Vanderbilt Journal of Transnational Law

First Page



This paper focuses on the contractual acquisition of foreign technology through licenses and other contractual arrangements as contrasted with the technological components in the usual direct investment. Such investment is made either in the form of the wholly-owned subsidiary of the transnational corporation or as part of a joint venture. The use of technology as a major component of direct investment has been discouraged over the years, although this trend was reversed in Chile after 1977.

Modern legislation and practice in the regulation of technology transfer is characterized in the several Latin American countries possessing such a regime by administrative scrutiny and approval of the contractual relationship at its inception rather than the judicial determination of alleged violations of regulatory rules during the life of the contract. The approach taken follows from the decision made by the Latin American states that they have an indispensable role to play in assuring that the direct and indirect costs of the importation of the technology be in the interest of national economic and social development, irrespective of the private benefit to the technology acquirer. This is in many ways analogous to the role of the state in serving the public interest by protecting the consumer.