Precision World Wide Case Study Essay Example

Precision World Wide Case Study Essay Precision World Wide Inc. wants to determine whether they should introduce a new Japanese prototype to their steel ring. This new ring which is made out of plastic is tougher and less costly to produce. By producing these plastic rings, Precision worldwide would go out of business if some form of action is not taken. One big issue is the level of steel rings that they currently have in their inventory. These rings cannot be sold for any value including scrap. The reason for having so much inventory is the result of having to order the highly specialized steel in large amounts so that a mill would be willing to handle the order. As far as this issue, Thorborg needs to realize that the cost of the steel rings in inventory is a sunk cost. With sunk costs, the cost becomes irrelevant because it cannot vary with the decision to produce plastic rings. A lot of times, managers are too scared or not willing to give up on a decision because they have invested so much into it. They need evaluate the decision based on what is a better more profitable product to produce regardless of what was already a sunk cost. Thorborg, also needs to properly handle the inventory and be very strategic in the way he sells the steel rings considering that he will have 15,100 finished rings would be left on hand by mid-September when the plastic rings roll out. Thorborg would be better off if he sold as many steel rings as possible prior to the production of the plastic rings. One strategy he can implement would be to price discriminate and sell to low value consumers at a discounted rate which will increase sales of the steel rings. He can talk to Henk which is the sales manager to come up with drastic price reductions and reduce steel ring inventory. Once all inventory is exhausted, produce all plastic rings. Another strategy would be to sell steel rings until the plastic rings are ready for the market, then sell the steel rings at a discount and sell plastic rings at the same time. We will write a custom essay sample on Precision World Wide Case Study specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Precision World Wide Case Study specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Precision World Wide Case Study specifically for you FOR ONLY $16.38 $13.9/page Hire Writer With this option, you must emphasize to the market that plastic rings are tougher which reflects on the price. You can also just sell steel rings and do not consider selling plastic rings at all. This option does not prepare the company for long term financial success because the profit margins are a lot higher for plastic rings. Also, you can just produce plastic rings and scrap all of you inventory. This option would not consider the opportunity cost of the excess steel rings inventory.

How Does Reedsy Select its Publishing Professionals

How Does Reedsy Select its Publishing Professionals How Does Reedsy Select its Publishing Professionals? "How do you select the editors and designers featured on your marketplace?" This is one of the questions we get most often at Reedsy, probably because we can’t help bragging (loudly and often) about the quality of our publishing professionals.The curation of our marketplace is what makes us a truly incomparable player in the industry. Over 15,000 publishing professionals (editors, designers, illustrators, publicists, marketers and translators) have applied to be featured on our site. Currently, only 1,100 have been accepted.Reviewing thousands of profilesSo how do people apply, exactly? It's pretty simple: professionals only need to sign up through our landing page and indicate during the onboarding process that they want to register as "professionals". Once signed up, we prompt them to fill in a Reedsy profile - a page that compiles all their professional information, from work experience to portfolio items to work philosophy.These profiles are public, which means Reedsy pro fessionals can use them as websites or landing pages for all professional activity. More importantly, profiles form the core of our quality control process.First, we make sure professionals who are serious about being listed on Reedsy complete their profile as exhaustively as possible. Our curation team reviews all new, fully finished profiles once a week, at which point they separate the ones who merit inclusion on our marketplace from the rest. If you visit our service pages, you will see a few examples of professionals who have been accepted, and will be able to click through to their public profiles.Our selection criteriaSo how do we determine who to activate? Naturally, the decision is ultimately somewhat subjective as it is made by actual people (not algorithms), but our curation team uses a list of tangible criteria to keep the decision as objective as possible. Here are a few criteria all our professionals meet:be a full-time professional in the field you are applying for (e diting, design, publicity, translation, marketing, ghostwriting)demonstrate experience on at least 10 published books that are well-reviewed on Amazon Goodreadshave experience in every "genre" listed in the profilehave 5+ years experience in your professionThe Reedsy marketplace is competitive, which means professionals meeting all the above criteria are not automatically accepted. These are "minimum criteria" that need to be supplemented with one or more of the following:significant experience working at a renowned traditional publishing companysignificant experience working as a freelance contractor for a renowned traditional publishing companyhistory of high-quality work with a bestselling author, or on a bestselling bookreceipt of a distinguished award in your fieldSome of our editors have worked on books by authors such as Ken Follett, Isabel Allende, George R.R. Martin, Hugh Howey or J.K. Rowling. Because of this, we tend to become more and more selective as our marketplace k eeps growing, and our current acceptance rate is at 1%. That said, we're always on the lookout for more professionals who meet our criteria.Naturally, we do our best to ensure that all information entered by the professionals on their profiles is accurate, and will often verify our professionals' portfolios by searching books' "acknowledgements" sections for mentions of their editors and cover artists.A constant quality controlSo, once I’m in, I’m in forever? Well, not quite. Our curation work doesn’t stop once the professional has been accepted based on the information provided in their profile. We closely monitor our professionals’ work through Reedsy and regularly survey our authors at the end of their collaborations.On rare occasions, we've had to â€Å"deactivate† one of our professionals because of unprofessional behavior, but we have not hesitated to do so - nor will we in the future. Reedsy acts as a third-party guarantor for authors in th eir collaborations on the platform, so it is our duty to keep monitoring our professionals’ work on the marketplace.Our team also keeps an eye on the marketplace to ensure we have sufficient professionals listed and available in each genre. It is by successfully juggling supply and demand that we have been able to build a safe haven for authors and professionals alike - and that’s what Reedsy is all about.

American Value Essay Example | Topics and Well Written Essays - 500 words

American Value - Essay Example These are sets of values that we believe we, as a society, should, and often do, live by. Interestingly enough, even our entertainment industry propagates and furthers those values. In the movie, The Shawshank Redemption, also there were certain â€Å"American values.† The movie is based on a Stephen King novella by the name of Rita Hayworth and Shawshank Redemption. It revolves around the friendship of two inmates at the Shawshank State Penitentiary, Andy and Red. Andy is a banker convicted of murdering his wife and her lover, though he always maintains his innocence. Red is known to smuggle contraband in the penitentiary, and he gets Andy a rock hammer and a poster of Rita Hayworth. The jail warden uses Andy’s skills as a banker to launder money the former makes through kickbacks and selling prison labor cheaply. When a fellow inmate, Tommy, tells Andy that he knows of another penitentiary’s inmate who had confessed to killing Andy’s wife and her lover, Andy takes the information to the Warden. However, the Warden is scared that his fraud will be revealed in case of Andy’s release, therefore, he has Tommy killed. Later, Andy escapes and exposes the Warden as a result of which the Warden kills himself. Red, upon his parole, goes to Mexico, where Andy has escaped to, and reunites with his friend. The movie touches upon the concept of justice, a value we Americans hold highly.

Internet Tools for Dirt Bikes Essay Example | Topics and Well Written Essays - 250 words

Internet Tools for Dirt Bikes - Essay Example Since Dirt Bikes already offers Internet access to every employee who uses a desktop computer, it would be prudent to develop private network by utilizing the present network connections. Intranet would thus be a viable alternative. Other internet tools I would recommend for the company are Virtual Private Network (VPN) and Voice over Internet Protocol (VoIP). The table below summarizes the benefits of the recommended internet tools (Bias 52): Internet tools Department Benefits Intranet Sales and Marketing †¢ Private †¢ Secure †¢ Protected by firewall †¢ Prevents unauthorized access of information †¢ Easy access of information †¢ Improved sales through convenient tracking †¢ Higher productivity †¢ Reduced costs Human Resource †¢ Extra security †¢ Easy-to-navigate environment †¢ Easy accessibility †¢ Access rights †¢ Interactive interface †¢ Less time spent on searching information †¢ Replaces cumbersome manu als †¢ Saves time and paper Manufacturing and Production †¢ Easy consolidation of data from many sources †¢ Increased speed of access †¢ Intranet offers centralized manufacturing and publishing of data †¢ Fosters collaboration between manufacturing and other functional groups †¢ Easy identification of product problems †¢ Improved inventory control †¢ Easy implementation of design changes †¢ Reduced cost †¢ Enhanced productivity

Regimes of Recognition and Enforcement of Judgments

Regimes of Recognition and Enforcement of Judgments A comparison of the similarities and differences of the respective regimes of recognition and enforcement of judgments under Council Regulation 44/2001 with those provided by the English Common Law. As a Member State of the European Union, the United Kingdom is subject to two regimes of recognition and enforcement of judgments. One is the domestic system that has developed under the English common law, while the other has been imposed upon the English legal system by the European Council, through Regulation 44/2001. These two regimes are similar in many ways, although there also significant differences between them. The Council Regulation acknowledges that in the pursuit of a community in which free movement of persons is ensured, there needs to be ‘measures relating to judicial cooperation in civil matters which are necessary for the sound operation of the internal market.’ Furthermore, it expressly recognizes that judicial differences between the national rules of member states governing jurisdiction and recognition of judgments ‘hamper the sound operation of the internal market’. The Regulation seeks to establish the free movement of judgments in civil and commercial matters, and it can therefore be seen as a harmonizing measure. It replaced the Brussels Convention on jurisdiction. The Regulation is based upon the principle that there should be a high level of predictability in the area of judicial enforcement and recognition. This can be seen as in-keeping with the general aims of the Community as set out in the earlier Treaties. Article 32 of the Regulation defines ‘judgment’ as ‘any judgment given by a court or tribunal of a member state, whatever the judgment may be called, including a decree, order, decision or writ of execution†¦Ã¢â‚¬â„¢ This deals with any semantic difficulties of interpretation throughout the Member States, and ensures that all judgments that should properly be described as judgments are so. The Regulation goes on to state that a judgment in one Member State will be recognized, without the need for any special procedure, in other Member States. This can be seen as differing to some extent from the common law regime in England, under which a specific treaty with the country in which the original judgment was obtained is required in order for that judgment to be enforced. Such was the result of the Brussels and Legano Conventions, which the Regulation has sought to amend. If this is not in existence, the jurisdiction of an English court will depend upon where the process was served upon the defendant. At common law, there is a distinction between service upon a defendant within the jurisdiction, and service upon a defendant outside the jurisdiction. Where the defendant is outside the jurisdiction, service upon such a defendant requires the permission of the court (under the Civil Procedure Rules Part 6). There are a number of other significant factors to which attention must be paid under the English common law relating to recognition of judgments. These factors include the nationality of the court which gave judgment (as was mentioned above relating to the question of whether a treaty exists with that country); the subject matter of the action (that is, whether it is an action in personam or in rem; a distinction which the Regulation also makes); as well as the nature of the order made by the court outside of the jurisdiction. The regime under the common law makes provision for the ‘registration’ of judgments, particularly of those from the Commonwealth and other Western European countries (under the Administration of Justice Act 1920, s9(1)). Once registered, a judgment has the same force and effect as if the judgment had originally been obtained from the registering court on the day of registration. Furthermore, foreign judgments can be registered under the Foreign Ju dgments (Reciprocal Enforcement) Act 1933. The effect of this is the same as registered judgments under the AJA; namely that the judgment obtains the force and effect it would have if granted in the registering court. These provisions, then, require a foreign judgment to be registered in the UK in order for it to be enforceable and recoverable on. This is considerably more protracted and complex than under the European regime brought in by Regulation 44/2001. This is more straightforward, although of course more limited. While a judgment obtained in a court of a Member State will be applicable throughout the Community, and actionable upon, this extends only to the other Member States as opposed to under British law, whereby the judgment of a court of any nationality will be recognized and enforced, so long as it is registered in accordance with the statutory provisions. Further principles have developed under the common law in England regarding what judgments will be enforceable. It is established that the judgment in personam of a court of ‘competent jurisdiction’ will be enforceable in England provided that it is for a definite sum of money, and it is final and conclusive. These conditions add little to the statutory provisions other than a requisite degree of certainty. This can be seen to differ from the Regulation which stipulates that even a judgment for a ‘periodic payment by way of penalty’ will be enforceable but only if the amount has been finally determined. There is no requirement, then, under Article 49, for the payment to be final and conclusive. There are, then, certain important differences between the two regimes on recognition and enforcement of judgments to which the UK is subject. Despite this, however, the Regulation sought to harmonise the laws relating to enforcement to promote the free movement of judgments within the Community. It has achieved this without infringing too much on the existing English regime which maintains it applicability to judgments from courts of nationalities outside the Community.

My Semester in France Essay -- Personal Narrative, essay about myself

There was a warm breeze that Friday in September when I packed my two large bags, kissed my family and friends good-bye, and left my home. Thus the greatest adventure of my life was begun. On my first day of studying in France, I woke up early and took a quasi-shower, which consisted of sprinkling myself with water for hours until all the soap finally drained out of my hair. My dressing procedures were followed by a silent breakfast that consisted of some bitter-tasting, dark liquid and a hard, bread-like substance. The bread I ate dry, for fear of the dark scary-looking pot of jam. I packed my books and headed off for class. As soon as I left my street, a man on a bike stared at me as he passed. "Stupid American," he thought and went about his business. Walking on, I passed a bakery with numerous strange people inside getting their baguettes. They stared at me as I passed, then they all turned to one another and made various snide remarks about me. They chuckled, thinking I didn't understand anything that they were saying. When I got to the first stoplight, I waited for the little man to turn green. The drivers who had a red light chuckled and thought to themselves, "That girl has no idea what she's doing. Don't they have street signs in America?" Walking along the street, there was a man walking his dog. I smiled at him, and he scowled and thought, "Silly Americans. Always smiling at everything." Next I passed a school, where a number of mothers were chatting outside, having just dropped their children off They looked at me, then back at each other. One said, "Oh my, I wouldn't wear that unless I was an American." Eventually, I passed a car repair garage. The men inside looked up a... ...hing to do with me. I spent a semester building a life in France. I spent it letting go of what I thought and embracing what I never imagined could be true. I learned a great deal about who I am and what I can accomplish. But I think the most important thing I learned is the magnitude of perception. I think I brought home with me the understanding that the world is more a sequence of varying perspectives, than one, defined order. Like the man on the bike and the people on the street and the church bells-and myself-life is shaped far less by reality than by our perception of it. I scurried home at the sound of the church bells, back through the streets of my little town. The air was crisp and cold on that Friday in December when I packed my bags, a little bulkier than before, kissed my family and friends good-bye, And left my home. My Semester in France Essay -- Personal Narrative, essay about myself There was a warm breeze that Friday in September when I packed my two large bags, kissed my family and friends good-bye, and left my home. Thus the greatest adventure of my life was begun. On my first day of studying in France, I woke up early and took a quasi-shower, which consisted of sprinkling myself with water for hours until all the soap finally drained out of my hair. My dressing procedures were followed by a silent breakfast that consisted of some bitter-tasting, dark liquid and a hard, bread-like substance. The bread I ate dry, for fear of the dark scary-looking pot of jam. I packed my books and headed off for class. As soon as I left my street, a man on a bike stared at me as he passed. "Stupid American," he thought and went about his business. Walking on, I passed a bakery with numerous strange people inside getting their baguettes. They stared at me as I passed, then they all turned to one another and made various snide remarks about me. They chuckled, thinking I didn't understand anything that they were saying. When I got to the first stoplight, I waited for the little man to turn green. The drivers who had a red light chuckled and thought to themselves, "That girl has no idea what she's doing. Don't they have street signs in America?" Walking along the street, there was a man walking his dog. I smiled at him, and he scowled and thought, "Silly Americans. Always smiling at everything." Next I passed a school, where a number of mothers were chatting outside, having just dropped their children off They looked at me, then back at each other. One said, "Oh my, I wouldn't wear that unless I was an American." Eventually, I passed a car repair garage. The men inside looked up a... ...hing to do with me. I spent a semester building a life in France. I spent it letting go of what I thought and embracing what I never imagined could be true. I learned a great deal about who I am and what I can accomplish. But I think the most important thing I learned is the magnitude of perception. I think I brought home with me the understanding that the world is more a sequence of varying perspectives, than one, defined order. Like the man on the bike and the people on the street and the church bells-and myself-life is shaped far less by reality than by our perception of it. I scurried home at the sound of the church bells, back through the streets of my little town. The air was crisp and cold on that Friday in December when I packed my bags, a little bulkier than before, kissed my family and friends good-bye, And left my home.

Foreign Collaboration

TAXPERT PROFESSIONALS Article on Foreign Collaboration 24 March 2011 0 TAXPERT Professionals | [Type the company address] Article on Foreign Collaboration Foreign Collaboration An Overview To fulfill the need of freeing the Indian industry from excessive official control and for promoting foreign investments in India in necessary sectors the much required liberalization of Indian economy was brought in by Industrial Policy of 1991. From then the Indian economy is more facilitating to Foreign Direct investment in all form. Foreign investment in India is regulated by ?Foreign Exchange Management Act ? Reserve Bank of India ? Department of Policy and promotion Foreign Exchange Management Act is an act to facilitate, promote and manage the foreign exchange in India. Reserve Bank of India issues various regulations to give effect to the various provisions of the Foreign Exchange Management Act. The Department of Industrial Policy & Promotion was established in 1995 and has been reconstitu ted in the year 2000 with the merger of the Department of Industrial Development. There has been a consistent shift in the role and functions of this Department since 1991.From regulation and administration of the industrial sector, the role of the Department has been transformed into facilitating investment and technology flows and monitoring industrial development in the liberalized environment. The role and functions of the Department of Industrial Policy and Promotion [here in after referred as Department or DIPP] primarily includes interalia is following: Formulation and implementation of industrial policy and strategies for industrial development in conformity with the development needs and national objectives; acilitation of FDI; technology collaborations at enterprise level and formulating policy parameters for the same; Trademarks, Industrial Designs and Geographical Indications of Goods and administration of regulations, rules made there under; TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign Collaboration The DIPP is in charge for encouraging acquisition of technological capability in various sectors of the industry where such acquisition is required to promote the economic development.Foreign technology induction is facilitated through liberal foreign technology collaboration regime either through FDI or through Foreign Technology Collaboration (FTC) agreement. There are two types of Foreign Collaboration the Financial collaboration and the technical collaboration. 1. Financial Collaboration refers to collaboration where only equity is involved. The financial collaboration can be by way of entering into Joint Venture agreement with the Indian Company. 2. Technical collaboration refers to collaboration where there is transfer of technology by the Foreign collaborator on due compensation.Foreign Colloboration Financial Colloboration 1 Financial Collaboration Techinical Colloboration Financial collab oration refers to collaboration where there is equity participation. It is regulated by the sectoral caps only and equity is permitted in almost all the sectors till the extent as mentioned in the Foreign Direct Investment Policy. Foreign Direct Investment is permitted under the automatic route in most sectors/activities excluding only few sectors which are prohibited like real estate etc and few where prior approval from FIPB is required. TAXPERT Professionals | www. taxpertpro. om [email  protected] com 09769134554 Article on Foreign Collaboration As per press note 3 (2005 Series) issued by DIPP prior government approval for new proposals would be required only in cases where the foreign investor has an existing joint venture in the â€Å"same field† [refer Annexure I for detailed discussion]. Same field as defined in the same press note mean 4 digit NIC 1987 code. In case of Financial collaboration a new Indian company [referred as Joint venture Company or JVC here in af ter] is formed, shares of which are subscribed by a foreign party and the Indian Company.When the money is received by Indian company [JVC] for subscription of shares by Foreign Company it has to intimate the RBI within 30 days of the receiving of Consideration and within 180 days of the receipt of consideration the shares are required to be allotted to foreign company, within 30 days of the allotment of shares the FC GPR Form along with Certificate from Chartered Accountant as well as Company secretary is required to be filed by Indian Company [JVC].As far as Financial collaboration is concerned in most of the cases a Joint Venture agreement is entered separately or all the conditions of joint Venture agreement are incorporated in the Article of Association of the Company. Interalia following are the clauses in Article of Association that will need consideration so that the interest of both the Joint Venture partners is saved: 1. Shares: – There can be restriction on transfe rring the share of a company [by each Joint Venture Partner] that no shareholder [JV partner] shall transfer the shares without the approval from other JV partner.The shares shall be offered to the other shareholder first before selling to the third party. How the fair value of the shares to be transferred shall be determined. There can be Lock in period for holding the shares. 2. Meetings:-The Quorum for the General meeting shall be at least one Shareholder? s representative appointed by both parties respectively. 3. Directors: – The Minimum number of directors representing interest of each party can be placed in Article of Association.The quorum of the Board Meeting can be framed to consist at least one Director appointed by each of the parties. The clauses can be put to safeguard interest of each party as to items where consent shall be given by way of affirmative voting by each party director. 2 Foreign technology agreements and collaborations For promoting technological capability and competitiveness of Indian Industry, acquisition of foreign technology is promoted through foreign technology collaborations.Foreign technology agreements and collaborations are permitted either through the automatic route under delegated powers exercised by the Reserve Bank of India, or by the Government. The items of foreign technology collaboration, which are eligible for approval through the automatic route and by the Government, are A. Technical know-how fees, B. Payments for designs and drawings, C. Payments for engineering services and D. Royalty TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign CollaborationFor entering into technology collaboration an agreement is entered into between the foreign entity and an Indian entity. The following should be taken into account while drafting the technology agreement that the licensed product/technical information is defined elaborately, period for which such a technolog y/knowhow is transferred, what is transferred and what is not transferred and what are exclusive and non exclusive rights transferred, manner of calculation of payment and schedule of payment, cost of foreign Technicians, which party will bear the taxes if etc. Please note that no permission is necessary for hiring of foreign technicians and no application need be made to Government for this purpose irrespective of whether the hiring of foreign technician is under an approved collaboration agreement or not]. As said earlier the collaboration can be through automatic route or government route.Below is the brief discussion regarding the same:- 2. 1 Automatic Route for Foreign Technology Agreements: The Reserve Bank of India, through its regional offices, accords automatic approval to all industries for foreign technology collaboration agreements subject to: The lump sum payments not exceeding US $2 million; Where there s technology Transfer :- Royalty payment being limited to 5 per ce nt for domestic sales and 8 per cent for exports, subject to a total payment of 8 per cent in sales without any restriction on the duration of the payments; and Where there is no technology Transfer: – The Government of India also permits payment of royalties of up to 2 per cent on exports and 1 per cent for domestic sales under automatic route on use of trademarks and brand names of the foreign collaborator without technology transfer. ? ? ?Also, Clarification was brought in by department via press note dated 23-12-2005 that as FDI upto 100% is permitted under the automatic route in most sectors/activities automatic route is also allowed for foreign technology collaboration where the payments are within 5% for domestic sales and 8% for exports. 2. 2 Government Approval for Foreign Technology Agreements As per press note 1(2005 series) Prior approval of the Government would be required only in cases where the foreign investor has an existing joint venture or technology transf er/trademark agreement in the „same? ield. The onus to provide requisite justification and also proof to the satisfaction of the Government that the new proposal would or would not in any way jeopardize the interests of the existing joint venture or technology/trademark partner or other stakeholders would lie equally on the foreign investor/technology supplier and the Indian partner. TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign CollaborationIn cases where the foreign investor has a joint venture or technology transfer/trademark agreement in the „same? field prior approval of the Government will not be required in the following cases: i. Investments to be made by Venture Capital Funds registered with the Security and Exchange Board of India (SEBI); ii. where in the existing joint-venture investment by either of the parties is less than 3 per cent; iii. Where the existing venture/collaboration is defunct or sick.Remit tance of Royalty/Technical Fee General permission has been given permission to authorised dealers by Reserve bank of India vide (DIR Series) Circular No. 76 dated 24th Feb 2004 to allow remittances for royalty and payment of Lump sum fee provided the payment; provided the royalty does not exceeds 5% of the domestic sales and 8% on exports and Lump sum fees does not exceeds USD 2 Million. Prior approval from Ministry of Industry and Commerce, Government of India in case exceeds the above said payments.In terms of Rule 4 of the Foreign Exchange Management (Current Account Transactions) Rules 2000, prior approval of the Ministry of Commerce and Industry, Government of India, is required for drawing foreign exchange for remittances under technical collaboration agreements where payment of royalty exceeds 5% on local sales and 8% on exports and lump-sum payment exceeds USD 2 million [item 8 of Schedule II to the Foreign Exchange Management (Current Account Transactions) Rules, 2000]. How ever as per RBI/2009-10/465 A. P. (DIR Series) Circular No. 2 dated 13 May 2010 the Government of India has reviewed the extant policy with regard to liberalization of foreign technology agreement and it was decided to omit item number 8 of Schedule II to the Foreign Exchange Management (Current Account Transaction) Rules, 2000, and the entry relating thereto. Accordingly, AD Category-I banks may permit drawal of foreign exchange by persons for payment of royalty and lump-sum payment under technical collaboration agreements without the approval of Ministry of Commerce and Industry, Government of India [w. . f 16 Dec 2009]. Source :http://rbidocs. rbi. org. in/rdocs/content/PDFs/AFE130510RC. pdf To sum up, success of any collaboration is dependent on the synergies that are driven from it by both parties. Therefore to achieve the desired objective of collaboration it is necessary that the matters like proper due diligence, tax structuring, drafting of joint venture agreement etc are v ery well taken care of. For further details get in touch at [email  protected] com TAXPERT Professionals | www. taxpertpro. om [email  protected] com 09769134554 Article on Foreign Collaboration Annexure I Source: http://dipp. nic. in/ DISCUSSION PAPER SUBJECT: APPROVAL OF FOREIGN/ TECHNICAL COLLABORATIONS IN CASE OF EXISTING VENTURES/ TIE-UPS IN INDIA 1. The Department of Industrial Policy and Promotion has decided to release Discussion Papers on various aspects related to FDI. In the series of these Discussion Papers, this is the third paper on „Approval of foreign/ technical collaborations in case of existing ventures/tie-ups in India?.Views and suggestions are invited on the observations made in the enclosed discussion paper, as also on the entire gamut of issues related to the subject, by October 15, 2010. 2. The views expressed in this discussion paper should not be construed as the views of the Government. The Department hopes to generate informed discussion on the subject, so as to enable the Government to take an appropriate policy decision at an appropriate time. TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign CollaborationDISCUSSION PAPER APPROVAL OF FOREIGN/ TECHNICAL COLLABORATIONS IN CASE OF EXISTING VENTURES/ TIE-UPS IN INDIA 1. 0 PRESENT SCENARIO: 1. 1 Paragraph 4. 2. 2 of Circular 1 of 2010 (Consolidated FDI Policy), specifies that investment would be subject to the „Existing Venture/ tie-up condition?. As per this condition, where a foreign investor had, prior to January 12, 2005, entered into an existing joint venture/ technology transfer/ trademark agreement in the same field, any new proposal for investment/ technology transfer/trademark agreement, requires Government approval.The proposal has to be routed through either the Foreign Investment Promotion Board (FIPB) in the Department of Economic Affairs, if fresh foreign investment is involved or the Project Approval Boar d (PAB) in the DIPP, if no foreign investment is involved. The 4 digit National Industrial Classification (NIC), 1987 Code, would be the basis for determining if the field was the same . 1. 2 The onus to demonstrate that the proposed new tie-up would not jeopardize the xisting joint venture or technology transfer/ trademark partner, lies equally on the foreign investor/ technology supplier and the Indian partner. 1. 3 The policy aims at protecting the interests of joint venture partners of agreements entered into, prior to January 12, 2005. Foreign collaboration agreements, both financial and technical, entered into after January 12, 2005, have been exempted from this stipulation. This is because such joint venture agreements are expected to include a „conflict of interest? lause, so as to safeguard the interests of joint venture partners, in the event of one of the partners desiring to set up another joint venture or a wholly owned subsidiary in the same field of economic act ivity. 1. 4 Five categories of investments have, however, been exempted from the requirement of Government approval, even though the foreign investor may be having a joint venture/ technology transfer/ trademark agreement in the same field.These are a) Investments to be made by Venture Capital Funds registered with the Securities and Exchange Board of India (SEBI ), b)Investments by Multinational Financial Institutions like the Asian Development Bank (ADB), International Finance Corporation(IFC), Commonwealth Finance Corporation (CDC), Deutsche Entwicklungs Gescelschaft (DEG), c) Where, in the existing joint venture, investment by either of the parties is less than 3 per cent d)Where the existing joint venture / collaboration is defunct or sick and e) Investments in the Information Technology or mining sectors. 2. 0 2. 1EVOLUTION OF THE PRESENT REGIME: PRESS NOTE 18 (1998 SERIES) In Press Note 18 (1998 series), Government set out the following guidelines for approval of foreign / te chnical collaborations, under the automatic route, in cases where previous ventures/ tie-ups existed within India. a) Automatic route for bringing in FDI and/or technology collaboration agreements (including trade-mark agreements), would not be available to those who have or had any previous joint-venture or technology transfer/trade-mark agreement, in the „same? or „allied? field, in India. TAXPERT Professionals | www. taxpertpro. com [email  protected] om 09769134554 Article on Foreign Collaboration b) Government approval route was, necessary in such cases. Detailed circumstances under which it was found necessary to set-up a new joint venture/enter into new technology transfer (including trade-mark) were required to be furnished at the time of seeking approval. c) The onus was clearly on such investors/technology suppliers, to provide the requisite justification /proof, to the satisfaction of the Government, that the new proposal would not, in any manner, jeopardize the interests of the existing joint-venture or technology/trade-mark partner or other stakeholders.It was at the sole discretion of the FIPB/ PAB, to either approve the application with or without conditions or to reject it in toto, duly recording the reasons for doing so. 2. 2 PRESS NOTE 10 (1999 SERIES) Press Note 10 (1999 series) defined the meaning of the terms â€Å"same field† and â€Å"allied field† as under: o o â€Å"same field† – four-digit NIC 1987code â€Å"allied field† – three-digit NIC 1987codeThe Press Note further clarified that, only proposals for foreign collaboration, falling under same four-digit or three-digit classifications, in terms of their past or existing joint ventures in India, would attract the provisions of Press Note 18 (1998 series). 2. 3 PRESS NOTE 2 (2000 SERIES) With a view to further liberalize the FDI regime, the Government issued Press Note 2 (2000 series), wherein all activities were placed under the automatic route for FDI, except for a specified negative list. Sector-specific guidelines were attached to this Press Note.In respect of the mining sector, it was mentioned that the provisions of Press Note 18 (1998 series) would not be applicable for setting up 100% owned subsidiaries, subject to a declaration from the applicant that he had no existing joint-venture for the same area and/ or the particular mineral. 2. 4 PRESS NOTE 8 (2000 SERIES) Press Note 8 (2000 series), recognized the special nature and needs of the IT sector. With a view to further simplify approval procedures and facilitate greater investment inflows into the IT sector in the country, FDI proposals elating to the IT sector were exempted from the provisions of Press Note 18 (1998 series). 2. 5 PRESS NOTE 1 (2001 SERIES) This Press Note provided for exemptions from the provisions of Press Note 18 for investments made in domestic companies by International Financial Institutions, such as the Asian Development B ank (ADB), International Finance Corporation (IFC), Commonwealth Development Corporation (CDC), Deutsche Entwicklungs Gescelschaft (DEG) etc.Accordingly, such International Financial Institutions were permitted to invest in domestic companies, through the automatic route, subject to SEBI/ RBI regulations and sector-specific caps on FDI. TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign Collaboration 2. 6 PRESS NOTE 1 (2005 SERIES) 1. Following the introduction of Press Note 18 (1998 series), certain representations were made by foreign investors. They pointed out that: a) The Press Note had the effect of overriding the contractual terms agreed to with the Indian partners. ) Domestic investors were using the provisions of the Press Note as a means of extracting unreasonable prices / commercial advantage. The Press Note was, thus, becoming a stumbling block for further FDI coming into the country. c) The term â€Å"allied field† was very widely defined, as it included even those products which would not have caused jeopardy to the manufacture of existing products. d) Foreign investors were being singled out to present their defence, without the Indian partner being asked to justify the existence of jeopardy. . Press Note 1 (2005 series), issued on 12 January, 2005, addressed these issues by amending the earlier guidelines. New proposals for foreign investment/technical collaboration were allowed under the automatic route, subject to sectoral policies and the following revised guidelines: a) Prior approval of the Government would be required only in cases where the foreign investor had a joint venture or technology transfer/trademark agreement in the ‘same' field, existing as on the date of the Press Note i. . 12 January, 2005. b) The onus to provide requisite justification and proof, to the satisfaction of the Government, that the new proposal would or would not, in any way, jeopardize the interests of the existing joint-venture or technology/ trademark partner or other stakeholders, would lie equally on the foreign investor/ technology supplier and the Indian partner. ) Even in cases where the foreign investor had a joint-venture or technology transfer/ trademark agreement in the ‘same' field, prior approval of the Government would not be required in the following cases: Investments to be made by Venture Capital Funds registered with the Security and Exchange Board of India (SEBI) or ii) where in the existing joint-venture investment by either of the parties was less than 3% or iii) where the existing venture/ collaboration was defunct or sick i) d) In so far as joint ventures to be entered into after the date of the Press Note were concerned, the joint venture agreements could embody a ‘conflict of interest' clause, to safeguard the interests of joint-venture partners, in the event of one of the partners desiring to set up another joint-venture or a wholly-owned- subsidiary, in the ‘same' field of economic activity. 2. 7 PRESS NOTE 3 (2005 SERIES) TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign Collaboration Subsequently, Press Note 3 (2005 series), issued on 15 March, 2005, clarified that: a) For the purposes of Press Note 1 (2005 Series), the definition of „same? field would continue to be 4-digit NIC 1987 Code. ) Proposals in the Information Technology sector, and the mining sector, continued to remain exempt from the application of Press Note 1 (2005 Series). c) For the purpose of avoiding any ambiguity, it was further reiterated that, jointventures/technology transfer/trademark agreements, existing on the date of issue of the said Press Note (i. e. 12. 1. 2005), would be treated as existing jointventures/technology transfer/trademark agreements, for the purposes of that Press Note. 3. 0 APPLICATION OF THE PROVISIONS IN PRACTICE: 3. 1 FIPB considered 566 proposals during th e calendar year 2009, out of which 16% related to matters linked with Press Notes 1 and 3 of 2005, wherein the applicants had a joint-venture / technology transfer agreement, with an Indian partner, as on 12 January, 2005. 3. Some of the principles emerging from the cases discussed in the FIPB 1 are set out below: a) In case the existing joint-venture has become defunct, there may not be any jeopardy to the Indian partner, in case the foreign collaborator wishes to set up a new venture. b) „Jeopardy? should not be invoked as a measure to stifle legitimate business activity and prevent competition. The issue of „jeopardy? has to be examined in light of the extant business agreements/arrangements between the parties. c) „Jeopardy? may not be established in cases where technology licence agreements have expired, as per terms mutually agreed by the joint-venture partners. d) In location specific projects/ activities, the concept of „jeopardy? cannot be extended b eyond the area originally envisaged in the agreement. In such cases, „jeopardy? eeds to be viewed in a location-specific context. 3. 3 The FIPB Review, 2009 has observed that: â€Å"While critics may feel that Press Note 1 has outlived its utility, the high pitched debate on the issue of jeopardy and Indian JV partners alleging foul play by the foreign collaborator cannot make us oblivious to its continuing relevance. † 4. 0 PRACTICES IN OTHER EMERGING MARKETS (CHINA AND BRAZIL): 1 FIPB Review, 2009 TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign Collaboration Emerging economies, such as Brazil and China, do not have any such corresponding requirements, under their foreign investment regimes. 5. CONCERNS RELATED TO LIBERALISING THE ‘EXISTING VENTURE/ TIE-UP CONDITION’: 5. 1 In 1998, the main policy concern was to protect the interests of domestic jointventure partners/ technology collaborators, who may ha ve been less advantageously placed, in comparison to their foreign counterparts, insofar as their ability to influence the terms of future business engagement were concerned. It was felt that an element of Government oversight was necessary, so that future collaborations were subjected to the test of „jeopardy? and existing domestic joint-venture partners/ technology collaborators were not placed in a position wherein their survival was threatened. 5. This policy framework was relaxed in 2005, while maintaining a balance between the need to ensure healthy foreign investment inflows and the need to ensure that survival of the domestic industry was not threatened. The main elements of the „existing venture/ tie-up condition? were retained, underlining Government? s concerns about ensuring the continued sustenance and growth of the domestic joint-venture partners/ technology collaborators, in collaboration with their foreign partners. 6. 0 THE CASE FOR REVIEW OF THE EXTANT REGIME: 6. 1 The „existing venture/ tie-up condition? has now been in existence, as a formal measure under the FDI policy, for nearly twelve years. It was last reviewed in 2005.There is a need to examine whether such a conditionality continues to be relevant in the present day context. 6. 2 The „existing venture/ tie-up condition? currently applies only to those joint-ventures which have been in existence as on or prior to 12 January, 2005. With more than five years having elapsed, it can be argued that the issue of „jeopardy? is, no longer relevant, as the Indian partners could have recovered their investments substantially during this period of time. 6. 3 The Indian industry today is in a much stronger position than it was in the 1990s, when the condition was first introduced. It, therefore, needs to be seen whether there is a need to continue with the elements of such a regime even today. 6. Further, industry has to increasingly become more competitive. This is particularly relevant in an era of globalization, where a number of Free Trade Agreements (FTAs) and Comprehensive Economic Cooperation/ Partnership Agreements (CEPAs/CEPAs) are in place . In such a scenario, if an industry is discouraged from being set up in India, it could be set up in a neighbouring country, with whom a trade agreement exists or is being negotiated. Competition today, is not only between domestic players inter se but also between international and domestic players. Dumping of goods from some of countries has posed serious threats to the survival of domestic industries.Between 1992 and 2010 (May), the Directorate General for anti Dumping (DGAD) has initiated anti-dumping investigations into 253 cases involving 38 countries/territories (considering 27 EC countries as a single territory). The major product categories on which anti-dumping duty has been levied are chemicals & petrochemicals, pharmaceuticals, fibres /yarns, steel and other metal products and consumer goods. TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554 Article on Foreign Collaboration Limiting international technology agreements through measures described above may constrain the growth of strong and competitive domestic industries. 6. It is also a moot point whether Government policy should intervene in the commercial sphere and override contractual terms agreed to between the parties, given the need to promote healthy competition, and ensure sustained long-term economic growth. It can be argued that Government should not be concerned about commercial issues between two business partners. 6. 6 The measure discriminates between the foreign investors who had shown confidence in India, by investing in the country prior to 2005 and those who invested later. 6. 7 The condition may be restricting a number of investors, who may not be able to reach agreement with their Indian partners on their future investment plans, thereby restricting the inflow o f foreign capital and technology into the country. 6. 8 A related issue is the concept of „same field?.Press Note 1 of 2005 significantly limited the scope of the provisions of Press Note 18 (1998 series), as the latter applied only to the â€Å"same field† and not the much wider â€Å"allied field†. However, in the present day context, even the concept of â€Å"same field† may not be an accurate indicator for determining whether the new venture would jeopardize the interest of the existing joint-venture partner. This is because , the NIC four digit Codes, even after revision , may still not fully reflect the complexities related to the concept of the „same? industry and may often tend to cover a wide range of industrial activities under the same head. As an example, the activity of „manufacturing of seat belts? may not jeopardize the activity of „manufacturing of car steering?.However, both fall under the „same field? under the NIC Code of 1987. Further, the NIC Codes of 1987 may not accurately represent many of the business situations in the current complex and diversified industrial environment, leading to difficulties in interpretation. 7. 0 POLICY OPTIONS FOR CONSIDERATION : 7. 1 For the reasons mentioned in Paras 6. 1 to 6. 8, should the „existing venture/ tie-up conditions? last amended in Press Notes 1 and 3 of 2005 and now included as paragraph 4. 2. 2 of Circular 1 of 2010 be totally abolished? 7. 2 Alternatively, if it is felt that such a condition should continue for some more time, should calibrated relaxations be introduced ?These could include exemptions from the application of the condition in cases where: a) The existing venture/tie up is more than say 10 years old b) If the activity of the new venture is demonstrably different from the activity of the existing venture/tie up, even though it has the same NIC field. Are there any other contingencies where such exemptions should be conside red? The article is contributed by CA. Sudha G. Bhushan, She is a Chartered Accountant and a company secretary. She is advisor to many international companies on international tax matters and FEMA Advisory services. She can be reached at [email  protected] com. TAXPERT Professionals | www. taxpertpro. com [email  protected] com 09769134554