International BLAW Part Three (chapters 8-15)

Jill is a passenger on an international flight covered by the Montreal Convention (MC). Her luggage is stolen. She is shocked because her Wimbledon tennis trophy was in the bag and is now gone. She is upset, becomes angry and is in tears, and later sues (in appropriate court) the air carrier for losing her luggage and causing her emotional distress in amount of $500,000. What is the result in court?

Maximum amount under MC allowed, e.g., approximately $1,600 USD.

The _____ vests the federal government with exclusive control over foreign commerce.

Commerce Clause

The fastest growing mode of ocean transport is called:

Containerized ocean cargo.

All products have a type of "economic nationality" for tariff purposes called:

Country of origin.

When the US Congress enacts a scheme of legislation or regulation in an area that prevails over inconsistent state regulation, the acts of Congress will prevail under the:

Doctrine of federal preemption

A basic right of WTO membership is that a country must treat goods and services from all WTO members:

Equally and without discrimination.

One of the principles of the WTO is that whereby members must eliminate quoatas and other non-tariff barriers and convert them into tariffs. This is called:

Tariffication

Company A in the US sells and exports widgets to Nigeria. The US lowers its tariff on foreign-manufactured widgets from 6.0% to 4.0%. Company A will then pressure the US to demand:

A reciprocal tariff concession from Nigeria on widgets or similar imports.

Country A wants to impose a quota on imports of cars from foreign manufacturers in specific countries but wishes to ensure that one country and its manufacturers do not come to dominate the market on imports by using for itself too much of the entire quota allowed for that group. You should suggest that Country A implement a(n):

Allocated quota

The President is concerned with fighting terrorism by tracking and stopping funding of terrorist groups who use the US banking system. He wants to know which agency he should speak to about this narrow issue broadly within the world of foreign trade. To which agency or group should he speak to?

Bureau of Financial Crimes Enforcement Network (FinCEN).

One of the main principles of the GATT system was a commitment by nations to:

Conduct of regular multilateral trade negotiations.

Prior to formally requesting binding dispute resolution with the WTO Dispute Resolution Body, the party complaining about a tariff violation must:

Conduct trade consultations with the offending party at the WTO

A telephone has component parts from China, Thailand, South Africa and Taiwan. It is assembled in Mexico and has a % of its value assigned as "Mexican" such that it qualifies for preferential tariff rate under NAFTA. In this analysis, the rule for determining tariff applicability is:

Domestic or Regional Value Content Rule.

Company A in Germany has a new product, a "security suitcase" that makes a bell or siren noise if a person other than its owner attempts to break into it. Usually the company exhibits its new products at a Frankfurt trade show. It wishes to make a more forceful entry into the US market by displaying its new product in the US to US buyer-distributors but at a minimal cost. What "tariff avoidance" strategy may they use to get product into the US legally for possible sales?

Use of foreign trade zone, e.g., New York, Boston, etc

President Trump has issued a "Buy America" Executive Order encouraging the purchase of American products. Company A has imported into the US certain foreign-made components for a kitchen stove having a value of only 30% of its price but otherwise uses only US-manufactured parts and advertises it as "Made in U.S.A." Will Customs allow this mark as a "US product" to assist US buyers in complying with intent of president's policy?

No, the US Federal Trade Commission regulates use of this mark.

The "country of origin" for tariff classification determination is the last country in which all "inputs" (raw materials, component parts) into the finished article underwent a required change in tariff classification. This is called the:

Tariff-Shift Rule.

Scottish separatists living in Glasgow in 2017 create the "Republic of Scotland" and declare themselves a separate state. They assert a right to become a member state of the EU and are greatly concerned at the "Brexit" vote in the UK and what happens after the UK leaves the EU. They believe EU membership is critical. Can the Republic of Scotland become an EU member automatically by virtue of having been a part of UK before?

No, the Maastricht Treaty deems only recognized "states" can apply for and be granted membership. Until such universal recognition occurs, at best the Republic of Scotland is a candidate for future membership. Their situation is similar to Kosovo (see Table 15.2).

Admiralty jurisdiction applies to the operation and management of vessels while engaged in navigation on:

"Navigable waters" used or capable of being used for commercial activity.

A means to prevent multiple taxations by a state or a multinational corporation is to offer the taxpayer a:

"Water's edge election"

As of January 2017, the maximum carrier liability from pasenger death or bodily injury is in US dollars approximately:

$153,000

The COGSA per-package liability limitation for carriers is ________ per package or customary freight unit.

$500

Company A wishes to import microwaves it manufactures into the US. The transaction value of each microwave is $100. The payable duty is a compound tariff rate. The specific rate is $2.00. The ad valorem tariff is 7.00%. What will be the liquidation amount paid on each microwave?

$9.00

Chapter 6

...

The Montreal Convention is best described as an example of:

A self-executing treaty

Personal and commercial shipments valued at $2,500 or less may be cleared though Customs:

By an informal entry process with duties payable immediately.

A refund of duties already paid by an importer when the original goods are re-exported or destroyed within a stated time period is called a:

Drawback.

The Uruguay Round from 1986 to 1994 ushered in significant changes to international trade regulation. These changes included all of the following except:

Elimination of all non-tariff trade barriers.

In 1944, the allied nations met at the Breton Woods Conference and out of concern with the "post-war" economies of the nations of the world created:

International Monetary Fund and World Bank.

_____ is not a non-tariff trade barrier.

Unconditional MFN trade

A free trade agreement usually refers to one with:

A "free trade area" providing favorable tariff treatment, often based on geography.

Your government asks for advice. It wishes to place a financial barrier on the entry of lace-up shoes being exported into the country by foreign manufacturers. It is intended to be a simple-to-enforce financial barrier. You suggest the easiest and simplest type tariff called a:

A global, flat tariff

The Import-Export Clause of the US Constitution specifically prohibits states from taxing:

Both imports and exports

Based on its economic growth in the past decade or so and global impact, the most significant admission into the WTO of a new member was in 2001 with the admission of ____________.

China

The price charged to transport cargo is called:

Freight.

In a normal import transaction, the final computation and assessment of the applicable duty on entered goods by Customs is called:

Liquidation.

COGSA exempts carriers from liability from:

Perils of the sea.

The Trade Reform Act of 1974 created a "fast track" process for approving trade agreements, known as the president's:

Trade promotion authority

A widget is imported into the US from South Africa. Once in the US, it is transported via rail from the entry port to Chicago. It has imposed on it then a special "Foreign Product Transportation Fee" that is not placed on transported products of domestic manufacturers. This is deemed inconsistent and invalid under:

"National treatment" principle of GATT.

John flies from New York City to Athens directly. When he arrives, he discovers his luggage has been lost and is not found after a search. He places a claim with the air carrier seeking a recovery that will compensate him for his loss of bag and contents, including the replacement value of a diamond ring worth $10,000 he was taking to Greece as a gift for his fiancée. The air carrier under the Montreal Convention will pay him an amount equal to approximately:

$1600

The tariff schedule of virtually all nations is based on:

Harmonized Commodity Description and Coding System developed by the World Customs Organization.

Computation of maximum carrier liability is often difficult in damage claims because of the lack of clarity defining the term:

Package

A states' authority to tax a business engage in foreign commerce may be determined by whether or not the imposed tax:

Results in multiple taxation

The process of modifying a product prior to importation with the intent of obtaining a lower duty rate at entry is called:

Tariff engineering.

A compound tariff rate is:

A combined rate with ad valorem rate plus with a specific rate.

A cargo vessel is owned by A. While on the ocean, the vessel springs a bad leak. The captain throws cargo overboard that belongs to B and C to make the vessel lighter. D also has cargo on the vessel which remains in the vessel and is not damaged or removed. Who will file a claim for general average against whom?

B and C have each a general average claim against D.

Legally defined sites (e.g., warehouses, manufacturing facilities) that are licensed by government and legally "outside" the customs enforcement territory of the country they are in are called:

Foreign Trade Zones.

The Carriage of Goods by Sea Act (COGSA) does not apply to bills of lading:

Issued for shipments between San Francisco and Los Angeles.

You are asked by your local Congressman what the status of the Trans Pacific Partnership Agreement (TPP) is as of June 2017. How do you respond?

It remains in effect but the US is not a member, and China has never been member.

A famous example of US law that motivated other counties to implement retaliatory tariffs which as a result hurt the US economy during the Depression was:

Smoot-Hawley Tariff Act.

The Montreal Convention provides that an international carrier must pay an amount computed on the value of:

Special drawing rights.

Country A imposes an import tax on fungible goods such as oil, wheat, or timber that enter specially from country B. This is likely called a:

Specific or flat tariff

Company A wishes to import kitchen microwaves into the US. The applicable tariff rate is 12.0%. If Company A engages in a deliberate strategy to import all component parts into the US (assembling them in US) and pay only 4.0% tariff to evade incremental 8.0% in costs, their act is called:

Tariff engineering.

The US wishes to publish its tariff rate on a product. There is some need for flexibility in the US rate determination predicted, so you advise that the easiest strategy is to publish a specific "ceiling" rate and use discretion to reduce rate as appropriate. This "ceiling tariff rate" is called:

The bound rate

All of the different "Rounds" of multilateral trade negotiations had the same goal of:

Trade liberalization

A law granting favorable tariff treatment to imports for developing countries is called a:

Trade preference

You are engaged with several nations as a trade representative of your country to create a free trade area agreement. As an example to argue in favor of such arrangement, you would cite any of the below as a success story of such structure except:

Caribbean Basin Initiative

A balance-of-payment deficit arises:

When nation's outflow of foreign exchange exceeds it receipts in its own currency.

The court of record with original jurisdiction to hear a dispute about the trade or tariff laws of the US is:

Court of International Trade

Miami places a "Port tax" on services provided by the port authorities to vessels entering the port from any destination, e.g., entry taxes, inspection charges, wharf fees, etc. Is this constitutional?

Yes, under the precedent of Department of Revenue of the State of Washington case.

Company A in Canada exports engines into the US. A US entity Company B acquiring them, pays all duties, and keeps them in stock for 6 months. Company B then cancels an anticipated product line of items for which the engines were acquired. The engine are cleaned, lubricated and then re-exported to Brazil. Company B can then:

Apply to Customs for a same-condition drawback.

Dutiable status of a good is determined by each of the following except:

Chemical components used in making the item

You are in charge of tariff policy for your country. You are asked to place an import restraint on products from a politically-allied nation. The restraint must be subtle and most difficult to detect and be "safe" from attack in the press. Your best suggestion is to implement:

Use of indirect non-tariff barriers by administrative regulations which are facially neutral but which impact imports by ally negatively as applied

Tom travels by air from Miami to New York, and then has a three-hour layover before he boards a flight to London. He is injured when aircraft encounters bad turbulence, lands in Charlotte, and the erratic landing there injures his leg. Is his injury covered by absolute liability provisions of Montreal Convention?

Yes, if he is deemed to be in one undivided carriage (i.e., all segments booked on one ticket) that is part of a single operation.

John works on a dredge that removes dirt and silt from bottom of Shiloh River. This is basically a "crane" sitting on a platform that is barely moveable. He is injured by another vessel striking the dredge while he was operating it. Can his lawsuit be heard by a court with admiralty jurisdiction?

Yes, if the river is "navigable water." Dredge is a "vessel."

Michelle leaves Miami on a flight bound for London. While proceeding up the east coast over Virginia, the plane makes an emergency landing and crashes too hard on the ground. Michelle is hurt. She brings a lawsuit under Virginia tort law seeking $250,000 for bodily injuries caused by pilot negligence, in addition to a recovery under the Montreal convention. The court will likely:

Decide only the Montreal Convention claim as the exclusive remed

You are the chief official in designing US trade policy. You wish to erect non-tariff trade barriers to Greek wine entering this country. This is politically sensitive given Greece's financial condition. Which strategy is the "sneakiest" and least likely to be made a political issue by angry Greek politicians?

Hidden or extra "red tape" in the importing process that causes delays.