Ch 12

Question 0

Congress enacted the foreign corrupt practices act (FCPA) 1977

Answer 0

Law intended to stop bribery of foreign officials

Prevent US citizens and companies from making payments
To foreign officials whose duties are not essentially
ministerial or clerical for purpose of obtaining business

Question 1

Risks involved In international trade

Answer 1

1 validity of contract law
2 property rights
3 protection of intellectual property
4 language barriers
5 political instability
6 export and import limitations

Question 2

Amended FCPA limits criminal liability for…

Answer 2

Violations of accounting standards for those who knowingly

Circumvent accounting controls or falsify financial records

Question 3

FCPA: Payment of bribe

Answer 3

Results in jail time

Question 4

Creeping expropriation

Answer 4

Series of acts, (taxes, regulation or other changes in law)
That have expropriatory effect reducing or eliminating
Foreign investments

Question 5

Expropriation (used in context of international law)

Answer 5

Seizure of foreign owned property by government

Question 6

Nationalization

Answer 6

Government assumes ownership of property

Question 7

Export controls

Answer 7

Controls placed on US strategic products and technology
Abroad

International trade risk

Question 8

Landmark case Paquette Habana (1900),

Answer 8

US Supremecourt held international law is par of our law

International law must be ascertained and administered by
Courts of justice of appropriate jurisdiction

Question 9

Public international law

Answer 9

Examines relationships between nations

and uses rules That are binding on all countries in the
international community

Question 10

Private international law

Answer 10

Examines relationships created by commercial transactions

Utilizes international agreements, as well as laws of nations
To resolve business disputes

Question 11

International Court of Justice (ICJ)

Answer 11

Traditional place for ascertaining what is public international
Law

Judicial branch of UN, consists of 15 judges representing
All the world’s major legal systems

Question 12

Decisions made by ICJ, the World Court don’t create…

Answer 12

Binding rules of law or precedent in future cases

Question 13

United Nations

Answer 13

Almost every country is a member

Goal is to prevent war

Question 14

International monetary fund (IMF)

Answer 14

Encourages international trade by maintaining stable
Foreign exchange rates

Works closely with commercial banks to promote orderly
Exchange policies with members

Question 15

World bank

Answer 15

Promotes economic development in poor countries by

Making loans to finance development projects/programs

Question 16

General Agreement on Tariffs and Trade (GATT)

Answer 16

After WW2, originally signed by 23 countries

Reduced tariffs and promoted free trade

Question 17

World Trade Organization (WTO)

Answer 17

Umbrella organization that regulates world trade

Question 18

3 core principles Of GATT

Answer 18

1 nondiscrimination

2 national treatment

3 elimination of trade barriers

Question 19

GATT: non discrimination

Answer 19

Treating all member countries equally with respect to

Trade

Question 20

GATT: National Treatment

Answer 20

Countries not favoring their domestic products over

imported products

Question 21

WTO: Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)

Answer 21

Strengthens protection of intellectual property rights internationally

Question 22

European Union’s mission, 5 things

Answer 22

1 provide peace, prosperity, stability
2 overcome divisions on the continent
3 ensure people’s safety
4 promote balanced economic and social development
5 meet challenges of globalization and preserve diversity
Of people’s of Europe

Question 23

Convention on the International Sale of Goods (CISG)

Answer 23

Outlines standard international practices for sale of goods

Looks at contract law for international commercial sale of
Goods

More lenient than US

Question 24

North American Free Trade Agreement (NAFTA) 1993

Answer 24

Eliminated tariffs and trade barriers between United States, Mexico and Canada Has settlement mechanism to resolve trade disputed Protects labor rights in Mexico

Question 25

Central American Dominican Republic Free Trade Agreement (CAFTA-DR) 2005

Answer 25

Opened up trade barriers between the United States, | Dominican Republic and Central American Countries

Question 26

Irrevocable letter of credit

Answer 26

Used to ensure payment on foreign sales The buyer obtains a commitment from the bank to advance A specified amount upon receipt of goods from carrier

Question 27

Bill of lading (foreign sales)

Answer 27

From carrier states the goods have been shipped

Question 28

License or franchise contract

Answer 28

Typical method for controlling transfers of information Allows international business to enter foreign market Without any direct foreign investment

Question 29

Why is a Foreign subsidiary created in a foreign country?

Answer 29

Most countries permit foreign firm to conduct business Only if a national (individual or firm) of host country is Designated as its legal representative This results in high fees, foreign subsidiary created In host country to avoid high fees

Question 30

Creation of foreign subsidiary (SA or AG) subjects domestic parent to risks

Answer 30

Subjects parent company to foreign law and foreign courts

Question 31

Joint ventures

Answer 31

``` Allow host countries to participate and get a large share of The profits (often the local partner gets a majority stake) ``` Decrease risk of foreign domination of local industry

Question 32

Alien Tort Claims Act (ATCA) 1789

Answer 32

Grants jurisdiction to US federal district courts over any Civil action by alien for tort only Committed in violation of law of nations or treaty of US

Question 33

Doctrine of Sovereign immunity

Answer 33

Foreign sovereign is immune from suit in United States | Based on status as a state

Question 34

Congress enacted Foreign Sovereign Immunity Act (FSIA) 1976

Answer 34

Codifies restrictive theory Rejects immunity for commercial acts in US or having direct Effects in this country

Question 35

Sovereignty

Answer 35

Supreme, absolute and uncontrollable power by which | Any state is governed

Question 36

Advantages to international arbitration 2

Answer 36

1 avoid publicity 2 easier for parties to understand than litigating in foreign Court

Question 37

The world intellectual property organization: arbitration and mediation center

Answer 37

Hears cases involving domain name disputes and | cybersquatting