A foreign legal opinion (or foreign law opinion) is an opinion of a law firm issued in cross-border commercial transactions certifying the effectiveness of the transaction under the applicable foreign law.Foreign legal opinions have become highly standardised over time, and most foreign legal opinions follow a fairly regimented format. The issuance of such opinions has become something of a sub-legal specialisation in itself, and books and articles are written on the subject of foreign legal opinions. A number of organisations issue template format opinions to indicate issues which are intended to be covered by such opinions, or standard form checklists for contents.
The original purpose of foreign legal opinion is grounded in the historical doctrine of ultra vires . The concern was that when doing business with a corporation formed in a foreign country, proper due diligence required that a legal opinion be sought to ensure that the relevant foreign company had the necessary capacity and power to enter into the transaction, and that it would be binding upon it.Over time opinions expanded to cover related aspects of foreign law, such as whether payments might be subject to exchange controls or usury laws, whether it was necessary for any of the other parties to hold any licences or permits under the regulatory laws of the foreign country, whether there would be adverse tax consequences under the laws of the foreign country, whether foreign judgments were recognised and enforced in that country other collateral matters.
During the 1970s and 1980s with the expansions in cross-border lender by financial institutions, banks became increasingly concerned to ensure that foreign companies to whom they lent money provided a foreign legal opinion certifying the legal validity of the loan transaction and the enforceability of the banks' rights (including any security interests).In time these requires came to be reflected in the Basel capital adequacy requirements for banks, resulting in different, more favourable, capital weighting for loans supported by opinions.
Foreign legal opinions are now highly standardised.Typically such opinions will confirm the jurisdiction which they relate to, confirm the documents that they reviewed, list certain assumptions of fact, and then set out various opinion statements. After the opinion statements, they will typically make certain standard, generally applicable qualifications.
The opinion will ordinarily state the conclusions of law, but will not provide reasoning. This reflects the role of the foreign law opinion as a risk assessment tool. The opinion is normally issued in the format of an unqualified favourable statement of the effectiveness of the transaction (hedged in by appropriate assumptions of fact and general qualifications of law).Where there are areas of legal uncertainty, or issues which require clarification and analysis, the foreign legal opinion will often remain in the standardised format, but will be supplemented with a second, reasoned, opinion. In cross border transactions the negotiation and discussion of the format of the foreign law opinions elucidates areas of legal stress or risk in relation to the proposed transaction and foreign legal systems.
Standard assumptions normally include assuming that documents and records reviewed by the law firm giving the opinion are accurate, that all copies they review are true copies, and that no provision of any other law (i.e. the laws of any country other than the country on whose laws the opinion is being given) adversely affects the opinion being expressed. In certain countries it is also standard to assume the genuineness of signatures and seals, but in other countries the foreign law firm may be expected to verify the accuracy of such signatures.
The substantive opinion statements a foreign legal opinion will make will ordinarily include:
Standard qualifications are usually matters of general law which it is impractical to advise upon in the abstract, but which might undermine the effectiveness of the enforceability of the transaction. For example most opinions will indicate that if the foreign party goes into bankruptcy that will limit the ability to enforce obligations against it. Similarly, rights may be lost when statutory limitation periods expire. In certain countries enforcement of obligations may be subject to obligations of good faith and fair dealing, and the foreign legal opinion will normally point this out by way of qualification.
The foreign legal opinion will typically express opinions on various issues which might not ordinarily be governed by the laws of the foreign country under its own conflict of laws system. Because a cross border transaction might end up being considered by the courts of any of a number of countries, the addressee(s) of the opinion will wish to be assured that all relevant issues, if determined by that foreign law, would likely be resolved satisfactorily. The courts of a third country may apply different choice of law rules to determine the lex causae of a particular issue to the courts of the foreign country.
Money laundering is the process of changing large amounts of money obtained from crimes, such as drug trafficking, into origination from a legitimate source. It is a crime in many jurisdictions with varying definitions. It is a key operation of the underground economy.
An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon.” Auditing also attempts to ensure that the books of accounts are properly maintained by the concern as required by law. Auditors consider the propositions before them, obtain evidence, and evaluate the propositions in their auditing report.
A 'financial audit' is conducted to provide an opinion whether "financial statements" are stated in accordance with specified criteria. Normally, the criteria are international accounting standards, although auditors may conduct audits of financial statements prepared using the cash basis or some other basis of accounting appropriate for the organisation. In providing an opinion whether financial statements are fairly stated in accordance with accounting standards, the auditor gathers evidence to determine whether the statements contain material errors or other misstatements.
Due diligence is the investigation or exercise of care that a reasonable business or person is normally expected to take before entering into an agreement or contract with another party or an act with a certain standard of care.
A letter of credit (LC), also known as a documentary credit or bankers commercial credit, or letter of undertaking (LoU), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods. Letters of credit are used extensively in the financing of international trade, when the reliability of contracting parties cannot be readily and easily determined. Its economic effect is to introduce a bank as an underwriter that assumes the counterparty risk of the buyer paying the seller for goods.
A syndicated loan is one that is provided by a group of lenders and is structured, arranged, and administered by one or several commercial banks or investment banks known as lead arrangers.
Securities regulation in the United States is the field of U.S. law that covers transactions and other dealings with securities. The term is usually understood to include both federal and state-level regulation by governmental regulatory agencies, but sometimes may also encompass listing requirements of exchanges like the New York Stock Exchange and rules of self-regulatory organizations like the Financial Industry Regulatory Authority (FINRA).
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A going concern is a business that is assumed will meet its financial obligations when they fall due. It functions without the threat of liquidation for the foreseeable future, which is usually regarded as at least the next 12 months or the specified accounting period. The presumption of going concern for the business implies the basic declaration of intention to keep operating its activities at least for the next year, which is a basic assumption for preparing financial statements that comprehend the conceptual framework of the IFRS. Hence, a declaration of going concern means that the business has neither the intention nor the need to liquidate or to materially curtail the scale of its operations.
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Australian insolvency law regulates the position of companies which are in financial distress and are unable to pay or provide for all of their debts or other obligations, and matters ancillary to and arising from financial distress. The law in this area is principally governed by the Corporations Act 2001. Under Australian law, the term insolvency is usually used with reference to companies, and bankruptcy is used in relation to individuals. Insolvency law in Australia tries to seek an equitable balance between the competing interests of debtors, creditors and the wider community when debtors are unable to meet their financial obligations. The aim of the legislative provisions is to provide:
The missives of sale, in Scots property law, are a series of formal letters between the two parties, the Buyer and the Seller, containing the contract of sale for the transfer of corporeal heritable property (land) in Scotland. The term 'land' in this article includes buildings and other structures upon land.