BLAW unit3
Extraterritorial criminal jurisdiction must be based on at least one of the following five principles:
1. territoriality 2. nationality 3. protective 4. personality 5. universally
If mediation is chosen as a form of dispute resolution, it will be:
A voluntary process
The International Chamber of Commerce is:
A worldwide organization with business community memberships.
24. Maurice O'Meara Co. v. National Park Bank of New York involved a letter of credit for a shipment of newsprint. The bank was concerned that the shipment was not as represented in the documents. In finding in favor of the seller's assignee, the court: a. emphasized the independence principle in letter of credit transactions. b. focused on the bank's legal right to refuse documents that do not strictly comply with the terms of the letter of credit. c. upheld the bank's right to have an inspection to test the tensile strength of the newsprint. d. emphasized the independence principle in letter of credit transactions and upheld the bank's right to have an inspection to test the tensile strength of the newsprint only.
ANSWER: a
27. Which of the following institutions does not provide credit guarantees to back trade finance lending by commercial institutions? a. The Federal Reserve Bank b. The Eximbank c. The Commodity Credit Corporation d. The Agency for International Development
ANSWER: a
28. A documentary draft issued for the purchase of goods by ABC Co. payable to XYZ Co., payable upon presentation, defines ABC Co. as the _____, XYZ Co. as the _____, and the specialized name for the documentary draft is _____ a. drawee; drawer; sight draft. b. drawer; drawee; sight draft. c. drawee; drawer; documents against acceptance. d. drawer; drawee; cash against documents.
ANSWER: a
34. The bank that is responsible for inspecting the documents to be sure they are in order, remitting payment to the seller, and negotiating the documents to the buyer is called: a. issuing bank. b. negotiating bank. c. advising bank. d. lading bank.
ANSWER: a
37. The issuing bank is required to pay on documents in case of _____, but not in the event of: a. fraud; breach of warranty. b. delivery of the goods; non-delivery of the goods. c. breach of warranty; fraud. d. issuing banks are not the paying banks.
ANSWER: a
38. When the Seller's bank guarantees payment under the letter of credit issued by buyer's bank it becomes a(n): a. confirmed letter of credit. b. irrevocable letter of credit. c. letter of credit with stipulations. d. standby letter of credit.
ANSWER: a
41. The type of credit that allows the use of one credit instead of many to be used with the maximum amount available during a certain period of time is called: a. a revolving credit. b. an irrevocable credit. c. a standby credit. d. a transferable credit.
ANSWER: a
47. The buyer in a letter of credit transaction is called the: a. account Party. b. beneficiary. c. exporter. d. issuer.
ANSWER: a
26. An international draft is an order from the seller to the buyer or the buyer's bank to pay the seller upon delivery of goods or the presentation of documents. Thus, the seller is both: a. the drawer and the drawee. b. the drawer and the payee. c. the drawee and the payee. d. the seller is only the drawer.
ANSWER: b
30. If the buyer's or seller's bank stamps its name, date, and signature on the face of a draft, it becomes a: a. trade acceptance. b. banker's acceptance. c. letter of credit. d. none of these are correct.
ANSWER: b
33. The internationally accepted body of rules pertaining to letters of credit is: a. Article 5 of the Uniform Commercial Code. b. Uniform Customs and Practices for Documentary Credits. c. Convention on Bills of Exchange and Promissory Notes. d. Uniform Code of Practice for Letters of Credit.
ANSWER: b
39. The type of letter of credit issued to guarantee that a party will fulfill its obligations under a service, construction, or sales contract is called: a. an Irrevocable Letter of Credit. b. standby Letter of Credit. c. letter of Warranty Credit. d. confirmed Letter of Credit.
ANSWER: b
44. Under the UCP, the description of the goods in the commercial invoice must correspond with the description in the credit. In all other documents, the goods may be described _____ a. in perfect conformance with the credit. b. in general terms not inconsistent with the description of the goods in the credit. c. in specific terms as requested by the buyer. d. in general terms consistent with the contract for the sale of goods.
ANSWER: b
46. The U.S. government agency that provides guarantees on loans or credit terms made by U.S. commercial banks or U.S. exporters to foreign buyers of U.S. made merchandise called: a. The World Bank. b. Eximbank. c. Commodity Credit Corporation. d. The Foreign Credit Insurance Association.
ANSWER: b
48. The seller in a letter of credit transaction is called the: a. account Party. b. beneficiary. c. importer. d. issuer.
ANSWER: b
52. A holder of a negotiable instrument cannot claim to be a holder in due course if (s)he: a. possesses a negotiable instrument. b. knows the instrument is overdue. c. unknowingly holds an instrument with a forged signature. d. takes the instrument free from disputes between the drawer and drawee.
ANSWER: b
54. Seller receives a letter of credit from a foreign buyer covering "1,000 standard-sized bed pillows." Seller's export manager completes an invoice for "1,000 bed pillows, size 20 by 26 inches" (this is the internationally accepted standard size for pillows). Which of the following is false? a. If the issuing bank accepts or pays against documents, it will be liable to the account party. b. The issuing bank must accept or pay against documents because 20 by 26 is standard and the goods conform to the contract. c. The issuing bank may refuse to accept or to pay the draft upon presentation of the invoice. d. If the buyer waives the defect in the invoice, the bank must accept or pay the draft.
ANSWER: b
25. Suppose that an issuing bank pays on documents that are conforming to the requirements of the letter of credit, but the seller has shipped worthless goods to the buyer. Which of the following statements, if any, are true? a. As long as the documents strictly comply with the letter of credit requirements, the bank will not have to reimburse the buyer. b. If there is fraud in the transaction, the bank will have to reimburse the buyer and seek its remedies against the seller. c. The strict compliance principle insulates the bank from liability, since it assures the bank that the underlying contract between the buyer and seller is entirely independent from the letter of credit contract. d. As long as the documents strictly comply with the letter of credit requirements, the bank will not have to reimburse the buyer and the strict compliance principle insulates the bank from liability, since it assures the bank that the underlying contract between the buyer and seller is entirely independent from the letter of credit contract.
ANSWER: c
29. A draft due at a future date or after a specified period of time that has been signed by the buyer is called: a. sight draft. b. time draft. c. trade acceptance. d. all of these are correct.
ANSWER: c
35. The rule that usually prevails for interpreting documents that are submitted to a bank for payment under a letter of credit is commonly called the: a. good faith rule. b. reasonable compliance rule. c. strict compliance rule. d. holder in due course rule.
ANSWER: c
42. The U.S. Export-Import Bank is the largest U.S. export financing agency that can provide: a. financing through the World Bank. b. financing for imports by U.S. firms. c. guarantees on loans made by commercial banks. d. all of these are correct.
ANSWER: c
45. If a U.S. exporter is concerned about political and economic stability in the buyer's country, the exporter should request which of the following payment terms: a. cash against documents. b. irrevocable letter of credit. c. confirmed letter of credit. d. open account terms.
ANSWER: c
49. Most documentary discrepancies that occur in a letter of credit transaction are: a. a result of fraud and misrepresentation. b. a result of the desire to profit from the transaction. c. a result of incomplete or inconsistent information. d. banking errors.
ANSWER: c
50. A holder in due course, as defined by the UCC, includes which of the following? A holder in due course: a. must have given a "just price" as consideration for the document or instrument. b. must be unrelated to the original document holder. c. must have taken the instrument for value and without notice it is overdue or has been dishonored. d. A and C only. e. none of these are correct.
ANSWER: c
51. Assume that DownPillow sells pillows to a Japanese buyer and forwards documents and a draft for acceptance. Assume also that DownPillow discounts the trade acceptance to a U.S. bank, which then discounts the instrument in the credit markets. If the pillows turn out to be moldy and worthless, which of the following statement(s) is (are) true? a. The Japanese buyer does not have to pay because the pillows are damaged. b. The U.S. bank must reimburse whoever bought the instrument and can bring a lawsuit for payment against DownPillow. c. The Japanese buyer must still honor and pay the acceptance upon presentation. d. The Japanese buyer does not have to pay because the pillows are damaged and the U.S. bank must reimburse whoever bought the instrument and can bring a lawsuit for payment against DownPillow. e. All of these are correct.
ANSWER: c
53. Which of the following is (are) true concerning the UCP? a. The UCP is a standardized set of rules in virtually all nations. b. Because the UCP was drafted by the ICC and is recognized in most states, it automatically governs international letters of credit. c. The UCP will govern a letter of credit only if its provisions are incorporated into the letter of credit by reference. d. None of these are correct.
ANSWER: c
31. Bills of exchange are governed in the U.S. by the _____, in England by the _____, and in over 20 other countries by the _____ a. Bills of Exchange Act; Convention on Bills of Exchange and Promissory Notes; The Uniform Commercial Code. b. Uniform Commercial Code; Convention on Bills of Exchange and Promissory Notes; Bills of Exchange Act. c. Convention on Bills of Exchange and Promissory Notes; Bills of Exchange Act; Uniform Commercial Code. d. Uniform Commercial Code; Bills of Exchange Act; Convention on Bills of Exchange and Promissory Notes.
ANSWER: d
32. A letter of credit is a contract between: a. the seller and the buyer's bank. b. the buyer's bank and the seller's bank. c. the sellers and their own bank. d. the buyers and their own bank.
ANSWER: d
36. In the event that a discrepancy is found in the documents presented under a letter of credit, the bank may request a waiver or: a. resubmit the draft. b. void the transaction. c. refuse delivery. d. refuse to pay against documents.
ANSWER: d
40. The type of letter of credit that can be split up between many suppliers, each able to present their own documents for payment and allowing the trader to take his profits from the balance of the credit, is called: a. an irrevocable credit. b. a revolving credit. c. standby credit. d. transferable credit.
ANSWER: d
43. The risk of loss due to the default of the buyer based on his or her inability to pay is known as: a. commercial risk. b. compensatory risk. c. default risk. d. currency risk.
ANSWER: d
Public international law involves: A. relationships between public corporations in different countries as to business terms. B.relationships between nations that are reflected in treaties, conventions, or charters. C. relationships between private individuals in different countries. D. ALL OF THE ABOVE
B.relationships between nations that are reflected in treaties, conventions, or charters.
In the U.S., jurisdiction is: I. Defined by the U.S. Constitution II. Defined by various statutes
Both I and II.
The disadvantages of arbitration include: I. Limited Discovery II. Limited Rights to Appeal
Both I and II.
The Organization for Economic Cooperation and Development (OECD) has developed
Codes of conduct for companies and host countries in an attempt to set ethical standards for both.
Many factors must be considered in choosing binding arbitration. All of the following should be considered except:
Complexity
If a US exporter is concerned about political and economic stability in the buyer country, the exporter should request which of the following payment terms to best protect the exporter's interest in getting paid for the goods:
Confirmed irrevocable letter of credit
International franchising allows the franchisee the right to use a(n):
Copyright
Foreign investment in the U.S. is often called:
Direct investment.
Firms that assist indirect exporters and are licensed to operate under the antitrust laws of the U.S. are:
Export trading companies.
A "free trade" nation has no barriers to trade.
F
A Bill of Exchange is a specialized type of non-negotiable instrument used to expedite payment in a documentary sale.
F
A red clause in a letter of credit is a promise by the advising bank to reimburse the seller's bank for loans made to the seller.
F
A self-executing treaty is one that requires further presidential or legislative action for it to become binding law.
F
A state's authority to tax a business engaged in foreign commerce is determined by the country with which the business trades.
F
An embargo only applies to imports from a particular nation.
F
Due to GATT's prohibition of quotas, a nation may not impose quotas to safeguard its external financial position and its balance of payments.
F
Expiration dates are an optional term of a letter of credit.
F
GATT envisages a process of tariff bargaining, and this is accomplished through a hit-and-miss process of tariff reductions and increases called "rounds."
F
Government agencies in the U.S. are not allowed to insure payments made to a U.S. bank if the underlying contract between the buyer and seller is entirely independent from the letter of credit.
F
If a conflict arises between the terms of a treaty and a statute, the first in time will prevail.
F
In order to convene a WTO panel, the complaining country must prove it has a "legal interest" in the case.
F
In order to make a prima facie case of nullification and impairment, a claimant must prove that the action has trade effects.
F
In the dispute regarding the European Union's importation of Latin American bananas, the dispute panel found no disparity in tariffs on the European Union's part.
F
Normal trade relations provides that a nation cannot negotiate a preferential trade agreement with another nation.
F
One of the primary objectives of GATT is the elimination of all quotas and quantitative restraints.
F
Quotas serve to increase the amount of imports of a product.
F
Terms of the sales contract must be reflected in the letter of credit, if not the buyer must clear all discrepancies upon examination of the letter of credit.
F
The 1947 GATT provided stiff penalties for the misuse of intellectual property.
F
The Commerce Clause vests the federal government with limited control over foreign commerce.
F
The Convention on Bills of Exchange as well as U.S. and English domestic laws require the language "bill of exchange" to appear clearly and prominently on the face of the instrument.
F
The Department of Treasury has the broadest authority over international trade of all department level agencies.
F
The GATT dispute panel found the continuing use of quotas on beef in Korea was justified
F
The Omnibus Act provides a fast-track procedure for approving trade agreements whereby the president can declare the agreement to be law.
F
The Trade Agreements Act of 1979 contains a provision allowing standard-setting by the U.S. government on private U.S. firms.
F
The Trading with the Enemy Act was passed for the purposes of allowing the U.S. to sell arms to friendly nations.
F
The U.S. Constitution gives the president specific powers over foreign commerce and international trade.
F
The Uruguay round of tariff negotiations was the first major multilateral trade negotiating session since World War II.
F
The drafters of the U.S. Constitution placed the power to regulate international trade equally in the state governments and federal government.
F
The main objective of U.S. trade law has been solely to discourage trade with unfriendly nations.
F
The most common device for regulating imports is the quota.
F
The president did not have authority under the International Emergency Economic Powers Act to ban travel to Libya during the Libyan problem.
F
The primary instrument for effectuating trade relations is the protocol.
F
There is uniform support for the use of trade policy as a tool for the implementation of foreign policy.
F
There is very little debate over how the U.S. Constitution divides power over foreign affairs and foreign trade between the Congress and the president.
F
Treaties of friendship, commerce, and navigation are non-self-executing bilateral agreements that provide legal protection to foreign nationals doing business in a host country.
F
Under a documentary collection, the banks are acting as the agent of the buyer for collection purposes.
F
Under accounts receivable financing, the factor is protected from contract claims for defective goods by the holder in due course rules.
F
Under the "national treatment" provisions of GATT, imported products may be regulated and taxed differently than domestic goods after they pass the border and enter a nation's stream of commerce.
F
Under the Reciprocal Trade Agreements Program, if the U.S. were to lower an existing tariff on an imported product from Country A, Country A need not lower the tariff on that same product imported from the U.S. but must lower tariffs on some product imported from the U.S.
F
Under the UCP, banks are responsible for the consequences of delay or loss in transit of any messages, credits, or documents, or for errors of any telecommunication.
F
Upon advising the seller that a letter of credit has been issued in its favor, the advising bank has assumed conditional responsibility for payment.
F
WTO DSU reports carry precedential value for future panels by providing definitive interpretations of GATT provisions.
F
When a nation's import regulations or procedures are transparent, it is difficult for foreign firms to gain entrance to its markets.
F
When import regulations are readily available to importers and exporters, they are considered to be transparent.
F
While WTO reports carry no weight as precedent, subsequent panels often consider them, and they can create legitimate expectations as to the interpretation of the treaty by WTO members.
F
While the Commerce Clause restricts what states may do as to imports, it places no restrictions on state actions as to exports.
F
A code of conduct is a set of principles that guide people's behavior and actions when communicating with others via the Internet and social media
FALSE
A treaty between three countries is said to be trilateral.
FALSE
In a common law system, the judge has the power to control the conduct of the trial and empowered with authority to examine witnesses and demand tangible evidence from the plaintiff and defendant.
FALSE
Many of today's international business law concepts are derived from the law merchant and maritime law, which are the accepted customs and practices of Renaissance-era merchants, traders, bankers, mariners, and ship owners.
FALSE
Once a group of nations has negotiated a convention, other nations cannot adopt the treaty.
FALSE
The International Court of Justice, formed in 1945, is the primary judicial art of the World Trade Organization.
FALSE
The U.N. has recently sponsored a "supranational" set of laws that transcends national boundaries; most industrialized nations have adopted it.
FALSE
The development of international law has a long history that include the customs that have evolved into written statutes recognized by civilized nations.
FALSE
The jurisdiction of the International Court of Justice upon its members in a dispute is compulsory.
FALSE
There is a uniform commercial body of law adopted by the United Nations governing all private international law questions.
FALSE
1. A Bill of Exchange is a specialized type of non-negotiable instrument used to expedite payment in a documentary sale.
False
11. Under the UCP, banks are responsible for the consequences of delay or loss in transit of any messages, credits, or documents, or for errors of any telecommunication.
False
12. A red clause in a letter of credit is a promise by the advising bank to reimburse the seller's bank for loans made to the seller.
False
14. Government agencies in the U.S. are not allowed to insure payments made to a U.S. bank if the underlying contract between the buyer and seller is entirely independent from the letter of credit.
False
16. The Convention on Bills of Exchange as well as U.S. and English domestic laws require the language "bill of exchange" to appear clearly and prominently on the face of the instrument.
False
18. The holder of a banker's acceptance may convert it to cash immediately at a discount rate, sell it on the discount market, or hold it until it matures, provided the buyer's account has sufficient funds to cover the transaction.
False
19. Under accounts receivable financing, the factor is protected from contract claims for defective goods by the holder in due course rules.
False
2. A documentary draft is a time draft that has thirty (30) day and sixty (60) day increments used in documentary sale transactions.
False
20. The SWIFT System is an electronic network to handle for the exclusive transmission of international banking transactions and regulated by the World Bank.
False
21. A holder in due course rule, where a purchaser of an acceptance, or any negotiable instrument, takes it free from most disputes that may arise between the drawer and drawee and is regulated under the Uniform Customs and Practice for Documentary Credits.
False
22. Bolero is a private company founded by a consortium of the world's largest banks to provide secure "digital identities" or signatures for confidentiality and authentication of financial and legal documents.
False
3. Under a documentary collection, the banks are acting as the agent of the buyer for collection purposes.
False
4. Letters of credit is a revocable commitment by a bank issued on behalf of its client and promising to pay a specific sum of money to a beneficiary upon compliance with the instructions of the letter of credit.
False
7. Terms of the sales contract must be reflected in the letter of credit, if not the buyer must clear all discrepancies upon examination of the letter of credit.
False
A host country refers to the country under whose laws the investing corporation was created or is headquartered.
False
Export controls have been extended by the president through the issuance of executive orders pursuant to the USA Patriot Act. a. True b. False
False
In a common law system, the judge acts as a lawyer in requiring the production of evidence.
False
Information to research foreign countries, markets, and trade agents is limited.
False
Membership in the IMF requires a country to be on the gold standard.
False
Most countries have broad discovery rules, just like the U.S., allowing the collection of evidence.
False
Once parties have initiated litigation in the United States, they cannot agree to have the dispute arbitrated.
False
Settlement of a dispute by arbitration never makes the decision binding
False
Since the end of the cold war all controls have been abolished on all commodities going to Russia. a. True b. False
False
The Full Faith and Credit Clause of the U.S. Constitution applies to foreign court judgments.
False
The Security Council of the United Nations has veto power over the U.N. General Assembly.
False
The World Bank and IMF are the same organization.
False
The trade sanctions against the Castro government in Cuba has been successful in encouraging a more democratic style representation. a. True b. False
False
Unilateral export controls are determined by several countries (against another or group of other countries) but enacted by only one country; multilateral export controls are determined and enacted by several countries to control the exports to another country or groups of countries. a. True b. False
False
Venue means the appropriate set of laws applicable to a case.
False
When an international seller and buyer negotiate a sales contract, they do not have the option to "opt out" of CISG
False
25. Which of the following is not part of the structure of the United Nations? General Assembly. Security Council. Secretary General. House of Representatives.
House of Representatives.
The forum for public international law disputes is:
International Court of Justice.
Franchising is best identified as a form of which of the three fundamental forms (methods) of engaging in international business?
Licensing intellectual property
The title of the goods sold in a documentary sale is transferred through
Negotiation of the document and physical delivery of the goods
If a U.S. company and an Austrian company end up in a dispute about a contract they entered into that contains an arbitration clause, a case brought before a U.S. court would:
Not be heard by the U.S. court because U.S. courts accept arbitration as a form of dispute resolution.
As applied to the European Union, the "Four Freedoms" include free movement of
People, capital, services, and goods
The basic resources of the IMF come from:
Quota subscriptions by member nations
In the event that a discrepancy is found in the documents presented under a letter of credit, the bank may request a waiver or
Refuse to pay against documents
Public international law involves:
Relationships between nations that are reflected in treaties, conventions, or charters.
One popular form of dispute settlement is arbitration. This is defined as:
Submission for determination of the disputed matter to a private unofficial person selected by agreement.
Islamic law is based on:
Sunnah.
"Bill of exchange" and "international draft" are two names for the same type of negotiable instrument.
T
A back-to-back letter of credit is actually two letters of credit used as a financing device.
T
A convention is a multilateral agreement on matters usually related to commercial issues of common concern.
T
A documentary draft payable by terms other than cash against documents is called a time draft.
T
A treaty is an agreement or contract between two or more nations that is recognized and given effect under international or domestic law.
T
Almost all products are subject to some technical standards set by government regulations or by private standard-setting groups.
T
Although the 1947 GATT was never ratified by the U.S. Congress, it was considered legally binding in the United States under international law.
T
An embargo is a complete ban on trade with a foreign nation.
T
Congress has delegated to the president the authority to carry out the trade policies that it has set by statute.
T
Examples of self-executing treaties include the Warsaw Convention, the Hague Convention, and the Convention on Contracts for the International Sale of Goods.
T
For the most part, trade in textiles and services are not regulated by the GATT system.
T
If the issuing bank buys documents that contain a discrepancy, the bank cannot seek reimbursement from the account party, its customer.
T
In a tariff concession, one country promises not to levy a tariff on a given product at a level higher than agreed upon.
T
In order to negotiate an order instrument, it must be indorsed and delivered.
T
International trade law is public international law that regulates trade.
T
Letters of credit are a bank's conditional promise to pay cash on the documents.
T
Letters of credit are recognized in all modern legal systems of the world.
T
Letters of credit drawn with no specified expiration date are required to be submitted within 21 days or a discrepancy occurs.
T
Nontariff barriers are any restrictions, interference, or disincentive to trade other than tariffs.
T
One argument in favor of a strong executive branch in international affairs is that the nation must "speak with one voice."
T
Other examples of nontariff trade barriers include exchange control on currencies, performance standards, and foreign customs procedures.
T
State governments may restrict imports in order to deal with public health and safety concerns.
T
Tariff concessions under GATT are recorded in tariff schedules, which are detailed product-by-product listings of all tariff obligations for that nation.
T
Tariffication is the process in which quotes, licensing schemes, and other nontariff barriers to trade are "converted" to tariffs.
T
The American Bell International v. Islamic Republic of Iran case involved the issue of whether there was irreparable injury to the plaintiff.
T
The Cuban Asset Control Regulation and the U.S. Arms Export Control Act share in common the requirement that a license must be obtained in order to engage in certain activities.
T
The General Agreement on Tariffs and Trade is today the most important instrument for regulating international trade.
T
The Omnibus Act gives the president special authority to try and reduce barriers for American multinational firms operating in the telecommunications industry.
T
The Trade Act of 1974 and Omnibus Act give the president broad powers to deal with a range of complex international economic problems.
T
The Trading with the Enemy Act was used by President Nixon in the 1960s to avert a crisis that the U.S. was having in the foreign exchange and gold markets.
T
The holder of a banker's acceptance may convert it to cash immediately at a discount rate, sell it on the discount market, or hold it until it matures.
T
The issuing bank will honor the draft as long as the documents appear to be in good order on their face and correspond to the terms of the letter of credit, regardless of the conditions of the goods received.
T
The negative implication doctrine means that state governments may not enact laws that impose a substantial burden on foreign commerce.
T
The obligation of the issuing bank to honor the beneficiary's draft under a letter of credit is totally independent of the sales contract between the buyer and seller.
T
The unconditional most favored nation policy provides that a lower tariff rate negotiated with one nation automatically grants lower tariff rates to like products imported from all nations that stand in most favored nation status with the U.S.
T
Throughout history, U.S. presidents have utilized executive agreements to conduct foreign affairs even though these agreements are not specifically provided for in the Constitution.
T
Trade law has been used in the U.S. to further not only U.S. economic policy but also U.S. foreign policy.
T
Under GATT, charges may be imposed upon the movement of imported goods, such as port fees and inspection fees.
T
Under normal trade relations, when a nation extends some privilege or right to one of its trading partners, that privilege automatically becomes applicable to all other trading partners.
T
Under the Supremacy Clause of the Constitution, where a law of the federal government directly conflicts with a state law, the federal law will prevail.
T
Under the equal dignity rule, statutes and treaties are of equal legal importance.
T
Usually, import restrictions that protect one sector of a country's economy will result in foreign retaliation against another sector.
T
Whether a treaty is self-executing or not depends on how a U.S. court interprets the language of the treaty and the history surrounding its negotiation and approval.
T
1. The United States belongs to the Organization for Economic Cooperation and Development.
TRUE
2. Pacta sunt servanda means that every treaty in force is binding upon the parties to it and must be performed by them in good faith.
TRUE
3. According to the Statute of the International Court of Justice, the court shall look to conventions establishing rules expressly recognized by the contesting states.
TRUE
A self-executing treaty is one that automatically creates rights that are enforceable in the courts of a contracting nation, without any further legislative action.
TRUE
Because international law is not dictated by any one legislative body, it is lawmaking by choice and by consent.
TRUE
International business law draws from both public and private law as related to business transactions.
TRUE
Moral conduct is the preeminent concern in Islamic law
TRUE
One reason international business law still retains a "national" character is that national attitudes toward economics affect attitudes toward law and regulation.
TRUE
The purpose of the United Nations Commission on International Trade Law is to promote international trade through the harmonization of trade law among nations.
TRUE
The two classifications of national legal systems are civil law countries and common law countries.
TRUE
The multinational conference that met at Bretton Woods, New Hampshire, in 1944 was instrumental in creating:
The World Bank
Zapata, a Texas Corporation, entered into a contract with Unterweser, a German corporation, to tow Zapata's drilling rig from Louisiana to Italy. A storm arose and Zapata told Unterweser to tow the rig into Tampa, Florida. Zapata immediately filed a lawsuit in Florida against Unterweser for damages to the rig. The original contract called for "Any dispute must be heard before the London Court of Justice." The U.S. Supreme Court held that:
The parties must adhere to the forum-selection clause and have the case heard in London.
Which of the following does not accurately characterize export management companies?
They use their extensive sales contracts to market the products of other companies.
"Diversion" is when controlled goods are sold by a U.S. exporter to an importer in Country A, who in turn re-exports them to a buyer in Country B, which is unfriendly with the United States. a. True b. False
True
. Among the reasons for controlling exports are the protection of national security, the prevention of terrorism, the promotion of regional stability, and the preservation of scarce materials. a. True b. False
True
. Companies in some countries cooperate with the boycott against Israel. a. True b. False
True
10. If the issuing bank accepts documents that contain a discrepancy, the bank cannot seek reimbursement from the account party, its customer.
True
13. A back-to-back letter of credit is actually two letters of credit used as a financing device.
True
15. "Bill of exchange" and "international draft" are two names for the same type of negotiable instrument.
True
17. In order to negotiate an order instrument, it must be indorsed and delivered.
True
23. In a global trade transaction seller would ship monster cables from Port of Oakland to Bangkok, Thailand under an irrevocable letter of credit. The Thai buyer's bank issued the letter of credit with the instruction that the monster cables be placed aboard the George Mason on November 25, 2013. The loading brokers loaded the monster cables on board the ship on November 26, 2013 at 0100 hours (i.e. 1 am). On the manifest the broker wrote placed on board November 25, 2013. The confirming bank refuses to pay due to the fraud. Is the confirming bank obligated to pay to beneficiary or holder of the letter of credit.
True
5. Letters of credit are a bank's promise to pay provided that all of the terms and documents required submitted are correct.
True
6. The seller's bank acting as an advising bank agrees to transmit the funds received from the buyer's bank to the seller provided the terms of the letter of credit have been satisfied completely.
True
8. The obligations under the letter of credit between the seller and buyer and independent of the sales contract between the seller and the buyer.
True
9. The issuing bank will honor the draft as long as the documents appear to be in good order on their face and correspond to the terms of the letter of credit, regardless of the conditions of the goods received.
True
A U.S. court might refuse to enforce a Libyan court judgment.
True
A foreign company's first line of defense in litigation in the U.S. is often that they are not subject to the jurisdiction of the courts.
True
A home country refers to the country under whose laws the investing corporation was created or is incorporated.
True
A transfer of technology is governed by an international licensing agreement.
True
According to the Statute of the International Court of Justice, the court shall look to conventions establishing rules expressly recognized by the contesting states.
True
An example of a failed unilateral use of export controls was the embargo of wheat destined to Russia as a political response to the Russian invasion of Afghanistan. a. True b. False
True
Choice of forum clauses fix in advance where the case will be heard by contract.
True
Diversion refers to the illegal placement of goods in the hands of an individual for whom an export license would not be granted because of the type of product, the product's end use, or the country involved. a. True b. False
True
Formulas, blueprints, and technical data are subject to controls when exported. a. True b. False
True
Global quotas are quantitative import restrictions on a particular regardless of its country of origin
True
Government seizure of foreign assets is an example of international law risk.
True
In an arbitration agreement, the parties may choose to restrict the arbitrator's powers or let the arbitrator decide what is equitable and good.
True
In some circumstances, the presentation of research by a U.S. scientist at a convention in a foreign nation may require an export license. a. True b. False
True
In the United Nations General Assembly, all nations have an equal vote.
True
Intellectual property rights are valuable assets that can be licensed to a foreign licensee as a means to penetrate a foreign market rather than establish a wholly owned subsidiary
True
International business law draws from both public and private law as related to business transactions.
True
Items that are not classified on the Commerce Control List may be exported without an in individual export license. a. True b. False
True
Laws applying to private parties in international transactions are called private international law.
True
Many business persons believe that certain antitrust claims are unique and are not subject to arbitration.
True
Pacta sunt servanda means that every treaty in force is binding upon the parties to it and must be performed by them in good faith.
True
The Department of Commerce has the responsibility for the control of nonmilitary commercial goods, commodities, and technology. a. True b. False
True
The GATT Agreement has an escape clause whereby member nations may levy increase duties on imported procedures where there are unforeseen circumstances that cause or threaten serious injury to domestic procedures
True
The GATT/WTO agreement authorize under certain circumstances countervailing measures to offset the effect of subsidies on imports that cause or threaten material injury to a domestic industry
True
The U.S. anti boycott laws are applicable to foreign affiliates of U.S. based companies. a. True b. False
True
The U.S. export control system is conflicted as on one hand it advocates free trade argue with limited restrictions while national security on the other hand advocates press for relatively more restrictions. a. True b. False
True
The current law that controls the export of goods from a U.S. manufacturer to a foreign buyer also controls the re-export of those goods beyond the boundaries of the country of the original foreign buyer. a. True b. False
True
There is no global consensus on an effective international control system over arms and technology. a. True b. False
True
the US Bureau of Customs and Border Protection is the agency charged with assessing and collecting tariffs and administering duty-free zones
True
The primary body of law in the US dealing with domestic sales contracts is:
Uniform commercial code (UCC)
If one is trying to determine the correct geographical location of a court that has jurisdiction over a case, he is determining:
Venue
The difference between a common law country and a civil law country is:
a common law country relies heavily on precedent established by previous court cases while a civil law country uses a comprehensive code of law.
Customs union
a free trade area with a common external tariff
Of the following, the most precise definition of a free trade area is
a group of two or more countries in which import duties and other trade barriers are reduced or eliminated
. In the United States, the office that initially reviews and rules on license applications is the: a. Bureau of Industry and Security. b. Office of Export Trade Control. c. Export Administration Board. d. Export Policy Operations Committee.
a. Bureau of Industry and Security.
The two principal agencies that regulate the export of goods from the U.S. are: a. U.S. Department of Commerce, U.S. Department of State. b. U.S. Department of Defense, U.S. Bureau of Customs and Border Protection. c. U.S. Customs Service, Federal Trade Commission. d. Federal Trade Commission, U.S. Department of Commerce.
a. U.S. Department of Commerce, U.S. Department of State.
In United States v. Mousavi, the federal court upheld the conviction of criminal charges against the defendant under IEEPA and the Iranian Transaction Regulations and rejected his defense that: a. he did not willfully violate a specific law or regulation. b. the items in dispute were not under any type of "control" or sanctions list by the U.S. c. IEEPA was an unconstitutional exercise of power by Congress. d. none of these are correct.
a. he did not willfully violate a specific law or regulation.
When determining whether personal jurisdiction offends "traditional notions of fair play and substantial justice," the court evaluates several factors, including:
a. Burden on the defendant. b. The plaintiff's interest in having a convenient forum. c. The forum's legitimate interests in the dispute. d. Two of the above. e. All of the above. The correct answer: All of the above
Tariffs on imported products are imposed for which of the following reasons:
a. Collection of revenue. b. Protection of domestic industries. c. To assert political objectives. d. All of the above. The correct answer is: All of the above.
The United States has, in part, accepted the jurisdiction of the International Court of Justice. The U.S. acceptance does not apply to:
a. Disputes the parties have entrusted to other tribunals. b. Disputes that the United States decided are essentially domestic. c. Disputes arising under a multilateral treaty unless all parties affected are before the court or the U.S. specially agrees to jurisdiction. d. A and B only. e. All of the above. Correct The correct answer is: All of the above.
A cooperative business arrangement between two or more companies may be a:
a. Partnership. b. Joint venture. Incorrect c. Corporation. d. All of the above. The correct answer is: All of the above.
All of the following are purposes of the International Chamber of Commerce except:
a. Represent business via intergovernmental institutions. b. Harmonize international business practices. c. Sell shares in international business corporations. Correct d. Provide a link with countries with different economic systems. The correct answer is: Sell shares in international business corporations.
Islamic law is known as: a. Sharia. b. Koran. c. Sunna. d. Fiqh.
a. Sharia.
What do many legal historians believe led to the development of modern international law? a. The rise of the European nation-state b. Chinese dynastic law c. Roman law d. Trade law in the Middle Ages
a. The rise of the European nation-state
Which three countries are notable because few, if any, treaties have direct effect there, and thus require parliamentary action before they are enforceable by private parties? a. United Kingdom, Canada, and Australia b. United Kingdom, Canada, and the United States c. Canada, Australia, and China d. United Kingdom, France, and Germany
a. United Kingdom, Canada, and Australia
The Organization for Economic Cooperation and Development (OECD) has developed: a. codes of conduct for companies and host countries in an attempt to set ethical standards for both. b. guidelines for interest rates to be charged multinational enterprises. c. codes of conduct for employee practices for multinational corporations. d. none of these are correct.
a. codes of conduct for companies and host countries in an attempt to set ethical standards for both.
The principle that a nation can project its laws beyond its territorial borders is known as: a. extraterritoriality. b. territoriality. c. nationality. d. protective jurisdiction.
a. extraterritoriality.
NAFTA's "national treatment" principle states:
all imports from a NAFTA country must be treated like similar domestically produced goods
Enforcement of the U.S. export laws is the function of the: a. U.S. Department of Commerce. b. Office of Export Enforcement. c. State and local police forces. d. U.S. military.
b. Office of Export Enforcement.
Which of the following statements is not true? a. U.S. export control law requires the issuance of an export license to cover the movement of controlled U.S.-origin products from India to Taiwan. b. The Department of Commerce will not recommend the decontrol of a product on grounds that a non-U.S. item of comparable quality is available rendering the control ineffective. c. The Bureau of Industry and Security has 90 days to review and rule on the application of an export license. d. Civil penalties may be imposed on a strict liability basis for violations of export control law without having to prove criminal intent.
b. The Department of Commerce will not recommend the decontrol of a product on grounds that a non-U.S. item of comparable quality is available rendering the control ineffective.
In 1949, NATO's COCOM was created: a. to aid Europe's economic recovery after WWII. b. to control the exporting of goods with military applications to communist countries. c. to prevent the escalation of the Cold War. d. to provide U.S. manufacturers with fairer trading opportunities outside the U.S.
b. to control the exporting of goods with military applications to communist countries.
The Paquette Habana case concerned: a. a question of the applicable method for joining the IMF. b. a question discerning applicable international law. c. a question concerning the law merchant on mercantile law of Cuba. d. a question of which court has jurisdiction over an international case.
b. a question discerning applicable international law.
Nations that express their willingness to join a treaty are called: a. ratifiers. b. signatories. c. contracting parties. d. abrogators.
b. signatories.
A treaty between two countries is said to be _________, and a treaty between three or more countries is said to be _________.
bilateral; multilateral
. In Briggs and Stratton Corp. v. Baldridge, Briggs was blacklisted by Arab countries because of its compliance with U.S. anti-boycott regulations. Briggs subsequently brought a lawsuit claiming damages as a result of U.S. government action. Specifically, Briggs demanded "just compensation" under the Fifth Amendment "takings clause." The court: a. invoked sovereign immunity to avoid taking subject matter jurisdiction. b. refused relief because the amount of damages was "speculative, at best." c. refused relief because Briggs's property had not been "seized or restrained." d. allowed relief, since Briggs could demonstrate a complete taking of certain contractual opportunities and reasonable investment expectations. e. refused relief because Briggs lacked "standing."
c. refused relief because Briggs's property had not been "seized or restrained."
Which of the following is NOT one of the reasons that International Business Law has become more uniform? a. The forces of free trade, economic integration, and the globalization of business have accelerated the need for greater uniformity in IBL. b. Nations have had to cooperate in their legal responses to global issues, common problems, and technologies. c. All nations have agreed to practice and enforce the codes and legislation set down by the World Trade Organization. d. Private industry and trade organizations have encouraged the growth of uniform IBL.
c. All nations have agreed to practice and enforce the codes and legislation set down by the World Trade Organization.
Which of the following is NOT one of the objectives of the International Labour Organization? a. To help promote the rights of workers b. To eliminate child labor c. To provide health care for all workers d. To create decent and beneficial employment opportunities
c. To provide health care for all workers
Which convention calls for contracting parties to criminalize bribery of public officials and money laundering? a. UN Convention Against Crime b. UN Convention of Extraterritoriality c. UN Convention Against Corruption d. None of these are correct
c. UN Convention Against Corruption
A treaty between two countries is said to be _____, and a treaty between three or more countries is said to be _____. a. bitreaty; tritreaty b. bitreaty; multitreaty c. bilateral; multilateral d. biratified; multiratified
c. bilateral; multilateral
The UN's Guiding Principles for Business on Human Rights Article 23 states all of the following except: a. businesses should comply with all applicable laws and respect internationally recognized human rights, wherever they operate. b. businesses should seek ways to honor the principles of internationally recognized human rights when faced with conflicting requirements. c. businesses should seek to comply with the laws of their home country before considering internationally recognized human rights. d. businesses should treat the risk of causing or contributing to gross human rights abuses as a legal compliance issues wherever they operate.
c. businesses should seek to comply with the laws of their home country before considering internationally recognized human rights.
All of the following are principles established by the codes of conduct promulgated by the Organization for Economic Cooperation and Development (OECD) except: a. to take into account the policies and objectives of the country with which a corporation operates. b. nondiscrimination in hiring. c. mandatory wage scales for countries in which each corporation operates. d. utilizing "reasonable terms" when transferring technology.
c. mandatory wage scales for countries in which each corporation operates.
If a country is willing to join a treaty but has an exception to the terms of the treaty, the exception is called a(n): a. ratification. b. signatory. c. reservation. d. abrogation.
c. reservation.
To determine the dutiable status of goods, it is necessary to know their classification, customs dutiable value, and
country of origin
When the president decides to impose export controls for national security or foreign policy reasons, the following businesses may be adversely affected: a. farmers whose crops are in short supply. b. businesses who cooperate with Arab nations in boycotting Israel. c. subsidiaries of U.S. companies having contracts with nations targeted by U.S. foreign policy. d. All of these are correct.
d. All of these are correct.
Which is not a current issue regarding export controls? a. Can effective multilateral controls be established? b. Who is the enemy? c. In the absence of multilateral controls, can unilateral controls be effective? d. Can the State Department both promote trade and commerce and control exports?
d. Can the State Department both promote trade and commerce and control exports?
The OECD Guidelines for Multinational Enterprises encourages responsible conduct in which of the following areas? a. Employment b. Bribery c. Environment d. Both bribery and environment
d. Both bribery and environment
Which of the following is NOT one of the crimes generally covered by the universal principle of jurisdiction? a. Piracy b. War crimes c. Slavery d. Money laundering
d. Money laundering
Foreign investment laws might include: a. protection against state intervention and the ability to repatriate profits. b. repatriation of profits and the ability to have 100% foreign ownership. c. governmental approval of technology transfer agreements. d. all of these are correct.
d. all of these are correct.
In 1625, Hugo Grotius wrote a landmark book on international law called On the Law of War and Peace. In it, he stated that the law of nations: a. was divinely given. b. arose by common agreement and by the accepted practice of nations. c. recognized that all states are equal. d. all of these are correct.
d. all of these are correct.
Doing business internationally requires an understanding of all of the following except: a. international law. b. national law. c. different international organizations. d. availability of legal counsel in each country
d. availability of legal counsel in each country
The United States has, in part, accepted the jurisdiction of the International Court of Justice. The U.S. acceptance does not apply to: a. disputes the parties have entrusted to other tribunals. b. disputes that the United States decided are essentially domestic. c. disputes arising under a multilateral treaty unless all parties affected are before the court or the U.S. specially agrees to jurisdiction. d. disputes the parties have entrusted to other tribunals and disputes that the United States decided are essentially domestic only. e. all of these are correct.
e. all of these are correct.
In a socialist country, the legal system:
exhibits no need for commercial law because such disputes are settled politically.
once a group of nations has negotiated as convention, other nations cannot adopt the treaty
false
The rule that usually prevails for interpreting documents that are submitted to a bank for payment under a letter of credit commodity called then:
strict compliance rule
A self-executing treaty is one that automatically creates rights that are enforceable in the courts of contracting nation, without any further legislative action
true
Formulas, blueprints, and technical data can be subject to controls when exported
true
Negotiable bill of lading is proof of title allowing for the transfer of the title to the goods without requiring the owner to take physical possession of the goods
true
The current US export controls that control the export of goods from a US manufacturer to a foreign buyer also purport to control the re-export of those goods beyond the boundaries of the country of the original foreign buyer
true
There are preferences in the US tariff laws designed to stimulate the economic progress of less developed nations
true