Chapter 46- International Law

EU

'erased' boundaries between member states in addition to trade

T/F: Many countries have entered into agreements to facilitate trade with certain regions of the world. Two examples of these Regional Trade Communities are the European Union (EU) and Central American Common Market (CACM).

True

T/F: The FCPA applies even if the payment (bribe) is made outside of the United States.

True

T/F: The World Trade Organization (WTO) is a global organization dealing with the rules of trade among nations.

True

T/F: The most important multilateral trade treaty is probably the General Agreement on Tariffs and Trade (GATT).

True

T/F: The name of the law that prohibits U.S. companies from paying or offering to pay bribes to foreign government officials, political party officials, agents or relatives to induce them to misuse their official position is called the Foreign Corrupt Practices Act (FCPA).

True

Generally, which law applies to contracts for the sale of goods in the United States?

Uniform Commercial Code (UCC)

International Treaties and Agreements

between independent nations; General Agmt on Tariffs & Trade (GATT) created World Trade Organization. Member states agree to give 'most favorable trade relation' status (now called Normal Trade Relations) to other members, which means can move goods/services more easily.

International Court of Justice

branch of U.N., but only jurisdiction over nations, not individuals, and the decision can be ignored because no way to actually enforce

CISG

convention on contracts for international sale of goods; used internationally and has problems for US people such as no requirement for written contracts and might not get what you ordered

Sovereign Immunity

each country has absolute and total authority over events occurring within its territory and a foreign country is generally free from court system in host country

Confiscation

government does NOT pay just compensation or takes for non-public purpose (wrongful/illegal)

Expropriation

government does pay 'just compensation' for a property taken for public purpose; legally is okay as long as fair compensation is paid

How to avoid problems in international law?

have a good contract and use arbitration to resolve disputes; consider using "choice of law" clause

Methods to establish business internationally

import, export, license, franchise, different foreign investment

Problem with international law

it's more difficult to enforce Interational laws since no compulsory jurisdiction in international courts; no single body of law applies, may conflict from one country to another, many sources of law

Regional Trade Communities

member states get even greater benefits to increase trade than members of WTO such as NAFTA

What does international business involve?

new risks and new laws

Foreign Corrupt Practices Act

prohibits US companies from bribing foreign governemnt officials to obtain/maintain a business; also imposes record-keeping requirements on SEC traded companies (applies to US citizens) and harsh civil/criminal penalities

Nontariff Barriers

quotas, bans, safety standards, and subsidies

What does international law cover?

relationships between different nations, international organizations and persons

Act of State Doctrine

rule that a court should not question the validity of actions taken by a foreign government in its own country

USMCA

to eliminate trade barriers, free competition, encourage investment, IP enforcement

UCC

uniform commercial code; used for US contracts for the sale of goods, need to be over $500 to be enforceable and can require 'perfect tender' of goods, there is no writing requirement

For international contracts for the sale of goods (not consumer goods), which law applies - and do you get "Perfect Tender"?

Convention on Contracts for the International Sale of Goods (CISG) and NO - you do not get "Perfect Tender

You are purchasing goods from a company located outside the United States. What is the name of the contract provision (clause) would you want to include in your contract to specify which law you want to apply?

Choice of law clause

Internationally, which of the following refer(s) to the governmental seizure of foreign-owned property for a public purpose where the owner is paid just compensation (i.e., fair compensation)?

Expropriation and Nationalization

T/F: If you are in compliance with the United States laws for patents, trademarks and copyrights (collectively, intellectual property), then your intellectual property will automatically be protected in countries outside of the United States.

False

T/F: In the United States, the taking of property by the government for a public purpose and with just compensation (i.e., fair compensation) is called Confiscation.

False

T/F: "Dumping" is the sale of exported goods from one country to another country at less than normal value.

True

T/F: If you choose to use a Letter of Credit, this means that as the seller, you will receive payment from the buyer's bank.

True

You are selling goods to a company located outside the United States. You have never done business with this particular company, and you are understandably concerned about the risk of getting paid. In this situation, you can greatly reduce your payment risk by using which of the following?

Letter of Credit

T/F: In the United States, the taking of property by the government for a public purpose and with just compensation (i.e., fair compensation) is called Eminent Domain.

True

Purpose of International Treaties/Agreements

Purpose is to reduce trade barriers between nations, minimize tariffs, quotas, unnecessary restrictions (standards), anti-dumping, and other barriers to trade that tend to reduce competition

A duty or tax paid on imported goods moving into or out of a country, and which has the effect of being a barrier to international trade and protecting domestic (United States) markets, is called a:

Tariff

The legal doctrine that prohibits the courts of one country from "sitting in judgment on the acts of the government of another done within its own territory" is called:

The Act of State Doctrine

T/F: Internationally, if foreign-owned property is seized by the government but the owner is not paid anything, this is called Confiscation.

True