In a striking contrast from managing business trips and short-term assignments as "business as usual", global organizations are now facing increased risks for non-compliance with immigration, taxation and labor regulations. This article analyzes current immigration-related legislative developments and policy trends with respect to the most widely used category of visa worldwide – business travelers – in various jurisdictions, all of them putting an end to the "business as usual" assumptions. It addresses the new, heavier burden that the "genuine" business visitors bear when applying for entry into foreign countries and analyzes the risks inherent to the use and abuse of this classification across jurisdictions. Finally, it suggests a number of Global Mobility Management (GMM) strategies to mitigate these risks and to avoid potential liabilities.
In today's global economy, a "business visitor visa" may seem like the ready-made solution for any short-term assignee or commuter. Seemingly, the "the age of the stealth" has arrived, supported by the advent of new technologies and the ease of international travel. Nonetheless, in response to the globalization trends, also viewed as threats to the national economy and security, national governments are tightening their immigration policies. In this world of increasingly complex regulations, deploying business visitors internationally is rife with risks, leading to exposures and liabilities far beyond penalties for immigration noncompliance. The potential for catastrophic consequences of non-compliance connected to short-term assignments is yet to be fully understood by GMM specialists, Human Resources managers, and legal counsels.
Daily, the hubs of international travel are bustling with activity. Canada and the United States process on average 70 million international travelers annually just along the Canada-U.S. international border. Other corridors, such as China – Australia, or France – Russia, are enjoying significantly greater volume of business visits than ever before. Amongst these travelers, most of non-tourists crossing the international borders are pleading to be business visitors exempted from work authorization, some rightfully and others less so. In terms of underlying intent, these visitors can be divided into three major categories, which we dubbed 'the real deal', 'the misfit', and the 'cheater'. All of them deserve a closer look.
The Real Deal: Proving Legitimacy Becomes a Rule. In a multitude of business situations, being a business visitor is the only status an employee travelling internationally would ever claim or need. Millions of travelers coming and going are in fact such legitimate business visitors. However, today's reality is such that the "burden of proof" rests more than ever upon the traveler. An exemption from obtaining a visa or a work permit no longer equals an exemption from providing documented evidence of the purpose of travel. In many instances the support of the host organization is required. As an illustration, the UK visa office recently released specific guidance requiring travelers to present clear proof of business meetings to be held in the United Kingdom.
The organization's ability to support its employees with the appropriate documentation becomes critical when the business visitor seeks a legal exemption allowing to do more than "standard business meetings", for instance, performing after-sales services, receiving or giving training, looking for opportunities to invest, or attending board meetings. The immigration officials exercise wide discretionary decision-making power to grant or deny admission. When doubts are raised, a deferral or denial of entry can ensue, having a direct impact on the ability of organizations to efficiently deliver their business commitments to international clients.
Case study 1: Sales Personnel Are No Longer the Typical Visitors
Historically, a business person soliciting sales of merchandise manufactured outside the country on behalf of a foreign organization was the business visitor par excellence. However, with the increasing number of policies to "buy local", many organizations have created local subsidiaries or sister companies that enable them to bid on certain contracts with foreign governments or other partners. While it may be a good business decision, it triggers new immigration challenges and it can jeopardize the traditional way of operating. Where a local presence is established in the host destination, even through a mere mailing address, a presumption of local labor is raised and sales personnel run a great risk of being denied entry without proper work authorization. Modern immigration officers have developed unsurpassed skills at "googling" enterprises and identifying their business locations. Immigration authorities are also using social networks, such as Facebook, LinkedIn or Twitter to find even more information on both businesses and travelers. These practices combined with a wide search and seize power including the authority to search laptops and smart phones make any sign of local presence easily visible. Where it can be established that a sales person will act on behalf of a local entity, whether or not it is a subsidiary of a foreign organization and no matter which entity is paying for his services, the fine line between the visitor and the worker is crossed. Moreover, sales personnel signing documents on behalf of a local entity may trigger not only work authorization issues but also serious fiscal consequences for the local and foreign organization, such as creating sufficient "nexus" or presence for fiscal purposes.
The Misfit: "Not Knowing the Law Does Not Exempt You from the Law"
For a businessperson waived from the requirement of an entry visa, is it possible that swiping a machine readable passport at the airport became as easy as swiping a credit card to make a purchase at a duty free shop minutes later? Frequently, travelers believe their passport should open all doors, assuming that they became "citizens of the world" in the era of globalization. The reality is that certain national barriers have become "invisible" but they exist nonetheless. In certain activities, as we demonstrate below, the line between the visitor and the worker is blurred and only a legal professional can provide a definite recommendation as to the appropriate status in a specific jurisdiction.
Case study 2: Finding of Visa Fraud Triggers Employer-Employee Civil Litigation. In certain countries, generous exemptions allow work or delivering training to local workers under temporary business visitor status. In other destinations it is not the case, as found out a Canadian employee of an IT firm who requested to enter the United States as a business visitor. In this case, after submitting employer letter that vaguely stated attendance to business meetings, the employee was interviewed for four hours by U.S. immigration examiners to finally specify that such meetings were de facto training sessions on functionalities of a software previously deployed at client site. The employee was found guilty of misrepresentaton and, not only was he denied entry but banned for lifetime from entering the United States for attempting visa fraud. This decision is without appeal and renders the employee unable to cross the U.S. border, even in transit situations.Considering that he was not properly informed nor documented by his employer, the employee facing the tremendous impact of a lifetime ban on his personal and professional life, filed a lawsuit against the company for damages. This type of litigation is clearly a risk for any organization, even more in the actual context of close monitoring of business visitors by many countries.
Driven by today's competitive pressures, "cost control" measures, and perceived difficulties in obtaining proper work authorization, organizations may be tempted to break immigration laws by getting short-term expatriates into the country as business visitors. Many national governments have responded to the "visitor visa abuse" by increased enforcement and new restrictions, as well by the emergence of a new public discourse about the legitimacy of business visitors. Recent litigation in the United States, discussed in detail below, prompted certain lawmakers to embark on a crusade against the misuse of the business visitor category. The U.S. Department of State has been asked to reevaluate and possibly eliminate the use of a specific exemption provision, known as "B-1 in lieu of H" which has been for many organizations a legal avenue for bringing skilled workers to the United States on short-assignments.
Why me, or How the Cheaters Get Caught...
The investigations of noncompliance may come about in various scenarios, such as a "whistleblower" or a disgruntled employee, a random audit, a statement made during an interview by the visa or immigration service, or even a denunciation by the competition. The panoply of recent joint security initiatives between different nations also makes the exchange of data between governments instantaneous, enabling all participant States to benefit from a wide array of information on both the travelers and the international activities of the organizations employing them. Sanctions for non-compliance can be severe and include monetary fines, tax audits, expulsion from participation in foreign worker programs, and imprisonment of managers having signed documents proven fraudulent. Beyond these sanctions, the ability of an organization to conduct business internationally is more and more directly impacted by its ability to manage efficiently its short-time travelers.
Case Study 3: Palmer v. Infosys Technologies Limited Incorporated. Recently, the eyes of all GMM specialists were turned to a lawsuit filed in Lowndes County, Alabama by Jack Palmer, an employee of Infosys against its IT giant employer based in Bangalore, India, a story that has made headlines in February 2011. Mr. Palmer alleges that the company systematically used B-1 business visitor visas to send Indian workers to temporarily staff projects at U.S. client sites, in direct violation of U.S. immigration laws. The evidence filed with the court includes employees' emails and memos from the company's intranet, instructing the visa applicants specifically on how to procure business visitor visas by avoiding a vocabulary such as "work, implementation, activity, consulting, etcetera" . While the court has yet to decide the case, it is clear that the situation has been damaging to Infosys, whose legitimate business visitors clearly are hurt by the situation even before the verdict. Many organizations are questioning their global delivery model and the need for sound GMM policies has become more pressing than ever.
Successful Business Strategies for Risk Management
The complex issues of business visitors must be managed via carefully planned and consistently applied GMM policies. The stakeholders must acknowledge and understand the risks inherent in this type of global assignment and take specific actions to mitigate them. The resulting application of sound policies for managing the business traveler workforce company-wide, may become, in fact, the key difference between winning and losing the GMM game, thereby impacting directly the ability of organizations to act at an international scale. Key recommendations can be summarized as follows:
- Abandon the Assumptions and Seek Legal Advice: The rules that apply to taxation do not apply to immigration and vice versa. The legal frameworks differ in substance and in application from one jurisdiction to another. Seek legal opinion on any situation that exceeds "business meetings only".
- Take Control of the Situation and Enforce Compliance. Lax attitudes can have disastrous consequences for the company and the individual. Ensure that all travel requests are checked against the immigration perspective. Introduce policies for clearing all travels only where employees are compliant with host destination immigration requirements. Ensure that support documentation is reviewed and signed by a limited number of authorized representatives who are well informed of the consequences of non-compliance.
- Support Short-Term Business Travelers: The borders are crossed faster with proper paperwork in hand. This is a particularly important consideration given the increasingly important role of enforcement and verifications in immigration worldwide. Inform employees about the importance of compliance.
- Be Not Afraid of the Work Permit: When it is established that a work permit is required, the procedure for obtaining such permit may in fact be by far faster and more cost-efficient than hectic attempts to salvage the situation gone bad.
- Include Business Travelers into the Company's GMM Systems. Manage short-term assignees the way long-term expats are managed. Structured data about short-term travelers will help in-house stakeholder conduct reviews and identify the possible misuses of business visitor category to take the appropriate action.
Increasingly, organizations are witnessing the "end of business as usual" with respect to the global mobility of business visitors, whereby national governments are introducing more restrictive immigration laws and enforcing their application like never before. In a visa-free framework, driven by some common misconceptions about the existing ground rules, the misuse or abuse of the business visitor category bears some considerable risks. Even a single instance of noncompliance can have a significant impact on organizations by limiting the mobility of their key personnel in a particular jurisdiction, thus jeopardizing business operations. The successful management of short term expatriates thus becomes an indispensable tool for achieving business success on global scale.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.