UNCTAD

Draft Model
for tnc
Asst. Prof. Rishi Dev
ALS
AUM
 Introduction
The term "transnational corporation" as used in this Code
(UNCTAD Draft Model) means:
an enterprise - whether of public, private or mixed ownership,
comprising entities in two or more countries,
regardless of the legal form and fields of activity of these entities,
• which operates under a system of
 decision-making,
 permitting coherent policies and
 a common strategy through one or more decision-making centers,
• in which the entities are so linked, by ownership or otherwise, that one
or more of them [may be able to] exercise a significant influence over
the activities of others, and, in particular, to share knowledge,
resources and responsibilities with the others.
 Object
• Smooth flow of trade.
• Reducing the Gap between Developed and
Developing Countries.
• good practice for all enterprises
• Sharing expertise, technical know-how,
technology etc.
 History

• WW-I
• WW-II
• League of Nations
• UN
• Organs
 Activities of TNC
General and political
•Respect for national sovereignty and
observance of domestic laws, regulations and
administrative practices
•Adherence to economic goals and development
objectives, policies and priorities
•Review and renegotiation of contracts (in good
faith)
 Activities of TNC
• Adherence to socio-cultural objectives and
values
• Respect for human rights and fundamental
freedoms
• Non-interference in internal political affairs
• Non-interference in intergovernmental relations
• Abstention from corrupt practices
 Activities of TNC
Economic, financial and social
• Ownership and control (Co-operation with Govt. and other entities).
• Balance of payments and financing
• Transfer pricing (Based on Market Price)
• Taxation
• Competition and restrictive business practices
• Transfer of technology
• Consumer protection
• Environmental protection
 Activities of TNC
Disclosure of information
1. Financial Information
(a) A balance sheet;
(b) An income statement, including operating results and sales;
(c) A statement of allocation of net profits or net income;
(d) A statement of the sources and uses of funds;
(e) Significant new long-term capital investment;
(f) Research and development expenditure.
 Activities of TNC
2. Non-Financial Information
(a) The structure of the transnational corporation, showing the name
and location of the parent company, its main entities, its percentage
ownership, direct and
indirect, in these entities, including shareholdings between them;
(b) The main activity of its entities;
(c) Employment information including average number of employees;
(d) Accounting policies used in compiling and consolidating the
information published;
(e) Policies applied in respect of transfer pricing.