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A body of law formed as a result of international customs, treaties, and organizations that governs relations among or between nations |
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The principle by which one nation defers and gives effect to the laws and judicial decrees of another nation, as long as those laws and decrees are consistent with the law and public policy of the accommodating nation |
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| Provides that the judicial branch of one country will not examine the validity of public acts committed by a recognized foreign government within its own territory |
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| The seizure by a government of a privately owned business or personal property for a proper public purpose and with just compensation |
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| Government seizure of private property for an illegal purpose or without just compensation. It is a violation of international law |
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| What is the risk to US investors posted by the Act of State Doctrine? |
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| Owners who have established operations in foreign countries could have their assets expropriated and they would have no way to fight it |
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| Doctrine of Sovereign Immunity |
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| Immunizes foreign nations from the jurisdiction of US courts when certain conditions are satisfied |
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| What is provided by the Foreign Sovereign Immunities Act? |
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| It is the codification by Congress of the doctrine of sovereign immunity |
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| What exceptions does the FSIA provide? |
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| A foreign state is not immune from the jurisdiction of US courts when the state has “waived its immunity either explicitly or by implication” or when the action is taken “in connection with a commercial activity carried on in the United States by the foreign state” or having “a direct effect in the United States.” |
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| A US company signs a sales contract with a foreign purchaser that provides for the conditions of shipment and payment for the goods |
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| A US corporation may set up a specialized marketing organization in that foreign market by appointing a foreign agent or a foreign distributor |
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| 3 methods used by US companies to carry out manufacturing abroad |
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| 1. Licensing, 2. Franchising, 3. Investing in a Wholly Owned Subsidiary or a Joint Venture |
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| The parent company (in the US) retains complete ownership of all the facilities in the foreign country, as well as complete authority and control over all phases of the operation |
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| The US company owns only part of the operation; the rest is owned by either local owners or by another foreign entity |
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| Choice of Language Clause |
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| designates the official language in which the contract will be interpreted in the event of a disagreement |
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| Indicates what court, jurisdiction, or tribunal will decide any disputes arising under the contract, especially the specific court which will have jurisdiction |
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| Allows the parties to choose the law that will govern their contractual relationship |
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| Will commonly stipulate that in addition to acts of God, a number of other eventualities (such as government orders or embargoes, declarations of war, etc.) may excuse a party from liability for nonperformance |
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| Usually issued by a bank on behalf of a customer or other person, are instruments in which the issuer promises to honor drafts or other demands for payment by third parties in accordance with the terms of the instrument. It allows the parties to perform their parts of the contract without having to worry about losing money or property because of the other party’s nonperformance |
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| What prevents Congress from enacting taxes on exports? |
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| Article I, Section 9 of the US Constitution |
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| Why wouldn't we want to tax exports? |
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| Due to the trade deficit, we import much more than we export; the country does not want to discourage domesting companies from earning revenues through exports |
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| What means does Congress have to control exports? |
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| Congress can control exports through quotas, export incentives, and subsidies |
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| A limit on the amount of goods that can be imported |
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| A tax levied on imported goods |
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| When a good is sold for less than its market value |
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| Why are there laws against foreign countries "dumping" in the US? |
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| It is designed to undersell US businesses and obtain a larger share of the US market |
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| What is the purpose of organizations like the EU, NAFTA, and the WTO? |
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| They are designed to eliminate trade barriers between certain countries, such as tariffs, quotas, etc |
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| What is the purpose of the Foreign Corrupt Practices Act? |
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| The act makes it illegal to bribe foreign government officials in order to obtain business contracts and other favors |
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| Does the whistleblower protection of SOX extend to employees of US companies working abroad? |
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| Sarbanes-Oxley Act was designed solely for domestic application |
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| Does the Sherman Antitrust Act apply to violations outside of the US? |
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| It applies to violations outside the United States, and foreign governments as well as persons can be sued for violations |
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| What antidiscrimination laws apply to employees of US firms who are working outside the US? |
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| Generally, US employers must abide by US antidiscrimination laws unless to do so would violate the laws of the country where their workplaces are located |
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