Essay Sample on Relevant Aspects of U.S. Law for Business

Introduction

The fictional company's name is RTU Corporation. The company intends to increase its reach internationally and has constricted the pursuit to Mexico. The company should be aware of the U.S. law while pursuing business in Mexico. Additionally, it is important for the firm to evaluate the legal implications of expanding the business to Mexico. Ethical implications are also crucial in making this business resolution. The memo also recognizes that some U.S firms have managed to adhere to the United States laws and are making progress in the country. The memo evaluates the potential compliance concerns with respect to facets of law and morals that are explicit to the U.S and doing business in Mexico.

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Relevant Aspects of U.S. Law That the Firm Should Be Aware of Doing Business Globally

Principle of Comity

Comity is the courtesy one jurisdiction provides by enforcing the laws of another jurisdiction. In the U.S. law, comity may refer to the Privileges and Immunities Clause in Article Four of the U.S. Constitution. This clause stipulates that the residents of each state shall be permitted to all Privileges and Immunities of residents in the multiple states (Gordon & Williams, 2002). The guidelines in this law ensure that there is no conflict between the U.S. and any overseas country. RTU Corporation should, therefore, respect the principle of comity as stipulated in the U.S. and Mexican laws.

Employment Laws

The American employment laws are applicable to American workers and employers in overseas nations. It is important to understand that the law is not applicable to non-American citizens who are working in Mexico. RTU Corporation should comply with the local jurisdiction available in Mexico.

Legal Implications of Moving the Business to Mexico

The U.S. government has encouraged U.S. companies to pursue business activities in the Mexican market. Mexico has extremely low expenditures on labor, and its domestic firms have been denationalized over the last five years. This move has provided a range of new investment prospects. Any firm that has interests in moving to Mexico requires to evaluate some of the lawful repercussions of doing business in the country (Ajami & Khambata, 2006). Mexico has established a more open free-market economy and is also a member of the North American Free Trade Agreement (NAFTA) which is the biggest free trade area in the world. This has attracted numerous investments from the United States and other parts of the world, especially in automotive, biochemical and food processing businesses (Clarke, 2017).

In spite of these merits, Mexico has huge disparities between the poor and the wealthy. Some sectors of various industries are still underdeveloped, and numerous drug trafficking issues together with violence are extremely ingrained in Mexican society. The country provides a low-cost location because of its close access to the U.S. market but stands on a separating line between underdevelopment and development in a fiscal sense and its situation between the U.S. and Central America (DiMatteo, 2016).

RTU Corporation understands these implications and will be cautious while doing business in this country. The company should adhere to the guidelines set by the U.S. government regarding investment in foreign countries. The company should also understand that failure to respect the laws may lead to revocation of its licenses to operate in an international market. Although the labor costs are low in the country, the company should not exploit employees in the country to avoid fines from the U.S. government.

Ethical Repercussions in This Business Decision

Human Rights

Human rights moral implications can occur in some nations when fundamental human rights are not appreciated. For example, numerous rights are taken for granted in Mexico. Rights such as rights of association, rights of speech and rights of movement are universally approved. However, in Mexico, the government has not guaranteed the rights as stipulated by the constitution. Incidences of abuse of rights and lawlessness are reported in the country (Winer, 1999). RTU Corporation has reported some of human rights abuse but not measures have been put in place to curb the problems.

RTU corporation needs to make an informed decision concerning doing business in Mexico. The company has a responsibility for ensuring that human rights are respected. The law enforcement officers in the country have failed to ensure that companies attain the freedom needed to conduct business in the country.

Corruption

Corruption is one of the greatest problems that a country or any society can experience. Corruption continues to be experienced in most countries across the world. Multinational corporations have attained economic advantages by making payments to government agents. The United States enacted the Foreign Corruption Act to fight bribery from multinational corporations in the U.S. doing business internationally (Fatehi, 2008). Additionally, the U.S. approved the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions that compels countries to make corruption practices of overseas administration representatives an unlawful offense.

RTU Corporation should ensure that its officials have integrity while doing business in Mexico. Incidences of bribery are reported in most multinational companies doing business in Mexico. This affects the companies' credibility in the country. To avoid this, the U.S. government ensures that any company reported to have engaged in criminal activities is fined a huge amount of money.

How Other Domestic Firms Have Managed To Adhere To the U.S. Laws

Mexico and the United States do not share the same legal and political frameworks. According to Bohlman and Dundas (1999), the key is to comprehend that once the firm is in an overseas market, the workers have to stand by the laws and rules in Mexico. The domestic firms have managed to adhere to the U.S. laws by staying away from distress by not commanding U.S. principles on the local workers. It is also important to note that these firms are conscious that they ought not to permit practices within their foreign divisions, stakeholder's offices or license that would be regarded as unlawful or unethical in the U.S.

Numerous U.S. laws control global business undertakings of American corporations. To ensure there is a success for any international business, there is a need to remain updated with the compliance platform to deal with legal concerns that could occur from these operations. Two classes of law govern U.S. companies. The first class involves laws that are applicable in a local context entail antitrust, employment and economic-intelligence laws. The second class involves laws that are targeted exactly to the worldwide business like the Foreign Corrupt Practices of 1977 (FCPA). The firms address the adherence concerns through extensive risk evaluations of the firm's susceptibility to illegal conduct in conjunction with the firm's internal review (Bohlman & Dundas, 1999). The firms also address adherence to laws by educating the workers about the adherence risks integrated with each partnership, secondary, and the state.

The firms have also managed to comply with the U.S laws by establishing effective submission processes and guidelines to avert, identify and penalize delinquency. The acts are also intended to prevent compliance issues from occurring in future. Companies like Coca Cola have established and utilized a submission team. The team's job is to facilitate certification in adherence at all times and also safeguarding the rights of the employees. If there are any cases to be found, there are addressed immediately. Several firms are also permitting public display of the profit/loss statements of their firms (Miller, 2016). Since they are taking larger risks of inspection by opening their business internationally, they have made adherence precedence in their business practices. Firms working in Mexico have detailed employment designed to safeguard employee rights under local labor laws. In cases of a conflict with the employee, the host country (Mexico) supersede the contract terms. The company may also be fined for violations.

Conclusion

Legal implications are experienced in daily business practices. A firm intending to invest in Mexico is not exempted from legal implications. RTU Corporation should understand that various laws govern business activities in overseas countries. A law such as the principle of comity and employment laws is crucial in undertaking business in another country. Mexico is an open market economy and provides businesses with an opportunity to grow. However, corruption and abuse of human rights are rampant in the country. To ensure that there is effective compliance with U.S laws, a company like RTU should respect the employment laws and follow the local laws in the country.

References

Ajami, R. A., & Khambata, D. (2006). International Business: Theory and practice. Armonk, N.Y: M.E. Sharpe.

Bohlman, H. M., & Dundas, M. J. (1999). The legal, ethical, and international environment of business. Cincinnati, Ohio: West.

Clarke, T. (2017). International Corporate Governance: A Comparative Approach. Taylor & Francis.

DiMatteo, L.A. (2016). International Business Law and the Legal Environment: A Transactional Approach. Taylor & Francis.

Fatehi, K. (2008). Managing internationally: Succeeding in a culturally diverse world (9781412961530). Sage Pub.

Gordon, G., & Williams, T. (2002). Doing business in Mexico: A practical guide. New York: Best Business Books.

Miller, R.L. (2016). Business Law Today: The Essentials. South-Western.

Winer, K. (1999). Compliance programs take on new importance in a global economy. Retrieved from: https://apps.americanbar.org/buslaw/blt/9-2overseas.html on date 28/1/2019