As someone who accompanied the international transactions on behalf of the Legal Department of IAI and currently advises many Israeli companies, Adv. Erez Modai is aware of the many complexities in the field: "In addition to all business issues, there are cross-border elements such as transportation, liability, insurance , Judicial powers and more "
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Move to Gallery ViewAdv. Erez Modai: Specialization in accompanying international transactions Photo: shutterstock
Miri Vered, in collaboration with Adv. Erez Modai
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08 May 2022
It is impossible not to be impressed by the high-achieving resume of lawyer Erez Modai. He was the lawyer who accompanied international transactions in the legal department of IAI. Over the years, he has gained experience in negotiating with companies and governments from forty different countries, with the cumulative volume of international transactions he has accompanied to date standing at $ 1.5 billion.
In front of governments and the largest companies in the world
He seems to have been attracted to international relations intertwined already in the early stages of his life. As a teenager, Adv. Modai accompanied his doctor doctor on his professional visits to Japan, Canada, Europe, and 26 countries in the United States. As a high school student, he took the French matriculation exam in addition to English, At a young age, an in-depth understanding of the differences that exist between cultures. . Having learned from the best and most experienced, I have been privileged to face countless challenges of complex complex deals in innovative fields with some of the world’s largest companies and governments from dozens of different countries. That's how I experienced in the most practical way cultural differences in business, "he says.
Advocate Moda later turned to studying for a master's degree in business administration in order to maximize the professional benefit he would bring to the table in the context of negotiating and complex projects. Today, he accompanies his clients in two aspects that he says are almost inseparable: International.
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"When you understand the differences between cultures, opportunities open up"Photo: Courtesy of Adv. Erez Modai"International transactions are complex because in addition to all business issues, they include cross-border elements such as transportation, liability and insurance and create conflicts between regulations, laws, tax regimes, judicial powers and more," explains Adv. Modai. , We may find ourselves responsible for the import customs in his country, for registering importers and issuing an import license according to 'strange' requirements of local regulation, for product insurance, for the obligation to remove the packaging from the same territory 'for environmental reasons', for tax on the 'local value' created there. , And may also apply to the transaction the powers of local courts and law, including in the matter of workers' rights, local representative, antitrust, increased liability and more and more. There is no doubt that even with a nice return for the transport, our wages will come out at a loss. "These private cases are just a small part of the mines where the international deal is for those who do not understand the complexity of the field."
Oceans and glaciers of cultural gaps
As someone who is well versed in the field, Advocate Modai explains that "international transactions are oceans dotted with glaciers of cultural disparities: the Titanic deal may also sink as a result of a misunderstanding of the business partner's culture, or worse - of the explosive potential of any interaction with civilians. Other. For example, in one culture a contract is sacred - literally a Catholic wedding. In another culture a contract is only a temporary basis for change. Such a conceptual gap could cause severe, costly and very embarrassing 'business accidents': an international deal that would only take 'money on the table' amounting to tens of millions of dollars a year, exploded solely due to a lack of understanding of the importance of respecting the local factor. Proper preparation for negotiations would have prevented this and unfortunately I was not there to save the deal. "
He adds that "in another case, negotiations were not formed because a price was required - too low: members of the same culture tend to open negotiations with very aggressive proposals, which may reach 500% of the reservation price (the minimum value for them per transaction). When Israelis demanded less than twice this value, but were unwilling to go below it, they were perceived as 'inflexible' people with whom 'business cannot be done'. In a third case, Israelis relied on the 'fairness' of a foreign partner and revealed sensitive information to him. As a result of a lack of understanding of this cultural gap, the hospitality disappeared and a draconian draft was laid on the table that took advantage of the Israeli weakness and squeezed every drop of profit. "
Adv. Modai tackles these many complexities with a series of solutions he has developed over the years. To avoid double taxation and more and more. "The experience and international connections also allow me to find and build solutions to new challenges," he says.
As for cultural gaps, an educated advocate is conscious of turning them into a burden as an asset: “When one understands the differences between cultures, opportunities open up to turn difference into an asset in negotiation. If we understand the important values in a particular culture - for example accuracy, time, security and respect - we can trade them just like any other value. Thus, one culture member will be willing to pay more in a 'quick deal' that will allow him the honor of cutting the film, while another culture member will be willing to pay more for a long-term deal that will make him remembered even after he retires and possibly die. One will strive to 'finish quickly with the payment' and another will agree to high interest rates because 'followed by the flood' ".
One of the examples of accompaniment that neutralizes risks in a smart way and without stimulating cultural gaps, can be seen in the case of an Israeli business that established a company in an Asian country together with a local partner. The company operated by the local partner was intended to produce products based on Israeli technology and sell them in additional territories. "Along with its benefits, the deal raised real long-term concerns about the leakage of IPR - Israeli intellectual property rights, 'loss of control' over the joint company and the oppression of the Israeli share of profits, and 'cannibalization' of Israeli products by smuggling products out of the agreed territories," says Adv. In addition, when I raised these points, the Israelis feared that the treatment of them would be perceived by the partner as a lack of trust and a violation of his dignity. In the end, we introduced special precautions: the management of the joint company was regulated in such a way that the laws of local corporations would not block the involvement of Israelis, mechanisms were established to ensure profit sharing, Various collateral was required from the partner and he signed documents that could greatly simplify and reduce dealing with breaches of the agreement, both in the same territory and in others. All of these were achieved while being sensitive to cultural gaps, focusing on the common interest and without harming the fabric of the long-term relationship with the partner. "