Cross-border transactions between competing countries are highly complex affairs. However, when the industries in question involve safety and regulatory compliance, the assistance of legal experts in international trade is indispensable. When conducting business in an industrial environment where the protection of persons and property is relevant to business, many situations and circumstances arise that require legal interpretation and advice. Industrial applications and particularly those that relate to products that are flameproof/explosion-proof or other such industries require a solid lawyer who can provide suitable guidance for the international aspect of the industry and the different standards and legal principles across jurisdictions. The following cases demonstrate how an international business lawyer could affect the outcome of situations involving flameproof/explosion-proof operation, manufacture and sales of industrial products.
As an example of how an international business lawyer could assist in cross-border flameproof/explosion-proof, safety equipment and other industrial products, consider the following case. A Canadian company manufacturing photocopiers for the oil and gas sector in Canada faced a dilemma when its attempt to sell products to India was rejected by customs officers. Ultimately it was revealed that the Indian Bureau of Standards had failed to confirm the validity of Canada’s ISO-certified photocopiers for flammable environments. The affected company was forced to allow its Indian lawyer to conduct an expensive investigation into the standards of flammability as certification is experienced differently in different countries. The matter was later settled when the Indian company involved agreed to accept the ISO certification on the basis that the Canadian company enter into a product liability agreement.
International business lawyers can assist by – Obtain confirmation of appropriate certification standards; -Drafting contracts with appropriate legal language to confirm that injurious events have not taken place due to defective products; -Investigating where the problem lies (i.e. do different jurisdictions apply different standards or has the certification in question been received in accordance with standards set out in the contract?); -Arranging for local certification for imported products where the country does not recognize certification from overseas; -Obtaining certification according to import country standards; -Negotiating with the buyer/orer to change supplier to one that possesses the proper certification.
An American importer of equipment to be used in other countries that makes use of flamproof/explosion-proof equipment citing issues related to regulations for certification (i.e. failure to recognize certifications based on industries in different countries), the necessity for carrying high stakes inventory and origin authentication, and pricing resulted in losses and interference from the local competition. The reason was the inability to verify that the products being sold were certified, raised safety and liability issues regarding non-compliant products and the seller was untraceable.
In this case: Again, international business lawyers could assist by – Conducting investigations to determine the root of the problem; – Drafting contracts with appropriate language to shift the risk of certification and authorized representation onto parties that are adequately licensed and/or certified for import; – Undertaking appraisals to make determinations regarding proper values for imports; – Providing audit services to properly determine value and help to expediate border release. The foreign buyer or seller may refuse to sign a contract or refuse to accept the certification standards of the importer/exporter.
