Chapter 9

Foreign Sovereign Immunities Act (FSIA)

(1976) exclusively governs the circumstance in which an action may be brought in the U.S. against a foreign nation

foreign exchange market

a worldwide system in which foreign currencies are bought and sold

comity

principle by which one nation defers and gives effect to the law and judicial decrees of another nation. This recognition is based primarily on respect.

expropriation

the seizure by a government of a privately owned business or personal property for a proper public purpose and with just compensation

force majeure clause

"impossible or irresistible force", a provision in a contract stipulating that certain unforeseen events--like war, political upheavals, act of God-- will excuse a party from liability for nonperformance of contractual obligations

Section 1605 of FSIA

(Foreign Sovereign Immunities Act) a foreign state isn't immune from the jurisdiction of U.S. courts when the state has "waived its immunity eith explicitly or by implication" or when the action is taken "in connection w/a commercial activity carried on in the U.S. by the foreign state" or having a "a direct effect in the United States"

NAFTA

(North American Free Trade Agreement) primary goal is to elimimate tariffs among the U.S., Canada, and Mexico

2 ways U.S. firm can manufacture goods in other countries

1. licensing 2. franchising

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Most countries restrict exports for the same reasons: to protect national security, to further foreign policy objectives, and to prevent the spread of nuclear weapons

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The interpretation of the words in a contract can be a matter of dispute even when both parties communicate in the same language

Export Trading Company Act of 1982

U.S. banks are encouraged to invest in export trading companies, which are formed when exporting firms join together to export a line of goods.

direct exporting

U.S. firm signs sales contract with foreign purchases

indirect exporting

U.S. firms sets up specialized marketing organization in that foreign market by appointing foreign agent/distributor

correspondent bank

a bank in which another bank has an account, vice-versa, for the purpose of facilitating fund transfers

choice-of-law clause

a clause in a contract designating the law (such as the law of a particular state or nation) that'll govern the contract

choice-of-language clause

a clause in a contract designating the official language by which the contract will be interpreted in the even of a future disagreement over the contract's terms

exclusive distributorship

a distributorship in which the seller and distributor of the seller's products agree that the distributor will distribute only the seller's products

sovereign immunity

a doctrine that immunized foreign nations from the jurisdiction of US courts when certain conditions are satisfied

confiscation

a government's taking of a privately owned business or personal property without a proper public purpose or an award of just compensation

forum-selection clause

a provision ina contract designating the court, jurisdiction, or tribunal that will decide any disputes arising under the contract. The forum doesn't necessarily have to be within the geographic boundaries of the home nation of either party.

quota

a set limit on the amount of goods that can be imported

tariff

a tax on imported goods. (Raises prices on imported goods, causing some people to purchase more domestically.)

distribution agreement

contract betw'n seller and distributor of the seller's products setting out the terms and conditions of the distributorship

act of state doctrine

doctrine providing that the judicial branch of one country will not examine the validity of public acts committed by a recognized foreign government within its own territory

normal trade relations (NTR) status

each World Trade Organization (WTO) member is obligated to treat other member as least as well as it treats the country that receives its most favorable treatment with regard to imports or exports

Export Administration Act of 1979

flow of technologically advanced products and technical data can be restricted

payment methods for international transactions

foreign exchange market or correspondent bank

Hague Convention

indicates that whenever a contract doesn't specify a choice of law, the governing law is that of the country in which the seller's place of business is located (1988 Hague Convention on the Law Applicable to Contracts for the Internat'l Sale of Goods)

national law

law that pertain to a particular nation

Trading with the Enemy Act of 1917

no goods may be imported from nations that have been designated enemies of the U.S.

Revenue Act of 1971

promotes exports by exempting from taxes the income earned by firms marketing their products overseas through certain foreign sales corporations

international law

the law that governs relations among nations. International customs and treaties are important source of international law

dumping

the selling of goods in a foreign country at a price below the price charged for the same goods in the domestic market

export

to sell goods and services to buyers located in other countries