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International Contracting Update

March 31, 2011

One consequence of today’s economic realignment is that a growing number of companies are seeking to increase their share of international business. This comes at a time when the regulators’ eyes are especially vigilant towards overseas trading relationships.

In combination, a result of these developments is that international contracting and commercial practices are coming under the executive spotlight. They want to ensure that contract terms are competitive, that contract structures are efficient and that review and approval processes are thorough, without causing long delays.

The result is that IACCM, as the only international association for contracting and commercial issues, has seen a flurry of requests for help in areas such as:

  • models for the design and structure of international / global agreements, including signature requirements and methods
  • internal review and approval procedures for multi-country contracts
  • due diligence methods for validating / monitoring overseas suppliers, sub-contractors, sales agents and distributors
  • software tools and systems that can assist in managing the efficiency and speed of international contracting
  • skills and knowledge development for staff involved in international contracts, especially in respect of emerging markets
  • ‘best practices’ in handling requirements for local content and offf-set agreements

These requests have come from all parts of the world. As competition for international business increases, it seems that no one is immune from the need to improve. For companies that have a long history of international trade, there is a recognition that the rules have changed due to new market entrants and new regulation. For the new entrants, there is a sudden urgency in grasping the methods and practices that will enable them to better understand and manage risks and to improve their competitive position.

This has led to a number of new research initiatives and training programs, and there is every sign that demand will increase in the months ahead. Winning business internationally has become a business imperative – and it would be smart for contracts and commercial groups to be sure they are prepared.


One Comment
  1. RKK permalink

    International contracting is probably one of the most complex mechanisms but also one where large multi-nationals like IBM have lots of experience in. Having said that putting an international contract in place is as much an understanding of the clients business environments as it is of the laws, scope, delivery mechanisms, etc. Unfortunately the world is not set up in a consistent manner and that creates the exciting world of international contracting.

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