Helping Our Fellow Litigators in Guam

A small group of American attorneys recently flew across the Pacific Ocean to Guam, nearly 6,000 miles west of San Francisco. The American College of Trial Lawyers had been collaborating with an associate justice of Guam’s Supreme Court for nearly a year, laying the groundwork for the trip. On January 17, I joined 10 other Fellows from the College in Hagåtña, the capital city, to stage a three-day trial workshop.

You may be wondering, “Why Guam?” The U.S. Court of Appeals for the Ninth Circuit has jurisdiction over the island, an unincorporated U.S. territory with a population of about 170,000. Guam has its own district court, similar to federal district courts in the U.S. It also has a Supreme Court that serves a similar function as state supreme courts. Continue Reading

Countdown to GDPR Deadline: What Your Organization Should Be Doing to Prepare

In late May, the European Union’s new General Data Protection Regulation (GDPR) takes effect, changing the manner in which companies all over the world – not just those in the EU – store and use Europeans’ personal data. GDPR requires any company that collects personal information of European citizens to comply with its data privacy requirements, including:

  • Keeping all records of all personal data processed.
  • Performing data protection impact assessments in cases of high-risk processing activities.
  • Collecting personal information only through opt-in consent of individuals and deleting an individual’s personal data upon request.
  • Notifying individuals within 72 hours of a data security breach.

In order for U.S.-based companies to adequately prepare for GDPR compliance – and avoid massive fines – it is critical to conduct a detailed assessment of the extent to which your organization collects personal data and ensure that proper safeguards are in place throughout all divisions of your organization. Continue Reading

Economic Boom and Government Policies Make Now a Good Time to Invest in the U.S.

For multinational companies that have been eyeing initial U.S. investments or considering expansion of their existing presence in the U.S., a variety of economic and policy developments make this an ideal time to consider executing on those investment plans.

Most importantly, the U.S. economy has been accelerating and is poised to continue its strong growth during 2018. The unemployment rate has slid under pre-recession levels and, on an annual basis, finished last year at the lowest mark since 2000. In addition, the broadest measure of economic output – gross domestic product (GDP) – has been trending around 3 percent for the past few quarters. Manufacturers, distributors, and companies across industries are benefiting from this rising growth. Continue Reading

Digging Into the Details of New FCPA Guidance From the U.S. Justice Department

Over the last 10 years, 143 companies have paid a combined $10.9 billion to resolve Foreign Corrupt Practices Act cases.

That staggering price tag shows the U.S. Department of Justice’s willingness to go after alleged bribery of foreign officials, shoddy bookkeeping, and fraud. In recent years, the DOJ has beefed up its enforcement unit focused on the Foreign Corrupt Practices Act (FCPA), and officials in the Trump administration have made clear that enforcement remains a priority. If you think about FCPA enforcement as a carrot-and-stick approach, the stick isn’t going anywhere.

As for the carrot, the DOJ recently announced changes that give companies even more benefits for self-disclosing violations. The new FCPA corporate enforcement policy expands on a pilot program that had offered mitigation credit for self-disclosures. Continue Reading

Challenges for Establishing Businesses South of the Border

Mexico is already a large player in the world economy, and its economic might is growing. Many manufacturers in Europe and the U.S. already have or are considering operations there, especially original equipment manufacturers (OEMs) and others in the automotive industry. But what do companies need to know to create a successful subsidiary south of the U.S. border?

There are a variety of challenges that manufacturers and other businesses face when they are starting operations in Mexico, Central America, and South America. I recently detailed some of those challenges at Clemson University during the 2017 International Forum for German and Spanish in the Professions. I shared some insights I’ve learned over the years while working on international business transactions and economic development. Below are some highlights. Continue Reading

Know Before You Go: Complying With U.S. Export Regulations When Traveling Abroad

When you take your laptop, phone, and other electronic devices across the U.S. border, there are a variety of laws and regulations that come into play. We have created this flyer for international business travelers. It summarizes U.S. laws and regulations and includes tips to ensure compliance. Continue Reading

International Business Leaders Talk Chinese Investment, Automotive Trends, and Millennial Employees at Global Carolina Connections

Global Carolina Connections hosted its fifth annual global business conference on August 9 at the College of Charleston in Charleston, South Carolina. The formation of the Global Carolina Connections Conference is a direct result of feedback that my co-founders and I heard from international business executives in the region seeking to learn more about the resources available to global companies who have already located in the Carolinas and want to continue to expand here. Global Carolina Connections is a chance to gather with hundreds of business and economic development leaders to engage in valuable discussions regarding the unique needs facing U.S. subsidiaries of internationally owned companies. C-level executives share their companies’ challenges and how they’re overcoming them, and economic development leaders and international business service providers detail relevant trends in foreign direct investment (FDI).

We’ve hosted the conference in several cities. Charleston hosted one of the best yet, serving as the perfect venue for a sincere discussion about foreign direct investment and how to support further growth in this area. The Charleston region was a natural fit as it’s one of the most important cities for international trade and investment along the East Coast. Panels focused on banking and finance, major trends among international automotive suppliers in the region, the Trump administration’s potential effect on trans-Atlantic business, and best practices for recruiting and retaining employees, particularly how millennial employees have changed the landscape for all employers in the market. Continue Reading

Brexit’s Impact on the U.S. Capital Markets

You may have heard by now that the U.K. plans to leave the European Union at some point in the next few years. Since the British voted back on June 23, 2016, there has been no shortage of learned analysis/rank speculation about Brexit’s future impact on the U.K. and EU economies and financial markets. Opinions range from dire to blasé, with reality likely to fall (as it is wont) somewhere in the middle.

One surprising consequence, however, may be Brexit’s impact on U.S. capital markets. In a recent Heard on the Street column in The Wall Street Journal, Paul J. Davies theorizes from London that post-Brexit EU companies may have no choice but to tap the U.S. capital markets to make up for less convenient access to U.K. investors. It’s an intriguing, and believable, hypothesis.

Mr. Davies notes that much of the capital used to fund business expansion comes from savings, mostly in the form of pension funds, insurance companies and investment funds. He cites statistics provided by the Financial Stability Board, Investment Company Institute, European Central Bank and OECD showing that eurozone savings total less than 150% of its total GDP, as compared to more than 250% of GDP in the U.K. and 240% of GDP in the U.S. He notes further that there currently is no single set of capital markets laws and standards within the EU, making it hard to raise capital simultaneously in several eurozone countries. Therefore, frequent or large eurozone issuers often turn to the U.K.’s massive capital markets. Post-Brexit, that may not be feasible. As a result, Mr. Davies says, EU companies may be far more inclined to access the U.S. capital markets, even if that means setting up overseas subsidiaries and satisfying U.S. reporting and other regulatory standards. Continue Reading

Managing International Investigations: European Conceptions of Attorney-Client Privilege and Their Effect on International Internal Investigations

Update on 5/12: Jones Day’s complaint has been thrown out by a court in Munich. That decision reinforces the importance of examining how attorney-client privilege is construed in different foreign jurisdictions.

On March 15, 2017, German prosecutors raided the Munich offices of Jones Day as part of their own investigation into the Volkswagen (“VW”) diesel emissions scandal and VW’s luxury car unit, Audi. The U.S.-based law firm has represented VW since 2015, when it began conducting a comprehensive internal investigation to identify those responsible for the scandal. Although VW has long insisted that no one on its management board is implicated, Jones Day’s final report ultimately led VW to plead guilty to fraud, obstruction and other charges. As a result, VW has incurred more than $22 billion in fines and settlements. Although the results of Jones Day’s investigation were provided to VW and the U.S. Department of Justice, the report was never publicly released. In light of the March 15 raid, it appears that the German authorities now want access to this (and other) protected information.

In the United States, the work product and attorney-client privileges are sacrosanct. Therefore, subject to limited exceptions, the government is not usually privy to communications between a lawyer and his/her client. However, the concept of attorney-client privilege in Germany is far more fluid and contentious. In fact, there is no general principle under German law that recognizes the attorney-client privilege. Instead, the German courts are left to interpret provisions of the civil and criminal codes of procedure along with the Federal Lawyers’ Act, often with varying results. For example, the Regional Court (Landgericht) of Hamburg issued a landmark decision in 2010 approving the seizure of internal investigation documents from a law firm (decision 608 Qs 18/10). However, in 2015, the Braunschweig Regional Court came to the opposite conclusion, holding that documents prepared by external lawyers in an internal investigation were protected because they were prepared in the context of a defense (decision 6 Qs 116/15).  (For commentary, click here). Here, the German authorities argue that to the extent there is a privilege, it does not apply because Jones Day was hired to conduct a limited internal investigation and was “not functioning as the company’s legal representative.”

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A Transactional Overview of Foreign Direct Investment Into the United States

Stock image from LocationUSAFor foreign companies considering market expansion and investment in the United States, there are two general avenues. First, companies consider achieving these goals by a merger with or acquisition of a domestic business entity. Second, they consider opening a representative sales office or manufacturing facility in the United States. This overview will focus on the latter alternative, specifically a transactional overview of the process for investing in a manufacturing facility.

Goals: A couple of common factors drive such an investment decision. One is to shorten logistical supply paths for significant customers with existing operations in the United States. Another is to hedge against fluctuations in raw material pricing, currency, taxes, and trade duties.

Teaming: Most companies designate internal project teams comprised of members experienced in production, logistics, and finance. For larger projects, companies should also include additional members experienced in human resource management, government relations, taxation, and real estate/construction management.

Definition of Project Scope: Once the internal team is staffed, companies then work to define the facility design and location. During this stage, many companies tap either internal resources familiar with this process in the United States or engage engineering and site consultants to develop the criteria for the project. The end work product for this stage is a summary of the internal business case and the external summary of the jobs to be created and investment required to establish and grow the facility over the first five years. Continue Reading