International Business Law and its Environment CH1

quota

A limit placed on the quantities of a product that can be imported

Export Trading Company Act

Allowing producers of similar products in the United States to form an export trading company; created a more favorable environment for the formation of joint export ventures, in part by removing antitrust disincentives to trade activists

least developed countries (LDCs)

The poorest and weakest economies in the developing world as identified by UNCTAD.

nationalization

The transfer of private-sector firms to government ownership and control, usually with payment to shareholders and pursuant to a larger plan to restructure a national economy

Repatriation of profits

Where a multinational returns the profits from an overseas venture to the country where it is based

certificate of origin

a document that states the name of the country in which the shipped goods were produced, one of the most important legal documents used in import/export transactions.

non-tariff barriers

are all barriers to the import of goods or services other than tariffs.

sanctions

are broader and more comprehensive restrictions on trade and financial transactions with countries, who sponsor international terrorism, engage in the proliferation of weapons of mass destruction, threaten international peace, or violate major principles of international law

licensing agreement

are contracts by which the holder of IP will grant certain rights (the "license") in that property to another party under specified conditions and for a specified time, in return for consideration, such as a fee or royalty or as a part of a larger business arrangement.

multinational corporations

are firms that have significant foreign direct investment assets or that derive a significant portion of their revenues from more than one country.

Foreign distributors

are independent firms, usually located in the country or region to which a firm is exporting, that purchase and take delivery of goods for resale to their customers.

Foreign sales representative

are independent sales agents who solicit orders on behalf of their principals and receive compensation on a commission basis.

suppliers risk

being victim of fraud or receiving defective goods.

export plan

defines a company's intent to leverage resources and manage constraints in initiating and developing export activity

newly industrialized countries

developing countries that have made rapid progress toward becoming industrialized or technology-based economies

political risk

generally defined as the risk to a firm's business interests resulting from political instability or civil unrest, political change, war, or terrorism in a country in which the firm is doing business.

payment or credit risk

in an import/export transaction, the risk that the buyer will fail or refuse to pay

Export Management Company (EMC)

independent firms that assume a range of export-related responsibilities for manufacturers, producers, or other exporters

foreign subsidiary

is a "foreign" company organized under the laws of a foreign host country, but owned and controlled by the parent corporation in the home country.

franchsing

is a business arrangement that uses an agreement to license, control, and protect the use of the franchisor's patents, trademarks, copyrights, or business know-how, combined with a proven plan of business operation in return for royalties, fees, or commissions

foreign branch

is a business presence by the investor in the host country.

joint venture

is a cooperative business arrangement between two or more companies for profit.

export control

is a restriction on exports of goods, services, or technology to a country or group of countries imposed for reasons of national security or foreign policy.

tariff

is an import duty or tax imposed on goods entering the customs territory of a nation.

confiscation

is expropriation without payment of any compensation.

Importing

is the entering of goods into the customs territory of a country or the receipt of services from a foreign provider

Trade

is the import or export of goods and services across national borders, usually as part of an exchange

Exporting

is the shipment of goods out of a country or the rendering of services to a foreign buyer located in a foreign country

expropriation

is the taking by government of privately owned assets, such as real estate, factories, farms, mines, or oil refineries, with the payment of some compensation.

intellectual property

legal rights which result from intellectual activity in the industrial, scientific, literary, and artistic fields.

indirect exporting

practice by which a company sells its products to intermediaries who then resell to buyers in a target market

Direct exporting

refers to a type of exporting in which the exporter, often a manufacturer, assumes responsibility for most of the export functions, including marketing, export licensing, shipping, and collecting payment.

foreign direct investment (FDI)

refers to the ownership and operation or effective control of the productive assets of an ongoing business by an individual or corporate investor who is a resident or national of another country.

Trade in services

refers to the providing of services to a customer or the operation of services companies in a foreign country.

infringement

refers to the violation of the IP rights of another, and often occurs in the unauthorized use, distribution, or appropriation of those rights.

countries in transition

refers to those countries that transitioning from centrally planned economies (usually based on communist doctrine) to free markets.

currency controls

restrictions on foreign currency transactions used by some developing countries that do not have large reserves of foreign currency.

exchange rate risk

results from the fluctuations in the relative value of two currencies when one is exchanged for the other

affiliates

several subsidiaries owned by one parent company

transfer of technology

the sharing of scientific information, technology, and manufacturing know-how, between firms, universities, or other institutions is known as

emerging market economy

used to describe countries or regions with the potential for rapid economic growth