Cross-border compliance is usually described as a matter of knowing more rules. In practice the harder problem is that the rules do not merely stack. They contradict each other, and someone has to decide which one governs when they do.
A company operating across two or more jurisdictions will at some point face a term that one regulator requires and another prohibits. That is the actual work of cross-border compliance, and it is a design question rather than a research question.
What cross-border compliance covers
Broadly, it is adherence to the laws governing international transactions and operations: trade controls, tax, anti-corruption, data protection, sector regulation, employment, and the contractual mechanics that sit across all of them. The scope varies by industry. For healthcare and health technology companies, data protection and sector regulation usually dominate.
Where cross-border ventures actually get into difficulty
Conflicting obligations, not merely numerous ones
The standard advice is to understand each jurisdiction’s requirements. That is necessary and insufficient. The operative issue arises where the requirements conflict: a data localization rule against a disclosure obligation, a mandatory retention period against a deletion right, a local content requirement against an export control.
Building to the strictest applicable standard resolves most of these and is the approach we generally recommend, because a compliance matrix maintained separately for each market is a document that goes out of date quietly. Where conflicts are genuinely irreconcilable, the answer is usually structural: separate entities, separate data environments, or a decision not to serve a market.
Data protection across regimes
The General Data Protection Regulation sets the reference standard in Europe, and international transfers out of the EEA remain a live area following the Schrems litigation and the adequacy arrangements that followed it. In the United States there is no single equivalent, which means the analysis runs state by state and sector by sector.
For companies handling health data the layering is heavier still, because HIPAA, state consumer health data statutes and GDPR each define their subject matter differently. A company can be an EU controller and a US business associate at the same time, holding a data processing agreement and a business associate agreement that do not agree on retention, sub-processing or deletion.
Anti-corruption
The US Foreign Corrupt Practices Act reaches conduct by third parties acting on a company’s behalf, which makes distributors, agents and local partners a principal source of exposure. In healthcare this is sharper than in most sectors, because in many countries the physicians and hospital administrators involved in purchasing are government employees and therefore foreign officials.
Parallel regimes apply at the same time with different standards, among them the UK Bribery Act, France’s Sapin II and Brazil’s Clean Company Act. Diligence on intermediaries, and contractual audit and termination rights over them, do more to control this risk than a policy document does.
Tax and transfer pricing
Corporate tax, VAT, customs treatment, withholding and transfer pricing each turn on where value is deemed to be created. Intercompany arrangements set up for administrative convenience in year one frequently do not survive examination in year four. This is worth structuring properly at the outset because retroactive correction is expensive and sometimes not available.
Dispute resolution
Governing law, forum and dispute mechanism are negotiated last and matter most when everything else has failed. The questions that decide the outcome are whether an award will be enforceable where the counterparty holds assets, whether arbitration or litigation is realistic given that answer, and whether the clause names an institution and seat with sufficient precision to work.
Commercial practice and expectation
Negotiation style, decision-making structure and what a signature is understood to commit vary considerably between markets. This is not a compliance obligation, but misreading it produces the same result as one, which is a deal that does not close or an agreement the parties understand differently.
Getting the sequence right
The single most useful step is to involve counsel before the structure is fixed rather than after. Entity choice, contracting entity, data flows and intermediary relationships are cheap to arrange correctly at the outset and expensive to unwind once they are operating.
Our founder, Robyn D. Marino, has more than twenty years advising on cross-border contracts and international ventures, with contracting experience in more than 30 countries, much of it in healthcare, insurance and pharmacy services.
Talk to us
If you are planning an international venture or already running one and finding the regulatory picture more layered than expected, we are glad to talk it through. Contact us or book a discovery call.
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