CHAPTER 25 International Law and Global Commerce

civil law systems

Systems of law that are drawn largely from the Roman law heritage, which uses written law as the highest source, and opt for a systematic codification of general law principles.

European Court of Justice

The court that functions as the final arbiter of the codes governing European Union member states.

International Court of Justice

The judicial branch of the United Nations, charged with settling legal disputes submitted to it by member states and giving advisory opinions on legal questions submitted to it by duly authorized international organs, agencies, and the U.N. General Assembly. Also known as World Court.

The parties to an international dispute are typically corporations or government entities, while domestic dispute resolution can involve relatively small claims by individuals. True or False

True

Terms of Reference

Under the ICC Rules of Arbitration, a document known as ( )—containing a summary of the parties' claims, a list of issues to be determined, and applicable procedural rules—must be drafted and submitted to the arbitrator and the opposing party.

Modern International Law

a body of rules and principles of action binding on countries, international organizations, and individuals in their relations with one another.

treaty

any agreement between two or more nations to cooperate in a certain manner.

foreign offical

any officer or employee of a foreign government or any department, agency, or instrumentality thereof.

Vienna Convention on the Law of Treaties

effective in 1980, has become one of the standards used by courts and other tribunals when interpreting treaty law.

International Law

has traditionally been defined in very broad terms; it is not limited simply to rules that are applied to settle disputes in court. Rather, it is influenced by a combination of law, religious tenets, and diplomatic relations between nations.

Mixed legal systems (also known as hybrid or composite legal systems)

include not only political entities in which two or more systems apply cumulatively or interactively but also entities in which there is a combination of systems as a result of more or less clearly defined fields of application.

France enacted a national law pertaining to the import and export requirements for certain types of wine. If the United States defers to the French law and honors its import and export requirements, it is exhibiting A) comity. B) sovereign immunity. C) protocol. D) convention.

A

U.N. Convention on Contracts for the International Sale of Goods (CISG)

A trade agreement developed by the U.N. Commission on International Trade Law to establish uniform rules for drafting certain international sales contracts.

General Agreement on Tariffs and Trade (GATT)

A treaty designed to facilitate international trade; administered by the World Trade Organization.

The three primary sources of international law are A) copyrights, patents, and trademarks. B) preamble, amendments, and articles. C) civil law systems, common law systems, and religious-based legal systems. D) treaties, customs, and judicial decisions.

D

Sovereign Immunity

Long-standing doctrine of international law that holds that, with some exceptions, nations are exempt from jurisdiction by other nations' courts.

INTERNATIONAL MEDIATION

Mediation and conciliation both involve a consensual (rather than adjudicative) process, often with the involvement of a neutral third party.

Comity

is the general notion that nations will defer to and give effect to the laws and court decisions of other nations. However, this is not a legal doctrine that requires courts to accept the judgments of foreign courts. Rather, it is rooted in the idea that reciprocal treatment is a necessary element of international relations.

Religious-based legal systems

legal doctrines and guidelines directly based on certain religious tenets

World Intellectual Property Organization Copyright Treaty

was passed to provide uniform copyright protection to computer programs and to certain protectable databases. It also affords authors with specific rights over the sale and distribution of their works that they may not have under the Berne Convention alone.

United Nations (U.N.)

which was created after World War II to facilitate common international concerns on defense, trade, the protection of human rights, and other matters.

Quarter Inc. is an Italian company that set up its ventures in the United States. It sells watches—designed and manufactured in Italy—in the United States. For the past few months, Quarter Inc. has not been doing well and has not paid rent for its establishment. According to the Foreign Sovereign Immunities Act (FSIA), which of the following most likely applies to Quarter Inc.? A) Quarter Inc. can be legally charged because sovereign immunity does not apply to foreign entities engaged in a commercial enterprise on U.S. soil. B) Quarter Inc. cannot be legally charged because as a foreign entity, it is exempt from prosecution based on sovereign immunity. C) Quarter Inc. can be legally charged only if Italy recognizes U.S. laws and defers to them under the concept of comity. D) Quarter Inc. cannot be legally charged because as a foreign entity, it cannot be tried in a U.S. court of law.

A

The _____ provides that its International Arbitration Rules apply only in the absence of any designated rules. A) American Arbitration Association (AAA) B) International Chamber of Commerce (ICC) C) London Court of International Arbitration (LCIA) D) International Court of Arbitration

A

Which international legal systems use written law as their highest source of law? A) Civil law systems. B) Mixed legal systems. C) Common law systems. D) Religious-based legal systems.

A

Which of the following is true of the International Court of Justice? A) It gives advisory opinions on legal questions submitted to it by duly authorized international organs. B) It is the final arbiter of the codes governing European Union (EU) member countries. C) It is intended to promote stability of international currencies and provide temporary assistance for countries to help prevent the collapse of their economies. D) It coordinates aid to developing international organizations and takes steps toward eliminating bribery and other corruption from developing economies.

A

Foreign Sovereign Immunities Act (FSIA)

A federal statute that incorporates the concept of sovereign immunity by explicitly prohibiting U.S. courts from rendering judicial actions against foreign nations or their government officials unless the foreign nation has waived its immunity, is engaged in a commercial enterprise on U.S. soil, or has taken actions that have a direct effect on U.S. interests.

Berne Convention Agreement

A multinational agreement covering copyright protection; requires that foreigners from signatory countries be granted protection, via reciprocity, under the copyright laws of any other member country.

Paris Convention agreement

A multinational agreement covering patents; requires signatory countries to protect the same inventor rights under any member country's patent laws as those enjoyed by citizens of that member country.

Madrid Protocol (2003)

A multinational agreement that aims to facilitate multinational protection of trademarks through the use of a uniform, single-source process.

Agreement on Trade-Related Aspects of Intellectual Property (TRIPS)

A multinational agreement that covers minimum requirements and standards for all areas of intellectual property protection and provides an infrastructure for enforcement and dispute resolution.

1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards

An international treaty established in 1958 that allows for the enforcement of arbitration awards in many major countries, provided that the arbitration is international.

Which of the following statements is true of international arbitration? A) International arbitration awards can only be enforced in the country that the dispute originates in. B) International arbitration usually has no connection with the country in which the arbitration is being held. C) Arbitration is only considered international if the subject matter of the dispute involves two states from a country. D) Arbitration that is international is always administered by a single, universal arbitration forum.

B

Which of the following is true of common law systems? A) They operate in countries that have drawn their body of law largely from Roman law heritage. B) They rely heavily on written codes to define their laws and do not favor the notion of courts filling in any gaps in the statutes. C) They strongly favor use of case law, as opposed to legislation, as the ordinary means of expressions of general law. D) They are used exclusively by European, Latin American, African, and Asian countries.

C

Which of the following is true of sovereign immunity? A) It allows no exceptions. B) It cannot be waived by a foreign country. C) It exempts nations from jurisdiction by other nations' courts. D) It prevents governments from fulfilling contractual obligations.

C

private international law

Category of international law principles that focuses on the regulation of private individuals and business entities.

Public international law

Category of international law principles that primarily addresses relations between individual countries and international organizations.

Which of the following statements accurately describes a feature of the U.N. Convention on Contracts for the International Sale of Goods (CISG)? A) The CISG provisions apply to transactions in which one party is a nonmerchant. B) The CISG gives buyers an absolute right and obligation to cure. C) The CISG requires an offer for the sale of goods to have complete terms in order to be valid. D) The CISG specifically provides that contracts are not subject to requirements as to format.

D

This INCO term has the universal meaning that the parties understand the goods will not be transported by the seller.

Ex Works (EXW)

The seller's expense and risk of loss end when the seller delivers good to the freighter ship, The buyer is responsible for the freighter delivery charges and any losses occurring en route to delivery is known as

FOB (Free on board)

Mediation and conciliation are growing in popularity as international dispute resolution procedures. Both involve an adjudicative process, always without the involvement of a neutral third party. True or False

False

Private international law primarily addresses relations between individual countries and international organizations. True or False

False

Similar to the U.S. Constitutional requirement that full faith and credit be given to judgments of the courts of sister states, the principle of comity requires that courts of one nation accept the judgment of a foreign court. True or False

False

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards resulted in the limited enforceability of arbitration awards worldwide. True or False

False

The World Trade Organization (WTO) is intended to promote stability of world currencies. True or False

False

The International Court of Justice sits in Luxembourg and is the final arbiter of the codes governing European Union (EU) member countries. True or False

False (This is the European Court of Justice)

Foreign Corrupt Practices Act (FCPA)

Federal legislation enacted in 1977 that prohibits corporate bribery of foreign officials; requires corporations to keep accurate books, records, and accounts; and requires issuers registered with the Securities and Exchange Commission to maintain a responsible internal accounting control system.

The seller provides transportation at the seller's expense only to the carrier named by the buyer

Free carrier (FCA)

U.N. Convention on Contracts for the International Sale of Goods (CISG)

In 1988, the United States became a signatory nation to a U.N. treaty that attempts to establish an international commercial code. This governs transactions between any of its 79 ratifying countries (as of March 2013).

Ad Hoc Arbitration Rules

Rules such as those set out in the U.N. Commission on International Trade Law (UNCITRAL) Arbitration Rules serve to bridge the gap for parties who are unwilling to incur the additional expense involved in using the services of an arbitration body but who Page 801do not wish to spend time agreeing to the details of a procedure to govern their arbitration.

The International Chamber of Commerce provides international abbreviations, known as INCO terms

Standardized contractual terms and designations used in international and some domestic sales contracts to avoid confusion due to language barriers and differing legal systems.

International Organizations

These play a unique role in the development of international law. They are typically structured through use of multinational representation and are created and regulated by treaty.

Common Law systems

This law system takes on a variety of cultural and legal forms throughout the world. generally includes countries whose law, for the most part, is technically based on English law concepts and legal organizational methods that strongly favor the use of case law, as opposed to legislation/statutes, as the ordinary means of expressions of general law.

Paris Convention

This was the first multinational agreement to establish minimum requirements for trademark protection, and a general agreement by its signatories established protections against unfair competition.

Public international law addresses relations between individual countries and international organizations. True or False

True

The General Agreement on Tariffs and Trade (GATT) includes minimum requirements and standards for all areas of intellectual property protection and provides an infrastructure for enforcement and dispute resolution. True or False

True

Customs--Customary law

this law follows the basic principle of international law that individual conduct is permitted unless expressly forbidden. Therefore, prohibitions as well as affirmative practices must be proved by the state relying on them.