Legal Aspects of International Trade and Enterprise
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AI Summary
This report explores the legal aspects of multinational companies and their impact on business operations and decisions. It focuses on Verizon Communications, analyzing its industry, headquarters, and number of employees. The report also examines the legislative regulatory framework and the importance of treaties, conventions, and agreements in relation to Verizon's products and services.
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Legal Aspects of International Trade and Enterprise
Legal Aspects of International Trade and Enterprise
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Executive Summary
The legal aspects of multinational companies affect their business operations and
decisions due to which they have to take these factors into consideration while managing
their operations. Verizon Communications is an American corporation which is analysed in
this report to evaluate its industry, headquarters location and number of employees. The
legislative regulatory framework and other legal aspects which apply to the operations of
the enterprise are analysed as well. This report also evaluated the importance of treaties,
conventions and agreements in relation to impact on the products and services of Verizon
Communications.
Executive Summary
The legal aspects of multinational companies affect their business operations and
decisions due to which they have to take these factors into consideration while managing
their operations. Verizon Communications is an American corporation which is analysed in
this report to evaluate its industry, headquarters location and number of employees. The
legislative regulatory framework and other legal aspects which apply to the operations of
the enterprise are analysed as well. This report also evaluated the importance of treaties,
conventions and agreements in relation to impact on the products and services of Verizon
Communications.
2
Contents
Introduction of Verizon...........................................................................................................3
Legislative Regulatory Framework........................................................................................3
Treaties, conventions and agreements.................................................................................4
References.............................................................................................................................7
Contents
Introduction of Verizon...........................................................................................................3
Legislative Regulatory Framework........................................................................................3
Treaties, conventions and agreements.................................................................................4
References.............................................................................................................................7
3
Introduction of Verizon
Verizon Communications Incorporation is an American multinational enterprise that
operates in telecommunications and mass media sector. The company was founded in
1983, and its headquarters is situated in New York City, United States (Verizon, 2019).
The company is a major telecommunication provider in the United States, and it also offers
its services worldwide; however, it mainly operates in the United States. Products and
services of the company include landline, mobile phone, cable, broadband, internet and
others. The corporation has also diversified its offerings by entering into the mass media
industry. There are over 155,400 employees that work on behalf of Verizon
Communications to manage its operations globally (Forbes, 2019). In the
telecommunication sector, the company has generated a competitive advantage due to its
effective approach towards wireless and wireline technology. The company has
established its operations in Australia through its subsidiary Verizon Australia Pty Ltd. The
company has not disclosed any information regarding the number of employees which it
has hired to manage its operations in Australia (Bloomberg, 2019).
Legislative Regulatory Framework
There are various laws in the legislative regulatory framework of Verizon Communications
which the company has to comply with. These are guidelines which provide directions to
the management of Verizon Communications to make sure that they take business
decisions while considering the interest of a diverse range of stakeholders. They have to
ensure that they did not form any policies that could hinder their interest in order to
achieve the goal of profit maximisation (Mann et al., 2018). There are various guidelines
and policies that are adopted by Verizon Communications with an objective to ensure that
it complies with these guidelines. Violation of these policies could impose legal penalties
on Verizon Communications or its directors due to which they could face financial
penalties or imprisonment.
1) Corporations Act 2001 (Cth).
The Corporation Act or CA is a key part of the legislative framework of Verizon
Communications in Australia. Under this act, directions are given for the company and its
directors to make sure that they did not engage in unethical or illegal practices that could
potentially harm the interest of the stakeholders of the company. As per these policies,
they are bound by various duties. The provisions regarding general duties are given under
section 180 to 183. Section 180 provides that directors must act with care and diligence by
making sure that their actions did not hinder the action of the company. Along with these
guidelines, the company’s directors are obligated to act in good faith (Bird and Gilligan,
2016). The provisions regarding this duty are given under section 181 based on which the
directors have to put the interest of the company above their personal interest. Section 182
provides provisions for misuse of the position of directors and section 183 provides
provisions for misuse of the information by the directors. They are obligated to make sure
that they did not use their position or information to harm the company or gain an
advantage which is unfair (Bird and Gilligan, 2016). Along with the director duties, there
are various other provisions as well which applies to the operations of Verizon
Communications. For example, the company has to conduct annual general meetings and
directors meetings on a regular basis. The company is also obligated to report regarding
its operations to the regulators in Australia.
2) Competition and Consumer Act 2010 (Cth) (CCA).
Introduction of Verizon
Verizon Communications Incorporation is an American multinational enterprise that
operates in telecommunications and mass media sector. The company was founded in
1983, and its headquarters is situated in New York City, United States (Verizon, 2019).
The company is a major telecommunication provider in the United States, and it also offers
its services worldwide; however, it mainly operates in the United States. Products and
services of the company include landline, mobile phone, cable, broadband, internet and
others. The corporation has also diversified its offerings by entering into the mass media
industry. There are over 155,400 employees that work on behalf of Verizon
Communications to manage its operations globally (Forbes, 2019). In the
telecommunication sector, the company has generated a competitive advantage due to its
effective approach towards wireless and wireline technology. The company has
established its operations in Australia through its subsidiary Verizon Australia Pty Ltd. The
company has not disclosed any information regarding the number of employees which it
has hired to manage its operations in Australia (Bloomberg, 2019).
Legislative Regulatory Framework
There are various laws in the legislative regulatory framework of Verizon Communications
which the company has to comply with. These are guidelines which provide directions to
the management of Verizon Communications to make sure that they take business
decisions while considering the interest of a diverse range of stakeholders. They have to
ensure that they did not form any policies that could hinder their interest in order to
achieve the goal of profit maximisation (Mann et al., 2018). There are various guidelines
and policies that are adopted by Verizon Communications with an objective to ensure that
it complies with these guidelines. Violation of these policies could impose legal penalties
on Verizon Communications or its directors due to which they could face financial
penalties or imprisonment.
1) Corporations Act 2001 (Cth).
The Corporation Act or CA is a key part of the legislative framework of Verizon
Communications in Australia. Under this act, directions are given for the company and its
directors to make sure that they did not engage in unethical or illegal practices that could
potentially harm the interest of the stakeholders of the company. As per these policies,
they are bound by various duties. The provisions regarding general duties are given under
section 180 to 183. Section 180 provides that directors must act with care and diligence by
making sure that their actions did not hinder the action of the company. Along with these
guidelines, the company’s directors are obligated to act in good faith (Bird and Gilligan,
2016). The provisions regarding this duty are given under section 181 based on which the
directors have to put the interest of the company above their personal interest. Section 182
provides provisions for misuse of the position of directors and section 183 provides
provisions for misuse of the information by the directors. They are obligated to make sure
that they did not use their position or information to harm the company or gain an
advantage which is unfair (Bird and Gilligan, 2016). Along with the director duties, there
are various other provisions as well which applies to the operations of Verizon
Communications. For example, the company has to conduct annual general meetings and
directors meetings on a regular basis. The company is also obligated to report regarding
its operations to the regulators in Australia.
2) Competition and Consumer Act 2010 (Cth) (CCA).
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Another relevant act that applies to the operations of Verizon Communications is that the
CCA. The directions are implemented under this act for companies to make sure that they
did not prohibit or limit the level of competition which they face in their respective industry.
They have to make sure that they did not form any contracts that are unfair or illegal based
on the fact that they limit the competition in the industry (Grantham, 2018). Along with
these directions, there are provisions implemented in the organisation regarding the
protection of the rights of customers who consume the products and services of
companies. There are various directions given for companies to make sure that they
prioritise the interest of Australia customers when they form business strategies. For
example, they cannot make false or misleading claims regarding telecommunications
services to its customers, or a lawsuit can be filed under section 18.
3) Employment provisions.
There are various provisions that are implemented by the government to make sure that
the rights of employees in Australia are protected. The company has to make sure that it
complies with the guidelines given under the Fair Work Act 2009 (Cth). Under this act,
provisions are given for companies regarding the protection of employment rights. Verizon
Communications is also obligated to make sure that safety and health policies are
implemented to protect the interest of employees (Harpur, 2017). For example, there is a
strict prohibition on companies to make sure that they did not enforce the employees to
work on public holidays. Moreover, the company has to make sure that effective policies
are implemented that are targeted towards ensuring the safety of employees. The
company is also required to pay its employees a salary which is higher than the minimum
wage decided by the government. The company is also obligated to make sure that it did
not enforce the employees to work for more than 38 hours in a week.
4) Taxation policies.
There are various provisions which are implemented by the government regarding the
imposition of tax on the operations of companies. The companies have to pay corporate
tax on the income which they generate from the selling of their goods and services. The
rate of corporate tax is 30 per cent; however, this is not a fixed rate, and the government
can make changes in this rate. The Goods and Services Tax (GST) is another relevant tax
which is imposed on Verizon Communications. The rate of GST is 10 per cent; however, it
can also be increased or decreased by the government (Solomon, 2018). Compliance with
these regulatory provisions is crucial for the company to make sure that the company
discharge its taxation obligations and fulfil them in a given financial year.
Treaties, conventions and agreements
Along with the provisions given under the legislative framework of Verizon
Communications, the company is also bound to comply with directions given under the
treaties, conventions and agreements which are formed between two or more countries.
Guidelines and directors are included in these factors with an objective to make sure that
companies act within their limits and they did not engage in practices that could potentially
hinder the interest of their stakeholders (Dougles, 2017). Thus, the provisions provided in
them affect the products and services of companies operating in the global marketplace.
Verizon Communications is also bound by these provisions since its services are affected
by them. The company has to make sure that it complies with them to avoid any negative
factors that could potentially harm the interest of its stakeholders.
1) AUSFTA (Australia-United States Free Trade Agreement).
Another relevant act that applies to the operations of Verizon Communications is that the
CCA. The directions are implemented under this act for companies to make sure that they
did not prohibit or limit the level of competition which they face in their respective industry.
They have to make sure that they did not form any contracts that are unfair or illegal based
on the fact that they limit the competition in the industry (Grantham, 2018). Along with
these directions, there are provisions implemented in the organisation regarding the
protection of the rights of customers who consume the products and services of
companies. There are various directions given for companies to make sure that they
prioritise the interest of Australia customers when they form business strategies. For
example, they cannot make false or misleading claims regarding telecommunications
services to its customers, or a lawsuit can be filed under section 18.
3) Employment provisions.
There are various provisions that are implemented by the government to make sure that
the rights of employees in Australia are protected. The company has to make sure that it
complies with the guidelines given under the Fair Work Act 2009 (Cth). Under this act,
provisions are given for companies regarding the protection of employment rights. Verizon
Communications is also obligated to make sure that safety and health policies are
implemented to protect the interest of employees (Harpur, 2017). For example, there is a
strict prohibition on companies to make sure that they did not enforce the employees to
work on public holidays. Moreover, the company has to make sure that effective policies
are implemented that are targeted towards ensuring the safety of employees. The
company is also required to pay its employees a salary which is higher than the minimum
wage decided by the government. The company is also obligated to make sure that it did
not enforce the employees to work for more than 38 hours in a week.
4) Taxation policies.
There are various provisions which are implemented by the government regarding the
imposition of tax on the operations of companies. The companies have to pay corporate
tax on the income which they generate from the selling of their goods and services. The
rate of corporate tax is 30 per cent; however, this is not a fixed rate, and the government
can make changes in this rate. The Goods and Services Tax (GST) is another relevant tax
which is imposed on Verizon Communications. The rate of GST is 10 per cent; however, it
can also be increased or decreased by the government (Solomon, 2018). Compliance with
these regulatory provisions is crucial for the company to make sure that the company
discharge its taxation obligations and fulfil them in a given financial year.
Treaties, conventions and agreements
Along with the provisions given under the legislative framework of Verizon
Communications, the company is also bound to comply with directions given under the
treaties, conventions and agreements which are formed between two or more countries.
Guidelines and directors are included in these factors with an objective to make sure that
companies act within their limits and they did not engage in practices that could potentially
hinder the interest of their stakeholders (Dougles, 2017). Thus, the provisions provided in
them affect the products and services of companies operating in the global marketplace.
Verizon Communications is also bound by these provisions since its services are affected
by them. The company has to make sure that it complies with them to avoid any negative
factors that could potentially harm the interest of its stakeholders.
1) AUSFTA (Australia-United States Free Trade Agreement).
5
The treaties which provide provisions regarding corporations of the United States in
Australia affects the operations of Verizon Communications since it is a US-based
organisation. As per the guidelines given under this act, the services of Verizon
Communications are affected. In order to build trading relationships between these nations
that support their economic growth, provisions are implemented under this treaty that
promotes trading practices (Kavanagh, 2016). This goal is achieved by making the
process of expanding in another country easier for companies. Verizon Communications is
able to bypass the legislative requirements which are otherwise imposed on the enterprise
due to the relaxations given under this treaty. The standards which companies have to
maintain otherwise are lowered, and the company is able to make sure that it effectively
complies with them without facing legal complications. Along with relaxations in terms of
legislative compliances, there are various provisions which are implemented by the
government to low the tariff and charges which are imposed on companies. These fees
affect the products and services of companies since they have to increase the prices of
their products to compensate for the losses (Kavanagh, 2016). Verizon Communications
also face similar problems when it offers its services in Australia. However, these issues
have been resolved by the provisions including under the AUSFTA. Through this free trade
agreement, new trading opportunities are opened for Verizon Communications since the
company is able to keep offering its services at affordable prices in the Australian market.
2) Conventions between the United States and Australia (1982).
Along with treaties and agreements, the terms on which governments agreed on in
conventions also affect the products and services of companies. In the convention of 1982,
various provisions were established by the government. One of these terms is the
establishment of a double tax treaty between these countries. Double tax is imposed on
companies that operate in multiple countries because their income is taxed in domestic as
well as foreign country. This affects the products and services of companies since it makes
it difficult for them to offer them to a large number of customers at affordable prices which
adversely affects the profitability of the enterprise as well (Dyreng et at., 2015). Verizon
Communications is no exception, and its services are affected by these policies as well.
The company is no longer bound to pay double tax on its revenue that is generated from
its services in Australia. It benefits the company by making it easier for the organisation to
reach a large number of customers in Australia while ensuring that these customers are
not charged at higher rates.
3) Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA).
One of the key objectives of the formation of trading treaties is to build a strong
relationship between countries that open the opportunities for economic welfare. The
ANZCERTA is a good example which is a key treaty focused towards the promotion of
economic growth. Under this treaty, the legal standards which are imposed on
corporations are removed by the government (Mitchell, Sheargold and Voon, 2017). This
is achieved by the implementation of effective policies that are guided towards removing
tariffs and charges. A simpler trading environment is created under this treaty that makes it
easier for companies to make sure that they effectively expand their operations that
achieve the goals of economic growth of these countries. Verizon Communications is
benefited by the provisions implemented under this treaty by the government. These
policies affect its products and services by ensuring that the company is able to distribute
them through multiple sources to its customers (Mitchell, Sheargold and Voon, 2017). It
also becomes easier for the organisation to get the approval to establish its network
towers in New Zealand since it complies with the standards given by the Australian
The treaties which provide provisions regarding corporations of the United States in
Australia affects the operations of Verizon Communications since it is a US-based
organisation. As per the guidelines given under this act, the services of Verizon
Communications are affected. In order to build trading relationships between these nations
that support their economic growth, provisions are implemented under this treaty that
promotes trading practices (Kavanagh, 2016). This goal is achieved by making the
process of expanding in another country easier for companies. Verizon Communications is
able to bypass the legislative requirements which are otherwise imposed on the enterprise
due to the relaxations given under this treaty. The standards which companies have to
maintain otherwise are lowered, and the company is able to make sure that it effectively
complies with them without facing legal complications. Along with relaxations in terms of
legislative compliances, there are various provisions which are implemented by the
government to low the tariff and charges which are imposed on companies. These fees
affect the products and services of companies since they have to increase the prices of
their products to compensate for the losses (Kavanagh, 2016). Verizon Communications
also face similar problems when it offers its services in Australia. However, these issues
have been resolved by the provisions including under the AUSFTA. Through this free trade
agreement, new trading opportunities are opened for Verizon Communications since the
company is able to keep offering its services at affordable prices in the Australian market.
2) Conventions between the United States and Australia (1982).
Along with treaties and agreements, the terms on which governments agreed on in
conventions also affect the products and services of companies. In the convention of 1982,
various provisions were established by the government. One of these terms is the
establishment of a double tax treaty between these countries. Double tax is imposed on
companies that operate in multiple countries because their income is taxed in domestic as
well as foreign country. This affects the products and services of companies since it makes
it difficult for them to offer them to a large number of customers at affordable prices which
adversely affects the profitability of the enterprise as well (Dyreng et at., 2015). Verizon
Communications is no exception, and its services are affected by these policies as well.
The company is no longer bound to pay double tax on its revenue that is generated from
its services in Australia. It benefits the company by making it easier for the organisation to
reach a large number of customers in Australia while ensuring that these customers are
not charged at higher rates.
3) Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA).
One of the key objectives of the formation of trading treaties is to build a strong
relationship between countries that open the opportunities for economic welfare. The
ANZCERTA is a good example which is a key treaty focused towards the promotion of
economic growth. Under this treaty, the legal standards which are imposed on
corporations are removed by the government (Mitchell, Sheargold and Voon, 2017). This
is achieved by the implementation of effective policies that are guided towards removing
tariffs and charges. A simpler trading environment is created under this treaty that makes it
easier for companies to make sure that they effectively expand their operations that
achieve the goals of economic growth of these countries. Verizon Communications is
benefited by the provisions implemented under this treaty by the government. These
policies affect its products and services by ensuring that the company is able to distribute
them through multiple sources to its customers (Mitchell, Sheargold and Voon, 2017). It
also becomes easier for the organisation to get the approval to establish its network
towers in New Zealand since it complies with the standards given by the Australian
6
government. It improves the overall quality of services of Verizon Communications which
benefit the company and its customers.
4) Korea-Australia Free Trade Agreement (KAFTA).
Verizon Communications manages its operations in South Korea through Verizon Korea
Limited. The positive trading relationship between Australia and South Korea benefits the
services of Verizon Communications. The free trade agreement that is formed between
these nations removes the technical complications for telecommunication enterprises to
expand their operations in these markets (Quansah and Ahn, 2017). Verizon
Communications is able to bypass various legal provisions and duties which improves the
quality of its services and reduces their prices. Thus, this treaty benefits the company in
becoming a market leader in the telecommunication sector by making sure that it sustains
its profitability.
government. It improves the overall quality of services of Verizon Communications which
benefit the company and its customers.
4) Korea-Australia Free Trade Agreement (KAFTA).
Verizon Communications manages its operations in South Korea through Verizon Korea
Limited. The positive trading relationship between Australia and South Korea benefits the
services of Verizon Communications. The free trade agreement that is formed between
these nations removes the technical complications for telecommunication enterprises to
expand their operations in these markets (Quansah and Ahn, 2017). Verizon
Communications is able to bypass various legal provisions and duties which improves the
quality of its services and reduces their prices. Thus, this treaty benefits the company in
becoming a market leader in the telecommunication sector by making sure that it sustains
its profitability.
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References
Bird, H. and Gilligan, G. (2016) Deterring corporate wrongdoing: penalties, financial
services misconduct and the Corporations Act 2001 (Cth). Company and Securities Law
Journal, 34, p.332.
Bloomberg. (2019) Company Overview of Verizon Australia Pty Limited. [online] Available
at: https://www.bloomberg.com/research/stocks/private/snapshot.asp?
privcapId=22759930 [Accessed 04/05/2019].
Douglas, M. (2017) Will Australia accede to the Hague convention on choice of court
agreements. Macquarie LJ, 17, p.148.
Dyreng, S.D., Lindsey, B.P., Markle, K.S. and Shackelford, D.A. (2015) The effect of tax
and nontax country characteristics on the global equity supply chains of US
multinationals. Journal of Accounting and Economics, 59(2-3), pp.182-202.
Forbes. (2019) Verizon Communications. [online] Available at:
https://www.forbes.com/companies/verizon-communications/#2bca36b44314 [Accessed
04/05/2019].
Grantham, R. (2018) To Whom Does Australian Corporate and Consumer Legislation
Speak. U. Queensland LJ, 37, p.57.
Harpur, P. (2017) Collective Versus Individual Rights: The Able Worker and the Promotion
of Precarious Work for Persons with Disabilities Under Conflicting International Law
Regimes. Loy. LA Int'l & Comp. L. Rev., 41, p.51.
Kavanagh, P. (2016) A case for negotiated performance-based contracting rather than
competitive tendering in government public transport (bus) service procurement. Research
in Transportation Economics, 59, pp.313-322.
Mann, M., Daly, A., Wilson, M. and Suzor, N. (2018) The limits of (digital)
constitutionalism: Exploring the privacy-security (im) balance in Australia. International
Communication Gazette, 80(4), pp.369-384.
Mitchell, A.D., Sheargold, E. and Voon, T. (2017) Environmental Protection: Moderate
Safeguards and Novel Opportunities: The Evolution of Australian Policy on Trade and
Investment. In Regulatory Autonomy in International Economic Law. Cheltenham : Edward
Elgar Publishing.
Quansah, K.A. and Ahn, W.C. (2017) The Effect of the Korea-Australia Free Trade
Agreement (KAFTA) on the Korea-Australia Trade Structure. The Asian Journal of
Shipping and Logistics, 33(4), pp.229-235.
Solomon, J. (2018) Understanding Australian GST: A Guide for SaaS Companies. [online]
Available at: https://www.chargebee.com/blog/gst-australian-saas-founders-heres/
[Accessed 04/05/2019].
Verizon. (2019) About us. [online] Available at: https://www.verizon.com/about/ [Accessed
04/05/2019].
References
Bird, H. and Gilligan, G. (2016) Deterring corporate wrongdoing: penalties, financial
services misconduct and the Corporations Act 2001 (Cth). Company and Securities Law
Journal, 34, p.332.
Bloomberg. (2019) Company Overview of Verizon Australia Pty Limited. [online] Available
at: https://www.bloomberg.com/research/stocks/private/snapshot.asp?
privcapId=22759930 [Accessed 04/05/2019].
Douglas, M. (2017) Will Australia accede to the Hague convention on choice of court
agreements. Macquarie LJ, 17, p.148.
Dyreng, S.D., Lindsey, B.P., Markle, K.S. and Shackelford, D.A. (2015) The effect of tax
and nontax country characteristics on the global equity supply chains of US
multinationals. Journal of Accounting and Economics, 59(2-3), pp.182-202.
Forbes. (2019) Verizon Communications. [online] Available at:
https://www.forbes.com/companies/verizon-communications/#2bca36b44314 [Accessed
04/05/2019].
Grantham, R. (2018) To Whom Does Australian Corporate and Consumer Legislation
Speak. U. Queensland LJ, 37, p.57.
Harpur, P. (2017) Collective Versus Individual Rights: The Able Worker and the Promotion
of Precarious Work for Persons with Disabilities Under Conflicting International Law
Regimes. Loy. LA Int'l & Comp. L. Rev., 41, p.51.
Kavanagh, P. (2016) A case for negotiated performance-based contracting rather than
competitive tendering in government public transport (bus) service procurement. Research
in Transportation Economics, 59, pp.313-322.
Mann, M., Daly, A., Wilson, M. and Suzor, N. (2018) The limits of (digital)
constitutionalism: Exploring the privacy-security (im) balance in Australia. International
Communication Gazette, 80(4), pp.369-384.
Mitchell, A.D., Sheargold, E. and Voon, T. (2017) Environmental Protection: Moderate
Safeguards and Novel Opportunities: The Evolution of Australian Policy on Trade and
Investment. In Regulatory Autonomy in International Economic Law. Cheltenham : Edward
Elgar Publishing.
Quansah, K.A. and Ahn, W.C. (2017) The Effect of the Korea-Australia Free Trade
Agreement (KAFTA) on the Korea-Australia Trade Structure. The Asian Journal of
Shipping and Logistics, 33(4), pp.229-235.
Solomon, J. (2018) Understanding Australian GST: A Guide for SaaS Companies. [online]
Available at: https://www.chargebee.com/blog/gst-australian-saas-founders-heres/
[Accessed 04/05/2019].
Verizon. (2019) About us. [online] Available at: https://www.verizon.com/about/ [Accessed
04/05/2019].
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