Module 7 - Chapter 7 Reading: International & Space Law

International Principles and Doctrines

- Principle of Comity: nations will defer to and give effect to laws and judicial decrees of other nations when those laws are consistent with their own (ie: US court ordinarily will recognize and enforce a default judgment when one party failed to appear in court from an Australian court bc the legal procedures are compatible in both nations) - Act of State Doctrine: US courts will avoid passing judgment on the validity of public acts committed by a recognized foreign government within its own territory - Doctrine of Sovereign Immunity: foreign nations are immune from US jurisdiction under the Foreign Sovereign Immunities Act when certain circumstances are satisfied

Roles of International Organizations

- adopt resolutions, declarations and other types of standards that often require nations to behave in a particular manner - create uniform rules in certain areas (ie: United Nations Commission on International Trade Law has made considerable progress in establishing uniformity in International law as it relates to trade and commerce)

How does the World Trade Organization WTO minimize trade barriers among nations?

- establish normal trade relations status - this means each member is obligated to treat other members at least as well as it treats the country that receives its most favorable treatment with regard to imports or exports

What is the difference between expropriation and confiscation?

- expropriation: occurs when a government seizes privately owned business or privately owned goods fora proper public purpose and awards for just compensation - confiscation: when a government seizes private property for an illegal purpose or without just compensation

What is franchising and what are the benefits of it?

- franchising is a form of licensing where an owner of a trademark, trade name, or copyright licenses another to use the mark, name, or copyright under certain conditions in the selling of goods or services - this form of licensing allows the franchisor to maintain greater control over the business operations than is possible with most other licensing agreements

Three Sources of International Law

- international customs - treaties - international organizations

Why do US firms license foreign manufacturing companies to use its copyrighted, patented, or trademarked intellectual property or trade secrets?

- reach a wider audience worldwide and get paid in royalties (aka so many cents per unit produced or a certain percentage of profits from units sold in a foreign country)

Source #3: International Organizations

- refers to an organization that is composed mainly of member nations and usually established by treaty ie: the US is a member of more than one hundred bilateral and multilateral organizations, including at least twenty through the United Nations

What is the difference between subsidiaries and joint ventures?

- subsidiaries: when established in another country, the parent company retains complete ownership of all the facilities in the foreign country, as well as total authority and control over all phases of the operation - joint venture: US company owns only part of the operation; the rest is owned by local owners in the foreign country or by another foreign entity; all firms involved share responsibilities, profits, and liabilities

How does the New York Convention affect arbitration agreements?

- they assist in the enforcement of arbitration clauses - the convention requires courts in nations that have signed it to honor private agreements to arbitrate and recognize arbitration awards made in other contracting states

Source #2: Treaties

- treaty: an agreement or contract between two or more nations that must be authorizes and ratified by the supreme power of each nation - bilateral agreements (between two nations) - multilateral agreements (multiple nations)

Why would a US firm enter into a distribution agreement?

- when a foreign country represents a substantial market, a US firm may wish to appoint a distributor located in that country - agreement that sets out the terms and conditions of the distributorship, such a price, currency of payment, availability of supplies, and method of payment - disputes concerning these agreements may involve jurisdictional or other issues, as well as contract law

How can Congress restrict or encourage exports? (remember: congress cannot impose any export taxes)

1. export quotas, ie: how much grain is sold abroad 2. restrictions on technology exports: under the export administration act, the flow of technologically advanced products and technical data can be restricted 3. incentives and subsidies: the US uses incentives and subsidies to stimulate certain exports and thereby aid domestic businesses

What are the types of restrictions the US has on imports?

1. prohibited goods: no goods can be imported from nations that have ben designated enemies of the US; also illegal drugs, agricultural products that pose dangers to domestic crops or animals 2. quotas: the US has a limit on the number of automobiles imported from countries like Japan 3. tariffs: raise the prices of imported goods, causing consumers to purchase domestically manufactured goods instead of imported

What four things need to be true in order for a court to compel the parties to arbitrate their disputes

1. there is a written or recorded agreement to arbitrate the matter 2. the agreement provides for the arbitration in a convention signatory nation 3. the agreement arises out of a commercial legal relationship 4. one party to the agreement is not a US citizen; in other words, both parties cannot be US citizens

What circumstances need to be present in order for a foreign state to not be immune to the sovereign immunity doctrine?

1. when the foreign state has waived its immunity either explicitly or by implication 2. when the foreign state has engaged in commercial activity within the United States or in commercial activity outside the US that has a direct affect in the US 3. when the foreign state has committed a tort in the US or has violated certain international law 4. when a foreign state that has been designated a state sponsor of terrorism is sued under the FSIA for personal injury or death that was caused by an act of torture or a related act of terrorism

Act of State Doctrine example:

Flaherty Ics. a US Company, owns a mine in Argentina. The government of Argentina seizes the mine for public use and claims that the profits that Flaherty realized from the mine in preceding years constitute just compensation. Flaherty disagrees, but the act of state doctrine may prevent the company's recovery in US Court

Differences between International and National Law

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

What is dumping?

Selling goods in another country below market prices (aka "less fair than fair value") - to prevent this, an extra tariff called the antidumping duty ay be assessed on the imports

TRUE OR FALSE: If a sales contract does not include an arbitration clause, litigation may occur.

TRUE

US AntiTrust Laws

They may subject firms in foreign nations to their provisions, as well as protect foreign consumers and competitors from violations committed by U.S. citizens.

What treaty provides a framework for international space law?

UN Treaty on Principles Governing the Activities of States in the Exploration and Use, including the Moon and Other Celestial Bodies aka Outer Space Treaty - expresses general principles that have been expanded and applied in subsequent treaties - outer space is free for exploration and use of all nations - the moon, planets, asteroids, and other celestial bodies are not subject to the appropriation of any single nation - space objects used for solely peaceful purposes

what is the difference between choice of law clause and forum selection clause?

choice of law: designates the applicable law for a sales contract litigation forum selection: indicates what court, jurisdiction, or tribunal will decide any disputes arising under the contract

Source #1: International Customs

customs that have evolved among nations in their relations with each other over time

Direct vs. Indirect Exporting

direct: US Company signs a sales contract with a foreign purchaser that provides for the conditions of shipment and payment for goods indirect: if sufficient business develops in a foreign country, a US corporation may set up a specialized marketing organizations in that foreign market by appointing a foreign agent or distributor

How can foreign investments be protected from confiscation?

guaranties such as statutory laws or provisions in international treaties can ensure compensation if property is confiscated

What are the advantages of establishing foreign manufacturing facilities?

lower costs, fewer government regulations, and lower taxes and trade barriers - typically US firms establish manufacturing plants abroad if they believe that doing so will reduce their costs, particularly for labor, shipping, and raw materials

What federal law allows US citizens to file civil actions in US courts for torts that were committed overseas?

the Alien Tort Statute

Do antidiscrimination laws apply extraterritorially?

yes; laws such as American with Disabilities Act, Age Discrimination, and Title VII all apply abroad unless abiding by them violates the laws of the country where their workplaces are located