Business Without Borders – International Business and Tax Planning Blog

Archive for August, 2010

• Doing business in India might be different on September 1, 2010, because the more than one million BlackBerry users there may be without messaging and e-mail.  The Indian government is threatening to ask mobile phone operators to block those BlackBerry services until Canadian-based Research in Motion (RIM) provides access to data transmitted over the handset.  India joins the United Arab Emirates (UAE) - the first country to suggest blocking the BlackBerry  services, Lebanon, Algeria, Saudi Arabia and Kuwait in citing ”national security risks” for their demands.
  UPDATE: Two government officials have stated that RIM has agreed to give government agencies access to messenger services by September 1. 
• Japanese whisky distillers eye the U.S. market (whiskey is spelled without the superfluous “e” in Japan) … albeit a slow and steady expansion.  According to the U.S. Distilled Spirits Council, total whiskey sales in the United States was 46.5 million cases in 2009 .  In 2009, Suntory, a major Japanese whisky producer, launched the Hibiki brand in Europe and the United States with sales of 6,000 cases and hopes to sell 8,000 cases of Hibiki, a whisky blend, and 31,000 cases of Yamazaki, single malt whiskies, this year.
• Meanwhile, Northwest U.S. wineries in Washington and Oregon are eyeing Hong Kong and mainland China with a similar slow and steady strategy.    The elimination of an 80 percent excise tax in Hong Kong in 2008 will likely make any strategy easier to implement.  Wine imports to Hong Kong reached a record $491 million last year.  The U.S. accounts for $40 million, or 8 percent of those imports, making  Hong Kong the fourth-largest export market for U.S. wines.  Most of the wine, 90%, though, came from California.
• While we are on the subject of wine, Middle East winemakers strive for recognition, as they, too, are looking to expansion, targeting international buyers.  Omar Zumot, an organic wine producer near the Syrian border, relies on specially cultivated sheep to ward off pests, their saliva serving as an anti-bacterial and sterilizing trunks, and nitrates produced by fish from a nearby pond to fertilize his vineyard.
• Lastly, a couple of interesting articles on labor in Cuba, Japan, Bangladesh, and globally, here and here.  Why not?

New Internal Revenue Service (IRS) proposal would require business taxpayers to report “uncertain tax positions” (UTP).

On June 1, 2010, the comment period ended for the new IRS Draft Schedule UTP and Draft Instructions.  What is this schedule and where does it apply?

Read the rest of this entry »

Summer is almost over, but there is some time left to get in a little more Summer reading.  We offer you two interviews of Jeanne Hamburg on intellectual property issues.  In the June issue of Women’s National Book Association-New York City Chapter Newsletter, she is interviewed by Rhona Whitty about the agency model, a new distribution model in publishing.  “Your Domain: Trademark And Copyright Issues In The Online Marketplace,” was featured in the August issue of The Metropolitan Corporate Counsel.  In the interview, Jeanne discussed trademark and copyright issues in the online setting, including cybersquatting, domain name ownership, website development and “click through” license agreements.  Good reading!

• Outsourcing to India Draws Western Lawyers.  The legal outsourcing industry has taken off in India as money-conscious U.S. firms are hiring lawyers in India to do tasks such as document review and contract management. Now, to make this process more successful, Indian legal outsourcing firms are actively recruiting lawyers from western countries, such as the U.S. and the U.K. Surprisingly, these lawyers are considering the move since revenue from legal outsourcing firms in India is expected to reach $440 million this year. Outsourcing remains a contentious issue in the U.S. as jobs at home are lost, but experts say the outsourcing of legal jobs that can be done at a more cost-effective price with the potential for western lawyers in India remains an option for U.S. firms and lawyers.
• India Seeks Harsher Punishment for Bhopal Gas-Leak Accused.  Officials from the Indian government have filed a petition to seek harsher punishments against U.S.-owned Union Carbide Corp., in its negligence of the 1984 gas leak in Bhopal, India. Amnesty International calculated that the tragedy killed a combined 22,000 people, while Union Carbide estimated only 3,800 deaths. In the 1996 ruling, the charges of culpable homicide were weakened and Union Carbide local unit officials faced only 2 years in prison. Michigan-based Dow Chemical Co., acquired Union Carbide in 1999 and the Indian government said it will pursue the liability case to gain further compensation for victims of the leak. However, a Union Carbide spokesman said the company is not subject to Indian jurisdiction since the operation of the Bhopal plant was under Union Carbide India Ltd.
• How to Sell Online in China.  China’s online consumer market is a relatively untapped market that holds great potential for multinational companies who understand the Chinese online population. Chinese use the internet to communicate via instant messaging more than any other country, and this is not only limited to the young population, but to all reaches of the Chinese population. For multinational companies to be successful in the Chinese online market, they must accurately target the right consumers, while still maintaining consumer loyalty. Though many domestic firms have taken advantage of these opportunities, there is still time for foreign entrants. China’s online population is projected to reach 650 million in five years, which leaves sufficient time for foreign companies to find ways to successfully tap into the market.
• CRC Wins U.K. Ruling on Lehman Client Money-Accounts.  New York-based CRC Credit Fund Ltd., Lehman Brothers Inc., and Lehman Brothers Finance AG can have claims to billions of dollars that weren’t put in separate accounts with the Lehman Brothers Holdings Inc.’s U.K. unit, when Lehman Brother International Europe collapsed in 2008. CRC and Lehman Brothers appealed the ruling that clients whose money was not properly separated into “client money” accounts would be treated as unprotected creditors in the UK insolvency case; leaving clients with only a fraction of the money they were owed. This is a huge step in investor protection, which now means clients whose money was not properly handled by firms, can still be protected, and in this case, included in the pool of accounts that had been separated. Lehman is seeking $3 billion and CRC is seeking $76 million in money that should have been separated, a significant amount for those clients hurt in the 2008 collapse.
• Google Will Sell Brand Names as Keywords in Europe. Google has announced it will change its search policy to allow third-party advertisers to buy trademarked terms. Prior to the March ruling by the European Court of Justice, brands such as Louis Vuitton, could file trademark complaints against Google to prevent third-party advertisers from appearing in results alongside their trademarked names. Though brand owners argued that to protect brand value they should be the only ones allowed to use their trademarked terms, the court ruled that Google had respected trademark law. The companies now will be shown in Google results alongside third-party advertisers selling their products. Though the decision benefits the basis of the internet giant’s revenue, AdWords, it comes as a blow to trademarked brand owners.

^{Compiled and summarized by Aylin S. Khor}

• Korea Firm Courts Harrah’s for Cambodia Angkor Casino.  Korean development firm, Intercity Group, has invited Harrah’s Entertainment Inc. and MGM Resorts International, two of the world’s largest casino owners, to the site of the new Cambodia Angkor Casino. Intercity’s vice president, James Cho, said he would like to present Harrah’s and MGM with management operations deals. The casino will offer an alternative to the more established centers, such as those in Singapore and Macau. Still, however, the current economic situation may make it difficult for Intercity to find the funds for such a large scale project, which could make Harrah’s and MGM hesitant to strike a deal.
• Europe to Investigate Anti-Trust Complaints Over IBM Mainframes.  The European Commission has launched an investigation into IBM’s potential abuse of its dominance in the computer mainframe industry. The commission is going to assess whether IBM shut out competition from other mainframe producers or service providers by illegally tying sales of its mainframe operating systems to its mainframe hardware. A second investigation, which the commission has stated it will also set up, will examine whether IBM has delayed the sale of spare parts to block potential rivals from performing mainframe maintenance. With many complaints like these coming from small rival firms, IBM could face potential charges and serious fines.
• GM, Eclipsed at Home, Soars to Top in China.  While the U.S.’s once prosperous General Motors is slowly declining at home, in China, its sales and profits are rapidly rising. GM entered China a mere 13 years ago and already the country’s sales account for a quarter of GM’s total global sales. Part of GM’s success in China stems from the fact that its products do not carry the skepticism found among American consumers. Chinese consumers take the car for face value, and due to the psychology of the Chinese car market which has arisen from years of scarcity, buyers are not inclined to haggle the price. As the company’s sales plummet at home, GM says it will continue to take advantage of China’s potential and projects to sell 3 million automobiles annually in China by 2015.
• Pace to Buy U.S. Broadband Company.  U.K.-based Pace PLC, the world’s largest developer of cable and satellite television boxes, is set to buy U.S. broadband technology firm, 2Wire. Pace representatives say this deal will expand its customer reach into the telecom market. Since 2Wire already has established relationships with the top North American telecom providers, namely AT&T, it will make it easier for Pace to address and meet the U.S. operator requirements. The buy will cost Pace around $475 million, but also give them the ability to move into the global telecommunications market.
• U.K. Girds for New U.S. Fast Food Invasion.  Taco Bell, Chipotle, and Ruby Tuesdays, food chains well-known to just about every American are making the move across the pond into the U.K.  The U.K. food market is an attractive place for U.S. food chains since the “eating-out” culture is so established. Since the food services industry in the U.K. is so dynamic, diners readily welcome diversity and options. More specifically, the U.K. market is lacking in Mexican food options, an advantage for Taco Bell and Chipotle. Though the U.K. food market fell by 1.4% in 2009, it is predicted to grow by 4% this year.  U.S. food chains are looking to contribute to the growth.

^{Compiled and summarized by Aylin S. Khor}