International trade always raises different issues and has to consider international laws and regulations carefully to perform legally and efficiently. It is essential for the parties involved in cross-nation commerce to examine all of the trade conditions and requirements and investigate the laws concerning the productions that they aim to sell. The purpose of this paper is to focus on the specific case of tobacco exports to Taiquat and analyze the legal and ethical environment of the business operations related to the case.
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It is essential to remember that each tobacco company aiming to export tobacco to other nations has to comply with the U.S. Food and Drug Administration standards. The authorities have established two major criteria for the manufacturing of tobacco, and it is integral for the businesses to follow them (The U.S. Food and Drug Administration, 2015). The company that wants to bring American tobacco to the Taiquat population has faced a situation where the government representatives require the payout.
Later it turned out that those officials do not have any salaries, and it is the only way of earning their living. One can argue that initially, the money asked by the official figures of Taiquat represented the bribe and seemed to be an act of corruption. Consequently, in this situation, it is required to turn to the guide to the U.S. Foreign Corrupt Practices Act issued by the Department of Justice and Securities and Exchange Commission.
Firstly, one should understand what corruption is and how to determine whether a specific action would be considered corrupt or not. The FCPA was issued in 1977 because the spread of commerce to the international levels has increased the number of bribes accepted by foreign officials from American companies (The Criminal Division, 2012). One of the options for this tobacco company is to consider the demands of Taiquat officials as corporate bribery and not to accept the terms. It will result in the inability to bring American tobacco products to that area. According to the FCPA, the bribery of foreign representatives “affects the very stability of overseas business” (The Criminal Division, 2012, p. 1). Keeping that in mind, paying the money to a foreign official can be considered as a corruption act, which is unethical and illegal.
However, at this point, it is crucial to take into consideration all of the circumstances of the situation. The fact that Taiquat officials have no salaries implies that the money from international companies who are willing to sell their products in this region is the only payment that the officials get. Thus, the company can consider that money to be not bribery, but rather assistance instead of the salary. Therefore, paying it would not be unethical, but it will be considered as an official cost of business operations.
There are other aspects to consider for the operations of the tobacco company to be fully legal and ethical. It is important to remember the principle of comity, “by which one nation defers to the laws of another” (Miller & Hollowell, 2019, p. 549). The U.S. Department of Justice has issued the Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions.
The recommendations suggest that it is crucial for the global community to have similar corruption standards and to be able to identify corporate bribery. Considering this, one might claim that the laws of Taiquat can have parallel principles of corruption. As far as the government representatives do not get official salaries implies that the payments from international companies for introducing new products will be considered as legal payments.
In conclusion, keeping in mind all of the sides of the current situation, it would not be considered illegal or unethical for the tobacco company to make a payment to Taiquat officials. The fee would represent an official cost for the company to introduce its business into foreign territory. However, if further requests of the payments take place, the company should carefully consider the legality of the issue in compliance with international laws.
Miller, R. L. R., & Hollowell, W. E. (2019). Business law: text & exercises. Australia: Cengage.
The Criminal Division of the U.S. Department of Justice and the Enforcement Division of the U.S. Securities and Exchange Commission. (2012). A resource guide to the U.S. foreign corrupt practices act. November 14, 2012. Washington, DC: U.S. Government Printing Office.
The U.S. Food and Drug Administration. (2015). United States tobacco product exports that do not conform to tobacco product standards. July 20, 2015. Washington, DC: U.S. Government Printing Office.