Details and instructions

You are members of a legal team of consultants that has been instructed to advise a firm (PET CHIPS) which manufactures electronic micro chips, primarily used in the microchipping of family pets.

50% of the company’s sales are dedicated to exports. The company is based in the UK but is seriously considering relocating its manufacturing base to the West African Republic. WAR is currently listed as a Least Developed Country (LDC) by both the World Bank and UNCTAD.

WAR was a nation beset with problems of corruption and civil unrest in the years after it gained independence in the 1960s. There had been frequent changes of government and it had been a reputation for instability.

However over the last 10 years its economy has grown significantly and according to economic forecasts by the World Bank and the International Monetary Fund it is expected to soon exit the cohort of LDCs, and join the one of developing countries with middle income economies. It would be a good place to locate a business with access to the large African market, and significantly lower labour costs than in the UK.

A general election is due next year. The main opposition party, the Socialist League has proposed as part of its manifesto, the Nationalisation of all foreign owned businesses with a turnover of more than £1m per annum. Petchips (Africa) would undoubtedly fall within that category.

“`With reference to international trade provisions please present the advantages and disadvantages of the company moving its business to West Africa. Also highlight any potential difficulties which could be encountered and refer to international safeguards which PET CHIPS (Africa) might be able to rely upon if a proposal for nationalisation were to be pursued“.

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