Government and Business: Ethical and Legal Responsibilities Analysis

This report examines the legal and ethical responsibilities of businesses in the context of government regulations and international trade. It focuses on a scenario involving XYZ Company and ABC Company, where ABC is exporting software to a country under U.S. export restrictions. The report analyzes the potential legal and financial consequences for both companies under the Export Control Reform Act of 2018 and the Arms Export Control Act of 1976, highlighting the criminal and administrative penalties for violations. It emphasizes the importance of ethical conduct, suggesting that XYZ Company should report ABC's illegal activities to the appropriate authorities to mitigate risks. Furthermore, the report discusses the impact of political conflicts on business operations, particularly concerning trade and investor confidence. It concludes by stressing the need for businesses to comply with regulations to ensure their security and position in both domestic and international markets. The report references various legal documents and reports to support its arguments.

Running Head: Government and Business
Government and Business
System04128

Government and Business
Table of Contents
Question 1..................................................................................................................................2
Question 2..................................................................................................................................2
Question 3..................................................................................................................................3
Bibliography...............................................................................................................................4
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Government and Business
Question 1
XYZ is legally as well as morally responsible for the acts of ABC Company because the
finished product is being supplied to a country in which U.S. has specifically prohibited the
export services. The finished product of ABC Company includes the software, which is
manufactured by XYZ firm. ABC Company is a customer of XYZ Company because they
are selling software to ABC. They are a part of the prohibited export. In Export Controls
Reform Act, 2018 (H.R.5040 - Export Control Reform Act of 2018) and Arms Export
Control Act 1976 (Arms Export Control Act), ABC company have done serious offence and
are liable for criminal as well as administrative punishment. XYZ should immediately take
action when they get notice about the illegal acts by ABC Company. The criminal
punishment for selling products to prohibited country is $1,000,000 and 20 years
imprisonment per violation and the administrative penalty is $250,000 per violation or double
the amount of transaction whichever is greater (Penalties).
Question 2
It is not the goal of U.S. Law to require every business to examine other businesses that it has
trade. Nevertheless, it holds organizations responsible for infractions happening after notice
are received. In light of a legitimate concern for the national security, it would be ethically,
lawfully and financially advisable for XYZ to tell the proper agencies since it would save
organization from risk and culpability. It may cost organization a colleague and bring about
notoriety viewpoints, yet it will spare the organization from extreme repercussions from the
law. XYZ Company should immediately stop trading with ABC Company and should not
resume the transaction until ABC stops exporting goods to the country where trade is being
prohibited. Moreover, XYZ should wait until ABC Company has given permission to
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continue to do business by the appropriate authority after investigating the case. XYZ should
have proof that they did not know that the ABC is exporting the products to other country.
Question 3
American business has impact due to conflict between the government because the main
motive of any company is profit maximisation and they do not work to give preference to any
government. Any business needs political stability for effective and efficient working. It
affects investor and consumer confidence. Political conflict in this case is effecting the
business of XYZ and ABC both. When there was no conflict between U.S. and other country
then the export was legal but when the situation got worse between the countries then all the
trade between the countries was stopped and hence was illegal. Until the ban on export is not
revoked, any trade or export to the country will considered as an offence in various
legislations and companies will be paying huge amount as damages. This will have huge
impact on business as their profit margin may decrease significantly (Washington Trade
Report). To ensure the administration’s adequacy with respect to sanctions abroad, it must
regulate the business practices at home, accordingly guaranteeing its own position and
security at home and abroad.
Bibliography
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Government and Business
Arms Export Control Act. n.d. 2019 April 2019 <https://legcounsel.house.gov/Comps/Arms
%20Export%20Control%20Act.pdf>.
H.R.5040 - Export Control Reform Act of 2018. 2018. 15 April 2019
<https://www.congress.gov/bill/115th-congress/house-bill/5040/text?format=txt>.
Penalties. 2016. 15 April 2019
<https://www.bis.doc.gov/index.php/enforcement/oee/penalties>.
Washington Trade Report. 2012. 2019 April 2019
<http://www.washingtontradereport.com/EAAFindings.htm>.
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