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Legal issues

Compliance with government sanctions and regulations

Exporters should be aware that Australia maintains United Nations Security Council sanctions and bilateral sanctions in respect of a number of countries. These sanctions require Australian organisations and individuals to comply with a range of measures and, in general, also apply extraterritorially to Australian nationals overseas.

Sanctions may include export and import restrictions, prohibitions of technical assistance, training and financing, travel sanctions, and financial sanctions against specific persons and entities.

For information about United Nations sanctions currently in force, please see: www.dfat.gov.au/un/unsc_sanctions/index.html.

For information about the operation of the defence and strategic goods export control regime, please see: www.defence.gov.au/strategy/deco.

Help your business take off overseas

If you are ready to start exporting or have recently launched your new website it is time to think about how you are going to protect your intellectual property (IP) overseas.

You may already have IP protection in Australia but you must remember that Australian IP registration only provides protection in Australia. Once your Australian registration is filed, the clock starts ticking and you need to think about filing your foreign applications within 12 months (for patents) and six months (for trade marks and designs).

As soon as you have identified the foreign markets you wish to trade in, you need to decide whether to file separate IP applications in those countries directly or make use of international agreements, which allow you to seek protection in several countries at once.

Protecting your IP overseas can seem overwhelming, and that is why IP Australia has developed a suite of fact sheets called IP Passport. The fact sheets outline foreign IP regimes and focus on some of the IP issues and challenges which may be faced by Australia exporters.

The extensive suite covers 11 countries including - Canada, China, Korea, European Union, India, Indonesia, Japan, New Zealand, Singapore, Thailand and the United States of America. There are also two general fact sheets on exporting and importing which help businesses think about how their IP can be protected and what needs to be considered when importing or exporting.

Visit www.ipaustralia.gov.au for more information.

Dealings with terrorists - what the Australian business community should know

The Government has passed laws making it a criminal offence to hold assets that are owned or controlled by terrorist organisations or individuals, or to make assets available to them, punishable by up to five years imprisonment. Go to the Department of Foreign Affairs and Trade's Consolidated List to search for individuals and entities listed by the Government for the purposes of terrorist asset freezing.

In addition to the Consolidated List, the Australian Government also maintains a list of groups that are proscribed as terrorist organisations under the Criminal Code. Go to the National Security Australia website to view the Criminal Code list of 'terrorist organisations'. If a group is listed as a 'terrorist organisation' it is an offence to:

  • Direct the activities of the organisation
  • Recruit persons to the organisation
  • Receive training from or provide training to the organisation
  • Receive funds from or make available funds to the organisation
  • Provide support or resources to the organisation

For further information, please see www.dfat.gov.au/trade/exporting.html#ec

Issues which may affect your ability to trade and operate offshore include:

  • Differences between legal systems
  • Question of which laws will apply in disputes
  • Rules of competition
  • Patent registration
  • Extra-territoriality of overseas legislation
  • Product liability

International contracts for the sale of goods can be very complex. This includes specially prepared contracts. It also includes contracts that have ‘standard terms and conditions’ that are often in small print on a standard order form.

Before you negotiate an international sales contract, ask for advice on the legal implications from a professional who specialises in international contracts. This includes information about:

  • Defining key terms (eg. Incoterms 2000), which are the standard trade definitions most commonly used in international contracts)
  • Limiting agreement to the contract
  • Describing the goods
  • Contents of the payment clause
  • The ‘retain property until payment’ clause
  • Trade terms (shipping terms, as with Incoterms 2000)
  • Force majeure
  • Dispute resolution
  • Applicable law and jurisdiction
  • Fees and charges - including what you are responsible for and what your buyer is responsible for

Australian companies need to ensure that they have checked the credentials of overseas partners and buyers. Australian companies also need to be aware that there are scam operations working in some markets and again this emphasises the need to conduct background checks. Before signing or accepting contracts, it is in your interests to seek professional legal advice from legal firms specialising in international work.

Dispute resolution

Austrade does not get involved in commercial disputes between Australian companies and overseas entities. Companies involved in international commercial disputes should seek appropriate legal advice in Australia or overseas. Austrade can provide referrals to legal service providers upon request.

A number of international arbitration commissions exist to facilitate international dispute resolution. Deciding upon which arbitration body best suits your commercial needs is complicated, and requires the balancing of many considerations. Australian companies should seek legal advice when deciding which body to elect as their preferred location for arbitration. The decision of which arbitral body is best suited to resolve a dispute will depend on a combination of convenience, cost and the facts of the particular case.

While the Australian Government supports the use of arbitration as a preferred method of commercial dispute resolution with foreign companies, it does not endorse one arbitration body over another – whether in Australia or overseas.

Information on frauds, scams and dishonest conduct

Below are the details of some dishonest schemes that have been brought to our attention, operating in certain markets. This is information on such schemes, is not offered as advice nor is it a comprehensive list of such schemes. Austrade provides this information to highlight the importance of being aware of such practices and validating the credentials of potential buyers and partners.

Email scams

In the case of emails/letters the author may say they have obtained your address from a mutual friend or Austrade. The author may identify him/herself as the widow/son/daughter/nephew etc of a recently deceased Tribal Chief/President etc who has in their possession a large sum of money (usually US$10 million plus) that they need to get out of the country. The offer is a request for the receiver to advise bank account details to receive 20 per cent of the monies plus the opportunity to help the author invest the rest.

Individuals and companies should not respond to these requests for funds. Some authors will mention Austrade or another organisation as a reference and the receiver should be aware that Austrade is in no way involved in these activities. If you are in doubt of the legitimacy of an email that you have received please contact us at info@austrade.gov.au.

Gift giving scams

The ‘gift giving’ scams that Austrade is aware of have been operating in some parts of China. The scams generally operate as follows:

  • An Australian manufacturer is contacted direct by a potential customer.
  • The customer expresses interest in the product/s on offer and invites the Australian manufacturer to visit the market.
  • The Australian manufacturer does visit the market and meet with the company claiming to be a customer. There are several meetings and dinners and the customer suggests that the Australian manufacturer should pay for these events and also offer gifts as a sign of the new partnership. While in the market the customer promises to order large quantities of product.
  • The manufacturer returns to Australia and follows up with the customer seeking to confirm details of the promised order. The manufacturer does not hear from the customer again and in monetary terms has lost the costs of the travel to the market and gifts provided.
  • Noting the above, Australian entities should actively check and confirm the credentials of customers that have made direct contact.

Please contact info@austrade.gov.au for advice on the services we can provide in this area.

Business registry scam

Austrade has been alerted to a dishonest scheme involving a non existent business registry. The scam operates as follows:

  • Australian company receives a letter encouraging them to register their business information in a publication called Industry and Commerce 2006.
  • The one page letter includes questions about the type of business and contact details. The letter looks professional and is addressed correctly.
  • The letter requests payment of $1200 to be listed in the directory.
  • The return envelope is to an address in Spain.

While this particular example is a scam obviously there are many legitimate business registries in operation. Before responding to requests for inclusion in such directories companies should confirm that both the publishing company and the actual publication exist. Please contact info@austrade.gov.au for advice on the services we can provide in this area.

For further information on scams, visit the Australian Competition and Consumer Commission's website SCAMwatch, which provides information on all types of scams from pyramid selling to Internet scams, and how to avoid and report them to the relevant agencies.

Foreign bribery

Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Austrade specifically denies liability for loss associated with use of this information and the user does so entirely at their own risk.

For more information, please call 13 28 78 or email info@austrade.gov.au.

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