JD BUSINESS LAW CHAPTER 24 INTERNATIONAL LAW

How does civil law system work

In civil law system, the primary source of law is statutory codes which the courts interpret for individual cases but the court may not depart from the code and develop their own law. In theory, the code sets forth all principles needed for the legal system

what is "commercial activity" under FSIA

It is defined as a regular course of commercial conduct, transaction or act that is carried out by a foreign state within the US but it is up to courts to decide if a particular activity is governmental or commercial

What regional trade agreements/associations also serve this purpose

The European Union, the North American Free Trade Agreement, The Central America-Dominican Republic US Free Trade Agreement and The Republic of Korea-US Free Trade Agreement

what entity has created uniform rules for trade

The United Nations Commission on International Trade Law

Under NEI, how was export financing changed

Under the NEI, the Export-Import Bank fo the US increased the financing available to small and medium sized businesses by 50%.

What is the WTO and what is its purpose

World Trade Organization which was established to minimize trade barriers between nations

what is the export promotion cabinet

a component of the NEI made up of officials from 16 govt agencies and departments. All cabinet members must submit detailed plans to the president outlining seips they will take to increase exports.

what is Sharia

a comprehensive code of principles that govern both the public and private lives of persons of Islamic faith. It directs aspects of day to day life like politics, economics, banking, business law, contract law and social issues.

In joint venture who shares in responsibilitiy, profits and liabilities of the venture

all of the firms involved

what US laws have extraterritorial application

antitrust laws, Alien Torts ACt and Anti-discrimination laws.

US uses what system

common law

what are quotas

limits on the amounts of goods that can be imported.

when is a foreign state not immune:

1, when the foreign state has waived immunity either explicitly or by implication 2. when the foreign state has engaged in commercial activity w/i the US or in commercial activity outside the US that has a "direct effect on the US" 3. when the foreign state has committed a tort in the US or has violated certain international laws

What types of controls are imposed on international agreements

1. 1. investment protections 2. export controls 3. import controls

what are the 3 important legal principles that are employed by courts of various nations to resolve or reduce conflicts that involve a foreign element

1. The principle of comity 2.The Act of State Doctrine 3. The doctrine of sovereign immunity

What are the two ways US does business internationally

1. export 2. establish foreign production facilities whci may provide lower labor cost, fewer govt regulations, lower taxes and trade barriers 3. licensing technology to an existing foreign company or sell franchises to overseas entities.

so how does Congress restrict or encourage exports

1. export quotas 2. restrictions on technology exports 3. incentives and subsidies imposed to stimulate exports and aid domestic business

what are the sources of international law

1. international customs 2. treaties 3. international agreements

what are the ways that a US company does manufacturing abroad

1. licensing: allows freign firm to use an established brand name for a fee 2. franchising where owner of trademark, tradename or copyright licenses another to use the mark in selling of goods and services 3. invest in wholly owned subsidiary or joint venture

what is the foremost law on international trade

1980 convention on Contract for the International Sale of Goods (CISG) - like UCC it spells out duties of international buyers and sellers

what does the Sherman ACt control

Any conspiracy that has a substantial effect on US commerce is w/i reach of Sherman act. It applies even if the violation occurs outside US and foreign govts and business can be sued for violations

Who is in NAFTA and how does it work

Canada, Mexico and US- goal was to eliminate tariffs amoung the three nations on substantially all goods by reducing tariffs incrementally over time. It gives the 3 countries na competitive advantage by retaining tariffs on goods imported from other countries and eliminates barriers that have prevented cross border movement.

How does the WTO minimize barriers

Each member of the WTO is required to grant NORMAL TRADE RELATIONS STATUS to other member countries- this means that each member is obligated to treat other members at lease as well as it treats the country that receives its most favorable treatment with regard to imports or exports

what is the effect of choice of law and choice of forum clauses

If the contract does not have an arbitration agreement, these clauses identify what forum and what forum law will decide a dispute. without these, there is no way to determine where the matter should be heard or whether any decision will be effective

How does trial procedure differ between common and civil law systems

In civil law systems, judges actively question witnesses.

How does a common law system work

In common law system, the courts independently develop the rules governing certain areas of law like torts and contracts and these common law rules apply to all areas not covered by statutory law and doctrine of stare decisis obligates judges to follow precedential decisions for consistency through judges may modify or overturn precedent

what is the National Export Initiative

Initiative created by the Obama administration with goal of doubling exports (and to reduce outsourcing)

what agency investigates allegations that imported goods infringe US patents and imposes penalties if needed

International Trade Commission

what US agencies are instrumental in imposing anti-dumping duties

International Trade Commission and International Trade Administration

disputes as to resolutions created by international organizations are heard by whom

International court of justice - though normally only has authority when nations voluntarily submit to its jurisdiction

what is the principle of commity

It refers to legal reciprocity. One nation will defer and give effect to the executive/legislative/and judicial acts of another country as long as the acts are consistent with the law and public policy of the accomodating nation (ex. US court will recognize and enforce a default judgment from Austrailian court, ex: nearly all nations recognize validity of marriage decree issued elsewhere)

what anti discrimination laws of US have extraterritorial impact

The Age Descrimination in Emplooyment act, federal laws re: discrimination on race/color/origin, religon, gender, age and disability, Title VII of the Civil Rights Act of 1964

What is the New York Convention

The UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards - it assists in the enforcement of arbitration clauses and requires courts in nations that have signed it to honor private arbitration agreements and recognize arbitration awards in other contracting states. - implemented in nearly 100 countries.

what is direct exporting

US company signs sales contract with foreign purchaser that provides for the conditions of shipment and payment for the goods.

what goods are prohibited from import

Under Trading with the Enemy Act of 1917, no goods may be imported from nations that have been designated enemies of the US, also other laws prohibit importing illegal drugs, books that urge insurrection against the US, agricultural products that pose danger to domestic crops or animals or imporation of goods that infringe US patents.

what is a bilateral agreement

an agreement formed by two nations to govern their commercial exchanges or other relations with one another

what is a treaty

an agreement or contract between 2 or more nations that must be authorized and ratified by the supreme power of each nation

what anti-dumping measures are in place to prevent it

an extra tariff, known as the antidumping duty may be assessed on imports to prevent this

what investment protections exist

because the possibility of confiscation may deter investors, many countries guarantee compensation to foreign investors if their property is taken. The guaranty can take form of constitutional or statutory law or provisions in treaties, other countries provide insurance for investments against confiscation

Define "international law"

body of law formed as a result of international customs, treaties and organizations that governs relations among or between nations

what are the two different systems of law found in the world

common law and civil law systems

what are the two forms of exports

direct and indirect

what are international customs

evidence of a general practice accepted as law

what is the major difference between international law and national law

governmnet authorities can enforce national la

Under the New York Convention, when will a court compel parties to arbitrate

if all of the following are true: 1. there is a written or recorded agreement to arbitrate the matter 2. the agreement provides for arbitration in a convention signatory nation 3. the agreement arises out of a commercial relationship 4. One party to the agreement is not a US citizen (both parties cannot be US citizens)

when a wholly owned subsidiary is established where is the parent company

in the US- the parent maintains complete ownership of all the facilities in foreign country

what is the Alien Torts ACt

it allows even foreign citizens to bring civil suits in US courts for injuries caused by violations of the law of nations or a treaty of the US- cases have involved environmental destruction, human rights violations, etc.

what is the role of ITC re: anti-dumping

it assesses the effects of dumping on domestic businesses and makes recommendations to the president re: temporary import restrictions

what is the role of the ITA

it decides whether imports were sold at less than fair value and their determination establishes the amount of the anti dumping duty which is set to equal the difference between the price charged in the UC and the price charged in the exporting country.

Under FSIA, what is a "foreign state"

it includes both a political subdivision of a foreign state and an instrumentality (dept or agency of any branch of govt) of a foreign state

What is the Islamic Legal system

it is a third system used in Islamic countries where the law is influenced by sharia, the religous law of Islam

what is FSIA

it is the Foreign Sovereign Immunities Act and it governs the circumstances in which an action may be brought against a foreign nation, including attempts to attach a foreign nation's property. Because the law is jurisdictional in nature, the plaintiff generally has burden of showing defendant is not entitled to sovereign immunity.

what is sovereign immunity

it is the doctrine that exempts foreign nations from the jurisdiction of the US court (codified in FSIA)

what is the Act of State Doctrine

it provides that the judicial branch of one country will not examine the validity of public acts committed by a recognized foreign government w/i the latter's own territory- it can be important when doing business in or investing in other countries

what does the term international organization mean

it refers to an organization composed mainly of officials of member nations and usually established by treaty (US is member of more than 100 multilateral and bilateral organizations inc. at least 20 thru the UN)

What is the impact of KIORUS FTA)

it will eliminate 95% of each nations tariffs on industrial and consumer exports w/i 5 years and is the largest free trade agreement the US has outside of NAFTA

How does the Act of State Doctrine impact expropriation or confiscation

it, like soverign immunity discussed below, tends to shield foreign nations from jurisdiction of US courts so that if property is taken overseas, generally there is little legal protections against it.

define "national law"

law of a particular nation

what are the predominant countries that use civil law

most of Europe, Latin America, Africa and Asia

Can congress impose any export taxes on US goods

no-forbidden by constitution

what is a multilateral agreement

one formed by several nations

what are trade barriers

restrictions on imports

what does CISG govern

sales contracts between trading partners in nations that have ratified the CISG

what are tarifs

taxes on imports- it is usually a percentage of the value of the import but it vcan be flat rate, such as per barrell of oil.

In the US who has the power to make treaties

the president provided 2/3 of the senators present concur

what is dumping

the sale of imported goods at less than fair value (fair value is usually determined by the price of the goods in the exporting country)

How do international organizations impact international law

they adopt resolutions, declarations and other types of standards that often require nations to behave in a particular manner

If a nation violates international law what recourse is there by the other countries

they have no recourse but to take coercive action which includes economic sanctions, severence of diplomatic relations, boycotts or war

why do countries engage in dumping

they hope to undersell US businesses and obtain a larger share of US market

To what extent do US antitrust laws apply outside US

they may sugject firms in foreighn nations to their provisions and may protect foreign consumers and competitors from violations by US citizens because Section 1 of the Sherman ACt provides for the extraterritorial effect of US anti trust laws.

what is the impact of tarifs

they raise the price of imported goods causing some consumers to buy domestically manufactured products instead of imports.

what was purpose of CAFTA-DR

to reduce trade tariffs and improve market access among members

t/f sometimes tarifs are imposed in retaliation for political acts by another country

true

under what circumstances does a US firm establish an agency relationship with a foreign firm

when US firm wants to limit its invlovlement in international market will establish agency and the foreign firm then acts as the agent to enter contracts in foreign location

what is a distribution agreement

when a US firm and a distributor located in foreign country enter into an agreement setting forth terms and conditions of distribution such as price, currency, guarantee of supplies and mthod of payment

When does expropriation occur

when a government seizes a privately owned business or privately owned goods for a proper public purpose and awards just compenstion

what is confiscation

when a government seizes private property for an illegal purpose

what is indirect exporting

where US company appoints a foreign agent or distributor

Can US restrict imports

yes and they do through prohibitions, quotas and tarifs