Managing the Rupee. Protec'on, Restric'ons and Opportuni'es for Naviga'ng the Future of Business in India

Transcription

1 Managing the Rupee Protec'on, Restric'ons and Opportuni'es for Naviga'ng the Future of Business in India

2 Panelists Katherine Brennan S&P Global Deputy General Counsel & Corporate Secretary Karim Shehadeh American Bureau of Shipping VP & Deputy General Counsel Manish Mehta Benesch Partner Ravi Singhania Singhania & Partners Managing Partner Moderator: Terri Pepper Gavulic TerraLex Execu've Director

3 Why is the rupee different than other currencies?

4 Indian Rupee ConverGbility Indian Rupee not fully convergble unlike AUD, EUR, HKD, SGD, USD Government restricgons on overseas capital account and current account transacgons Risk in full convergbility Ø Ø Ø Increased foreign debt High volaglity Effect on balance of trade and exports

5 What happens differently in Indian courts than in U.S. or other courts?

6 Indian Judiciary vs. U.S. Judiciary Indian Judiciary: Single court system Supreme Court of India High Courts of India Subordinate Courts U.S. Judiciary Dual court system Federal Courts State Courts U.S. Supreme Court is the highest court

7 Indian Judiciary vs. U.S. Judiciary: U.S. Appointment of Judges State Courts: States have different rules for appoingng judges Popular ElecGon (ParGsan or Non-ParGsan ElecGon) Governor appointment or Legislature Appointment Merit SelecGon Federal Courts: Supreme court jusgces, court of appeals judges and district court judges are all nominated by the President and confirmed by the Senate.

8 India: Indian Judiciary vs. U.S. Judiciary: Appointment of Judges Judges appointed and transferred by the Collegium Collegium: Chief JusGce of India and the four most senior judges of the Supreme Court Three Judges Cases NaGonal Judicial Appointments Commission

9 Law of Damages: India, Generally Based on Common Law Sources of Damages: Indian Contract Act 1872 Sale of Goods Act Indemnity Contracts Tort Law ArbitraGon Proceedings Consumer ProtecGon Act

10 What are corporagons doing to protect and/or leverage the fluctuagons of the rupee and manage country risk?

11 Risk Assessment Dashboard Summary of most relevant risks Country Overall Residual Risk As of Date FICTITIOUS DATE Risk Residual Risk Trend Risk Residual Risk Trend Regulatory & Compliance Local regulagons InternaGonal regulagons SancGons, bribery, AML OperaGons & Financial OperaGonal processes Bank account consideragons Foreign currency risk ReputaGon Intangibles Risk to company brand Strategic Ability to expand into local market Risk of potengal loss of investment GeopoliGcal PoliGcal changes Government instability Non-governmental (e.g., terror) threats Low Moderate Elevated Significant Improving Stable Æ Worsening Ç Ç

12 What is the impact from an operagons perspecgve?

13 Are there regulagons to consider?

14 Currency Control RegulaGons in India Foreign Exchange Management Act, 1999 Foreign Exchange Management (Current Account TransacGons) Rules, 2000 Foreign Exchange Management (Permissible Capital Account TransacGons) RegulaGons, 2000 Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) RegulaGons, 2000

15 Currency Control RegulaGons in India Foreign Exchange Management (Transfer or Issue of Any Foreign Security) RegulaGons, 2004 Foreign Exchange Management (Foreign Exchange DerivaGve Contracts) RegulaGons, 2000 Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) RegulaGons, 2000

16 Are there any current or pending developments to watch?

17 U.S. Law Firms OperaGng in India 1961 Advocates Act Bars internagonal lawyers and firms from pracgcing in India January, 2017: Government amends Special Economic Zones: U.S. firms can establish offices and advise clients from SEZ but currently cannot operate full legal pracgces in the country Special economic zone: area in the country that has more liberal economic laws than the country as a whole

18 Resources for In-House Counsel

19 RESOURCES CURRENCY CONTROL REGULATIONS Ø the foreign exchange management act, 1999 arrangement of secgons Ø Master DirecGon - Establishment of Branch Office (BO)/ Liaison Office (LO)/ Project Office (PO) or any other place of business in India by foreign engges Ø Master DirecGon Direct Investment by Residents in Joint Venture (JV) / Wholly Owned Subsidiary (WOS) Abroad Ø Master DirecGon - External Commercial Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency by Authorised Dealers and Persons other than Authorised Dealers Ø Master DirecGon- on Risk Management and Inter-Bank Dealings Ø Master DirecGon - Liberalised Remiiance Scheme (LRS) Ø Master DirecGon AcquisiGon and Transfer of Immovable Property under Foreign Exchange Management Act, 1999 Ø Master DirecGon Export of Goods and Services (Updated as on September 15, 2017) Ø Master DirecGon Import of Goods and Services

20 QuesGons?

21 Thank you.