CROSS-BORDER TRANSACTIONS : Transactions that have potential tax consequences in more

than one country.

The impact of globalisation eventually led to an irreversible increase in legal needs of international
commercial and contract law patrons and a relative rise in the demand by private individuals and
entities to higher degrees of legal certainty in conducting cross-border transactions. The resultant
effect is that private international commercial law is sometimes substituted for public law where the
latter can be slow, unsatisfactory or quite simply not available to the parties. [9] This option is
exercised not only in the absence of suitable state law, but also where the parties would voluntarily
decide to opt out from state law to forestall common problems encountered in their use during cross-
border transactions such as; jurisdictional issues, applicable law and enforceability of judgements in a
different legal system. In a lot of cases, domestic courts are generally unprepared in terms of required
expertise, costs, length of procedure and language requirement, etc and are a major factor as to why
international arbitration has thrived in the resolution of cross-border dispute resolution

--
BSP requires banks to report cross-border transactions
MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has required banks to report on their
cross-border financial transactions in order to better assess potential risks faced by the local banking
sector and the domestic financial system as a whole.

Were basically enhancing the scope of our financial system surveillance for financial stability
reasons, BSP Deputy Governor Nestor A. Espenilla Jr. said.

The new measure mandates banks to submit a Report on Cross-Border Financial Position, aimed at
giving the central bank an assessment of possible risks the local lenders may face in the future.
The Report on Cross-Border Financial Position is designed to measure and monitor the cross-border
financial claims and liabilities of universal and commercial banks and their subsidiary thrift banks, the
circular said..

(This is) to provide the BSP with a comprehensive view of potential financial risks and transmission
channels emanating from foreign counter parties of Philippine banks.

The report includes a banks financial claims from and financial liabilities to non-residents and
multilateral agencies. Banks will need to list the claims and liabilities according to geographic region or
country, sector and currency.

The big banks will be required to submit an initial, one-time report on their cross-border financial
position 120 days after Sept. 30.

After this phase, universal and commercial banks and their subsidiary thrift banks should submit a
quarterly report on their cross-border financial positions to the BSP.

The BSP stressed that banks will face penalties for late and/or erroneous reports.

Specific guidelines for the mode and manner of submission of the new report, meanwhile, will be
covered by a separate issuance, the central bank said.

The BSP has been continuously implementing reforms in line with its mandate of keeping a stable
financial system.

Last month, BSP Governor Amando M. Tetangco Jr. pointed out the Philippine banking system itself
has been a key example of financial stability and reform success following its resilience during the
global financial crisis of 2008.

But Tetangco said despite efforts that have been put in place for financial stability, the central bank
will remain vigilant in order to make such sustainable.