Legal Definitions - foreign assignment

A foreign assignment refers to the legal transfer of a right, interest, or obligation from one party to another, where the transaction involves an international element. This international element could mean that one or more of the parties involved are located in different countries, the right or interest being transferred relates to assets or activities in a different country, or the transfer itself is governed by the laws of a different country. Essentially, it's an assignment that crosses national borders.

Here are some examples to illustrate this concept:

• Example 1: Intellectual Property Rights

  A US-based software company, CodeCrafters Inc., develops a unique algorithm. They decide to sell the exclusive rights to use and license this algorithm specifically within the European Union to a German technology firm, EuroTech Solutions GmbH. This transaction allows EuroTech Solutions to market and distribute products incorporating the algorithm across Europe, while CodeCrafters retains rights for other regions.

  This is a foreign assignment because CodeCrafters Inc. (a US entity) is transferring its intellectual property rights (the algorithm's usage and licensing rights) to EuroTech Solutions GmbH (a German entity), involving parties and jurisdictions in different countries.

• Example 2: Contractual Payment Rights

  Global Logistics Ltd., a British shipping company, provides extensive freight services for a major oil exploration project in Angola, managed by the Angolan state oil company. Upon completion of the services, Global Logistics is owed a substantial payment. To improve its immediate cash flow, Global Logistics enters into an agreement with Africa Finance Partners, a South African investment bank, to sell its right to receive that future payment from the Angolan oil company in exchange for an upfront, discounted sum.

  This illustrates a foreign assignment because Global Logistics Ltd. (UK) is transferring its contractual right to receive payment from a foreign entity (the Angolan state oil company) to another foreign entity (Africa Finance Partners from South Africa), making the assignment international in scope.

• Example 3: Loan Portfolio Transfer

  North American Bank, a large Canadian financial institution, holds a portfolio of commercial loans, including several significant loans made to businesses operating in Mexico. To reduce its exposure to foreign markets and focus on its domestic operations, North American Bank sells these Mexican business loans to LatAm Credit Corp., a financial institution based in Brazil that specializes in Latin American debt acquisition.

  This is a foreign assignment because North American Bank is transferring its rights to collect on debts owed by businesses in Mexico to LatAm Credit Corp. (Brazil). The subject matter (Mexican loans) and at least one party (LatAm Credit Corp.) are foreign to North American Bank's primary jurisdiction, making it an international transfer of financial rights.