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Blog Category: commercial law

Commerce General Counsel Kelly Welsh to Discuss Legal Reform in China

Guest blog post by Kelly Welsh, General Counsel, U.S. Department of Commerce

Transparency.  Predictability.  Accountability.  These fundamental elements of commercial law are essential to creating a business climate at home and abroad that will foster growth and innovation.  Promoting a strong commercial rule of law wherever U.S. companies do business is a high priority for Secretary Pritzker and the Department of Commerce.  That’s why I am travelling to Beijing and Wuhan, China during the week of January 12 to speak to the public, academics, legal professionals, the media, Chinese government officials, and U.S. businesses about how the United States and China can work together to promote commercial rule of law. 

During October’s Fourth Plenum meeting, China announced its plans for extensive and far-reaching legal reform.  Those plans embraced themes that the U.S. government has been discussing with Chinese leaders for many years in the U.S.-China Joint Commission on Commerce and Trade and the Strategic and Economic Dialogue, including the Transparency Dialogue.   We therefore see this as a continuation of our cooperation and an opportunity to move the conversation forward in promoting sound commercial legal principles.  Next week, I will meet with Chinese government officials and U.S. industry leaders on commercial rule of law issues that fundamentally impact both of our economies.

I also will lead a U.S. delegation to the 19th U.S.-China Legal Exchange, where senior officials from the U.S. Environmental Protection Agency, the U.S. National Institute of Standards and Technology and the Federal Trade Commission will share U.S. experiences in regulating air pollution and promoting data security.

At the Beijing American Center and at Wuhan University, I will deliver remarks on how the United States and China can work together to advance the transparent, accountable, and predictable commercial legal system needed to promote a strong and innovative economy-- discussing both the history of our engagement and the opportunity to strengthen the commercial rule of law presented by the Fourth Plenum announcements.

The 2010 Joint Commission on Commerce and Trade

On December 14 and 15, Commerce Secretary Locke and U.S. Trade Representative Kirk, together with Chinese Vice Premier Wang Qishan, co-chaired the 21st annual U.S.-China Joint Commission on Commerce and Trade (JCCT) in Washington, DC.  General Counsel Kerry participated in this year’s JCCT, which covered a range of issues and yielded positive results, particularly China’s commitments to enhance its enforcement of intellectual property rights, adopt non-discriminatory government procurement policies, and collaborate with the U.S. in areas of emerging technology such as Smart Grid.  China’s commitments will lead to increased opportunities for U.S. exporters and a more level playing field for U.S. companies operating in China.   

General Counsel Kerry led the U.S. delegation’s work on commercial law cooperation.  In this area, the two sides agreed to continue to promote mutual understanding of commercial legal developments impacting U.S.-China trade.  The primary vehicle for this cooperation is the U.S.-China Legal Exchange, which GC Kerry co-leads.  The United States and China agreed to convene the 2011 Legal Exchange in the United States in cities and on topics to be determined by mutual agreement.  This builds upon the work of GC Kerry, Chinese Deputy International Trade Representative Chong Quan, and Legislative Affairs Office of the State Council Vice-Minister An Jian, who successfully led the 2010 U.S.-China Legal Exchange to Hangzhou (October 18), Wuhan (October 20), and Chengdu (October 22), which focused on U.S. export promotion activities and trade remedies laws and practices. 

Read more about Commerce’s participation here.

Expanding the Global Fight Against Corruption

By Cameron F. Kerry

Today, December 9, is International Anti-Corruption Day.  It’s an occasion to reflect on the global fight against corruption.

Bribery and corruption are trade barriers that impede our ability to rebuild the economy and meet President Obama’s goal of doubling U.S. exports. In the past year alone, American companies are believed to have lost out on deals worth about $25 billion because they refused to pay bribes.  

Companies should be able to compete for international business on the quality and price of their products and services, not bribes.   

“In too many places, the culture of the bribe is a brake on development and prosperity, President Obama has said. “It discourages entrepreneurship, destroys public trust, undermines the rule of law and stifles economic growth.” 

The United States has been a leader in combating transnational bribery since it enacted the Foreign Corrupt Practices Act (FCPA) in 1977.  It has been leading by example: U.S. enforcement agencies have filed 105 enforcement actions involving bribery of foreign officials since the beginning of 2009, and have collected over $2 billion in criminal and civil penalties.  In a review of U.S. efforts, the 38-country Working Group on Bribery of the Organization for Economic Cooperation and Development (OECD) recently applauded U.S. enforcement.

The United States has also been working to level the playing field internationally.  The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions now has 38 parties who undergo detailed peer review; the United Nations Convention Against Corruption has been joined by 148 nations and is stepping up compliance review; when the G-20 leaders met in Seoul last month, they endorsed President Obama’s proposal to broaden the G-20 anti-corruption agenda and adopted a comprehensive Anti-Corruption Action Plan.  

What we still need is the political will to implement and enforce these international anti-corruption mechanisms on the part of all countries with companies in international business.  Countries such as the United Kingdom and Germany are taking steps to improve laws and step up enforcement. Under France’s G-20 Presidency, we count on that country to set a strong example as well.

Economic powers like China and Russia are critical to the fight.  China, a G-20 member, does not currently have a law criminalizing bribery of foreign officials in international business transactions, but ongoing U.S.-China government-to-government exchanges appear to be making progress. China’s National People’s Congress has published for comment proposed amendments to its criminal law that would prohibit foreign bribery in international business and may take up the bill early next year. G-20 member Russia also has a foreign bribery law in the works.

Fighting corruption also requires cooperation between government and civil society. The Working Group on Bribery recently released Good Practice Guidance to help companies develop compliance programs for preventing and detecting foreign bribery. The G-20 will invite industry and civil society to increase voluntary compliance efforts and innovative public-private partnerships to prevent corruption as part of its Anti-Corruption Action Plan.

Because of the FCPA, businesses subject to U.S. jurisdiction have incorporated foreign bribery compliance programs into their corporate cultures. In fact, companies subject to the FCPA have said they rely upon it as a useful tool to shield themselves against bribe solicitations, refusing to pay them because they are illegal not only under local law, but also back home.

Strong preventive programs enable companies to lead by example and educate their employees about the importance of fighting corruption.  Companies known for their integrity and quality business practices are also more likely to be highly valued by capital markets.  Compliance enhances true competitiveness.  Governments seeking sustainable growth – as opposed to kleptocratic ones – prefer doing business with reputable companies that deliver high-quality products and services without undermining good governance.

We’d like more businesses from other countries to do the same.  The way to level the playing field is not to lower U.S. standards.  Rather, it is to set the bar high against corruption for all companies no matter where they are from by continuing to expand the network of trading partners participating in the fight against transnational bribery.

No nation or government, no business or NGO can end corruption in international business transactions alone. 

Cameron Kerry is General Counsel of the U.S. Department of Commerce.

US - China Commercial Relationship Policy Conference

Last week the US Department of Commerce jointly sponsored a Policy Conference to discuss the US-China Commercial Relationship with the Jackson School of International Studies at the University of Washington, the Henry Jackson Foundation, and the host of the event, Georgetown University.  The event featured a number of panels composed of experts from all fields discussing the state and future of US-China policy.  The event was bracketed by welcoming remarks from Commerce Secretary Gary Locke and concluding remarks by General Counsel Cameron Kerry.  Kerry also participated on the conference’s final panel in a discussion of the Impact of Developments in China’s Commercial Legal System

During his remarks, General Counsel Kerry spoke about the work of his office and the Department of Commerce in developing commercial rule of law in China.  He said, "With the Rule of law, business can predict and plan their investments, research and development, purchases, and sales with greater certainty.  Without it, they are left to guess about the costs and benefits of any deal."  He discussed the importance of both the US-China Joint Commission on Commerce and Trade (JCCT) and the Strategic and Economic Dialogue (S&ED) in fostering a strong bilateral commercial relationship.  He described the US-China Legal Exchange, a program designed to foster mutual understanding of the legal regimes governing trade and investment that began in 1983. He also spoke of his role as co-lead of the Transparency Dialogue, which has led to greater transparency in Chinese Government decision-making processes, including the promulgation of rules and regulations and dialogue on transnational bribery.  He sees the role of lawyers in both countries as crucial to promoting the rule of law. 

After his panel, General Counsel Kerry concluded the conference by addressing the need for a more sustainable, balanced trade with China.  He noted that the two nations are inextricably linked to each other’s wellbeing and that China must strive to be as free, fair, and open as the United States.  The conference has helped to set the stage for the JCCT, which the US will host in Washington, DC on December 14-15, 2010.


Read General Counsel Kerry's remarks here.