LEGL 4900 Exam 3 Vocab

manufacturing drawback

a refund of duties and taxes paid on merchandise that is imported, subjected to manufacture or production, and then exported within five years

Dual-use items

commercial items that may also have military or "proliferation" uses (relating to the proliferation of nuclear, chemical, or biological weapons)

Counter purchase agreement

common type of countertrade; involves the sale of goods to a buyer, often a foreign government, which requires as a condition of the sale that the seller buy the other goods produced in that country

tariff-shift rule

states that the country of origin is the last country in which all 'inputs' into the finished article underwent a defined change in tariff classification

deemed export

the release or transfer of any item subject to control, including technology or software (source code); to a foreign person in the united states.

parallel trade

the resale of goods between countries without the authorization of the owner of the intellectual property (IP) rights associated with those goods

Inconvertibility Risk

the risk that the government of a country with soft currency will hinder the foreign entrepreneur from trading the foreign currency back into US dollars

nationalization

the taking of an entire industry or a natural resource as part of a plan to restructure the nation's economic system

Diversion

the unlawful transfer, transshipment, rerouting, or reexporting of controlled goods or technology from one destination which the goods or technology were legally shipped to another destination or foreign person who has not been licenses to receive the items.

preferential rules of origin

those applicable to goods traded within a free trade area or customs union, or that receive preferential tariff treatment under trade preference programs for developing countries

political risk analysis

tries to forecast political disruptions that can threaten the value of a foreign investment

Output or Customer Restrictions

used to limit the amount of products the licensee can produce or limit the number of customers the licensee can sell to.

National Security Controls

used to prohibit the export of goods or technology that would make a significant contribution to another country's military that would be detrimental to the U.S.'s national security.

Notice of adjustment

when Customs at the port of entry determines that additional duties are owed, this is sent to the importer

unitary index adjustment

A contractual provision in which the investor and the government agree on payment through a commonly accepted measure of relative currency value or national inflation

Tax Haven

A country where the effective tax rate on a relevant item of income is very low or zero

Binding Ruling

A determination, made by U.S. Customs, and only applicable to the United States, that classifies a specific product and assigns it a tariff rate before the goods are imported. The ruling is binding on U.S. Customs, which means that it cannot "change its mind" after the product is imported. also called a ruling letter

Same-condition drawback

A drawback of duties paid on imported goods that are re-exported in the "same condition" as they were imported, provided they were not significantly altered.

composite goods

A good that represents the collective expenditure on every other good except the commodity being considered

Customs union

A group of countries committed to (1) removing all barriers to the free flow of goods and services between each other and (2) the pursuit of a common external trade policy.

Export Management and Compliance Program

A mandatory program in an organization that states the compliance policies of a company in writing, involving senior managers as well as personnel at all levels.

Arbitral Panel

A panel of five experts in NAFTA, who termed that US was in violation of NAFTA

Joint Venture

A partnership in which two or more companies (often from different countries) join to undertake a major project.

Grant Back

A provision under which any improvements by the licensee of a license agreement is granted back to the licensor

Prior Disclosure

A statute to encourage importers to voluntarily report their own possible violations of the customs laws

rules of origin

A system of allocating certificates whereby a defined amount of a product or service must be certified as being created within that region

ad valorem tariff rate

A tariff rate based on the percentage of the value of the articles imported

Franchise tax

A tax levied on the annual receipts of businesses that are organized to limit the personal liability of owners for the privilege of conducting business in the state.

value-added tax

A tax on increased value of the product at each stage of production and distribution rather than just at the point of sale.

Biopiracy

A term describing the ways that corporations from the developed world allegedly claim ownership of, free ride on, or otherwise take unfair advantage of, the genetic resources and traditional knowledge and technologies of developing countries

traditional theory

A theory that promotes majority rule without violating minority rights, maintaining the willingness to compromise, and recognizing the worth and dignity of all people.

Buy-back agreement

A type of countertrade in which the seller agrees to supply technology or equipment to construct a facility and receives payment in the form of goods produced by the facility.

Fair, reasonable, and nondiscriminatory (FRAND)

An agreement done voluntarily between a standard setting organization and the holder of an intellectual property rights -reason Samsung was required to give a license to Apple before seeking injunctive relief -can reduce risk of patent "hold-up" and perceived advantages of litigation -only applies in limited circumstances and has not curbed litigation in a meaningful way

Export Control Classification Number (ECCN)

An alpha-numeric code, e.g., 3A001, that describes an item and indicates licensing requirements. All ECCNs are listed in the Commerce Control List (CCL) (Supplement No. 1 to Part 774 of the EAR).

Active Investment

An approach to investing in which the investor seeks to outperform a given benchmark.

Customs Broker

An authorized agent, licensed by federal law, to act for and on behalf of importers in making entry of goods.

priority claim

An unsecured claim that is entitled to be paid ahead of other unsecured claims that are not entitled to priority status. Priority refers to the order in which these unsecured claims are to be paid.

Free Trade Area (FTA)

Area in which tariffs among members have been eliminated, but members keep their external tariffs

Extraterritorial Jurisdiction

Control by a community of an area larger than the community or jurisdiction for planning and zoning purposes, granted by the state legislature, which allows local governments to plan and control urban development outside their boundaries until annexation can occur.

Dutiable Value

Customs value of goods entered into any country - must be reported by the importer-of-record to national customs authorities at time of entry

Trademarks

Designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products

substitution drawback

Duties paid on imported goods may be received by a U.S. firm that imports goods and then exports other goods of the "same kind and quality "

Barter

Exchange goods without involving money.

Maquiladora

Factories built by US companies in Mexico near the US border to take advantage of much lower labor costs in Mexico.

right of priority

For a period of one year, an application for a patent in a second member country will be treated as though it had been filed on the same date as the application made in the first member country.

expropriation

Forced transfer of assets from a company to the government with compensation

essential character

If two or more headings or subheadings each describe only certain materials or components in composite goods, the article must be classified under the heading that describes the material or components that give the article its

Prior Approval

Insurers cannot use rates until approved by the Department of Insurance, or until a specific time period has expired after the filing.

Foreign Direct Investment

Investment made by a foreign company in the economy of another country.

Counterfeit Goods

Merchandise made without proper legal authorization with the intent to pass (distribute or utter) for profit.

Multilateral Sanctions

Sanctions imposed by more than one country

Conscious avoidance

Term used to apply to officers or managers of a company who try to avoid criminal liability by deliberately avoiding information.

Tariff Shift Rule

The Annex 401 rules of origin may be based on a change in tariff classification, a regional value-content requirement, or both, depending on the requirements for that particular product

drawback

a refund of duties already paid on imported goods when the goods are reexported or destroyed

private political risk insurance

The Political Risk Insurance provided by private insurers covering the risk of a foreign government take-over

net book value

The acquisition cost of an asset less accumulated depreciation, depletion, or amortization

Cybersquatting

The act of registering a domain name that is the same as, or confusingly similar to, the trademark of another and then offering to sell that domain name back to the trademark owner.

Country of Origin

The country from which an imported article is said to have originated according to specific rules, known as rules of origin

Political Risk

The likelihood that political forces will cause drastic changes in a country's business environment that will adversely affect the profit and other goals of a particular business enterprise.

Commerce Control List (CCL)

The list that shows all the licensing requirements

National Treatment

The principle of nondiscrimination between foreigners and locals

non-preferential rules of origin

Those applicable to imports of DEVELOPED countries that will receive normal tariff treatment.

Tied-purchase clauses

clauses that require the franchisee to buy certain goods from the franchiser

Geographical Limitations

When the licensor agrees to provide services to facilitate the anticipated activities, such as assistance in setting up an assembly line or other training and technical support, this is one way it can restrict the licensee's use of the transferred IPR. e.g. within a specific nation

Geographical Indications

Where a product, particularly wine or liquor is marketed by reference to a geographic region

compound tariff rate

combination of both ad valorem and specific rates

Soft Currency

a currency that is not easy to exchange for other currencies

tariff schedule

a document listing all the possible Harmonized System classification categories, as well as their associated tariff rates for the different types of countries

certificate of origin

a document that states the name of the country in which the shipped goods were produced

Countertrade

a form of trade in which all or part of the payment for goods or services is in the form of other goods or services

Common Market

a group of countries that acts as a single market, without trade barriers between member countries. AKA economic community.

Contract Manufacturing

a joint venture in which a company contracts with manufacturers in a foreign market to produce its product or provide its service

License

a limited permission to use the U.S. firm's trademarks, copyrights, or know-how in making products for sale in the vicinity of the foreign company's country.

Royalty

a payment for material that has been copyrighted, or legally declared as belonging to the creator

utility patent

a property right awarded for a new and non-obvious process, machine, or composition of matter that has a useful function

Currency invonvertibility

a reciprocal arrangement between buyer and seller for the sale of goods or services intended to minimize the outflow of foreign exchange from the buyer's country.

Sanction

a regulation that restricts or prohibits certain relationships with specified (or "targeted") foreign countries, foreign entities, or named foreign individuals because of their support for international terrorism, the proliferation of weapons of mass destruction, for international drug and narcotics trafficking, or other threats to national security.

Consolidated Screening List

a searchable database of lists published by the Department of Commerce, department of state, and department of treasury.

Gray market

a situation where products are sold through unauthorized channels of distribution. Also called parallel importing.

political risk insurance

a type of insurance that can be taken out by businesses, of any size, against political risk—the risk that revolution or other political conditions will result in a loss

Domestic or Regional value content test

a type of value added test that requires some minimum percentage of the value of materials and direct processing operations be performed in a country in order for it to have originated there

Export

actual shipment or transmission out of the united states in any manner, or releasing or transferring of technology or software to a foreign person in the united states.

rejected merchandise drawback

allowed for imported merchandise that was shipped without consent, is defective, or does not conform to specifications or to samples

validated end user program

allows qualified exporters to pre-approve shipments to foreign trusted customers, business partners, and subsidiaries of American companies of certain high technology or dual use items without the need for individual export licenses

reinsurance treaty

an agreement among insurance companies that spreads the risk among its members

Generalized System of Preferences (GSP)

an agreement where a large number of developed countries permit duty-free imports of a selected list of products that originate from specific countries

Automated Commercial Environment

an online system of US Customs and Border Protection, in collaboration with the US Census Bureau

boycott

an organized refusal of one or more nations, often backed by economic sanctions, to trade with one or more other nations.

Foreign person

any U.S. Person effectively owned or controlled by a foreign interest, foreign businesses not incorporated in the U.S., individuals holding a work or student visa (F1, J1, H1B)

Regional value content

calculation used to determine the percentage of originating materials in a product to nonorigninating. Transactional value or net cost.

Harmonized Tariff Schedule (HTS)

classification scheme used by many nations to determine tariffs on imported goods

Currency Exchange rights

negotiating with government of a soft-currency to get priority rights to currency conversion

Fundamental Research

defined in the EAR as "research in science, engineering, or mathematics, the results of which ordinarily are published and shared broadly within the research community, and for which the researchers have not accepted restrictions for proprietary or national security reasons"

soft blockages

delays in processing conversion requests by the local authorities

Electronic Export Information (EEI)

electronic filing required for each export shipment leaving the US

Trade creditors

entities that sell supplies or services to the venture should try to buy locally in local currency; retain hard-currency for repatriation

civil customs fraud

far more serious than negligence. a fraudulent violation exists where there is clear and convincing evidence that the importer knowingly made a materially false statement or omission while entering or attempting to enter goods into the United States.

Double Taxation

feature of taxation that allows stockholders' dividends to be taxed both as corporate profit and as personal income

Customs user fees

fees imposed on importers to help fund the cost of customs enforcement and port services

hard blockages

occur when the foreign government passes a law that prevents conversion or transfer

substantial transformation

occurs when the processing of an article results in a new and different article having a distinct name, character, or use; occurs when an HS classification changes

rule of relative specificity

if an article can be classified under two or more headings or subheadings, it must be classified under the one that most specifically-most narrowly-describes the article with the greatest degree of accuracy and certainty

Import Substitution rights

if preferential currency exchange rights aren't available, can replace foreign imports with domestic production

Bad Faith

intentional wrongful behavior which under the UDRP now includes some negligence without a finding of intent.

short supply controls

law that protects the country's economy from excessive foreign demand for scarce materials

export controls

laws and regulations that govern the control and licensing of certain goods and technology exported from the United States or released or transferred to anyone who is not a U.S. citizen or permanent resident, whether that person is within or outside the United States.

language politics

laws or customs that determine when and where which language will be spoken

Antiboycott

legal responses by governments that make it unlawful for their citizens or companies to participate in a boycott

foreign trade zones (FTZs)

legally defined sites - warehouses and manufacturing facilities - operated pursuant to legislation and under government license, that are legally "outside" the customs territory of the country they are in

Patents

licenses that give an inventor the exclusive right to make, use, or sell an invention for a set period of time

Commerce Country Chart (CCC)

lists each country and indicates when an export license is required. (if X under 'reason for control'). Not all countries need an export liscense

specific tariff rate

specified dollar amount per piece, or unit of weight or measure

Binational Panels

panels where NAFTA cases now go, apply the same standard of review as would a court of law convened in the country where the case originated

Design Patents

patents that are granted when someone has invented a new and original design for a manufactured product

Intellectual Property Rights (IPRs)

patents, copyrights, and trademarks extended to individuals and organizations to protect their ownership of products or other creative works generated through their original ideas

modern-traditional theory

permits takings of foreign property but imposes some requirements 1) for a public purpose 2) nondiscriminatory 3) accompanied by prompt and adequate compensation

Informal Entry

personal and commercial shipments valued at $2,500 or less may be cleared through this process

insurance syndicates

pools of money provided by investors to insure specific projects

Currency Risk

potential threat to a firm's operations in a country due to fluctuations in the local currency's exchange rate

transfer pricing

prices charged in sales between an organization's units

privatization

process of converting government enterprises into privately owned companies

export credit agencies

promote investment from their own countries

Formal Entry

refers to the administrative process required to import goods into the customs territory of a country

reexport

refers to the shipment or transfer of American-controlled items or technology from one foreign country to another foreign country or foreign person

Commercial Invoice

required for all shipments intended for sale or commercial use in the United States

Field of use limitations

restrict the applications for which the licensee may employ the IPR

Exclusive rights

rights or permission for one paper to publish a story that no other paper can

General Rules of Interpretation

rules found at the front of the tariff schedules help to classify goods

Franchising

selling to a foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits

repatriated

send (someone) back to their own country

Currency Swaps

simultaneous purchase and sale of a given amount of foreign exchange for two different value dates

Export Taxes

taxes meant to raise export cost and divert production for home consumption

informed compliance

the "softer" mechanisms designed to place the burden of voluntary compliance on importers

Enforced Complience

the active investigation of customs violations and the prosecution of violators.

Foreign Availability

the controlled item, or one of comparable quality, is "available-in-fact" from non-US sources in sufficient quantities so that any attempt to control for national security purposes would be ineffective

creeping expropriation

the effect of laws and regulations that subject the investor to discriminatory taxes, legislative controls over management of the firm, price controls, forced employment of nationals, license cancellation, and restrictions on currency convertibility

Copyrights

the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit

copyrights

the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit

Liquidation

the final computation and assessment of the applicable duty on entered goods by customs

global supply chain

the firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized

technology

the information necessary for the development, production, use, or operation of items, and in almost any form, such as blueprints, drawings, photographs, formulae, and engineering designs, whether written, verbal, or electronic

Parallel Exchange

the investors, all committed to the local incontrovertibility risk, spread that risk over a larger group, with the hoping of reducing the vagaries of local bureaucracy

Ultimate purchaser

the last person in the US who receives an article in the form in which it was imported

dutiable status

the legal status of imported goods at the time of entry for purposes of compliance with the tariff and customs laws

Principal use

the ordinary use to which articles of the same class and kind as those being imported are usually put and which is greater than any other single use of the article

Fluctuation Risk

the possibility that the currency of the country in which the US investor has put its money will devalue against the US dollar

Profit Margin Preservation

the price or payment to the foreign investor will be adjusted periodically to maintain the same profit margin

Transaction value

the price that is actually paid or payable for the goods when sold for export

Production Sharing

the process of combining the higher labor skills and technology available in developed countries with the lower-cost labor available in developing countries

deemed reexport

the release or transfer of an item from someone who was licensed to receive it to a different foreign person