(Gregory O. Somers, Ogilvy Renault LLP)
A bill currently before the United States Congress – the Foreign Manufacturers Legal Accountability Act of 2010 (FMLAA)-could, if made into law, have an adverse impact on businesses and manufacturers that export products to the United States. [...]
Implications for Canadian and other foreign exporters and manufacturers
Potential consequences of the FMLAA include:
• Comparative disadvantage: The expense associated with having a registered agent in the U.S. may decrease the competitiveness of foreign manufacturers and exporters in relation to their U.S. domestic counterparts.
• Regulatory difficulties: Exporters will face the challenge of overseeing the activities of their suppliers, as they may be required to declare that their suppliers meet the requirements of the FMLAA. Even compliant exporters may have their goods delayed at the border if there are irregularities in documentation.
• Increased exposure for liability: Ordinarily, foreign manufacturers are often well-advised to defend product liability lawsuits in their home country. The U.S. imposes greater burdens on manufacturers for product liability than foreign laws of many other jurisdictions. By compelling submission of exporters to the jurisdiction of U.S. courts, costs of litigation and the likelihood of a negative outcome may be significantly increased. Read more here.
