Currency and payment issues, including reference to the Anti-Money Laundering, Bribery and Corrupt Practices legislation found in relevant jurisdictions.

■ Import/export regulations, including licenses, duties, quotas and trade barriers.

■ Resales of products in target countries, including advertising restrictions, business and ethical codes, consumer protection laws, intellectual property protection and electronic commerce issues.

■ Taxes and tax treaties.

■ Arbitration and other dispute resolution matters;

■ “Soft” issues including language, cultural and business practice differences between contracting parties.

Each of these essential topics includes cross-references to substantive resources, with an emphasis on links to websites, thereby permitting the Checklist user’s efficient access to and assessment of the underlying principles for each topic. Where appropriate, specimen form documents are included, for which visitors to the Checklist website are invited to submit comments concerning alternative forms used in their respective countries.

A. Status of Checklist; contacts

The Checklist has been prepared as a quick overview and broad summary of complex, constantly changing fields of law. It is intended as a resource for practicing lawyers and not as the practice of law itself. No attempt has been made to address all special rules or the application of general rules to special circumstances. Prior to rendering advice in any of the fields covered by this chart, the user should consult then-current statutory, regulatory and decisional laws.

The Checklist is expressly contemplated to be a living, evolving document. Thus the Checklist will be regularly reviewed and updated, on a schedule to be determined by the participating committees, to reflect changes either in substantive principles or reference sources and to add comments submitted by site visitors and deemed useful for a broader audience. Visitors to this site will not be notified of changes to the Checklist, so it may prove useful to check periodically for updates. The latest update is indicated on the first page of the Checklist. For those who wish to submit proposed additions to or revisions of the Checklist, or other comments on alternative law, practices or forms in various countries, please direct them to one or both of the project co-chairs as follows:

■ For Committee M: Michael M. Sax, Sax Law Office, One University Avenue, Suite 402, Toronto, Ontario M5J 2P1, Canada, Telephone (416) 955-0300, Fax (416) 364-9880, E-mail mmsax@saxlaw.com.

■ For Committee X: Michael K. Lindsey, Paul, Hastings, Janofsky & Walker LLP, 515 South Flower Street, 25^th Floor, Los Angeles, California 90071, Telephone (213) 683-6262, Fax (213) 996-3262, E-mail michaellindsey@paulhastings.com.

B. Checklist Contributors

This Checklist has been made possible only through the generous contributions of a number of dedicated members of Committees M and X of the International Bar Association Section on Business Law. Their names and contact details are listed in Section X below. If you would like to contribute to the next update of the Checklist, furnish a specimen document for use in the Checklist or provide country-specific or other commentary or any of its components, please contact one or both of the Checklist project co-chairs identified in Section I.A above.

C. About the Sponsoring Committees

1. About Committee M

Committee M, the Committee on International Sales and Related Commercial Transactions of the Section on Business Law, focuses on legal issues fundamental to the growth and development of international commerce.

The Committee deals extensively with issues relating to international sales contracts, agency and distribution, cross-border acquisitions, warranties and financing of international sales.

In addition to reviewing the current legal position in different countries from a comparative perspective, the Committee also examines international and supranational instruments, such as the United Nations Convention on the International Sale of Goods, Incoterms and the Uniform Customs and Practice for Documentary Credits, as well as, for example, relevant instruments of the European Union and Mercosur.

The Committee also focuses on law reform in the fields of law within its scope, and since 1997 has monitored and offered suggestions in connection with the proposed Hague Convention on International Jurisdiction and the Effects of Foreign judgments in Civil and Commercial Matters.

With members practicing in all continents, the Committee M website offers an opportunity for the Committee members to participate in activities, even if they are unable to attend Committee sessions at annual conferences or ad hoc seminars. With developments in international commerce occurring at an ever faster pace, posing new or what may appear to be new legal problems, the Committee M officers very much hope that the Committee’s website will become a forum for lawyers practising international sales law to exchange views on topics of practical interest.

Click here to access Committee M's website.

2. About Committee X

Committee X, the International Franchising Committee of the Section on Business Law, focuses on the law and business of international franchising. Committee interests include:

■ competition law principles;

■ cross-border sales and licensing issues;

■ the business forms employed; and

■ trademark and intellectual property protections required to assure franchising success.

The Committee has served and continues to play an educational role for the legal profession, judiciary and legislators, and enables members to examine and comment upon legislative and regulatory proposals affecting international franchising. Through the Committee's regular Newsletter, International Franchising, Committee members are kept up to date on legal developments, seminars and publications of interest around the world.

The Committee regularly conducts seminars in its interest areas, both as part of the annual IBA and SBL meetings and separately, in an annual program held in Washington, D.C., and in periodic stand-alone conferences. The Committee has also published International Franchising: Commonly Used Terms Volume I, a compendium of commonly used terms in franchising. Other publications are in development. Through the Committee's list serve, Committee members throughout the world can pose or respond to questions of common interest to franchise lawyers. Thus, Committee X provides abundant involvement and educational opportunities for lawyers involved in the global phenomenon that is franchising.

Click here to access Committee X's website.

II. Are you/your clients ready to export?

While exporting (which for the purposes of this Checklist includes all forms of relationships described below) holds substantial economic promise for most companies, the international counselor should carefully advise his or her client to consider if it is ready to take on the challenges and demands associated with international transactions for the sale of goods or services. Exporting may not be an option for clients that cannot carry on their domestic business profitably and are limited to utilizing their already taxed financial and human resource capabilities. This section and related links will provide you and your clients with tools that will assist you to counsel them to identify their readiness, advise on how to acquire export skills, assess the competitiveness of their products or services in the new market, define clear objectives in their export plan, and help your clients decide on the legal relationship they will require to carry out their objectives.

http://www.ibanet.org/general/FindDocuments.asp > (last visited April 2, 2003) is the general IBA Reading Room link. It may be useful to help locate specific articles written by members of various sections, which have not been linked in this Checklist for reasons of brevity and not necessarily preference.

A. Preparing to export goods, services or intellectual property

Several government agencies and other entities have published useful overviews or checklists of the issues to be considered in preparing to export. These include:

■ http://exportsource.ca/index_e.cfm. > (last visited April 2, 2003) This site also includes a step by step guide to exporting at http://exportsource.gc.ca/pdf/step_e.pdf > (last visited April 2, 2003) http://strategis.ic.gc.ca/SSG/sc01304e.html > (last visited April 2, 2003)

■ http://www.sba.gov/oit/info/Guide-To-Exporting/ > (last visited April 2, 2003) (U.S. Small Business Administration guide)

■ http://www.export.org.uk/ and http://www.international-trade.org.uk/. > (last visited April 2, 2003) This site provides overseas market information; access to trade finance advice; downloadable international trade education and training material; online travel advice services; assistance with technical and documentation problems and the UK's most comprehensive database of international trade information and tested global links.

■ http://www.tradepartners.gov.uk > (last visited April 2, 2003) - this incredibly useful website is maintained by the UK government and specifically deals with assisting businesses to export. Prospective exporters can use the site to searching by country for which more information is desired, business sector in which the exporter is involved or by subjects, which are all found under the general branch of exporting.

■ http://www.unzco.com/basicguide/toc.html. > (last visited April 2, 2003) This site provides a basic guide to exporting with links to other resources.

■ For a list of the benefits and challenges of exporting see http://exportsource.ca/heading_e.cfm?HDG_ID=8 > (last visited April 2, 2003)

Country-specific information may be difficult to find, but the web has made the challenge of locating such information much more feasible. The following sites, for example, offer helpful information links on a number of countries:

■ http://exportsource.ca/heading_e.cfm?HDG_ID=65 > (last visited April 2, 2003)

■ http://strategis.ic.gc.ca/sc_mrkti/ibin/compare.html > (last visited April 2, 2003)

■ http://www.findlaw.com/12international/countries/index.html > (last visited April 2, 2003)

An Industry Canada guide designed to help the exporter develop a better understanding of how cross cultural differences can impact the effectiveness of its marketing efforts and its foreign relationships can be found at http://strategis.ic.gc.ca/SSG/sc01685e.html?he=y > (last visited April 2, 2003)

In South Africa, the Department of Trade and Industry has a website which provides a potential exporter with assistance on a wide range of matters - http://www.thedti.gov.za/exporting/learntoexport.html. > (last visited April 2, 2003) See also http://www.tradeworld.net > (last visited April 2, 2003) for a comprehensive export help system.

B. Suggestions to Businesspersons on visit to the export market

Companies considering export sales for the first time or to a new jurisdiction should be encouraged, before any relationship with a foreign representative is entered or any transaction takes place, to visit the subject country or countries to assess the markets as well as their local contacts. Some care should be devoted to the object of the visit to the export market, planning the visit, preparing checklists and materials (samples, sales and marketing, promotional, multilingual cards and other material), bringing gifts, cultural issues, negotiation styles, requisite documentation and travel requirements. These and other issues are surveyed at http://www.unzco.com/basicguide/c14.html. > (last visited April 2, 2003)

Before actually visiting the country, the company planning to export should compile a briefing book or similar resource for all of its personnel surveying the planned country or region as well as information on the available markets in that country or region. Much valuable information of this sort is available on the web, including the following:

■ http://www.intracen.org/menus/countries.htm > (last visited April 2, 2003) – International Trade Center: Trade Information Index provides links to national trade support institutions and country-specific business information.

■ http://strategis.ic.gc.ca/SSG/bi18354e.html > (last visited April 2, 2003) – Service Provided by Industry Canada: Create Your Own Market Research Report International Business Practices.

Information about the European Union and its members can be found on several sites, including:

■ http://mkaccdb.eu.int/ > (last visited April 2, 2003) - the EU Market Access Database

http://www.eurofound.ie/emire/emire.html > (last visited April 2, 2003)- The Empire database,

the online version of the European Employment and Industrial Relations Glossaries, which explain the national industrial relations systems of the EU member states through their terminology. This includes such important terms as “agent” and “bankruptcy,” terms, which are vital in understanding, and penetrating EU markets.

■ http://www.obcebdbh.be/menu/menuie.html?ver=en >(last visited April 2, 2003) - website of the Belgian Foreign Trade Board.

■ http://www.newbusiness.be/3_loso.htm >(last visited April 2, 2003) - a summary of legal options for sales operations in Belgium, including agency, distribution and franchise relationships. Other information at this site includes a summary of the tax and legal aspects of setting up a company in Belgium.

■ http://www.germany-info.org/relaunch/index.html >(last visited April 2, 2003)- general information about Germany and its markets, published by the German embassy in Washington, D.C.

■ http://www.ixpos.de/en/en.html >(last visited April 2, 2003)- the German Business Portal, providing a method for locating trade contacts and business partners in Germany as well as a summary of the tools, services and information that various government and semi-independent players in Germany provide.

■ http://www.bfai.com/?uid=3831a9c3a823a15c9051af74d4e70596&id=home >(last visited April 2, 2003)- the German Office for Foreign Trade website, providing economic, tax, customs and other information along with a free database of potential German business partners.

■ http://www.amcham.de/ >(last visited April 2, 2003)- website of the American Chamber of Commerce in Germany offering a wealth of information, including, at its Info Center, market research and information on forming a company in Germany.

C. Financing the export program

Several governments offer assistance to companies desiring to enter the export market. For example, the website http://198.103.104.42/pemd/menu-e.asp >(last visited April 2, 2003) describes the Program for Export Market Development offering assistance to Canadian companies who wish to export and have a 1 – 2 year plan. The program provides assistance on the basis of a company's one-year (or in some special instances, two-year) international marketing plan. Eligible costs include market visits, incoming buyers, trade fair participation abroad, product testing for market certification, legal fees for marketing agreements incurred abroad, air transportation costs for off-shore company trainees, product demonstration costs and other costs necessary to execute the marketing plan.

Annual contribution per application is a minimum of $5,000 and a maximum of $50,000. The contribution is repayable based on four percent of incremental export sales in the target market over a four-year period. For first time exporters there is also a maximum contribution of $7,500 available to such companies for either a market identification visit or participation at an international trade fair. The contribution is repayable at four percent of any export sales in the target market over the next two years.

U.S. companies get assistance from the U.S. Small Business Administration, whose program is described at http://www.sba.gov/oit/export/index.html. > (last visited April 2, 2003) Finding overseas markets, dealing with the initial complexities of exporting, and financing export sales are some of the challenges facing smaller firms seeking to participate in international trade. To help them meet these challenges, the U.S. Small Business Administration offers aid to current and potential small exporters through two major programs: business development assistance and financial assistance.

Other comparable web sources from other countries include the following:

■ http://www.bmf.gv.at/finanzmarkt/_start.htm > (last visited April 2, 2003) – the Austrian Federal Ministry of Finance

■ http://www.ixpos.de/en/en.html > (last visited April 2, 2003) – the German Business Portal.

■ http://www.eda.admin.ch/sub_ecfin/e/home/docus/financ.html > (last visited April 2, 2003) – the Economic and Financial Affairs Division of the Swiss Federal Department of Foreign Affairs.

III. Relationship issues

Successful exporting depends on many factors. If you are a manufacturer, you need an effective way to deliver your goods to your target market and to distribute them. This may involve direct selling (as mentioned below), using intermediaries, licensing or partnering/joint venturing. If you plan to export services, you need a mechanism to help you secure and manage contracts in the market, which usually calls for some form of local presence.

Identifying the characteristics and regulations of your target market will help you decide which entry strategy to pursue. For example, for relatively accessible markets, direct selling may be a viable option. For markets with cultural differences, complex local business practices and unfamiliar legal environments, it may be better to find a local partner (and the term is used here in describing any of the following relationships and not as a form of legal entity). Although designed as a major international project partnership selection checklist, http://exportsource.ca/heading_e.cfm?HDG_ID=93 > (last visited April 2, 2003) is a good checklist for your clients to use if they seek out a local “partner.” (The word partner may not be entirely accurate even in the loosest sense as many jurisdictions, particularly in some of the EU countries, may characterize the relationship as close to an employer/employee relationship, as further noted in Section III.B below.)

Any relationship agreements or practices should be considered in light of the relevant competition/anti-trust provisions of the applicable jurisdiction, as well as the jurisdiction’s laws applicable to the commencement of franchise and similar arrangements. Links to such laws are found below in Sections IV.D and III.D, respectively. The potential forms of relationship with offshore representatives, ranging from commission agent or commercial agent to importer/distributor, are discussed below.

A. Vendor-vendee

If an exporter can afford it, from both a time and money standpoint, it may be interested in establishing its own presence in foreign countries. This alternative would eliminate many of the relationship issues discussed in this section, unless the exporter engages in multi-level marketing or franchising in the export market, in which case a number of additional issues would be raised. (See Section III.D below.) Direct selling without a physical presence is an alternative method of market penetration where the exporter is ready, willing and able to achieve its goal. Internet direct sales may raise other issues, as noted in Section VII.G below.

See http://guides.library.fullerton.edu/business/topics/marketing.htm#DirectMarketing > (last visited April 2, 2003) for a California State University, Pollak Library Research Guide to Business Resources bibliography consisting of links to various direct international marketing and international resources.

B. Agent

A commission agent or commercial agent sells on behalf of an exporter or principal goods or services originating from the exporter or principal, and receives a commission on sales in compensation for such efforts. The commercial agent can be paid a fixed fee, a retainer, a commission or a combination of all three. The principal appoints the agent to sell goods or services in a designated territory, to solicit orders and inquiries in that territory and generally to promote the sale of the goods or services in accordance with the terms, provisions and conditions of a written or verbal agreement. Legally binding sales transactions are typically subject to the principal’s acceptance (and therefore a direct contractual link between the principal and the customer) but this acceptance process may be modified by the by the terms of the principal/agent agency agreement. The exporter will generally ship goods directly to the customer (an agent does not take ownership of goods), the customer will pay according to agreed terms directly to the exporter and the exporter will bear the risk of payment.

It is important to have a clearly defined agreement between the exporter and its agent setting out the relationship and its limitations, and the relationship should be monitored carefully to verify that the agent does not have actual or apparent authority greater than provided for in the parties’ agreement. Local laws may govern the relationship; whether the agent is paid a salary, a retainer, a commission or a combination of all three; and the circumstances that will permit termination of the parties’ relationship as well as the compensation that must be paid by the principal to the agent upon any such termination. Local laws may even characterize the parties’ relationship as something else, and therefore it is important to obtain advice from local counsel prior to entering into any such arrangement.

Useful websites to review prior to the initiation of a commercial agent relationship include the following:

■ http://www.unidroit.org/english/conventions/c-ag.htm > (last visited April 2, 2003) - Unidroit Convention on Agency in the International Sale of Goods (17 Feb 1983)

■ http://www.jus.uio.no/lm/hcpil.applicable.law.agency.convention.1978/index.html > (last visited April 2, 2003) - Convention on The Law Applicable to Agency, The Hague, 14 March 1978

■ http://www.jus.uio.no/lm/un.minimum.standards.shipping.agents.convention.1988/index.html - United Nations (UNCTAD) Minimum Standards For Shipping Agents (1988)

■ http://www.unidroit.org/english/conventions/c-fact.htm > (last visited April 2, 2003) - Unidroit Convention on International Factoring (28 May 1988)

■ http://www.hg.org/corp.html > (last visited April 2, 2003) – Hieros Gamos: Agency

■ http://europa.eu.int/scadplus/leg/en/lvb/l23024.htm > (last visited April 2, 2003) - EC Council Directive 86/653 on the co-ordination of the laws of member states relating to self-employed commercial agents. Each member state was required to implement this directive, but note that the concept and calculation of compensation arising out of the termination of an agency relationship are treated quite differently in the various member states’ national legislation.

■ http://www.hmso.gov.uk/si/si1993/Uksi_19933053_en_1.htm > (last visited April 2, 2003) - The UK Commercial Agents (Council Directive) Regulations 1993, as amended, which govern the relations between commercial agents and their principals in the UK. These Regulations implement EC Council Directive 86/653. Among other things, the Regulations provide for the indemnification or compensation of a commercial agent following termination of the agency relationship.

■ http://www.frenchlaw.com/agents_distributors.htm > (last visited April 2, 2003) - a brief summary of the different treatment of agents and distributors under French law.

■ http://www.jura.au.dk/ip2001/reports/hamburg.pdf > (last visited April 2, 2003) - a discussion of commercial agency contracts under German law.

■ http://www.jura.au.dk/ip2001/reports/spain.pdf > (last visited April 2, 2003) - discusses the treatment of agency, distributor and sales representative agreements under Spanish law.

C. Distributor

An importer/distributor relationship is one in which the local representative imports goods for resale to customers in the chain of distribution (retailers or end users) in a specified territory. The difference between a distributor and a commercial agent, discussed in Section II.C above, is that a distributor is independent (not an agent of the exporter/principal) and a distributor typically takes ownership of the goods shipped to the export market and pays the exporter for them. An importer/distributor will generally purchase goods from the exporter upon terms set out in the parties’ distribution agreement at a wholesale price and resell it at a mark-up. A distributor usually carries stock and offers after-sales service in the specified territory. The exporter generally has no direct contact or contract with the customers in the distribution chain in the distributor’s territory. It may provide warranty policies that are set by the exporter and fulfill those policies in accordance with local laws.

The contractual arrangement between the exporter and distributor may grant the distributor the right to market goods or services under the exporter’s trade names or marks and the right to exploit other intellectual property of the exporter. An example of a thorough distribution agreement is found in Section XII below. Local laws may govern the relationship and prescribe whether the relationship may be characterized as something else. Accordingly, it is prudent to utilize local counsel in structuring such a relationship.

Websites providing a useful overview of distribution arrangements and law include the following:

■ http://tradelinks.wfta.org/index.asp?category_id=7768&language=en&parentcategory_id=2 > (last visited April 2, 2003) - American Chambers of Commerce Abroad

■ http://www.worldchambers.com > (last visited April 2, 2003) – World Chambers Network

■ http://www.hg.org/commerc.html > (last visited April 2, 2003) - Hieros Gamos: Distributorship.

D. Franchise

Franchising is a method of distributing products or services. At least two levels of people are involved in the franchise system: (1) the franchisor, which licenses its trademark or trade name and a business system; and (2) the franchisee, which pays a royalty and often an initial fee for the right to do business under the franchisor's name and system. Frequently, particularly in the international expansion of a franchised system, a third level participant is involved. That third level participant is generally referred to as a master franchisee or area developer. That person obtains the right to open and operate franchises in a specified country or countries, and to license others to do so. Technically, the contract binding the parties in any of these relationships is the “franchise,” but that term is also often used to mean the actual business that the franchisee operates. http://www.franchise.org/resourcectr/faq/q1.asp > (last visited April 2, 2003)

Franchise relationships may be subject to pre-sale disclosure and/or registration requirements, and may also be subject to restrictions on the right of the franchisor to terminate the parties’ relationship or to refuse to renew the relationship upon expiration of the stated term of the parties’ agreement. A summary of the countries and provinces or states that currently regulate some aspect of franchising may be found at http://www.unidroit.org/english/franchising/annex.htm. > (last visited April 2, 2003) Additional regulation of this form of relationship may be expected, as the International Institute for the Unification of Private Law, also known as UNIDROIT, recently approved a Draft Model Franchise Disclosure Law on which the organization’s Committee of Governmental Experts had been working for several years. The text of the model law and related commentary may be found at http://www.unidroit.org/english/franchising/modellaw/main.htm. > (last visited April 2, 2003)

There are many useful websites devoted to franchising and the legal regulation of this form of relationship, including the following:

■ http://www.ibanet.org/general/CommHome.asp?section=SBL&Committee=SBL-X > (last visited April 2, 2003) - IBA International Franchising Committee

■ http://www.franchise.org > (last visited April 2, 2003) - International Franchise Association

■ http://www.abanet.org/forums/franchising/home.html > (last visited April 2, 2003) - American Bar Association Forum on Franchising. In 2001 this organization published a useful book entitled Fundamentals of International Franchising, and its overview Fundamentals of Franchising book also devotes attention to this subject. See http://www.abanet.org/webapp/wcs/stores/servlet/ProductDisplay?storeId=10251&productId=-17319&categoryId=-3655> (last visited April 2, 2003)

■ http://www.unidroit.org/english/publications/franchising/main.htm > (last visited April 2, 2003) - The UNIDROIT Guide to International Master Franchise Arrangements

■ http://www.ftc.gov/bcp/franchise/netfran.htm > (last visited April 2, 2003) - U.S. Federal Trade Commission: Franchise and Business Opportunities trade regulation rule

■ http://www.ftc.gov/bcp/menu-fran.htm > (last visited April 2, 2003) – U.S. Federal Trade Commission: Franchise & Business Opportunities, Consumer Information.

■ http://www.ftc.gov/bcp/franchise/netdiscl.htm > (last visited April 2, 2003) - List of U.S. State offices administering franchise disclosure and/or registration laws.

■ http://bsa.cbsc.org/gol/bsa/interface.nsf/engdoc/1.2.2.html> (last visited April 2, 2003) - Canadian Business Service Centres (a federal, provincial, local, academic and private sector information and assistance cooperative) provides valuable links on Franchising, General Information Guides.

■ http://www.british-franchise.org.uk/ > (last visited April 2, 2003) - this site is the home of the British Franchise Association, the only organization in the UK that is dedicated to the promotion and regulation of the franchise industry

E. Licensing

Licensing of intellectual property rights occurs when the owner (the licensor) of intellectual property rights (copyright, know-how, trade secrets, trademarks or patents) in goods, software or other products or services grants written permission to another party (the licensee) to use, manufacture, market, sell and/or otherwise exploit the intellectual property in an identified territory, for a defined usage and time period. If the goods are not patentable or there has been no registration of other statutory intellectual property rights, then what may be licensed is a trade secret or know-how. An example is Coca-Cola, which may license its secret formula to international bottlers where it controls the manufacturing process in the export markets although it does not actually do the manufacturing itself.

As noted above, an exporter may license some rights to a distributor or franchisee, and a licensing relationship may result from other forms of agreement between an exporter and a third party operating in the country to which goods or services are exported.

For links to various papers (which are available for a fee) on the licensing relationship see the following sites:

■ http://www.ibanet.org/general/PaperDetails.asp?ID=MB75&Section=GEN&Committee > (last visited April 2, 2003)

■ http://www.ibanet.org/general/PaperDetails.asp?ID=MB170&Section=GEN&Committee> (last visited April 2, 2003)

■ http://www.ibanet.org/general/PaperDetails.asp?ID=MB149&Section=GEN&Committee> (last visited April 2, 2003)

■ http://www.ibanet.org/general/PaperDetails.asp?ID=TV5&Section=GEN&Committee> (last visited April 2, 2003)

Links to other useful websites related to intellectual property licensing may be found at http://www.hg.org/intell.html. > (last visited April 2, 2003)

F. Partnering/Joint Venturing (a “JV”)

From an international point of view, a JV is merely a form of business relationship carried on in one state between parties from two or more different states whereby the parties have determined that they should share risk, pool their respective technology and know-how, and complement their resources (e.g., products, real and/or intellectual property, money, warehousing and manufacturing facilities, etc.) in order to satisfy mutual needs to access markets with new goods/services and reduce future competition. In some jurisdictions, and particularly some emerging markets, the legal regime often dictates that the only vehicle a foreign national may use to enter the market is a joint venture with a local “partner. This was true in transitional economies. In addition to “deal” issues in any joint venture relationship, complex issues of corporate, tax and competition law may arise. Accordingly, local counsel should be solicited in structuring any such relationship.

There are few websites devoted to the discussion and assessment of issues involved in the formation and operation of joint ventures. Several useful treatises are available, and the following websites also provide some information that is useful in this area:

■ http://www.novexcn.com/joint_venture_main.html > (last visited April 2, 2003) - Link to JV laws in China , Viet Nam, and other countries

■ http://www.swiggartagin.com/aigc/tic33.html > (last visited April 2, 2003) - International Sales and Joint Ventures, Article from Association of Independent General Counsel

■ http://pachome1.pacific.net.sg/~chanpal/article5.htm > (last visited April 2, 2003) - Key Factors in an International Joint Venture Agreement

G. Collateral Issues

1. Local Counsel

Your client may need to locate several different lawyers with expertise in any of the above relationships, and the topics that will be discussed below including compliance issues, taxes, corporate structure, competition rules, local licensing, etc. Information obtained from afar can be confusing and occasionally contradictory, particularly in areas where trading rules and local laws may differ from the exporter’s home (EU, NAFTA) or where the laws are in a state of flux. As the exporter’s domestic lawyer, it is important for you to be involved early in the capacity as legal coordinator to maintain a consistency of concerns as your client moves or trades around the globe. Important in any relationship with foreign counsel are the scope of the engagement and who will be directly responsible for foreign counsel charges, i.e., does the foreign counsel invoice the referring lawyer or the client directly? This should be clarified at the outset to avoid potential confusion and embarrassment at a later date.

2. Immigration

If your client will be conducting direct sales or sending key employees for indefinite periods of time to export markets to establish or monitor any of the above relationships it will be necessary to investigate and obtain the necessary business visas and permits for these personnel. It will also be necessary to understand the local employment regulations and personal income tax that may affect these employees as they work in this jurisdiction.

The Immigration & Nationality Law Committee of the IBA’s Section on Legal Practice, whose website is http://www.ibanet.org/general/CommHome.asp?pubtype=paper&Section=SLP&Committee=SLP-14 > (last visited April 2, 2003), regularly conducts programs and has published a number of papers applicable to such issues. The Committee’s paper on “The International Transfer and Employment of Executives, Managers and Those with Specialized Knowledge to Canada - Mastering the Exemptions,” is available (for a fee) at http://www.ibanet.org/general/PaperDetails.asp?ID=AA87&Section=SLP&Committee=SLP-14. > (last visited April 2, 2003) The Taxes Committee of the IBA’s Section on Business Law, whose website is located at http://www.ibanet.org/general/CommHome.asp?section=SBL&Committee=SBL-N > (last visited April 2, 2003) regularly deals with the issues of taxation of domestic personnel working abroad. Several papers from a Committee program on “Migrating Executives and Key Employees: Compensation and Benefit Plan Considerations” are available (for a fee) in the IBA’s Reading Room at http://www.ibanet.org/general/FindDocuments.asp. > (last visited April 2, 2003)

Other useful websites in this area include the following:

■ http://www.law.cornell.edu/topics/immigration.html > (last visited April 2, 2003) - An overview of U.S. immigration law with useful links to other resources

■ http://www.findlaw.com/01topics/20immigration/sites.html > (last visited April 2, 2003) - List of links to immigration and naturalization websites in the U.S. and various other countries

■ http://www.ind.homeoffice.gov.uk/ > (last visited April 2, 2003) - U.K. Immigration and Nationality Directorate

■ http://www.ein.org.uk/ > (last visited April 2, 2003) - Electronic Immigration Network

IV. Substantive law of sales

A. Convention on the International Sale of Goods

In an effort to create some uniformity in the rules relating to contracts for the sale of goods, the United Nations Commission on International Trade Law, established in 1965 by the UN, drafted the Convention on Contracts for the International Sale of Goods (“CISG”) which was adopted by the signatory countries and came into force on January 1, 1988. According to at least one source, the CISG now provides the legal underpinning for two-thirds of all world trade. http://joe.law.pace.edu/> (last visited April 2, 2003)

The subject matter of the CISG is complex, and we recommend that you read the actual text in the language of your choice. However, please note that the CISG applies only to the formation of commercial contracts (with some exceptions in Article 2), whether oral or written, for the sale of goods which are manufactured or produced (and not predominantly services) between contracting parties (1) whose place of business (regardless of the contracting parties nationality) are in different States and (2) whose country where they carry on business has ratified the CISG. It also applies to the rights and obligations of the seller and buyer arising from any such contract. The CISG is not concerned with the validity of the contract or the effect that the contract may have in the property in the goods sold. It does not cover product liability. Notwithstanding the application of the CISG, it is possible that parties may still designate the application of the law of a particular State in their agreement and thus avoid the application of the CISG or derogate from the effect of any of its provisions (Article 6). Further, note that when exporting to Denmark, Finland, Norway or Sweden, those countries have declared the CISG is not to apply to the formation of contracts where the parties to a sale have their places of business in any of those countries.

The following are among the many useful websites devoted to CISG issues:

■ http://fletcher.tufts.edu/multi/texts/BH775.txt > (last visited April 2, 2003) - United Nations Convention on Contracts for the International Sale of Goods (11 Apr 1980)

■ http://cisgw3.law.pace.edu/cisg/text/text.html > (last visited April 2, 2003) – Texts of CISG in different languages and http://cisgw3.law.pace.edu/cisg/countries/entries.html > (last visited April 2, 2003) for a list of Contracting States

■ http://fletcher.tufts.edu/multi/texts/BH784.txt > (last visited April 2, 2003) - Convention on the Law Applicable to Contract Obligations (19 Jun 1980)

■ http://www.uncitral.org/english/texts/sales/limit-conv.htm > (last visited April 2, 2003) - Convention on the Limitation Period in the International Sale of Goods (New York 1974)

■ http://www.uncitral.org/english/status/status-e.htm > (last visited April 2, 2003) - Status of UNCITRAL Conventions and Model Laws

■ http://www.jura.uni-freiburg.de/ipr1/cisg > (last visited April 2, 2003) - The CISG online website provides texts, bibliographic references and German case law on the CISG

■ http://www.cisg.law.pace.edu > (last visited April 2, 2003) - The Pace University School of Law database on the CISG and International Commercial Law

■ http://www.cisg.law.pace.edu/cisg/text/antecedents.html > (last visited April 2, 2003) - Antecedents to the CISG.

■ http://www.uncitral.org/english/clout/index.htm > (last visited April 2, 2003) - Case Law on UNCITRAL Texts (CLOUT).

■ http://www.unidroit.org/english/principles/pr-main.htm > (last visited April 2, 2003) - UNIDROIT Principles of International Commercial Contracts.

B. Key country laws (e.g., U.S. Uniform Commercial Code)

Many countries have their own laws dealing with commercial issues. Notable among those is the United States’ Uniform Commercial Code (UCC), originally adopted by the National Conference of Commissioners on Uniform State Laws and the American Law Institute, and then accepted substantially unchanged as statutory law in all 50 states and the Virgin Islands. An overview of the UCC, together with the full text of the law, is found at http://www.law.cornell.edu/topics/commercial.html.> (last visited April 2, 2003)

Other useful websites include the following:

■ http://www.law.nyu.edu/library/foreign_intl/civiljuris.html > (last visited April 2, 2003)– N.Y. School of Law Library: Civil Codes, Civil Procedure and Jurisprudence.

■ http://www4.law.cornell.edu/cgi-bin/empower?DB=ucc > (last visited April 2, 2003)– Search Uniform Commercial Code. Cornell Law School, Legal Information Institute.

■ http://www.iuscomp.org/gla/ > (last visited April 2, 2003)- German Law Archive, which includes the text of the 2002 Law of Obligations contained in the German Civil Code.

C. Title retention/security interest laws

To provide some security for the promised payment for goods shipped in a sales transaction, the seller (exporter), if not paid immediately or by a letter of credit, may seek to retain title to the goods or to obtain some other form of security interest. A security interest in such a transaction arises when the purchaser of the goods agrees that the seller/exporter (the secured party) may take the goods or other identified collateral owned by the purchaser if payment for the goods is not made as provided for in the parties’ agreement. A security interest also provides the exporter with some assurance that if the purchaser should become insolvent or go bankrupt, the exporter may still be able to recover the amount owed by the purchaser by taking possession of the goods or other collateral.

In the United States, Article 9 of the Uniform Commercial Code governs security interests in personal property such as goods. http://www.law.cornell.edu/ucc/9/overview.html. > (last visited April 2, 2003) As noted above, the UCC has been adopted with some modifications by every state in the United States.

Useful sites discussing the concept of secured transactions and related issues include the following”

■ http://www.uncitral.org/en-index.htm > (last visited April 2, 2003) – UNCITRAL Working Group VI: Security interests.

■ http://www.jus.uio.no/lm/private.international.commercial.law/insurance.html > (last visited April 2, 2003) – Lex Mercatoria: Private International Commerce Law: Insurance.

D. Antitrust/unfair competition laws

Individual country or regional (e.g., European Union) competition laws may dictate the nature of the contractual provisions that can be included in an international sales agreement. For example, restrictions on the prices that may be charged by a reseller of products, the territory that the reseller may sell in, the other (i.e., competitive) goods that the reseller may carry during the term of the parties’ relationship and other similar provisions may be subject to challenge under one or more of such competition laws.

The world’s leading competition law resource is the International Bar Association’s Global Competition Forum, which has links to the most current versions of the world's competition laws, direct links to national competition authorities and international organisations, and articles, speeches, and commentary by world-renowned experts in competition law enforcement, regulation and reform.
http://www.globalcompetitionforum.org/> (last visited April 2, 2003)

Additional resources are available at a number of websites around the world, including the following:

■ http://www.europa.eu.int/comm/competition/index_en.html > (last visited April 2, 2003) - Directorate-General IV: Competition European Commission

■ http://www.antitrustinstitute.org > (last visited April 2, 2003) - American Antitrust Institute (AAI)

■ http://www.unctad.org/en/subsites/cpolicy/index.htm > (last visited April 2, 2003) – UNCTAD Competition Policies Portal

■ http://www.apeccp.org.tw > (last visited April 2, 2003) - Asian-Pacific Economic Cooperation (APEC) Competition Policy and Law Database

■ http://www.antitrust.org > (last visited April 2, 2003) - Project linking antitrust case documents, enforcement guidelines and speeches, economic bibliographies, and current antitrust issues in the news

■ http://www.hg.org/antitrust.html > (last visited April 2, 2003) – Hieros Gamos: Antitrust/Unfair competition section

■ http://www.efta.int/structure/SURV/efta-srv.asp > (last visited April 2, 2003) - European Free Trade Association EFTA Surveillance Authority

■ http://www.oecd.org/oecd/pages/home/displaygeneral/0,3380,EN-home-71-3-no-no-no,FF.html > (last visited April 2, 2003) - Organization for Economic Cooperation and Development (OECD) Competition Police and Law Division

■ http://www.oas.org > (last visited April 2, 2003) - Organization of American States (OAS) Trade Unit

■ http://www.wto.org/english/tratop_e/comp_e/comp_e.htm > (last visited April 2, 2003) - Competition policy and the World Trade Organization

■ http://www.oecd.org/oecd/pages/home/displaygeneral/0,3380,EN-home-368-nodirectorate-no-no-no-24,FF.html > (last visited April 2, 2003) – OECD - Trade and Competition

■ http://www.oecd.org/oecd/pages/home/displaygeneral/0,3380,EN-home-71-3-no-no-no,FF.html > (last visited April 2, 2003) – OECD - Competition Law and Policy.

■ http://www.usdoj.gov/atr/index.html > (last visited April 2, 2003) - U.S. Department of Justice: Antitrust Division

■ http://www.ftc.gov/ftc/antitrust.htm > (last visited April 2, 2003) - U.S. Federal Trade Commission: Antitrust/Competition, Washington, D.C.

■ http://www.usdoj.gov/atr/public/guidelines/internat.html> (last visited April 2, 2003) - Antitrust Enforcement Guidelines for International Operations - The U.S. Department of Justice and the Federal Trade Commission jointly issued this enforcement policy statement in 1995

■ http://www.clubi.ie/competition/compframesite/WorldsBiggestAntiTrustSitesList.html > (last visited April 2, 2003) - the self-described World's Biggest Competition, Anti-trust and Regulatory Sites List

■ http://www.unctad.org/en/subsites/cpolicy/english/nat-compaut.htm > (last visited April 2, 2003) - UNCTAD's Directory of National Competition Authorities

■ http://www.antitrustcases.com > (last visited April 2, 2003) - The Antitrust Case Browser

V. Currency and payment issues

A. Currency for payment

Typically the parties to an export transaction will specify the currency for payment of invoices for the goods or services delivered by the exporting company. See, e.g., Section 6.3 of the specimen document in Section XII below; and http://www.cdnpay.ca/eng/rules/rules-e.htm > (last visited April 2, 2003) – Canadian Payments Association.

B. Payment mechanisms

There are many useful websites dealing with the parties’ desired payment mechanism, including the following:

■ http://www.ykl.co.kr/eng/logis/ucp.html > (last visited April 3, 2003) - UCP 500 1993 Uniform Customs and Practices for Documentary Credits 1993.

■ http://www.regionline.dp.ua/store/ucp500.htm > (last visited April 3, 2003) - UCP 500 1993 Uniform Customs and Practices for Documentary Credits 1993. Russian version.

■ http://www.miripravo.ru/laws/finance/standby_e.html > (last visited April 3, 2003) - UN Convention on Independent Guarantees and Stand-by Letters of Credit (New-York, 1996).

■ http://www.jus.uio.no/lm/bills.of.exchange.and.promissory.notes.convention.1930/index.html > (last visited April 3, 2003) - Convention Providing a Uniform Law For Bills of Exchange and Promissory Notes (Geneva, 1930) The League of Nations.

■ http://www.jus.uio.no/lm/un.credit.transfers.model.law.1992/index.html > (last visited April 3, 2003) - UNCITRAL Model Law On International Credit Transfers, 1992.

■ http://www.jus.uio.no/lm/un.bills.of.exchange.and.promissory.notes.convention.1988/index.html > (last visited April 3, 2003) - UNCITRAL Convention on International Bills of Exchange and International Promissory Notes, 1988.

■ http://www.miripravo.ru/laws/finance/factor_ottawa_e.html - Unidroit Convention on International Factoring (Ottawa, 28 May 1988).

■ http://www.miripravo.ru/laws/finance/leas_ottawa_e.htm - Unidroit Convention on International Financial Leasing (20 May 1988).

■ http://www.miripravo.ru/laws/finance/veksel_geneva_e.html > (last visited April 3, 2003) - Convention Providing a Uniform Law For Bills of Exchange and Promissory Notes (Geneva, 1930, The League of Nations).

■ http://www.itds.treas.gov/methodofpayment.html > (last visited April 3, 2003) – ITDS: Methods of Payment for International Transactions.

C. Financing Exports

In addition to the resources described in Section II.B above, several countries offer services and financing for exporters. For example, Export Development Canada provides exporters with financing, insurance and bonding services as well as foreign market expertise. EDC provides export financing and indirect loans to buyers of Canadian capital goods and services. http://www.edc.ca/> (last visited April 3, 2003)

The Export-Import Bank of the United States (Ex-Im Bank) is an independent U.S. Government agency that helps finance the overseas sales of U.S. goods and services. In 65 years, Ex-Im Bank has supported more than $300 billion in U.S. exports. Ex-Im Bank's mission is to create jobs through exports. It provides guarantees of working capital loans for U.S. exporters, guarantees the repayment of loans or makes loans to foreign purchasers of U.S. goods and services. Ex-Im Bank also provides credit insurance that protects U.S. exporters against the risks of non-payment by foreign buyers for political or commercial reasons. Ex-Im Bank does not compete with commercial lenders, but assumes the risks they cannot accept. It must always conclude that there is reasonable assurance of repayment on every transaction financed. http://www.exim.gov/> (last visited April 3, 2003)

D. Special issue (Corruption)

Led by the OECD and the U.S. (see Section V.D.1 below), several countries have adopted laws and regulations dealing with the issues of bribery and corruption in international business transactions. The website of Transparency International, the global coalition against corruption, may be found at http://www.transparency.org. > (last visited April 3, 2003) Among other things, this site includes TI’s annual Global Corruption Report. http://www.globalcorruptionreport.org/> (last visited April 3, 2003)

The OECD Convention and Anti-Corruption Division are described at the following sites:

■ http://www1.oecd.org/daf/nocorruption/20nov1e.htm > (last visited April 3, 2003) - Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (17 Dec 1997).

■ http://www.oecd.org/oecd/pages/home/displaygeneral/0,3380,EN-home-86-3-no-no-no,FF.html> (last visited April 3, 2003) - The OECD Anti-Corruption Division serves as the focal point within the OECD Secretariat to support the work of the OECD in the fight against bribery and corruption in international business transactions.

1. U.S. Foreign Corrupt Practices Act

The U.S. Foreign Corrupt Practices Act (FCPA) seeks to prevent the bribery of foreign officials by representatives of U.S. companies operating internationally.

Websites devoted to the FCPA and its interpretation and enforcement include the following:

■ http://www.usdoj.gov/criminal/fraud/fcpa.html > (last visited April 3, 2003) - FCPA text, regulations and lay person’s guide

■ http://sensor.northgrum.com/ethics/Documents/FCPA.pdf > (last visited April 3, 2003) - FCPA description and self test

■ http://www.coudert.com/practice/fcpa_oecd_memo.htm > (last visited April 3, 2003) - FCPA as amended by the OECD International Anti-Bribery And Fair Competition Act Of 1998.

■ http://www.transparency.org > (last visited April 3, 2003) – Transparency International: A Global Coalition against Corruption.

2. Canadian version of same

The Canadian version of the U.S. FCPA is described at the following sites:

■ http://lois.justice.gc.ca/en/C-45.2 > (last visited April 3, 2003) - Corruption of Foreign Public Officials Act 1998. Department of Justice, Canada.

■ http://canada.justice.gc.ca/en/dept/pub/cfpoa/guide5.html > (last visited April 3, 2003) – the Corruption of Foreign Public Officials Act: a Guide.

■ http://www.ogilvyrenault.com/en/data/pu/117-e-g.pdf> (last visited April 3, 2003) – Overview of the Corruption of Foreign Public Officials Act.

3. Money Laundering

Several countries and international institutions have developed money laundering laws and regulations. One definition of money laundering is found in Article I(C) of the European Community Directive on prevention of the use of the financial system for the purpose of money laundering:

“the conversion or transfer of property, knowing that such property is derived from criminal activity or from an act of participation in such activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such activity to evade the legal consequences of his action;

the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from criminal activity or from an act of participation in such activity;

the acquisition, possession or use of property knowing, at the time of receipt, that such property was derived from criminal activity or from an act of participation in such activity;

participation in, association to commit, attempts to commit and aiding, abetting, facilitating and counselling the commission of any of the actions mentioned in the foregoing indents.”

A recent addition to U.S. money laundering laws is found in the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the Patriot Act), adopted in the wake of the terrorist attacks on the U.S. on September 11, 2001. The full text of the Patriot Act may be found at http://www.ins.usdoj.gov/graphics/lawsregs/patriot.pdf. > (last visited April 3, 2003) The Patriot Act made significant changes to previously existing money laundering and bank secrecy laws in order to assist law enforcement authorities in fighting terrorism. Among other things, both banks and (broadly-defined) non-bank financial institutions must establish procedures and controls to prevent money laundering and to report unusual activity to the government.

Useful sites to review with respect to money laundering issues include the following:

■ http://www.iifcr.com > (last visited April 3, 2003) - Financial Crime Review (FCR) delivers practical advice on the detection and prevention of money laundering and fraud-covering the securities, banking and insurance sectors. On subjects ranging from the basics of financial crime regulation, prevention and compliance, through to broad policy issues, the Journal offers objective, practical research for practitioners. In the Spring 2001 edition there is an article on why companies must know their customers.

■ http://www.fintrac.gc.ca > (last visited April 3, 2003) - The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) was established as an independent agency with a mandate to collect, analyze, assess and disclose information in order to assist in the detection, prevention and deterrence of money laundering and the financing of terrorist activities. http://www.fintrac.gc.ca/publications/guide/guide_e.asp> (last visited April 3, 2003) sets forth FINTRAC’s guidelines for compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. http://laws.justice.gc.ca/en/ > (last visited April 3, 2003) - Canadian Department of Justice Consolidated Statutes and Regulations

VI. Import/export regulations

A. Customs

Useful customs websites include the following:

■ http://www.wcoomd.org/ie/index.html > (last visited April 3, 2003) – World Customs Organization.

■ http://www.wcoomd.org/ie/en/CustomsWebSites/customswebsites.html > (last visited April 3, 2003) – Links to World Custom Organizations.

■ http://www.wto.org/english/tratop_e/cusval_e/cusval_e.html> (last visited April 3, 2003) - Customs valuation on the WTO website.

■ http://www.customs.ustreas.gov > (last visited April 3, 2003) - U.S. Customs Services.

■ http://www.citba.org > (last visited April 3, 2003) – Customs and International Trade Bar Association.

■ http://www.customs.treas.gov/imp-exp/rulings/hq.html > (last visited April 3, 2003) – Ruling letters issued by U.S. Customs Service.

■ http://europa.eu.int/eur-lex/en/lif/ind/en_analytical_index_08.html > (last visited April 3, 2003) - current European Union legislation on customs and free movement of goods within the European Union. Note that this is one of the rare areas where a true European law exists.

■ http://www.hmce.gov.uk/ > (last visited April 3, 2003) - this site deals with all aspects of importing and exporting from the UK including a note of the rates applicable to imports and exports.

B. Foreign trade regulations

Foreign trade regulations have been made more accessible by the web. Following are some useful sites:

■ http://www.washlaw.edu/forint > (last visited April 3, 2003) - the foreign and international law web is a service of the Washburn University School of Law Library. The goal is to provide links to primary foreign and international legal resources, research aids, and sites useful in conducting research in these areas of the law.

■ http://www.usatrade.gov/website/ccg.nsf/ccghomepage?openform > (last visited April 3, 2003) - The Country Commercial Guides (CCG) are prepared by U.S. Embassy Staff once a year and contain information on the business and economic situation of foreign countries and the political climate as it affects U.S. business.

■ http://web.ita.doc.gov/ticwebsite/FTOHomeP.nsf > (last visited April 3, 2003) - Foreign Trade Offices Database.

■ http://strategis.ic.gc.ca/SSG/bi18354e.html > (last visited April 3, 2003) – Service Provided by Industry Canada: Create Your Own Market Research Report International Business Practices.

■ http://www.cit.uscourts.gov/ > (last visited April 3, 2003) - contains decisions of the United States Court of International Trade on international trade issues.

■ http://www.cites.org > (last visited April 3, 2003) - Convention on International Trade in Endangered Species (CITES) site contains listings of wildlife protected under CITES, as well as permit requirements for the international trade of such wildlife and commercial products derived from such wildlife.

■ http://www.ccra-adrc.gc.ca/customs/business/exporting/menu-e.html > (last visited April 3, 2003) - Canada Customs and Revenue Agency helps other federal government departments by administering and enforcing regulations on their behalf. If a company is exporting goods that are controlled or regulated, it must submit the appropriate permit, certificate or license before exporting them, regardless of the destination or value of the goods. The Canada Customs and Revenue Agency site will help you understand the reporting requirements which must be fulfilled in order to meet Customs Act obligations. Follow the links to navigate through the export requirements.

■ http://www.pch.gc.ca/progs/pcm-mcp/export_e.cfm > (last visited April 3, 2003) - Canadian Heritage has placed export restrictions on certain cultural property, which is deemed to have historical, scientific or cultural significance. The Canadian Cultural Property Export Control List describes the categories of cultural property that require export permits in order to leave the country. See “A Guide to Exporting Cultural Property from Canada”

■ http://www.dfait-maeci.gc.ca/eicb/menu-en.asp > (last visited April 3, 2003) - Canada’s Export and Import Controls Bureau (EPD) is responsible for administering the Export and Import Permits Act (EIPA) which was first enacted in 1947. The EIPA delegates to the Minister of Foreign Affairs (referred to as "the Minister") wide discretionary powers to control the flow of goods contained in specified lists provided for under the Act. Under authority of the Department of Foreign Affairs and International Trade Act, the Minister for International Trade provides policy direction in most areas involving market access and trade policy.

■ http://www.dti.gov.uk/worldtrade/uktrade.htm > (last visited April 3, 2003) - a thorough guide to exporting to the UK.

C. Imports

1. Licenses

In any international sales transaction, the goods or services being exported may be subject to licensing requirements in the exporting and/or importing countries. Following are some descriptive websites:

■ http://www.wto.org/english/tratop_e/implic_e/implic_e.html> (last visited April 3, 2003) - Import licensing on the WTO website.

■ http://www.itds.treas.gov/licenseinfo.html > (last visited April 3, 2003) - Exporting License Requirements: U.S. Perspective.

■ http://www.pmdtc.org/> (last visited April 3, 2003) - U.S. Department of State Office of Defense Trade Controls site contains information regarding export/import regulations for defense articles and defense services covered by the United States Munitions List (USML).

■ http://www.info.gov.hk/tid/faq/iel99.htm#top > (last visited April 3, 2003) – The 1^st Step to Import/Export Licensing: Hong Kong Perspective.

■ http://www.moeaboft.gov.tw/english/licens.htm > (last visited April 3, 2003) – Board of Foreign Trade, Taiwan: Import/Export Licensing.

■ http://www.ccra-adrc.gc.ca/customs/business/importing/menu-e.html > (last visited April 3, 2003) - Canada Customs and Revenue Agency site has a guide for foreigners wishing to sell goods to Canada.

■ http://www.cbsc.org/manitoba/index.cfm?name=chapte07 > (last visited April 3, 2003) - controls such as permits, certificates, examinations, and embargos are applied to certain goods entering the country. Some are to protect the health and safety of Canadian citizens (i.e. inspecting meat products), some are to protect Canadian industry (i.e. prohibiting the import of certain goods which will have an unfair advantage over Canadian-produced goods), while others send a message to a country that has a policy Canada does not approve of (i.e. Canada banned the import of food items from South Africa to protest apartheid).

■ http://www.dti.gov.uk/export.control/ > (last visited April 3, 2003) - this comprehensive site explains up to date requirements for export from the UK.

2. Duties

Duties may be assessed against imported products in the country of importation. The following sites are among those that describe the duty rates and related issues:

■ http://web.ita.doc.gov/ticwebsite/tic.nsf/AF34FA880278BDD58525690D00656C6F/384F53B83A002BD68525691B0074149B?OpenDocument - > (last visited April 3, 2003) Ask U.S. Customs about tariff rates on imports into the United States.

■ http://ia.ita.doc.gov -> (last visited April 3, 2003) Import Administration: Safeguarding American Industries and Jobs against Unfair Trade.

■ http://dataweb.usitc.gov/SCRIPTS/tariff/toc.html - > (last visited April 3, 2003) Harmonized Tariff Schedule of the United States (HTSUS). This site provides links to the current harmonized tariff schedule which specifies the specific duty rate and/or quota category for all imported products.

■ http://www.ccra-adrc.gc.ca/customs/general/publications/notices-e.html -> (last visited April 3, 2003) Canada Customs and Revenue Agency site lists Customs Tariffs, Regulations, Memoranda, Duty Deferral Fact Sheets and other publications relating to rates of duties.

3. Quotas

Quotas provide limitations on the quantity of certain goods that may enter the commerce of the import country or the quantity that may so enter subject to a reduced customs duty rate.

One commentator has noted that “[t]here are two basic types of quotas: absolute quotas and tariff-rate quotas. Absolute quotas limit the quantity of imports to a specified level during a specified period of time. Sometimes these quotas are set globally and thus affect all imports while sometimes they are set only against specified countries. Absolute quotas are generally administered on a first-come first-served basis. For this reason, many quotas are filled shortly after the opening of the quota period. Tariff-rate quotas allow a specified quantity of goods to be imported at a reduced tariff rate during the specified quota period.” Steven M. Suranovic, International Trade Theory & Policy Analysis, Ch. 10, available at http://internationalecon.com/v1.0/ch10/10c060.html. > (last visited April 3, 2003)

■ Following are some useful sites describing the use of quotas:

■ http://www.customs.ustreas.gov/impoexpo/impoexpo.htm > (last visited April 3, 2003) – U.S. Customs Service: Quota Information.

■ http://www.wto.org/trade_resources/quotes/goods/ma_quotas.htm > (last visited April 3, 2003) – WTO: Quotas.

■ http://www.emergingtextiles.com/?q=idx&s=11-trad > (last visited April 3, 2003) – Quotas and Tariffs: Textile and Clothing Trade Information.

■ http://otexa.ita.doc.gov/ > (last visited April 3, 2003) - Office of Textile and Apparels (OTEXA) site contains information regarding the implementation and applicability of various textile and apparel-related trade preference programs, such as the North American Free Trade Agreement (NAFTA), the African Growth and Opportunity Act (AGOA), the Caribbean Basin Trade Partnership Act (CBTPA), etc. This website also maintains information on textile quotas.

■ http://www.ccra-adrc.gc.ca/E/pub/cm/d10-18-1/d10181ed.html > (last visited April 3, 2003) - Canadian Tariff Rate Quotas Memorandum provides a general overview of tariff rate quotas and the legislation that applies to them. It also outlines departmental guidelines for the administration of tariff rate quotas.

4. Barriers – trade and nontrade

There has been much discussion over the years of the impact of trade and nontrade barriers to imports in various countries. The following websites provide a useful overview:

■ http://fletcher.tufts.edu/multi/texts/BH209.txt > (last visited April 3, 2003) - General Agreement on Tariffs and Trade (1947) (as amended through 1966). Final Act of the Uruguay Round via The World Trade Organization.

■ http://www.wto.org/english/tratop_e/gatt_e/gatt_e.htm > (last visited April 3, 2003) - GATT and the Goods Council.

■ http://mkaccdb.eu.int > (last visited April 3, 2003) – the Market Access Database: Applied Tariffs Database; Sectoral and Trade Barriers Database; WTO Bound Tariffs Database; Exporters' Guide to Import Formalities.

■ http://www.wto.org/english/tratop_e/tbt_e/tbt_e.html > (last visited April 3, 2003) - Technical barriers to trade.

■ http://www.wto.org/english/tratop_e/tbt_e/tbtagr_e.html > (last visited April 3, 2003) – Agreement on Technical barriers to trade.

■ http://www.ustr.gov/html/2001_contents.html > (last visited April 3, 2003) - 2001 National Trade Estimate Report on Foreign Trade Barriers. Summary of trade limitations and conditions on a list of countries.

■ http://web.ita.doc.gov/ticwebsite/tic.nsf/AF34FA880278BDD58525690D00656C6F/6D53BA058AEBB3428525691B0072E1F3?OpenDocument > (last visited April 3, 2003)- Tariff Websites Worldwide.

■ http://web.ita.doc.gov/ticwebsite/euweb.nsf/F0ABA4BC1968A497852568E3006DF7C5/1918317A0195DFE0852568E3006E0C9A?OpenDocument > (last visited April 3, 2003) – EU Tariff Schedule.

■ http://www.apectariff.org > (last visited April 3, 2003) – APEC Tariff database.

■ http://www.law-lib.utoronto.ca/resources/topic/inttrade.htm > (last visited April 3, 2003) - the Bora Laskin law library University of Toronto database contains extensive trade law links

■ http://www.citt.gc.ca/about/about_e.htm > (last visited April 3, 2003) - The Canadian International Trade Tribunal (the Tribunal) is an administrative tribunal operating within Canada’s trade remedies system. It is an independent quasi-judicial body that carries out its statutory responsibilities in an autonomous and impartial manner and reports to Parliament through the Minister of Finance. Its mandate inter alia is to conduct inquiries into whether dumped or subsidized imports have caused, or are threatening to cause, material injury to a domestic industry; hear appeals made under the Customs Act, the Excise Tax Act and the Special Import Measures Act; conduct inquiries and provide advice on such economic, trade and tariff issues conduct inquiries into complaints by potential suppliers concerning procurement by the federal government that is covered by the North American Free Trade Agreement, the Agreement on Internal Trade and the World Trade Organization Agreement on Government Procurement; conduct safeguard inquiries into complaints by domestic producers that increased imports are causing, or threatening to cause, serious injury to domestic producers.

D. Exports

There are many online sites devoted to the general issue of product exporting, including the following:

■ http://www.export.gov > (last visited April 3, 2003) – U.S. government export portal.

■ http://www.ita.doc.gov/ > (last visited April 3, 2003) - U.S. International Trade Administration (ITA) website contains general export promotion information.

■ http://www.exim.gov > (last visited April 3, 2003) – Export-Import Bank of the U.S. The Office Export Credit Agency of the U.S. Government.

■ http://www.itds.treas.gov/Export2.html > (last visited April 3, 2003) – Site contains information on exporting.

■ http://www.delg.org > (last visited April 3, 2003) - Defense Export Loan Guarantee Program.

■ http://www.unzco.com/basicguide/toc.html > (last visited April 3, 2003) – Basic Guide to Exporting.

■ http://www.census.gov/foreign-trade/schedules/b > (last visited April 3, 2003) - The U.Ss Census Bureau provides the 10 digit Schedule B classification product codes which are used to classify U.S. exports.

■ http://www.fas.usda.gov/export.html > (last visited April 3, 2003) - Official U.S. Department of Agriculture export credit programs for U.S. grown or made foodstuffs.

■ http://exportsource.ca/heading_e.cfm?HDG_ID=125> (last visited April 3, 2003) - A link from the Team Canada site to various International funding agencies such as Asian Development Bank, International Monetary fund, etc.

■ http://exportsource.ca/heading_e.cfm?HDG_ID=123 > (last visited April 3, 2003) -A link to the Canadian Federal programs that assist Canadian exporters develop markets and finance their risk.

■ http://www.bxa.doc.gov/ > (last visited April 3, 2003) - U.S. Department of Commerce Bureau of Industry and Security (BIS) (formerly Bureau of Export Administration - BXA) site contains information regarding export licensing requirements for those products covered by the commodity control list.

■ http://www.ustreas.gov/ofac > (last visited April 3, 2003) - U.S. Department of Treasury Office of Foreign Assets Control (OFAC) site contains information regarding licensing requirements for exports to those countries currently covered by U.S. embargoes.

■ http://www.customs.ustreas.gov/ > (last visited April 3, 2003) - U.S. Customs Service website contains general export information.

■ http://www.deadiversion.usdoj.gov/ > (last visited April 3, 2003) - U.S. Drug Enforcement Administration Office of Diversion Control site contains information regarding export licensing/registration requirements for certain chemicals.

■ http://www.pmdtc.org/ > (last visited April 3, 2003) U.S. Department of State Office of Defense Trade Controls site contains information regarding export/import regulations for defense articles and defense services covered by the United States Munitions List (USML).

VII. Resales in target country

A. Advertising restrictions

Advertising – particularly advertising directed at consumers – is subject to a variety of restrictions imposed by national governments around the world, generally prohibiting unfair or deceptive advertising but also limiting other types of advertising considered pernicious in the consumer context. The following websites describe some of these restrictions:

■ http://www.asa.org.uk > (last visited April 3, 2003) – Advertising Standards Authority. Follow “LINKS” link to access useful sites on Advertisement and Self-regulation.

■ http://www.ftc.gov/bcp/menu-ads.htm > (last visited April 3, 2003) – Federal Trade Commission: Advertising: Business, Consumer, Policy Information, Industry Guides to Advertising.

■ http://competition.ic.gc.ca/ > (last visited April 3, 2003) - Canadian Competition Bureau is responsible for administration and enforcement of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act. Its role is to promote and maintain fair competition so that Canadians can benefit from lower prices, product choice and quality services. This is an extensive site with a number of Guidelines relating to marking of “Made In Canada” rules and Advertising Guidelines.

■ http://www.inspection.gc.ca/english/bureau/labeti/guide/prefacee.shtml > (last visited April 3, 2003) - the Canadian Food Inspection Agency Guide to Food Labelling and Advertising

■ http://www.adstandards.com/en/standards/adstandards.asp > (last visited April 3, 2003) - the Canadian Code of Advertising Standards (Code) has been developed to promote the professional practice of advertising and is administered by Advertising Standards Canada, the industry body committed to creating and maintaining community confidence in advertising. The Code sets the criteria for acceptable advertising and forms the basis upon which advertising is evaluated in response to consumer, trade or special interest group complaints.

■ http://www.easa-alliance.org > (last visited April 3, 2003) - European Advertising Standards Alliance (EASA).

■ http://europa.eu.int/comm/consumers/index_en.htm > (last visited April 3, 2003) - European Union directives and enforcement policies on fair business practices, comparative and misleading advertising, and related subjects.

■ http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=en&numdoc=31984L0450&model=guichett > (last visited April 3, 2003) - EU Directive 84/450/EEC to harmonize member states’ national legislation on misleading advertising.

■ http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=31997L0055&model=guichett > (last visited April 3, 2003) - EU Directive 97/55/EC, which amended EU Directive 84/450/EEC to address comparative advertising.

■ http://www.fs.dk/uk/acts/ukmfl.htm > (last visited April 3, 2003) - Danish Marketing Practices Act.

■ http://193.120.124.98/front.html > (last visited April 3, 2003) - Irish Consumer Information Act, 1978.

■ http://www.asai.ie/ > (last visited April 3, 2003) - Advertising Standards Authority for Ireland (self-regulatory body).

■ http://www.ivir.nl/legislation/advertising/netherlands.html > (last visited April 3, 2003) - Dutch Advertising Code (a system of self-regulation).

■ http://www.english.konsumentverket.se/mallar/en/artikel.asp?lngCategoryId=665 > (last visited April 3, 2003) - overview of Swedish consumer, advertising and marketing law.

■ http://www.spamlaws.com > (last visited April 3, 2003) - summaries and links to laws dealing with unsolicited commercial email (“spam”) in the United States, European Union (and its member states) and ten other countries.

B. Business ethics/codes

Beyond statutory law, companies entering a new country may be subject to a variety of ethical precepts or business codes applicable to the conduct of business or marketing in the country. The following websites provide examples of such codes:

■ http://www.business-ethics.org > (last visited April 3, 2003) - International Business Ethics Institute.

■ http://www.ethics.ubc.ca/resources/business > (last visited April 3, 2003) – Center for Applied Ethics: Business Ethics Resources.

■ http://www.spu.edu/depts/sbe/ethics/links.htm > (last visited April 3, 2003) - Links to Business Ethics Sites: International, U.S. Colleges and Universities, Corporate Organizations, Journals.

■ http://www.kids-o-rama.com/quicklinks/selfreg.htm > (last visited April 3, 2003) – Links to Self-regulation/Codes of Conduct.

■ http://www.goodmoney.com/directry_codes.htm > (last visited April 3, 2003) - Principles & Codes For Socially Responsible Business Practices.

■ http://www.theresponsibleorder.com/324businesscode.htm > (last visited April 3, 2003) – California Business and Professions Codes: Construction Industry Related.

■ http://www.spu.edu/depts/sbe/ethics > (last visited April 3, 2003) – Seattle Pacific University: Business Ethics Portal.

■ http://www.businessethics.ca/ > (last visited April 3, 2003) - Canadian resource for Business Ethics. Links to domestic and international institutes, organizations, case law and other useful resources.

C. Consumer protection laws

Consumer protection concerns manifest themselves in a wide variety of legislation, ranging from the prohibition of certain “unfair” terms in consumer contracts to minimum terms for certain contracts such as consumer product warranties. The following sites survey the types of legislation that may be found in various countries:

■ http://www.unctad.org/en/subsites/cpolicy/english/guidelines.htm > (last visited April 3, 2003) – UNCTAD: United Nations Guidelines for Consumer Protection.

■ http://www.jus.uio.no/lm/oecd.consumer.protection.in.electronic.commmerce.guideline.recommendation.1999/index.html - OECD Recommendation of the OECD Council Concerning Guidelines for Consumer Protection in the Context of Electronic Commerce (Organization for Economic Co-operation and Development) 1999.

■ http://www.dti.gov.uk/CACP/ca/policy/distanceselling/newregs.htm > (last visited April 3, 2003) – Department of Trade and Industry: Consumer Protection Directorate.

■ http://www.consumersinternational.org > (last visited April 3, 2003) – Consumer International: A worldwide non-profit federation of consumer organizations, dedicated to the protection and promotion of consumer interests.

■ http://www.consumersinternational.org/links.html > (last visited April 3, 2003) – Consumer International: Links to Consumer Organizations, International Agencies and NGOs.

■ http://www.ftc.gov/ftc/consumer.htm> (last visited April 3, 2003) – Federal Trade Commission: Consumer Protection Information.

■ http://strategis.ic.gc.ca/SSG/ca01188e.html > (last visited April 3, 2003) - Industry Canada’s site that list and links privacy laws, provincial and federal consumer protection laws, voluntary industry codes and standards.

■ http://consumerinformation.ca/cgi-bin/main.cgi?Language=E > (last visited April 3, 2003) - The Canadian Consumer Information Gateway is a Government Online initiative that includes over 35 federal government departments and agencies, as well as over 250 provincial and territorial partners. These organizations have come together in a unique partnership to promote Canadian consumer interests and awareness. Selected Non Governmental Organizations (NGOs) will join this cooperative initiative, further enhancing its value to Canadian consumers.

■ http://europa.eu.int/eur-lex/en/lif/ind/en_analytical_index_15.html > (last visited April 3, 2003) - a list of all current EU legislation addressing consumer concerns. Note that all directives must be implemented into national law by the member countries. Each directive therefore specifies a term within which the content of the directive must be implemented into member states’ national legal systems. The content of the directive constitutes the minimum legal standard for such legislation, but any member state is permitted to go further in its own national law than provided by the directive.

■ http://www.fs.dk/index-uk.htm > (last visited April 3, 2003) - Danish consumer laws and enforcement authorities.

■ http://www.ecic.ie/legislation/list/index.htm > (last visited April 3, 2003) - Irish consumer legislation.

■ http://www.english.konsumentverket.se/mallar/en/artikel.asp?lngCategoryId=657 > (last visited April 3, 2003) - overview of Swedish consumer law.

■ http://www.consumers.gov.uk/consumer_web/index_v4.htm > (last visited April 3, 2003) - the Consumer Gateway - a one stop service run by the U.K. Department of Trade and Industry (DTI).

■ http://www.ceg.co.uk/shopping.htm > (last visited April 3, 2003) - guidance on how to avoid some of the pitfalls of cross-border shopping in the European Union.

■ http://www.econsumer.gov/english/index.html > (last visited April 3, 2003) - This website enables consumers to register cross-border e-commerce complaints.

D. Transfer Pricing

Most countries have laws that regulate transfer pricing and in particular prohibit the manipulation of prices between connected parties so as to transfer profits to lower tax jurisdictions. Transfer pricing refers to the price for the transfer of products and services in transactions between parts of a multinational corporate group, transactions which if manipulated could affect the allocation of profits for tax and other purposes among such entities. In an effort to avoid the inappropriate allocation of such profits, international guidelines promulgated by the OECD adopt the arm’s length principle – that a transfer price should be the set at the same price as if the two companies were two independent entities, negotiating at arm’s length, not part of the same corporate structure.

The OECD Transfer Pricing Guidelines provide a detailed framework for the application of the arm’s length principle. They are available for purchase at http://oecdpublications.gfi-nb.com/cgi-bin/OECDBookShop.storefront/EN/product/232001041P1 > (last visited April 3, 2003) and are summarized at http://www.oecdobserver.org/news/fullstory.php/aid/670/Transfer_pricing:_Keeping_it_at_arms_length.html. > (last visited April 3, 2003) Other resources include the following:

■ http://www.oecdobserver.org> (last visited April 3, 2003) – several articles on the OECD Transfer Pricing Guidelines.

■ http://www.irs.gov/irm/page/0,,id%3D23064,00.html > (last visited April 3, 2003) - U.S. Internal Revenue Service guidelines on the determination of transfer pricing methodologies for international transactions.

■ http://www.ccra-adrc.gc.ca/E/pub/tp/ic87-2r/ic87-2r-e.html > (last visited April 3, 2003) - This circular sets out the Canada Customs and Revenue Agency's views on transfer pricing and also provides the CCRA's position with respect to the application of the 1995 OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations referenced above.

■ http://www.sars.gov.za/it/practice_notes/it_practice_note_7_1999.pdf > (last visited April 3, 2003) - in practice note 7 the South Africa Revenue Services set out details relating to their adoption of the arm’s length principle.

E. Sale of goods – local restrictions

Goods imported into a foreign market may be subject to local content, disclosure and performance requirements or restrictions, such as those referenced on the following websites:

■ http://www.access.gpo.gov/nara/cfr/index.html > (last visited April 3, 2003) - U.S. Code of Federal Regulations (CFR) site contains links to all titles of the code of federal regulations, which contain all federal import and export regulations.

■ http://www.access.gpo.gov/su_docs/aces/aces140.html > (last visited April 3, 2003) - Federal Register database contains links to the U.S. Federal Register, which publishes both proposed and final rules and regulations, as well as other general notices.

■ http://www.fda.gov/ > (last visited April 3, 2003) - U.S. Food and Drug Administration (FDA) website contains information regarding the regulation of domestic and imported food, cosmetics, cosmetic devices (including sunglasses), drugs, medical devices and radiation emitting devices (including consumer and business products).

■ http://endangered.fws.gov/ > (last visited April 3, 2003) - U.S. Fish and Wildlife Service (FWS) website contains information on import regulations concerning federal endangered species, as well as commercial products derived from such federal endangered species.

■ http://www.fcc.gov/ > (last visited April 3, 2003) - U.S. Federal Communications Commission (FCC) site contains information on import regulations for electronic and telephonic devices.

■ http://www.ftc.gov/os/statutes/textilejump.htm > (last visited April 3, 2003) - Federal Trade Commission (FTC) rules regarding garment labeling requirements for clothing.

■ http://www.aphis.usda.gov/ > (last visited April 3, 2003) - U.S. Department of Agriculture Animal and Plant Health Inspection Service (APHIS) site contains information on regulations for imported animal and agricultural products.

■ http://www.fsis.usda.gov/index.htm > (last visited April 3, 2003) - U.S. Department of Agriculture Food Safety and Inspection Service (FSIS) website contains information regarding import/export requirements of meat, poultry, and egg products.

■ http://www.epa.gov/region5/defs/html/tsca.htm> (last visited April 3, 2003) - U.S. Environmental Protection Agency (EPA) site contains information on the Toxic Substance Control Act (TSCA) which regulates the imports of certain chemical substances.

■ http://www.atf.treas.gov/index.htm > (last visited April 3, 2003) - Bureau of Alcohol, Tobacco, and Firearms (ATF) regulations concerning the import of alcohol, tobacco, and firearm products.

F. Intellectual property protection

The intellectual property associated with exported products – trademarks, copyrights or perhaps patents, as well as trade secrets associated with the products or their production – are subject to extensive protection throughout the world by way of national legislation in every country as well as a network of international treaties. The following websites provide an overview of the protections available:

■ http://www.wipo.org > (last visited April 3, 2003) – the World Intellectual Property Organization administers international treaties on intellectual property. This site contains a number of useful intellectual property resources, including the WIPO Guide to Intellectual Property Worldwide at http://www.wipo.org/about-ip/en/. > (last visited April 4, 2003)

■ http://www.uspto.gov/web/menu/other.html - Extensive information including documents, forms, and links for intellectual property offices worldwide. > (last visited April 4, 2003)

■ http://fletcher.tufts.edu/multi/texts/copyright96.txt - World Intellectual Property Organization: Copyright Treaty (20 Dec 1996). > (last visited April 4, 2003)

■ http://fletcher.tufts.edu/multi/texts/wtowipo.txt - World Intellectual Property Organization-World Trade Organization: Agreement Between WIPO and WTO(Geneva, 22 December 1995). > (last visited April 4, 2003)

■ http://fletcher.tufts.edu/multi/texts/UNTS13444.html - Universal Copyright Convention as revised at Paris on 24 July 1971; and Protocols (24 Jul 1971). > (last visited April 4, 2003)

■ http://www.eurunion.org/legislat/iiprop/iiprop.htm - European Union Intellectual & Industrial Property Policies. > (last visited April 4, 2003)

■ http://www.delphion.com/simple > (last visited April 4, 2003)

■ - Delphion intellectual asset management solutions empower business and intellectual property (IP) professionals to analyze, manage and leverage intellectual property assets.

■ http://www.law.com/professionals/iplaw.html - site featuring Intellectual Property news, current cases and practice papers. The News section is free of charge, for other information subscription is required. > (last visited April 4, 2003)

■ http://www.unesco.org/culture/copy - UNESCO's Copyright Laws Database (“national legislations on authors rights and neighboring rights”). > (last visited April 4, 2003)

■ http://www.cordis.lu/ipr-helpdesk - Intellectual Property Rights Help Desk (European Commission). All services will be suspended for a few months, but expected to be up and running very soon. > (last visited April 4, 2003)

■ http://www.wto.org/wto/intellec/intellec.htm - World Trade Organization (WTO) Intellectual Property Page. > (last visited April 4, 2003)

■ http://www.inta.org > (last visited April 4, 2003)- International Trademark Association (INTA).

■ http://www.iipa.com/ > (last visited April 4, 2003)- International Intellectual Property Alliance (IIPA).

■ http://www.ip-institute.org.uk/ > (last visited April 4, 2003)- Intellectual Property Institute.

■ http://www.apic.jiii.or.jp/ > (last visited April 4, 2003)- Asia-Pacific Industrial Property Center (APIC).

■ http://www.jus.uio.no/lm/intellectual.property/toc.html > (last visited April 4, 2003)– Lex Mercatoria: Intellectual Property.

■ http://www.uspto.gov/web/menu/other.html > (last visited April 4, 2003)- United States Patent and Trademark Office (USPTO).

■ http://www.loc.gov/copyright/ > (last visited April 4, 2003)- United States Copyright Office (Library of Congress).

■ http://strategis.gc.ca/sc_mrksv/cipo/welcome/welcom-e.html > (last visited April 4, 2003)- The Canadian Intellectual Property Office, a Special Operating Agency (SOA) associated with Industry Canada, is responsible for the administration and processing of the greater part of intellectual property in Canada. The site contains laws, guides, links, and databases of patents, trademarks and copyright registrations.

■ http://www.intellectual-property.gov.uk/ > (last visited April 4, 2003)- a UK government-sponsored site surveying intellectual property and the protections therefor.

■ http://www.patent.gov.uk/ > (last visited April 4, 2003)- home of the UK Patent Office.

■ http://www.ggmark.com/#Trademark_Links> (last visited April 4, 2003) – All about trademarks. This site, dedicated to trademarks, and trademark law, is maintained by Gregory H. Guillot, Chartered.

■ http://www.hg.org/intell.html > (last visited April 4, 2003)- Hieros Gamos: “Intellectual Property Law” (includes links to national government web sites).

■ http://www.patents.com/ > (last visited April 4, 2003)- Oppedahl & Larson Patent Law Web Server “Intellectual property resources on the Internet.”

■ http://www.sice.oas.org/int_prop.asp > (last visited April 4, 2003)- Organization of American States (OAS) Foreign Trade Information System/Sistema de Información sobre Comercio Exterior (SICE) (national legislation, directories, and links to official sources on IP information).
http://clea.wipo.int/lpbin/lpext.dll > (last visited April 4, 2003) - Collection of Laws for Electronic Access, includes bibliographic citations/references and some full texts in English translation of foreign intellectual property laws.

G. Electronic commerce issues

As the internet becomes progressively more ubiquitous in people’s lives, it is having impacts throughout society and business. Electronic commerce is no longer a toy for consumer purchases of books, CDs and electronics. Rather, the internet has rapidly developed into a tool for facilitating business. It is also causing a rethinking of the law, its substance and its application. Traditional legal concepts are being applied to a medium never contemplated at the time of their establishment, and new laws are being adopted at a dizzying pace. The following websites provide an example of the scope of ongoing legal developments:

■ http://fletcher.tufts.edu/multi/texts/uni.txt > (last visited April 4, 2003)- UNCITRAL – Draft Model Law on Electronic Commerce (revised 14 June 1996).

■ http://www.uncitral.org/english/workinggroups/wg_ec/index.htm > (last visited April 4, 2003)– UNCITRAL Working Group IV: Electronic Commerce.

■ http://www.jus.uio.no/lm/wta.electronic.commerce.1998/doc.html > (last visited April 4, 2003)- WTO Declaration on Global Electronic Commerce (Adopted on 20 May 1998).

■ http://www.iccwbo.org/home/menu_electronic_commerce.asp > (last visited April 4, 2003)– International Chamber of Commerce: Electronic Commerce.

■ http://www.mbc.com/ecommerce/ecom_overview.asp > (last visited April 4, 2003)- Summary Of Electronic Commerce And Digital Signature Legislation McBride Baker & Coles.

■ http://www.jus.uio.no/lm/electronic.commerce/toc.html > (last visited April 4, 2003)– Lex Mercatoria guide to Electronic Commerce.

■ http://www.eclip.org > (last visited April 4, 2003)– ECLIP “Electronic Commerce Legal Issues Platform”.

■ http://www.ita.doc.gov/td/ecom/menu.html > (last visited April 4, 2003)– International Trade Administration: Electronic Commerce Task Force.

■ http://www.ftc.gov/bcp/menu-internet.htm > (last visited April 4, 2003)– U.S. Federal Trade Commission: Consumer Protection: E-Commerce & the Internet.

■ http://e-com.ic.gc.ca/english/index.htm > (last visited April 4, 2003)– Electronic Commerce regulations in Canada.

■ http://e-com.ic.gc.ca/english/index.htm > (last visited April 4, 2003)– This site is the virtual focal point for information on Canada's Electronic Commerce Strategy, outlining the various initiatives, laws and regulations, which are helping make Canada a world leader in the adoption and use of electronic commerce.

■ http://www.dti.gov.uk/cii/ecommerce/index.shtml > (last visited April 4, 2003)- website of the UK Communications and Information Industries Directorate that provides useful links to various E-commerce sites.

■ http://www.saxlaw.com/2001%20final%20paper.htm > (last visited April 4, 2003) - International Law Issues Relating to Electronic Commerce.

■ http://www.ibanet.org/Docs/9151_jasbl9906253.pdf > (last visited April 4, 2003)- International Business Lawyer article on potential competition issues arising from the online distribution and sale of products. A more detailed treatment of this subject is available at http://www.ibanet.org/general/PaperDetails.asp?ID=SW4&Section=GEN&Committee=.> (last visited April 4, 2003)

■ http://www.ibanet.org/Docs/0814_cx80.pdf > (last visited April 4, 2003)- overview of contract, intellectual property and privacy issues in the implementation of e-commerce strategies in franchise and distribution systems.

VIII. Taxes generally

A. To what taxes will seller be subject?

■ http://www.jus.uio.no/lm/tax.and.financial.regulation/tax.html > (last visited April 4, 2003)– Lex Mercatoria: Exhaustive Resource on International Tax and Financial Regulation.

■ http://www.taxsites.com/international.html > (last visited April 4, 2003)- A wealth of information about international taxation.

■ http://www.paradine.com/worldtax/index.html > (last visited April 4, 2003)- A collections of tax sites from a variety of sources including government agencies, universities and commercial vendors.

■ http://www.taxquestions.com > (last visited April 4, 2003)- general information on both international tax topics and other tax topics.

■ http://www.crossborder.com > (last visited April 4, 2003)– Crossborder tax and transaction site.

■ http://europa.eu.int/eur-lex/en/lif/ind/en_analytical_index_09.html > (last visited April 4, 2003)- EU legislation on taxation. Note that tax law is still a creature of national legislation, and hence a check must be made of the law of each country into which a company plans to enter.

■ http://www.ccra-adrc.gc.ca/ecomm/ > (last visited April 4, 2003) -Report Of the Canadian Minister's Advisory Committee on Electronic Commerce - Summary of General Recommendations

■ http://www.oecd.org/EN/documentation/0,,EN-documentation-101-nodirectorate-no-no-no-29,00.html > (last visited April 4, 2003)- the latest e-commerce and taxation policies and publications from the OECD

B. Tax treaties

A tax treaty is designed to avoid double taxation for people who would otherwise pay tax on the same income in two countries. Generally, a tax treaty determines how much each country can tax income such as pensions, wages, salaries, interest and royalties.

■ http://www.windstar-tech.com/public/treaties.html > (last visited April 4, 2003)– Tax Treaties: Windstar Technologies, Inc.

■ http://www.irs.gov/individuals/display/0,,i1=1&genericId=13330,00.html > (last visited April 4, 2003)– Income tax treaties from the U.S. prospective.

■ http://www.ssa.gov/international/inter_intro.html > (last visited April 4, 2003)- provides a description and the text of U.S. bilateral social security agreements with 18 countries, eliminating dual Social Security coverage and taxes. Social Security Programs Throughout the World, 1999 edition, provides a summary of social security programs, legislation and administration in 172 countries. Also contains links to the social security web sites of other countries.

■ http://www.fin.gc.ca/treaties/treatystatus_e.html > (last visited April 4, 2003)- Department of Finance Canada list of status of tax treaties with Canada i.e., signed, under negotiation, not yet in force, in force etc.

IX. Arbitration and dispute resolution

A. Mediation rules and advisability

■ http://www.jus.uio.no/lm/europe.international.commercial.arbitration.convention.geneva.1961/index.html> (last visited April 4, 2003) - European Convention on International Commercial Arbitration of 1961 Done at Geneva, April 21, 1961 United Nations, Treaty Series , vol. 484, p. 364 No. 7041 (1963-1964).

■ http://www.jus.uio.no/lm/inter-> (last visited April 4, 2003)american.international.commercial.arbitration.convention.panama.1975/index.html > (last visited April 4, 2003)- Inter-American Convention on International Commercial Arbitration (Panama Convention, January 30 1975).

B. Arbitration rules

■ http://www.jus.uio.no/lm/arbitration/institution.rules.html> (last visited April 4, 2003) - International Commercial Arbitration Institution Rules . Contains Arbitration Rules of International Organizations and countries Arbitration Rules.

■ http://www.jus.uio.no/lm/arbitration/rules.html#un> (last visited April 4, 2003) - International Arbitration Rules: United Nations Arbitration Rules; World Intellectual Property (WIPO) Arbitration Rules; Institutionalised Arbitration; Arbitration involving states.

■ http://www.asil.org/resource/arb1.htm > (last visited April 4, 2003)– The American Society of International Law Guide to International Commercial Arbitration.

■ http://www.jus.uio.no/lm/arbitration/model.laws.html > (last visited April 4, 2003)- Arbitration Model Laws.

■ http://www.internationaladr.com/e.htm > (last visited April 4, 2003)– International ADR: National Arbitration Laws.

■ http://www.jus.uio.no/lm/arbitration/national.laws.html > (last visited April 4, 2003)- National Arbitration Laws.

C. Enforceability of arbitral awards

■ http://www.jus.uio.no/lm/un.arbitration.recognition.and.enforcement.convention.new.york.1958/index.html> (last visited April 4, 2003) - United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958).

■ http://www.jus.uio.no/lm/brussels.jurisdiction.and.enforcement.of.judments.in.civil.and.commercial.matters.convention.1968/index.html > (last visited April 4, 2003)- Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968.

■ http://www.jseinc.org/en/bulletin/bulletin40/vol.40-enforcement.pdf > (last visited April 4, 2003)– The Enforcement of Foreign Arbitral Awards in Japan, by Takao Tateishi

D. Other dispute resolution methods

■ http://www.uncitral.org/en-index.htm > (last visited April 4, 2003)– UNCITRAL Working Group II: Arbitration and conciliation.

■ http://www.worldbank.org/icsid/basicdoc/93.htm > (last visited April 4, 2003)– International Center for Settlement of Investment Disputes: Rules of Procedure for Conciliation Proceedings (Conciliation Rules).

■ http://www.jus.uio.no/lm/un.conciliation.rules.1980/index.html > (last visited April 4, 2003)- UNCITRAL Conciliation Rules, 1980.

X. “Soft” issues

A. Language

■ http://www.itds.treas.gov/glossaryfrm.html > (last visited April 4, 2003)– International Trade Terms.

■ http://www.blc.co.at > (last visited April 4, 2003)– Business Language Center: Austrian Site.

■ http://www.languagesnto.org.uk/blis/blis.htm > (last visited April 4, 2003)- Business Language Information Service.

■ http://www.lapointerosenstein.com/fichier/listelibrary/10/DoingbusinessinQuebec.pdf > (last visited April 4, 2003)- summary of the requirements under the Canadian Province of Quebec’s language legislation.

■ http://www.culture.fr/culture/dglf/lois/loi-gb.htm > (last visited April 4, 2003)- As of August 5, 1995, in France, the use of French shall be mandatory for the designation, offer, presentation, instructions for use, and description of the scope and conditions of a warranty of goods, products and services, as well as bills and receipts.

B. Culture

■ http://www.executiveplanet.com/community/default.asp > (last visited April 4, 2003)- This site provides relevant information on international business culture, business customs and protocol, gift-giving, negotiating tactics, business entertainment and more. Focusing on country-specific business customs and etiquette, Executive Planet also features information on negotiating, business entertaining, cross-cultural communication, business dress and other areas of business protocol.

■ http://www.ibrc.bschool.ukans.edu/about/publications/publications.htm > (last visited April 4, 2003)- this site offers useful information for the international business person concerning etiquette, business practices, etc.

■ http://www.bspage.com/1netiq/Netiq.html > (last visited April 7, 2003)- Business etiquette. Read it before pursuing business correspondence through e-mail.

■ http://www.escapeartist.com > (last visited April 7, 2003)- The site lists everything you need to know about living overseas, offshore investing and country destination profiles.

C. Business practices

■ http://www.worldbiz.com > (last visited April 7, 2003)- Provides cross-cultural country reports for business executives. International Management Reports 2002: Purchase or order online.

■ http://strategis.ic.gc.ca/SSG/bi18354e.html > (last visited April 7, 2003)– Service Provided by Industry Canada: Create Your Own Market Research Report International Business Practices.

■ http://www.cbponline.com > (last visited April 7, 2003)- Source for Project Management Research and Publications.

■ http://strategis.ic.gc.ca/SSG/cp00002e.html > (last visited April 7, 2003)– Government of Canada: Fair Business Practicies Act.

■ http://www.ubpnet.org > (last visited April 7, 2003)- Uniform Business Practices for the Retail Energy Market.

■ http://www.mra-net.org/docs/industry/best_business_practices_1.cfm > (last visited April 7, 2003)– Marketing Research Information: Recommended Best Business Practices.

■ http://www.bbpnews.com – Bureau of Business Practices: Aspen Publishers, Inc.

XI. Checklist Contributing Authors

This Checklist has been made possible only through the generous contributions of a number of dedicated members of Committees M and X of the International Bar Association Section on Business Law. Their names and contact details are listed below. If you would like to contribute to the next update of the Checklist, furnish a specimen document for use in the Checklist or provide country-specific or other commentary or any of its components, please contact one or both of the Checklist project co-chairs identified below.

CO-CHAIR	CO-CHAIR
Michael K. Lindsey	Michael M. Sax
Paul, Hastings, Janofsky & Walker LLP	Sax Law Office
515 South Flower Street	One University Avenue, Suite 402
25^th Floor	Toronto, Ontario M5J 2P1
Los Angeles, California 90071	Canada
E-mail: michaellindsey@paulhastings.com	E-mail: mmsax@saxlaw.com
Telephone: (213) 683-6262	Telephone: (416) 955-0300
Facsimile: (213) 996-3262	Facsimile: (416) 364-9880

John R.F. Baer	Willie Coetzee
Sonnenschein Nath & Rosenthal	Shepstone & Wylie
8000 Sears Tower	35 Aliwal Street
233 South Wacker Drive	Durban, 4001
Chicago, Illinois 60606	South Africa
E-mail: jbaer@sonnenschein.com	Email: sw.coetzee@wylie.co.za
Telephone: (312) 876-2604	Telephone: +27-31-302 0451
Facsimile: (312) 876-7934	Facsimile: +27-31-301 1185

Marco Hero	John Pratt
TIGGES Rechtsanwälte	Pinsent Curtis Biddle
SteinstraBe 4	Dashwood House
D-40212 Düsseldorf, Germany	69 Old Broad Street
E-mail: hero@tigges-info.de	London EC2M 1NR
Telephone: +49 (0211) 86 87-112	United Kingdom
Facsimile: +49 (0211) 86 87-160	E-mail: john.pratt@pinsents.com
	Telephone: +44 (0)20 7418 7000
Andrew Scott	Facsimile: +44 (0)20 7418 7050
Paul, Hastings, Janofsky & Walker LLP
600 Peachtree Street NE	Astrid Christofari
Suite 2400	Rechtsanwaltin
Atlanta, Georgia 30308-2265	Am Eckbusch 62
E-mail: andyscott@paulhastings.com	42113 Wuppertal
Telephone: (404) 815-2204	Germany
Facsimile: (404) 685-5204 Alan G. Lebowitz Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP 245 Park Avenue, 33rd Floor New York, NY 10167 Tel: 212-557-4000 Fax: 212-557-4415	Telephone: +49 (02 02) 72 08 42 Facsimile: +49 (02 02) 72 08 87 Patrick Lindgren Advocare Salomonkatu 17 A 14 FIN-00100 Helsinki, Finland Telephone: +358 9 7001 9730 Facsimile: +358 9 685 2244

XII. Specimen Forms of Agreement Used in International Sales Transactions

A. International Distribution Agreement

TEXT	COMMENTS
[Note: Many of the numbers, time periods, etc. provided herein are suggestions only and may need to be altered dependent on the nature of the product being sold].
THIS AGREEMENT is made and entered into by and between [LEGAL NAME OF MANUFACTURER], a New York corporation with its principal office at [Address of Manufacturer], U.S.A. (“Manufacturer”), and [LEGAL NAME OF DISTRIBUTOR], a [type of entity] with its principal office at [Address of Distributor] (“Distributor”).
WHEREAS, Manufacturer is or intends to be engaged in the business of manufacturing [Products] (the “Products”);
WHEREAS, Distributor desires to act as Manufacturer’s [sole or nonexclusive] distributor of the Products in [Territory] (the “Territory”), and Manufacturer desires that Distributor provide such sales and distribution services in accordance with the terms and conditions hereinafter set forth; and
WHEREAS, the success of both the Manufacturer and the Distributor is directly affected by the business conduct of the Distributor and the Distributor therefore recognizes that adherence to the terms of this Agreement is a matter of mutual importance and consequence to the Distributor and the Manufacturer;
NOW, THEREFORE, in consideration of the premises and mutual promises, terms and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties do hereby agree as follows:
1 Definitions. As used in this Agreement, defined terms shall have the meaning set forth in the Definitions attached hereto as Exhibit A, which is incorporated herein by reference.
2 Appointment and Acceptance. 2.1 Products and Territory. The Manufacturer hereby appoints Distributor as its distributor to sell the Products within the Territory.
2.2 Customers. Distributor agrees to resell Products only to Customers. Distributor is specifically excluded from soliciting (or causing anyone to solicit) orders from parties outside the Territory and from soliciting orders for or selling any other products of Manufacturer.
2.3 [Alternative 1:] Sole Distributor. Distributor shall be a sole distributor of the Products in the Territory during the term of this Agreement, subject to Manufacturer’s right from time to time to make direct sales of the Products in the Territory or outside the Territory for use by Customers in the Territory. [Alternative 2:] Nonexclusive Distributor. Distributor is a nonexclusive distributor for the Products of the Manufacturer and Manufacturer has the right to make direct sales of the Products in the Territory, to make sales of the Products outside the Territory for use by Customers in the Territory, and to appoint additional distributors, sale representatives or other agents with a right to sell or offer for sale in the Territory any or all of the Products.
2.4 Independent Contractor. This Agreement does not constitute Distributor an agent, employee, or legal representative of Manufacturer for any purpose whatsoever.
Distributor is not granted, nor shall it represent that it has been granted, any right or authority to assume or create any obligation or responsibility, express or implied, on behalf of or in the name of Manufacturer, to incur debts or make collections for Manufacturer or to bind Manufacturer in any manner whatsoever; it being the intent of the parties hereto to create the relationship on the part of the Distributor of an independent contractor, for whose actions or failure to act the Manufacturer shall not be responsible.
2.5 Acceptance of Appointment. The Distributor hereby accepts appointment as distributor in the Territory and agrees to keep, observe, and perform all of the terms and conditions of this Agreement.
3 Product Changes; Price of Products. 3.1 Product Changes. [Alternative 1:] The Distributor agrees that the Manufacturer has the right, at its sole discretion and without incurring any Liability to Distributor, to add or delete Products from the coverage of this Agreement and such addition or deletion will not be a breach of this Agreement or be considered a termination of this Agreement.
[Alternative 2:] Manufacturer reserves the right, in its sole discretion and without incurring any Liability to Distributor, to (a) alter the specifications for any Product; (b) discontinue the manufacture of any Product; (c) discontinue the development of any new product, whether or not such product has been announced publicly; or (d) commence the manufacture and sale of new products having features which make any Product wholly or partially obsolete, whether or not Distributor is granted any distribution rights in respect of such new products.
Notwithstanding the foregoing, the Manufacturer shall use its best efforts to provide Distributor with prompt written notice of such decisions no less than sixty (60) days prior to their effective date. The Manufacturer shall fill all accepted purchase orders from Distributor for any altered or discontinued Products of which manufacturing and commercial deliveries shall have commenced but otherwise shall have no obligation to do so unless the delivery date requested in the relevant purchase order was prior to the effective date of the change.
3.2 Prices. The prices at which the Manufacturer shall sell Products to the Distributor shall be equal to the Suggested International Retail Prices less the Discount in effect at the time the order is received.
3.3 Price Changes. Manufacturer may, at any time during the term of this Agreement, increase its Suggested International Wholesale Prices for the Products by providing Distributor with at least sixty (60) days prior written notice. Increased prices shall not apply to purchase orders accepted prior to the effective date of the price increase unless such orders provide for delivery, and delivery is in fact made, more than ninety (90) days after the date of acceptance of the order. Price decreases with respect to all Products shall be effective immediately upon written notice to the Distributor on all such Products not yet delivered.
3.4 EX WORKS. The prices paid by Distributor, unless otherwise stated, are EX WORKS (EXW) (INCOTERMS 1990) Manufacturer’s facility in the U.S.A. or abroad, as determined by Manufacturer.
3.5 Resale Price. Distributor shall resell Products at such prices as Distributor, in its sole discretion, may determine; provided, however, that such prices shall be determined by Distributor in a manner that maximizes its sales in the Territory (both in terms of quantity and dollar volume) and is consistent with positioning the Products and Manufacturer’s name as being of the highest quality, yet affordable to the general buying public. Distributor shall provide Manufacturer with its initial list prices for the Products and shall keep Manufacturer fully informed by providing Manufacturer with any new list sales prices within ten (10) days of any change in such list prices.
4 Orders. 4.1 Purchase Orders. All orders for Products shall be submitted to the Manufacturer in the form of a Purchase Order which shall be sent by mail or by facsimile and shall set forth: (a) the identity of Product being purchased; (b) the quantity to be purchased; (c) the purchase price in accordance with Section 3.1; (d) the general shipping instructions including destination address; (e) a reference to the priority of this Agreement; (f) the delivery or performance schedules agreed with Manufacturer; and (g) any other special information required by this Agreement or by the circumstances of the particular order. Except as otherwise agreed by the Manufacturer, Distributor’s Purchase Orders must be received by the Manufacturer at least sixty (60) days prior to the requested delivery dates.
4.2 Incorporation of Terms and Conditions. The terms and conditions of this Agreement shall be deemed incorporated into and made a part of each Purchase Order, and shall not be superseded by any Purchase Order except as expressly agreed to in a writing which specifies the extent to which such Purchase Order overrides the terms and conditions of this Agreement and which is signed by authorized representatives of both parties.
4.3 [Alternative 1:] Firm Orders. Orders placed by Distributor will be considered firm with no right of cancellation.
[Alternative 2:] Cancellation. Distributor shall not, without Manufacturer’s written consent, cancel any of its orders for the Products within thirty (30) days of the scheduled Delivery Date. Distributor may, at any time, cancel an order thirty-one (31) days or more before the scheduled Delivery Date subject to a cancellation charge equal to Manufacturer’s actual documented non-recoverable costs incurred resulting from cancellation of such order.
4.4 Placement and Acceptance of Orders. All Purchase Orders from Distributor are subject to acceptance in writing by Manufacturer at its Order Address, which may be granted or denied in its sole discretion. Each Purchase Order shall be deemed to be an offer by Distributor to purchase the Products pursuant to the terms of this Agreement and, when accepted by the Manufacturer as herein provided, shall give rise to a contract between Distributor and Manufacturer on the terms and conditions set forth herein. All acceptances and shipments are conditional upon the Distributor’s compliance with the payment terms set forth in Article 6 below.
5 Shipment. 5.1 Shipping Costs. Distributor shall pay all shipping costs EXWORKS, including but not limited to the cost of export packing, carriage to port of shipment, freight to the port of destination, and insurance, including war risk insurance if applicable. Distributor shall be responsible for unloading the goods at port of destination, and for direct payment of lighterage and wharfage charges, customs charges, import duties, costs resulting from customs delays or work stoppages at the port of destination, and any other costs occurring after Delivery.
5.2 Insurance. Distributor agrees to insure each shipment of Products with a reputable insurer for the full invoice price of such shipment. Such insurance shall provide, at a minimum, for coverage of the Products from Delivery until title passes pursuant to Section 5.4. Manufacturer shall have no obligation to deliver Products without receipt of a certificate of insurance from Distributor evidencing such coverage and showing Manufacturer as an additional named insured.
5.3 Late or Partial Shipments. Distributor acknowledges that Manufacturer has a finite production capacity which will vary from time to time or which may be interrupted entirely and therefore Manufacturer’s responsibilities to ship orders to Distributor are limited to best efforts and late shipments or partial shipments are permissible.
5.4 Title to Products and Risk of Loss. [Alternative 1:] Title to the Products and risk of loss passes to Distributor upon Delivery.
[Alternative 2:] To secure the payment of all amounts due hereunder and the observance and performance of all the terms, provisions, agreements and covenants of this Agreement, Manufacturer shall retain title to each Product sold to Distributor under the terms of this Agreement until the earlier of the dates on which Distributor shall have (a) resold the Products to a Customer or (b) made payment in full to Manufacturer of all amounts due hereunder. Such retention of title shall operate to the maximum extent permitted under the law of the country in which the respective Product is physically located, and Distributor shall comply with any formalities required to give effect thereto.
6 Payment. 6.1 Payment. [Alternative 1:] Payment shall be by irrevocable letter of credit in a form acceptable to Manufacturer and issued or confirmed by a bank acceptable to or designated by Manufacturer.
[Alternative 2:] Payment shall be made no later than thirty (30) days after distributor is invoiced by Manufacturer for Products, which shall not occur until after Delivery of such Products.
6.2 Alternative Method of Payment. Notwithstanding the foregoing, a different method of payment or credit arrangement may be agreed to in writing by the parties in which case such other method of payment or credit arrangement will govern until otherwise determined by Manufacturer.
6.3 Currency. Distributor agrees to make all payments in U.S. currency.
6.4 Late Fees. If, for any reason, the Distributor does not pay any amounts due Manufacturer pursuant to this Agreement, Distributor shall pay late charges on such past due amounts at a monthly rate of one and one-half percent (1½%) (or, if less, the maximum interest rate then allowed under applicable law).
6.5 Credits for Returned Items or Disputed Amounts. In the event of any dispute arising over any part of an invoice or the total amount due under an invoice, all undisputed amounts shall be promptly paid by Distributor in accordance with this Article 6.
7 Advertisement. 7.1 [Alternative 1:] Advertising Materials. Distributor shall diligently advertise the Products in the Territory. Manufacturer shall furnish Distributor with reasonable quantities of Manufacturer’s brochures, sales literature, advertising copy and other materials in the English language, for use by Distributor in preparing its own advertising materials. All expenses incurred by Distributor in creating and preparing advertising materials and in advertising the Products shall be borne by Distributor. Distributor shall provide to Manufacturer copies of all advertising materials concerning the Products, Trademarks or the Manufacturer which it shall create or prepare prior to any use thereof and shall not use the same without the prior written consent of Manufacturer, which shall not unreasonably be withheld.
[Alternative 2:] Media Plan. The Distributor and Manufacturer shall agree upon a media plan which shall establish a budget, select media outlets, set the frequency of advertising and otherwise define a program to advertise Products in the Territory.
Such media plan shall be agreed upon within thirty (30) days after the execution of this Agreement by both parties. All expenses associated with advertising the Products shall be borne by the Distributor. Notwithstanding the foregoing, all creative control shall remain exclusively with Manufacturer and Distributor shall not advertise, distribute any advertising materials regarding the Products or use the Trademarks except as provided for in the media plan developed with Manufacturer.
[Optional:] 7.2 Promotions. Distributor agrees to develop and actively implement sales, promotion and merchandising programs, including those suggested by Manufacturer and to participate in trade shows, fairs and exhibitions in the Territory where such participation can reasonably be expected to promote the Products.
8 Customer Support. 8.1 Maintenance. Distributor agrees to provide maintenance and other customer support services to Customers in the Territory in accordance with standards established by Manufacturer and communicated to Distributor in writing from time to time. Without limiting the generality hereof, Distributor shall have the following obligations in this respect: (a) To maintain at all times a sufficient staff of personnel who are fully trained and qualified to perform such support services; (b) To maintain inventories of spare parts which shall be sufficient to ensure timely maintenance of installed Products and, without limiting the generality hereof, to purchase an initial supply of spare parts, the content of which shall be reasonably defined by Manufacturer;
(c) To cooperate with Manufacturer in dealing with any Customer complaints concerning the Products and to take any action reasonably requested by Manufacturer to resolve such complaints; and (d) To cooperate with Manufacturer in arranging for any Customer warranty service.
8.2 Training. The sales and technical support functions in respect of Products sold to Customers shall be carried out by Distributor. Distributor shall identify from among its sales and technical personnel, individuals having the educational and professional qualifications required for competent performance of such functions. It shall designate from among those individuals an agreed number for training by Manufacturer, all of whom shall be reasonably conversant in the English language. Manufacturer will train such personnel at its facility in [location of training facility], U.S.A. or other facility as designated by Manufacturer. There will be no charge for the initial training or the training materials, the contents of which will be determined by Manufacturer. Manufacturer will provide additional training at Manufacturer’s standard fees for such training, or at such other fees as may be established by mutual agreement. Except as otherwise agreed, all such training shall be in the English language. Distributor will pay for all travel expenses related to such training, including airfare, meals, lodging and other living expenses.
9 Additional Responsibilities of Distributor. In addition to all other requirements and obligations set forth in this Agreement, the Distributor agrees to accept the responsibilities and obligations set forth below. [These are optional and shall be reviewed to choose those which apply]
9.1 Best Efforts. Distributor agrees to devote its best efforts to the distribution, promotion, sale, and servicing of the Products in the Territory and to protect and enhance the reputation of the Manufacturer and the Products.
9.2 Competitive Products. [Alternative 1:] The Distributor acknowledges that Products have an image for high quality and that it derives a benefit from being an authorized retailer with the right to sell such Products. To preserve this image for the highest quality and thereby enhance its own sales, and in consideration for the Manufacturer making available to the Distributor the Products at favorable prices, the Distributor agrees that during the term of this Agreement it shall not, either directly or indirectly, develop, produce, distribute or market products in the Territory which are competitive with existing Products or which are likely to adversely affect market opportunities in the Territory for future Products of the Manufacturer having functional characteristics similar to those of existing Products.
[Alternative 2:] [If in an European Union country and a Nonexclusive Agreement] Distributor agrees to notify Manufacturer of any other manufacturer from which it is purchasing products competitive with the Products for resale to the Customers in the Territory during the term of this Agreement.
9.3 Sole Source of Products. Distributor agrees that it will only purchase Products from Manufacturer or Manufacturer’s licensees authorized to sell Products to Distributor in the Territory as confirmed by Manufacturer.
9.4 Counterfeit or Improper Sales. Distributor agrees to notify Manufacturer immediately if it becomes aware of any counterfeit products of Manufacturer’s Products or unauthorized sales of the Products and to assist Manufacturer at Manufacturer’s cost in its attempts, if any, to halt such conduct. Manufacturer has the right, but not the obligation, to pursue any counterfeit or improper sales at its sole and absolute discretion.
9.5 Investment in Capital. Distributor represents and agrees that, upon the expiration or termination of this Agreement that it will be able to easily utilize any buildings, equipment, installation, furnishings, or supplies in which it invests or any specially-trained personnel that it employs to perform this Agreement in other activities in which it is or can reasonably become involved.
9.6 Office and Employee Expenses. Distributor agrees to maintain and pay all salary and other business expenses.
9.7 Insurance. Distributor shall procure and maintain continuously during the term hereof, comprehensive public liability insurance insuring both Distributor and Manufacturer against claims for bodily injury, death, property damage and any other Liability arising out of or as a result of Distributor’s or Distributor’s Agent’s activities. Distributor shall not be required to purchase insurance coverage for any Liability resulting from Manufacturer’s negligence. Such insurance shall be for an amount that is reasonable and customary in the business; provided, however, that Manufacturer may establish minimum amounts for such insurance by written notice to Distributor.
Distributor shall provide to Manufacturer a certificate of insurance evidencing such coverage and showing Manufacturer as an additional named insured within ten (10) days after execution of this Agreement by both parties and prior to conducting any business pursuant to this Agreement. Distributor’s failure to send such certificate to Manufacturer shall be considered a material breach of this Agreement.
9.8 Minimum Order. Distributor agrees that it will meet the Quarterly Minimum Purchase Requirement each Quarter for distribution in accordance with this Agreement. Failure to purchase the Quarterly Minimum Purchase Requirement during any Quarter after the first six (6) months of this Agreement shall constitute a material breach of this Agreement.
9.9 Marketing Reports. Within five (5) days of the beginning of each Quarter, Distributor shall submit to Manufacturer (in a form designated by Manufacturer) a written report including without limitation business trends in the Territory and Customer contacts. Once a year on the date determined by the Manufacturer and communicated to the Distributor in writing, Distributor shall submit to Manufacturer (in a form designated by Manufacturer) a written report including without limitation production and market forecasts for the Products in the Territory for the following year.
9.10 Sales Reports. Within five (5) days of the beginning of each month, Distributor shall submit to Manufacturer (in a form designated by Manufacturer) a written sales report.
9.11 Other Sales Records. Distributor agrees to maintain and provide to Manufacturer at its request complete records as to maintenance, performance and reliability of all Product units sold in the Territory.
9.12 Business Leads. Distributor agrees to investigate diligently all leads with respect to potential Customers referred to it by any source, including Manufacturer.
9.13 Inspection. Distributor agrees to permit Manufacturer to contact and/or visit Customers and to visit Distributor’s place of business and to inspect its inventories, service records, and other relevant documents upon reasonable notice.
10 Additional Responsibilities of Manufacturer. In addition to all other requirements and obligations set forth in this Agreement, the Manufacturer agrees to accept the responsibilities and obligations set forth below.
10.1 Cooperation. Manufacturer agrees to cooperate with Distributor in the promotion and sale of the Products in the Territory.
10.2 Sales Literature. Manufacturer agrees to furnish Distributor catalogs, sales bulletins, samples and engineering data adequate to describe the Products in the English language without charge. Manufacturer will pay the shipping and mailing costs incurred in sending this material to the Distributor. Local taxes and import duties shall be paid by Distributor. Distributor agrees to translate such documents when necessary.
10.3 Financial Statements. Manufacturer, upon request, will furnish Distributor its current financial statements as made public in the U.S.A.
11 Duration and Termination. 11.1 Term of Agreement. The term of this Agreement shall commence on the Effective Date and shall expire on the Expiration Date, unless sooner terminated pursuant to Sections 11.2 through 11.4 below. There shall be no right to renew this Agreement.
11.2 Immediate Termination. This Agreement shall terminate after a party gives written notice of the occurrence of any of the following events, which termination shall be effective as of the date of such notice: (a) Failure by Distributor to comply with the requirements set forth in Articles 12 or 13 of this Agreement. (b) The bankruptcy or insolvency of either party or the appointment of a receiver or trustee for assets of either party. (c) Determination by the Manufacturer that a conflict of interest exists due to any agreement or other relationship between the Distributor and any competitor of Manufacturer, which agreement or relationship has not been approved in writing by Manufacturer. [If European Union country and nonexclusive agreement, delete everything after the word “exists” to conform to Section 9.2] (d) Determination by Manufacturer that the Distributor has lost key personnel who Manufacturer deems critical to the continued effective representation of Manufacturer in the Territory by the Distributor. (e) Determination by Manufacturer that ownership or a controlling interest of Distributor has changed.
11.3 Thirty-Day Cure. This Agreement shall terminate thirty (30) days after a party gives the other party written notice of such other party’s default of any of its material obligations under this Agreement (except those obligations governed by the previous section) and the other party’s failure to cure such default within such thirty (30) days.
11.4 Termination Without Cause. This Agreement shall terminate on the ninetieth (90th) day after written notice by one party to the other party of a desire to terminate the Agreement without cause.
11.5 Orderly Changeover. Within thirty (30) days of the effective date of the expiration or termination of this Agreement for any reason, the Distributor shall provide Manufacturer with lists of Customers, location and purchasers of all Products sold which are still covered by the Warranty, current sales negotiations and other information reasonably necessary for an orderly changeover of distributorship arrangements in the Territory.
11.6 Return of Materials. Upon the expiration or termination of this Agreement, the Distributor shall deliver immediately, at its expense, to the Manufacturer the originals and all copies of any Trade Secrets or Proprietary Information, as well as all demonstration equipment, sales literature, and other property of Manufacturer which has been provided to Distributor and which has not otherwise been disposed of in accordance with Manufacturer’s instructions.
11.7 Effect on Prior Orders. [Alternative 1:] The expiration or termination of this Agreement shall not affect the rights and obligations of the parties that have vested prior to the effective date of such expiration or termination, including rights and obligations with respect to orders accepted by Manufacturer prior to such effective date. Final settlement for such orders shall be on the same basis as though this Agreement were continuing, and any obligations of one party to the other with respect to such orders shall remain in full force and effect until fully paid or discharged.
[Alternative 2:] Manufacturer shall have the right at its option to (a) cancel any or all accepted Purchase Orders which provide for delivery after the effective date of termination, and/or (b) repurchase all or any part of the inventories of Products in Distributor’s possession as of the termination date at Manufacturer’s invoiced price to Distributor for such products, less depreciation calculated from the Delivery Date on a twenty-four (24) month, straight-line basis and less any appropriate amount for excessive wear and tear. Manufacturer shall exercise its option under this subsection by notifying Distributor in writing no later than thirty (30) days after the effective termination date.
11.8 Maintenance. If requested in writing by Manufacturer, Distributor shall continue to maintain Products installed at Customer sites in the Territory for a period of up to twelve (12) months following termination. During such period, Manufacturer shall continue to supply to Distributor, on the same terms and conditions as applied prior to the termination, all hardware, software upgrades and spare parts that are required to enable Distributor to provide such maintenance.
11.9 No Compensation. In the event of termination of this Agreement for any reason in accordance with the terms hereof, the parties hereby agree that, without prejudice to any other remedies with either party may have in respect of any breach of this Agreement, neither party shall be entitled to any compensation or like payment from the other as a result of such termination.
12 Compliance with Laws. 12.1 U.S. Export Laws. The Products may require a license for export from the U.S. Government which demands advance disclosure of the ultimate consignee and all parties to the sale, and prohibits diversion, transshipment, or reexportation out of the Territory contrary to U.S. law and regulations by any party. The Distributor hereby agrees to furnish all documentation required by the U.S. Government in connection with obtaining any required export license, and certifies that unauthorized diversion, transshipment or reexportation of the Products in violation of the export license or any applicable law will not be permitted.
12.2 Import Laws. The Distributor shall obtain all authorizations required to import the Products into the Territory and shall obtain any other regulatory approvals (except the export license) required.
12.3 Transfer of Technical Data. The Distributor represents and warrants that it will not transfer, directly or indirectly, any technical information received from the Manufacturer, nor any product produced from such technical information, except as set forth in this Agreement and in accordance with the Export Administration Act (as amended from time to time), or any successor provision or any other applicable laws, rules, or regulations pertaining to the export of data, information or products, as in effect in the United States or the Territory.
12.4 Registration. Distributor agrees to submit this Agreement to governmental authorities in the Territory for approval or registration as required by law, and to obtain such approval or registration within thirty (30) days after the Execution Date and prior to conducting any business. Distributor shall pay all costs and expenses for obtaining such registration or approval. Within sixty (60) days after the Execution Date, Distributor shall furnish the Manufacturer with written evidence that such approval or registration has been accomplished. Any translation of this Agreement from the English language to another language must be verified and approved by Manufacturer prior to registration or filing with the governmental authorities in the Territory.
12.5 Foreign Corrupt Practices Act. Distributor hereby specifically represents and warrants that it will comply with all laws relating to the conduct of business practices which prohibit any gratuities or inducements.
In particular, the distributor acknowledges that the Manufacture is subject to certain United States laws, including but not limited to the Foreign Corrupt Practices Act of 1977 and any amendments thereto, which apply to activities carried out on the Manufacturer’s behalf outside the United States and agrees neither to take nor omit to take any action if such action or omission, as the case may be, might cause the Manufacturer to be in violation of any such law. Upon written notice from Manufacturer, the Distributor shall provide such information as the Manufacturer shall reasonably consider necessary to verify compliance by the Distributor with the provisions of this section.
12.6 Other Laws. In addition, Distributor shall comply with all other applicable laws, regulations, or other requirements of any countries which affect this Agreement and the Distributor’s performance hereunder and, without limiting the generality of the foregoing, shall (a) furnish all documentation required by any such other country in connection with the exportation or importation of the Products and (b) maintain all registrations with governmental agencies, commercial registries, chambers of commerce, or other offices which may be required under local law in order to enable it lawfully to conduct its business and perform its obligations under this Agreement.
12.7 Materiality. Non-compliance by Distributor with the provisions of this Article 12 shall constitute a material breach of this Agreement.
12.8 Indemnification. Distributor agrees to indemnify and hold harmless the Manufacturer from losses and penalties resulting from Distributor’s failure to comply with this Article 12.
13 Intellectual Property Rights. 13.1 Trademarks. (a) Manufacturer hereby grants to Distributor a non-exclusive, non-transferable, and royalty-free right and license to use the Trademarks in connection with the sale, rental, lease, or other distribution, promotion, advertising and maintenance of the Products for so long as such Trademarks are used by Distributor in accordance with Manufacturer’s standards, specifications and instructions, but in no event beyond the term of this Agreement. Distributor shall afford Manufacturer reasonable opportunities during the term hereof to inspect and monitor the activities of Distributor in order to ensure Distributor’s use of the Trademarks in accordance with Manufacturer’s standards and instructions. (b) Distributor shall acquire no right, title or interest in such Trademark is other than the foregoing limited license and all rights in the Trademarks shall be in the name of Manufacturer, and Distributor agrees not to use any Trademarks as part of Distributor’s corporate or trade name or permit any third party to do so without the prior written consent of Manufacturer. Distributor further agrees that it will not in any manner represent that it has ownership of the Trademarks and it will not register or attempt to register any such Trademarks under the laws of any jurisdiction, and will not at any time do, or cause to be done, any act or thing contesting, or in any way impairing or tending to impair, any part of Manufacturer’s right, title, and interest in such Trademarks, whether or not they are registered in the jurisdictions in which Distributor is located or does business.
(c) Manufacturer shall use its best efforts to register the Trademarks in any jurisdictions within the Territory in which Manufacturer, in its sole discretion, determines such registration to be necessary or useful to the successful distribution of the Products. In addition, in the event Manufacturer believes that it is advisable to enter into a registered user agreement, effect any filing or obtain any governmental approval or sanction for the use by Distributor of any of the Trademarks pursuant to this Agreement, the parties shall fully cooperate in order to do so. All expenses relating to the registration of the Trademarks in the Territory, as well as the making of filings or obtaining any governmental approvals for the use by Distributor of the Trademarks, shall be borne by Distributor.
(d) Distributor shall promptly notify Manufacturer of any use by any third party of the Trademarks or any use by such third parties of similar marks which may constitute an infringement or passing off of Trademarks. Manufacturer reserves the right in its sole discretion to institute any proceedings against such third party infringers and Distributor shall refrain from doing so. Distributor agrees to cooperate fully with Manufacturer in any action taken by Manufacturer against such third parties, provided that all expenses of such action shall be borne by Manufacturer and all damages which may be awarded or agreed upon in settlement of such action shall accrue to Manufacturer.
(e) Distributor agrees to use the Trademarks so as to assure their continued validity and enforceability and in strict compliance with all applicable laws and regulations. In addition, Distributor agrees not to (i) remove or alter any patent numbers, trade names, trademarks, notices, serial numbers, labels, tags or other identifying marks, symbols or legends affixed to any Products or containers or packages, (ii) affix to the Products any other trade name or trademark, or (iii) use the Trademarks on any other products or articles, advertisement, business card, sales brochure, or other document available to the Customers, or the public without Manufacturer’s prior written approval.
13.2 Proprietary Information and Trade Secrets. (a) Distributor acknowledges that it and the Distributor’s Agents will be entrusted with trade secrets and Proprietary Information that, the Manufacturer has developed and has a legitimate business interest in protecting. Pursuant therewith, the Distributor agrees to the following provisions. (b) Distributor will treat as confidential and will not, without the prior written approval of the Manufacturer, use (other than in the performance of its duties hereunder), publish, disclose, copyright or authorize anyone else to use, publish, disclose or copyright, (i) any information which constitutes Trade Secrets during the term of this Agreement and subsequent thereto, or (ii) Proprietary Information either during the term hereof or for three (3) years after expiration or termination of this Agreement.
(c) Distributor further agrees that it will require each of the Distributor’s Agents to be bound by the requirements of this Agreement and that, upon the request of the Manufacturer, Distributor will provide evidence satisfactory to Manufacturer of having fulfilled such requirement to Manufacturer.
13.3 Injunctive Relief. The Distributor agrees that its and any of the Distributor’s Agents actual or threatened breach of the provisions of Section 13.1 or 13.2 shall constitute irreparable harm to the Manufacturer, and the Manufacturer, in addition to all other rights, shall be entitled to seek an injunction restraining Distributor or such person therefrom.
Nothing herein shall be construed as prohibiting the Manufacturer from pursuing any other available remedy for such breach or threatened breach, including the recovery of damages from Distributor or such person. This provision shall remain in full force and effect in the event Distributor or such person should claim that the Manufacturer violated any of the terms of this Agreement and any other claims shall be pursued independently of the covenants set forth in this Section 13.3. [Optional: Manufacturer does not have to agree to indemnify Distributor for patent infringement, only if requested by Distributor]
13.4 Patent Indemnification.
(a) Manufacturer shall, at its own expense, defend any suit instituted against Distributor which is based on an allegation that any Products manufactured by Manufacturer and sold to Distributor hereunder constitute an infringement of any patent of any country in the Territory and shall indemnify Distributor against any award of damage and costs made against Distributor by a final judgment of a court of last resort if it is determined therein that any such Product constitutes an infringement of any patent of any country in the Territory, provided that Distributor shall have given Manufacturer timely notice in writing of any notice or claims of infringement and permitted Manufacturer through Manufacturer’s counsel to defend the same and given Manufacturer all available information, assistance and authority to enable Manufacturer to assume such defense.
Manufacturer shall have control of the defense of any such suit, including appeals from any judgment therein and any negotiations for the settlement or compromise thereof, with full authority to enter into a binding settlement or compromise. (b) In the event that any Product is held to infringe and its use is enjoined, Manufacturer shall at its option and expense (i) procure for Distributor the right to continue using such Product, (ii) provide the necessary instructions and documentation to modify such Product so that it no longer infringes, or (iii) grant Distributor a credit for such Product upon its return to Manufacturer, allowing for reasonable depreciation for deterioration, damage and obsolescence.
(c) Notwithstanding the provisions of Section 13.1 hereof, Manufacturer shall have no Liability whatsoever to Distributor with respect to any patent infringement or claim thereof which is based upon or arises out of (i) the use of any Product in combination with other equipment not recommended or supplied by Manufacturer if such combination causes or contributes to the infringement, (ii) the use of any Product in a manner for which it was neither designed nor contemplated, or (iii) any modification of any Product by Distributor or any third party which causes the Product to become infringing. (d) Section 13.4 hereof states the entire liability of Manufacturer for or arising out of any patent infringement or claim thereof with respect to Products furnished to Distributor under this Agreement.
14 Dispute Resolution.
14.1 Negotiation. The parties will first attempt to resolve any Dispute which arises in connection with this Agreement by negotiation by an officer of each company not directly involved with the subject matter of this Agreement.
14.2 Arbitration. [*Use this arbitration clause only if willing to arbitrate under AAA rules:] If the parties cannot resolve the Dispute through negotiation within thirty (30) days or such longer period as may be agreed upon by the parties in writing, the parties agree and consent to resolve the Dispute solely through arbitration in accordance with International Arbitration Rules of the American Arbitration Association (“AAA”) at the offices of the AAA in [location for Arbitration*], U.S.A. in the English language. Each party shall appoint one arbitrator with the two arbitrators thus appointed selecting a third arbitrator. The arbitrators shall be empowered to resolve all Disputes, whether in contract or in tort, and to award any remedies authorized by this Agreement and any applicable statute or common law.
All arbitration proceedings, including all evidence and statements, shall be confidential and shall not be used or disclosed for any other purpose. Each party shall pay its own attorneys’ fees and expenses; all other expenses of arbitration shall be equally divided between the parties; provided, however, the arbitrators shall have the authority to assess any of the foregoing costs against any party acting in bad faith.
The award of the arbitrators shall be final and binding and is the sole and exclusive remedy of the parties regarding any Disputes hereunder except that nothing contained in this Agreement shall prohibit either party from seeking injunctive relief or equitable remedies in a court of competent jurisdiction of pursuing other equitable remedies. A judgment on the award may be entered in any court having jurisdiction thereof. The award shall be in U.S. Dollars and shall earn interest from the date of the award until satisfied in full at the United States prime interest rate as reported in the Wall Street Journal on the business day immediately preceding the date of the award. Should either party bring any legal action against the other with respect to any claim required to be arbitrated under this Agreement by any method other than arbitration, the other party shall be entitled to recover from such party all damages, costs, expenses and attorneys’ fees incurred as a result of such action.
[*Use if unwilling to use AAA*:] Any Dispute which is not resolved by negotiation as provided above shall be referred to and finally resolved by arbitration under the rules of the London Court of International Arbitration (“LCIA”), which rules are deemed to be incorporated by reference, in London, England, in the English language. Each party shall appoint one arbitrator with the two arbitrators thus appointed selecting a third arbitrator.
The arbitrators shall be empowered to resolve all Disputes, whether in contract or in tort, and to award any remedies authorized by this Agreement and any applicable statute and common law. All arbitration proceedings, including all evidence and statements, shall be confidential and shall not be used or disclosed for any other purpose. Each party shall pay its own attorney’s fees and expenses; all other of arbitration shall be equally divided between the parties; provided, however, that the arbitrators shall have the authority to assess any of the foregoing costs against any party acting in bad faith. The award of the arbitrators shall be final and binding and is the sole and exclusive remedy of the parties regarding any Disputes hereunder, except that nothing contained in this Contract shall prohibit either party from seeking injunctive relief or equitable remedies in a court of competent jurisdiction or pursuing other equitable remedies.
The award may be confirmed and enforced in any court of competent jurisdiction. The award shall be in U.S. dollars and shall earn interest at the LIBOR rate (on the business day immediately preceding the date of the award) from the date of the award until the award is satisfied in full. The parties agree that if any question of law arises in the course of arbitration or with respect to any award made by the arbitral tribunal, no appeal or application shall be made to any court including without limitation appeal to the High Court under Section 1 of the Arbitration Act of 1979 or application under Section 2 of said Act.
14.3 Governing Law. This Agreement shall be governed by and construed accounting to the laws [OPTION 1 (IF UNDER AAA RULES):] of the State of [state of governing law], U.S.A., not including its conflict of laws rules or principles, and applicable U.S. federal laws. [OPTION 2 (IF UNDER LCIA RULES):] of England and Wales, not including the rules and principals regarding conflict of laws. [ADD REMAINING TERMS:] The United Nations Convention on the International Sale of Goods shall not apply to this Agreement. Subject to the foregoing provisions in this article, the Distributor hereby answers to submit to the jurisdiction of the state and federal courts in the State of [state of governing law], U.S.A.
15 Warranty 15.1 Warranty or Products. Manufacturer warrants for a period of [warranty period] after the date of shipment of the Products by Manufacturer that such Products shall be free from defects in design, material and workmanship. Manufacturer’s sole obligation in the event of a breach of such warranty shall be to repair or replace all defective Products or parts. In no event shall Manufacturer have any responsibility or bear any Liability for the cost of labor for the repair of any defective Products or parts, the removal of defective parts or the installation of replacement parts. All costs of shipment to Distributor any repaired or replaced Products or parts shall be borne by Manufacturer. If and as requested by Manufacturer, Distributor shall return at its cost all parts replaced under the said warranty to Manufacturer within thirty (30) days after such replacement. All such replaced parts shall become the property of Manufacturer upon their replacement.
15.2 Claims. Warranty claims hereunder must be made promptly and in writing; must recite the nature and details of the claim, the date the cause of the claim was first observed and the serial number of the Product concerned; and must be received by Manufacturer no later than thirty (30) days after the expiration of the warranty period.
15.3 Exclusions from Warranty. Manufacturer shall have no obligations under the warranty set forth in Section 15.1 in the event that:
(a) Repair or replacement of the Products was necessitated in whole or in part by catastrophe or due to damage or mishandling by Distributor, its customer or any other party who is not an employee or representative of Manufacturer;
(b) The Product or part was maintained or repaired other than by an authorized employee or representative of Manufacturer or Distributor or was modified in any manner without the prior written consent of Manufacturer; or
(c) The Product or part was properly used or maintained in accordance with Manufacturer’s then applicable operating and/or maintenance manuals, whether by Distributor or its customers.
15.4 No Warranty on Software. All software provided to Distributor hereunder is on an “as is” basis without warranty of any kind.
16 LIMITATION OF LIABILITY. EXCEPT AS EXPRESSLY PROVIDED IN ARTICLE 15, THE MANUFACTURER MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND TO DISTRIBUTOR, CUSTOMERS AND/OR SUBDISTRIBUTORS, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY WARRANTY OF NON-INFRINGEMENT. FURTHERMORE, UNDER NO CIRCUMSTANCES SHALL MANUFACTURER BE RESPONSIBLE FOR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY ACTS OR OMISSIONS ASSOCIATED THEREWITH OR RELATING TO THE USE OF ANY ITEMS OR SERVICES FURNISHED, WHETHER SUCH CLAIM IS BASED ON BREACH OF WARRANTY, CONTRACT, TORT OR OTHER LEGAL THEORY AND REGARDLESS OF THE CAUSES OF SUCH LOSS OR DAMAGES OR WHETHER ANY OTHER REMEDY PROVIDED HEREIN FAILS, NOR SHALL MANUFACTURER’S TOTAL LIABILITY EXCEED AN AMOUNT EQUAL TO THE TOTAL AMOUNT PAID BY THE DISTRIBUTOR TO THE MANUFACTURER FOR PRODUCTS PURSUANT TO THIS AGREEMENT.
17 Additional Indemnification. Each party shall indemnify and hold the other party harmless, including their directors, officers, employees, agents, subsidiaries, affiliates, subcontractors and assignees, or any of them, from and against any Liability occasioned by, arising out of, resulting from, caused by, or directly or indirectly relating to this Agreement, for which the other party is neither wholly nor contributorily responsible.
18 Miscellaneous.
18.1 Force Majeure. Manufacturer will exercise every reasonable effort to meet any quoted or agreed upon shipment date or dates. Manufacturer shall not, however, be liable for any loss or damage, including consequential damages, due to delays or failure to ship resulting from any cause beyond its reasonable control, such as, but not limited to, securing necessary export licenses, compliance with government laws or regulations, acts of God, acts or omissions of the Distributor, acts of civil or military authority, judicial action, defaults of vendors, labor disputes, failure or delays in transportation, embargoes, wars or riots, the inability of Manufacturer or its vendors to secure adequate material, labor or facilities, or the inability of carriers to make scheduled deliveries.
18.2 No Waiver of Rights. A failure by one of the parties to this Agreement to assert its rights for or upon any breach of this Agreement shall not be deemed a waiver of such rights, nor shall any such waiver be implied from the acceptance of any payment. No waiver in writing by one of the parties hereto, with respect to any right, shall extend to or affect any subsequent breach, either of like or different kind, or impair any right consequent thereon.
18.3 Agreement. This Agreement constitutes the entire Agreement between the Manufacturer and the Distributor and supersedes any prior or contemporaneous agreements between Manufacturer and Distributor whether written or oral.
18.4 Amendments. No agreement varying or extending the terms of this Agreement shall be binding on either party unless covered by an addendum signed by an authorized representative of each Party.
18.5 Non-Assignable. This Agreement and/or the rights granted hereunder shall not be assignable or transferable by Distributor, directly or indirectly, in whole or in part without the written consent of Manufacturer.
18.6 Notices and Other Information. All notices given pursuant to this Agreement shall be in the English language. Notices shall be deemed effective on the day they are dispatched by certified air mail or express courier requiring signature on receipt to the other party at such party’s Notice Address.
18.7 Severability of Provisions. The invalidity under applicable law, regulations, or other governmental restrictions or prohibitions of any provisions of this Agreement shall not affect the validity of any other provisions of this Agreement, and in the event that any provision hereof be determined to be invalid or otherwise illegal, this Agreement shall remain effective and shall be construed in accordance with its terms as if the invalid or illegal provision were not contained herein.
18.8 Effective Date. This Agreement shall become effective as of the Effective Date upon acceptance in writing by the Manufacturer at its office in [place of acceptance], U.S.A.
18.9 Gender. As used herein, the singular shall include the plural and the plural may refer to only the singular. The use of any gender or the terms “it” or “its” shall be applicable to all genders, corporations, partnerships, and other entities.
18.10 No Third-Party Benefit. Nothing herein, expressed or implied, is intended or shall be construed to confer upon or give to any person, firm, or corporation, other than the parties hereto, any remedy or claim by reason of this Agreement or any term, covenant or condition hereof, all of which shall be for the sole and exclusive benefit of the parties hereto.
18.11 Survival. All provisions which would naturally survive the expiration or termination of this Agreement shall survive the expiration or termination of this Agreement.
18.12 Headings. The headings as to contents of particular sections are inserted only for convenience and shall not be construed as part of this Agreement or as a limitation on the scope of any terms or provisions of this Agreement.
18.13 Publicity. This Agreement is confidential and neither party shall issue press releases or engage in other types of publicity of any nature dealing with the commercial and legal details of this Agreement without the other party’s prior written approval shall not be unreasonably withheld.
Approval of such disclosure shall be deemed to be given to the extent such disclosure is required to comply with governmental rules, regulations or other governmental requirements. In such event, the disclosing party shall furnish a copy of such disclosure to the other party.
18.14 Counterparts. This Agreement may be executed in two or more counterparts in the English language, and each such counterpart shall be deemed an original hereof. In case of any conflict between the English version and any translated version of this Agreement, the English version shall govern. All correspondence, documents and communications of any kinds made under this Agreement shall be made in the English language.

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals the day and year shown below.

[NAME OF DISTRIBUTOR:]

BY:

NAME: [NAME]

TITLE: [TITLE]

[MANUFACTURER:]

BY:

NAME: [NAME]

TITLE: [TITLE]

EXHIBIT A

DEFINITIONS

“Annual Minimum Purchase Requirement” shall mean the amount set forth in Item 7(b) of the Term Sheet.

“Agreement” shall mean the agreement between the Manufacturer and Distributor and all the exhibits attached hereto.

“Customers” shall mean the actual or potential end-users of the Products who purchase the Products in the Territory.

“Delivery” shall mean the time when Products are made available to Distributor at Manufacturer's facility in the U.S.A. or abroad, as determined by Manufacturer.

“Discount” shall mean the discount specified in Item 5 of the Term Sheet.

“Dispute” shall mean any claim or controversy arising out of this Agreement or the breach, termination or validity thereof involving either of the parties or its affiliates and the officers, directors and employees thereof, including any claims or controversies which could otherwise be submitted to a court of competent jurisdiction.

“Distributor” shall mean the party identified in the first paragraph of the Agreement above as the Distributor.

“Distributor's Agents” shall mean Distributor's shareholders, officers, directors and employees who act on behalf of the Distributor with respect to the Agreement.

“Effective Date” shall mean the date specified in Item 1 of the Term Sheet, or if later, the date on which Distributor has received all necessary government approvals in the Territory for the performance of its obligations hereunder and for the remittance of funds to Manufacturer.

“Expiration Date” shall mean the date specified in Item 2 of the Term Sheet.

“Liability” shall mean any and all liability, losses, damage, expenses (including attorneys' fees), costs, claims, suits, demands, actions, causes of action, proceedings, judgments, assessments, and deficiencies and charges.

“Manufacturer” shall mean [name of manufacturer], a [state of incorporation], U.S.A. corporation.

“Notice Address” shall be the address of each party as set forth in Item 8 of the Term Sheet to which the other party shall send notice.

“Order Address” shall be the address for placing orders as set forth in Item 7 of the Term Sheet, or such other address as designated in writing by the Manufacturer.

“Product” or “Products” shall mean the products manufactured by Manufacturer under its Trademarks which Manufacturer shall make available to Distributor from time to time for distribution in accordance with the terms and conditions of the Agreement, including, but not limited to, those products described in Item 4 of the Term Sheet. The Products specifically exclude, without limitation, [products excluded].

“Proprietary Information” shall mean any and all information, whether or not in tangible form, of a confidential, proprietary or secret nature belonging to the Manufacturer or licensed by it, other than Trade Secrets, which is material to the Manufacturer and not generally known by the public, including all information annotated by a legend, stamp or other written identification as “Proprietary Information”.

“Purchase Orders” shall mean the written purchase orders used by the Distributor to submit orders for Products to the Manufacturer.

“Quarter” shall mean each three month period beginning on January 1, April 1, July 1 and October 1, during the term of the Agreement, provided that the first Quarter shall consist of the period from the Effective Date to the sooner of March 31, June 30, September 30, or December 31.

“Quarterly Minimum Purchase Requirement” shall be that amount set forth in Item 6(a) of the Term Sheet.

“Suggested International Wholesale Prices” shall mean those prices for the Products as set forth in Exhibit C.

“Term Sheet” shall mean the Term Sheet attached hereto as Exhibit B.

“Territory” shall mean the territory specified in Item 3 of the Term Sheet.

“Trade Secret” shall mean any and all information, whether or not in tangible form, belonging to the Manufacturer or licensed by it which derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use and which is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Without limiting the generality of the foregoing, Trade Secrets shall include but are not limited to marketing plans, price lists, product costs, product strategies, technical or nontechnical data, formulae, techniques, drawings, designs, processes, financial data, financial plans, product plans, marketing plans, advertising plans, lists of actual or potential customers or suppliers, and related items.

“Trademark” shall mean any and all trademarks, logo types and trade names of Manufacturer including, but not limited to, those names listed in Item 11 of the Term Sheet as the same may be modified by Manufacturer from time to time to include additional trademarks, logo types and trade names.

EXHIBIT B

TERM SHEET

1. EFFECTIVE DATE OF AGREEMENT:

2. EXPIRATION DATE OF AGREEMENT:

3. TERRITORY OF THE DISTRIBUTOR:

4. PRODUCTS:

5. DISCOUNT: Percent (____%) off the Suggested International Wholesale Prices.

6. MINIMUM PURCHASE REQUIREMENT:

A. QUARTERLY B. ANNUAL

Year 1: U.S. $ X 4 = $

Year 2: U.S. $ X 4 = $

Year 3: U.S. $ X 4 = $

Year 4: U.S. $ X 4 = $

Year 5: U.S. $ X 4 = $

7. ADDRESS FOR PLACEMENT OF ORDERS:

8. SERVICE OF NOTICE:

Manufacturer's Address:

Attn:

Distributor's Address:

Attn:

9. TRADEMARKS:

EXHIBIT C

SUGGESTED INTERNATIONAL WHOLESALE PRICES

LA/754042.9

DRAFT 03/30/03