BUL 6852 Midterm Review
Currency Option
(also known as a forex option) is a contract that gives the buyer the right, but not the obligation, to buy or sell a certain currency at a specified exchange rate on or before a specified date. For this right, a premium is paid to the seller.
International Law 3 Kinds of Relationships
1. Public International Law (states) 2. Quasi-Public International Law (states and persons) 3. Private International law (person to person)
Indirect Exporting
1. involves an organization sells to an intermediary in its own country. This intermediary then sells the goods to the international market and takes on the responsibility of organizing paperwork and permits, organizing shipping and arranging marketing
General Agreement on Trade in Services (GATS)
1. treaty of the World Trade Organization (WTO) that entered into force in 1995 following the Uruguay Round negotiations. It was created to include services in the multilateral trading system. Ranging from architecture to voice-mail telecommunications, services today form the largest and most dynamic component of developed and developing countries' economies (accounting for more than 60 % of global production and employment, although no more than 20 % of total trade). No services supplied in the exercise of governmental authority No services related to air traffic rights
International Centre for Settlement of Investment Disputes (ICSID)
1966 multilateral treaty formulated by the Executive Directors of the World Bank to further the Bank's objective of promoting international investment. Provides for settlement of disputes by conciliation, arbitration or fact-finding
Charter of Fundamental Rights
2009 EU Law human rights
Basket of Risks
A basket is a set of instruments that are held together because its statistical profile delivers a desired goal, such as hedging a risk or trading it, which cannot be achieved through the individual constituents or even subsets of them
Licensing
A business arrangement in which one company gives another company permission to manufacture its product for a specified payment
Franchise; Franchising
A business system in which private group of individuals is sold the rights of business logo, model, and the name of a much larger company, usually an MNC or Multinational Company by the owners or franchisors to run it in a different location is called as Franchisee Business
Currency Rate Fluctuation
A change in an exchange rate. happen constantly and occur for all floating currencies
Export Management Company (EMC)
A foreign or domestic company that acts as a sales agent and distributor for domestic exporters in international markets
Conflict of Cultural Traditions
An unethical practice in a home country is considered ethically proper in the host country
Nontariff Barriers
A non-tariff barrier is any measure, other than a customs tariff, that acts as a barrier to international trade. These include: regulations: Any rules which dictate how a product can be manufactured, handled, or advertised rules of origin: Rules which require proof of which country goods were produced in quotas: Rules that limit the amount of a certain product that can be sold in a market
Repatriation
Ability of funds to be transferred freely across countries by converting to foreign currency
ATA Carnet
Admission Temporaire - international customs and temporary export-import document. It is used to clear customs in 87 countries and territories without paying duties and import taxes on merchandise that will be re-exported within 12 months
Benefit-Cost Analysis
Attempts to monetize the ethical determination by placing a dollar value on the benefits and costs of an action from the narrow perspective of the decision-maker
Caux Round Table Principles for International Business
Blend the Western concept of the dignity of all human beings with the Japanese concept of kyosei—that a primary value of society is working together for common good
Self-executing treaty
Contains a provision that the treaty will apply to the parties without their having to adopt any domestic enabling legislation
Concession Agreement
Contract that gives a company the right to operate a specific business within a government's jurisdiction or on another firm's property, subject to particular terms
Offset Agreement
Direct offset: the exporter may be required to establish manufacturing facilities in the importing country or to use a specified percentage of the components in the product sold from the importer´s country. Indirect offset: the exporter may be obliged to buy goods o services from the importing country without any link to the product sold
Attorney General Opinion
Establishes a procedure to provide responses to inquiries concerning conformance of an action with the Department of Justice's enforcement policy regarding the FCPA. Issue 30 days after receiving request
Protocols
Etiquette of diplomacy, not usually written down
Eximbank
Export Import Bank (Exim Banks) are government or semi government agencies that ensure the safety and growth of a country's foreign trade. They provide customized financial instruments to safeguard the interests of exporters against default/nonpayment from the importers
Exporting-Importing
Exporting is defined as the sale of products and services in foreign countries that are sourced or made in the home country. Importing refers to buying goods and services from foreign sources and bringing them back into the home country
Jus Cogens
Foundation of respect fundamental principles 1969 Vienna Convention on the Law of Treaties
U.S. Trade and Development Agency (USTDA)
Helps companies create U.S. jobs through the export of U.S. goods and services for priority infrastructure projects in emerging economies
Objective Territoriality
If foreign companies act in ways that directly affect a state other than their own, they may be accountable by the other state
Categorical Imperatives
Immanuel Kant, nonnegotiable duties that were a priori to any utilitarian calculation. Common formulation is that human beings can never be used as a means to an end, all individuals recognized as equal, rational persons. Wrong to subject someone to a risk without their informed consent
Principle of Comity
In situations where 2 nations share common policy and ideas, one of nations submits to laws and judicial decrees of the other
Conventions
Legally binding agreements between states sponsored by organizations such as the UN
Treaties
Legally binding agreements between two or more states
Act of state doctrine
Nation is sovereign over its own territory and its official domestic actions. May not be questioned by the judicial bodies of another country
CE Mark
Obtain the CE Mark are guaranteed access to the markets of all EU Markets. Asserts that the product meets mandatory health, safety, and environmental requirements of the EU
Corporate Codes of Conduct
Often includes integrative ethics approach elements
Caux Round Table Principles for International Business
Principle 1 - Responsibility of business to go beyond shareholders toward stakeholders Principle 2 - Requires that the social and economic impact of business be directed at advancing innovation, justice, and world community Principle 3 - Beyond the letter of law toward a spirit of trust, may not be appropriate for a company to enforce its rights strictly under the law Principle 6 - Respect for the environment, improving the environment, promoting sustainable development, avoiding the wasteful use of natural resources Principle 7 - Avoidance of illicit operations, targets bribery and corruption and their damaging effect on country's development
Amendments of 1988 (FCPA)
Provided more detailed definitions of some of the crucial terms of the FCPA. FCPA does not provide a private right of action. Government only has to prove that a party had reason to know that some of its money would be used to bribe a foreign official
USUS
Requires consistent and recurring action or lack thereof by states
Arbitrage
Simultaneous buying and selling of securities, currency or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset
Doctrine of Sovereign Immunity
State must agree to it, US Foreign Sovereign Immunities Act FISA of 1976
Home Country
The country in which a person was born and usually raised, regardless of the present country of residence and citizenship
International Trade Administration (ITA)
The mission of the International Trade Administration (ITA) is to create prosperity by strengthening the international competitiveness of U.S. industry, promoting trade and investment, and ensuring fair trade and compliance with trade laws and agreements
Opinio Juris Sive Necessitatis
The psychological element must show that states observing the custom must regard it as binding
Privatization
The transfer of a business, industry, or service from public to private ownership and control
Overseas Private Investment Corporation (OPIC)
U.S. development finance institution. This government agency assisted private businesses that wanted to invest abroad. OPIC encouraged development in emerging markets through private sector investment overseas by assisting corporations to analyze and manage riskswhile encouraging development in emerging markets. This helped the agency advance the country's foreign policy and national security goals.
Sale of Services
Usually involve carrying out tasks that have been contractually agreed to be carried out during a period decided by the company
Evergreen Laws
can be entered in a contract by stating that the contract automatically renews on a given day each year if neither side provides notice
Joint Venture
a commercial enterprise undertaken jointly by two or more parties which otherwise retain their distinct identities
Host Country
a country where a company that is based in another country has business activities: When production costs are raised in the host country, the company can easily move its activities to another country
Counter-Purchase
a situation where a seller receives full payment in cash for the goods and services it sells to a foreign country but agrees to spend some portion of the amount received in that same country within a specified time
Foreign Distributor
carry on the responsibility of marketing the manufacturer's product and servicing customers in the local market. The characteristics that contribute to successful distributors are numerous, making it imperative for manufacturers to employ a systematic approach to selection
Jurisdiction, Personal
the judge has the power or authority to make decisions that affect a person. For a judge to be able to make decisions in a court case, the court must have "personal jurisdiction" over all of the parties to that court case
International Court of Justice
the principal judicial organ of the United Nations (UN). It was established in June 1945 by the Charter of the United Nations and began work in April 1946
Consignment
agreement to pay a supplier of goods after the goods are sold
International Chamber of Commerce (ICC)
aims to foster international trade and commerce to promote and protect open markets for goods and services and the free flow of capital. The ICC performs three primary activities: the establishment of rules, dispute resolution, and policy advocacy
Futures Contract
an agreement traded on an organized exchange to buy or sell assets, especially commodities or shares, at a fixed price but to be delivered and paid for later
CIF (Cost, Insurance, and Freight)
an expense paid by a seller to cover the costs, insurance, and freight of a buyer's order while it is in transit. The goods are exported to a port named in the sales contract. Once the freight loads, the buyer becomes responsible for all other costs.
Forward Contract
an informal agreement traded through a broker-dealer network to buy and sell specified assets, typically currency, at a specified price at a certain future date
Comparative Advertising
any advertising which explicitly or by implication identifies a competitor or goods and services offered by a competitor
Technical Barriers
any regulation, standard or procedure that could make exporting goods to another country more difficult. TBTs are often greater obstacles to exporters than tariffs (import fees). Testing or certification procedures are examples of technical barriers to trade
Foreign Credit Insurance Association (FCIA)
association of insurancecompanies that offers insurance to U.S. exporters against nonpayment by foreigncustomers due to commercial and political risks.
WTO Agreements
cover goods, services and intellectual property. They spell out the principles of liberalization, and the permitted exceptions. They include individual countries' commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets. They set procedures for settling disputes. They prescribe special treatment for developing countries. They require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted, and through regular reports by the secretariat on countries' trade policies
Article 38 of the Statute of the International Court of Justice
divides the sources of international law into those of a primary and secondary nature. The primary sources, which the Court will consider in its decisions, include conventions (or treaties), customary law, and general principles recognized by civilized nations.
Foreign Sales Representative
entity or person acting as a foreign representative for a local business. An individual or firm that serves as a foreign representative for a domestic supplier and seeks sales in the foreign country for the supplier
United Nations Commission on International Trade Law (UNCITRAL)
established by the United Nations General Assembly by resolution 2205 (XXI) of 17 December 1966 (see annex I), plays an important role in developing that framework in pursuance of its mandate to further the progressive harmonization and modernization of the law of international trade by preparing and promoting the use and adoption of legislative and non-legislative instruments in a number of key areas of commercial law
Trade Barriers
government policies which place restrictions on international trade. Trade barriers can either make trade more difficult and expensive (tariff barriers) or prevent trade completely (e.g. trade embargo)
United Nations Convention on Contracts for The International Sale of Goods (CISG)
governs contracts for the international sales of goods between private businesses, excluding sales to consumers and sales of services, as well as sales of certain specified types of goods.
Ninth Ministerial Conference (WTO)
held in Bali, Indonesia, from 3 to 7 December 2013, ministers adopted the "Bali Package", a series of decisions aimed at streamlining trade, allowing developing countries more options for providing food security, boosting least-developed countries' trade and helping development more generally
North American Free Trade Agreement (NAFTA)
implemented to promote trade between the U.S., Canada, and Mexico. The agreement, which eliminated most tariffs on trade between the three countries, went into effect on Jan. 1, 1994. Numerous tariffs—particularly those related to agricultural products, textiles, and automobiles—were gradually phased out between Jan. 1, 1994, and Jan. 1, 2008
Trade Facilitation Agreement (TFA)
improve trade efficiency worldwide, encouraging economic growth by cutting red tape at borders, increasing transparency and taking advantage of new technologies.
Trade in Goods
includes all goods which add to, or subtract from, the stock of material resources of a country by entering its economic territory (imports) or leaving it (exports)
Export Trading Company (ETC)
independent company that provides support services for firms engaged in exporting. This may include warehousing, shipping, insuring, and billing on behalf of the client
World Trade Organization (WTO)
intergovernmental organization that regulates and facilitates international trade between nations
Bilateral Investment Treaty (BIT)
international agreements establishing the terms and conditions for private investment by nationals and companies of one state in another state.
Countertrade
international trade by exchange of goods rather than by currency purchase
Foreign Direct Investment (FDI)
investment made by a firm or individual in one country into business interests located in another country
Barter Transaction
involves two parties and is one where one basket of goods and services is exchanged for another basket of different goods and services. without any accompanying monetary payment
Lex Mercatoria
law merchant is used to designate the concept of an a-national body of legal rules and principles, which are developed primarily by the international business community itself based on custom, industry practice, and general principles of law that are applied in commercial arbitrations
Multilateral Investment Guarantee Agency (MIGA)
member of the World Bank Group. Our mandate is to promote cross-border investment in developing countries by providing guarantees (political risk insurance and credit enhancement) to investors and lenders
Remarketer
merchant or export agent who purchases goods and services directly from the producer, packing and marking the goods in line with his or her own specifications. Remarketers will then sell these goods and services abroad via their contacts in their own names and take over all risks
Disagio
negative difference between the face value of a security or loan and its actual, lower price.
International Law Covers
o Common (case) o Civil (statutory law) o Substantive
Consent of particular state can be found in
o Declarations of its government o Domestic legislation o Its court decisions o Treaties to which it is a party
Option Contract
offers the buyer the opportunity to buy or sell—depending on the type of contract they hold—the underlying asset. Unlike futures, the holder is not required to buy or sell the asset if they choose not to
Hedging
strategically using financial instruments or market strategies to offset the risk of any adverse price movements. Put another way, investors hedge one investment by making a trade in another
Expropriation
the act of a government claiming privately owned property against the wishes of the owners, ostensibly to be used for the benefit of the overall public
Nationalization
the transfer of a major branch of industry or commerce from private to state ownership or control
Free Trade Agreement (FTA)
pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange
Uruguay Round
participants had agreed on a package of cuts in import duties on tropical products — which are mainly exported by developing countries. They had also revised the rules for settling disputes, with some measures implemented on the spot. And they called for regular reports on GATT members' trade policies, a move considered important for making trade regimes transparent around the world
Buying Agent
people or companies that offer to buy goods or property on behalf of another party
Transfer Pricing
price at which related parties transact with each other, such as during the trade of supplies or labor between departments. Transfer prices are used when individual entities of a larger multi-entity firm are treated and measured as separately run entities
Customs Broker
private individuals, partnerships, associations or corporations licensed, regulated and empowered by U.S. Customs and Border Protection (CBP) to assist importers and exporters in meeting Federal requirements governing imports and exports
Convertibility
quality that allows money or other financial instruments to be converted into other liquid stores of value. Convertibility is an important factor in international trade, where instruments valued in different currencies must be exchanged
Customary International Law
refers to international obligations arising from established international practices, as opposed to obligations arising from formal written conventions and treaties
Freight Forwarder
responsible for the transportation of goods between one destination and another. They act as an intermediary between the shipper and transportation services, liaising with various carriers to negotiate on price and decide on the most economical, reliable and fastest route
Jurisdiction, Subject Matter
the authority or power that each court has over certain types of legal disagreements (disputes). For a court to hear a particular case, it must have subject matter jurisdiction over the issue or issues that you are asking the court to decide on
General Agreement on Tariffs and Trade (GATT)
signed on October 30, 1947, by 23 countries, was a legal agreement minimizing barriers to international trade by eliminating or reducing quotas, tariffs, and subsidies while preserving significant regulations. The GATT was intended to boost economic recovery after World War II through reconstructing and liberalizing global trade
Commission Agent
someone who sells a company's products and receives a part of the money paid for the goods for doing this
Buy-Back
the buying back of goods by the original seller. The buying back by a company of its own shares. A form of borrowing in which shares or bonds are sold with an agreement to repurchase them at a later date
Global Supply Chain
the worldwide system that a business uses to produce products or services
U.S. Commercial Service (CS)
to promote the export of goods and services from the United States, particularly by small- and medium-sized businesses; to represent U.S. business interests internationally; and to help U.S. businesses find qualified international partners