JD BUSINESS LAW CHAPTER 24 INTERNATIONAL LAW
How does civil law system work
In civil law system, the primary source of law is statutory codes which the courts interpret for individual cases but the court may not depart from the code and develop their own law. In theory, the code sets forth all principles needed for the legal system
what is "commercial activity" under FSIA
It is defined as a regular course of commercial conduct, transaction or act that is carried out by a foreign state within the US but it is up to courts to decide if a particular activity is governmental or commercial
What regional trade agreements/associations also serve this purpose
The European Union, the North American Free Trade Agreement, The Central America-Dominican Republic US Free Trade Agreement and The Republic of Korea-US Free Trade Agreement
what entity has created uniform rules for trade
The United Nations Commission on International Trade Law
Under NEI, how was export financing changed
Under the NEI, the Export-Import Bank fo the US increased the financing available to small and medium sized businesses by 50%.
What is the WTO and what is its purpose
World Trade Organization which was established to minimize trade barriers between nations
what is the export promotion cabinet
a component of the NEI made up of officials from 16 govt agencies and departments. All cabinet members must submit detailed plans to the president outlining seips they will take to increase exports.
what is Sharia
a comprehensive code of principles that govern both the public and private lives of persons of Islamic faith. It directs aspects of day to day life like politics, economics, banking, business law, contract law and social issues.
In joint venture who shares in responsibilitiy, profits and liabilities of the venture
all of the firms involved
what US laws have extraterritorial application
antitrust laws, Alien Torts ACt and Anti-discrimination laws.
US uses what system
common law
what are quotas
limits on the amounts of goods that can be imported.
when is a foreign state not immune:
1, when the foreign state has waived immunity either explicitly or by implication 2. when the foreign state has engaged in commercial activity w/i the US or in commercial activity outside the US that has a "direct effect on the US" 3. when the foreign state has committed a tort in the US or has violated certain international laws
What types of controls are imposed on international agreements
1. 1. investment protections 2. export controls 3. import controls
what are the 3 important legal principles that are employed by courts of various nations to resolve or reduce conflicts that involve a foreign element
1. The principle of comity 2.The Act of State Doctrine 3. The doctrine of sovereign immunity
What are the two ways US does business internationally
1. export 2. establish foreign production facilities whci may provide lower labor cost, fewer govt regulations, lower taxes and trade barriers 3. licensing technology to an existing foreign company or sell franchises to overseas entities.
so how does Congress restrict or encourage exports
1. export quotas 2. restrictions on technology exports 3. incentives and subsidies imposed to stimulate exports and aid domestic business
what are the sources of international law
1. international customs 2. treaties 3. international agreements
what are the ways that a US company does manufacturing abroad
1. licensing: allows freign firm to use an established brand name for a fee 2. franchising where owner of trademark, tradename or copyright licenses another to use the mark in selling of goods and services 3. invest in wholly owned subsidiary or joint venture
what is the foremost law on international trade
1980 convention on Contract for the International Sale of Goods (CISG) - like UCC it spells out duties of international buyers and sellers
what does the Sherman ACt control
Any conspiracy that has a substantial effect on US commerce is w/i reach of Sherman act. It applies even if the violation occurs outside US and foreign govts and business can be sued for violations
Who is in NAFTA and how does it work
Canada, Mexico and US- goal was to eliminate tariffs amoung the three nations on substantially all goods by reducing tariffs incrementally over time. It gives the 3 countries na competitive advantage by retaining tariffs on goods imported from other countries and eliminates barriers that have prevented cross border movement.
How does the WTO minimize barriers
Each member of the WTO is required to grant NORMAL TRADE RELATIONS STATUS to other member countries- this means that each member is obligated to treat other members at lease as well as it treats the country that receives its most favorable treatment with regard to imports or exports
what is the effect of choice of law and choice of forum clauses
If the contract does not have an arbitration agreement, these clauses identify what forum and what forum law will decide a dispute. without these, there is no way to determine where the matter should be heard or whether any decision will be effective
How does trial procedure differ between common and civil law systems
In civil law systems, judges actively question witnesses.
How does a common law system work
In common law system, the courts independently develop the rules governing certain areas of law like torts and contracts and these common law rules apply to all areas not covered by statutory law and doctrine of stare decisis obligates judges to follow precedential decisions for consistency through judges may modify or overturn precedent
what is the National Export Initiative
Initiative created by the Obama administration with goal of doubling exports (and to reduce outsourcing)
what agency investigates allegations that imported goods infringe US patents and imposes penalties if needed
International Trade Commission
what US agencies are instrumental in imposing anti-dumping duties
International Trade Commission and International Trade Administration
disputes as to resolutions created by international organizations are heard by whom
International court of justice - though normally only has authority when nations voluntarily submit to its jurisdiction
what is the principle of commity
It refers to legal reciprocity. One nation will defer and give effect to the executive/legislative/and judicial acts of another country as long as the acts are consistent with the law and public policy of the accomodating nation (ex. US court will recognize and enforce a default judgment from Austrailian court, ex: nearly all nations recognize validity of marriage decree issued elsewhere)
what anti discrimination laws of US have extraterritorial impact
The Age Descrimination in Emplooyment act, federal laws re: discrimination on race/color/origin, religon, gender, age and disability, Title VII of the Civil Rights Act of 1964
What is the New York Convention
The UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards - it assists in the enforcement of arbitration clauses and requires courts in nations that have signed it to honor private arbitration agreements and recognize arbitration awards in other contracting states. - implemented in nearly 100 countries.
what is direct exporting
US company signs sales contract with foreign purchaser that provides for the conditions of shipment and payment for the goods.
what goods are prohibited from import
Under Trading with the Enemy Act of 1917, no goods may be imported from nations that have been designated enemies of the US, also other laws prohibit importing illegal drugs, books that urge insurrection against the US, agricultural products that pose danger to domestic crops or animals or imporation of goods that infringe US patents.
what is a bilateral agreement
an agreement formed by two nations to govern their commercial exchanges or other relations with one another
what is a treaty
an agreement or contract between 2 or more nations that must be authorized and ratified by the supreme power of each nation
what anti-dumping measures are in place to prevent it
an extra tariff, known as the antidumping duty may be assessed on imports to prevent this
what investment protections exist
because the possibility of confiscation may deter investors, many countries guarantee compensation to foreign investors if their property is taken. The guaranty can take form of constitutional or statutory law or provisions in treaties, other countries provide insurance for investments against confiscation
Define "international law"
body of law formed as a result of international customs, treaties and organizations that governs relations among or between nations
what are the two different systems of law found in the world
common law and civil law systems
what are the two forms of exports
direct and indirect
what are international customs
evidence of a general practice accepted as law
what is the major difference between international law and national law
governmnet authorities can enforce national la
Under the New York Convention, when will a court compel parties to arbitrate
if all of the following are true: 1. there is a written or recorded agreement to arbitrate the matter 2. the agreement provides for arbitration in a convention signatory nation 3. the agreement arises out of a commercial relationship 4. One party to the agreement is not a US citizen (both parties cannot be US citizens)
when a wholly owned subsidiary is established where is the parent company
in the US- the parent maintains complete ownership of all the facilities in foreign country
what is the Alien Torts ACt
it allows even foreign citizens to bring civil suits in US courts for injuries caused by violations of the law of nations or a treaty of the US- cases have involved environmental destruction, human rights violations, etc.
what is the role of ITC re: anti-dumping
it assesses the effects of dumping on domestic businesses and makes recommendations to the president re: temporary import restrictions
what is the role of the ITA
it decides whether imports were sold at less than fair value and their determination establishes the amount of the anti dumping duty which is set to equal the difference between the price charged in the UC and the price charged in the exporting country.
Under FSIA, what is a "foreign state"
it includes both a political subdivision of a foreign state and an instrumentality (dept or agency of any branch of govt) of a foreign state
What is the Islamic Legal system
it is a third system used in Islamic countries where the law is influenced by sharia, the religous law of Islam
what is FSIA
it is the Foreign Sovereign Immunities Act and it governs the circumstances in which an action may be brought against a foreign nation, including attempts to attach a foreign nation's property. Because the law is jurisdictional in nature, the plaintiff generally has burden of showing defendant is not entitled to sovereign immunity.
what is sovereign immunity
it is the doctrine that exempts foreign nations from the jurisdiction of the US court (codified in FSIA)
what is the Act of State Doctrine
it provides that the judicial branch of one country will not examine the validity of public acts committed by a recognized foreign government w/i the latter's own territory- it can be important when doing business in or investing in other countries
what does the term international organization mean
it refers to an organization composed mainly of officials of member nations and usually established by treaty (US is member of more than 100 multilateral and bilateral organizations inc. at least 20 thru the UN)
What is the impact of KIORUS FTA)
it will eliminate 95% of each nations tariffs on industrial and consumer exports w/i 5 years and is the largest free trade agreement the US has outside of NAFTA
How does the Act of State Doctrine impact expropriation or confiscation
it, like soverign immunity discussed below, tends to shield foreign nations from jurisdiction of US courts so that if property is taken overseas, generally there is little legal protections against it.
define "national law"
law of a particular nation
what are the predominant countries that use civil law
most of Europe, Latin America, Africa and Asia
Can congress impose any export taxes on US goods
no-forbidden by constitution
what is a multilateral agreement
one formed by several nations
what are trade barriers
restrictions on imports
what does CISG govern
sales contracts between trading partners in nations that have ratified the CISG
what are tarifs
taxes on imports- it is usually a percentage of the value of the import but it vcan be flat rate, such as per barrell of oil.
In the US who has the power to make treaties
the president provided 2/3 of the senators present concur
what is dumping
the sale of imported goods at less than fair value (fair value is usually determined by the price of the goods in the exporting country)
How do international organizations impact international law
they adopt resolutions, declarations and other types of standards that often require nations to behave in a particular manner
If a nation violates international law what recourse is there by the other countries
they have no recourse but to take coercive action which includes economic sanctions, severence of diplomatic relations, boycotts or war
why do countries engage in dumping
they hope to undersell US businesses and obtain a larger share of US market
To what extent do US antitrust laws apply outside US
they may sugject firms in foreighn nations to their provisions and may protect foreign consumers and competitors from violations by US citizens because Section 1 of the Sherman ACt provides for the extraterritorial effect of US anti trust laws.
what is the impact of tarifs
they raise the price of imported goods causing some consumers to buy domestically manufactured products instead of imports.
what was purpose of CAFTA-DR
to reduce trade tariffs and improve market access among members
t/f sometimes tarifs are imposed in retaliation for political acts by another country
true
under what circumstances does a US firm establish an agency relationship with a foreign firm
when US firm wants to limit its invlovlement in international market will establish agency and the foreign firm then acts as the agent to enter contracts in foreign location
what is a distribution agreement
when a US firm and a distributor located in foreign country enter into an agreement setting forth terms and conditions of distribution such as price, currency, guarantee of supplies and mthod of payment
When does expropriation occur
when a government seizes a privately owned business or privately owned goods for a proper public purpose and awards just compenstion
what is confiscation
when a government seizes private property for an illegal purpose
what is indirect exporting
where US company appoints a foreign agent or distributor
Can US restrict imports
yes and they do through prohibitions, quotas and tarifs
