International Law Exam #2 Study Guide
Importer's duty:
-use reasonable care to determine the dutiable status of the good being imported and to report it to customs authorities(and to provide necessary documentation).
Freight Forwarders bill of lading:
federally licensed individuals acting as agent for seller; can either be "straight" or "order" (i.e., nonnegotiable or negotiable); do not allow claims against the carrier, only against the forwarder (carrier is liable only to the forwarder).
Under U.S. law:
final decisions (or negative determinations to not initiate investigation or that no material injury exists) of ITC and ITA in countervailing duties cases and dumping cases are reviewable in U.S. Court of International Trade (if it is an antidumping case involving Canadian or Mexican goods, appeal may be to a binational arbitration panel under NAFTA).
Allocated Quota:
total limit is "allocated" among several countries.
"Unfair competition" in the form of:
(1) dumping; (2) "unfair governmental subsidies"
Convention for the International Sale of Goods ("CISG")
(deals with formation of contract and rights and obligations of seller and buyer, but not validity of contract); CISG applies (assuming contract does not specify otherwise unless the parties opted out of CISG or to opted to vary its terms in clear and unambiguous language) if: (1) contract is for commercial sale of goods (some transactions are excluded from CISG); (2) between parties with places of business (for a multinational entity -- country with closest relation to contract and where it would perform) in different countries; (3) places of business are in countries that ratified the CISC. Overall theme of CISG -- endeavors to keep the parties in their bargain
Global Quota:
- imposed by importing country on particular product regardless of its country of origin.
"tariff law"
- laws and regulations that determine the "dutiable" status of goods (legal status of the imported goods at the time of entry for purposes of tariff and customs laws) and the rate of the duty (tariff); "customs law" is a broader term which encompasses "tariff law" but also covers other aspects of the control of goods and people crossing international borders. U.S. Bureau of Customs and Border Protection assesses and collects tariffs and administers duty-free zones.
Airway Bill:
- most air transport is handled through nonnegotiable air waybills (meaning that the carrier will deliver the goods only to the named consignee); Q. why is negotiability not as important for air transport as it is for ocean transport? A. Air transport is so much quicker.
Other customs laws affecting U.S. imports:
- such as drawbacks (refunds) of duties already paid on imported goods when the goods (or other goods manufactured from the imported goods) are re- exported or destroyed -foreign trade zones (legally defined site within country subject to special customs regulations).
Difference between:
-"shipment" contracts (contract requires seller to ship goods by carrier but does not require seller to deliver the goods to a named place; under UCC risk of loss passes to buyer when seller delivers goods to the first carrier) & -"destination" contracts (seller to deliver goods at a particular destination such as "Rotterdam"; under UCC risk of loss passes to buyer when seller deliver goods to buyer at port of destination); under CISG If the contract calls for goods to be handed over to carrier at a particular place, then risk of loss passes to buyer at that place; if seller is expected to ship and no particular place is mentioned, then risk of loss passes when goods are handed over to first carrier for transport
Trade Terms
E terms - place the lowest amount of responsibility on the seller --"EXW" (ex works)seller need only make goods available at factory. Buyer arranges all transportation and bears all risks and expenses from there. F terms - shipment contracts - "FCA" (free carrier; applies to all types of transport) seller places goods in hands of carrier named by buyer at specified place and provides export license); "FAS" (free alongside ship; applies to water transport only) seller places goods at dock shipside and provides export license; "FOB" (free on board; applies to water transport only) seller has the goods loaded on the ship and provides export license; C terms - shipment contracts (but "C" means seller responsible for certain costs after delivery of goods to carrier) - "CFR" (cost and freight; applies to water transport only) seller contracts for transport and freight; arranges for loading on ship; documentary sale is assumed); "CIF" (cost, insurance and freight; applies to water transport only) seller contracts for transport, insurance assigned to buyer and freight; arranges for loading on ship; documentary sale is assumed); "CPT" (carriage paid to; applies to all types of transport) similar to CFR, but allies to all modes of transport; no need for seller to obtain insurance; documentary sale is assumed; "CIP" (carriage and insurance paid to; applies to all modes of transport) same as CPT but seller obtains insurance; documentary sale assumed; D terms - destination (arrival) contracts - place the greatest amount of responsibility on seller - "DAT" (delivered at terminal; applies to all modes of transport) seller bears all costs of delivering and unloading the goods at destination terminal; "DAP" (delivered at place; applies to all modes of transport) same as DAT, but goods need not be unloaded by seller; "DDP" (delivered duty paid; applies to all modes of transport) same as DAT, but seller also pays import duties and obtains import licenses and clears goods through customs.
Electronic Data Interchange (EDI)
Instead of paper documents. Advantages: -permits tracking of goods in transit and address delays; -quicker transmission of documents gets payment quicker for seller. -eliminates multiple paper copies of documents (more efficient and accurate) Issues: -security -not available in all countries. -lack of standardization.
Classification/coding
("Harmonized Commodity Description and Coding System"- developed by the "World Customs Organization" - an international convention that uses standard rules and tariff language to describe and classify (and assign a code to) goods; used by virtually all countries trading internationally); "tariff classification" - assigning types or kinds of goods to categories based on the name, use or physical characteristic of the good. "tariff schedule" - a listing of specific items, coded numerically and described by name or use and used to apply the nation's tariff rates (according to the country of origin of the good) for each classificaiton. -The U.S. tariff schedule is at "Harmonized Tariff Schedule of the United States" -- maintained by the International Trade Commission ("ITC") (available online from the ITC or the U.S. Customs and Border Protection); other countries/jurisdictions have their own; Canada has its "Customs Tariff"; the European Union has its "Combined Nomenclature of the European Union."
On board bill of lading:
-signed by ship's master or agent of carrier stating the goods have been loaded on-board; Thus, buyers insist on "on-board" bill of lading.
Excuses for nonperformance:
1) impossibility, (2) frustration of purpose and (3) commercial impracticability; Under CISG exemption (excuse) for "Impediments Beyond Control" party is not liable for failure to perform obligations (1.) due to impediments beyond control, (2.) not reasonably foreseeable at time of contract, (3.) unavoidable and could not be overcome, (4.) notice was given to the other side of the impediment and its effect on the contract; Usually impediment does not entirely excuse performance, but merely suspends it until the impediment ends. Force Majeure ("superior force") clauses excuse (or suspend) party from performance upon occurrence of certain events
Documentary sale:
A type of contract for sale of goods in which constructive possession and ownership of goods are transferred from seller to buyer through the "negotiation" and "delivery" of a "negotiable" document of title issued by an ocean carrier. -In a situation involving a "negotiable" document a "holder by due negotiation" takes title (to the document and to the goods it represents); a negotiable bill of lading is important to international trade because of its negotiability; the goods can be bought and sold while still in transit (title is transferred through negotiation of the document, for example, the ocean bill of lading); (Buyer does not take immediate hand over of goods with documentary of sale (ex. still on water) Not simultaneous exchange of goods for money but money for document)
How Documentary Collection Works:
A.Seller entrusts goods to carrier/ gets negotiable bill of lading (or multimodal transport document) made "to order" from/by carrier Seller endorses bill of lading/presents to seller's bank for collection along with other documents contract requires it submit, for example, marine insurance policy certificate of origin seller's commercial invoice showing price to be paid (this is always necessary) "documentary draft" - this is a negotiable instrument for making payment (a negotiable order to pay that is made out by seller, drawn on buyer and payable to order of seller). B.Seller's bank forwards package of documents to collecting bank in buyer's country with instructions to release the documents to the buyer only on payment of the draft; -When buyer pays the draft, the collecting bank sends the money to seller's bank
Clean bill of lading:
as opposed to "foul" - does the bill of lading indicate any visible damage to the goods? Thus, buyers insist on a "clean" bill of lading; usually this relates only to external appearance of the goods.
EAR "controlled items":
can include "commercial items" (intended primarily for civilian use)and "dual-use items" (commercial items which also have military uses or proliferation uses relating to proliferation of nuclear, chemical or biological weapons); Weapons, munitions and defense systems are not considered "dual use" and are regulated under an export control system administered by the U.S. Department of State, not the EAR; EAR applies to (1) U.S. origin goods and technology (wherever located - even if in a foreign country); (2) certain foreign-made goods having a certain percentage (usu. at least 25%) of U.S.- origin controlled content or technology; (3) certain items made in foreign country using U.S. -origin controlled technology; and (4) items made at a plant outside the U.S. if the plant was designed and built with U.S. technology; understand how this is an aggressive interpretation of the reach of US law (because many things are U.S. made). Major (broad) reasons for controlling exports under EAR - (1) protect national security; (2) promote U.S. foreign policy; or (3) prevent short supply of essential domestic materials; other reasons for export controls - protection of wildlife, environment, public safety, antiquities; nonproliferation; crime control; and anti- terrorism; under EAR export controls should not be imposed for foreign policy or national security purposes if there is "foreign availability" of the goods or technology; goods or technology to be controlled are selected by Department of Commerce (in consultation with other parts of government or multilateral control arrangement organizations of which US is a member) and placed on "Commerce Control List"; the president sets the list of "controlled" countries; actions of Dept. of Commerce and President in setting lists largely exempt from public comment procedures or judicial review; U.S. export controls apply to both "exports" and "re-exports" (and to "deemed exports" and "deemed re- exports"); "diversion" - unlawful transfer, transshipment, rerouting, or re-exporting of controlled goods or technology from one (legal) destination to another (unlawful) destination; "export license" required for each export or re-export (or "deemed exports" or "deemed re-exports") of controlled goods or technology; export license determined based on (1) whether the item is controlled, (2) the country of destination, and (3) the identity of end-user; End User Controls make it unlawful to release any controlled item to certain listed persons or entities. Exporter has burden of using due diligence to comply with export control regulations; penalties (civil and, depending on circumstances, criminal) for failure to comply are serious.
Transaction risks:
delivery risk (risk to buyer that seller will not deliver as required by contract); payment risk/credit risk (risk to seller that buyer will not pay as required by contract).
Steps in importation:
formal entry [the step at which estimated duties paid or a customs bond posted], liquidation [the final computation and assessment of the applicable duties; if additional duties are owned a "notice of adjustment" is issued], and protest [initially with U.S. Bureau of Customs and Border Protection at the port of entry with appeals thereafter to Customs headquarters in Washington and, ultimately to Court of International Trade and then to Court of Appeals for the Federal Circuit]; and the enforcement procedures (include civil violations and criminal penalties depending on the situation).
Auctioned Quota:
quota rights sold to the highest bidder.
Dutiable Statius of Goods:
which depends on (a) classification/coding ("Harmonized Commodity Description and Coding System"- developed by the "World Customs Organization" - an international convention that uses standard rules and tariff language to describe and classify (and assign a code to) goods; used by virtually all countries trading internationally); "tariff classification" - assigning types or kinds of goods to categories based on the name, use or physical characteristic of the good; (b) customs value (dutiable value), and (c ) country of origin ("rules of origin" are used to determine the country of origin;
Absolute Quotas
•" strictly prohibits imports of an item above a pre-determined limit (whether based on value or quantity of specific goods such as weight, number of pieces, etc. or based on the percentage of the domestic market). •Types of "absolute quotas" include "global quotas," "allocated quotas," "zero quotas," and "auctioned quotas."
Quotas:
•"Quota" is a quantitative restriction on imports. - Article XI prohibits use of quotas as protectionist measure
Multimodal transport documents:
("combined transport document" or "through bills of lading") For example, container that goes from train to ship -Therefore, there are operators who deal with train company and shipping line; -seller can do single contract with operator who then contracts with others
Payment risk:
("credit risk") in an international sales transaction is risk to the seller that the buyer will fail to pay as required. Why are international transactions particularly risky for seller in terms of payment risk? •May not know buyer's credit background •May be difficult to pursue seller for payment in foreign jurisdiction with unfamiliar legal system •If the buyer refuses delivery, seller may be stuck with goods in distant locale which are difficult to resell and too expensive return to seller's location
Remedies for Breach:
(1) avoidance (cancellation) of contract (under CISG buyer may "avoid" or cancel contract (or certain provisions of it) if seller's failure to perform is a fundamental breach; if the seller requests additional time to cure a fundamental breach, the buyer does not have to grant the additional time; in the case of non-delivery, buyer may avoid the contract only at the end of the nachfrist period (at the end of the additional period of time the seller was given to perform); if buyer fails to take delivery or fails to pay, then seller can avoid contract; (2) remedy or cure; (3) additional time for performance (extension), CISG gives extra grace period for seller to perform (i.e., attempt to cure) beyond time for performance (German "Nachfrist" ("the period after"))seller may request reasonable extension of time to perform (i.e., to cure) and if buyer does not respond, the seller gets the additional time; (4) price reduction (if seller ships defective or non-conforming goods (or there is a partial shipment) buyer may adjust the price it pays; this remedy is available whether or not the seller's breach has been fundamental); (5) damages (money damages); breaching party (buyer or seller) liable for damages in amount sufficient to make the injured party whole; and (6) specific performance (under CISG Court may grant specific performance without regard to whether or not money damages would be inadequate as a remedy; Court need not grant it unless it would do so under its own law).
"Documentary collection" process
(banks act as intermediaries between the buyer and the seller to handle the exchange of bill of lading for payment); (documentary sale can mitigate may risks, particularly, for example, if certificates of inspection or analysis and certificates of insurance are used, but does not actually guarantee that the buyer will actually purchase the documents when presented; seller could sue for breach); Documentary collection is indicated as "cash against documents" ("CAD") "documents against payment" ("D/P") But even if CAD or D/P is not stated, the documentary collection is normally implied in most documentary sales contracts The documentary collection process should work smoothly, but there is still no absolute guarantee, for example, that disputes won't arise (Even if the parties do not setup documentary collection and use documentary sales then use of banks will still usually apply)
Importing
(entering of goods into country); Commercial shipments go through administrative entry process ("clearing customs") in which customs officials (a) determine if there are any prohibitions or restrictions on the import of those goods or whether any other laws or regulations are applicable and (b) whether any tariff (duty) is due; each country will have own processes; similar from country to country due to "harmonization" process.
Fundamental Breach:
(results in such detriment to the other party as substantially to deprive him or her of what he or she is entitled to expect under the contract, unless the breaching party did not foresee (and a reasonable party in position of breaching party would not have foreseen) such a result.
Dumping:
(selling of goods in a foreign country for less than the price charged for "like" or comparable goods in the exporter/producer's home market; an "unfair trade practice" prohibited under GATT (1947) and US law; definition of "dumping" does not depend on the firm's motive); remedies for dumping are the imposition (by the importing country) of "antidumping duties" (in addition to normal tariffs that might be applicable); to level the playing field by offsetting the low price of the dumped goods. -Antidumping duties may be imposed on imported goods sold (or likely to be sold) in the U.S. at "less than its fair value" (i.e., the "export price" of the goods sold in the U.S. is less than the "normal value" of like or similar goods (which depends on a number of factors, including physical characteristics, use, common (or different) producers, common (or different) components, comparable (or different) commercial value, etc.) sold for consumption in the exporter/producer's home market); this difference is the "dumping margin"; Special rules for antidumping investigations involving nonmarket economy countries ("NMEs"); -Reason there need to be special rules for calculating dumping margins involving goods originating in NMEs. (In AD cases involving NMEs, it is difficult or even impossible to determine the "normal value" of merchandise sold in an NME country because of likely government manipulation of costs and prices.) -Disputes over antidumping duties may be taken to WTO (by nations, not private parties); if WTO panel finds the antidumping order imposed by importing country violates the WTO Antidumping Agreement, it may recommend measures to be taken against importing country by Dispute Settlement Body
Straight bill of lading:
(this is a nonnegotiable bill of lading); goods are intended by seller/shipper to go only to the consignee (the named recipient); in order to claim goods consignee need only (in US) present identification; some other countries (Canada, U.K., etc.) still will require consignee to present the straight bill of lading in order to claim the goods; straight bills of lading do not represent title to the goods.
Zero Quota:
complete ban on import of a product.
Trade Adjustment Assistance Program:
federal assistance program for workers who become unemployed as result of increased imports of foreign goods; Petitions for "trade adjustment assistance" may be filed by group of workers (3 or more), employer, state jobs agency or labor union; Secretary of Labor determines whether (1) significant number of workers in a firm have (or are threatened to) partially or wholly lose their jobs; (2) firm's sales or production had decreased absolutely, and (3) increased imports of like or directly competitive products importantly contributed; if Secretary of Labor determination is affirmative, then group of workers is certified as eligible for trade adjustment assistance; workers certified as eligible can then apply individually for benefits with state jobs office (benefits can be cash, tax credits, vouchers for job search expenses, training, relocation, health care insurance; in some circumstances for older workers benefits can be wage subsidies)
Delivery risk:
in an international sales transaction is risk to the buyer that the seller will fail to ship/deliver as required. Why are international transactions particularly risky for buyer in terms of delivery risk? •May not know seller well •Seller may not care as much about foreign customers as it does its domestic customers Why are ocean shipments particularly risky in terms of delivery risk? •Time •Moisture •Storms •Shipwreck •Pilferage •Piracy •If "intermodal" transport (for example, truck to ocean) -- losing goods during transfer
Boycott
is an organized refusal of one or more nations to trade with one or more other nations.
Privatization:
is process by which a government sells or otherwise transfers government-owned industries or other assets to the private sector.
Customs value (dutiable value)
is the transaction value of the goods (i.e., the price actually paid or payable for the merchandise when sold for export to the United States) plus (if not already part of the purchase price) (1) packing and container, (2) selling commission paid by the buyer (but not the buying agent's commission), (3) production "assists" (dutiable assists), i.e., goods, services, or intellectual property furnished by the importer to the foreign producer free or at reduced cost for use in manufacturing the goods for import and sale in county of importation, (4) and royalty or license fee the buyer is required to pay as a condition of sale, and (5) proceeds of any subsequent resale that accrues to the seller. The transaction value does not include international freight charges, insurance or customs brokerage fees, inland transportation after importation, charges for assembling or maintain the goods after importation or import duties.
Received for shipment bill of lading:
issued by carrier upon receiving goods for transport; no guarantee that the goods will be loaded on board ship soon; thus, on-board bill of lading is more typically insisted upon by buyers; received-for-shipment bill of lading can be converted into an on-board bill of lading by notation on face of bill of lading of date of loading and name of vessel;
Export Controls:
laws and regulations that govern the licensing of certain goods and technology exported from the country or transferred to non-citizens; (but each nation has its own export controls, (unilateral [country alone] vs multilateral controls [coalition of countries acting together; most effective]); U.S. Export Administration Act of 1979 permitted Bureau of Industry and Security ("BIS"), part of Department of Commerce, to promulgate export control regulations ("Export Administration Regulations" or "EAR").
Anti boycott laws:
make it unlawful for citizens or companies to participate in a boycott; U.S. export control laws have antiboycott provisions making it illegal to "comply [with or] support any boycott fostered or imposed by a foreign country against a country which is friendly to the United States" (example, Arab League boycott of Israel)
"tariff engineering"
modifying or engineering a product prior to importation in order to obtain a favorable duty (because the article is classified according to its condition at time of importation); Marking and labeling of imports - countries require imported goods be marked with the country of origin (some goods are exempt; under U.S. law, if there is a substantial transformation resulting in a new article with a new name, character or use, then it is no longer a foreign article needing to be marked; Under U.S. law, US-made goods do not have to be designated "Made in USA" when sold in US, but if a seller chooses to make the "Made in USA" claim, it can only do so if all or virtually all of the materials, processing or component parts are made in USA and final assembly or processing took place in US.
Formation of International Sales Contracts:
mutual assent (offer and acceptance); differences between UCC (the primary source of US domestic law on sale of goods) and CISG in terms of necessity of a writing (under CISG contract for international sale of goods need not be in writing whereas under the UCC contract for sale of goods over $500 need to be in writing) and use of parol evidence (parole evidence rule is not incorporated into CISG which allows a court to consider all relevant circumstances in considering the intent of the parties), etc., mailbox rule (CISG does not use "mailbox rule"), limits on use of standard contract terms, how Battle of Forms operates (under CISG acceptance with new (additional or different) terms that do not materially alter the deal become part of the contract unless offeree objects; acceptance with new (additional or different) terms that do materially alter the deal are considered a rejection and counter-offer); CISG does not address the validity of a contract, the competence of the parties, etc.; CISG does not mention consideration.
Automated Export System:
online system of U.S. Census Bureau collects Electronic Export Information ("EEI") from the exporter (or the freight forwarder as authorized agent for the exporter) and is required to be filed (usually prior to shipment) for each transaction for which an export license has been issued (and for many other shipments)
Safeguarding
or protecting domestic industries from foreign competition; - buying time for domestic industries to adjust; General WTO rule is that member nations may not raise tariff rates on imported goods just to protect domestic industry or domestic jobs, but under limited circumstances a government may impose temporary safeguards (emergency remedies provided by law (usually tariffs) )to protect its domestic industry from injury from increased imports; Basis and procedures for WTO "safeguards" are in Article XIX of GATT (1947) (the "escape clause" - allows a country to take temporary corrective action ("emergency action") to "escape" (be relieved of its tariff concessions) in order to "safeguard" its domestic industry where: (1 ) as a result of unforeseen developments; and (2) due to a tariff concession (or obligation under a trade agreement); (3) increased quantities of an imported product; (4) are causing (or threatening to cause) serious injury to domestic producers of like or directly competitive products) and the WTO Agreement on Safeguards (1994) (which provides that "safeguard" may be imposed by a country only after an independent administrative agency in the importing country has conducted an investigation and determined that legal requirements for imposing "safeguard" have been met and the increase in imports are the actual cause of the domestic industry's decline; decline due to an overall economic slowdown such as a recession or decline due to technological advances by domestic competitors are not enough).
Country of Origin
origin used to determine (1) tariff rate for goods, (2) whether the goods are subject to countervailing duties or antidumping duties; (3) whether the goods are subject to an embargo or quota, (4) applicability of government procurement rules; (5) health or safety issues; (6) country of origin (may be different test) for marking or labeling requirements, etc. ("rules of origin" are used to determine the country of origin; (i) "non-preferential rules of origin" applicable to countries that receive normal tariff treatment - general non-preferential rule - from what country are the goods "wholly obtained" or, if not "wholly obtained in one country, then the country of origin is the country where the goods last underwent a "substantial transformation" into a new and different article; and (ii) "preferential rules of origin" applicable to free trade area or customs union or applicable to developing countries (for example, general preferential NAFTA (pre-USMCA) rule to be "NAFTA origin goods, goods must be "wholly produced or obtained" in Canada, Mexico or the United States or, if contain non-NAFTA originating inputs (raw materials or components) must meet either regional value content requirements or "tariff shift" rules of origin. )- what it is, what it is worth and where it came from; "tariff schedule" - the nation's tariff rates (according to the country of origin of the good) for each classification; the U.S. tariff schedule is at "Harmonized Tariff Schedule of the United States." Harmonized Tariff Schedule of the United States has 2 columns: Column 1 - has 2 tariff rates: (1) "general rate" - applicable to imports from countries which the U.S. accords "normal trade relations" status; (2) "special rate" - special tariff treatment if the item comes from a developing country (for example, under Generalized System of Preferences) or from a free trade area in which US participates; Column 2 - original Smoot-Hawley Tariff Act of 1930 rates now applicable to countries to which U.S. has not granted "normal trade relations" status. Tariffs can be "ad valorem" (percentage of the value of the article imported), "specific" (specified amount per unit of weight or measure) or "compound" (a combination of both ad valorem and specific tariff rates)
Transactions risks of documentary sale:
payment risk and delivery risk. in an international sales transaction is the risk faced by a buyer or seller when money or goods are moved in an international sales transaction.
A "bill of lading" is three things:
receipt for the goods (noting any visible damage); contract of carriage (i.e., a transport document); document of title to the goods; a negotiable ocean bill of lading is a document of title issued by an ocean carrier to a shipper upon receipt of goods for transport; (i.e., clean, on-board, received for shipment, and straight) and other types of transport documents (air waybill, multimodal transport documents, and freight forwarder's bill of lading); much is now done electronically through electronic data interchange ("EDI") instead of paper documents;
Sanctions:
regulations that prohibit domestic companies or citizens from doing business with certain foreign governments, organizations or individuals (for example, due to support of terrorism, spread of nuclear weapons, drug trafficking); each nation will has its own sanction procedures) and, in addition, there can be international cooperation as to sanctions; Authority for U.S. Sanctions - two main bases for president's authority to act - (1) Trading with the Enemy Act (1917) and (2) International Emergency Economic Powers Act ("IEEPA")(this is the primary current grant of power to president to impose sanctions during peacetime emergency - president may declare emergency in event of "any unusual and extraordinary threat, which has its source in whole or in part outside the United States, to the national security, foreign policy or economy of the United States" in the U.S. enforced by the Office of Foreign Assets Control (part of Department of Treasury); also U.S.A. Patriot Act (2001) - greater ability to seize assets (and assets can be frozen pending (rather than after) investigation of links to terrorism); enforced by Office of Foreign Assets Control part of the U.S. Department of Treasury and Financial Crimes Enforcement Network Right to export and travel is a privilege which is recognized by law, but can be revoked; "export controls" and "sanctions" are enforced by civil and criminal penalties
Performance of Contracts:
seller's obligations (including to deliver conforming goods in manner specified within the time specified) and buyer's obligations (including to pay and take delivery).
Trade terms
shorthand abbreviations (FOB, CIF, etc.) to express arrangement between parties about transfer of risk of loss and other issues: See, International Rules for the Interpretation of Trade Terms (Incoterms 2010) By International Chamber of Commerce (Paris) Have the effect of customary law Incoterms has 11 trade terms in 4 groups (E, F, C, D) - note, Incoterms 2010 has just 2 (Group 1 and Group 2) groupings rather than 4 See, for example, Exhibit 5.3 of text Incoterms not automatically part of contract Therefore, say "This contract is to be interpreted in accordance with Incoterms 2010." Some of the Incoterms are for water transit only (FAS, FOB, CFR, CIF)
Unfair governmental subsidies:
subsidies ("subsidy" as financial contributions (including any form of income or price support) made by a government that confers a benefit on a specific domestic enterprise or industry) are governed by GATT/WTO and WTO Agreement on Subsidies and Countervailing Measures (1994) ("SCM Agreement") as well as by national laws and regulations; Under the SCM Agreement "nonspecific subsidies" are permissible, but "specific subsidies" (i.e., given (a) to a select company or number of companies, (b) to a select industry or group of industries, or (c ) to firms in a select geographic region of a country) are prohibited if they are either (a) a prohibited subsidy impermissible per se and prohibited in all circumstances its harmful effects are presumed; no proof of adverse effects is necessary; there are two types of "prohibited subsidies" - "export subsidies" (made available to domestic firms upon the export of their product (or made contingent upon export performance)) and "import substitution subsidies" (government subsidy contingent on the recipient using or purchasing domestically made goods rather than imported goods) or (b) an actionable subsidy (also known as "adverse effects subsidies" are not automatically prohibited, but can be "actionable" if (1) causes material injury to producers of like product in the complaining country; (2) violates a trade agreement or (3) it causes "serious prejudice" to the interests of complaining country); Subsidy disputes can be resolved through the WTO Dispute Settlement Body (nation to nation) (which may authorize complaining country to take countermeasures to offset the improper subsidies of the other country); subsidy disputes can alternatively be resolved through administrative action at the national level in the country into which the subsidized goods are imported ("countervailing duty actions"); both routes can be pursued (WTO and national countervailing duty action), but only one remedy (WTO authorized countermeasure or nationally authorized countervailing duty) will apply; special rules for NMEs in countervailing duty actions.
Safeguarding
tariffs are the preferred form of safeguard and, if used, should be as less- restrictive as possible, temporary (lifted when conditions permit) and "global" in nature; developing countries are exempted from application of the "safeguard" measure unless their imports amount to more than 3% of the imports of that product;. Under WTO agreements country imposing safeguard measures should compensate the nation against which the measures are imposed (i.e., the counties supplying the imports for which the measures are imposed); this "trade compensation" takes the form of Country A lowering tariff duties on certain products coming from Country B to offset the increased duties coming from the safeguard measure imposed by Country A on different products for which Country B was a large supplier to Country A; If the countries do not reach agreement on the "trade compensation" then Country B may "suspend ... substantially equivalent concessions" US "safeguards" law is "Section 201" of the Trade Act of 1974; it differs from GATT/WTO in some respects: (a) U.S. law does not limit the imposition of safeguards (or "import relief") to situations where the injury or risk of injury to domestic industry arises from "unforeseen developments"; and (b) requirements for determining a "serious injury" differ under U.S. law than under GATT/WTO. Understand the impact of that difference in laws (WTO Dispute Settlement Body in a number of "safeguard" cases rules against U.S.). Under Section 201 petition for import relief is made to International Trade Commission ("ITC") - an independent agency; (can be made by any firm, trade association, union, worker group, Congress, President, ITC itself); ITC gives public notice, holds hearings makes a determination (affirmative or negative) as to injury and, if affirmative, may recommend a limited-duration remedy (which could include (1) tariff increases, (2) tariff-rate quotas, (3) absolute quotas, (4) auctioned quotas, or (5) financial assistance to workers or to domestic industry) to President who may make an adjustment to imports if, in his or her discretion, it will help the domestic industry make a positive adjustment to import competition and economic and social benefits will outweigh the cost;
