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Cross-Border Transaction Liability

Geraldine MacDonald, Independent Consultant

Pages: p. 7

Checkpoints in Cyberspace: Best Practices to Avert Liability in Cross-Border Transactions is an intensely serious look at the US trade and export regulations that govern cross-border transactions. Written by lawyers, but eye-opening to the layperson, the book uses a case-study approach to demonstrate the ramifications of common business transactions that can run afoul of the law. The book's style and language makes it an easy read, but a familiarity with mergers and acquisitions helps in understanding the material. The authors clearly present case studies and audit practices for major issues such as trade sanctions, export regulations, personal data protection, information security, and patent issues. They explain how easy it is to "commit multiple violations" of trade and export regulations in the current business world, which largely employs electronic transactions to communicate. Heeding the authors' advice can help avoid unplanned delays in transactions and minimize potential liability.

Building business transaction "checkpoints" is one of the book's central themes. On first reading, you could almost view this recommendation as a "choke point" because the steps to compliance are so tedious and complex. However, the authors are quick to demonstrate that anticipating requirements and regulations actually results in faster, smoother transactions. For example, they demonstrate how a merger that was almost complete was then subsequently abandoned when illegal practices were discovered late in the process.

One of the book's significant strengths is how clearly it illustrates the risks associated with violating the laws and compliance requirements it discusses. Thorough presentations of each law, regulation, and compliance requirement, along with examples of checkpoints and audit steps, simplify the vast array of complicated legal issues. In addition to pointing out strategies for successfully avoiding liability, the authors also carefully list the penalties and fines for violations. They note that businesses and corporations aren't the only parties that can be sanctioned; individuals involved in the transactions can be penalized as well. Corporations can also acquire successor liabilities as a result of mergers and acquisitions.

The analysis presented ranges from the commonplace to the extraordinary in the detailed presentation of facts and legal findings. One of the simpler examples uses a typical Web site software-compliance terms and conditions statement to show how a company admits to cross-border transactions while trying to put the burden of compliance on the user. Explaining this transaction, something that many readers encounter during the normal course of business, helps foster greater comprehension of the other case studies presented in the book.


In reading Checkpoints in Cyberspace, I gained considerable understanding of the complex regulations and requirements that govern multinational transactions. Having all of this material in one well-documented place, decoded by professionals in the field, makes this book an essential text for current and aspiring business executives.

About the Authors

Geraldine MacDonald has extensive experience in the computing and telecommunications industry. She has an MS in advanced technology from the State University of New York at Binghamton. MacDonald spent 10 years as a senior executive at America Online. She has served on the boards of Educom, CAUSE, the Corporation for Research and Educational Networking, the ACM Special Interest Group for University and College Computing Services, the State University of New York Council on Educational Technology, and the New York State Education and Research Network. Contact her at
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