Legal Aspects of UPS Operations in Australia: Treaties and Regulations

This report provides a detailed analysis of the legal and regulatory framework impacting United Parcel Services (UPS) operations in Australia. It identifies key legislative and regulatory factors, such as corporate tax regulations, open market systems, discrimination laws, and antitrust laws, and assesses their mixed impact on the company. Furthermore, the report discusses the influence of various treaties, conventions, and agreements, including the US-Australia Free Trade Agreement, the International Tax Amendments Bill 2002 with Canada, the Paris Convention, the Montreal Convention, and air service agreements, on UPS's products and services. The analysis highlights how these international agreements facilitate trade, reduce taxation burdens, and promote fair business practices, ultimately affecting UPS's operational strategies and revenue generation in the Australian market. Desklib offers a wide array of solved assignments and study resources for students.

Legal Aspects of International Business and Enterprise

Table of Contents
1. Identify a multinational company operating in Australia and discuss it briefly..........................3
2. Identify the legislative/regulatory framework affecting the operations of UPS..........................3
3. Discuss treaties, conventions and agreements that have impacted on the products and services
of the chosen organisation...............................................................................................................5
References........................................................................................................................................8

1. Identify a multinational company operating in Australia and discuss it briefly.
United Parcel Services is one of the leading multinational package delivery organisations in the
world. The organisation operates in the courier industry globally. The courier industry is a
competitive industry at the present moment with companies like FedEx, Royal Mail, DTDC,
DHL et cetera have operated successfully so far but United Parcel Services has been able to keep
its position in the market effectively. United Parcel Services operates all across Australia which
makes it a leading organisation in this country as well. The organisation presently operates in
220 countries and has a global strength of 454000 as counted in the last fiscal year. In Australia
the organisation has around 414 employees which help the organisation to operate in Australia
successfully. The organisation was founded 110 years back in Seattle, Washington. The
organisation has distribution centers in different locations but the headquarters of the company is
based out of Sandy Springs, Georgia in United States of America (Bruner et al., 2017).
2. Identify the legislative/regulatory framework affecting the operations of UPS.
For an organisation to operate in a country there are several rules and regulations which needs to
be followed. An organisation needs to analyse the main aspects of operations which would help
the organisation to abide by the rules and regulations of the country and provide the most
effective services to the consumers. The Australian government has announced different reforms
that each and every foreign organisation operating in the market has to abide by. It is important
to mention that the courier industry contributes to the Australian economy to a large extent but it
still stands to be important to abide by the rules and regulations of the country. The country has
certain legislative regulatory frameworks which makes it important for the organisation United
Parcel Services to follow while operating in the country. The Government has framed these
regulations for better operations of business as well as to ensure fair competition in the market
but it cannot be denied that there are both positive and negative results of these regulations for
the foreign organisations (Picciotto, 2017).
United Parcel Services is operating Australia for a long time now and the strength of the
organisation is expected to take a plunge in the coming future given the constant rise in the
demand of the overall services. One of the major aspects in foreign companies operating is the
corporate tax regulations. The country has the corporate tax set at 30% flat for every organisation

operating in the Australian market. It is extremely important to note that the country has set a
higher tax set as compared to other countries and hence the decision was recently made to reduce
the corporate tax by 1.5% which is still a good attempt to attract investment. In this case it is
important to note that the organisation needs to operate effectively but Australia has set its
corporate tax higher than countries like Hong Kong, Singapore, Thailand et cetera. The
Imputation tax system is mainly focused on developing a system which would help the investor
to invest less and tax does the job. On the other hand it is important to note that excessive tax
asked for the organisation clearly affects the interest of the company to operate in Australia. The
country applies an overall worldwide tax approach but the local companies are exempted from
paying tax on the business income earned by them (Seid, 2018). It is extremely important for the
organisation to note that the foreign organisations have to pay the business earnings in the form
of some percentage of tax which is clearly another financial burden for the organisation UPS.
Another regulatory framework that the country believes in is its open market system. The open
market system is extremely effective for most of the foreign companies because it helps them to
operate freely in the market. One of the major legislative frameworks that Australia follows is
the discrimination framework which helps the organisations to manage the operations in an
unbiased system. It is extremely important to mention that discriminatory practice is not accepted
in the country and hence all the organisations including the foreign organisations to abide by the
Human Rights Commission Act 1986 (Sornarajah, 2017).
The discrimination laws have to be effectively followed by the organisation in order to ensure
that there is no prejudice in the way the organisation manages its staff. The capital gain tax is
not paid by the local Australian organisations which are mandatory for any foreign organisation
operating in any part of Australia which is clearly another burden for the foreign organisations
like United Parcel Services to operate their business in Australia. It is extremely important to
note that the financial framework of the organisation has been stable in the last few years which
play an important role in attracting foreign organisations to the Australian market. The
Australian dollar is one of the most traded currency after US Dollars and Pounds and hence it is
clear that foreign organisations show interest because of the governmental stability and the
stability of the currency market. The Monetary targeting policy of the country has been
extremely effective in increasing the money supply within the market leading to the increase of
purchasing power which is extremely important to improve the overall transaction in the market

(Subedi, 2016). Even though the merger and control policies in the country is strict given the
improved infrastructure of the courier industry it has brought in good interest of the foreign
organisations which clearly shows that the competition is rising in the country and this has also
influenced companies like United Parcel Services. The Antitrust law is constantly evolving in the
country that is helpful in responding to the changes in the economic and environmental aspects
of business. Strict Antitrust law is effective in developing stronger infrastructure and better
consumer support and hence this regulation is effective helping the organisation to operate in a
better manner. The Federal Competition and Consumer Act 2010 has been extremely effective in
managing the anti competitive cartels and illegal agreements between organisations which
clearly affect the market stability. Even though it might shape as negatively impactful for
organisations coming from overseas region it will provide them an opportunity to ensure
effective practice of business especially in the air delivery and freight services. Hence it could be
said that the legislative and regulatory frameworks have mixed impact on the company United
Parcel Services (Picciotto, 2017).
3. Discuss treaties, conventions and agreements that have impacted on the products and
services of the chosen organisation
One of the major trade treaties that Australia has been involved in since 2005 is with USA. This
is a preferential free trade treaty which is extremely effective for both the country. There are
certain rules and regulations which are involved in this free trade treaty but it is important to note
that this treaty has contributed to the growth of diplomatic relationship between these two
countries. This treaty involves national treatment and free movements of goods and services and
this is where the courier industry comes into the picture. With United Parcel Services being one
of the leading organisations to operate in the courier industry it will be able to encash this
extremely effective trade treaty to operate in the both the countries freely (McGovern, 2018).
Even though the national regulations of Australia will be implemented on its operations but
market access to the organisation will be easier which drives the operations of the company to a
large extent. Even though there has been opposition on the treaty from both sides of the team it
is extremely important to note that this treaty has also found support from Australian and
American counterpart which shows that the future of this treaty is likely to fetch results for both
the organisations. The free movements of goods and services would help companies like United

Parcel Services because without proper delivery and supply system no trade would be successful
and hence the organisation UPS has significant chances of doing good business resulting from
this treaty (Lester, Mercurio and Bartels, 2016). The International Tax Amendments Bill 2002
with Canada is another effective tax treaty providing both the countries and the organisations
operating in the countries a strong platform to do business under managed environment in terms
of tax payments. United Parcel Services is present in both the countries and hence it is a matter
of discussion as to whether the organisation will get the facilities of this treaty from both the
countries or not but it is clear that lower taxes especially in terms of air delivery and freight will
be received by the organisation. As per this agreement double taxation will not be involved and
hence it will be effective for the organisations operating in these countries to operate freely and
avoid excess taxation which largely affects the profit of the operating organisations like United
Parcel Services (Herdegen, 2016).
The Paris Convention is an effective business convention which has helped many organisations
to come together and operate together for business profits. It is extremely important to note that
Paris Convention has been effective in maintaining strong national treatment and international
trade relations. The main focus of this convention is to eliminate any kind of discrimination
between organisations from different countries (Picciotto, 2017). When two companies from two
different countries operate in each other it becomes important to have business tolerance which is
extremely important to build up a strong business relationship and the Paris Convention helps to
create that sense of importance and respect in each other. The Montreal Convention is another
major movement in terms of cargo delivery agreement. Australia has actively taken part in the
convention which has helped the country to get into agreements with countries like US,
Indonesia et cetera which is a positive sign for the country as well as the companies operating in
Australia. There are number of different aspects involved in the Montreal Convention shows that
the implementation of business agreement would help United Parcel Services as it will mainly
get financial flexibility and better price for their services (Allee and Elsig, 2016).
The Air service agreements of Australia with other countries have been extremely effective for
the overall growth and development of the country as well as for the air delivery industry in the
country. Australia’s Air service treaty with Canada, Colombia, Denmark all have courier service
involved in the agreement which clearly shows the interest of Australia in its courier industry.

The upcoming trade treaty in air service segment with countries like India and Bangladesh are
likely to get officially established which would help the organisation United Parcel Services to
expand its business and generate significant revenue for the organisation. The US Australia Air
transport agreement taking place way back in 1946 has been effective in managing the air service
including the courier and air delivery services which have helped companies like DHL, United
Parcel Services et cetera to operate in Australia effectively and get the best out of the trade
agreement. The Government of Australia and the Government of Samoa got into an agreement
for exchange of air services including cargo where both the parties could decide on involving
new organisations to provide their services and accordingly they will be compensated (Herdegen,
2016). There are also other perks for companies like United Parcel Services getting involved in
this trade treaty. The rights and remedies are provided by both the countries which are the main
agenda of the treaty. This treaty has been designed with the aim to improve the trade relations
between Australia and Samoa and hence this treaty would be effective for both the countries to
consider this as a cornerstone and accordingly operate. In this scenario it could be said that
United Parcel Services would be able to freely organise its trade in Samoa as per the contract
made through this air service trade treaty which is an effective move by both the countries. To
conclude it could be said that the treaties, convention and agreements that Australia is involved
in largely help the organisations operating in the country and supports the growth and
development of the business (McGovern, 2018).

References
Allee, T. and Elsig, M., 2016. Are the contents of international treaties copied-and-pasted?
Evidence from preferential trade agreements.
Bruner, R.F., Lipson, M.L., Carr, S. and Lipson, M.L., 2017. FedEx Corp. versus United Parcel
Service of America, Inc.: Who Will Deliver Returns from China?. Darden Business Publishing
Cases, pp.1-14.
Herdegen, M., 2016. Principles of international economic law. Oxford University Press.
Lester, S., Mercurio, B. and Bartels, L. eds., 2016. Bilateral and regional trade agreements:
Commentary and analysis(Vol. 1). Cambridge University Press.
McGovern, E., 2018. International trade regulation (Vol. 2). Globefield Press.
Picciotto, S., 2017. Rights, responsibilities and regulation of international business.
In Globalization and International Investment (pp. 177-198). Routledge.
Seid, S.H., 2018. Global regulation of foreign direct investment. Routledge.
Sornarajah, M., 2017. The international law on foreign investment. Cambridge University Press.
Subedi, S.P., 2016. International investment law: reconciling policy and principle. Bloomsbury
Publishing.