International Law

Question 1

True/False: Multinational enterprises are companies doing business in several countries simultaneously.

Answer 1

True

Question 2

True/False: As of 2007, the top 15 countries which traded goods with the United States accounted for 80.5 percent of total U.S. trade.

Answer 2

False

Question 3

True/False: Tariffs are generally higher in developing countries than in developed countries.

Answer 3

True

Question 4

True/False: Generally, consumers are not adversely affected by tariffs since tariffs affect wholesale prices, not retail prices.

Answer 4

False

Question 5

True/False: Ad valorem duty is based on the fair market value of the imported good as of the date it reaches the United States, not the price actually paid for the good when sold for export to the United States.

Answer 5

False

Question 6

True/False: Although the United States government officially signed the GATT treaty, the United States Congress has refused to ratify the agreement.

Answer 6

False

Question 7

True/False: The European Union is the world’s most powerful regional association with 16 member nations as of 2009.

Answer 7

False

Question 8

True/False: A contract involving the sale of goods from a Texas seller to a French wholesaler must use the United Nations Convention on Contracts for the International Sale of Goods (CISG).

Answer 8

False

Question 9

True/False: If the United States sets a limit on the number of cars that can be imported, this action is a form of tariff.

Answer 9

False

Question 10

True/False: It is a violation of United States law for a domestic company to pay money to a foreign governmental official in order to obtain favorable influence of the foreign government.

Answer 10

True

Question 11

True/False: The Presidents of Oxtron, Inc., a U.S. company, and Dunka, Inc. a German company, met in Munich, Germany. Oxtron and Dunka are direct competitors in over-the-counter medicines. The presidents agree to fix prices on their major products. This agreement may violate U.S. antitrust law even though the agreement was made in Germany.

Answer 11

True

Question 12

True/False: Trein, Inc., a U.S. company entered into an exclusive distributorship agreement with Posty, Inc., a Zambian company. This means that Trein will only use Posty to distribute products in Zambia.

Answer 12

True

Question 13

True/False: Under European Union law, any agreement, contract, or discussion that distorts competition within European Union countries is illegal.

Answer 13

True

Question 14

True/False: International comity holds that the courts of one nation lack the jurisdiction to hear suits against foreign governments.

Answer 14

False

Question 15

True/False: The two principal requirements of the Foreign Corrupt Practices Act involve bribes and grease payments.

Answer 15

False

Question 16

For manufactured goods, the United States and European Union impose an average tariff of ________ percent, and major trading partners around the world impose tariffs of ________ percent for identical items.

Answer 16

less than 4; 10 to 30

Question 17

Axle Corporation imports goods into the United States. Who is required to pay the duty on the imported goods?

Answer 17

The importer, Axle Corporation.

Question 18

The United States and Argentina have signed the Convention on Contracts for the International Sale of Goods (CISG). Oxtron, Inc., a U.S. company, and Leer, an Argentinean company, have entered into a contract under which Oxtron is to ship medical devices to Leer. The contract does not include a choice of law provision. The contract will be governed by:

Answer 18

the CISG.

Question 19

The United States and Singapore have signed the Convention on Contracts for the International Sale of Goods (CISG). Notren, Inc., a U.S. company, and SWT, a Singapore company, have entered into a contract under which SWT is to ship party supplies to Notren. One of the terms of the contract states, “The validity and performance of this contract will be governed by the Uniform Commercial Code (UCC) of the state of New York, not the Convention of the International Sale of Goods (CISG).” The contract will be governed by the:

Answer 19

Uniform Commercial Code of New York.

Question 20

Oxtron, Inc., a U.S. company, and Leer, an Argentinean company, orally agreed to a contract under which Oxtron is to ship medical devices to Leer. The contract is governed by the CISG. Which statement is correct?

Answer 20

The contract is enforceable without a written agreement.

Question 21

In Marubeni America Corp. v. United States, the federal appellate court ruled that the Nissan Pathfinder was, for tariff classification purposes a motor vehicle for the transport of passengers. The classification of goods is significant because:

Answer 21

the tariffs will vary depending on the classification.

Question 22

If a foreign company “dumps” goods on the United States market:

Answer 22

a “dumping duty” will be imposed on the dumped goods if the Commerce Department determines the goods are being sold at less than fair value and that this harms an American industry.

Question 23

Notren, Inc., a U.S. company, and SWT, a Singapore company, entered into a contract under which SWT is to ship party supplies to Notren. One of the terms of the contract states, “Any disputes that arise under this contract will be resolved in the courts of Singapore.” This contract term is a:

Answer 23

choice of forum clause.

Question 24

What is a major argument against the GATT Treaty?

Answer 24

a. ) The United States will have to compete against countries with unlimited pools of exploited labor.
b. ) The United States will lose millions of jobs involving low-end employment and these types of workers are least capable of finding other employment.
c. ) Both a and b above are major arguments against GATT.

Question 25

The European Union used to be known as the:

Answer 25

Common Market.

Question 26

Zebra Toy Company, located in Chicago, sells $500,000 worth of toys to a London, England, wholesaler. This contract could be governed by:

Answer 26

a. ) Illinois’s Uniform Commercial Code.
b. ) English law.
c. ) the CISG.
d. ) All the above are correct.

Question 27

With respect to United States patents and copyrights, GATT:

Answer 27

will allow the United States to assess tariffs against a country that refuses to honor U.S. copyrights or patents.

Question 28

The primary goal of the North American Free Trade Agreement (NAFTA) is to:

Answer 28

eliminate almost all trade barriers between the three nations.

Question 29

What is a major difference between a United States lawsuit versus a French lawsuit?

Answer 29

In a French lawsuit, the rules of evidence are more flexible.

Question 30

The primary antitrust law in the United States is the:

Answer 30

Sherman Act.

Question 31

Hardhat Machine Company sold goods to Irish Eyes Company of Northern Ireland. Big Bank issued a letter of credit on behalf of Irish Eyes and the letter was given to Hardhat. The “account party” is:

Answer 31

Irish Eyes.

Question 32

Hardhat Machine Company sold goods to Irish Eyes Company of Northern Ireland. Big Bank issued a letter of credit on behalf of Irish Eyes and the letter was given to Hardhat. The documents required by the letter of credit are presented to the bank for payment while the goods are still in transit. Is Hardhat entitled to be paid?

Answer 32

Yes, the letter of credit is a promise by the bank to pay when certain documents are presented.

Question 33

As of 2007 figures, the country trading the most goods with the United States was:

Answer 33

Canada.

Question 34

Zebra Toy Company invests a large sum of money in retail stores located in a foreign country. Zebra intends to bring its foreign earnings back home to the United States. This practice is known as:

Answer 34

repatriation of profits.

Question 35

The Australian government has opened a tourist information center in New York City. If a dispute arises over the lease of the storefront, may the landlord sue the Australian government in the United States courts?

Answer 35

Yes, because the Australian government was engaged in a commercial activity.

Question 36

MagNet, a small United States computer company, started doing business in a foreign country. The foreign country later decided to take over all computer industry, including MagNet’s operation. The foreign country paid MagNet adequate compensation in United States dollars. The foreign country’s action is called:

Answer 36

expropriation.

Question 37

Kjell is the vice president of international sales for Oxtren, Inc, a U.S. company. To secure a multimillion dollar contract for his company, Kjell paid a Mongolian governmental officer $10,000. Kjell:

Answer 37

has violated the Foreign Corrupt Practices Act.

Question 38

The Marcel Company is opening an office in Mexico. The cost to obtain electrical service is $500, but the clerk suggests that service could be started faster if an additional $50 is paid, which the clerk will keep. If the Marcel official pays the additional $50:

Answer 38

he will not have violated the Foreign Corrupt Practices Act because this would be considered a “grease” or facilitating payment, which is legal.

Question 39

Archer Co. has decided it wants to expand into international business, but it is concerned about expropriation of its property or losses caused by political unrest. Archer is considering purchasing insurance through the Overseas Private Investment Corporation (OPIC). OPIC:

Answer 39

has had remarkable success at no cost to the U.S. government.

Question 40

The United States has agreed to which of the following?

Answer 40

a. ) GATT.
b. ) NAFTA.
c. ) CISG.
d. ) All of the above.