legl test 3 - ch 12, 13, 17, 18
utility patent
a patent that protects the functionality of the invention has broad range of potential applications
drawback
a refund of duties already paid on imported goods when the goods are reexported or destroyed
manufacturing drawback
a refund of duties and taxes paid on merchandise that is imported, subjected to manufacture/production, and then exported within five years most common type in US, encourages US manufacturers to export
sanction
a regulation that restricts/prohibits certain relationships with specified foreign countries, entities, or named individuals because of their support for international terrorism, proliferation of weapons of mass destruction, narcotics trafficking, etc.
commercial invoice
a seller must provide a separate invoice for each commercial shipment entering required for all shipments intended for sale in US must provide all pertinent info about shipment, in english, and be signed by the seller
domestic or regional value content test
a type of value added test, requires some minimum % of the value of materials and direct processing operations be performed in a country in order for it to have "originated" there
global supply chain
an integrated international network of logistics, communications, finance, and trade relationships designed to take a product from inception through production and delivery to customers
consolidated screening list
an online compilation of prohibited end users
automatic commercial environment
an online system of US customs and border protection, exporters use automated system to file an electronic export info info shared with bureau of industry and security for export control purposes and with census bureau for statistical purposes
boycott
an organized refusal of one or more nations, often backed by economic sanctions, to trade with one or more other nations
output or customer restrictions
can be used to limit the amount of products the licensee can produce or limit the number of customers the licensee can sell to especially if licensor plans to use the licensee as a source of products for the licensor's own distribution requirements
foreign policy controls
controls used to promote the foreign policy goals of the US and for the following reasons
national security controls
coordinated with US allies on basis of wassenaar arrangement license required for all items controlled for national security reasons for US (except canada)
tariff schedule
a listing of specific items, coded numerically and described by name or use tariff rate for each item given according to country of origin
nationalization
the taking of an entire industry or national 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 to which the goods or technology from one destination to which the goods were legally shipped to another destination who has not been licensed to receive the items
geographical indications
where a product, particularly a wine or liquor, is marketed by reference to a geographic region
double taxation
where the same item of income is taxed by two different tax authorities
customs broker
an authorized agent, licensed by federal law, to act for and on behalf of importers in making entry of goods
electronic export information
an electronic filing required for each export shipment leaving the US
political risk insurance
inconvertibility insurance = type of this
gross negligence
an importer commits this if there is clear and convincing evidence that the act or omission was done with actual knowledge or reckless disregard for the relevant facts and with disregard for the importer's obligations under the law
protesting liquidations
an importer that wants to dispute a liquidation made by customs may file a protest with customs within 90 days at the port where the goods entered
design patents
patents protecting the ornamental features of an article of manufacture
principal use
(in the US) 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
articles not requiring marks
1) products incapable of being marked 2) products that can't be marked without injury 3) crude substances 4) articles produced more than 20 years prior to importation 5) articles imported solely for the use of the importer and not intended for resale 6) certain products that are exported and returned
license
a limited permission to use a domestic firm's trademarks, copyrights, or know how in making products for sale in the vicinity of the foreign company's country
short supply controls
US law permits use of these to protect the US economy from excessive foreign demand for scarce materials
royalty
a license fee
currency swaps
a broad assortment of financial contracts, may be purchased from financial intermediaries to hedge against fluctuation risk
contract manufacturing
a business arrangement in which the production of goods is contracted or "outsourced" by one firm to a manufacturing firm, often overseas
tax haven
a country where the effective tax rate on a relevant item of income is very low or zero
same condition drawback
a drawback of duties paid on imported goods that are reexported in the "same condition" as they were imported, provided they were not significantly altered
extraterritorial jurisdiction
ability of a nation, as a matter of law, to extend the power of its export control laws over its goods and technology once they have left its territory
entry process
administrative process all commercial shipments must go through, supervised by national customs authorities
rejected merchandise drawback
allowed for imported merchandise that was shipped without consent, is defective, or does not conform to specifications or to samples merchandise is returned to US customs within 3 years and either destroyed or reexported
validated end user program
allows qualified exporters to preapprove 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 under its terms, the lead underwriter can commit the resources of the entire group after negotiating the transaction with the US investor
franchising
arrangement in which the licensor permits the licensee to sell certain goods under the licensor's trademark or service mark under the terms of a franchising agreement
composite goods
articles made of different materials or components if two or more headings/subheadings each describe only certain components, the article must be classified under the heading that gives it its essential character
bad faith
at common law, means intentional wrong behavior in UDRP, includes some negligence without a finding of intent
license exception
authorization to export without a license
passive investment
can involve either a passive debt investment (making a loan to a foreign business) or a passive equity investment (purchasing an equity interest in the foreign business as a portfolio investment that doesn't allow for control of business)
currency exchange rights
can negotiate with the government in advance for preferential access to hard currency, can help solve incovertability problem
useful
capable of industrial application
tied purchase clauses
clauses that require the franchisee to buy certain goods from the franchiser
compound tariff rate
combination of both ad valorem and specific tariff rates
counterpurchase agreement
common type of countertrade involves the sale of goods to a buyer, often a foreign govt, which requires as a condition of the sale that the seller buy other goods produced in that country
trading with the enemy act
congress passed to restrict trade with hostile countries during times of war or a time of emergency declared by the president
soft ucrrency
currency that is not freely exchangeable for currencies of other nations currency's fluctuation risk viewed as too great to maintain markets in it
soft blockages
delays in processing conversion requests by local authorities
substitution drawback
drawback of duties paid on imported goods may be received by a US firm that imports goods and then exports other goods of the "same kind and quality" usually deals with fungible goods or agricultural commodities
trade credtors
entities that sell supplies or services to the venture
qualified claims
even where an article can't be marked/described as "made in the USA" it may still bear a qualified claim if the claim is not deceptive ex: designed in california, assembled in china
record keeping requirements
exporters are required to keep records related to all licensed exports for a period of five years
repatriated
foreign income paid out to the US person, typically in the form of a divided
political risk analysis
form of proactive management enterprise retains a firm or its own personnel to analyze a host country's risk of nationalization/expropriation, as it would study any other business problem
general rules of interpretation (GRI)
found at beginning of tariff schedule, first step in determining dutiable status of an article
foreign availability
generally means 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
right of priority
given by paris convention to a patent holder provides the date of an applicant's foreign application is deemed to be the same date as the applicant's original application on the same invention, so long as the foreign application was filed before the first anniversary of the original application
comity
good relations among nations
production assists
goods, services, or intellectual property furnished by the importer to a foreign producer, free or at a reduced price, for use in producing merchandise for import into the US value must be included in transaction value when the goods are imported into the US
statute of limitations
government is barred from bringing any action to collect an import duty after five years from the date of the violation involving negligence or gross negligence or five years from the date of discovery of a violation involving fraud
rule of relative specificity
if an article can be classified under two or more headings/subheadings, it must be classified under the one that most specifically/narrowly describes the article with the greatest degree of accuracy and certainty
articles substantially transformed
if an article is not wholly the growth, product, or manufacture of one country, but has been produced in multiple countries, then the country of origin is that country where the article last underwent a substantial transformation into a new/different article of commerce
priority claim
if at least one of the applicants named in the PCT application is a national/resident of a PCT signatory, the PCT gives the application this on that invention in all signatory states with this, the applicant business has up to 30 months after filing to begin the administrative processing of the application
currency risk
if investment is in an enterprise that will be earning foreign currency, business must consider this
import substitution rights
if preferential currency exchange rights aren't available, US investor may seek these available when the new venture will manufacture a product in the soft currency country that the nation had previously imported
essential character
if two or more headings/subheadings describe only certain materials in composite goods, the article is classified under the heading that gives the article this
harmonized tariff schedule of the US
in US, maintained by ITC divided products into several thousand tariff classifications organized in 22 sections and 99 chapters, which are broken into headings, subheadings, and tariff items
parallel exchange
in some soft currency countries, foreign investors form consortia to trade local soft currency
negligent violations
in which the importer fails to use reasonable care, skill, and competence to ensure that all customs documents and statements are materially correct and all laws are complied with
transfer pricing
international trade between related parties, such as parent and its subsidiary, that are free to fix prices to one another because market forces don't discipline the prices
active investment
investment that ultimately will result in the investor having an ownership interest in the foreign business as either a foreign branch or subsidiary
foreign direct investment
investor owns and actively controls the productive assets of ongoing business concerns in a foreign country
inconvertibility (nontransfer) insurance
investors can purchase insurance policies to insure against hard blockages, can also pay higher fee to protect against soft blockages
nonobvious
involves an inventive step
export controls
laws and regulations that govern the control and licensing of certain goods and technology exported from the US or released/transferred to anyone who isn't a US citizen or permanent resident (whether that person is in/outside the US)
antiboycott laws
legal responses by govts 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 govt license, that are legally "outside" the customs territory of the country they are in duty deferral and duty saving device imported goods may be brought to these sites without being subjected to tariffs until such time as the goods are released into the stream of commerce of that country
exclusive rights
licensee may demand these when exploitation of the licensed IPR requires significant financial/other resources usually within some geographic area to enhance its chances of earning adequate ROI
geographical limitations
licensor may limit sale within a specific nation/region/etc.
rates of duty
listed to each tariff item in a tariff schedule column 1 = general rate (normal trade relations) column 2 = original rates from Smoot Hawley Act (1930), (countries not given normal trade)
export
means the "actual shipment or transmission" out of the US in any manner, or releasing or transferring technology/software to a foreign person in the US (who is neither a US citizen or permanent resident)
technology
means the info necessary for the development, production, use, or operation of items, and in almost any form
gray market goods/parallel imports
merchandise produced and sold abroad and then imported back to US for sale
patent protection
now available for any new inventions, whether products or processes, in all fields of technology, provided they are new, involve an inventive step, and are capable of industrial application
hard blockages
occur when the foreign govt passes a law that prevents conversion of transfer
substantial transformation
occurs when the original article loses its identity as such and is transformed into a new and different article of commerce having "a new name, character, or use" different from that of the original item
export management and compliance program
one of the best ways to ensure compliance, companies can establish internally effective one should be in writing and state company compliance policies
privatization
opposite of nationalization, natural sovereign transfers a govt owned asset to private parties can be accomplished by outright sale of assets or ownership interests in a state owned enterprise being sold to private investors
modern traditional theory
permits takings but imposes certain requirements on the nation exercising its takings power recognizes the sovereign's right to nationalize foreign owned property to exercise eminent domain
informal entry
personal and commercial shipments valued at $2500 or less may be cleared through this processe
insurance syndicates
pools of money provided by investors to insure specific projects
fluctuation risk
possibility that the currency of the country in which the US investor has put its money will devalue against the US dollar
countertrade
practice of making payments to the franchiser with goods instead of hard currency
traditional theory
prohibits all takings of foreign property foreign investors should be exempt from the sovereign's condemnation rights
export credit agencies
promote investment from their own countries
profit margin preservation/unitary index adjustment
provisions to build currency adjustment mechanisms into contractual payment terms price or payment to foreign investor will be adjusted periodically to maintain the same profit margin
informed compliance
refers to "softer" mechanisms designed to place the burden of voluntary compliance on importers
port of entry
refers to any place when customs or immigration authorities permit the entry of goods are people typically sea/ocean ports, river ports, airports
enforced compliance
refers to the active investigation of customs violations and the prosecution of violators
formal entry
refers to the administrative process required to import goods into the customs territory of a country following conditions for US: 1. goods arrived at a US port of entry 2. goods aren't of a type that isn't permitted entry or from an embargoed country 3. delivery authorized by customs after inspection/released 4. estimated duties have been paid or customs bond posted
dutiable status
refers to the legal status of imported goods at the time of entry for purposes of compliance with the tariff and customs laws 3 factors 1) classification/numerical coding of article 2) customs value of article 3) country of origin
reexport
refers to the shipment or transfer of American controlled items or technology from one foreign country to another foreign country or foreign person
net book value
reflects the tax related depreciated cost of assets without regard to whether there has in fact been true depreciation in value
binding ruling
represents the official position of customs with respect to the specific transaction for which it was issued binding on customs personnel until revoked
prior approval
requiring substantive ____ from a govt agency is a more intrusive type of regulatory scheme indicative of a relatively protectionist govt policy
fundamental research
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
field of use limitations
restrict the applications for which the licensee may employ the intellectual property right
political risk
risk that profits will be affected by changes in the host country's political structure or instability
inconvertibility risk
risk that the govt of a country with "soft currency" will hinder the US entrepreneur from trading the foreign currency back to US dollars
specific processing rules
rules state that an item originates in a country if it was subjected to specific forms of manufacturing or processing in that country
notice of adjustment
sent to the importer when customs at the port of entry determines additional duties are owed
specific tariff rate
specified dollar amount per piece, or unit of weight/measure
tariff shift rule
states that the country of origin is the last country in which all "inputs" into the finished article underwent a required change in tariff classification
international emergency economic powers act
statute provides the current grant of authority to the president to regulate economic and financial transactions and to place restrictions on importing or exporting during a peacetime international emergency
prior disclosure
statute to encourage importers to voluntarily report their own possible violations of the customs laws
patent cooperation treaty
supplemented paris convention by establishing a centralized utility patent application process, signed by 152 nations
notification registration
system more open to technological transfer prior approval schemes replaced by a simple registration procedure
expropriation
taking of an isolated item of property
ad valorem tariff
tariff rate based on a percentage of the value of the articles imported
value added tax
tax on the value added at every stage of the production process
franchise tax
taxes based on the franchiser's worldwide operations
export control classification number
the commerce control list and commerce country chart used together, identify items, give reasons for control for each, and tell whether a license is required to export to specific countries
country of origin
the country from which an imported article is said to have originated according to specific rules
dutiable value
the customs value of goods entered into any country must be reported by importer of record to national customs authorities at time of entry
barter
the direct exchange of goods for goods (or services)
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
importing
the entering of goods into the customs territory of a country
conscious avoidance
the exporter purposely avoided learning the truth about an end user or destination, information that might've had a bearing on their license application
liquidation
the final computation and assessment of the applicable duty on entered goods by customs, "closes the book"/makes the entry complete
gray market/parallel trade
the importation of merchandise produced and sold abroad and then imported back into the US for sale in competition with the US trademark owner
currency inconveribility
the inability to convert currency
ultimate purchaser
the last person in the US who receives an article in the form in which it was imported
rules of origin
the legal rules used to determine the country of origin of imported products found in trade agreements, national statutes, and the regulations of customs authorities
transaction value
the price actually paid or payable for the merchandise when sold for export to the US, plus the following amounts if not included in purchase price 1) packaging/container costs 2) selling commission paid by buyer to/for an agent of the seller 3) the value of any "assist" 4) any royalty/license fee the buyer has to pay 5) proceeds of any subsequent resale of merchandise that accrues to the seller
tariff engineering
the process of modifying or engineering a product prior to importation, or importing it at an earlier stage of manufacturing, for the purposes of obtaining a lower rate of duty
buy back agreement
the provider of the equipment or technology used in manufacturing will receive, as its payment, a portion of the goods manufactured by the supplier's equipment or the factory in which the equipment is installed
cybersquatting
the registering of a domain name with the intent to profit from the goodwill of a trademark belonging to another typically, they offer to sell the domain to the company that owns the trademark at an inflated price result of "first to file" rule
deemed reexport
the release or transfer of an item from someone who was licensed to receive it to a different foreign person
deemed export
the release or transfer of any item subject to control to a foreign person in the US
grant back
the return of ownership or right to use to licensor from licensee reasoning = licensee wouldn't have had opportunity to develop these technologies without the know how of the licensor
language politics
the situation, found in regions of a few countries, where laws require that companies conduct business in a certain language
fair reasonable and nondiscriminatory (FRAND)
this type of licensing can significantly reduce risk of patent "hold up", only applies in limited circumstances reason samsung had to give apple a license for 3G telecommunications
preferential rules of origin
those applicable to 1) goods traded within a free trade area or customs union 2) goods imported from countries that receive special tariff treatment pursuant to a trade agreement 3) goods imported under a trade preference programs for developing countries
non preferential rules of origin
those applicable to imports from developed countries that receive normal tariff treatment (or have normal trade relations)
dual use items
those commercial items that may also have military, terrorist, or proliferation uses
private political risk insurance
two principal markets, provided by Lloyd's of London and other insurance syndicates private = more regulation but more expensive
commerce control list
used by exporters to determine if a license is needed for export, published by BIS as supplements to EAR, available online
multilateral sanctions
usually more effective than sanctions without universal support harder to circumvent, carry the backing of intl law and force of intl moral opinion
civil customs fraud
violation that exists where there is clear and convincing evidence that the importer knowingly made a materially false statement/omission when entering (or attempting to enter) goods in the US
biopiracy
when corporations from more developed nations extract plants and animals indigenous to the emerging nation for search (w/help of local knowledge), alter the plant/animal (genetic engineering), and obtain patents related to research without providing host country with compensation or affordable access to the inventions
