MARKETING BRIEF: DOING BUSINESS IN SOUTH AMERICA. Hints and Hurdles - Some legal issues

Transcription

1 MARKETING BRIEF: DOING BUSINESS IN SOUTH AMERICA Hints and Hurdles - Some legal issues Andrew Hudson 23 February 2013

2 Hunt & Hunt profile A full service commercial law firm, with over 80 years experience in providing legal and advisory services in the corporate, financial services and property sectors Across our legal network we have over 50 partners With offices in almost every Australian State and Territory capital city, we offer clients depth and breadth of resources. Specialised expertise in the Asia Pacific region, including an office in Shanghai We provide clients with a global reach, being the sole Australian member firm of Interlaw, a network of over 65 law firms in more than 75 countries 2

3 3 Andrew Hudson Profile Past Chair, Customs and International Transactions Committee of the Law Council of Australia Past Chair of the International Law Section of the Law Institute of Victoria Convenor Interlaw Customs, Trade and Logistics Team CBFCA retained counsel Member of SEAC of Victorian Government Director of Export Council of Australia ( or ( Past Director Australian Services Round Table ( Website - ahudson@hunthunt.com.au Blog at Twitter at AndrewHudsonLaw Register for updates

4 4 Topics for Today 1. Who s who in South America 2. Any Free Trade action? 3. Controls on exports to the region 4. Anti-Bribery and corruption issues 5. Contract issues

5 5 Who s who in South America 1

6 6 Who s who in South America Most sources include 12 Sovereign States and others in South America Sovereign States: Argentina Bolivia Brazil Chile Columbia Ecuador Guyana Paraguay Peru Suriname Uruguay Venezuela

7 7 Who s who in the South America Non-Sovereign Territories Falkland Islands South Georgia and the South Sandwich Islands Other areas French Guiana and overseas region of France Many major trading partners but also many risks Remember a major trading block and Brazil a big WTO player.

8 8 On Australia s FTA radar? 2

9 9 On the FTA radar? Australia-Chile Free Trade Agreement ( ACI-FTA ) Entered into force on 6 March 2009 All tariffs to be eliminated by 2015 Major Australian exports to Chile include coal, civil engineering equipment, specialised machinery and vehicles Idea that the FTA will support other new opportunities such as mining and energy technologies and services, IT, infrastructure agriculture and food and beverage Care as to claims of origin must meet required rules of origin and have required certificate of origin from exporter

10 On the FTA radar? Trans-Pacific Partnership Agreement To build on existing Agreement including Brunei Darussalam, Chile, New Zealand and Singapore which extend into force in 2006 To include Australia, Canada, Malaysia, Mexico, Peru, the USA and Vietnam Seen as potential connecting rod between Latin America and Asia and with the proposed Regional Comprehensive Economic Partnership ( RCEP ) could set pathway to a free trade area of the Asia-Pacific Negotiation advanced US wants completion in 2013 Potential problem Australia v the US on ISDS 10

11 Controls on exports to the region 3 11

12 Controls on exports to the region Need to be aware of existing prohibited export regulations Permits can be obtained Further, a number of goods are also on the Defence and Strategic Goods List ( DSGL ) and subject to special export restrictions or prohibitions when intended for export to, or end use in countries subject to U.N. Security Council Sanctions requires export approval from DECO and separate permit from DFAT. Relevantly includes: Certain terrorist organisations Iran Iraq Lebanon 12

13 Controls on exports to the region Australia also has Autonomous Sanctions under our legislation which require DECO approval. Current relevant Sanctions for Syria. Embargo on all goods listed in the DGSL, and arms and related material not included in the DGSL, including equipment for internal repression. Export without permits are an offence. Also need to be aware of changes over time to include: Dual-use items Exports by technology See the Defence Trade Controls Act 2012 Dual-use goods controlled Also regulation of intangible transfers of related information (internet, ) 13

14 Controls on exports to the region New Military End-Use Law Minster for Defence has a new power to prohibit export of non-regulated goods that may contribute to a military end-use that may prejudice Australia s defence, security or international relations Military end-use if are to be for use in operations, exercises or other activities conducted by an armed force or group whether part of armed forces or a foreign country Examples of armed groups include military or defence forces, police, coast guard, militant or insurgent groups, private security companies or terrorise/criminal organisations Minister can issue notice to prohibit export Up to 10 years imprisonment or 2,500 penalty units or both 14

15 Controls on exports to the region Care that other countries (especially US and EU) have own sanctions regimes which could have impact on Australian exporters. US has extensive sanctions allowing fines, extradition and criminal sanctions for dealing with Syria and Iran Extends to where know goods to be re-exported to those countries Need comprehensive advice here and overseas 15

16 16 Anti-Bribery and corruption issues 4

17 Anti-Bribery and corruption issues Not just Australian law but could be caught by local laws in South America or laws of: US (FCPA) UK (Anti-Bribery Act) which have a very broad reach Are a number of issues in a number of countries Need to be aware that Australia proposing to change laws so that Trade Facilitation defence to be removed Need to be rigorous in review Transparency International s Corruption Perception Index suggests high levels of corruption (Bolivia 118, Ecuador 120 out of 182) 17

18 18 Contract issues 5

19 Issues for Australian Traders Respect limits for cultural behaviour Each South American country has it s own legal framework system and court process Differences in approach to Corporate Governance Start with own contract to set form Watch for DAFF requirements and Illegal Logging Prohibition Act for imports Care in choice of governing law Dispute resolution provisions Mediation Arbitration (and International Rules) 19

20 Issues for Australian Traders Watch for Brazilian AD regime Sovereign risk Exposure to large damages claims (Chevron in Ecuador) Need for rigorous due diligence, proper documentation and practices and ongoing monitoring 20

21 Questions