In 1918, the United States enacted a foreign tax credit (FTC) system for taxing foreign-source business income earned by multinational corporations (MNCs). (1) This system, known as “worldwide” taxation is said to implement “capital export neutrality” by neutralizing a citizen’s decision between investing domestically or abroad. (2) About half of the Organization for Economic Co-operation (OECD) countries have adopted a similar approach. (3) However, as foreign trade agreements and the complexity of U.S. tax treatment continue to increase, a “territorial” taxation system, as implemented by the other half of OECD countries, might be worth considering in the United States. (4)
This article will 1) define some of the underlying principles behind international tax policies, 2) suggest a proposal for a tax-exemption system, 3) explain how the proposal solves problems under the current system, and finally 4) attempt to rationalize potential criticisms surrounding … Read the rest
The Middle East with a fast growing population of over 300 million, abundant supply of natural resources, and governmental efforts aimed at privatizing and expanding country industries has cultivated this region into a growing, lucrative market for U.S. companies. Middle Eastern countries have undertaken globalization efforts to facilitate foreign direct investment and encourage trade with other regions. The economic importance of the Middle East along with these globalization efforts suggests that any U.S. company wishing to become a global business leader should have a presence in this Region.
This article provides an overview as to the state of U.S. investment and business in the Middle East, while detailing some of the industry areas and cultural issues that U.S. companies should consider prior to investing in the Region. The six member states of the Gulf Cooperation Council (GCC), Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, and the United … Read the rest
III. IS THERE A CORPORATE DUTY TO HEDGE?
In light of the preceding section it is clear that when derivatives are properly and cautiously used they create benefits to a busines. Current US case law is unclear in establishing whether or not directors of a corporation should consider at least the use of derivatives to hedge a material market risk, in other words, whether the fiduciary duties owned by directors to the shareholders of a corporation impose an implicit obligation to hedge.
The conclusion reached by the Court of Appeals of Indiana in Brane v. Roth offers important clues as to the scope of the use of derivatives in companies dealing with agricultural commodities.
A. The Point of Departure
In Brane v. Roth the Court of Appeals of Indiana was confronted with a derivative lawsuit involving a dispute between a group of shareholders … Read the rest
The Alien Tort Claim Act (ATCA) has been a source of controversy over the past years. Originally, it was used as a way to govern relations between nations, but now it is being utilized by human rights activists in order to hold corporations responsible for acts performed by their subsidiaries which infringe upon the rights of people in foreign nations in which the company resides.  The Act reads: “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” 
This article will discuss the history of corporate liability under the ATCA. It will then follow by spotlighting a case that almost set precedent in terms of corporate liability under the ATCA. It will conclude with a discussion of the effects of utilizing the … Read the rest
Antitrust law is usually understood as applying to companies and their products. The incentives for assuring competition among companies have not limited the function of antitrust law. Antitrust law has developed its application to beyond those players in the market. Now, lawyers and bar associations also have to watch out for antitrust regulation. The American Bar Association has been under pressure to lighten up several of its rules in order to allow multidisciplinary firms to evolve.
The application of antitrust law to lawyers will be discussed in this article. Part I discusses if the definition of “trade” applies to professional services for the purpose of antitrust regulation. Is the discussion of regulation related to horizontal agreements or legislation? If it is legislation (for example, laws establishing bar associations), it is out of the scope of antitrust law. … Read the rest
Someone might view the economic crisis times as the best period to broaden one’s business horizons and invest into a new market. The fast growing markets such as China, Brazil, India and to some extent Russia are waiting for new investors. Russia, having more than 140 million inhabitants, i.e. potential consumers, and abundant natural resources remains mostly neglected by investors in many business fields. For decades Russian market was viewed as not a place for those faint-of-heart. Now the growth of political stability and positive developments in legislation make the investment less risky and more attractive. Nevertheless, the still existing differences between local and internationally recognized legislative frameworks and court practices make investors wonder if there is any possibility to opt out of the Russian legal rules.
This article will explore the reasons behind Russian corporate norms that explain the inflexibility of current legislation and court practice and … Read the rest
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Mail carts are pushed down the
halls of Congress passing offices with televisions showing images of protestors
at a rally. Phones in those
congressional offices ring steadily from calls of individuals voicing their
opinions over the issue du jour. But are
the authors of the letters, the protestors on the televisions or the people on
the other end of the telephone conversations concerned citizens or are they paid
by an Astroturf organization – pawns of big business trying to pull the covers
over the eyes of Congress?
An Astroturf organization is a
“group that lends a veneer of moral legitimacy to a cause” which “allows a
group to present its position as … Read the rest
While larger firms and corporations may handle rising health insurance premiums, small businesses seem to be crushed under the weight of rising health costs for their employees.  The inability to obtain affordable, quality health coverage falls more on the shoulders of individuals and small businesses, which may be the primary reason President Obama and Congress have focused their health care reform proposals on benefits for individuals and small businesses. Statistics indicate nearly 46 million Americans have no health insurance coverage at all while nearly 25 million are underinsured.  Also, in 2007 total cost for health care reached $2.4 trillion in the U.S. or the equivalent of $7,900 per person, and the U.S. spends 52% more than Norway, which follows the US as the next most costly nation in regard to health care spending per person.  This article provides an overview of the main … Read the rest
In 1992, a group of shareholders brought a derivative lawsuit against the directors of a grain elevator cooperative for their failure to properly hedge the risk associated with the grain industry. Finding for the plaintiffs, the Court of Appeals of Indiana held: “we find that there was probative evidence that [cooperative’s] losses were due to a failure to hedge.” 
Inexplicably the cited holding has not being subject to detailed analysis by legal scholars. Having passed almost eighteen years since it was decided, the case now faces the risk of being forgotten without ever being the subject of legal discussion.
This article seeks at determining whether, under the basis of this holding, there should be a corporate duty for directors to hedge. In other words, should directors, at the very least, consider the use of derivatives to hedge the risks of a corporation?
To answer this question, this … Read the rest