Chapter 24

Civil Law

The official source of law is statutory code. Courts may not depart from the code and develop their own laws. Areas include: Eastern & Western Europe, Latin American, Japan, Russia, and Scandinavia.

comity

Willingness of one nation to deter and give effect tot the laws and judicial decrees of another country. Based on courtesy and respect. Helps prevent courts from becoming entangled in foreign affairs.

Continents Two Corporation, a U.S. firm, establishes a wholly owned subsidiary firm in Argentina. In this situation, Continents Two retains complete control and authority over a. all of the operation. b. only the part of the operation in the United States. c. none of the operation. d. about half of the operation.

A. All of the operation

The government of the United States and the governments of other nations have the power to enforce their respective national laws within their borders. The power to enforce international law within the borders of all nations rests with a. no court or international organization. b. the European Union. c. the International Court of Justice. d. the United Nations General Assembly.

A. No court or international organization

Sudan seizes the assets of Triage Medico, Inc., a U.S. firm. Triage's recovery from Sudan in a U.S. court may be prevented by a. the act of state doctrine. b. the doctrine of sovereign immunity. c. the Foreign Corrupt Practices Act. d. the principle of comity.

A. The act of state doctrine

International Principles/Doctrine

Comity, Act of State, and Sovereign Immunity

What are the four common legal systems?

Common law cCvil law Islamic law Mixed systems

International Organization

Composed mainly of officials of member nations and usually established by a treaty. U.S. is a member of more than 100 multilateral and bilateral organizations.

Export Controls

Congress cannot impose any export taxes, but it can use other devices to restrict or encourage exports: Export quotas, restrictions on technology exports, and incentives & subsidies.

How does international differentiate from Domestic Law?

Consists of rules that countries agree to follow. There's no global authority for enforcing international law which has "soft" enforcement.

Franchising

Contractual transfer or licensing of a bundle of IP rights know-how, and/or business plan in return for a fee, or royalty

Common Law

Courts independently develop the rules governing certain areas of law. These common law rules apply to all areas not covered by statutory law. Doctrine of Stare Decisis. Places include Great Britain, U.S., Australia, and Canada.

sovereign immunity

Courts of one country cannot hear cases brought against the government of another country. Codified as foreign services immunity act. Several exceptions: Commercial activity, waiver, violation of international law, and torts.

Islamic Law

Muslim legal system, may be based partly on civil or common, but emphasizing principles set forth in the Koran. Also known as Sharia or divine Law, popular in Saudi Arabia and Afghanistan

The chief aim of the European Union and other trade organizations is to minimize trade barriers among their members

True

The doctrine of sovereign immunity can immunize a foreign nation from the jurisdiction of U.S. Courts

True

International Law

"A body of law - formed as a result of international customs, treaties and organizations - that governs relations among or between nations."

Licensing

An agreement where a U.S. Firm permits a foreign company to use IP rights such as copyrights, trademark, patent, trade secret) for a fee or royalty.

Chile has a civil law system. In theory, in this system, the courts a. are obligated to follow the doctrine of stare decisis. b. may not develop their own laws. c. must create new rules of law. d. must develop legal concepts by case law.

B. May not develop their own laws

Business Abroad, Inc., a U.S. firm, obtains a judgment in a U.S. court against Quang Tri, Ltd., a Vietnamese business. Whether the court's judgment will be enforced by a court in Vietnam depends on the Vietnamese court's application of a. the act of state doctrine. b. the doctrine of sovereign immunity. c. the principle of comity. d. the World Trade Organization.

C. The principle of comity

The Association of Southeast Asian Nations is a regional trade association that was created through a. a bilateral agreement. b. a lateral agreement. c. a multilateral agreement. d. a unilateral agreement.

C. a multilateral agreement

Diners Corporation, a U.S. firm, signs a contract with Essen, A,G., a German firm, to give Essen the right to use Diners' trademark in restaurants in Germany. This is a. a distribution agreement. b. a joint venture. c. direct exporting. d. licensing.

D. Licensing

In the global environment of business, the law of a particular nation, such as Brazil, China, or India, is classified as a. environmental law. b. global law. c. international law. d. national law.

D. National law

Michael, a citizen of Ireland, and Nina, a citizen of the United States, enter into a contract. When Nina breaches the contract, Michael obtains an award of damages in an Irish court. He asks a U.S. court to enforce the award. The U.S. court defers to and enforces the Irish court's decree. This is a. a travesty of justice. b. the act of state doctrine. c. the doctrine of sovereign immunity. d. the principle of comity.

D. The principle of comity

The United States taxes each barrel of imported oil at a flat rate. This is a. an antidumping duty. b. a dumping duty. c. a quota. d. a tariff.

D. a Tariff

act of state

Doctrine that prohibits the courts of one country from examining the validity of legislative or executive acts of another country. Taking of private property; Expropriation - proper purpose and Confiscation - illegal purpose.

Direct Exporting

Exporter assumes responsibilities for most of all export functions

Indirect Exporting

Exporter uses "specialized intermediaries" to undertake export functions

A treaty is a contract or other agreement between two or more nations that must be ratified by the United Nations to take effect

False

Confiscating property without compensation does not normally violate principles of international law

False

Firms overseas have almost total legal protection against government acts in the countries in which they operate, under the act of state doctrine.

False

U.S. Anti-discrimination laws, as they affect employment relationships, generally do not apply extraterritorially.

False

International customs

Includes those commonly accepted rules of conduct that, through a consistent and long-standing practice, nations have followed out of sense of binding obligation.

government controls overtrade include:

Investment protections Export Controls Import Controls

Import controls

Prohibition, Quotas, tariffs, and anti-dumping duties

Minimizing Trade Barriers

Restrictions on imports are also known as trade barriers. The elimination of trade barriers is sometimes seen as essential to the world's economic well-being. -European Union -NAFTA -CAFTA-DR -KORUS-FTA

Foreign Direct Investment

Some U.S. firms expand into foreign markets by establishing a wholly-owned subsidiary or by entering into a joint venture with a company a company already in the foreign market.

What are the three primary sources of International law?

Treatises and international agreements, international customs, international organizations.

Law of treatises

Treatises are bilateral agreements between two or more nations. Bilateral's are formed by two nations. Multilateral are formed by several nations.

A party to a licensing agreement generally agrees to pay royalties on some basis.

True

An international custom is a general practice accepted in the international arena as law

True

Confiscation occurs when a government seizes private property for an illegal purpose and without just compensation

True

Restrictions on imports may include tariffs

True

Exporting

shipment of goods or rendering of services to a foreign buyer. Two types: Direct and Indirect.