3 - Political Environment

Question 1

Ways to manage/reduce political risk

Answer 1

• Insurance against some political risks is offered by both governmental and private agencies
• Share ownership with host country nationals
• Participating in community projects such as promoting social welfare and rural development projects

Question 2

Four different methods of seizing assets

Answer 2

Expropriation, confiscation, nationalization, creeping expropriation

Question 3

Creeping expropriation…

Answer 3

Limits economic activities of foreign firms. It may include price controls, discriminatory laws and patents or trademarks, and limits on repatriation of profits, dividends, royalties, etc.

Question 4

Nationalization occurs when…

Answer 4

A government takes control of some or all of the enterprises in an entire industry.
This is acceptable to international law if it 1) satisfies public purpose and 2) includes compensation

Question 5

Expropriation is when…

Answer 5

Governmental action is taken to dispossess a foreign company or investor

Question 6

Confiscation occurs when…

Answer 6

No compensation is provided

Question 7

What are the sources of laws for common, civil, and Islamic law?

Answer 7

Common - Case law, statutes/legislation
Civil - Statutes/legislation
Islamic - Religious documents, case law, proceeds by way of example rather than principle. Resultant inconsistencies.

Question 8

How are juries structured for common, civil, and Islamic law?

Answer 8

Common - provided at trial level
Civil - May adjudicate in conjunction with judges in serious criminal matters
Islamic - Allowed in Maliki school, not in other schools

Question 9

What two components make up Islamic law?

Answer 9

The Koran (code laws) and the Hadith (common law)

Question 10

Jurisdiction

Answer 10

A court’s authority to rule on particular types of issues arising outside of a nation’s borders.
Courts have jurisdiction if it can be demonstrated that the company is doing business in the state the court sits.

Question 11

Intellectual Property

Answer 11

IP must be registered in each country where business is conducted
Patent - exclusive right to make, use, and sell an invention for a specified duration
Trademark - distinctive mark/motto
Copyright - distinguishes ownership of written/recorded creative work