Test 1- chapter 5 Flashcards
Confiscation
occurs when no compensation is provided
Expropriation
Governmental action to dispossess a foereign company or investor; Compensation should be provided in a prompt, effective and adequate manner
nationalization
a government takes control of some or all of the enterprises in an entire industry
- acceptable when:
- satisfies public purpose
- includes compensation
Creeping of expropriation
limits economic activities of foreign firms
May include:
-Limites on repatriation of profits, dividends, or royalties
-Technical assistance fees
-increased local content laws
Common vs Civil Law
The napoleonic code of 1804 drew on roman legal systems an is the basis for continental european law today. Code law is also known as civil law.
Common Law:
-companies are legally incorporated by state authority
-Code law is used in only a few areas: The US uniform Commercial Code
Civil Law:
- Legal system reflects the structural concepts and principles of the Roman Empire
- Companies are formed by contract between two or more parties who are fully liable for the actions of the company
Anti Trust Issues
- Law are designed to combat restrictive business practices and to encourage competition
- enforced by FTC, Fair Trade, and Euro Commission
- Sherman act of 1890
Bribery and Corruption
Foreign Corrupt Practices Act:
- Requires publicly held companies to institutes internal accounting controls that would record all transaction
- provides payments to third parties
- its a crime for US corp to bribe foreign officials
Omnibus Trade and Competitiveness Act:
-allows for grease payments to cut red tape
Arbitration
Settles disputes outside of court