Many parts of the world lack the transparency and ease of commerce that we enjoy in the US. In fact, what we would consider corruption is common in most of the world. Other countries' companies don't worry too much about it. To them it is a cost of doing business. However, for US companies (including their foreign-chartered subsidiaries) it can be a severe problem, since the IRS and Justice Department will enforce ethical standards worldwide against American companies.

The Foreign Corrupt Practices Act is the main law that Americans must watch for. This law can put US companies at a disadvantage by holding them to a higher standard of behavior in foreign countries than the companies doing business there. This law certainly puts us in the position of presenting a higher moral standard than the rest of the world. You should consult an attorney or get a copy of this law from your local law library (see your local law school or courthouse libraries), since you should understand its requirements before you embark on international ventures. This law has caused some US companies to walk away from lucrative contracts due to the harsh domestic penalties associated with it.

Some countries require you to certify that your company is complying with their boycott. For example, if you want to ship products to the Middle East, you may have a big tax problem. Some Arab countries require that you sign on to their boycott of doing business with Israel. However, the US tax code penalizes you and disallows the foreign tax credits for participating in this boycott. Obviously the Arab boycott is illegal in Israel. So how do you solve these contradictory laws? These are issues for you to research carefully.

One of the largest problems when considering foreign regulatory frameworks is the issue of differing cultural perceptions. You may intend one thing while they process that information as meaning something totally different. The best way to overcome this is to review your business operations plan with officials of the U.S. Embassy in the country you are doing business with. Also, the international business department of your local large commercial bank may be able to offer advice.

There are non-tax concerns for American companies as well. The US imposes very few export controls. The main area of export restriction comes from high technology that the Departments of Defense, State, and Commerce feel could be used by hostile countries in military action against us. For example, some very sophisticated computer encryption software is classified under the heading of "munitions" and may not be sold outside of the US. If you are involved in anything with at least a moderate level of technology, check with the US Customs office nearest you. Most other exports don't even require any US government paperwork (although there will be plenty of paperwork for shippers, insurance, banks, and foreign governments).

The US government regulates imports. It is concerned about agricultural products that may spread pestilence, unfair competition with domestic enterprises, and a host of other concerns. Check with the US Customs office nearest you or on the web to determine if the products you wish to import have any US government restrictions or import duties.

Don't forget that the other country that your product is going to or coming from will have its own set of import and export regulations. You should never assume that their regulations will look similar to ours - few do. In fact, few countries are as "laid back" as the US on international trade. Try the U.S. Export Administration (part of the US Commerce Department) for counseling on how to find out about and address the specific customs and shipping issues in the countries you are targeting.

Finally, the US (and some foreign countries) have set up Foreign Trade Zones. These are on-shore areas where you can import components and export them all free of any customs duties. Check with your state ports authority or the Foreign Trade Zone office nearest you (they are listed in the government blue pages).