Doing Business In (Insert Country Name Here) - Department of ...

Return to table of contentsChapter 3: Selling U.S. Products and Services• Using an Agent or Distributor• Establishing an Office• Franchising• Direct Marketing• Joint Ventures/Licensing• Selling to the Government• Distribution and Sales Channels• Selling Factors/Techniques• Electronic Commerce• Trade Promotion and Advertising• Pricing• Sales Service/Customer Support• Protecting Your Intellectual Property• Due Diligence• Local Professional Services• Web ResourcesUsing an Agent or DistributorReturn to topCompanies wishing to use distribution, franchising and agency arrangements need toensure that the agreements they put into place are in accordance with European Union(EU) and Member State national laws. Council Directive 86/653/EEC establishes certainminimum standards of protection for self-employed commercial agents who sell orpurchase goods on behalf of their principals. In essence, the Directive establishes therights and obligations of the principal and its agents; the agent’s remuneration; and theconclusion and termination of an agency contract, including the notice to be given andindemnity or compensation to be paid to the agent. U.S. companies should beparticularly aware that the Directive states that parties may not derogate certainrequirements. Accordingly, the inclusion of a clause specifying an alternate body of lawto be applied in the event of a dispute will likely be ruled invalid by European courts.Key Link: http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31986L0653:EN:HTMLThe European Commission’s Directorate General for Competition enforces legislationconcerned with the effects on competition in the internal market of "vertical agreements."U.S. small- and medium-sized companies (SMEs) are exempt from these Regulationsbecause their agreements likely would qualify as "agreements of minor importance,"meaning they are considered incapable of affecting competition at the EU level but areuseful for cooperation between SMEs. Generally speaking, companies with fewer than250 employees and an annual turnover of less than €50 million are considered smallandmedium-sized undertakings. The EU has additionally indicated that agreements thataffect less than 10 percent of a particular market are generally exempted as well(Commission Notice 2001/C 368/07).2/18/2010 Country Commercial Guide for France 6INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICEAND U.S. DEPARTMENT OF STATE, © 2010. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.