Economist GMAT Reading Comprehension Challenge #12
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Article: America’s legal forays against foreign firms vex other countries
Vancouver airport is an unlikely venue...death for drug- smuggling.
- Meng was arrested in Canadian airport at the request of USA investigating business ties with Iran.
- China has arrested Canadians in China in retaliation.
Ms. Meng is not accused of breaking...face decades in jail.
- Meng didn’t break Canadian or Chinese law.
- USA has ramped up prosecuting people outside of USA enforcing sanctions, reducing corruption, fighting money laundering, and terrorism financing.
America’s aims are often laudable…looking for ways to limit its reach.
- USA aims often positive and good has come from this judicial reach.
- Continued growth though has raised questions about fairness.
- Critics call it USA’s “financial imperialism” and are looking to limit it.
Policymakers and business figures...good deal in trade talks with China.
- European policymakers and business figures don’t want to follow USA laws.
- They also consider USA motives at least partially designed to benefit USA economically.
- Trump hasn’t helped improve the image.
It is America’s central role...prosecutions in criminal courts
- USA central role gives it power to impose rules.
- Some rules only affect selling to USA others can trigger criminal proceedings.
Several elements tie together...subject to American law, lawyers say.
- USA law starts with the idea that it is applied only in USA borders.
- However, there is wide authority to interpret.
- Interpretation has been expanding.
A banking transaction...can make it their business.
- Any part of a transaction that touches something American might be considered in the realm of USA law.
The global banking system...keep doing business with them.
- Banks have been hit hard with fines leading them to denounce corrupt clients.
Along with companies, some banks...dogging Ms Meng.
- Some companies and banks have been required to have monitors observe their activities and report to USA.
- A monitor blew the whistle on Meng.
It seems plain to foreign critics...two have fallen on American companies.
- Critics claim that USA disproportionately targets foreign companies (¾ of fines levied on European banks)
- Anti-corruption probes also fall more on foreign firms.
Proving America treads more lightly...snarks a European boss, who suspects geopolitical factors are at play
- Proving USA is unfair is tricky.
- The disproportionate fines/probes might be OK.
- Euro banks seem to have been more corrupt and more often do business in tricky parts of the world.
The sanctions against Iran...“special purpose vehicle”, although progress is slow.
- Iran sanctions angered euro companies.
- Euro companies lost “coveted” opportunities.
- Euro politicians (aligned with companies) worry that USA judicial reach, especially under Trump, will be used to aid USA companies.
- France and Germany leading in “special purpose vehicle” to allow trade with Iran.
America’s activism is prompting other countries...If you can’t beat them, join them.
- USA being active prompts other countries to clean up corruption.
- Britain is joining USA in corruption busting.
- Other countries also cooperating
- With cooperation countries paid part of the fines.
To discuss the implications of the US’s expanding judicial reach.
America’s judicial reach has had significant positive effects although its expansion and some of its motives have come into question.