International busn law final Flashcards

Question

procedures for waiving and dishonoring

Answer 1

1. The bank should call the buyer if they want to waive the discrepencies. 2. if the bank and buyer refuses the documents, the bank must give a notice of refusal within 7 days and it must describe the discrepencies and have a clear refusal.

Answer 2

in a country where it is reliable, covers cost if issuing bank is insufficient, chosen by the seller,

Answer 3

issuing bank role- issues the letter of credit duties- check for discrepencies and see if they pay or not pay liabilities- total liability on line of credit advising bank role- to provide a service to the seller duties- collect and check documents liability- no liability on the line of credit but it is liable to its client, the seller confirming bank role- to confirm the credit duties- identical to the issuing bank liability- identical to the issuing bank

Answer 4

1. counterpurchase agreement- it involves the sale of goods to a buyer, who requires as a condition of the sale that the seller buy other goods produced in that country. 2. barter- it is the direct exchange of goods for goods 3. buy-back agreement- with the sale of machinery or industrial equipment, the provider of the equipment will recieve as a payment a portion of the goods manufactured.

Answer 5

the general agreement of tariffs and trade. the GATT has been the most important multilateral agreement for liberalizing trade by reducing tariffs, opening market, and setting rules for promoting freer and fairer trade.

Answer 6

world trade organization it provides an umbrella organization that sets the rules by which nations regulate trade in manufactured goods, services, intellectual property. the role is to facilitate international cooperation to open markets, provide a forum for future negotiations between members and provide a forum for the settlemennt of trade disputes.

Answer 7

it has to be consensus if the countries do not agree by consensus, voting is by majority

Answer 8

gasoline case between venezuela and brazil vs US feb 1994, US had passed a reguation imposing certain conditions of gas sold in the US. Under the clean air act, reduce pollution from gas emissions. there is a violation of international treatment. venezulan gas was being submitted to standards that are more rigorous than those of the US. The US argued that this discrimination aspect was justified article 20 of the gatt. said that under certain conditions, a country could do things to protect health, life. venezuela argued that imported and exported gas should be held at the same high requirement from the US. The panel ruled that imported gas was indeed discriminated. The US appealed the panels decisions a month later. The appellate body was in favor of brazil and venezuela. The two sides agreed on the timing. `

Answer 9

1. mutilateral trade negotitations- nations will meet periodically to reduce tariff and nontariff barriers to trade 2. predictability of trade opportunities- nations commit themselves to specific negogiated tariff rates 3. nondiscrimination and unconditional most-favored-nation-trade- member will not give any import advantage or favor to products coming from one member over the goods of another member 4. national treatment- member will not discriminate in favor of domestically produced goods and against imported goods. 5. elimination of quotas and other nontariff barrier- nations first convert their nontariff barrier into tarigg and then engage in negotiations to reduce the tariff rates.

Answer 10

it is the process by which quotas, licensing schemes, and other non tariff barriers to trade are conveted into tariffs.

Answer 11

one country promises not to levy a tatiff on a given product at a level higher than agreed upon. each country makes a concession to the products of the other country and recieves reciprocal treatment.

Answer 12

it has long been a guiding concept of international economic relations and of trade liberalization nondiscrimination means that in every aspect of economic life, all nations should be treated equally. the products of all nations should be treated equally and without discrimination by importing and exporting nations.

Answer 13

1. the concept of most favored nation trade, that favorable tariff treatment on goods and services imported from one country shall be extended to similar goods and serices from all other countries. 2. the concept of national treatment, that an importing country shall treat imported goods and services that same as its own domestic goods.

Answer 14

most favored nation trade it require that any trade advantage granted by one GATT member to the goods or services of another member should be granted to all unconditional MFN trade requires that whena nation extends some privilege or right to one of its trading partners, such as a reduced tariff, that privilege auto becomes applicable to all other trading partners.

Answer 15

the use of NTR (normal trade relation) tariff treatment is subject to several exceptions- the US law authorizes the president to deny NTR status to any nation on the basis of national security, foreign policy. the president may grant temp NTR status only if the country improves its human rights record.

Answer 16

the national treatment provisions of GATT are intended to ensure that imported goods will not be subjected to discriminatory treatment under the laws of importing nation

Answer 17

Art. XI of the GATT permits the use of tariffs as the acceptable method of regulating imports, but not quotas of other quantitiative restrictions. The use of quotas is subject to the principle of nondiscrimination.

Answer 18

dumping and antidumping duties subsidies

Answer 19

it is the unfair trade practice of selling products in a foreign country for less than the price charged for the same or comparable goods in the producer's home market.

Answer 20

may be imposed only when the dumping threatens or causes material injury to a domestic industry producing like products.

Answer 21

International trade administration- look for whether the produt has been sold at a price less than its normal value international trade commission- look for whether it has caused or threaten to cause a material injury to US producers of like products.

Answer 22

1. tariff 2. quotas 3. negotiated agreement with foreign countries that limit their exports to the US 4. trade adjustment assistance for the domestic industry

Answer 23

look for a market economy country that is at a level of economic developement comparable to that of the NME and is a significant producer of comparable merchandise.

Answer 24

any financial contribution by a government to a domestic firm or industry to achieve some economic or social objective

Answer 25

1. prohibited subsidies- distort trade patterns, prohibited even without injury to domestic industry. 2. domestic subsidies- government programs designed to achieve some greater social or national economic objective. permissible if they do not cause or threaten to cause material injury 3. nonactionable subsidies- non actionable and not countervailable if they meet the requirements of the GATT. always legal. subsidies granted to poor regions or universities.

Answer 26

export controls after major world events: during american revolution 1775- first US export regulation which restricted trade with IK. After wwi and wwii- world split into E and W

Answer 27

someone else could supply desired goods to the "enemies" and the US wouldve lost a sale.

Answer 28

to restrict trade with hostile countries during times of war, but used also in peacetime for economic crisis, but must have a reason why.

Answer 29

the prsident can still declare state of emergency, although the authority to act under it lasts for only one year at the end of which the president must ask Congress to renew authority over that situation

Answer 30

It provides the cureent grant of authority to the president to regulate economic and financial transactions and to place restriction on importing and exporting during a peacetime national emergency

Answer 31

banks are responsible for monitoring lists of persons and ultilizing a compliance program to catch money launderers and suppliers to foreign terrorist networks

Answer 32

1. supply control 2. foreign policy 3. national security

Answer 33

it is an organized regusal of one or more nations, often backed by economic sanctions to trade with one or more other nations

Answer 34

they are legal responses by the government that make it unlawful for their citizens to participate in a boycott

Answer 35

illegal to comply with or support any boycott forstered or imposed by a foreign country against a country which is friendly to the US

Answer 36

It prompted a reassessment of how to improve the efficacy of controls- 2 equal pushes: decontrol items for allies and increase controls for suspect users and end users.

Answer 37

1. Try to comply with the law in a way that allows companies to do business in a timely manner and meet the demands of their clients 2. The bureau of industry and security must review and rule licenses within 90 days. 3. Once the application for a type of validated license is recieved, the office of export licensing reviews the application 4. if the department cannot reach consensus the application goes through several layers of interagency committees, culiminating in a final decision by the president. Role of BIS os to review request Office of export decides

Answer 38

if a product is available from another source besides the US, export controls make little sense The office of foreign availability allows US companies for petition for a review of the foreign availability of products and tech (loopholes) block on exports from US but cant impede other countries to do the same.

Answer 39

it refers to the illegal placememnt of goods or commodities in the hands of an individual for whom an export license would not be granted either beause of country group, end use of the product, or the product itself. EX- shipping of US origin helicopters to North Korea through a west german firm. (loophole) EX: USA sells guns to france but the guns make its way to North Korea because France sold it to them

Answer 40

It is to collect revenues and protect. And also to prevent terrorists and terrorist weapons from entering the US and enforce customs laws. They have the authority to bar the entry of goods.

Answer 41

Calculation of duties is done by the importer

Answer 42

Negligent violation is when 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 Gross negligence is when there is a clear and convincing evidence that the act or omission was done with actual knowledge or reckless disregard for the relevant facts or aware that something is dangerous but didnt intend to harm. pay taxes but no prison. fradulent violation is when the importer clearly knowingly made a materially fasle statement. Up to 2 years in prison.

Answer 43

after 5 years from the date of violation involving negligence or gross negligence. after 5 years from the date of discovery of the violation involving fraud.

Answer 44

determined by - the classification of merchandise - the value of the merchandise -country of origin of merchandise

Answer 45

a mechanism for defining commodities, materials, and articles but does not set the tariff rate. 22 sections broken in 99 chapters. General rule- all goods entering the US are dutiable unless specifically exempted.

Answer 46

Importer of tents entered the tariff schedule as sports equipment instead of textiles. Textiles is the highest tax. The tents were 9 person tents so they were huge. When in trial. the question of "is camping a sport" arose. And said that yes camping is a sport but those tents were too heavy and big for backpacking. The court ruled in favor of customs.

Answer 47

GR1: an article be classified according to the four digit heading under which it is specifically and completely described. GR3a rule of relative specificity: when an article vcan be classified under more than one heading, it must be classified under the one that most specifically describes the item GR3b rule of essential character: when an article is made of two or more different components, the article should be under the heading that describes those materials that gives the article its essential character.

Answer 48

An importer of shower curtain sets classified its set by the inner plastic liner. Customs argued that it be classifed by the outer curtain so under textile. Company said the plastic liner is the essence/purpose which prevented water from escaping. The decision was in favor of the company.

Answer 49

It is a way to modify the product to apply a lower rate. It is illegal when its intent is to pay lower.

Answer 50

the country of oridin is that country where an article was grown, mined or wholly and completely produced originating in that country.

Answer 51

The general rule is that the country of origin is that country where a product last underwent a substantial transformation. The name, character, use test for NTR countries. A substantial transformation occurs when the original article loses its identity as such and is transformed into a new article having a new name, character or use.

Answer 52

It is to maximize profits for their stockholders.

Answer 53

laws the protect workers from abusive or discriminatory practice.

Answer 54

The US: great flexibility to owners- traditionally US managment completely by iteself and in secret makes strategic decisions such as whether to close a plant or reduce manpower levels. EU: right of consultation about or notice before the implementation of decisions resulting in workforce reduction

Answer 55

many countries require substantial employee representation on the coporate board of directors.

Answer 56

US: no person is legally entitled to a job, once an individual ceases to be productive, their future employement is in jeopardy. legally require severance pay is high. easiest dismissal in the US because it is employement at will- no cause to fire you. EU: employees acquire a property interest in their jobs over time- legally require severance pay is high. consultation with the works council or dismissal under a cause.

Answer 57

In EU, when there is an acquisition, they have to keep everything and employees at same salary and level. The US can dismiss.

Answer 58

1. control by a foreign person or lack of control from american employer. 2. foreign compulsion defense- local law prevails. 3. bona fide occupational qualification- the performance of the job require a trait such as a specific religion or gender.

Answer 59

it is signed by representatives of employees and employers that has a a list of conditions of employemnt such as min wages and time off. It applies like local law.

Answer 60

an enterprise with great market power must be concerned with the limits that antitrust or competition laws placeon extensions of that power.

Answer 61

-end of 19th century: sherman antitrust and clayton act: in order to permit free market forces to operate. -After wwii in eu: comptition law: developed rapidly and europeans are more willing to rely on direct government action and less willing to count on litigation

Answer 62

1. prohibition of agreements between competitors that restrict competititon 2. prohibition of the abuse of a dominant market position

Answer 63

art. 81 of the treaty of rome and section 1 of the sherman act prohibit concerned anticompetitive conduct. -this principle is implemented differently under different systems

Answer 64

art. 82 of treaty of rome and sec. 2 of the sherman act: problem of monopoly and abuse of monopoly power - a company must first have a dominant market position -second, the dominant party must be found to have abused this position

Answer 65

parties to all mergers, acquisitions, joint ventures, having a community dimension must provide pre-transaction notification to the commission -5 weeks, phase 1: deals notified to the commission automatically befin the phase 1 inquire. the task force studies the competitive effects of the proposed transaction -if no doubts result, the merger is cleared -if doubts arise, phase 2: a 4.5 month review, look into each doc and make deep investigations any merger task force rejection of a proposed merger will nbe held to stringent standard of proof thus any company undergoing a merger review should expect a more intense review

Answer 66

foreign competition law is similar to US law in substance, but it is enforced differently- the most obvious distinction is in the sanctions for violating the law. -US law is enforced by private attorney generals and private cause of action for violation of antitrust rules and possibility of criminal liability. -in EU, EU competition laws may be enforced only in national courts. A private party may not go to the pan-european forums. no criminal liability

Answer 67

those that no amount of explanation can make legal- automatic sanctions actions subject to the rule of reason can be legal if they are not found to be anticompetitive

Answer 68

the commission may under art. 81(3) exempt agreements that violate the terms of art. 81(1) by a comfort letter, an individual exemption or a negative clearance. -comfort letter tell companies in advance that their anticipated transactions if implemented as represented are not likely to infringe competition law. -individual exemption allows performance of an agreement that would otherwise violate art. 81(1) beause it has favorable economic effects overall -negative clearance is a confirmation that an agreement does not

Answer 69

the commission may under art. 81(3) exempt agreements that violate the terms of art. 81(1) by a comfort letter, an individual exemption or a negative clearance. -comfort letter tell companies in advance that their anticipated transactions if implemented as represented are not likely to infringe competition law. -individual exemption allows performance of an agreement that would otherwise violate art. 81(1) beause it has favorable economic effects overall -negative clearance is a confirmation that an agreement does not fall within art. 81(1).

Answer 70

europeans: resolution of competitive law issues prior to the transaction taking place through admin action. -de minimis exception: art. 81(1) is not violated if (1) the parties to the agreement in question have combined gross annual reveneues of less than 200 million euros (2) the products covered by the agreement do not account for more than 5% of the volume in the relevant market. with De Minimis exception the majority of agreements within EU are not considered to be anticompetitive. -conform letter: tell companies that their anticipated transactions, if implemented as represented is not likely to infringe competition rules. benefits of the preapproval approach by the EU- the parties can consummate the transaction without risk of subsequent nullifications and fines. disadvantages: the commision has been overwhelmed. virtual prohibition of almost everything. costs. US does not have an analogous pre approval system in sept 2000, the commision proposed an end to its preapproval system- parties would as in US decide for themselves whether an arrangement violates competition law, based on the commission precedent.

Answer 71

american have tended to apply their antitrust law to every corner of the globe.

Answer 72

the plantiff, a US corporation, alleged that a rival US corporation had caused the Costa Rican governemnt to serize the plantiffs banana plantation and prevent the completion of the plantiff's railway. The Sherman act shall be interpreted to be cofnined in its operation and effect to the territorial limits over which the lawmaker has general and legitimate powers. decision: the judgment for defendent was affirmed on appeal because defendent's actions, although illegal in the US, were permitted by the local law in the foreign jurisdiction at issue.

Answer 73

developing of the effects doctrine- US courts interpreted the sherman act to require an ever decreasing effect on the US before it was applicable- any state may impose liabilityes within its borders whcih the state reprehends. A group of europeans formed a swiss corp called alliance. Effect was to create a cartel that controlled aluminum supplies. Decision: US court of appeals reversed the district courts decision and remanded the case to it for further proceedings consistent with its opinion.

Answer 74

in 1982, the US congress clarified its intent in the sherman act adopting a strict version of the "effects test" in the foreign trade antitrust improvements act- the act provides that US antitrust law does not apply to conduct unless such conduct has a direct, substantial, and reasonably foreseeable effect on US commerce or on the business of a person engaged in exporting goods from the US to foreign nations