LEGL 4900 Exam 3 Vocab
manufacturing drawback
a refund of duties and taxes paid on merchandise that is imported, subjected to manufacture or production, and then exported within five years
Dual-use items
commercial items that may also have military or "proliferation" uses (relating to the proliferation of nuclear, chemical, or biological weapons)
Counter purchase agreement
common type of countertrade; involves the sale of goods to a buyer, often a foreign government, which requires as a condition of the sale that the seller buy the other goods produced in that country
tariff-shift rule
states that the country of origin is the last country in which all 'inputs' into the finished article underwent a defined change in tariff classification
deemed export
the release or transfer of any item subject to control, including technology or software (source code); to a foreign person in the united states.
parallel trade
the resale of goods between countries without the authorization of the owner of the intellectual property (IP) rights associated with those goods
Inconvertibility Risk
the risk that the government of a country with soft currency will hinder the foreign entrepreneur from trading the foreign currency back into US dollars
nationalization
the taking of an entire industry or a natural resource as part of a plan to restructure the nation's economic system
Diversion
the unlawful transfer, transshipment, rerouting, or reexporting of controlled goods or technology from one destination which the goods or technology were legally shipped to another destination or foreign person who has not been licenses to receive the items.
preferential rules of origin
those applicable to goods traded within a free trade area or customs union, or that receive preferential tariff treatment under trade preference programs for developing countries
political risk analysis
tries to forecast political disruptions that can threaten the value of a foreign investment
Output or Customer Restrictions
used to limit the amount of products the licensee can produce or limit the number of customers the licensee can sell to.
National Security Controls
used to prohibit the export of goods or technology that would make a significant contribution to another country's military that would be detrimental to the U.S.'s national security.
Notice of adjustment
when Customs at the port of entry determines that additional duties are owed, this is sent to the importer
unitary index adjustment
A contractual provision in which the investor and the government agree on payment through a commonly accepted measure of relative currency value or national inflation
Tax Haven
A country where the effective tax rate on a relevant item of income is very low or zero
Binding Ruling
A determination, made by U.S. Customs, and only applicable to the United States, that classifies a specific product and assigns it a tariff rate before the goods are imported. The ruling is binding on U.S. Customs, which means that it cannot "change its mind" after the product is imported. also called a ruling letter
Same-condition drawback
A drawback of duties paid on imported goods that are re-exported in the "same condition" as they were imported, provided they were not significantly altered.
composite goods
A good that represents the collective expenditure on every other good except the commodity being considered
Customs union
A group of countries committed to (1) removing all barriers to the free flow of goods and services between each other and (2) the pursuit of a common external trade policy.
Export Management and Compliance Program
A mandatory program in an organization that states the compliance policies of a company in writing, involving senior managers as well as personnel at all levels.
Arbitral Panel
A panel of five experts in NAFTA, who termed that US was in violation of NAFTA
Joint Venture
A partnership in which two or more companies (often from different countries) join to undertake a major project.
Grant Back
A provision under which any improvements by the licensee of a license agreement is granted back to the licensor
Prior Disclosure
A statute to encourage importers to voluntarily report their own possible violations of the customs laws
rules of origin
A system of allocating certificates whereby a defined amount of a product or service must be certified as being created within that region
ad valorem tariff rate
A tariff rate based on the percentage of the value of the articles imported
Franchise tax
A tax levied on the annual receipts of businesses that are organized to limit the personal liability of owners for the privilege of conducting business in the state.
value-added tax
A tax on increased value of the product at each stage of production and distribution rather than just at the point of sale.
Biopiracy
A term describing the ways that corporations from the developed world allegedly claim ownership of, free ride on, or otherwise take unfair advantage of, the genetic resources and traditional knowledge and technologies of developing countries
traditional theory
A theory that promotes majority rule without violating minority rights, maintaining the willingness to compromise, and recognizing the worth and dignity of all people.
Buy-back agreement
A type of countertrade in which the seller agrees to supply technology or equipment to construct a facility and receives payment in the form of goods produced by the facility.
Fair, reasonable, and nondiscriminatory (FRAND)
An agreement done voluntarily between a standard setting organization and the holder of an intellectual property rights -reason Samsung was required to give a license to Apple before seeking injunctive relief -can reduce risk of patent "hold-up" and perceived advantages of litigation -only applies in limited circumstances and has not curbed litigation in a meaningful way
Export Control Classification Number (ECCN)
An alpha-numeric code, e.g., 3A001, that describes an item and indicates licensing requirements. All ECCNs are listed in the Commerce Control List (CCL) (Supplement No. 1 to Part 774 of the EAR).
Active Investment
An approach to investing in which the investor seeks to outperform a given benchmark.
Customs Broker
An authorized agent, licensed by federal law, to act for and on behalf of importers in making entry of goods.
priority claim
An unsecured claim that is entitled to be paid ahead of other unsecured claims that are not entitled to priority status. Priority refers to the order in which these unsecured claims are to be paid.
Free Trade Area (FTA)
Area in which tariffs among members have been eliminated, but members keep their external tariffs
Extraterritorial Jurisdiction
Control by a community of an area larger than the community or jurisdiction for planning and zoning purposes, granted by the state legislature, which allows local governments to plan and control urban development outside their boundaries until annexation can occur.
Dutiable Value
Customs value of goods entered into any country - must be reported by the importer-of-record to national customs authorities at time of entry
Trademarks
Designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products
substitution drawback
Duties paid on imported goods may be received by a U.S. firm that imports goods and then exports other goods of the "same kind and quality "
Barter
Exchange goods without involving money.
Maquiladora
Factories built by US companies in Mexico near the US border to take advantage of much lower labor costs in Mexico.
right of priority
For a period of one year, an application for a patent in a second member country will be treated as though it had been filed on the same date as the application made in the first member country.
expropriation
Forced transfer of assets from a company to the government with compensation
essential character
If two or more headings or subheadings each describe only certain materials or components in composite goods, the article must be classified under the heading that describes the material or components that give the article its
Prior Approval
Insurers cannot use rates until approved by the Department of Insurance, or until a specific time period has expired after the filing.
Foreign Direct Investment
Investment made by a foreign company in the economy of another country.
Counterfeit Goods
Merchandise made without proper legal authorization with the intent to pass (distribute or utter) for profit.
Multilateral Sanctions
Sanctions imposed by more than one country
Conscious avoidance
Term used to apply to officers or managers of a company who try to avoid criminal liability by deliberately avoiding information.
Tariff Shift Rule
The Annex 401 rules of origin may be based on a change in tariff classification, a regional value-content requirement, or both, depending on the requirements for that particular product
drawback
a refund of duties already paid on imported goods when the goods are reexported or destroyed
private political risk insurance
The Political Risk Insurance provided by private insurers covering the risk of a foreign government take-over
net book value
The acquisition cost of an asset less accumulated depreciation, depletion, or amortization
Cybersquatting
The act of registering a domain name that is the same as, or confusingly similar to, the trademark of another and then offering to sell that domain name back to the trademark owner.
Country of Origin
The country from which an imported article is said to have originated according to specific rules, known as rules of origin
Political Risk
The likelihood that political forces will cause drastic changes in a country's business environment that will adversely affect the profit and other goals of a particular business enterprise.
Commerce Control List (CCL)
The list that shows all the licensing requirements
National Treatment
The principle of nondiscrimination between foreigners and locals
non-preferential rules of origin
Those applicable to imports of DEVELOPED countries that will receive normal tariff treatment.
Tied-purchase clauses
clauses that require the franchisee to buy certain goods from the franchiser
Geographical Limitations
When the licensor agrees to provide services to facilitate the anticipated activities, such as assistance in setting up an assembly line or other training and technical support, this is one way it can restrict the licensee's use of the transferred IPR. e.g. within a specific nation
Geographical Indications
Where a product, particularly wine or liquor is marketed by reference to a geographic region
compound tariff rate
combination of both ad valorem and specific rates
Soft Currency
a currency that is not easy to exchange for other currencies
tariff schedule
a document listing all the possible Harmonized System classification categories, as well as their associated tariff rates for the different types of countries
certificate of origin
a document that states the name of the country in which the shipped goods were produced
Countertrade
a form of trade in which all or part of the payment for goods or services is in the form of other goods or services
Common Market
a group of countries that acts as a single market, without trade barriers between member countries. AKA economic community.
Contract Manufacturing
a joint venture in which a company contracts with manufacturers in a foreign market to produce its product or provide its service
License
a limited permission to use the U.S. firm's trademarks, copyrights, or know-how in making products for sale in the vicinity of the foreign company's country.
Royalty
a payment for material that has been copyrighted, or legally declared as belonging to the creator
utility patent
a property right awarded for a new and non-obvious process, machine, or composition of matter that has a useful function
Currency invonvertibility
a reciprocal arrangement between buyer and seller for the sale of goods or services intended to minimize the outflow of foreign exchange from the buyer's country.
Sanction
a regulation that restricts or prohibits certain relationships with specified (or "targeted") foreign countries, foreign entities, or named foreign individuals because of their support for international terrorism, the proliferation of weapons of mass destruction, for international drug and narcotics trafficking, or other threats to national security.
Consolidated Screening List
a searchable database of lists published by the Department of Commerce, department of state, and department of treasury.
Gray market
a situation where products are sold through unauthorized channels of distribution. Also called parallel importing.
political risk insurance
a type of insurance that can be taken out by businesses, of any size, against political risk—the risk that revolution or other political conditions will result in a loss
Domestic or Regional value content test
a type of value added test that requires some minimum percentage of the value of materials and direct processing operations be performed in a country in order for it to have originated there
Export
actual shipment or transmission out of the united states in any manner, or releasing or transferring of technology or software to a foreign person in the united states.
rejected merchandise drawback
allowed for imported merchandise that was shipped without consent, is defective, or does not conform to specifications or to samples
validated end user program
allows qualified exporters to pre-approve shipments to foreign trusted customers, business partners, and subsidiaries of American companies of certain high technology or dual use items without the need for individual export licenses
reinsurance treaty
an agreement among insurance companies that spreads the risk among its members
Generalized System of Preferences (GSP)
an agreement where a large number of developed countries permit duty-free imports of a selected list of products that originate from specific countries
Automated Commercial Environment
an online system of US Customs and Border Protection, in collaboration with the US Census Bureau
boycott
an organized refusal of one or more nations, often backed by economic sanctions, to trade with one or more other nations.
Foreign person
any U.S. Person effectively owned or controlled by a foreign interest, foreign businesses not incorporated in the U.S., individuals holding a work or student visa (F1, J1, H1B)
Regional value content
calculation used to determine the percentage of originating materials in a product to nonorigninating. Transactional value or net cost.
Harmonized Tariff Schedule (HTS)
classification scheme used by many nations to determine tariffs on imported goods
Currency Exchange rights
negotiating with government of a soft-currency to get priority rights to currency conversion
Fundamental Research
defined in the EAR as "research in science, engineering, or mathematics, the results of which ordinarily are published and shared broadly within the research community, and for which the researchers have not accepted restrictions for proprietary or national security reasons"
soft blockages
delays in processing conversion requests by the local authorities
Electronic Export Information (EEI)
electronic filing required for each export shipment leaving the US
Trade creditors
entities that sell supplies or services to the venture should try to buy locally in local currency; retain hard-currency for repatriation
civil customs fraud
far more serious than negligence. a fraudulent violation exists where there is clear and convincing evidence that the importer knowingly made a materially false statement or omission while entering or attempting to enter goods into the United States.
Double Taxation
feature of taxation that allows stockholders' dividends to be taxed both as corporate profit and as personal income
Customs user fees
fees imposed on importers to help fund the cost of customs enforcement and port services
hard blockages
occur when the foreign government passes a law that prevents conversion or transfer
substantial transformation
occurs when the processing of an article results in a new and different article having a distinct name, character, or use; occurs when an HS classification changes
rule of relative specificity
if an article can be classified under two or more headings or subheadings, it must be classified under the one that most specifically-most narrowly-describes the article with the greatest degree of accuracy and certainty
Import Substitution rights
if preferential currency exchange rights aren't available, can replace foreign imports with domestic production
Bad Faith
intentional wrongful behavior which under the UDRP now includes some negligence without a finding of intent.
short supply controls
law that protects the country's economy from excessive foreign demand for scarce materials
export controls
laws and regulations that govern the control and licensing of certain goods and technology exported from the United States or released or transferred to anyone who is not a U.S. citizen or permanent resident, whether that person is within or outside the United States.
language politics
laws or customs that determine when and where which language will be spoken
Antiboycott
legal responses by governments that make it unlawful for their citizens or companies to participate in a boycott
foreign trade zones (FTZs)
legally defined sites - warehouses and manufacturing facilities - operated pursuant to legislation and under government license, that are legally "outside" the customs territory of the country they are in
Patents
licenses that give an inventor the exclusive right to make, use, or sell an invention for a set period of time
Commerce Country Chart (CCC)
lists each country and indicates when an export license is required. (if X under 'reason for control'). Not all countries need an export liscense
specific tariff rate
specified dollar amount per piece, or unit of weight or measure
Binational Panels
panels where NAFTA cases now go, apply the same standard of review as would a court of law convened in the country where the case originated
Design Patents
patents that are granted when someone has invented a new and original design for a manufactured product
Intellectual Property Rights (IPRs)
patents, copyrights, and trademarks extended to individuals and organizations to protect their ownership of products or other creative works generated through their original ideas
modern-traditional theory
permits takings of foreign property but imposes some requirements 1) for a public purpose 2) nondiscriminatory 3) accompanied by prompt and adequate compensation
Informal Entry
personal and commercial shipments valued at $2,500 or less may be cleared through this process
insurance syndicates
pools of money provided by investors to insure specific projects
Currency Risk
potential threat to a firm's operations in a country due to fluctuations in the local currency's exchange rate
transfer pricing
prices charged in sales between an organization's units
privatization
process of converting government enterprises into privately owned companies
export credit agencies
promote investment from their own countries
Formal Entry
refers to the administrative process required to import goods into the customs territory of a country
reexport
refers to the shipment or transfer of American-controlled items or technology from one foreign country to another foreign country or foreign person
Commercial Invoice
required for all shipments intended for sale or commercial use in the United States
Field of use limitations
restrict the applications for which the licensee may employ the IPR
Exclusive rights
rights or permission for one paper to publish a story that no other paper can
General Rules of Interpretation
rules found at the front of the tariff schedules help to classify goods
Franchising
selling to a foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits
repatriated
send (someone) back to their own country
Currency Swaps
simultaneous purchase and sale of a given amount of foreign exchange for two different value dates
Export Taxes
taxes meant to raise export cost and divert production for home consumption
informed compliance
the "softer" mechanisms designed to place the burden of voluntary compliance on importers
Enforced Complience
the active investigation of customs violations and the prosecution of violators.
Foreign Availability
the controlled item, or one of comparable quality, is "available-in-fact" from non-US sources in sufficient quantities so that any attempt to control for national security purposes would be ineffective
creeping expropriation
the effect of laws and regulations that subject the investor to discriminatory taxes, legislative controls over management of the firm, price controls, forced employment of nationals, license cancellation, and restrictions on currency convertibility
Copyrights
the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit
copyrights
the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit
Liquidation
the final computation and assessment of the applicable duty on entered goods by customs
global supply chain
the firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized
technology
the information necessary for the development, production, use, or operation of items, and in almost any form, such as blueprints, drawings, photographs, formulae, and engineering designs, whether written, verbal, or electronic
Parallel Exchange
the investors, all committed to the local incontrovertibility risk, spread that risk over a larger group, with the hoping of reducing the vagaries of local bureaucracy
Ultimate purchaser
the last person in the US who receives an article in the form in which it was imported
dutiable status
the legal status of imported goods at the time of entry for purposes of compliance with the tariff and customs laws
Principal use
the ordinary use to which articles of the same class and kind as those being imported are usually put and which is greater than any other single use of the article
Fluctuation Risk
the possibility that the currency of the country in which the US investor has put its money will devalue against the US dollar
Profit Margin Preservation
the price or payment to the foreign investor will be adjusted periodically to maintain the same profit margin
Transaction value
the price that is actually paid or payable for the goods when sold for export
Production Sharing
the process of combining the higher labor skills and technology available in developed countries with the lower-cost labor available in developing countries
deemed reexport
the release or transfer of an item from someone who was licensed to receive it to a different foreign person