BLAW
Most Muslim countries today have modern legal systems based on
Civil law or common law mixed with Islamic Law
There are usually Controls on Investment in
Developing Countries
Corporate Codes of Conduct
INFO
Newly Industrialized Countries
Largest include Brazil, Russia, India, China, Saudi Arabia, Thailand, Mexico
The ICJ's judgements are...
Public Made binding only to the parties and not to the countries Hard to enforce
A nation has clear power over all persons (citizens and non-citizens), places and power within its geographical area, airspace or defined waters. This states the principle of: a. Territorial jurisdiction. b. Universal jurisdiction. c. Passive personality jurisdiction. d. Protective jurisdiction.
Territorial jurisdiction.
Criminal Jurisdiction and the Extraterritorial Reach of Domestic Law
Territoriality Nationality Protective Principle Passive Personality Universality
Three direct methods of international business:
Trade Licensing of Intellectual Property Foreign Direct Investment
Crimes Related to International Business
Transnational organized crime Transnational business crime UN Convention Against Corruption
the Ventress v. Japan Airlines (2007) case deals with
a FCN treaty between the U.S and Japan in a case for wrongful termination of employment. Shows how treaty interpretation is a matter for domestic courts
In a simple ecport/import transaction, the party dealing in the foreign currency...
bears all the exchange rate risk More info page 19
A treaty between two countries is said to be...
bilateral
The study of comparative law refers to the study of...
differences in national laws and legal systems.
The Nottebohm case deals with
diplomatic protection
Exporting can be
direct, in which the exporter assumes responsibility for most export functions
Ratification is the...
formal agreement of a signatory nation to be bound by the treaty, usually by its own legislative approval.
Exporters use foreign distributors when their...
products require service or a local supply of spare parts or if they are perishable or seasonal
An agreement that modifies or adds to a treaty or convention, or that deals with matters less significant than those dealt within treaties is known as a...
protocol
What does it take for a small business to be a successful exporter?
-Exporting should not be viewed as a solution to a failure at home -Requires executive-level commitment -Requires adaptation to doing business in a new environment -Need an Export plan
Stare decisis
Courts should "let the decision stand" unless it is overruled by a higher authority
The Least Developed Countries:
Examples: sub-Saharan Africa, Haiti, Bangladesh, Cambodia, Afghanistan
Origins of Common Law Systems.
The root is the Normandy region of France, transplanted to England in 1066 by William the Conqueror All justice flowed from the King and the King's Courts. Introduced feudalism and trial by jury Judges decided Cases and shared them with other judges- cases are legal precedent
Export Management Companies (EMCs) are independent firms that
assume export-related duties for manufacturers, producers, or other exporters
Knowledge of global environment refers to staying current with
economics, cultures, politics, and law
Exports can be sold by
independent foreign sales representatives in the foreign country who work on commission
One of the most important principles of treaty law is pacta sunt servanda "the pact must be respected" meaning...
that treaties are binding on the parties by consent and must be performed by them in good faith .
Forms of International Business
-Trade -Licensing of intellectual property -Foreign direct investment
Currency risk includes:
1. exchange rate risk 2. currency control risk
A document prepared by a manufacturer or exporter/shipper attesting to the geographic place (i.e., nation) where goods were made is called a: a. Export license b. Technology transfer license c. Certificate of origin d. Import license
Certificate of origin
Differences Between Modern Civil Law and Common Law Countries
Civil law judges do not create binding precedent Civil law judges take a more inquisitorial role in criminal cases In contract cases, civil law judges do the work of both judge and jury
Common law countries today
England, U.S, Australia, Cnada
International Law is the body of rules that has been
accepted as such by the international community"
Jurisdiction is the power of a...
court to act
Confiscation is
expropriation without payment or compensation
Criminal Jurisdiction is the power of a court to..
hear a criminal case and to act over a defendant.
Islamic law is known as
sharia law
Sosa v. Alvarez-Machain
-A DEA agent was captured, tortured, and murdered in Mexico. Defendant was identified as one of the perpetrators of the crime and when Mexico refused to extradite him to the US, the DEA hired some Mexican nationals to capture him and bring him back to the US. -The SC court ruled the defendant could be tried but his abduction may be grounds for a civil suit. -Defendant filed a group of civil suits in federal court against the US and Mexican nationals who captured him under the FTCA. -Ruled that ATS did not support defendant's claim because it did not fall into traditional law of nations case, and so private individuals cannot bring a case to the US against foreign citizens for crimes committed in other countries that violate law of nations/treaties with U.S. -Federal Court disagreed with government's contention that the FCTA did not apply, finding that the plan to capture the defendant was developed on U.S soil and therefore covered.
The primary source of customary international law rules for interpretation of treaties is: a. Defined in the New York Convention in the Role of Treaties. b. Set out in the United Nations Charter. c. Created by the formal opinions of the International Court of Justice. d. Defined in the Vienna Convention on the Law of Treaties.
Defined in the Vienna Convention on the Law of Treaties.
Franchising in the U.S is regulated primarily by the...
FTC at the federal level.
Forms of Investment:
Foreign branch Foreign subsidiary Affiliate Joint venture Local participation
John wants to go into business as an international trading company like the famous Japanese trading companies. He wants to bring together several US companies that make sporting goods and export their products to Mexico, with the power to determine which products are sold in what areas in Mexico and the prices to be charged to Mexican buyers. What are special US law uses he may need to be made aware of in his efforts? a. If anti-trust law prohibits these activities in Mexico just as US law may do so inside US. b. Labor and employment laws in US and how applied to US manufacturing company compliance with those laws. c. Restrictions in US law on nationalization in Mexico. d. Foreign direct investment policies.
If anti-trust law prohibits these activities in Mexico just as US law may do so inside US.
Paquette Habana Case
In Spanish-American War U.S sieged two commercial fishing ships sailing from Havana. Unarmed ships were owned by spanish citizen living in Cuba and sailed under spanish flags. Owners were unaware of hostilities between U.S and Spain and of the blockade of Cuba Fishing ships were sold by the Navy in florida as prizes of war. The original Spanish owner sued for damages in U.S District Court. U.S court upheld the seizure and owner appealed. Supreme Court reversed and said that under an established rule of international law peaceful fishing vessels are exempt from capture as prizes of war. Court acknowledged that it was bound to take judicial notice of international law.
Roman principles were the basis for consolidating the French law into one code called...
Napoleonic Code
A US citizen (individual or company) owes a duty to pay income taxes no matter where the income was earned. Which is the basis for exercise of this power to collect such tax by the United States? a. Universal jurisdiction. b. Nationality jurisdiction. c. Protective jurisdiction. d. Territorial jurisdiction.
Nationality jurisdiction.
Venezuela provides a recent example of a host state attempting to restructure its economy by transferring foreign investor assets to itself. This is called: a. Infringement b. Local participation c. Foreign direct investment d. Nationalization
Nationalization
example of universal jurisdiction:
Nazi Adolf Eichmann tried in Israel for Holacaust atrocities
Ways that IBL retains its national character
Need info. page 37
Ex: of territoriality
Prosecution of of foreign citizens in U.S courts for attempting to smuggle illegal drugs into the U.S on a foreign flag ship in international waters
Sources of International Business Law
Treaties, conventions, statutes, acts Law merchant UN Convention on Contracts for the International Sale of Goods
The most ipmprtant international IP org. is the...
World Intellectual Property Organization (WIPO) Agency of UN, est. in 1967 and has 185 member countries.
the United States v. Campbell case (2011) deals with
a federal court permitting the prosecution in the U.S of an Australian citizen arrested in India for a business crime committed against the U.S gov. And has to deal with extraterritoriality both under U.S and international law
Franchising is a good vehicle for entering...
a foreign market because the local franchisee provides capital investment, entrepreneurial commitment and on-site management to deal with local issues, such as labor and employment.
Abrogation is an...
act of national legislature that renders a treaty null and void in that nation
International human rights law protects individuals and groups from...
acts of governments that violate their civil, political, or human rights.
Friendship, Commerce, and Navigation (FCN) treaties are...
bilateral agreements that provide a broad range of protection to foreign nationals doing business in a host country.
Customary international law is a...
body of commonly accepted rules of conduct, or international norms, that have arisen out of consistent and long standing practice and that nations have followed out of a sense of binding obligation.
The International Labour Organization objectives are to...
bring together gov. industry, and labor groups with a focus on developing countries to help promote the rights of workers. International labor standards (recommendations) for basic worker rights
Nations that agree in advance to submit certain types of cases to the ICJ are said to have submitted to...
compulsory jurisdiction, although this is voluntary and may be withdrawn
Exporting is the shipping of goods or rendering of services to a
foreign buyer in a foreign country
A foreign subsidiar is a...
foreign company organized under the laws of a foreign host country, but owned by and controlled by the parent corporation in the home country.
Exports can also be sold by
foreign distributors, firms that receive goods and resell to customers
the Gaskin v. Stumm Handel (1975) case deals with
foreign language contracts the
Private international law refers to those rules that...
govern the rights and responsibilities of individuals, corporations, or other private parties in their cross border or international activities, as well as procedural rules for how courts resolve private international disputes. ex: family law and rules for international adoptions, wills and decedents estates.
OECD (Organization for Economic Cooperation and Development)
guidelines encouraging responsible business conduct Need More INFO???
The branch is a part of the
home country entity, with operations in the host country.
The US Alien Tort Statute is Used now for
human rights cases brought against U.S. multinational companies
A tariff is an...
import duty or tax imposed on goods entering the custom's territory of a nation.
International Trading Companies are firms that specialize in all aspects of
import/export transactions either by buying goods on their own accounts for resale or by acting as middlemen to bring other buyers and sellers together.
Certificate of Origin is one of the
most important legal documents used See the Tarbert Trading, Ltd. V. Cometals, Inc. (1987) case
Countries with a predominantly civil law system include
most of Eastern and Western Europe, Scandinavia, Latin America, Japan, and Russia
Small Business Success: In 2010, of 293,000 companies exporting goods from U.S., 98% were
small- to medium-sized businesses with less than 500 employees
Indirect exporting typically occurs when....
smaller or medium sized companies do not have a dedicated international sales staff.
Indirect exporting refers to a firm's use of
specialized intermedaries outside of their own org. to handle specific functions: foreign marketing, foreign sales, finance, and shipping.
The ICJ bases its work on the...
statute of international court for justice 15 independent judges from leading jurists and scholars on a worldwide basis.
Exporting is often a firm's first
step into international business
Trade in services refers to
the providing of services to a customer or the operation of service companies in a foreign country.
Common law system is where
the reasoned decisions of judges becomes the law of the case, a legal precedent that binds judges in deciding similar cases in the future.
Exporting is relatively...
uncomplicated and usually only requires a modest capital investment and the risks are manageable to most firms.
Islamic judges do not issue
written opinions
International Law has several characteristics that distinguish it from a country's national or domestic law:
1. International law consists fo rules that countries agree to follow. it is lawmaking by choice/consent 2. There is no global authority for enforcing international law. Nations must agree to be a party to these cases.
The Paquette Habana deals with how in the U.S it is generally accepted that customary international law is a part of...
American law to be applied by courts where there is no contradictory statute or treaty and where there is no other way to resolve the case other than by applying customary norms.
Modern Legal Systems of the World: Origins of Civil Law Systems
Based originally on Early Roman Codes Followed by Napoleanic Codes of 1800s Followed by Germanic Codes of 1900s
United States v. Campbell
Campbell was an Australian citizen who was employed in the construction of health care facilities and schools in Afghan. Projects were funded by the U.S gov. Campbell took a bribe for $14 million to give work to subcontractor Campbell was indicted in the U.S for bribery Campbell moved for dismissal claiming his prosecution was barred because the events occurred outside the U.S and he is not an American citizen Campbell was denied dismissal. The bribery occurring outside the U.S did not violate the principle against extraterritorial application of U.S law because the government has an interest in protecting itself from fraud wherever it occurs.
Nations that agree in writing in advance to submit certain cases to the ICJ are said to have submitted to ______. a. Universal jurisdiction. b. Diplomatic protection. c. Nationality jurisdiction. d. Compulsory jurisdiction.
Compulsory jurisdiction.
Distinguishing characteristics of International law:
Consists of rules countries agree to follow Has no global authority for enforcement
The International Criminal Court hears three types of cases:
Genocide crimes against humanity war crimes
International Business and Human Rights
Growing international consensus on business ethics and social responsibility International human rights law protects individuals and groups from acts of governments that violate rights
International law offers solutions to:
Human rights abuses, Pollution, Transnational crimes, and International terrorism, and more But enforcement is dependent on nations working together
Pakistani Legal System
Influenced by British, but governed by Islamic principles Need More Info
Company A owns intellectual property (IP) and agrees in writing to let Company B use that property for a specified purpose only. Company A and Company B are (in order): a. Licensor and licensee b. Licensee and licensee c. Licensee and licensor d. Franchisor and franchisee
Licensor and licensee
Modern Japan? China?
Modern Japan: Example of Legal Change by necessity MORE INFO
If you are asked which nations below are NOT a signatory to the Rome Statute of the International Criminal Court, which is your best response? a. Iran. b. United States. c. China. d. None of these three states are signatories
None of these three states are signatories
John is a citizen of the US. He enters into a contact with a French catering company called "Amuse Bouche" that caters events. They fail to fulfill their contract obligations to him. He looks for the law giving him a right to get a remedy (i.e., money damages). This dispute on its face appears to be a question of: a. Private international law. b. International norms. c. Public international law. d. Ratification.
Private international law.
Two ways of classifying types of international law:
Public international Law Private international Law
Non-tariff barriers to foreign trade include _______, which are used to quantitatively restrict the number of defined items that can enter into a country: a. environmental regulations b. quotas c. industrial standards d. an import duty or tax
Quotas
Currency controls in a host state may restrict or prohibit the foreign investor from: a. Achieving "excess profits" from host state operations as defined by its state law. b. Repatriating profits to home state. c. Repatriating profits to any local investor in a host state joint venture. d. Using exchange rates to their benefit.
Repatriating profits to home state.
English Common Law
The centuries-old body of legal rules and procedures that protected the lives and property of the British monarch's subjects.
In the legal systems of the United Kingdom and United States, the reasoned decisions of judges become the law controlling the case, and the precedent of similar cases is binding on future cases. This is called: a. Civil law system. b. Mixed civil law system. c. Sharia-based legal system. d. The common law system
The common law system
What is the difference between a "developed" and "developing" country?
Typically Banking and finance, law enforcement, energy, health, poverty, political instability, protectionist policies
Countries that have ratified treaties become...
contracting parties
Countries with a mixed civil law system include
much of Africa and a few parts of Asia, Middle Eastern countries with Islamic law
Rome Statute of the International Criminal Court was a treaty that created what?
the International criminal court in the Hague
the M. Aslam Khaki v. Syed Mohammad Hashim (2000) case deals with
the different types of law.
the Dayan v. McDonald's Corp. case deals with
the difficulty of in supervising the operations of a franchiser in a foreign country.
Jus gentium means...
the law of nations
the Sosa v. Alvarez-Machain (2004) case deals with
the limitations on the incorporation of customary international law into U.S law through ATS.
Expropriation is
the taking of privately owned assets (real estate, factories, farms, mines, oil refineries) by a government with some kind of compensation
Example of foreign sales representatives:
they may represent several different manufacturers of U.S sporting goods in Japan, one that makes baseball bats, another that makes globes ad a third that makes baseballs
Many firms that engage in direct exporting on a regular basis reach the point at which...
they must hire their own full time export managers and international sales specialists.
Public international law refers to...
those rules that apply to the conduct of nations in their relationships with each other and with individuals as citizens or residents. ex: rules for resolving territorial or boundary disputes, diplomacy or war, determining nationality how nations treat foreign citizens
Transnational Corporation is often used in the UN system, reflecting that the corps. operations and interests...
transcend national boundaries
Nationalization is the
transfer of private sector firms to government ownership and control, usually with payment to shareholders and pursuant to a larger plan to restructure a national economy
Host country refers to...
where the company operates
Dayan v. McDonald's Corp. case (1984)
Dayan received an exclusive franchise to operate McDonalds restaurants in Paris. Franchise agreement required that franchise meet all quality, service, and cleanliness standards of McDonalds. After several years of quality and cleanliness violations McDonalds sought to terminate the franchise and Dayan brought action arguing that McDonalds was obligated to provide his employees with operational assistance to meet cleanliness standards. Judgement was affirmed for McDonalds saying that they fulfilled all their responsibility and didn't have to provide french employees with training. Dayan had violated the agreement.
Some Common Risks of International Business
Distance and Logistics Language and Cultural Differences Cross Border Trade Controls Currency Risk Political Risk Exposure to Foreign Laws and Courts
A foreign entity organized under the laws of the host state but owned and controlled by the parent corporation in the home country of the investor is a: a. Joint venture b. Multinational corporation c. Foreign branch d. Foreign subsidiary
Foreign Subsidiary
The most important international judicial body is the...
International Court of Justice or ICJ which is the primary judicial arm of the UN It is the building found in the Hague
A written and binding agreement between three or more countries given effect under international law is best described as a(n): a. An international contract. b. Bilateral treaty. c. Multilateral treaty. d. Convention.
Multilateral treaty.
The ICJ has jurisdiction over cases brought under the...
UN charter or that involve a treaty, convention, international obligation, international law
The most common form of franchising is known as a...
business operations franchise and is usually used in retailing.
In the United States, the guidelines for sentencing corporate offenders allow for reduced fines and sentences if a defendant can show that it has had a ...
code of conduct and compliance program to reduce the likelihood of criminal conduct.
The principle that a nation can project its laws-its jurisdiction-beyond its territorial borders is known as...
extraterritoriality / extraterritorial jurisdiction
Companies that do not have the experience, personnel, or capital to tackle a foreign market alone frequently use...
indirect exporting
the Transatlantic Financing Corp. v. United States (1966) case deals with
international firms that are subject to the risks of war, terrorism, international hostilities. Has to be impractical, and wasn't
developing countries
lower per capita income, lower standard of living, higher foreign debt
Universal jurisdiction permits any country to...
prosecute perpetrators of the most heinous and universally condemned crimes regardless of where the crimes occurred or the nationality of the perpetrators or victims
IBL includes both...
public and private international law
EMCs might do as little as...
render advice and training on how to export or they might assume full responsibility for the entire export sales process.
A nonself executing treaty is one that...
requires some additional legislative act before it becomes enforceable in national courts
An export control is a...
restriction on exports of goods, services, or tech. to a country or group of countries imposed for reasons of national security or foreign policy. All countries have export controls In U.S done by Dept of commerce
Transfer of Technology is the sharing of
scientific information, technology, and manufacturing know-how between firms, universities, and other institutions
Export Trading Companies are market products of
several manufacturers in foreign countries
The term countries in transition refers to those countries that are...
transitioning from centrally planned economies to free markets. (ex USSR, China)
Examples of trade in services can be found in...
transportation, package delivery, banking, insurance, etc...
Sanctions can include restrictions on...
travel to those countries Done in the U.S by the Department of Treasury
Sources of international law
-International treaties and conventions -International custom -General principles of law recognized by civilized nations -Statute of the international court of justice and the judiciary arm of the United Nations
Universal Jurisdiction must also be based on one of the following five basic principles:
1. territoriality 2. nationality 3. protective principle 4. passive personality 5. universality
Challenges of Doing Business in Developing Countries:
Adverse government policies Rules often lack transparency Barriers have softened in recent years
Some Common Risks of International Business:
Exposure to Foreign Laws and Courts Receiving Professional Assistance in Going International The International Attorney Freight Forwarder/Customs Broker The International Banker
DIP SpA v. Commune di Bassano del Grappa
Italian law prohibits the opening of certain retail stores without obtaining a license from local authorities One applicant who was denied who was a subsidiary of a german company argued that the Italian retail licensing law discriminated against non-Italian companies and imported goods and lead to higher consumer prices. Argued that Italian Law was invalid under the laws of the EU and treaty of Rome. Italian law requiring the licensing of new retail stores by local committees is not invalid under the laws of the EU and treaty or rome because NEED More Info
FDI's are considered to be...
active investments and are generally made for the long term and with the expectation of being involved in company management and producing a profit from operations.
Sanctions are
broader and more comprehensive restrictions on trade and financial transactions with countries, who sponsor international terrorism, engage in the proliferation of WOMDs, threaten international peace, or violate major principles of international law.
A foreign branch is a...
business presence by the investor in the host country. Could be a a branch office or an entire network of operation facilities.
the Bernina Distributors v. Bernina Sewing Machine Co. (1981) case deals with
currency fluctuations on a contract
Payment or Credit risk refers to...
during an import/export transaction, the risk that the buyer will fail or refuse to pay.
Trade is the import or export of
goods and services across national borders
Foreign Distributors are..
independent firms, usually located in the country or region to which a firm is exporting, that purchase and take delivery of goods for resale to their customers.
Exports can also be
indirect, through intermediaries
Foreign Direct Investment provides the greatest degree of
market penetration, as well as greatest risk
CERES Principles:
network committed to environmentally and socially conscious business principles More Info
A quota is a
quantitative restriction on imports that limits the quantity of an item that may enter a country annually.
UN Global Compact partners who pledge to
support voluntary principles on human rights, labor standards, the environment, and corruption
Property or Marine risk refers to goods being damaged by
water, air crashes, etc in delivery to places
Two major types of international crime:
-Transnational organized crime (drugs, firearms, smuggling, trafficking, cyber crime) -Transnational business crime (bribery, corruption, tax evasion, customs fraud)
Factors driving uniformity in International Business Law:
Accelerating forces of free trade Need for nations to cooperate Intergovernmental organizations International tribunals Roles of private industry organizations and trade associations
Which term below is a type of currency risk related to fluctuations in relative value of two currencies when buyer and seller are in different countries? a. Currency controls in seller's country b. Quotas c. Exchange rate risk d. Shipment risk
Exchange rate risk
Infringement is the violation of
IP rights of another and often occurs in the unauthorized use, distribution, or appropriation of those rights Often referred to as piracy or counterfeiting
Intellectual Property Rights examples:
Patents Trademarks Copyrights Trade secrets
The most important international IP organization fostering government cooperation in developing IP policies and laws and assisting in the resolution of disputes via arbitration is: a. United Nations b. World Trade Organization c. World Intellectual Property Organization d. International Center for Intellectual Property Dispute Resolution
World Intellectual Property Organization
In re Union Carbide Corporation Gas Plant Disaster at Bhopal (1987) case deals with
a U.S multinational company that faced problems in owning and operating a plant in India
Foreign distributors assume the risks of..
buying and warehousing goods in their markets and provide additional product support services.
Tarbert Trading, Ltd. V. Cometals, Inc. deals with:
falsifying a certificate of origin
The protective principle of jurisdiction allows jurisdiction over...
noncitizens for acts committed abroad on the basis of a country's need to protect its national security, vital economic interests, and governmental functions.
International Trading Companies can be as small as...
one individual or a mutlinational corp. and they come from both developed and developing countries
Every area of international trade, foreign investment, and intellectual property rights is governed by at least
one international convention
Diplomatic protection is the right of...
one nation to take diplomatic or judicial action to protect the rights of a person to whom it has granted nationality from a violation of international law by another nation
Foreign Direct Investment is the ownership and active control of
ongoing business concerns including investment in manufacturing, mining, farming and other production facilities in a foreign (host) country
The UN global compact is a partnership of international companies, public interest groups, and UN agencies who pledge to
support a set of voluntary principles on human rights, labor standards, environment, and corruption.
The most common import barriers are...
tariffs and nontariff barriers
The home country refers to..
that country under whose laws the investing corporation was created or headquartered.
Russian Entertainment Wholesale, Inc. v. Close-Up International, Inc. case deals with
two licensees of exclusive distribution rights to Russian films in the U.S
Currency controls can take many forms such as:
-Prohibiting residents from making payments in a foreign currency -Prohibiting any foreign payments unless on gov. approval or through authorized bank accounts -Prohibiting the removal of foreign currency from the country by individuals abroad -Controls on foreign investors prohibiting them from removing/repatriating profits earned by subsidiary companies in that country.
Koran Sunna Fiqh
The Koran is the main religious book The Sunna is the written record of teachings/actions of Muhammed The Fiqh are the interpretations of Islamic jurists of the scriptures
Civil law refers to those modern legal systems that are derived from..
ancient Roman law
Jurisdiction of the International Court of Justice:
cases brought by nations against other nations; no individuals Enforcing judgments by world opinion
International Organizations and IP foster
cooperation and resolve disputes
In the U.S IP law is almost entirely the province of...
federal law.
developed coutries
high per capita income, high standard of living, later stages of industrialization, diversified economies.
The U.S, Russia, China, India haven't
joined the rome convention
Although rooted in antiquity, international law affects the
modern global economy
M. Aslam Khaki v. Syed Muhammad Hashim
Federal Shariah Court of Pakistan declared interest by banks to be against Islamic Law Brought to the supreme court of Pakistan. Decision: Interest on the use of money is unjustified and unearned income. A financial system based on interest is unjust and contrary to Islamic Law. Creates a debt based economy.
Factors influencing differences in International Business Law:
National courts' interpretations Differences in national legal systems Varying levels of economic development National attitudes toward economics
Which item below gives federal courts in the United States jurisdiction over civil claims for damages brought by non-US citizens for torts committed against them by other non-citizens outside the US? a. United Nations Charter. b. Law merchant. c. Decisions by the International Court of Justice (ICJ). d. US Alien Tort Statute.
US Alien Tort Statute
Several subsidiaries owned by one parent are called...
affiliates
Currency risks exist when a firm must...
convert one currency to the currency of another country before it can be used.
Supplier Risk is the possibility of being victims of...
fraud or receiving defective goods.
A treaty between three or more countries is said to be...
multilateral
Saudi Arabian Legal System
Need more info
Paul operates a vessel in international waters (i.e., in the high seas) off the coast of Texas. It acts as his floating base for illegal drug manufacturing operations, and after the drugs are made he sells his product to other individuals who come to his vessel and buys the drugs for which they will smuggle into the US and sell illegally. Paul is never at any time on US land, or within the US territorial sea or airspace. However, US law enforcement staff arrest him on the vessel. He is prosecuted in a US court on the basis of that court's: a. Universal jurisdiction. b. Protective jurisdiction. c. Nationality jurisdiction. d. Territorial jurisdiction based on "effects" inside US of Paul's acts.
Territorial jurisdiction based on "effects" inside US of Paul's acts.
Russian Entertainment Wholesale, Inc. v. Close-Up International, Inc. case (2011)
Two Russian film studies were granted rights to produce and distribute DVD versions of their films to multiple licensees. Each licensee received diff. limited rights. Krupny Plan could distribute the films only in Russian, and they sub-licensed their rights to the films to Close Up, a NYC corp. Russico could distribute multilingual versions of the same films Close up sued Ruscico and for damages from copyright infringement, claiming that it is the "exclusive" U.S licensee of the Russian language only films. The decision was that judgement was affirmed for the defendant.
Bernina Distributors v. Bernina Sewing Machine Co. (1981) case
Defendant purchased sewing machines from a Swiss manufacturer in Swiss Francs Machines were imported to the US for sale Contact with distributor in this case allowed for the importer to pass on cost increases to the distributor. So when the Franc rose in value against the dollar the importer imposed a 10% surcharge to protect itself. The increase in the swiss franc doubled the importers costs. The distributor sues. Importer argued that increased costs due to currency fluctuations could be passed on the distributor as any other cost and that the exchange risk had rendered performance of the contract commercially impracticable. judgement was affirmed for the distributor. The importer had assumed the exchange rate risk. Language of contract did not include currency fluctuations as one of the cost increases that could be passed on to the distribute thus the exchange rate risk remained with the importer. Cost increases and currency fluctuations dont render a contract too impracticable to perform
ABC Company in Memphis makes motorcycles at its plant there. It is considering the benefits of selling its motorcycles in the market of motorcycle riders in Brazil (estimated to be 5,000,000 new potential customers). Which is the LEAST risky way it can enter the Brazilian motor cycle rider market? a. Joint venture there to build a large plant with local participation. b. Creating a wholly-owned subsidiary there and constructing a plant for manufacturing. c. Entering into a foreign sales distribution agreement with a local owner of stores selling motorcycles. d. Use of foreign sales representative in Rio de Janeiro.
Entering into a foreign sales distribution agreement with a local owner of stores selling motorcycles
Liechtenstein v. Guatemala
Friedrich Nottebohm was born in Germany. Moved to Guatemala, and visits brother in Liechtenstein while remaining a german citizen. Germany invades Poland and he applies to become a citizen of Liechtenstein and gets it. In Guatemala he is arrested as a German enemy and turned over to the U.S for internment and has his property seized. He was released but never got his property. He filed a memorial for diplomatic protection of its citizen before the ICJ claiming that Guatemala had violated international law by refusing to recognize Liechtenstein as his country of nationality and Liechtenstein claims that it is entitled to damages. Decision: Guatemala was not required to recognize the citizenship granted by Liechtenstein in a way that did not follow well-established principles of international law.
Countries in transition to free markets include:
former Soviet Union and China
Multinational Corporations are firms with
significant foreign investments, assets, or operations move technology, factories, and capitals with most favorable economic conditions
Reasons for how IBL has become more uniform between countries and regions of the world:
1. Forces of free trade, econ. integration, globalization of business have accelerated the need for greater uniformity in the law for international business. 2. Nations have had to cooperate in their legal responses to global issues 3. Intergovernmental orgs such as the UN and WTO have made uniform codes on many business subjects. 4. International tribunals for disputer resolution have caused the greatest change in IBL in the modern era through written reports and render judgements 5. Roles of private industry orgs and trade associations have had an important role in encouraging the growth of uniform IBL
However, under alien tort, many U.S companies were sued because they were
cooperating with foreign governments in abusing human rights
The Civil law system is the ...
predominant legal system in the world
UN Convention Against Corruption
1. criminalize the offering or giving of a bribe or undue advantage to a public official 2. criminalize money laundering 3. improve enforcement by changing national bank secrecy laws so that the illicit proceeds of crimes can be tracked 4. establish corporate criminal liability for legal entities
Gaskin v. Stumm Handel (1975) case
A U.S citizen entered into an employment contract with a German firm Stumm Handel Contract was written in German and he never got English version The forum selection clause in the contract stated that any disputes that arise between parties would be settled in Germany Parties eventually reach disagreement and the plaintiff brought action in U.S contending that his failure to understand German rendered the forum selection clause invalid. Court dismissed the plaintiff's action stating that the plaintiff's failure to speak or read german was not grounds for invalidating because he lived in NYC and could of found translator
Texas Shoe Company in Dallas manufactures footwear there. It enters into a two-year contract to sell its boots to Barunia, an Asian nation that uses the boots for its military. The sales price of each pair of boots, as of the June 1, 2016, date of the contract, is fixed for the duration of the contract at 13.00 Baruns which is equal to $10.00 USD at that time. On June 1, 2017 at then current currency exchange rates $10.00 USD equals 15.00 Baruns. As of that date whose economic interests have been most negatively affected by ABC Company agreeing to accept payments in Baruns? a. ABC Company b. Barunia c. Neither party is affected at all by the currency fluctuation. It will always impact both parties' economic interests if not resolved in the contract or elsewhere by agreement. d. The parties are affected equally.
Barunia
In an export/import transaction the most common concern of the seller (particularly when not sure of the buyer's organization statutes and stability) is: a. Supplier risk b. Shipment risk c. Payment or credit risk d. Reputational risk
Payment or Credit Risk
International Franchising is a business arrangement that uses an agreement to
license, control, and protect the use of the franchisor's patents, trademarks, copyrights, or business know-how in return for royalties, fees, or commissions
IP is a valuable asset that can be transferred by the owner or holder to...
licensee through a grant of rights in that property called a license.
Newly industrialized countries are developing countries that have...
made rapid progress toward becoming industrialized or technology based economies. They are home to multinational corps
the three forms in international business are not...
mutually exclusive and each can play a role in an international firms strategy.
Territorial Jurisdiction refers to a...
nation's jurisdiction over all persons (citizens and noncitizens) places, and property within the territory of a country.
International Business Law (IBL) is the body of law and regulations, derived from
national and international sources, that governs cross-border business transactions, the activities of those doing business in foreign countries or subject to the jurisdiction of foreign courts, and the resolution of international disputes.
Public International Law Governs the conduct of
nations with other nations or in their relationship with individuals; norms regarded as binding on all members of the international community
Vienna Convention on the Law of Treaties is a 1969 agreement among states defining the
nature and obligations regarding treaties under international law
Nontariff barriers are...
all barriers to the import of foreign goods or services other than tariffs. They usually are laws or administrative regulations that have the effect, directly or indirectly, of restricting access of foreign goods or services to a domestic market.
Islamic Banks abide by Sharia Law which means they can't
charge interest on loans
US Alien Tort Statute gave the U.S federal courts jurisdiction over...
civil actions for damages brought by non-U.S citizens for torts committed against them by other noncitizens outside fo the U.S in violation of the norms of customary international law
A disadvantage of the joint venture is that a company may have to...
share its tech, expertise, and profits with another company or give up control over local ops
Local participation means that a...
share of the business is owned by nationals of the host country
Nations that express their willingness to join a treaty are called...
signatories
Several important IP treaties provide for..
streamlined procedures for mutually recognizing and enforcing IP rights.
A joint venture is a cooperative usiness arrangement between...
two or more companies for profit. It may take the form of a partnership or corporation
Direct exporting refers to a...
type of exporting in which the exporter, often a manufacturer, assumes responsibility for most of the export functions, including marketing, export licensing, shipping, and collecting payment.
In Civil Law judges can
undertake their own investigations of the facts and decide what witnesses to call and what questions to put to them.
Joel is the leader of a criminal gang responsible for robbing over a dozen banks in Italy, killing several policemen, and in general terrorizing communities all over northern Italy. He is finally caught by the police. Can he be prosecuted in the International Criminal Court (ICC)? a. No. b. Yes, since he committed a crime covered by that court located in Rome since a major violation of Italian law. c. Yes, but only if he is not an Italian citizen. d. Yes, without condition or restriction.
No
Transatlantic Financing Corp. v. United States (1966) case
U.S contracted with Transatlantic Financing (cargo ship operators) to transport wheat from Texas to Iran Parties never agreed on the route that would be taken Egypt and Israel go to war and Suez canal blocked off Ship now has to sail around Africa Transatlantic sued for the added expense and that its performance became legally impossible. The court ruled in favor of the US and Transatlantic appealed. Judgement was affirmed for the U.S. The closure of the canal and the resulting additional expenses of the alternate route didn't make the contract commercially impracticable.
Intellectual Property Rights are legal rights which result from
intellectual activity in the industrial, scientific, literary, and artistic fields
Lest developed countries are those defined by the UN on the basis of...
several socioeconomic criteria like low per capita income, poor nutrition and health, etc..
The shipment of goods out of country and the rendering of services to a buyer located in a foreign country is called: a. Exporting b. Distribution c. Licensing d. Importing
exporting
Trade typically represents the
least involvement and thus the least political, economic, and legal risk.
Currency controls are...
restrictions on foreign currency transactions used by some developing countries that do not have large reserves of foreign currency.
Freight forwarders and Customs brokers act as a...
agent for the exporter or importer in arranging transportation and insurance for goods, preparing import or export documents, and moving goods through customs.
A certificate of origin is a document, prepared or provided by..
an exporter or shipper, that certifies and attests to the country of origin of the goods being shipped.
Private International Law Deals with the rights and responsibilities of
private individuals or corporations operating in an international environment
A reservation is an...
exception to a treaty set out by a signatory country at the time of ratification.
Nations adopt a treaty or convention when...
it is completed in its final form and is ready for nations to ratify
A treaty is a
legally binding agreement between two or more nations that is recognized and given effect under international law.
A convention is a...
legally binding multilateral treaty on matters of common concern, usually negotiated on a regional or global basis and open to adoption by many nations. Examples: prisoners of war (Geneva); lost baggage reimbursement (Warsaw)
Licenses can be either...
exclusive or nonexclusive and frequently limit distribution to a certain geographical area.
Exchange rate risk results from the...
fluctuations in the relative value of two currencies when one is exchanged for the other.
California Stove Company (CSC) owns a patent on special technology for making its stoves sold in the United States. CSC decides to license its patented technology to Ecuador United (EU) in that country which also makes appliances. EU will use CSC technology to make the stoves and sell them to customers all over Chile for any price it determines. Under this licensing arrangement, EU pays to CSC an up-front fee of $50,000 for entering into this arrangement. For one year per their license agreement, CSC will receive a 10% royalty on sales revenue generated by EU from sales of its stoves made under the agreement. Over the course of that year, EU sells stoves having a total sales price of $1,000,000 (exclusive of sales taxes) and actually collects $800,000 of that amount from its customers. At the end of the year, EU will have paid CSC in total consideration under their arrangement the amount of: a. $105,000 b. $150,000 c. $130,000 d. $1,050,000
$130,000
ABC Company owns and manufactures appliances from its plant in Arlington, Virginia. It decides to open a new operation in Chile under Chilean law making appliances and selects William to be its local partner in Chile. William invests 20% of his own money of total startup costs for the Chilean entity, which is called a: a. Multinational company b. Wholly-owned subsidiary c. Joint venture d. Foreign branch
Joint venture
A self-executing treaty is one that automatically creates rights that are
enforceable in the courts of that country, without any further legislative action. the treaty is immediately binding on courts, gov. agencies, and individuals.
The Coalition for Environmentally Responsible Economies (CERES) is a private, mostly American network of environmental groups, socially conscious investors, and companies committed to
following the CERES Principles of environmental and social accountability.
Examples of cases heard by the ICJ:
land and maritime boundary disputes unlawful detaining of diplomats violations of sovereignty by armies humanitarian violations
Many basic concepts of modern IBL developed over centuries from the...
law merchant and maritime law, the accepted customs and practices of medieval merchants and traders.
Political Risk is generally defined as the...
risk to a firm's business interests resulting from political instability or civil interest, political change, war, or terrorism in a country in which the firm is doing business.
Under a typical franchising agreement, the franchisee is allowed to use a trade name or trademark in offering goods or services to the public in return for a...
royalty based on a percentage of sales or other fee structure. The franchisee usually obtains the franchisor's rules for operating and managing the enterprise, along with the brand and other trademarks to attract customers.
To understand the legal effect of a treaty in a country that is a party to it we must ask whether that treaty is...
self executing or nonself executing
Passive personality jurisdiction gives a country the right to...
hear cases stemming from crimes committed against their own citizens by non-citizens outside of their own territories.
International Licensing Agreements are contracts by which the
holder of intellectual property will grant certain rights (the license) in that property to another party under specified conditions and for a specified time, in return for a consideration (like a fee or royalty or part of a business arrangement.)
Tarert Trading v. Cometals, Inc. info...
Cometals was a New York trading corp. and they purchased 2,000 tons of Kenyan beans from Tarbert Trading, an English commodities trading co. The beans were shipped from a warehouse in Rotterdam and Cometals purchased the beans for a resale to a buyer in Colombia. Colombia required certificate of origin showing the beans were a product of Europe. So Cometals requested that Tarbert supply the certificated and Tarbert agreed. Insect damage occurred and Cometals refused the beans and Tarbert sued and Cometals said the agreement should be void because Tarbert could supply EEC certificate from Europe since they were Kenyan. The Decision was that the complaint and counterclaim were dismissed.
Idaho Battery Inc. (IB) makes millions of batteries for generating power for a variety of small consumer items. All batteries are manufactured in Boise, Idaho. It enters into a contract with Juno of Rome, an Italian company owning many department and equipment stores in Italy, whereby Juno sells the batteries made by Idaho Battery to Juno's many customers at store locations. Which statement below is true about this arrangement? a. Juno is a foreign sales distributor of IB products and does obtain title to the IB product before they are resold. b. Juno is a foreign distributor of IB products but never actually has title to the batteries it sells on behalf of Idaho to its customers. c. Juno exports directly the IB products to its customers in Italy. d. Juno is a foreign sales representative for Idaho Battery.
Juno is a foreign sales distributor of IB products and does obtain title to the IB product before they are resold.
Nigeria is a member of the United Nations. As all members of the UN, it has ratified the Charter of the UN. It has a border despite with Chad that sues Nigeria in the International Court of Justice seeking an adjustment of its borders. Must Nigeria as a member be bound by the future decision of the ICJ in that case? a. Yes, if it has agreed in advance to compulsory jurisdiction on the subject matter, e.g., border disputes. b. Yes. c. No, unless its national legislature has rendered the Charter null and void by abrogation. d. No, if it terminates any prior agreement to compulsory jurisdiction.
No, if it terminates any prior agreement to compulsory jurisdiction.
A certificate of origin is required by..
customs authorities of the importing country. And some countries require that the CO be certified by an outside org. or foreign consulate office of the importing country.
Importing is the
entering of goods into the territory of a country or the receipt of services from a foreign provider.
Firms with significant IP assets must protect their legal rights in...
every country in which they plan to do business or even in which their patent, trademark, or copyright might be stolen/infringed.
For example if two companies are members of an approved ETC they may jointly establish..
export prices, enter into joint export marketing arrangements, allocate export territories, and do business in ways that would be illegal if done with the U.S market. Can only happen if shown that advantage won't lessen competition within U.S.
Under the principle of nationality jurisdiction individuals, and corporate citizens owe duties to...
comply with the laws of their countries of nationality no matter where they are in the world. ex: a banker in Hong Kong must comply with U.S and Hong Kong law
In Civil law countries the legal codes are more...
comprehensive, establishing general principles that are interpreted by judges and applied to the case before them. Where there are gaps in the code law, the judge will draw from the code's principles and doctrine to decide a case. Civil law judges are not bound to follow earlier court decisions.
International Law is the body of rules applicable to the
conduct of nations in their relationships with other nations, and with individuals and other private parties, rules for settling disputes between nations, as well as rules for intergovernmental orgs. Can also include crimes and criminal procedures
In a joint venture typically each party...
contriburtes a diff. typoe of expertiese and each contributes different amounts of capital, each bringing its own special resources to the venure.
U.S export trading companies or ETCs can apply for and receive an
export trade certificate of review from the U.S Department of Commerce that waives the application of U.S antitrust laws to their specified export activities.
Protective Jurisdiction has been used as a basis of...
extraterritorial jurisdiction to prosecute terrorism, espionage, counterfeiting, making false statements to custom and immigration officers.
In Tarbert Trading v. Cometals it involved two trading companies who were apparently overly anxious to market the sale and a
fraudulent certificate of origin was used.
A multinational is usually not a ingle...
legal entity
DIP SpA v. Commune di Bassano del Grappa deals with
legality of an Italian law requiring retailers to obrain permission from a local committee vbefore opening a new store.
Emerging market economies are countries or regions with the...
potential for rapid economic growth. Many are transitioning from heavily state controlled economies to market economies.
Foreign sales representatives are...
independent sales agents who solicit orders on behalf of their principals and receive compensation on a commission basis.
Salomon Electronics in the United States makes small power generators for kitchen appliances. It distributes these parts through a chain of hardware stores in Mexico called Hardware Supplies of Yucatan (HSY) which "passes" on for re-sale the goods as received from Salomon. HSY customers buy the generators, many which explode or catch on fire when turned on. With a lawyer, these customers sue Salomon in US court for breach of contract, torts and applicable warranties. Salomon moves for transfer of the case to Mexico under forum non conveniens. If you were the judge, what would be the result of this motion? a. Transfer the case to Mexico by granting the motion b. Dismiss the case due to a lack of personal jurisdiction over plaintiffs c. Dismiss the case for a lack of universal jurisdiction d. Keep jurisdiction over the case and deny the motion, allowing Mexican plaintiffs their US court trial
Keep jurisdiction over the case and deny the motion, allowing Mexican plaintiffs their US court trial
Typically a multinational Corp. is comprised of a...
parent company in the home country and a foreign affiliates located in host countries.
Ventress v. Japan Airlines
Japan airlines is a Jap. air carrier based in Tokyo with offices in Cali. and Haw. Plaintiffs were employed by a Haw. company that contracted to perform services for JAL flights. They alleged that HAL had required a seriously ill pilot to fly, in violation of aviation laws. Plaintiffs were then harassed and fired after They sued in federal court seeking recovery for violation of Cali. whistle blower protection statute and wrongful termination. The court dismissed the claims on the basis that the state statute had been preempted by the 1953 treaty of friendship, commerce and navigation between the U.S and Jap. Plaintiffs appealed Judgement reversed for plaintiffs in decision. Although the FCN treaty does allow Jap. companies in the U.S to give preference to hiring Jap. citizens as executives, professional staff, and tech. experts it does not give them blanket immunity from state and fed. employment laws.
Susan is a US citizen. She owns a 50-acre tract of farmland in Mexico. Mexican law enforcement personnel constantly harass her, threaten to arrest her, and eventually detain her in a prison where she was tortured until she agrees to sell her land at a below-market price to local landowner. She angrily returns to the US and writes her elected officials asking the US government to help her and right the wrong she has suffered. Which is her best remedy or at least a place to start with reasonable prospect of a court remedy? a. Seeking diplomatic protection from US government and asking it to file a case seeking damages in the appropriate forum. b. Filing a lawsuit against the private landowner in Mexico in the ICJ. c. Suing the Mexican landowner and Mexico both in US federal court seeking damages. d. Filing a lawsuit against Mexico in the International Court of Justice (ICJ).
Seeking diplomatic protection from US government and asking it to file a case seeking damages in the appropriate forum.
Mexican Sandals (MS) is a company in Mexico City that makes shoes and sandals. It purchases 5,000 pairs of sandals made by a low-quality sandals manufacturer called Reggio, an Italian company that makes all its products in Rome. MS enters into a contract selling its Reggio-made sandals to ABC Company in the United States. The goods are delivered to ABC Company in Houston with a Certificate of Origin (CO) specifying Mexico as the nation where the sandals were made and which is a requirement for the sandals to receive favorable tariff treatment upon import into the US. The sandals are of poor quality and ABC refuses to pay for them, believing the Certificate of Origin to be false and a misrepresentation. MS sues ABC Company in US court for failure to pay the purchase price. What is the result? a. The court will order the case transferred to Italy since the shoes were made there. b. The court will dismiss the case for lack of personal jurisdiction over MS. c. The court will apply the terms of the contract and order ABC to pay the agreed purchase price if "reasonable." d. The court will dismiss the claim since it is contrary to public policy to enforce a contract for payment of "fake" goods.
The court will dismiss the claim since it is contrary to public policy to enforce a contract for payment of "fake" goods.
In re Union Carbide Corporation Gas Plant Disaster at Bhopal (1987) case
Union Carbide Corp. one of the largest chemical companies in the world has a subsidiary in India (UCIL) UCIL was incorporated under the laws of India so Indian workers were only there, Indian manufacturers and contractors built the plant, was held to Indian standards and were not at UCC American standards In 1984 a gas leak occurred and 10,000 people died. India Gov. files complaint in fed courts in NY on behalf of victims. UCC contends that action should properly be heard in the courts of India, District court agreed and dismissed the action District court dismissal of the actions of UCC was upheld based on the doctrine of forum non conveniens stating that to further the administration of justice, where a case is properly heard in the courts of more than one country, it should be heard in the country with the greater interest in the outcome of the case, and where it is more convenient which was India in this case.
Allen is a US citizen. He is a pirate and roams the Caribbean in his vessel with his fellow pirates looking for a vessel to attack. The "American Glory" is a vessel registered and operating under US laws. Allen's group of pirates boards that vessel and robs the passengers of all their cash and valuables. Allen departs the vessel with his loot and ultimately is captured in Brazil a month later where he is hiding out. He can be prosecuted in Brazil in the basis of the courts: a. Territorial jurisdiction. b. Universal jurisdiction. c. Protective jurisdiction. d. Nationality jurisdiction but only if at least one of the injured passenger was a citizen of Brazil.
Universal jurisdiction.
