Legal Aspects of International Trade and Enterprise Report - HI5015

This report evaluates the legislative framework impacting Siemens AG, a German multinational corporation, operating in Australia. It analyzes the company's global and Australian employee numbers and the relevant regulatory framework, including the Corporations Act 2001, Competition and Consumer Act 2010, employment laws (Fair Work Act 2009), and the Fair Trading Act 1992. The report also examines the impact of international treaties, conventions, and agreements on Siemens AG's products and services, such as the Double Taxation Treaty between Australia and Germany, the Australia-United States Free Trade Agreement (AUSFTA), the China-Australia Free Trade Agreement (ChAFTA), and the ASEAN-Australia-New Zealand FTA (AANZFTA). The analysis highlights how these legal and trade agreements affect Siemens AG's operations, market access, and pricing strategies within the Australian and international markets, emphasizing the importance of compliance and its implications for the company's growth and profitability.

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Legal Aspects of International Trade and Enterprise

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Executive Summary
The purpose of this report is to evaluate the legislative framework of a multinational
company. Siemens AG is selected in this report which is a German conglomerate
corporation that operates in healthcare, automation, energy and infrastructure industry.
The number of employees of Siemens AG globally and in Australia are analysed in this
report along with an evaluation of the legislative regulatory framework that is imposed on
the organisation. The impact of treaties, conventions and agreements on the products and
services of Siemens AG is also analysed in this report.

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Table of Contents
Introduction of the Multinational Company............................................................................3
Legislative Regulatory Framework........................................................................................3
Treaties, Conventions and Agreements................................................................................5
References.............................................................................................................................8

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Introduction of the Multinational Company
Siemens AG is a Germany-based multinational conglomerate corporation that was
founded in 1847 (Siemens, 2019). The company mainly offers its services in different
industries such as healthcare, energy, infrastructure and cities. Currently, Siemens AG is
the prominent maker of medical diagnostics equipment which is used by health divisions
on a global stage (Reuters, 2019). The company is huge in the automation industry as
well, and its automation division is the most profitable segment of the organisation. The
headquarters of Siemens AG is situated in Berlin and Munich, Germany. On a global
stage, there are over 377,000 employees that work for the company (Siemens, 2019). In
Australia, the company has extensively expanded its operations in many areas. It is
currently 594th ranked company of the top 2000 corporations operating in Australia. In
2018, the corporation hired more than 1488 employees in order to handle its operations
(IBIS World, 2018).
Legislative Regulatory Framework
In Australia, there are various policies that are implemented by the government in order to
make sure that they are able to govern their operations. The objective of these laws is to
make sure that companies did not misuse their positions in Australia to harm the interest of
customers, employees, government or other stakeholders (Low et al., 2015). These
regulatory compliances are applied to all multinational corporations, and they differ based
on their industries. Since Siemens AG is a conglomerate, there are different areas of laws
which apply to the operations of the company when it offers its services in Australia.
Through these policies, guidelines are provided for companies to make sure that they
effectively comply with laws. Following are different elements of the legislative regulatory
framework of Australia which are applied to the organisation.
 Corporations Act 2001 (Cth)
In order to manage its day-to-day operations, the company has to comply with the
provisions given under the Corporations Act. This is a relevant act that provides provisions
that apply to companies operating in the country. Under this act, provisions are given for
the company regarding reporting requirements which are mandatory to be followed. As per
these policies, the company has to report regarding its operations to the Australian
Securities and Investments Commission (ASIC) (Bae Choi, Lee and Psaros, 2013). The

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ASIC looks into the operations of the company to make sure that it did not violate any
laws. Various rights are recognised for the ASIC under which it can conduct an
investigation into the operations of Siemens AG to make sure that the company did not
engage in any illegal or unethical practices. The Corporations Act also provides provisions
regarding mandatory meetings which the directors of Siemens AG have to conduct.
 Competition and Consumer Act 2010 (Cth)
The Australian Government has imposed various provisions for the promotion of
competition in the country. Laws are also put in place to make sure that the rights of
customers are protected when companies conduct their business operations. The
provisions regarding competition law are given under the first schedule of this act. As per
these laws, Siemens AG cannot prohibit its suppliers from engaging with other businesses
in order to gain an unfair advantage in the market. Various provisions are also
implemented to make sure that the company is able to effectively engage with other
competitors that operate in the industry (Nagarajan, 2013). Thus, Siemens AG cannot
engage in any contracts that create a monopoly of the company in the market since it
adversely affects the economic growth of the country. The second schedule provides a
range of policies regarding the protection of consumer rights. These are also referred as
the Australian Consumer Law (ACL). As per these laws, Siemens AG has to make sure
that it takes corrective measures that are focused on protecting the rights of customers.
For instance, the provisions for the protection of customers from false and misleading
claims regarding products and services of the company are given under section 18 of the
act.
 Employment Laws
Since Siemens AG has hired employees in Australia to manage its operations, the
company has to make sure that it protects their rights. Various employment law provisions
are implemented by the Australian government to make sure that companies did not
violate the interest and rights of their employees. The provisions regarding employment
laws are given under the Fair Work Act 2009 (Cth). Various general guidelines are given
under this act to make sure that the company did not adversely affect the interest of the
company. A good example is the guidelines given for the company regarding maximum
working hours for employees (Bray and Stewart, 2013). In Australia, companies cannot
enforce workers to work for more than 38 hours in a week. Since many of the operations of
Siemens AG requires its employees to work for long working hours, the company has to

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form a contractual relationship with its employees to make sure that they work for long
hours. Furthermore, the corporation cannot hire employees below the minimum pay wage
which is decided by the government. The government also increases this minimum wage,
and Siemens AG also has to give increased minimum wage to its employees. Employees
receive additional pay for the hours for which they work in the company above 38 hours in
a week (Bray and Stewart, 2013). Siemens AG cannot pay the same wage to its
employees for the additional hours since they have the right to receive additional payment
for their work.
 Fair Trading Act 1992 (Cth)
The Australian government has also implement provisions for companies such as Siemens
AG to make sure that they did not engage in any practices that could harm the economic
growth or the interest of local communities. In this regards, provisions are given under the
Fair Trading Act. As per these laws, prohibitions are imposed on Siemens AG to make
sure that the company did not unfair trade in the Australian market by engaging in illegal or
unethical contacts with its suppliers or business partners (Graw, 2012). The company also
has to make sure that it fairly deals with its employees by providing them adequate health
and safety facilities to protect their interest.
Treaties, Conventions and Agreements
Since there are many countries in which Siemens AG operates, the treaties, conventions
and agreements that are formed between these nations affect its products and services.
There are a number of treaties, conventions and agreements in which the Australian
government has entered, and they made it easier for Siemens AG to expand its operations
in the overseas markets (Gardiner, 2015). The profitability of the organisation is affected
by these factors since it becomes easier and beneficial for the organisation to reach a new
customer base which is situated in foreign countries. Various guidelines and provisions are
also implemented on the organisations when they conduct their operations in the overseas
markets. Therefore, effective compliance with them is crucial for the organisation to make
sure that it is able to reach out to its customers.
 Double Taxation Treaty between Australia and Germany
In 2016, both nations formed a treaty with each other in order to address the issue of
double taxation. In this treaty, the government of Australia and the Federal Republic of
Germany has eliminated the imposition of double tax on the companies which operates in

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both nations. As per this treaty, the tax which was imposed on the income and capital of
companies has been removed (EY, 2016). Furthermore, stricter provisions are
implemented that made it difficult for companies to avoid paying tax to the government.
Since Siemens AG is a Germany based organisation, the company has benefited from this
treaty. This treaty has opened new business growth opportunities for the organisation by
making it easier for the company to easily expand its operations in both markets. This
treaty affects the products and services of the company as well. Siemens AG is able to
offer its services to its customers situated in Australia without hiking its prices due to the
avoidance of double taxation (EY, 2016). The removal of this tax means that the income
which the company sent back to its headquarters in Berlin is not taxed by the Federal
Republic of Germany. This makes it easier for the organisation to easily offer its services
to the customers without facing difficulties that lead to expand of its operations and growth
in its profitability which is important for the company to sustain its future growth.
 Australia – United States Free Trade Agreement (AUSFTA)
A major market for Siemens AG is the United States and treaties that are formed between
Australia and the United States benefit the company as well. Both of these nations have
formed a Free Trade Agreement (FTA). The purpose of this FTA is to promote trading
practices between the two countries. The government achieve this objective by removal of
unnecessary legal compliances that are imposed on companies (Thurbon, 2015). Under
this treaty, the taxes and other provisions which are imposed on the organisation are also
removed. Due to these factors, Siemens AG is able to effectively conduct its operations in
both markets without facing any hiccups. This treaty affects the products and services
which the company offers to its customers because it enables it to reduce their prices
since it did not have to pay fees, charges or duties which are usually imposed by foreign
governments. The quality of its products and services remains the same as well. These
factors contribute to the overall growth of Siemens AG and enable the company to sustain
its growth in the market.
 China-Australia Free Trade Agreement (ChAFTA)
China is a major market for Siemens AG as well. The positive relationships that are
constructed between the government of Australia and China lead to benefiting Siemens
AG as well. Australia is one of a few countries that have a positive trading relationship with
Chine and Siemens AG is able to take advantage of this fact. The company is able to
effectively expand its operations in China from Australia which saves its costs, and it also

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removes the obligation which is otherwise imposed on the company to comply with the
lengthy legislative framework implemented by the Chinese Government (Xiang, Kuang and
Li, 2017). Due to the removal of these factors, the products and services of Siemens AG
are offered at the same prices to its clients since both governments have also removed the
imposition of duties, fees and charges on foreign companies. Siemens AG is able to take
advantage of this fact, and the company is able to effectively expand its operations in the
Chinese market.
 ASEAN-Australia-New Zealand FTA (AANZFTA)
Siemens AG has also established its operations in the New Zealand market and treaties
between Australia and New Zealand benefit the company. Since there are positive trading
ties between Australia and New Zealand, Siemens AG is able to expand its operations in
both markets. Through AANZFTA, both governments have established free trade areas,
and companies operating in these areas are free from legislative framework which is
otherwise imposed on them (Tseuoa, Syaukat and Hakim, 2012). Along with legislative
policies, the government has also removed various duties, fees and charges which are
imposed on the company. Due to the removal of these elements, the prices of Siemens
AG remains the same since the company is not subject to additional fees or legislative
duties which increases the profitability of the company and expands its markets.

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References
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emission disclosures. Pacific Accounting Review, 25(1), pp.58-79.
Bray, M. and Stewart, A. (2013) From the arbitration system to the Fair Work Act: the
changing approach in Australia to voice and representation at work. Adel. L. Rev., 34,
p.21.
EY. (2016) New Australia-Germany Tax Treaty enters into force - EY – Global. [Online]
Available at: https://www.ey.com/gl/en/services/tax/international-tax/alert--new-australia-
germany-tax-treaty-enters-into-force [Accessed on 01/04/2019].
Gardiner, R.K. (2015) Treaty interpretation. Oxford: Oxford University Press.
Graw, S. (2012) An introduction to the law of contract. Toronto: Thomson Reuters.
IBIS World. (2018) Siemens Ltd - Premium Company Report Australia. [Online] Available
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S.M., Hölscher, A.H., Hofstetter, W.L., Jobe, B.A. and Kitagawa, Y. (2015) International
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Thurbon, E. (2015) 10 years after the Australia-US free trade agreement: where to for
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Tseuoa, T., Syaukat, Y. and Hakim, D.B. (2012) The impact of Australia and New Zealand
Free Trade Agreement on the beef industry in Indonesia. Journal of ISSAAS, 18(2), pp.70-
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Xiang, H., Kuang, Y. and Li, C. (2017) Impact of the China–Australia FTA on global coal
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