LES: Week Fifteen (Final Exam)

OPEC (Organization of Petroleum Exporting Counties)

A cartel that controls oil supplies, production, prices and taxes.

NAFTA

Has approval Implemented over 15-year period Canada, U.S., and Mexico: seamless trade.

GATT

147 member nations Trying to work through this approved concept of free trade. Establishes World Trade Organization (WTO): has dispute settlement body (DSB)-arbitration. Most-favored nation status gets more favorable trade treatment. Can impose fines.

EU treaty- specifics are pending for free trade

15 member group and correspondent members One currency in 1999 (euro) Aiming toward uniformity in law Established European Parliament and European Court of Justice (ECJ) 300 directives in place for governance.

Contracts for the International Sale of Goods (CISG)

1980 Vienna Convention is another name Adopted in 60 countries Designed to provide an international UCC and its convenience

You meet with a foreign official to persuade him to give you a license to open a casino to your large resort property by giving him a 1000 gift. This license is worth 100,00 in the community. You also give him a 500 payment to speed up trash removal service for your establishment. What is your maximum penalty, if any?

200,000

Which of the following would be a violation of the Foreign Corrupt Practices Act?

A payment to a member of the International Olympic Committee (a NGO) in order to obtain his or her vote on an Olympic site.

Antitrust in the International Marketplace

All firms doing business here subject to antitrust jurisdiction Export Trading Company Act: Allows joint ventures among competitors. For business in other countries. Tariffs Protections for Intellectual Property

Criminal law Protections

All those present in a country are subject to that country's criminal law Subject to all regulations as well.

NGOs (Nongovermental organizations)

An organization that is not a business or governmental entity. The international Olympic Committee is an example.

Foreign Corrupt Practices Act (FCPA)

Applies to businesses with principal offices in the US. Requires establishment of internal accounting controls so that bribes are not permitted to flow through easily. Prohibits making, authorizing, or promising a gift to a foreign official with the intent to corrupt; has five elements: 1. Instrumentality of interstate commerce must have been used- Example: Phones or mail. 2. Payment or something of value must have been given. 3. Money or item of value is given to foreign official with discretionary authority- a political candidate or political party. 4. Purpose of the payment was to get official to act or to keep from acting. 5. payment was made with the idea of assisting the giver's business. "Grease payments", or facilitation payments, are payments to get officials to do their jobs, not to influence outcome, and are not prohibited. Criminal violations of FCPA carry penalties up to $2,000,000 and ten years imprisonment for individuals; corporate fines are up to two times the amount of benefit received (Alternatives Fines Act) Civil fines under Alternatives Fines Act (not FCPA) are tied to benefits received.

Primary Trade Sanctions

Companies based in the US are prohibited from doing business with certain countries; may be limited to certain types of goods.

Secondary boycott

Companies from other nations doing business with a sanctioned country will also experience sanctions.

Expropriation: Act of State Doctrine

Country seizes private property by order of attachment. Leaves these decisions to executive and legislative branches and keeps them away from judiciary.

IMF- International Monetary Fund and World Bank

Currency stability- created at Bretton Woods with this goal. Special drawing rights- using line of credit to stabilize a country's currency Issues of buying currency

Forum Non Conveniens or "You have the Wrong court"

Dissmiss cases brought in wrong court Example" Union Carbide and Bhopal, India: proper forum was India.

Sovereign Immunity

Each nation is sovereign Other nations do not take jurisdiction over a country's international operations, laws, and people.

Types of International Law Systems- Common law systems

England United States

European Union

Established the goal of free trade, a single currency, and uniform laws on commerce and security among member nations.

Foreign Corrupt Practice Act ( FCPA)

Federal law prohibiting bribes of foreign public officials.

Trust, Corruption, Trade, and Economics

Focus in last five years on reducing bribes and corruption

Which the following are included as categories to whom payments are prohibited to influence results or outcome under the Foreign Corrupt Practices Act

Foreign government officials Judicial figures Government administrative hearing officers Head of the United Nation's International Labor Organization (a NGO)

Protections for U.S. property and Investment Abroad

Hickenlooper amendment to foreign assistance Act of 1962 Allows president to sanction countries that take property of U.S. companies. Treaties afford protections. OPIC is federal agency that provides insurance for U.S. businesses against expropriation (in poor countries)

Qualcomm Inc., the world's largest mobile chipmaker, received a notice from the SEC (Securities and Exchange Commission) that it was investigating allegations made by a whistleblower. A subsequent internal investigation found that the company made or gave "...special hiring considerations, gifts or other benefits... to several individuals associated with Chinese state-owned companies or agencies." Which of the foregoing would violate the FCPA?

Hiring officials or their relatives to gain an improper business advantage. Making gifts to officials to gain an improper business advantage. Giving any other benefits to officials for an improper business advantage.

Nonstatutory Sources of International Law- Environment and technology

How good are phone wires? Means of communication Reliability of communication

Organization for Economic Cooperation and Development (OECD)

International organization of countries committed to developing trade, initially through the elimination of corruption.

OECD Convention on combating Bribery of Foreign Public Officials in International Business Transactions

International organization of countries committed to developing trade, initially through the elimination of corruption. WRONG Agreement signed by countries who agree to criminally penalize bribery of foreign public officials.

International Prohibitions on trade

International tensions politically spill into trade Primary trade sanctions: can't do business with countries- can be limited in scope; during war. Can be limited to items; e.g. all but food and medications MFN, or "most favored nations", has no trade restrictions Secondary boycott: Original country is boycotted. U.S. will not do business with any company that works with government of that nation: e.g., military contractors can't use U.S. banks or get federal contracts. Generally not retroactive. Applies prospectively to new business.

The Kyoto Protocol (also known as the "the kyoto treaty" )

International treaty in which the members agree to reduce the output of greenhouse gasses to reduce global warming.

Nonstatutory Sources of International Law

LESCANT factors Language, Environmental & technology, Social organization, Contexting, Authority, Nonverbal behavior, time concept.

Repatriation

Limits on removal of profits from country where they are earned. Considered acts of state; cannot be litigated. Check limits before deciding to do business.

Nonstatutory Sources of International Law- Contexting

Low-context cultures (words matter, not context)- U.S., Canada, Switzerland, Germany, Scandanavian countries. Mid-level cultures- France, England, Italy. High-context cultures- Latin America, Islamic nations, Asian countries

Nonstatutory Sources of International Law- Time concept

Monochronic nations: time is everything (U.S., Great Britain) Polychronic- rest of the world

Transferring Real Property- Communism (prior to collapse)

Non-precedential Non-religious

OPEC

Organization of Petroleum Exporting Countries Cartel that controls supplies, production, prices and taxes

Grease payments (also called " facilitation payments")

Payments made only to get officials to do their normal jobs or to speed up the process.

Transferring Real Property- Islamic Law

Religious tenets integrated. Combination of Islamic law and colonizers' laws

Nonstatutory Sources of International Law- Authority

Role of lawyers and negotiators

Nonstatutory Sources of International Law- Nonverbal behavior

Silence and its role Gestures

Nonstatutory Sources of International Law- Language

Some areas require certain language

International business and the FCPA

Sometimes use grease payments: U.S. has actually increased: 1. Carefully train and remind employees. 2. Amended in December 1998 to bring U.S. laws in compliance with OECD's antibribery provisions. 3. Applies to all U.S. citizens acting outside U.S. and all non-citizens acting within U.S. 4. Expanded to include IMF and Olympic Committee. 5. U.S. basically met standards before. 6. OECD continuing to expand its efforts.

Transferring Real Property- Civil or code law

Statues or codes are very detailed; little reliance on precedent. France, Germany, Spain

Kyoto Treaty

The Kyoto prorocal or global- warming treaty Designated to reduce the greenhouse gas effect. All countries must reduce emmisions to 5% below 1990 levels. U.S. is required to do 7% reduction. Excluded from reductions: China, India and Mexico. EU- agreed to 8% reduction jointly- Note: Treaty is basically dead; U.S. will not approve; other countries have doubts.

NAFTA (North American Free Trade Agreement)

Treaty among the U.S., Canada, and Mexico to eliminate Tariffs for products originating in NAFTA countries as long as they are properly certified.

Bribe

Under the FCPA, it is making, authorizing or promising payments or gifts or money or anything of value to government or NGO officials with the intent to corrupt with the purpose of obtaining or retaining business for or with, or directing business.

Which of the following payments are considered to be "red flags" by the Justice Department when made by U.S. companies?

When consulting fees are high or odd payment arrangements are made.

Nonstatutory Sources of International Law- Social Organization

Woman working on deals Custom and habits

The Foreign Corrupt Practice Act

allows facilitation payments

The Foreign Corrupt Practice Act allows

allows payments designed solely to speed up the processing of paperwork.

Payments by employees of US companies to political candidates in foreign markets to secure an improper business advantage

are illegal

The FCPA does not make which of the following acts criminal?

making grease payments

Conflicts of Law

no two countries have the exact same commercial laws Some countries have no commercial codes uniform commercial code is widely used. Party autonomy controls If parties have not agreed, law of country where the contract is performed will apply