Business Environment

Presented By: GROUP NO. 9

Members: Ancy Antappan Divya Sudarsanan Aneera Alavi Sameena V Y Arun Kumar Nair Alex B Thomas

Topic : Intellectual Property Rights(IPR) Foreign Exchange Regulation Act(FERA) Foreign Exchange Regulation Act (FEMA) TRIPS(Trade-Related Aspects of Intellectual Property Rights) TRIMs(trade-related investment measures)

Intellectual Property Rights(IPR)

Rights granted to creators and owners of works.

Legally enforceable power to exclude others from using the information created, or to set the terms on which it can be used

PATENT

TRADEMARK COPYRIGHT BRANDS &

INTELLECTU AL PROPERTY RIGHTS

LOGOS

TRADE SECRET KNOW -HOW

DESIGN

Objective

Gives right to authors of literary and artistic works Encourage and reward creative work Protection of distinctive signs, in particular trademarks To stimulate innovation, design and the creation of technology

Provide protection for the results of investment in the development of new technology

Importance Of IPR

Wealth creation Legitimate ownership Monopoly market advantage Bargaining power Collaborations Image of a trustworthy organisation Allows to stay in Business.

Authorities in India

Controller General of Patents, Design and Trademarks under Department of Industrial Development, Ministry of Industry

Copyrights registration Under Ministry of HRD

Foreign Exchange Regulation Act(FERA)

An Act To consolidate and amend the law regulating certain payments Dealings in foreign exchange and securities Transactions indirectly affecting foreign exchange and the import and export of currency For the conservation of the foreign exchange resources of the country And for the proper utilization thereof in the interests of the economic development of the country. The Foreign Exchange Regulation Act (FERA) was enacted in 1973 by the Indian Parliament to consolidate and amend the FERA Act of 1947, regulating certain payments, foreign exchange and securities transactions, and transactions that affect India's currency trade.

History
FOREIGN EXCHANGE REGULATION ACT, 1973 (FERA) The Foreign Exchange Regulation Act (FERA) was legislation passed by the Indian Parliament in 1973 by the government of Indira Gandhi. FERA imposed stringent regulations on certain kinds of payments, the dealings in foreign exchange and securities and the transactions which had an indirect impact on the foreign exchange and the import and export of currency.

Provisions


Under FERA guidelines, the Reserve Bank of India (RBI) permitted only authorized dealers to guarantee debt in favor of an Indian resident on behalf of nonresident Indians (NRIs) or provide guarantees to foreign buyers of Indian exports. Companies in India had to offer guarantees to income tax authorities for taxes due from foreign-national employees. Indian companies had to obtain RBI approval to hire overseas consultants. Foreign companies (except high technology, and export firms) operating in India could own only up to 40 percent of the equity in their business. Shipping agents were permitted to guarantee the debt of foreign shipping principals only under specific laws.

FERA Violation- A Criminal Offense

 Transactions that were not mentioned in the act were not permitted  FERA regulations were enforced by the office of the Enforcement Directorate under the Department of Revenue, and supervised by the Ministry of Finance.  The directorate consisted of the head office, seven zone offices, nine sub-zone offices and a field unit  The act permitted 813 officers to scrutinize transgressions by businesses and individuals. Violations of the act could result in imprisonment.

IBM and Coca-Cola Exited India



IBM and Coca-Cola closed their Indian operations because of FERA's equity regulations.

Naunihal Singh wrote in "India and the United States," "(Then Finance Minister George) Fernandes claimed the soft drink company was making excessively large profits--0-15 million rupees annually on initial investment of only 600,000 rupees." Multinational companies were repatriating large profits.

Foreign Exchange Regulation Act (FEMA)

Foreign Exchange Regulation Act of 1973 (FERA) was repealed on 1st June 2000 and it was replaced to Foreign Exchange Management Act (FERA).

FEMA, which has replaced FERA, had become the need of the hour since FERA had become incompatible with the proliberalisation policies of the Government of India.

FEMA has brought a new management regime of Foreign Exchange consistent with the emerging frame work of the World Trade Organization (WTO).

Objective Of FEMA

consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments.

For promoting the orderly development and maintenance of foreign exchange market in India.

FEMA broadly covers all matters related to foreign exchange, investment avenues for NRIs such as immovable property, bank deposits, government bonds, investment in shares, units and other securities, and foreign direct investment in India.

Objective .Contd

FEMA extends to the whole of India. It applies to all branches, offices and agencies outside India owned or controlled by a person who is a resident of India and also committed outside India by any person to whom this Act applies.

TRIPS(Trade-Related Aspects of Intellectual Property Rights)

 

International agreement administered by WTO. Sets down minimum standards for many forms of intellectual property(IP)regulation as applied to nationals of other WTO members.

Contain requirements that nations laws must meet for copy right rights, geographical indications, integrated circuit layout designs, patents and undisclosed or confidential information.

Also specifies enforcement procedures, remedies and dispute resolution procedures.

FEATURES
 Most important multilateral instrument for the

globalization of intellectual property loss.

 TRIPS has a powerful enforcement mechanism.  It requires member state to provide strong protection

for intellectual property rights.

 Access to essential medicines.  Software and business method patents.

IMPLEMENTATION IN DEVELOPING COUNTRIES



Developing countries were allowed extra time to implement the applicable changes to their national laws.

A 2005 report by the WHO found that many developing countries have not incorporated TRIPS flexibilities into their legislation to the extent authorized under Doha.

TRIPS standard of requiring all countries to create strict intellectual property systems will be detrimental to poorer countries' development.

TRIMs(Trade-Related Investment Measures)?

Government imposed measures to either

encourage or compel

investment to achieve certain national priorities.

established for foreign investors to ensure the positive impacts of foreign direct investment (FDI) Aimed at protection of domestic sectors from competition injection of foreign investment

More frequently used by developing countries Aimed at protection of domestic sectors from competition injection of foreign investment

More frequently used by developing countries

FAMILIAR TRIMS
Local content requirements (LCRs)

Popular government policies in developing countries to regulate FDI Foreign investors are required to utilize a certain proportion of local parts and components in their production

Transfer technology to the local countries

Trade balancing requirements

Limit the amount of imports To avoid potential serious balance of payment deficit

Foreign exchange balancing requirements

Aim at linking the imported level of a foreign firm to the value of its exports maintain a net foreign exchange earning

Export performance requirements (EPRs)

restrictions on the sales of products in domestic market certain proportion of production - stipulated for export

Technology transfer requirements

Foreign investors are required to share new technologies and researches with local researchers, government agencies, businesses or local communities.

Joint venture requirements

limit foreign ownerships of the firms located in home countries influence the activities of foreign investors by requiring them to take on local partners in joint venture

CONS OF TRIMs

TRIMs discourage free trade and free competition TRIMs have a negative impact on the economic efficiency of a foreign operation in a country

TRIMs also slow down the pace of technological upgrading of local operations in host countries

the gains of wholly owned subsidiaries are higher than that of joint ventures which are set up in request under joint ventures requirements.

Trims agreement


The TRIMs Agreement is a multilateral agreement that only applies to the measures that affect trade of goods. Came into effect on 1 January 1995 Focuses on discriminatory treatment of imported and exported products Prohibits those TRIMs which violate "national treatment" principles in GATT or lead to restrictions in quantity

Objectives

To advocate Members to eliminate those TRIMs which cause trade distortions Expand the liberalization of world trade and facilitates investments across international frontiers.

Content

The Agreement contains only an illustrative list of measures in Annex. The measures in the list are inconsistent with Article III (National Treatment on Internal Taxation and Regulation) o Article XI (General Elimination of Quantitative Restrictions) of GATT 1994

be eliminated under the Agreement, including local content requirements, trade balancing measures, foreign exchange balancing requirements and export performance, etc.

the developing countries are allowed to retain TRIMs which constitute a violation of GATT Article III (National Treatment on Internal Taxation and Regulation) or Article XI (General Elimination of Quantitative Restrictions)