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REWIND: International Business News #21

Posted on April 27th, 2012 | Author: admin

  • New manufacturing technologies such as 3-D printing and advances in materials science will completely revolutionize manufacturing in coming years.  As manufacturing becomes more and more dependent on intellectual property, it will be interesting to see if international treaties regarding intellectual property rights protections will keep pace.
  • The United States Supreme Court recently heard oral argument on Kiobel v. Royal Dutch Petroleum Company.  In this case, the Supreme Court will be asked to resolve whether the Alien Tort Act allows foreign plaintiffs to bring suit against U.S. companies for certain human rights violations.  Interestingly, oral arguments also delved into broader issues of whether U.S. Courts can hear abuse cases when the alleged wrongdoing occurred outside of the United States.
  • The recent Michael Kors IPO provides an interesting case study on whether it makes sense for international companies to incorporate abroad to avoid certain U.S. taxes.  Even though about 95% of its sales is in the U.S. and Canada, Michael Kors incorporated in the British Virgin Islands.  If Michael Kors had been incorporated in the U.S., it would be subject to U.S. taxes for income earned worldwide, as opposed to merely taxes earned within the U.S.  Morgan Stanley estimates that U.S. companies have about $1.375 trillion dollars in cash sitting overseas due to these U.S. taxation rules.
  • A former real estate executive at Morgan Stanley, handling Morgan’s China real estate operations, pled guilty this week to violating federal anti-corruption laws.  His prosecution is part of a larger crackdown by the U.S. government on citizens who commit fraud and bribery abroad.  Around the same time, the New York Times exposed the investigation of Wal-Mart de Mexico for paying millions of dollars in bribes to help advance its expansion in a crucial market.