Mitigating Harsh Regulatory Actions by a Foreign Government

The Issue

A prestigious U.S. educational testing company that provided English language examinations for over ten years in an Asian country suddenly found its contractual agreements under pressure from a government ministry promoting the ministry’s own language tests. The client stood to lose a major cross-border investment and feared that adverse government action could put its contracts at risk in a number of neighboring countries as well

The Strategy

We worked closely with the client to position it as a partner of the ministry in developing sophisticated and accurate language tests that could help students obtain overseas educational opportunities. This approach aimed to mitigate underlying resentment against the U.S. company that was perceived as imposing its own standards on the country. We further highlighted the mutually beneficial legal agreements anchoring the client’s presence as well as the country’s laws and policies barring discrimination against foreign enterprises.

The Outcome

With support from the ministry, the client renewed a multiyear contract to provide educational testing services. The client took on a new commitment, in line with its corporate social responsibility policy, to assist the ministry, on an ongoing basis, in developing effective educational testing procedures – which in turn improved the client’s reputation in the country.

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