HI5015 Legal Aspects Of International Trade: Law And Audit Of Wells Fargo In US Assessment Answer

pages Pages: 4word Words: 890

Question :

Assessment Details and Submission Guidelines  
Trimester T1   2019 
Unit Code HI5015   
Unit Title HI5015   Legal Aspects of International Trade and Enterprise 
Assessment Type Individual   Assignment 
Assessment Title Research   paper 
Purpose of the   assessment (with ULO 
Students are required to research a   multinational company (MNC) of your choice from the list below and explain in   a report format on how any Legislative regulatory framework/s affecting the   MNCs which operate in Australia and the impact of treaties, conventions or   agreements on their products and services that they provide in Australia. 
Weight 20%   of the total assessments 
Total Marks 20   marks 
Word limit Not   more than 2000 words  
Submission Guidelines 

  • All work must be submitted on Blackboard by   the due date along with a completed Assignment Cover Page.  
  • The assignment must be in MS Word format, no   spacing, 12-pt Arial font and 2 cm margins on all four sides of your page   with appropriate section headings and page numbers.   
  • Reference sources must be cited in the text of   the report, and listed appropriately at the end in a reference list using   Harvard referencing style. 

 Assignment 1 Specifications 


This assignment aims at ensuring that students have familiarised themselves with their chosen MNCs topic and are able to identify the relevant Legislative, regulatory framework/s, treaties, conventions or agreements that are affecting their operation in Australia. 


Assignment Questions: 

 1.       Identify a multinational company (MNC) which operates in Australia. Provide a brief description of the company including the following: 

  • The industry the company operates in  
  • Number of staff in Australia  
  • Number of staff globally  
  • Location of global headquarters (150 words, minimum 3 references)  

 2.       Identify any legislative regulatory framework/s affecting the MNC you have identified which operates in Australia and discuss why and how it affects the company. For example, multinational corporations, like local companies, are subject to 30 per cent corporate tax. (925 words, minimum 3 references) 

 3.       Identify any treaties, conventions or agreements that have impacted on the products or services that your chosen MNC provides in Australia. How does it impact the provision of these products and services? (925 words, minimum 3 references) 

 Assignment structure is to be written as a report format.  It must include: 

  • Cover page 
  • Executive summary 
  • Table of contents 
  • Section headings  
  • Paragraphing 
  • Page numbers 
  • Reference list at the end of the report 


 1.       Please choose from one of the following multinational companies (MNCs) operate in Australia from the list (see below).  

 2.       Enter the name of your chosen MNC in Blackboard 

  • Go to “Assignments and due dates” - “Individual assignment: choose your Multinational Company”.
  • Choose a company from the list of 100 multinational companies (MNCs). 
  • You cannot choose a company that has already been chosen and entered by another student before you.  
  • Unless your lecturer advises otherwise, you can work on your chosen MNC as long as it has not been chosen by another student before you.  

 3.       A 50% deduction automatically applies if you work on a company different from the one you entered in Blackboard, without obtaining prior permission from your lecturer.  

Show More

Answer :

Law and Audit 

Executive summary

The current assignment is upon the working of the multinational companies in a global platform where their trade has been allowed to be fostered because of the nation wise treaties and conventions entered upon by different trading partners. The legislations operating in Australia also affects the business of the multinational companies and the manner they can grow. The analysis of Wells Fargo based in United States but working internationally is being done to understand this phenomenon. 


With the economic changes, there are several laws and regulations which needs to be complied by the company in its business functioning> however, it is necessary to set up harmonization in the domestic and international reporting framework if company wants to sustain its business in long run. In this report, Wells Fargo Company has been selected for the report.  The application of this treaty has initiated coordination between the tax officials of these two countries which also prevents evasion of tax. The treaty also puts limit upon the tax deducted at source, especially on investment income.  It is analysed that Wells Fargo is prevented to pay taxes on the income generated in Australian lands in United States. If the Australian taxation system is complied with, and no tax amount is evaded, the company is prevented to be charged for taxation of any amount in United States (Thuronyi, and Brooks, 2016). 

Brief description of the company

About the company and industry

Wells Fargo is based in America and is operating as a financial services company. As per the American market data, the company is fourth largest U.S. bank due to the pool of assets owned which value US$ 1.895 trillion for financial year 2018. The industry of company’s operation is Banking, Insurance and Financial services. The company operates globally with 70 million customers in around 35 countries. The company also has its business operations in Australia and is listed at Australian Stock Exchange (Tayan, 2019). The legislative authorities studied include Australian Competition (AC)  and Consumer Commission (CC), Australia Prudential Regulatory Authority (APRA) and Australian consumer law. The effect of the conventions entered for avoidance of double taxation and for the bilateral trade agreement has been studied. The introduction of Wells Fargo organisation is also discussed. 

Number of employees globally

The company has recorded the employee strength of 258.7 thousand for the present scenario. This is the number of full time employees who are working in Wells Fargo since 2009.

Location of headquarters

The company’s headquarters are located in San Francisco, California in United States.

Effect of legislative regulatory frameworks operating in Australia upon the operations of Wells Fargo

The different regulatory frameworks existent in Australia that effect the operations of MNCs like Wells Fargo are as follows:

  • Australian Competition and Consumer Commission (ACCC): the framework provided by this commission takes care of the business environment where a healthy competition sustains and the different players of market need to abide that competition. The competition is entertained to confirm a fair trading platform to every business house equally to ensure protection of consumers. It has a significant impact upon the players of banking and financial services because of the recent agreement entered with Australian Securities and Investment Commission (ASIC) for administration of banking and finance related services (Greenleaf, et al. 2019). The securitisation of interests of all the stakeholders is undertaken by this agreement and the anti-competitive legislations formulated by ACCC.
  • Foreign Interest Regulation Board (FIRB): the frameworks of this regulatory board have been formulated for protection and promotion of national interest of Australia by reviewing outside nation’s investment proposals. As per this framework any of the investment proposal laid by Wells Fargo in Australia that might hamper the Australian interest shall either be denied completely or shall be accepted only conditionally (Kirchner, and Mondschein, 2018). 
  • Australian Securities and Investment Commission: the financial services and the entire fiscal market of Australia are managed by the managed by the ASIC. The commission is responsible for issuance of Australian Financial Services License which is must to be held by every company in Australia that commences the financial service business, and so is required by Wells Fargo. The commission is responsible to make the registration of financial bodies like Wells Fargo and monitor their functioning on regular basis. The public is kept informed about the operations of these companies by the information released by ASIC (Laing, Douglas, and Watt, 2015).

Even the supervision of the operations undertaken by the External Dispute Resolution Scheme (EDRs) is done by the ASIC. Along with it ASIC also works for the management of the operations of the financial and banking companies. 

  • Australian Stock Exchange: the regulation of listing companies is done by the Australian Stock Exchange. A Corporate Governance Council is set by the Australian Stock Exchange which has set certain recommendations and Principles required to be followed by the listed companies in Australia including listed organisations like Wells Fargo. Well Fargo is required to disclose information in its annual report as required by the guidelines presented by the ASX Corporate Governance Council. Wells Fargo is required certainly to follow these disclosure and content requirement for annual reports. In case Wells Fargo is not disclosing such information, a reason for the same is also required to be disclosed (Jayawardena, et al. 2016).
  • Australian Prudential Regulatory Authority (APRA): the Australian financial market is being managed by APRA along with ASIC. APRA has been held responsible for administration of authorised deposit taking institutions (ADIs), superannuation funds and insurance companies in relation to their licensing and prudential norms. Operation of Wells Fargo in a risk free environment is possible only because of the working of regulatory frameworks like APRA. The interest of all the parties involved in a prudential framework is undertaken by APRA. In an online as well as in an offline market the regulations of APRA are in operation (Ellis, and Littrell, 2017). However, APRA also considers the kind of risk management operations in operation by the domestic as well as the multinational corporations in the country to keep a check upon the anti-competitive practices. The interests of all the stakeholders are important to be taken care of. It is important for every organisation affecting the interest of public is must to ensure these regulations particularly when it is around the money of public. 
  • Corporations Act 2001 and the taxation rates: all the corporations in Australia are primarily governed by the regulations set by the Corporations Act 2001. The corporate business entities of Australia are mandated to use the legislative framework while preparing the financial statements for their organisation. It is federal regulatory body governing the publically listed entities (Bottomley, 2016). 

also every corporation whether listed or not is required to pay the tax on the income earned at the rate of 30%, irrespective of the tax rate required to be paid in their home country. It implies that no matter at what interest rate Wells Fargo pays tax on its income in United States, it has to pay tax at the rate of 30% for the income earned in Australian business. 

  • Australian Consumer Law (ACL): the consumer is said to be the king of market and the business houses have to manage their operations in a manner that suits the consumers and is not exploitative for them. Like domestic business operating in Australia, MNCs like Wells Fargo are also mandated by the regulatory framework of ACL. All the consumer related matters like warranties and guarantees, agreements with consumers, rights of consumer in market etc. are taken care by the ACL. The main motive of setting up of these frameworks is consumer protection (Cantatore, and Marshall, 2016). 

Impact of the treaties, conventions or agreements operational in Australia which have impact on the provision of goods and services provided by Wells Fargo

  • Avoidance of double taxation on account of convention entered between Australian government and United States’ Government: the provisions of this convention were initiated to get applicable on both the countries from 31st October 1983. The treaty specifies the manner in which a corporation operating in Australia but having some other country as home country can avoid a double taxation, i.e. taxation both in Australia and in home country. The application of this treaty has initiated coordination between the tax officials of these two countries which also prevents evasion of tax. The treaty also puts limit upon the tax deducted at source, especially on investment income. Also this treaty specifies rule particularly for the computation of taxes for different legal entities (Castro¸2017).

Because of entrance of this treaty between United States and Australia, the organisation Wells Fargo is prevented to pay taxes on the income generated in Australian lands in United States. If the Australian taxation system is complied with, and no tax amount is evaded, the company is prevented to be charged for taxation of any amount in United States (Thuronyi, and Brooks, 2016). 

  • Australia - United States Free Trade Agreement (AUSFTA): the economic relationship between the countries Australia and United States of America are completely revamped and liberalised because of the bilateral agreement of trade entered by these countries. This trade agreement entered bilaterally is known with the name of AUSFTA. The commercial bond between the two countries is strengthened by the effect of this trade agreement (Son, et al. 2018). Under this trade agreement robust trade policies are formulated between the two countries that strengthen the volume and value of trade with much ease and no hassle. Due to the effect of operation of this agreement the trade between the two countries have become triple of what it was earlier (Armstrong, 2015). 

Because of AUSFTA the operation of Wells Fargo has been able to transact its business with much ease and smoothness with the Australian competitors. Any business requirement imported by Wells Fargo in Australia is now tariff free because of the application of the provisions of this act. Also, for the products and services exported by Wells Fargo in United States there stand no tariff upon them. The quality of business done by Wells Fargo however is unaffected because of the removal of these tariffs (Williams, 2017). 

The legislations and authorities dealing in the financial and banking sector are also mandatorily meant to treat Wells Fargo in the same manner with same privileges and opportunities as they make available for any domestic organisation operating in the same industry. Environment which extend non-discriminatory applications of all the policies have been made available to Wells Fargo (Voon, and Mitchell, 2016). Wells Fargo being belonging from one of the most favoured nations of Australia is allowed to operate with same business environment as is provided to the domestic concerns. No discrimination can be borne between the two. 

On account of application of this trade agreement any kind of limitation upon the trade is not allowed to be exerted upon the multinational companies (Gleeson, and Menkes, 2018). 


In the pursuit of the world coming together the benefits of globalisation cannot be reaped unless the trade on an international level is highly liberalised and the useless restrictions on the same are removed. The different treaties and conventions entered by Australia are not limited to just with United States but with several countries over the globe. This is a step that has promoted trade on the international platform. If the provisions of these treaties are seriously followed, that can help a lot in removing the unnecessary obstacles that prevent organisations from growing and businesses from fostering. It is just a step which has to be seriously implemented by the trading partners to help themselves attain high economic growths.