20 Minutes, Medium PROBLEM 15.7B
FCPA VIOLATIONS
Under the amended FCPA, activities a and d are illegal because both payments are intended to
help company P obtain business it may not otherwise have been awarded. Activities b and c
would be considered facilitating payments to speed up governmental service b, or to encourage
Education.
40 Minutes, Medium CASE 15.1
BRISTOW, INC.
SOLUTIONS TO CRITICAL THINKING CASES
There are many factors that must be taken into account when faced with multiple globalization
strategy choices. These factors include (but are not limited to) control issues, feasibility issues,
cost, and fit between a particular choice and the firm’s long-term global strategy. If Bristow
chooses to simply export to Country Y to satisfy the needs of Kale, it will maintain strict control
over production and quality, but will face high shipping costs and longer delivery times. If
Bristow chooses to export, information on more efficient shipping options would be of greater
importance.
To maintain a high level of control and reduce shipping times, Bristow may opt to purchase the
local company and operate it as a wholly-owned subsidiary. This option would likely involve a
substantial outlay of capital to update the facility’s existing technology. Bristow would need to
do an extensive analysis of this option to determine if the return on the investment in the
If issues of control are not of primary importance, Bristow should consider licensing its
technology to a domestic firm or establishing a joint venture with Kale. A licensing agreement
would allow Kale to be supplied with Bristow products on a timely basis, but without a
substantial investment of capital and with less risk. Before entering into such an agreement,
Education.
50 Minutes, Medium CASE 15.2
INTERNATIONA
L
A
CCOUNTING STANDARD
S
www.iosco.org
Student opinions will vary on the topic. Interesting background information can be located by
browsing the IOSCO web site at:
Education.
40 Minutes, Medium CASE 15.3
U.S. FOREIGN TRADE ZONES
INTERNET
a.
b.
Assembled Re
p
acka
g
ed Cleaned
Tested Destro
y
ed Stored
c.
1. The website describes the creation of FTZs as follows:
The National Association of Foreign Trade Zones home page is located at:
http://www.naftz.org
Answers to parts a through c can be located by clicking on the issues tab.
Applications for foreign trade zones are submitted to the Foreign Trade Zones Board
Staff within the Import Administration of the Department of Commerce. The
application submitted to the Board must provide extensive information on the proposed
Legally, a Foreign Trade Zone (FTZ) is an area within the United States that the
Government considers legally outside of the U.S. Customs territory. Certain types of
The answers will differ depending on the state. The activities that can occur in a foreign
trade zone include the following:
The answers to the re
q
uest for other information are below.
Education.
2.
ATOFINA Petrochemicals, Inc. BMW Manufacturing Corp.
Caterpillar, Inc. Conair Corporation
Conoco, Inc. Eastman Kodak
General Motors Chrysler
General Electric Company JVC America, Inc.
Kawasaki Motors Manufacturing Corp. Motiva Enterprises LLC
Northrop Grumman The Premcor Refining Group
Tosco Refining Company Wyeth Nutritionals, Inc.
Xerox Corporation Over 500 companies
3. The following benefits are listed on the Web site:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Merchandise may be exported and returned to an FTZ without duty payment.
No duty is owed on in-bound, zone-to-zone transfer of FTZ merchandise.
Spare parts may be stored, returned, or destroyed without duty payment.
Delays in Customs clearances and duty drawback are eliminated.
Duties are not owed on labor, overhead, or profit attributed to FTZ production
operations.
Quality control inspections can identify substandard goods to be destroyed or
returned without duty payment.
The following companies are some of the companies using FTZs:
Deferral of customs duties: Customs duties are paid only when and if merchandise
is transferred into U.S. Customs and Border Protection territory.
Reduction of duties: FTZ users can pay the duty rate on component material or
merchandise produced from component material, whichever is lower.
Duties are reduced or eliminated on materials subject to defect, damage,
obsolescence, waste or scrap.
Customs duties are never paid on merchandise exported from a zone.
30 Minutes, Medium CASE 15.
4
INTERNATIONAL CORPORATE GOVERNANCE
ETHICS, FRAUD & CORPORATE GOVERNANCE
Many countries around the world have different standards for disclosure, timeliness of
reporting, and accuracy. Importantly, only recently has corporate governance become an
important issue for international companies. The OECD Web site says:
Corporate governance deals with the rights and the responsibilities of a company’s
management, its board, shareholders and various stakeholders. How well companies
are run affects market confidence as well as company performance. Good corporate
Education.