Legal Aspects of International Trade and Enterprises

Legal aspects of international trade and enterprises.
Legal aspects of international trade and enterprises.
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Legal aspects of international trade and enterprises.
1. Description of Procter and Gamble Multi-National Company.
Procter and Gamble is a multi-national company that deals with consumer goods. The
company offers Skin as well as personal care products under different brands such as Olay,
Safeguard, and Old spice among others. Formed back in 1837 by a British American business
man called William Procter and an Irish American business man called James Gamble
(Azman, Baharumshah, Law, 2010 p.67).They believed in the dream they had of wanting to
find small yet meaningful ways of changing and improving people’s lives. , and formed this
company, it started as a very Procter and Gamble company has invested so much in human
resources, they believe that one of the reasons that they have made it so far is because of their
well trained staff and personnel. By 2017, a report showed that Procter and Gamble had a
total of 95 thousand employees worldwide and in Australia they had 157 employees
(Beamish, 2013 p.75).The global headquarters of Procter and Gamble are located in
downtown Cincinnati, Ohio in America.
2. Legislative framework of the company.
There are certain legislative and regulatory frameworks that affect all multi-national
companies operating in Australia. The Australian government recognizes the need for a
regulatory framework that will keep pace and act as a watch dog to all Multi-national
companies operating in Australia. Procter & Gamble being a multi-national company based
in Australia is affected by some of these regulatory frameworks (Boddewyn, 2015 p.65)
Below is a discussion on some of the legislative frameworks that affect Procter & Gamble
Company.

Legal aspects of international trade and enterprises.
Exchange rate controls in Australia have been abolished. The major bank in Australia; the
reserve bank of Australia took the initiative of suspending almost all of the foreign exchange
programs in Australia (Briscoe,Tarique,Schuler,2012 p.42).This has really affected Procter &
Gamble Company and its operations. Exchange rate needs to be controlled, when they are
controlled then they can result to some serious financial and economic consequences. Despite
the many sales that Procter & Gamble company are making from the sale of its consumer
goods, the profit that they are making would not match the one they would make if the
government of Australia had decided to control the exchange rates.
The other regulation framework that affects Procter & Gamble Company is the Australia’s
corporate tax rate of 30%. When compared to other economies, this tax rate is very
competitive and even way much higher (Brownlie & Crawford,2012 p.213).A lot of money is
deducted as tax out of the total money that the company makes from the sales of its various
types of consumer goods. This has made Procter & Gamble Company not to make any
considerable amount of profit. This corporate tax rate is very high. Australia is does not have
a well-developed economy, the 30% corporate tax rate is therefore overrated, countries with
developed economies such as Japan, Chin, United States, France, Germany among others are
some of the countries that can impose the 30% corporate tax rate.
Australia is among one of the countries in the world that has a very strong but enduring
traditional democracy. Australia is a country that the rule of law and the entire necessary
regulatory framework prevails (Dabbah, 2010 p.342).For instance Procter & Gamble
Company has to fully abide by the Foreign Corrupt Practices Act compliance program. The
company signs and commits not to engage in any corrupt and unwanted dealings in Australia.
Failure to the compliance with this program then the appropriate action will be taken against
the company. In the case where the authorities in charge get to know or get some piece of

Legal aspects of international trade and enterprises.
tangible evidence that the company is engaging is corrupt dealings, then all its operations
would be shut down and the appropriate action taken which will first be determined by
carrying out an investigation to determine the credibility of the provided information.
The legal system that exists in Australia is very different from the one that is America. In
Australia the legal system is totally not under any circumstance immune to political pressure
when situations have arisen and one is trying as much as possible to resolve business disputes
and misunderstandings that might have occurred as a result of different reasons. This is
among one of the factors that greatly affects Procter & Gamble Company (Buckley &
Casson, 2016 p.90).
Government’s subsidies, anti-dumping rules in Australia greatly affect the overall operations
of Procter & Gamble Company. In Australia there are certain rules regarding damping and
disposal of wastes. Procter & Gamble Company therefore have to adhere to these rules. A
violation of any of these rules or a section of these rules will result to serious consequences.
The issue of countervailing and some serious trade remedies. These rules must follow to the
later by the company.
Apart from the Australian government, there is the World Trade Organization that is specially
formed and designed to enhance various trade opportunities to multi-national companies such
as Procter & Gamble (Buckley & Casson, 2016 p.150).This organization has some effect on
the operations of multi-national company. It is tasked with the activity of monitoring
international trade. It has the ability of influencing some very crucial terms of trade that can
be implemented in a certain country. It does not have total control, it just have an ability to
influence the direction that the laws and regulations will take. Being under the surveillance
and also guidance of the World Trade organization, Procter & Gamble companies operations