BUL 6852 Midterm Review

Currency Option

(also known as a forex option) is a contract that gives the buyer the right, but not the obligation, to buy or sell a certain currency at a specified exchange rate on or before a specified date. For this right, a premium is paid to the seller.

International Law 3 Kinds of Relationships

1. Public International Law (states) 2. Quasi-Public International Law (states and persons) 3. Private International law (person to person)

Indirect Exporting

1. involves an organization sells to an intermediary in its own country. This intermediary then sells the goods to the international market and takes on the responsibility of organizing paperwork and permits, organizing shipping and arranging marketing

General Agreement on Trade in Services (GATS)

1. treaty of the World Trade Organization (WTO) that entered into force in 1995 following the Uruguay Round negotiations. It was created to include services in the multilateral trading system. Ranging from architecture to voice-mail telecommunications, services today form the largest and most dynamic component of developed and developing countries' economies (accounting for more than 60 % of global production and employment, although no more than 20 % of total trade). No services supplied in the exercise of governmental authority No services related to air traffic rights

International Centre for Settlement of Investment Disputes (ICSID)

1966 multilateral treaty formulated by the Executive Directors of the World Bank to further the Bank's objective of promoting international investment. Provides for settlement of disputes by conciliation, arbitration or fact-finding

Charter of Fundamental Rights

2009 EU Law human rights

Basket of Risks

A basket is a set of instruments that are held together because its statistical profile delivers a desired goal, such as hedging a risk or trading it, which cannot be achieved through the individual constituents or even subsets of them

Licensing

A business arrangement in which one company gives another company permission to manufacture its product for a specified payment

Franchise; Franchising

A business system in which private group of individuals is sold the rights of business logo, model, and the name of a much larger company, usually an MNC or Multinational Company by the owners or franchisors to run it in a different location is called as Franchisee Business

Currency Rate Fluctuation

A change in an exchange rate. happen constantly and occur for all floating currencies

Export Management Company (EMC)

A foreign or domestic company that acts as a sales agent and distributor for domestic exporters in international markets

Conflict of Cultural Traditions

An unethical practice in a home country is considered ethically proper in the host country

Nontariff Barriers

A non-tariff barrier is any measure, other than a customs tariff, that acts as a barrier to international trade. These include: regulations: Any rules which dictate how a product can be manufactured, handled, or advertised rules of origin: Rules which require proof of which country goods were produced in quotas: Rules that limit the amount of a certain product that can be sold in a market

Repatriation

Ability of funds to be transferred freely across countries by converting to foreign currency

ATA Carnet

Admission Temporaire - international customs and temporary export-import document. It is used to clear customs in 87 countries and territories without paying duties and import taxes on merchandise that will be re-exported within 12 months

Benefit-Cost Analysis

Attempts to monetize the ethical determination by placing a dollar value on the benefits and costs of an action from the narrow perspective of the decision-maker

Caux Round Table Principles for International Business

Blend the Western concept of the dignity of all human beings with the Japanese concept of kyosei—that a primary value of society is working together for common good

Self-executing treaty

Contains a provision that the treaty will apply to the parties without their having to adopt any domestic enabling legislation

Concession Agreement

Contract that gives a company the right to operate a specific business within a government's jurisdiction or on another firm's property, subject to particular terms

Offset Agreement

Direct offset: the exporter may be required to establish manufacturing facilities in the importing country or to use a specified percentage of the components in the product sold from the importer´s country. Indirect offset: the exporter may be obliged to buy goods o services from the importing country without any link to the product sold

Attorney General Opinion

Establishes a procedure to provide responses to inquiries concerning conformance of an action with the Department of Justice's enforcement policy regarding the FCPA. Issue 30 days after receiving request

Protocols

Etiquette of diplomacy, not usually written down

Eximbank

Export Import Bank (Exim Banks) are government or semi government agencies that ensure the safety and growth of a country's foreign trade. They provide customized financial instruments to safeguard the interests of exporters against default/nonpayment from the importers

Exporting-Importing

Exporting is defined as the sale of products and services in foreign countries that are sourced or made in the home country. Importing refers to buying goods and services from foreign sources and bringing them back into the home country

Jus Cogens

Foundation of respect fundamental principles 1969 Vienna Convention on the Law of Treaties

U.S. Trade and Development Agency (USTDA)

Helps companies create U.S. jobs through the export of U.S. goods and services for priority infrastructure projects in emerging economies

Objective Territoriality

If foreign companies act in ways that directly affect a state other than their own, they may be accountable by the other state

Categorical Imperatives

Immanuel Kant, nonnegotiable duties that were a priori to any utilitarian calculation. Common formulation is that human beings can never be used as a means to an end, all individuals recognized as equal, rational persons. Wrong to subject someone to a risk without their informed consent

Principle of Comity

In situations where 2 nations share common policy and ideas, one of nations submits to laws and judicial decrees of the other

Conventions

Legally binding agreements between states sponsored by organizations such as the UN

Treaties

Legally binding agreements between two or more states

Act of state doctrine

Nation is sovereign over its own territory and its official domestic actions. May not be questioned by the judicial bodies of another country

CE Mark

Obtain the CE Mark are guaranteed access to the markets of all EU Markets. Asserts that the product meets mandatory health, safety, and environmental requirements of the EU

Corporate Codes of Conduct

Often includes integrative ethics approach elements

Caux Round Table Principles for International Business

Principle 1 - Responsibility of business to go beyond shareholders toward stakeholders Principle 2 - Requires that the social and economic impact of business be directed at advancing innovation, justice, and world community Principle 3 - Beyond the letter of law toward a spirit of trust, may not be appropriate for a company to enforce its rights strictly under the law Principle 6 - Respect for the environment, improving the environment, promoting sustainable development, avoiding the wasteful use of natural resources Principle 7 - Avoidance of illicit operations, targets bribery and corruption and their damaging effect on country's development

Amendments of 1988 (FCPA)

Provided more detailed definitions of some of the crucial terms of the FCPA. FCPA does not provide a private right of action. Government only has to prove that a party had reason to know that some of its money would be used to bribe a foreign official

USUS

Requires consistent and recurring action or lack thereof by states

Arbitrage

Simultaneous buying and selling of securities, currency or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset

Doctrine of Sovereign Immunity

State must agree to it, US Foreign Sovereign Immunities Act FISA of 1976

Home Country

The country in which a person was born and usually raised, regardless of the present country of residence and citizenship

International Trade Administration (ITA)

The mission of the International Trade Administration (ITA) is to create prosperity by strengthening the international competitiveness of U.S. industry, promoting trade and investment, and ensuring fair trade and compliance with trade laws and agreements

Opinio Juris Sive Necessitatis

The psychological element must show that states observing the custom must regard it as binding

Privatization

The transfer of a business, industry, or service from public to private ownership and control

Overseas Private Investment Corporation (OPIC)

U.S. development finance institution. This government agency assisted private businesses that wanted to invest abroad. OPIC encouraged development in emerging markets through private sector investment overseas by assisting corporations to analyze and manage riskswhile encouraging development in emerging markets. This helped the agency advance the country's foreign policy and national security goals.

Sale of Services

Usually involve carrying out tasks that have been contractually agreed to be carried out during a period decided by the company

Evergreen Laws

can be entered in a contract by stating that the contract automatically renews on a given day each year if neither side provides notice

Joint Venture

a commercial enterprise undertaken jointly by two or more parties which otherwise retain their distinct identities

Host Country

a country where a company that is based in another country has business activities: When production costs are raised in the host country, the company can easily move its activities to another country

Counter-Purchase

a situation where a seller receives full payment in cash for the goods and services it sells to a foreign country but agrees to spend some portion of the amount received in that same country within a specified time

Foreign Distributor

carry on the responsibility of marketing the manufacturer's product and servicing customers in the local market. The characteristics that contribute to successful distributors are numerous, making it imperative for manufacturers to employ a systematic approach to selection

Jurisdiction, Personal

the judge has the power or authority to make decisions that affect a person. For a judge to be able to make decisions in a court case, the court must have "personal jurisdiction" over all of the parties to that court case

International Court of Justice

the principal judicial organ of the United Nations (UN). It was established in June 1945 by the Charter of the United Nations and began work in April 1946

Consignment

agreement to pay a supplier of goods after the goods are sold

International Chamber of Commerce (ICC)

aims to foster international trade and commerce to promote and protect open markets for goods and services and the free flow of capital. The ICC performs three primary activities: the establishment of rules, dispute resolution, and policy advocacy

Futures Contract

an agreement traded on an organized exchange to buy or sell assets, especially commodities or shares, at a fixed price but to be delivered and paid for later

CIF (Cost, Insurance, and Freight)

an expense paid by a seller to cover the costs, insurance, and freight of a buyer's order while it is in transit. The goods are exported to a port named in the sales contract. Once the freight loads, the buyer becomes responsible for all other costs.

Forward Contract

an informal agreement traded through a broker-dealer network to buy and sell specified assets, typically currency, at a specified price at a certain future date

Comparative Advertising

any advertising which explicitly or by implication identifies a competitor or goods and services offered by a competitor

Technical Barriers

any regulation, standard or procedure that could make exporting goods to another country more difficult. TBTs are often greater obstacles to exporters than tariffs (import fees). Testing or certification procedures are examples of technical barriers to trade

Foreign Credit Insurance Association (FCIA)

association of insurancecompanies that offers insurance to U.S. exporters against nonpayment by foreigncustomers due to commercial and political risks.

WTO Agreements

cover goods, services and intellectual property. They spell out the principles of liberalization, and the permitted exceptions. They include individual countries' commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets. They set procedures for settling disputes. They prescribe special treatment for developing countries. They require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted, and through regular reports by the secretariat on countries' trade policies

Article 38 of the Statute of the International Court of Justice

divides the sources of international law into those of a primary and secondary nature. The primary sources, which the Court will consider in its decisions, include conventions (or treaties), customary law, and general principles recognized by civilized nations.

Foreign Sales Representative

entity or person acting as a foreign representative for a local business. An individual or firm that serves as a foreign representative for a domestic supplier and seeks sales in the foreign country for the supplier

United Nations Commission on International Trade Law (UNCITRAL)

established by the United Nations General Assembly by resolution 2205 (XXI) of 17 December 1966 (see annex I), plays an important role in developing that framework in pursuance of its mandate to further the progressive harmonization and modernization of the law of international trade by preparing and promoting the use and adoption of legislative and non-legislative instruments in a number of key areas of commercial law

Trade Barriers

government policies which place restrictions on international trade. Trade barriers can either make trade more difficult and expensive (tariff barriers) or prevent trade completely (e.g. trade embargo)

United Nations Convention on Contracts for The International Sale of Goods (CISG)

governs contracts for the international sales of goods between private businesses, excluding sales to consumers and sales of services, as well as sales of certain specified types of goods.

Ninth Ministerial Conference (WTO)

held in Bali, Indonesia, from 3 to 7 December 2013, ministers adopted the "Bali Package", a series of decisions aimed at streamlining trade, allowing developing countries more options for providing food security, boosting least-developed countries' trade and helping development more generally

North American Free Trade Agreement (NAFTA)

implemented to promote trade between the U.S., Canada, and Mexico. The agreement, which eliminated most tariffs on trade between the three countries, went into effect on Jan. 1, 1994. Numerous tariffs—particularly those related to agricultural products, textiles, and automobiles—were gradually phased out between Jan. 1, 1994, and Jan. 1, 2008

Trade Facilitation Agreement (TFA)

improve trade efficiency worldwide, encouraging economic growth by cutting red tape at borders, increasing transparency and taking advantage of new technologies.

Trade in Goods

includes all goods which add to, or subtract from, the stock of material resources of a country by entering its economic territory (imports) or leaving it (exports)

Export Trading Company (ETC)

independent company that provides support services for firms engaged in exporting. This may include warehousing, shipping, insuring, and billing on behalf of the client

World Trade Organization (WTO)

intergovernmental organization that regulates and facilitates international trade between nations

Bilateral Investment Treaty (BIT)

international agreements establishing the terms and conditions for private investment by nationals and companies of one state in another state.

Countertrade

international trade by exchange of goods rather than by currency purchase

Foreign Direct Investment (FDI)

investment made by a firm or individual in one country into business interests located in another country

Barter Transaction

involves two parties and is one where one basket of goods and services is exchanged for another basket of different goods and services. without any accompanying monetary payment

Lex Mercatoria

law merchant is used to designate the concept of an a-national body of legal rules and principles, which are developed primarily by the international business community itself based on custom, industry practice, and general principles of law that are applied in commercial arbitrations

Multilateral Investment Guarantee Agency (MIGA)

member of the World Bank Group. Our mandate is to promote cross-border investment in developing countries by providing guarantees (political risk insurance and credit enhancement) to investors and lenders

Remarketer

merchant or export agent who purchases goods and services directly from the producer, packing and marking the goods in line with his or her own specifications. Remarketers will then sell these goods and services abroad via their contacts in their own names and take over all risks

Disagio

negative difference between the face value of a security or loan and its actual, lower price.

International Law Covers

o Common (case) o Civil (statutory law) o Substantive

Consent of particular state can be found in

o Declarations of its government o Domestic legislation o Its court decisions o Treaties to which it is a party

Option Contract

offers the buyer the opportunity to buy or sell—depending on the type of contract they hold—the underlying asset. Unlike futures, the holder is not required to buy or sell the asset if they choose not to

Hedging

strategically using financial instruments or market strategies to offset the risk of any adverse price movements. Put another way, investors hedge one investment by making a trade in another

Expropriation

the act of a government claiming privately owned property against the wishes of the owners, ostensibly to be used for the benefit of the overall public

Nationalization

the transfer of a major branch of industry or commerce from private to state ownership or control

Free Trade Agreement (FTA)

pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange

Uruguay Round

participants had agreed on a package of cuts in import duties on tropical products — which are mainly exported by developing countries. They had also revised the rules for settling disputes, with some measures implemented on the spot. And they called for regular reports on GATT members' trade policies, a move considered important for making trade regimes transparent around the world

Buying Agent

people or companies that offer to buy goods or property on behalf of another party

Transfer Pricing

price at which related parties transact with each other, such as during the trade of supplies or labor between departments. Transfer prices are used when individual entities of a larger multi-entity firm are treated and measured as separately run entities

Customs Broker

private individuals, partnerships, associations or corporations licensed, regulated and empowered by U.S. Customs and Border Protection (CBP) to assist importers and exporters in meeting Federal requirements governing imports and exports

Convertibility

quality that allows money or other financial instruments to be converted into other liquid stores of value. Convertibility is an important factor in international trade, where instruments valued in different currencies must be exchanged

Customary International Law

refers to international obligations arising from established international practices, as opposed to obligations arising from formal written conventions and treaties

Freight Forwarder

responsible for the transportation of goods between one destination and another. They act as an intermediary between the shipper and transportation services, liaising with various carriers to negotiate on price and decide on the most economical, reliable and fastest route

Jurisdiction, Subject Matter

the authority or power that each court has over certain types of legal disagreements (disputes). For a court to hear a particular case, it must have subject matter jurisdiction over the issue or issues that you are asking the court to decide on

General Agreement on Tariffs and Trade (GATT)

signed on October 30, 1947, by 23 countries, was a legal agreement minimizing barriers to international trade by eliminating or reducing quotas, tariffs, and subsidies while preserving significant regulations. The GATT was intended to boost economic recovery after World War II through reconstructing and liberalizing global trade

Commission Agent

someone who sells a company's products and receives a part of the money paid for the goods for doing this

Buy-Back

the buying back of goods by the original seller. The buying back by a company of its own shares. A form of borrowing in which shares or bonds are sold with an agreement to repurchase them at a later date

Global Supply Chain

the worldwide system that a business uses to produce products or services

U.S. Commercial Service (CS)

to promote the export of goods and services from the United States, particularly by small- and medium-sized businesses; to represent U.S. business interests internationally; and to help U.S. businesses find qualified international partners