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In The News

January 22, 2013

There are always so many interesting items in the news that are relevant to the world of contracts and commercial. I thought for today’s blog I would share just three that I spotted this morning.

First, The Economist highlights the growing squeeze on bribery and corruption. It hails the progress being made by the G20 group of countries and, while there are still wide disparities in enforcement, there are definite steps in the right direction. It goes wider than Government; consumer groups are increasingly vocal in exposing corruption around the world, with active web sites in countries such as Uganda, India, Liberia and Indonesia. Investors are also more inclined to scrutinize companies for anti-corruption compliance and the US FCPA and UK Bribery Act hold out the potential for large penalties. Industry networks, such as the Extractive Industries Transparency Initiative (with 70 members) are joining the push-back.

Second, there is the continued anger of citizens in a growing number of countries over corporate tax avoidance. The days of off-shore havens and preferential tax rates may be numbered, limiting the value of complex arrangements around cross-border management fees and royalties. These arrangements have also caused significant inflexibility in the way many contracts are structured, so these shifts could have real impact on how we do business.

Third, Europe has at last made some progress to simplify its patent system. Gaining an EU wide patent has until now been an expensive and time-consuming exercise, with the need to register in each country with a local language application. Registering a patent in Europe cost on average nearly $50,000, against less than $2,000 in the US. It still costs close to $6,000, but that is at least more realistic. Meanwhile, China overtook the US last year to become the country where the greatest number of patents was filed during 2012. The IP battle shows no signs of lessening….



One Comment
  1. Neal Unitt-Jones permalink

    Anti-corruption is the biggest change for good I have seen during my career. In the old days, we used to just say “that’s the cost of doing business” and assumed that “the seniors” in our business knew what they were doing. Those were also the days (in the UK) where a pub was full of smoke, and TV celebs took advantages that they shouldn’t have. Now, we can’t imagine passive-smoking on a Friday night or that 70’s attitudes to untouchable fame persist; similarly, the giving-of-Rolexes seems thoroughly archaic.

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