Staging an International Meeting: Negotiating and Preparing Contracts

When it comes to planning successful meetings and events abroad, preparation becomes an art - requiring research, patience, and practice. There are the unfamiliar challenges of negotiating and contracting with foreign hotels, convention centers, and other vendors; different cultures to understand; and potential risks to be explored, from scheduling your meeting over a local or national holiday to threats of disease, terrorism, and war. While many of the logistics necessary to stage an international meeting are identical to those steps required at home, there can be very big differences, depending on the host country.

The one common denominator, regardless of the country? Until negotiations occur and the parties sign a contract, nothing happens. Knowing how to understand, negotiate, and prepare contracts with counterparts across borders is the key to successful international meetings.

Negotiating international business agreements successfully requires following three fundamental principles: 1) understand your counterpart's culture and objectives; 2) develop a strategy; and 3) seek assistance to apply your strategy in unfamiliar territory.

You need to understand cultural practices without stereotyping. Use Internet resources and/or rely on other professionals and experts in culture and protocol to assist you. Keep an open mind when developing personal relationships. In addition to understanding your counterpart's culture, you need to grasp his/her negotiating objectives, and standard operating procedures. International counterparts may not share your ideas about the legitimacy of certain negotiation tactics, so don't assume that they do.

It is not uncommon for South Korean negotiators to continue asking for concessions or making demands after the contract is signed. When negotiating with Russian or Chinese negotiators, it may be considered a sign of weakness to give away concessions early in the negotiations. Local bankers, attorneys, foreign currency exchanges, DMCs, or professional congress organizers (PCOs) already know the particular customs of a foreign city or country and can sometimes negotiate better terms with vendors and guide you around pitfalls. For instance, foreign hotels may not offer complimentary overnight arrangements for site inspections. If they don't, a third party may be able to tell you that up front and help you negotiate to have the expense reimbursed if you choose that hotel. You could also consider entering a joint venture with a local affiliate and having a representative of the affiliate take responsibility for negotiating and signing the contract. One caveat: If your U.S. organization will have liability under the contract, you need to have input and decision-making authority on the final terms.

There are five aspects of cultural differences that affect international negotiations summarized here from an article titled "International Negotiation: How Do I get Ready?"

1. Negotiation Objectives Find out the objectives of the other side early in the discussions. Most U.S. planners want convenient dates, competitive rates and prices, good service, and favorable contract terms when negotiating with hotel or convention centers. However, Asian planners may focus on obtaining one specific objective such as an agreement to pay a certain rate before negotiating other aspects of a deal. In Asia, falling short of accomplishing a specific objective may be considered losing face with co-workers and superiors, while accomplishing the objective may save face. The "single objective" negotiation style is usually at work when attempts to compromise or proposed trade-offs fail. In order to avoid frustration and negative feelings on either side when negotiations stall, the best strategy in this scenario is to bargain for other concessions to bring the total package in line with the total budget.

2. The Importance of Relationships Negotiating international contracts can seem painfully slow to American business people. Successful negotiations overseas may depend on building relationships up front. In many Asian, European, and Latin American cultures, no contract will be signed until they know the goals and objectives of your organization and gain trust in you personally. For this reason, when making visits or site inspections, adjust your timeline. Include ample time to meet with individuals with whom you will be negotiating and/or executing meeting plans. Be prepared to divulge background information about your organization and yourself in initial introductions. If several people from your organization are involved with the negotiations, avoid changing the players in midstream unless there is a personal emergency, as this may slow down negotiations. A new player will need to start the relationship building process all over. Use face time to build good personal relationships and later, negotiations and planning made by telephone, e-mail, or fax will go smoother.

3. Decision Makers In the United States, Australia, Canada, Scandinavia, the Netherlands, and other European countries, authority to make decisions resides with top executives or may be delegated to lower levels in the organization. Individual decision-making is valued and those who make decisions are held responsible. If you are a serious buyer or seller in any of these countries, it is not difficult to find one person on the other side who can make a buying or selling decision. In countries like China, India, Indonesia, Japan, Malaysia, the Philippines, Taiwan, Greece, Portugal, Turkey, Mexico, and most Latin American countries, individual decision-making is less important or even frowned on. Decisions are made by group consensus among certain levels of management. Finding one person or persons with the final authority to make a decision may be difficult. Find out who, if not the sales counterpart, can make decisions that deviate from the norm on rates, concessions, and contract terms. If decisions have to be made at a higher level or by committee, involve the final decision maker(s) in negotiations early and often.

4. Negotiation Techniques Bargaining for goods and services is a way of life in many cultures outside the United States. Children in other countries watch their parents bargain with street vendors and shopkeepers and learn early how to use it as a negotiation tool. Americans may find themselves at a disadvantage when negotiating with their counterparts in such countries. Brush up on negotiating techniques used by business people in other countries before negotiations begin (see "Negotiation Techniques" on p. 50).

5. Reaching Closure When negotiations are considered final varies according to the culture and legal system in the country that has jurisdiction. In North America and Northern European countries including Denmark, Norway, and Sweden, parties usually come to a verbal agreement on the main terms one by one followed by a written contract detailing all of the terms. This is also generally true in Switzerland and Germany. In other countries like France, Latin America, and most Arab countries, business people frequently renegotiate terms that, to Americans, may seem finalized. The Chinese and South Koreans consider contracts a mere formality and will continue bringing up new demands. U.S. meeting planners should remain flexible and be prepared to make concessions after the contract is signed.

International Contract Basics 

In North America, contracts typically are not binding until both parties sign the contract. However, preliminary contract discussions can be binding in some foreign countries. When negotiating with overseas counterparts, U.S. planners should keep detailed notes on all discussions and follow up in writing to confirm terms agreed to and to document outstanding issues (via fax or e-mail).

 Foreign language issues can be tricky. If, in the negotiating and contracting stages, you use either an interpreter or a translator or both, they should have specialized knowledge of the industry to avoid any misinterpretations. A translator proficient in both English and the native language should be used if your foreign counterpart insists on the contract being in his or her country's language (some countries' legal systems require it). Many times you will be asked to sign a contract in both the native language and English. In these instances, the translator hired to conform both copies should be required to certify them before signing.

In its broadest sense, a contract is simply an agreement between two or more parties that defines each party's obligations to the other for a specified consideration. When contracts are formed in the United States, local laws or business practices with which both parties are familiar may fill in missing or vague terms. If the parties are from different countries, the intention of the parties is not easily implied. The creation of a contract in a foreign country is a more complex process than creating a contract between two parties with the same culture. In cross-border transactions, the parties may meet once or not at all. The parties have different cultural values, dissimilar business practices, and are subject to different laws by different governments with different legal systems. A discussion of the legal systems around the globe and uniform international laws dealing with trade practices is beyond the scope of this article. Planners should consult with U.S. legal counsel who is familiar with the meetings industry, and sometimes with counsel in the foreign country on specific laws and business practices.

In general, it is not recommended that parties to an international contract rely on international law for implied terms. To ensure predictable results, it is advised that the rights and obligations of the parties be stated clearly and in detail so that both parties will understand what they are required to do and what they are entitled to receive. In case of a breach, an international arbitrator or judge is more likely to enforce clear and explicit terms (unless the terms violate local law), and thus the parties can more closely predict the outcome.

Important Terms in International Hotel Contracts

In many countries, hotels and convention centers send out proposals that are simple form agreements. These proposals are usually incomplete and lack details. When a U.S. planner receives a proposal from an overseas hotel or convention center, the proposed contract will most likely be very short, sometimes only one page. The proposal may or may not have been revised to fit the needs of the planner's event. Some hotels send out one form contract for guest rooms and a separate form contract for catering functions.

Outside of the United States, Americans may be seen as legalistic, argumentative, and quick to file a lawsuit. In many foreign countries, the relationship between the parties is more important than the written details in the contract. That's fine, but only written details will save the day in the end. Your obligation is to add needed details to the contract to clarify the intent of the parties and to protect your organization. Sending a copy of your model contract with negotiable points highlighted is recommended. It introduces terms and the level of detail that the planner expects his/her foreign counterpart to consider.

In every contract, it is important that all material terms are in the contract from the beginning, not left for future negotiations or for one party to dictate to the other. International hotel contracts look similar to U.S. contracts. They both include basic "rates, dates, and space" terms, the number of rooms, terms for payment, meeting space, catering functions, performance terms (attrition and cancellation), and terms regarding force majeure, liability, and insurance. The key difference is how the basic terms are negotiated and what is written in the final contract.

Following are some typical terms and how they should be addressed in an international hotel contract.

Identity of the Parties

The legal name of both parties responsible for performance and payment for nonperformance should be clearly stated. If a local affiliated organization has negotiated the contract and is responsible for paying the bills, state that clearly in the contract.

If you have used a third party, like a PCO, to negotiate your contract but your organization wants to control the final implementation, your organization must be listed as the party to the contract. Don't let a third party "own" your contract unless there are strategic advantages.

Rates

In many countries, the room rate is prepackaged with other items. For instance, hotels in Europe and Asia offer a Daily Delegate Rate (DDR) or a 24-hour rate. Make sure your contract is specific about what is included in the rate. A DDR usually includes function space and labor, a lunch, and a morning and afternoon coffee or tea break. This is quoted as a per-person price (not per room). The 24-hour rate usually includes a guest room for one night, dinner, and breakfast. Because these packages are priced per person, be careful when you ask for extra chairs in a meeting room. Note, the package rates may or may not include Internet access or basic audiovisual equipment. Discuss these items with your counterpart and specify them in the contract if you want them to be included in the package rate quoted. You should also negotiate to include whether Internet access is included in the rate for all attendees or if you want the hotel to offer it separately, as requested by each guest.

When you contract for a DDR or 24-hour rate be sure to specify what is included with the meals and breaks. When booking a hotel in France, expect cold meats, cheese, and bread for breakfast. If you want something different for your American attendees, be very specific in the contract. In international contracts you can't be too literal. One planner put in the contract that the hotel was to serve "typical American breakfast food." In a prior exchange of e-mails, the planner had mentioned that typically Americans like breakfast meats and hash brown potatoes. When the meeting was held, the hotel served cold barbecue chicken and potato salad for breakfast - not a big hit with attendees. That could have been avoided if the contract had been more specific.

Booking around the block is as big a problem in overseas hotels as it is at home. Organizations routinely negotiate rooms and group rates months and years in advance. This can lead to problems when your hotel is running special promotional rates that are below the group rates. Experienced travelers know how to discover this via the Internet. Planners should include contract language that ensures that the hotel will not offer promotional or rack rates that are less than the negotiated group rate unless the lower rates apply to the group's attendees as well. The contract should also state that your organization will get credit for all rooms occupied by your group's attendees regardless of the rate paid.

Generally, foreign hotels do not like to quote definite rates and prices more than a year out. A formula for rate increases, if any, needs to be in the contract for long-term bookings. The formula should stipulate that definite rates will be the lesser of: rates established on a certain date, the current group rate plus an agreed upon percentage cap each year, a certain percentage discount off the applicable rack rate for the meeting dates, or the current group rates plus or minus the percentage change in the Consumer Price Index (CPI)3 for the hotel's country between the month the contract is signed and the last full month for which figures are available prior to the month of the meeting.

The contract should state if taxes and gratuities are included in the package prices. If taxes are included, stipulate that the VAT (Value Added Tax) will be stated separately to make it easier to apply for a refund from the foreign government where the meeting takes place.

Room Blocks/Attrition

Be knowledgeable about your hotel's guest room configuration. Be specific about what kind of rooms you want to block for your attendees. In most European countries, a single room means a room with one bed. A double room is a room with one double bed and a twin room is a room with one twin bed. In Asia, you will find that most hotels have twin-bedded rooms to the exclusion of others. Understand the lingo. If you want all your attendees to have a double room regardless of whether one or two persons will share occupancy, make it clear in the contract.

Attrition clauses are difficult to negotiate wherever your meeting is held. Many contract proposals do not include a provision for allowable attrition, or else state attrition damages as fees for partial cancellation. Some foreign hotels expect the group to pick up 100 percent of the rooms blocked and meals contracted. In these instances, the meeting sponsor is expected to pay for 100 percent of the rooms up front. This is negotiable, but don't be shocked when you see it. Terms specifying allowable attrition and the calculation of damages should be very specific to avoid a future dispute. List any review dates for reduction of the room block - without liability - as well as what percentage of the final block the group is expected to use or pay for. Also specify if attrition damages are based on the package rate, just the room rate, or on estimated lost profit. You will meet resistance on the "lost profit" concept, but the same accounting principles are used worldwide to calculate the facility's variable expenses that are avoidable. Whether avoidable expenses are recoverable as damages depends on the law used to enforce the contract in the particular country.

Currency, Deposits, Method of Payment

Many international event planners prefer to negotiate payment in U.S. dollars (USD). This eliminates some of the risk with foreign rates, but frequently has hidden costs. Hotels and other vendors may mark up their prices 10 percent to 20 percent in order to cover any risk of exchanging dollars to their local currency at the time of payment. It is preferable to list all rates and prices in the local currency whenever possible.

Deposit terms should always be negotiated. Foreign hotels will usually demand prepayment of the master account with nonrefundable deposits. Prepayment of non-refundable deposits is a substantial burden and risk to a U.S.-based group. The contract should state that deposits are refundable if the hotel cancels the contract, or one of the parties terminates the contract due to a force majeure act or occurrence. U.S. planners can protect or eliminate the need for sending deposits overseas by either making deposits with an escrow agent or using a standby letter of credit.

Provisions for People with Disabilities

The Americans with Disabilities Act (ADA) doesn't apply outside U.S. borders. However, most industrialized nations have some equivalent regarding individuals with disabilities. State in the contract that the foreign hotel represents that it will be in compliance with its country's law(s) regarding access and use of public facilities by people with disabilities. Be aware that older hotels and hotels outside major cities will not be accessible to many with disabilities.

Meeting Space/Rental

U.S. planners are used to getting meeting space without charge if they use or pay for a certain number of rooms or generate a certain amount of catering revenue. This is not usually the case in most overseas hotels. Expect to pay rental, but try to negotiate it out of the contract. Be aware that terms for typical meeting room setups may differ in other countries. Include actual sketches of how you want meeting rooms to be set as part of the contract.

Security

Security tends to be more relaxed in foreign hotels than in U.S. hotels. Add language to your contract establishing that the hotel is responsible for providing a safe hotel and that all public lobbies, hallways, and parking lots that are controlled by the hotel will be monitored. This will limit your organization's exposure to liability to attendees that may become crime victims in the hotel. If protecting the contents of meeting materials from outsiders is important to your organization, the responsibilities of the hotel in providing security to ensure this should be in the contract.

Intellectual Property

If your organization wants the hotel to assist in marketing the event, the details of that arrangement should be clearly stated. Additionally, the contract should state that both parties are licensing the use of their respective name, logo, and other trademarks to the other for the limited purpose of promoting the hotel and the event.

Limitation of Liability

Watch for language in hotel proposals that makes the group liable for "all acts or omissions of the group and its guests." That means if one of your attendees negligently starts a fire while smoking in bed and the hotel is destroyed, your group could be responsible for rebuilding the entire hotel. Insist on wording to the effect that your organization will be responsible for its officers, directors, and staff, but will not be liable for the acts or omissions of attendees unless they are involved in a group function or acting on behalf of the organization when the damage occurs. Indemnification and Insurance An indemnification clause in a contract is for each party to agree to defend against and/or compensate the other party for asserted claims against that party under certain circumstances. Your hotel contract should include reciprocal indemnification provisions clearly stating both parties' obligations. Insurance requirements should also be spelled out regarding liability to third parties (attendees) and responsibility for property damage. Both parties' liability for damage to the other's property should be limited to the amount and scope of insurance stated in the contract. Ask your organization's insurance carrier to review the contract to ensure that overseas activities are covered. [Note: Convention cancellation insurance policies pay for covered events anywhere in the world, but group liability policies are specially written for international exposure.]

Miscellaneous Charges/Authorized Signatures

Hotel contracts in other countries often have "hidden charges" that aren't listed in the contract. Look closely for phrases such as, "subject to standard terms and conditions" and "incorporated by reference." Make sure you receive a copy of all terms and conditions that are incorporated into the contract before you sign it. The standard terms and conditions are often multi-page documents covering much more than the actual contract proposal. You may need to include additional terms in your contract that deal with these "standard terms."Add a provision that neither your organization nor your attendees are responsible for additional charges not listed in the contract or later agreed to in writing by an authorized representative of the group.

Permits and Licenses

In some destinations, events that involve the public require a special permit or authorization. Your hotel contact should know about this and will sometimes take responsibility for obtaining it. Your contract should contain wording requiring the hotel to assist the group in identifying all licenses and permits that may be required by the local government.

Force Majeure and Termination

A well-written Force Majeure and Termination clause will list under what circumstances the contract may be terminated without liability to either party. Asian, European, and South American laws recognize the concept that a party's contractual obligations may be discharged if the reason for non-performance is due to acts outside the party's control. Historically, hotels in these countries have been loath to accept such clauses excusing performance. This position has softened recently after well-publicized terrorist attacks such as the 2004 Madrid train bombings, the 2005 London bombings, 2006 India train bombings, the ongoing conflict between Israelis and Arabs, and the August 2006 thwarted terrorist plot in London to detonate bombs on planes.

Force Majeure and Termination clauses should set the standard that must be met before termination is allowed including not only "impossibility" but also "acts or occurrences that materially and adversely affect the group's ability to hold the international meeting or attract attendees." These include: "bad weather or threats of bad weather," "acts of terrorism or specific threats," "any event or occurrence creating a significant risk to the health or safety of attendees," and the "restriction or curtailment of commercial transportation." It is recommended that the contract state what percentage of the potential attendees must be affected by a force majeure event allowing the group to cancel its meeting and terminate the contract without liability; 30 percent to 50 percent is usually acceptable. It is also recommended that references to government organizations in the host country be included as well as references to agencies in the countries from where attendees will be traveling regarding travel advisories and health issues.

Cancellation/Liquidated Damages

Cancellation clauses are intended to specify what damages are owed one party if the other party cancels or fails to perform the contract for reasons other than a force majeure event. Missing deposit payment dates can also be considered a default under the cancellation clause allowing the hotel to terminate the contract without liability.

In some countries, damages are not recoverable by the injured party unless the contract specifically provides for them. Liquidated damages for cancellation by the group, or a formula for determining them, are prevalent in international contracts. A sliding scale with damages starting out small and increasing the closer the cancellation occurs to the anticipated meeting date is generally accepted. Make sure the cancellation details cover either the DDR, 24-hour rate for the full package, the guest room portion, or food and beverage. Insist that all damages be reduced to estimated lost profit and that the group's potential damages will be credited with rooms resold. State if taxes are due on damages and the specific amount of VAT that may be reimbursable by the foreign government.

Your contract should always include a provision detailing what damages are due to your organization if the hotel cancels or defaults on the contract. The provision should include reimbursement to your organization for any expenses incurred to relocate the meeting to another facility, including increased costs or prices charged by the other venue, as well as lost revenue from attendees that cancel due to the relocation of the meeting.

Audit Provision

An audit provision should be included in every hotel contract to ensure the group's right to independently inspect the hotel's pickup and occupancy reports when potential damages are owed for attrition or cancellation. Asking for an audit provision may imply distrust, so assure your counterpart that an audit provision is meant to verify the hotel's accuracy, not its honesty.

Dispute Resolution/Arbitration

The worst-case scenario is for your organization to be subject to the legal system in a foreign country. Arbitration is the universal dispute resolution method preferred for contracts across borders, as it tends to be quicker, less expensive, and less adversarial. Neutral parties can conduct the arbitration hearings and the results are private. Parties should decide up front what organization or institution they want to use for arbitration if a dispute occurs over contract enforcement. There are many international organizations and institutions from which to choose. Every contract with overseas vendors should include an arbitration clause covering the following :

• Arbitration rules - the institution or organization chosen will have its own set of generally accepted rules they will apply. The parties can choose a different set of rules to apply if agreeable.
• Place of arbitration - usually the forum where the hotel or other vendor is located or in a neutral country. If you are contracting with a major hotel chain in a foreign country, it is acceptable to list a U.S. city where the hotel chain's headquarters is located or in a well-recognized international city like New York or Washington, D.C.
• Applicable law - this is negotiable, but must be one of the countries where the parties are located. Foreign hotels that are part of a major chain headquartered in the United States may be agreeable to stipulating U.S. law. On the other hand, they will push to state that their country's laws apply if the hotel has foreign national owners, regardless of the chain affiliation.
• Composition of the arbitration panel - specify one or three arbitrators. With three, each party selects an arbitrator and those two arbitrators select the third arbitrator.
• Language of the arbitration - English is universally recognized as an international language and is preferable if both parties agree.
• Additional matters - consider including the following in the Arbitration Clause: Discovery and Production of Documents, Interim Relief (including an injunction to force performance), Relief to be Granted, Time Limitations, Award of Costs and Expenses.

Remember to seek the advice of professionals like bankers, currency consultants, legal, and insurance experts to assist in negotiating and preparing the best legal terms for your contract with foreign hotels and other vendors.

© John S. Foster, Esq. / 2006 / Atlanta, Georgia, All Rights Reserved John Foster, Esq., CHME, is an attorney and counsel whose firm, FOSTER, JENSEN & GULLEY LLC, specializes in the legal aspects of meetings, conventions, trade shows, and special events, as well as association management. He is the legal columnist for Convene, and the author of Meeting & Facility Contracts; Meetings & Liability; Independent Meeting Planners & the Law; and What Every Hotelier Must Know about Legal Affairs Management.

Hot Markets

Associations that have booked a meeting in Germany or are planning to do so are "on-trend." It's the most popular destination for meetings and conventions outside the United States, according to the International Association Meetings Market 2005 survey. Conducted by the Amsterdam-based International Congress & Convention Association (ICCA), the survey takes into account data from 5,283 international meetings held last year. Rankings cover meetings organized by international associations; all events take place on a regular basis and rotate among a minimum of three countries.

Top 10 International Countries for Meetings Destination No. of Meetings

1. United States 376
2. Germany 320
3. Spain 275
4. United Kingdom 270
5. France 240
6. Netherlands 197
7. Italy 196
8. Australia 164
9. Austria 157
10. Switzerland 151

Top 10 International Cities for Meetings

1. Vienna 129
2. Singapore 125
3. Barcelona 116
4. Berlin 100
5. Hong Kong 95
6. Paris 91
7. Amsterdam 82
8.-9. Budapest and Seoul 77 (each)
10. Stockholm 72

Planner Q & A: The International Meetings Equation

Choosing an international destination for an association meeting offers groups a wide range of advantages, but it also poses challenges. CONVENE recently asked three planners who put together international meetings to share their insights.

CONVENE: Besides the appeal to delegates and potential to boost attendance, what are some of the benefits of holding a meeting abroad rather than in the United States?

BEHROZ DAROGA, CMP, president, MEC-USA, Meetings, Events & Communications, New York City: In general, hotels outside the United States offer greater flexibility than their counterparts here. They are more willing to negotiate, so the meeting dollar stretches further. For example, I am currently planning a domestic meeting for the American Society of Clinical Oncology. The hotel refuses to give the group a certain number of rooms, unless we agree to pay for breakfast every day plus five lunches or five dinners daily. In Europe, at least, that would never happen. Similarly, in my experience, many foreign hotels do not require any payment until 45 days before the event. In the United States, it isn't uncommon for properties to request a deposit right after the contract has been signed.

Hotels abroad, especially in the Far East, are also so interested in developing the meetings market that they routinely add frills for groups. One of MEC's clients has a meeting scheduled for India; the hotel has offered more than one complimentary reception and a luncheon as well.

DEREK JENKS, CMP, director of meetings, Association Management Group, McLean, Va.: Attrition clauses can be less of a problem in international venues. We recently signed a contract for a meeting in Puerto Rico. There was no attrition clause whatsoever. That's a rarity in the United States, if it exists at all.

ROSS ROBINSON, president, Seven Consulting, Montreal, and former director of meetings and conferences, World Federation of Hemophilia: Fewer attrition issues definitely top the list. When the World Federation of Hemophilia held a meeting in Thailand, we selected a limited number of hotels and were essentially able to write our own contracts. For international associations, going outside the United States for a meeting can also be instrumental in attracting foreign delegates. Many simply do not want the headache of traveling to the United States for a meeting, especially now. Going back to the example of Thailand, the World Federation was able to achieve its mission to increase the number of Asian delegates who attended because of the destination.

CONVENE: What are some of the challenges faced by planners putting together international meetings?

DAROGA: Choosing a destination is one. Under the Sarbanes-Oxley Act of 2002 (SOX), international meetings of American organizations cannot be held in countries that do not have a bilateral tax exemption agreement with the United States. Awhile back, MEC was in the midst of assisting District Four of the American College of Obstetrics & Gynecology (ACOG) to plan a meeting. They wanted to go to Rome, but SOX was introduced and at the time, Italy did not have such an agreement in place. We needed to come up with an alternative. Until recently, we could not send groups to the Bahamas because of a lack of a bilateral tax exemption agreement.

Finding space for larger meetings can prove challenging, too. Apart from Berlin, Vienna, Barcelona, and now, with its new facility, Milan, centers in many cities aren't large enough to accommodate 10,000, 15,000, or 25,000 attendees. In these cases, you need to scout out a lot of hotel conference space.

JENKS: In certain destinations (China and Japan), hoteliers consider their meeting rooms to be premium space, and they charge for it accordingly. They can do this in part because it's in heavy demand; it's customary for private citizens to hold parties there rather than in their own homes. By contrast, if you were to hold a meeting in a domestic destination and were to book 600 rooms on a peak night, you would expect the meeting room rental to be complimentary. Allow for the extra charges in the budget.

Planners also need to learn the nuances of other cultures and what protocols to follow, whether in negotiations or during the meeting. For example, in Japan, you must accept that the individuals with whom you are meeting - suppliers, for example - will be late for the appointment. Often planners will encounter someone who in the United States would not be expected to be treated as a VIP, but in his or her country is a VIP and expects to be catered to that way. In Spain, it's a practice that there will be a three-hour break from all business in the middle of the day and around Europe at least, foreign delegates expect a good selection of food and drink at exhibit booths.

ROBINSON: A North American supplier usually answers a question or questions posed by a planner during the negotiation process and beyond, even if that supplier knows the answer isn't going to please the client. In several foreign cultures, people do not want to tell you the bad news; if you do not receive a response, you need to look at the issue from the other side and ask the question in a different way. What's more, in many areas - notably Asia and Southern Europe - the negotiating scenario is nothing like it is in the states. Suppliers want to get to know a planner before discussing costs. It's not just about money.

CONVENE: Beyond Europe, which international meeting destinations are eliciting groups' interest?

DAROGA: I see increased interest in the Far East and even India. The ability to get more for the money is driving business, as is the fact that many delegates have been to Europe before and it has become routine for them, but they haven't explored Asia.

ROBINSON: Australia is a hot one. A lot of people say, 'I've been to Paris and Prague; how about something entirely different?'

CONVENE: What else should planners keep in mind when it comes to international meetings?

DAROGA: Know your liabilities. While hotels abroad are still more flexible than those here, they have taken a beating and many do include liability clauses in their contracts. It isn't unusual to be asked for a non-refundable deposit up front. A few years ago, MEC booked 125 rooms for a meeting in Italy and came in with 110; there was no charge. One year later, something similar occurred and there was a charge.

JENKS: Be aware that security, liability, and legal issues will differ between the United States and other nations; research them accordingly and hire professionals to help navigate the waters.

ROBINSON: Remember to ask yourself what you are trying to accomplish - why you are holding a conference in the first place and whether an international destination is a real fit. Going international can be great, but there needs to be a synergy with the overall plan in order to make it successful and worth the effort.

Negotiating Techniques

While there are numerous negotiating techniques used around the globe, following are five5 that U.S. planners need to be able to recognize and deal with: 

•  Reluctant buyer or seller - acting as a disinterested buyer or seller is used to gain an advantage by forcing the other side to modify its terms to gain the buyer or seller's interest.
• Red herring - this technique occurs when an issue is insignificant to one side and very important to the other. Buyers or sellers can use it. The disinterested party will pretend that the issue that's insignificant to them is more important than it really is in order to get the other side to make concessions on more important issues. For example, a hotelier might negotiate hard on complimentary VIP gifts only to give in if the planner will agree to stricter terms for attrition. If the red-herring technique is faced, the best strategy is to counter with the set-aside technique by saying, "Since we can't agree on this point, let's set it aside for now and come back to it later after we get other matters settled."
• Extreme openings - a technique frequently encountered in Arab and some Asian countries. One party starts the process by making an extreme proposal in terms putting pressure on the other side to lower their expectations. For example, your preferred hotel might start out with a ridiculously high price or demand a large deposit far in advance of the meeting. The best way to counter this is to respond with an extreme demand in the opposite direction. Another counter response is to say, "If your hotel values its rooms at such a high rate then we need not waste our time any further." Invariably, if the other side wants your business, they will ask what rate your organization is willing to accept and work toward a compromise.
• Best offer pressure - in the United States, "this is our best offer" usually means "take it or leave it." Planners should not always accept this statement at face value. In some Asian countries, business people will make a series of "best" offers with each offer being a little better than before.
• Time pressure - when negotiating agreements with foreign counterparts, allow plenty of time. The American style of hurried negotiations can work against you, particularly in Japan and China. Never negotiate when you have time constraints and don't reveal your deadline to your counterparts. For example, when negotiating in Asia, never tell your counterpart your departure flight. Suppose you arrive on a Friday for a weekend site inspection and negotiation with a hotel and you have a return flight on Monday morning. Your Asian counterpart may spend the weekend discussing pleasantries about the hotel and details about your organization. They will save discussion of specific terms until Sunday evening when you are more likely to make concessions under time pressure. The best strategy is to tell the other side you have plenty of time and can change your return ticket if necessary.

An Insider's Guide to International Shipping

Sure, there are speakers to book, a trade show to organize, and meals to plan, but when it comes down to it, getting your stuff - and your exhibitors' stuff - to the convention on time and on budget can spell the difference between a successful international convention and a disaster.

It's your first convention in an international destination … and it's your exhibitor's worst nightmare. They have booked their flights, paid for their hotels, and are ready to sell, sell, sell their company's services at your convention. Unfortunately, all of their materials were held up at customs. Come opening day of your event, they have nothing to promote their company, aside from a chair and some blue curtain.

Freight forwarding and customs brokerage may not be the most fascinating aspect of planning your international convention, but it could arguably be the most important (as this worst-case scenario illustrates). As the convention planner, it's up to you to make sure all the materials necessary for a successful event get to where they need to be, on time.

Hiring a freight forwarder and customs broker for your international convention helps you and your exhibitors before, during, and after your event. Here's how:

• They're a great selling feature. If you are pitching an international conference, your exhibitors will appreciate the fact that you have lined up a shipping expert to help them get their materials to their rightful destination. You can also rest easy knowing all of the materials you will need to run a great event will be where you need them, when you need them.
• They save time. When exhibitors call asking for shipping advice, you can just hand them over to your freight forwarder who can give them all the information they need.
• They prevent unforeseen problems. When picking an international location for your conference, your freight forwarder or customs broker will be able to tell you if there are any potential customs or shipping pitfalls. They will know about a country's customs policies and charges. For example, the range of the VAT (Value Added Tax) in Europe can be anywhere from 71/2 percent to 25 percent payable on the value of the goods being brought in.
• They fix problems 24/7. Your freight forwarder has the expertise to address any challenges that may arise, in the timeliest manner possible. Federal Express, UPS, and other commercial couriers do a great job of picking stuff up and dropping it off, but if there is a problem, it is often difficult to get them to fix it in time for your event. In this industry, a 1- or 2-day delay can be catastrophic. OK, so now you may be sold on the idea. Here's how to select a good freight forwarder:
• Make sure your freight forwarder is also a licensed customs broker or aware of the customs procedures of the country you are planning your meeting. Customs brokers are knowledgeable about the provisions that the host government may have in place that will allow temporary importing or duty and tax relief. For example, the Canadian government has privileges available to some meeting and conventions that will allow duty and tax free importation of their display goods. Freight forwarders may not be aware of this, but customs brokers will. In fact, in some cases, if you go through a licensed customs broker, your freight can clear customs at your hotel instead of at the border, further streamlining your efforts.
• If your freight forwarder is not also a customs broker, they may contract this service out to an affiliate company. This is fine, as long as you have the name and local number of the customs broker that they are using. It does you no good to be in Barcelona, Spain, when your U.S.-based freight forwarder is not even open.
• Make sure your freight forwarder has experience in shipping convention and meeting materials. Unlike most freight, your materials are very time sensitive. Freight delays of a week or even a day can determine whether you will have your material at the show or not. 
•  Take your potential supplier for a test drive and send a last-minute shipment into the city you are considering for your meeting's destination.
• Don't let size sway you. You don't need a freight forwarder that has hundreds of offices worldwide as much as you need to have one or two key individuals within an organization who are dedicated to your program. They will have intimate knowledge of your event including move-in times and dates. Often larger companies are not structured in a way to allow any one individual to be ultimately responsible for your event. Smaller organizations often have the flexibility you need.
• Check references. Enough said.

Paul Griggs is the founder of Events on the Move Customs and Freight, a company that provides freight forwarding and customs brokerage for the meetings and conventions industry. He provides free consultation and advice to meeting planners on shipping and customs brokerage for international meetings and conventions. He can be reached at pgriggs@eventsonthemove.com or toll-free at (877) 355-1116. For a complete listing of customs and shipping tips for international meetings, e-mail info@eventsonthemove.com.

International Shipping Terms

AGENT - One who negotiates contracts or acts in the legal capacity of another party.

AIR CARGO - Any property carried, or to be carried, in an aircraft, excluding passenger baggage.

AIRWAY BILL - Also called air consignment note. A bill of lading issued by the airline acknowledging receipt of merchandise, indicating conditions of cartage and issued only in non-negotiable form.

ARRIVAL NOTICE - A document issued by railroads, airlines and maritime services identifying the shipment is sent to the consignee or their agent and informing consignee agent of cargo's arrival.

ATA CARNET - An international Customs document issued by authorized Chambers of Commerce allowing temporary admission of goods in many foreign countries without the need for bonds, deposits/guarantees, duty and Customs formalities.

BANK GUARANTEE CASH DEPOSIT - Payable by the exhibitor to the forwarder, Customs agent or official authorities in place of a temporary import bond to ensure the amount requested is the minimum amount of import duties and taxes which would be paid in case of final import.

BILL OF LADING (B/L) - A contract between a shipper and a carrier providing proof that the merchandise was transferred from the shipper to the consignee and that the carrier has assumed responsibility for the cargo until it is delivered.

BONDED WAREHOUSE - A warehouse approved by Customs into which non-cleared goods may be placed.

CARTAGE AGENT - Ground service operator who provides pickup and delivery in areas not served directly by air carrier.

CERTIFICATE OF ORIGIN - A document certifying the origin of goods. CIF - Cost plus insurance plus freight = CIF value. A pricing term indicating the cost of goods, insurance and freight are included to establish CIF value.

COMMERCIAL INVOICE - An invoice required to be presented to Customs representing one shipment of merchandise by one consignor to one consignee clearly identifying the product for classification and appraisement purposes.

CONCEALED DAMAGE - Damage to merchandise that is not discovered until shipment is unpacked.

CONSIGNEE - A party to whom goods are delivered.

CONSOLIDATION - A combination of many small shipments into one shipment of 10 with more than one consignee.

CONTAINER DETENTION - A charge which is assessed when the container is removed from the carrier's control but is not returned within the allowable free time.

CUSTOM HOUSE BROKER (U.S.) - A person or firm licensed by the Treasury Department engaged in entering and clearing goods through Customs.

CUSTOMS - A government authority designated to regulate the flow of goods to and from a country and to collect duties levied by a country on imports and/or exports. The term also applies to the procedures involved in such collection.

DANGEROUS GOODS - Articles or substances that are capable of posing a significant risk to health, safety, or property when transported and which are classified according to the most current editions of ICAO Technical Instructions for the Safe Transport of Dangerous Goods and the IATA Dangerous Goods Regulations.

DECLARED VALUE (CARTAGE) - The value of goods declared to the carrier by the shipper for the purposes of determining charges or establishing the limit of carrier's liability of loss, damage, or delay.

DOCK RECEIPT - A receipt given for a shipment received or delivered at a pier. When delivery of a foreign shipment is completed, the dock receipt is surrendered to the vessel operator or his agent and serves as the basis for the preparation of the Ocean Bill of Lading.

DUTIES - The sum of money assessed by a country's fiscal authorities to discourage imports. EC - European Community.

EXPORT LICENSE - A permit required to engage in the export of certain commodities to destinations. Lists of such goods are found in the comprehensive Export Schedules issued by the Bureau of Foreign Commerce.

FOOD STUFF/EDIBLES - Imports are subject to sanitary veterinary health certificates. Live animals/plants may be quarantined.

FUMIGATION - Required in some countries for live plants and wooden packing. GST - Goods and services taxes.

HARMONIZED SYSTEM - International commodity description and classification referencing system. Formerly known as Schedule B.

OCEAN BILL OF LADING - A receipt for cargo and a contract or transportation between a shipper and the ocean carrier.

PERMANENT IMPORT - In case of sales, with payment of duties and VAT, or in case of free distribution, disposable or consumables usually exempted from payment of duties and VAT depending on each country. Quantity and value exempted at discretion of Customs authorities.

PIER DEMURRAGE - A charge assessed when the container is removed from the carrier's control and is not returned within the allowable free time.

POWER OF ATTORNEY (POA) - A "grant of authority" from the principal (importer) to the agent (broker) to perform certain acts on the principal's behalf. A Power of Attorney is required by a broker to perform those activities, defined as "Customs business," on behalf of and in the name of a principal.

PROHIBITED CARGO - Goods restricted by international convention. Also refers to drugs, weapons, and ammunitions.

RATE OF EXCHANGE - The rate of currency exchange established daily as the buying rate of foreign currency by the Federal Reserve Bank. The daily rate is used only when it varies by more than 5 percent from the quarterly rate. When applicable, the daily rate is the rate certified on the day of exportation.

SHIPPER'S EXPORT DECLARATION - A form required by the Treasury Department and completed by the shipper showing the value, weight, consignee, destination, etc. of export shipments as well as the Schedule B identification number.

TEMPORARY IMPORT - Exhibition material whose temporary import status exempts payment of duties and taxes on arrival.

TEMPORARY IMPORT BOND/DEPOSIT (TIB) - Articles not imported for sale, admitted into the U.S. on a temporary basis without payment of duty under bond for their exportation.

TIR CARNET - Similar to an ATA Carnet, but used for trucks from non-EC countries to EC countries or for transit between non-EC countries. Can be used for different unloading locations. Trucks must be sealed by Customs.

VAT (Value Added Tax) - VAT applies to all EC countries, Switzerland, and other countries around the world. The percentage applies to CIF value and duties and the percentage differs from one country to another. Local VAT on forwarding/handling services is not charged between EC companies with a registered VAT number or to non-EC exhibitors on condition the local forwarder executes Customs clearance and transport.

Hand Carrying Goods Abroad

Latin America

• Hand carrying goods into Latin American countries is extremely difficult.
• Any items retained by Customs can be expensive to clear and involve many delays.

Western Europe

• There are generally no problems associated with hand carrying goods into Western Europe.
• Make sure to have a commercial invoice with you.
• Allow one or two business days for clearance, if seized. If goods are detained, get a receipt for your freight forwarder.

Socialist/Muslim Countries

• Hand carrying into these countries is not recommended.
• Because the laws are stringent, penalties, fines and confiscation can result.
• Freight forwarders have limited ability to clear goods hand carried into these countries, if seized.

From www.twiglobal.com

Five Steps to Worry-free Shipping

1. Ship early. The earlier you send your shipment, the higher the chance of having it at your event on time and the lower the cost to get it there. Add customs clearance to the mix, and you should be motivated to move a little faster. If you can have your shipment held at your freight forwarder's warehouse seven days prior to your event move-in date, you can build a comfortable buffer to mitigate last-minute problems. They should be able to hold your freight at no charge.

2. Track your shipment. If you don't have a tracking number from your freight forwarder, then call them to get updates. If you are tracking your freight and you see it sitting in a city for more than a day, there could be a problem.

3. If it is really important, take a copy with you. There are some documents, such as business cards, presentation folders, registration forms, evaluation forms, awards, or certificates that are going to be critical to your event or presentation. If your shipment is delayed, you can always run these documents from a disk or color copy them from an original.

4. Check local holidays. In the shipping world, holidays prior to your event can cause more problems than holidays during the event. Find out what national holidays are in the days and weeks prior to your event as they backlog the supply chain from warehousing, trucking, and customs.

5.Be prepared for your shipment to go through many transfers. The company that picks up your freight may not be the same company that delivers it. It will pass through many warehouses, being unloaded and reloaded along the way. Prepare for this cross docking by packing and labeling well. This will minimize damage and potential loss along the way.

ATA Carnet

An ATA Carnet (www.atacarnet.com) is an internationally accepted customs document often called "The Merchandise Passport" for Boomerang Freight. By presenting an ATA Carnet to foreign customs, your merchandise and equipment pass duty free and tax free into carnet countries - more than 69 nations and territories in Europe, North America, South America, Asia, Africa, and Oceania - for up to one year. At the end of the year, all the items listed on the carnet must be returned to the United States (hence the term "boomerang freight"). Exhibition trade show booths are considered boomerang freight.

According to Rick Schleef, regional sales manager, TWI Global Inc., show organizers should use an ATA Carnet when exporting goods of a very high value, if goods are traveling to several Carnet countries, and/or if goods are exporting and importing several times in one year. For more information, including a Carnet work-up sheet, go to www.twiglobal.com/pdf/ShippingGuide.pdf.

The Other 'Customs' of International Meetings: Protocol

When I first started planning international meetings more than 20 years ago, "going global" was the catchphrase of the day. Companies sought new markets outside of the United States and associations sought new membership. When I started planning meetings abroad, my focus was strictly on logistics: freight forwarding, negotiating in foreign currencies, collaborating with airlines, tax deductibility, choosing activities for attendees to enjoy while they were in the destination, and producing a positive experience that would not be forgotten … all important aspects of international meetings.

I didn't realize I was overlooking one of the most critical parts of the international meeting experience: protocol. As an international meeting planner, I also needed to assume the role of protocol officer without the title. I quickly learned that it was my job to understand cultural expectations to get the job done. Here are some protocol tips I share from my hard-earned experience:

Communication Styles

Communication is not the same all over the rest of the world as it is in the United States - and I am not referring to obvious language differences. Americans like to "get to the point" and to know definitively what is going to happen at each step of the way. Our communications, both written and verbal, are more hurried. We often use "shorthand English," thinking the other party will understand our meaning. For example, responding to questions from a Japanese meeting planning team, one U.S. hotel sales executive said, "No problem," which was interpreted as "No, there is a problem." The hotel lost the business.

In Asia, the Middle East, and in many part of Europe, communication is more looped. It starts with social chat, may include a mention of the work at hand, and then goes back to social chat. Americans may become frustrated with the time it can take to get consensus on a point, but should not try to hurry the process. Understand that the relationship between the parties is more important than the contract. In negotiations with vendors, "no" doesn't mean no most of the time; it means maybe. Sometimes, as in Asian countries, "maybe" means no.

Dress

How you dress sets the tone for your business relationships overseas. Fortunately, the conservative navy or gray suit for men and women is proper just about everywhere. It conveys a sense of professionalism. For women, a modest neckline is just as important.

You may not have thought about it, but colors have a strong influence in how you are perceived abroad. While red is a power color in the United States, in parts of Africa it is a color of mourning. In Asia, it is a lucky color, while in Russia and many countries of the former Soviet Union, red still stands for communism and the blood of revolution. In Latin America, the color purple is associated with death. In Asia, white is the color of mourning. Color consideration must be given to gifts as well as dress.

Business Cards

You will need to hand out twice as many business cards overseas as you would expect to hand out during a meeting at home. In almost every office meeting, you will give one to the receptionist as well as to your contact. Always give your business card with your right hand or both hands. The left hand is historically the "dirty" hand, reserved for personal hygiene, so refrain from using it to offer gifts or your business card. Don't forget to have the other side of your business card translated in the language of the country in which you are doing business if English is not the primary language spoken there.

Eye Contact

Meeting one's gaze is revered in the United States. We determine if the other person is honest and trustworthy by whether s/he establishes eye contact with us. But don't hold your gaze too long in Asia. A steady gaze is considered to be aggressive and even hostile. The rule to abide by is if you feel that your eye contact is making someone uncomfortable, look away. In most cultures, intermittent eye contact is acceptable.

Greetings

Greetings can be tricky. Handshaking is firm and relatively short (three seconds) in North American and Northern European business. However a lighter (limp) but lingering handclasp (10-12 seconds) is the norm in Asia. To make a great impression, go along with cultural norms. Observe. What you get should be what you give in return.

Gifts

In the United States, gift giving in business is regulated by Congress. There are limits to the value of gifts you receive from other American organizations. Other countries generally don't have those limits and gift giving is an important part of business relationships. But there is an art to giving gifts. Knowing when to give, what to give, to whom to give it, and how to wrap it are equally important.

In Asia, at your first meeting with a new client or supplier, exchanging gifts will be the norm. There are mandatory gift-giving holidays around the world. In Japan, gifts are exchanged July 15, or mid-year and at year's end, on Jan. 1.

Gifts representing your company, industry, or country should be made in your country. Some suggestions of appropriate gifts that work almost anywhere are picture books of your town or country, high-quality writing instruments, Native American artifacts, travel accessories such as candles, air purifiers, compasses (Muslims need to know the direction of Mecca), and zoom binoculars. Any intellectual gift - books, music and handicrafts (art) - will be appreciated. Some taboos:

• leather gifts given to Hindus
• alcohol and any product which includes it as an ingredient given as gift to a Muslim
• giving knives, which represent severing relationships (so forgo giving that lovely carving set)
• a gift made in China given to a Japanese client.

Women in Business

 In many cultures, women are not as easily accepted in the role of competent business people as the United States. Because of their cultural norms, it takes more time for international business contacts to trust a woman's knowledge and competency. Be patient and maintain your professionalism. Often women are ignored at business meetings if they are there with male colleagues; historically they have been seen as assistants, not the ones in charge. It often is important for the group to overtly refer to the women and solicit their opinions on matters to keep all parties included in the meeting.

Promptness

Still another concept to grasp in order to successfully conduct business in the international arena is one of time. In all of Northern Europe, Scandinavia, the Netherlands, Germany, Switzerland, and Belgium, there is a high regard for promptness. Being 10 minutes early is appreciated. In the United States, Canada, United Kingdom, France, and Australia, promptness is appreciated. However, in Southern Europe (Spain, Italy, Greece), most of the Mediterranean, and Arabian Gulf Countries, a meeting may be scheduled for 2 p.m. and actually begin between 2:30 p.m. and 3:30 p.m. (except for banquets).

In most of Latin America and Asia, it is even more lax, and appointed times are just estimates. You can't go wrong by being on time; just bring a book to read or work to occupy you while you wait.

Keep in mind that Americans are almost the only adults on earth who eat dinner at 6 p.m. Assume you will eat later than you are accustomed and keep that in mind when planning group dinners which include local colleagues.

Cynthia Lett is a speaker, consultant and coach to Fortune 1,000 executives, government agencies in 30 countries, and savvy professionals worldwide. She is the director of The Lett Group and executive director of the International Society of Protocol & Etiquette Professionals. Lett is the author of Lett's Talk ... Real Etiquette Dilemmas and How to Solve Them. She is a recognized media expert whose commentary on workplace/career issues is regularly featured on TV and radio shows, and in newspapers and magazines. For more information, call (888) 933-3883 or (301) 946-8208 or visit www.lettgroup.com.