Western Union 2013 Annual Report Download - page 137

2013 FORM 10-K
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A substantial portion of our revenue is generated outside of the United States and much of the cash and cash equivalents from
this business are held by our foreign entities. Repatriating these funds to the United States would, in many cases, result in significant
tax obligations because most of these funds have been taxed at foreign tax rates that are relatively low compared to our combined
federal and state tax rates in the United States. If repatriation of these funds is required or if a change in legislation requires a
different tax treatment, our business, financial condition and results of operations could be adversely impacted. For further discussion
regarding the risk that our future effective tax rates could be adversely impacted by changes in tax laws, both domestically and
internationally, see risk factor "Changes in tax laws and unfavorable resolution of tax contingencies could adversely affect our
tax expense" below.
Money transfers and payments to, from, within, or between countries may be limited or prohibited by law. At times in the
past, we have been required to cease operations in particular countries due to political uncertainties or government restrictions
imposed by foreign governments or the United States. Occasionally agents or their subagents have been required by their regulators
to cease offering our services, see risk factor "Regulatory initiatives and changes in laws, regulations and industry practices and
standards affecting us, our agents or their subagents could require changes in our business model and increase our costs of
operations, which could adversely affect our operations, results of operations, financial condition, and liquidity" below.
Additionally, economic or political instability or natural disasters may make money transfers to, from, within, or between particular
countries difficult or impossible, such as when banks are closed, when currency devaluation makes exchange rates difficult to
manage or when natural disasters or civil unrest makes access to agent locations unsafe. These risks could negatively impact our
ability to offer our services, to make payments to or receive payments from international agents or our subsidiaries or our ability
to recoup funds that have been advanced to international agents or are held by our subsidiaries, and as a result could adversely
affect our business, financial condition and results of operations. In addition, the general state of telecommunications and
infrastructure in some lesser developed countries, including countries where we have a large number of transactions, creates
operational risks for us and our agents that generally are not present in our operations in the United States and other more developed
countries.
Many of our agents outside the United States are post offices, which are usually owned and operated by national governments.
These governments may decide to change the terms under which they allow post offices to offer remittances and other financial
services. For example, governments may decide to separate financial service operations from postal operations, or mandate the
creation or privatization of a "post bank," which could result in the loss of agent locations, or they may require multiple service
providers in their network. A government could decide to restrict remittance service to only the national post office. These changes
could have an adverse effect on our ability to distribute, offer or price our services in countries that are material to our business.
Breaches of our information security policies or safeguards could adversely affect our ability to operate and could damage our
reputation, business, financial condition and results of operations.
We collect, transfer and retain consumer, business, employee and agent data as part of our business. These activities are subject
to laws and regulations in the United States and other jurisdictions, see risk factor "Current and proposed regulation addressing
consumer privacy and data use and security could increase our costs of operations, which could adversely affect our operations,
results of operations and financial condition" below. The requirements imposed by these laws and regulations, which often differ
materially among the many jurisdictions, are designed to protect the privacy of personal information and to prevent that information
from being inappropriately used or disclosed. We have developed and maintain technical and operational safeguards designed to
comply with applicable legal requirements. However, despite those safeguards, it is possible that hackers, employees acting contrary
to our policies or others could improperly access our systems or the systems of our business partners and service providers and
improperly obtain or disclose data about our consumers, business customers, agents and/or employees. Further, because some data
is collected and stored by third parties, it is possible that a third party could intentionally or inadvertently disclose personal data
in violation of law. Also, in some jurisdictions we transfer data related to our employees, business customers, consumers, agents
and potential employees to third-party vendors in order to perform due diligence and for other reasons. It is possible that a vendor
could intentionally or inadvertently disclose such data. Any breach of our security policies or applicable legal requirements resulting
in a compromise of consumer, business, employee or agent data could require us to notify impacted individuals, and in some cases
regulators, of a possible or actual breach, expose us to regulatory enforcement action, including fines, limit our ability to provide
services, subject us to litigation and/or damage our reputation.