Final Material - Chapter 13

Front 1

Name 2 sources of International Law

Back 1

Public international law and private international law.

Front 2

Define 'Public International law'

Back 2

Examines relationships between nations and uses its rules that are binding on all countries in the international community.

Front 3

What is the ICJ?

Back 3

International Court of Justice (ICJ) also known as the world court.

- 15 judges representing all of the world’s major legal systems
- Judges are elected by the U.N. General Assembly and the Security Council (they are first nominated by national groups, not governments)

- Jurisdiction: only countries have access to the court
- only countries who have submitted to the court’s jurisdiction may be parties; there is no compulsory process for forcing a country to come before the court

- Moreover, a country may refuse to submit to the court’s jurisdiction

- ICJ has no enforcement authority; it must rely on diplomacy or economic sanctions against countries that breach international law

Front 4

Define 'Private International Law'

Back 4

- examines relationships created by commercial transactions and utilizes international agreements and the individual laws of nations to resolve business disputes.

- Refers to the laws of individual nations and the multilateral agreements developed between nations

- What law controls an international contract?

Choice of law and forum selection clause

• Private int’l law is represented by the laws of individual nations and the multilateral agreements developed between nations to provide mutual understanding and some degree of continuity to international business transactions.
• In deciding what countries law will control, most international contracts contain choice of law and forum provisions to eliminate this uncertainty.

Front 5

What role does the United Nations serve?

Back 5

The United Nations - Primary Goal: “to save succeeding generations from the scourge of war” and, to that end, the UN authorizes “collective measures for the prevention and removal of threats to peace, and for the suppression of acts of aggression or other breaches of the peace”

- Power rests with the Security Council, composed of 15 member states
- has the power to authorize military action and to sever diplomatic relations with other nations

- Five permanent members of the Security Council: U.S., Russia, China, France & the U.K. – each has veto power over any action proposed by the Council

Front 6

What is the International Monetary Fund? (IMF)

Back 6

is under the auspices of the UN
Goal: to encourage international trade by maintaining stable foreign exchange rates and working closely with commercial banks to promote orderly policies of its members

Gives major loans.

Front 7

What is the World Bank?

Back 7

promotes economic development in poor countries by making loans to finance necessary development projects and programs

Eradicates poverty

Front 8

What is the World Trade Organization (WTO)?

Back 8

is an umbrella organization designed to regulate and promote international trade

Eliminates tariffs. Goods can flow freely between the countries.

Front 9

What is the role of the General Agreement on Tariffs and Trade (GATT)

Back 9

was created in 1948 and originally signed by 23 countries after WWII as a way of opening up trade and ending the protection of domestic industries
- GATT has been revised numerous times, including by the 1994 Uruguay Round which created the WTO
• The WTO is an international organization which, as its primary purpose, seeks to resolve trade disputes between member nations.
• The WTO administers the GATT but does not have the authority to regulate world trade in any manner it desires.
o Expects that nations avoid unilateral trade wars and rely on GATT dispute settlement procedures to avert conflict.

Front 10

Name the Key Features of GATT principles and the operation of the WTO.

NEN

Back 10

1) Nondiscrimination - (treating all member countries equally with respect to trade); all countries can participate equally with regards to trade

2) Elimination of Trade Barriers -reducing tariffs and other restrictions in foreign products) getting rid of tariffs
• Under the WTO, existing tariffs are reduced and the agreement extends GATT rules to a new areas such as agricultural products and service industries.

2) National Treatment - (countries not favoring their own domestic products over imported products)

Front 11

What is TRIPS? (Trade-Related Aspects of Intellectual Property Rights) includes trade in counterfeit goods.

Back 11

“TRIPS” is designed to protect intellectual property rights for WTO countries.
• This agreement discusses the applicability of GATT principles and those of relevant international property agreements in an effort to strengthen the protection of intellectual property in the international sphere.

Front 12

True or False: The WTO has the power to hear disputes.

Back 12

True; WTO can resolve international trade disputes

- Problems with compliance.

•If nation does not comply with a WTO ruling, the organization has the power to impose sanctions.

o Compliance by the most powerful trading nations is necessary to give the WTO credibility.

Front 13

List criticism about TRIPS.

Back 13

* Lack of emphasis on human rights, environmental and labor issues.

* Tensions between developed and developing countries,
esp. re: cutting tariffs

* WTO is the only global international trade organization dealing with the rules of trade between nations.

*Issues with enforcement.

Front 14

What is the European Union?

Back 14

- Originally known as the European Community which was established by the Treaty of Rome in 1957

- 27 member nations

Front 15

What are the European Unions' major institutions?

MC-PJ

Mic Check Pa Jama.

Back 15

1M) Council of Ministers
- composed of one rep. from each member state
- Coordinates the policies of the member states in a variety of areas from economics to foreign affairs.

2C) The Commission
- Consists of individuals who represent the will of the entire Union rather than specific national concerns. Much of the executive functions of the EU are carried out by the Commission as it seeks to forge a single identity.

3P) The Parliament
- The parliament is comprised of elected representatives from each member state and is divided into political factions that often create coalitions across national borders.

4J) The Court of Justice
- Serves the role of deciding the nature and parameters of EU law. Appointed by the Council, and each member nation has a justice seated on the court.

Front 16

Name the three major agreements affecting trade.

CNC

Back 16

1) CISG
2) NAFTA
3) CAFTA-DR

Front 17

What is the CISG?

Back 17

became effective in 1988; adopted by the U.S. and most countries involved in international trade
- applies to contracts for the commercial sale of goods

• Outlines standard international practices for the sale of goods.
• Applies to contracts for the commercial sale of goods (consumer sales for personal, family, or household use are excluded) between parties whose businesses are located in different nations, provided that those nations have adopted the convention.

Front 18

What is NAFTA?

Back 18

- Agreement passed in 1993 between U.S., Canada, Mexico
- Key aspects:
- free trade with the reduction and elimination of tariffs between the 3 countries
- Dispute resolution
- Agreement to improve labor rights in Mexico
- Environmental Agreements

• The passage of NAFTA set in motion increased trade and foreign investment and opportunities for economic growth in the United States, Mexico, and Canada.
• NAFTA provides for a dispute settlement mechanism that makes it easier to resolve trade disputes between the three countries.

Front 19

What is CAFTA-DR?

Back 19

Central America-Dominican Republic Free Trade Agreement (CAFTA-DR)

- Participating countries: U.S., Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic

- Goal: to eliminate trade barriers

Front 20

List the risks associated with Licenses and Franchises granted to a foreign firm.

Back 20

* issues of quality supervision and control
* Worries about (your) cheaper products coming back into the U.S.
* Disclosure of confidential information

• Licensor must take care to restrict the use of the product or technology to agreed-upon geographic areas and must take adequate steps to protect the confidential information that is licensed to the foreign firm so that third parties cannot exploit it.

Front 21

List 4 risks associated with international trade

Back 21

1) Expropriation
2) Nationalization
3) Export Controls
4) bribes

Front 22

Define 'expropriation'.

Back 22

the seizure of foreign-owned property by a government

Note: owners are supposed to be compensated; if not, considered confiscation

Front 23

Define 'nationalization'.

Back 23

when the expropriating government assumes ownership & operation of the property or entity

Front 24

True or False: The U.S. as well as other nations prohibits the government from seizing private property except for “public purposes” and upon the payment of “just compensation”.

Back 24

True; It is customary for international law to recognize the right of governments to expropriate the property of foreigners only when accompanied by “prompt, adequate, and effective compensation.”
o Accepted international standard requires full compensation to the investor including fair market value as a going concern.

Front 25

Define 'Export Controls'

Back 25

- are defined as action taken on a national and multilateral basis to prevent the exportation of controlled goods and technology to certain locations

- Military and Dual-use technology

• Another risk involved in doing business abroad is export controls placed on the sale of strategic products and technology abroad.


• Participating nations seek, through their national policies, to ensure that transfer of conventional arms and strategic goods and technologies do not destabilize regional and international security.

• Prevent terrorist groups and individuals from acquiring arms and strategic goods and technologies.

• Significant criminal and administrative sanctions may be imposed upon corporations and individuals convicted of violating the law

Front 26

Define 'Pressure for Bribes and the Foreign Corrupt Practices Act (FCPA)'

Back 26

- Law is designed to stop bribery of foreign officials whose duties are not essentially “ministerial or clerical” by U.S. companies and citizens for the purpose of obtaining business

• If its private than its another thing. If your public, you are not allowed to bribe foreign officials.

Front 27

List the two principal requirements of the FCPA

Back 27

1- Financial records and accounts must be kept “which, in reasonable detail fairly and accurately reflect the transactions and disposition of assets” of the business

2- The business must “devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances” that transactions are being carried out in accordance with management’s authorization

Front 28

True or False: Payments through intermediaries, “third parties, “local agents,” are prohibited when a person knows that the payment or a portion will directly or indirectly go to a public official.

Back 28

True

Front 29

What is a grease payment and what is a travel expense.

Back 29

Grease payment is getting things through customs. Paying a bribe to get certain things through. Getting a license which could violate a local national law.

Travel Expenses - for foreign officials. Would be prohibited if it included extra expenses such as official's family or children and other unnecessary options.

Front 30

List the criminal penalties for violating the FCPA.

Back 30

2 million for companies

100,000 fines for individuals and or 5 years in prison (officers, directors, stockholders, employees, and agents)

Front 31

Define Sovereign Immunity

Back 31

- permits a foreign government from suits in the courts of other nations
• Provides that a foreign sovereign is immune from suit in the US.
o Foreign sovereign claims to be immune from suit entirely based on its status as a state.

Front 32

Define the Foreign Sovereign Immunities Act of 1976.

Back 32

rejects immunity for commercial acts carried out in the U.S. or having direct affects on this country

Front 33

Describe the process in which you would sue a foreign firm in the U.S.

Back 33

Jurisdiction is established if:

- the foreign defendant has minimum contacts with the forum court
• Plaintiff must demonstrate that exercise of personal jurisdiction over the defendant “does not offend traditional notions of fair play and substantial justice.”

Front 34

Define the Alien Torts Claims Act

Back 34

1789 statute granting jurisdiction to U.S. federal district courts over "any civil action by an alien for a tort only, committed in violation of the law of nations or of a treaty of the United States.”

Front 35

True or False: It is essential to demonstrate that the acts committed violate the law of nations.

Back 35

True.

Front 36

Define the Law of Nations:

Back 36

o Law of nations is embodied in international agreements, treaties, and conventions.
o Passed to prevent problems with pirates, and prevents state courts from getting involved in international affairs.
o If your company is involved with any example below, those are considered to violate international norms.

Front 37

List some examples of international norms that could be violated under the Alien Torts Claims Act

Back 37

- Examples: forced labor, and human rights abuses such as murder, rape, torture, unlawful detention, and kidnapping.