As a trusted CPA financial advisor, you probably counsel your clients or your employer to make the most of their assets. You’re usually among the first to be consulted when a business problem appears, and your advice often dictates how a problem is solved. For this reason, it’s important that you get to know at least a few basic facts about resolving business disputes with foreign nationals. The “foreign” dimension significantly changes the character of business disputes, and requires special strategies for: (1) assessing risks and benefits and, if warranted, (2) cleverly seeking recovery. It’s a Whole Different Ball Game Generally speaking, in a litigation, it’s more difficult to recover from a foreign defendant than a domestic one. Consider these issues: Where can you sue? If you sue and prevail in the United States, can you enforce your judgment abroad? Do you need foreign enforcement, or are there sufficient assets stateside to satisfy the judgment? If there are sufficient assets, how do you ensure that those assets will still be here if and when you get your judgment? As a CPA, you need to know these issues exist and be able to either respond to them or at least know where to direct your client or employer to seek answers. Evaluate and Leverage Settlement Scenarios As with all business disputes, a middling settlement is often preferable to a full-blown lawsuit; in a foreign context, this is even more critical. Indeed, in settlement discussions, the foreign national will certainly emphasize the difficulties of collection as a reason to settle the dispute, even for a fraction of its value. If the amount at stake is significant, you should talk to an attorney experienced in international asset recovery to assess the difficulties. If the foreign national has assets in this country, for example, the dispute will likely proceed as if it were a domestic problem; the foreign aspect should not force an extraordinary discount. On the other hand, if your company’s preference is to enforce the judgment abroad, the difficulties multiply; the United States is not a party to any bilateral treaties or any international conventions concerning the recognition and enforcement of foreign legal judgments. For this reason, your company’s ability to recover will be based on the laws of each particular foreign country. Unless you understand how easy or difficult it will be to recover, you won’t be able to optimize settlement negotiations. Enlist the Services of a Private Investigator Most international recovery attorneys work closely with private investigators to find assets that may be available to satisfy any judgment. If you know where the assets are, you can change the playing field. For example, in certain cases, it’s possible to freeze assets while litigation continues. If you’re able to do so, not only do you ensure that any eventual judgment will be satisfied; in most cases, freezing the assets can lead to a quick, advantageous settlement. Once assets are discovered, the attorney can work with other investigative professionals to develop strategies for reaching the missing funds. The attorney also can provide a general cost benefit analysis so that your client will be able to determine if his or her recovery effort is financially justified. Consider Arbitration Clauses For Future Transactions Arbitration clauses in contracts can make recovery easier. Unlike court judgments, there are several treaties that govern international recognition of arbitration awards, and enforcement of such awards may be substantially easier than enforcement of judgments. It will be important for your client to assess the pros and cons of the arbitration clauses with his or her attorney to provide the surest access to future recovery. Resolving Disputes Many sophisticated companies are surprised by the novel problems they face in seeking to pursue recovery against foreign nations. When you become aware that your company has a business dispute involving a foreign national, you should advise legal counsel to address the issue head on. The attorney will be able to help accurately assess the risks and benefits of different methods of dispute resolution, and intelligently craft the best strategy for a cost-effective, business-sustaining outcome. About the Authors Robert Nachman, Esq. and Roberto Anguizola, Esq. are lawyers with law firm Schwartz Cooper Chartered located in Chicago, Ill. Mr. Nachman focuses his practice on the areas of bankruptcy and litigation, while Mr. Anguizola primarily concentrates his practice in commercial litigation and cross-border disputes. They can be reached at rnachman@schwartzcooper.com and ranguizola@schwartzcooper.com.