International Law

• Types of law systems– Common law– Code law– Islamic law– Communism

• Definition:– Treaties, customs, recognized principles when one

country deals with another– Bilateral– Multilateral

LESCANT Factors

• Language

• Environment & Technology

• Social organization

• Contexting

• Authority

• Nonverbal behavior

• Time Concept

Contracts for the International Sale of Goods

• 1980

• Adopted in 53 countries, including U.S.

• Similar to UCC

Treaties and International Trade Organizations

• WTO/GATT– Outlaws tariff discrimination– Most favored nation status– Outlaws nontariff barriers– Caps tariffs

Treaties and International Trade Organizations

• UNCITRAL– United Nations Commission on International

Trade Law– 36 countries– Proposes ‘model laws’ for uniformity

Treaties and International Trade Organizations

• EU– European Commission

• Education• Health• Culture• Consumer protection

– Council of Ministers– European Parliament– Court of Justice– Euro– Antitrust laws similar to Sherman Act

Treaties and International Trade Organizations

• NAFTA– All tariffs to be eliminated in 15 years

• Can be “snapped back” if US is overrun with imports or imports cause harm

• Duty free if 100% North American origin

– Environment• Left to each nation if not arbitrary or unjustifiably

discriminatory• Regulations must be “necessary” to protect life• Regulations must be based on “scientific principles”• No mention of genetic engineering

Treaties and International Trade Organizations

• U.S. International Trade Commission– 6 appointed commissioners with 9 year terms– Advises president on preferences (lower tariffs)– Industries petition ITC– Import interference with agricultural programs– Keeps track of unit labor costs by country– Special 301

• International theft of U.S. intellectual property• Identifies “priority foreign countries”• May impose sanctions

International Courts

• No real enforcement

• International Court of Justice (World Court)– Established by UN– Nation v. Nation– Voluntary agreement to have case heard– Not bound by the decisions– Not for business disputes

International Courts

• European Court of Justice– Enforces EU law– Member nations, EU institutions, other parties

& businesses v. member nations– Enforcement by national courts

International Courts

• WTO dispute resolution– Trade disputes between member nations– May order retaliatory trade sanctions

International Arbitration

• Organizations– American Arbitration Association– International Chamber of Commerce– UN Commission on International Trade Law

• Arbitrator issues award– No enforcement power

• Enforcement only if:– Nation is signatory of UN Convention on the

Recognition and Enforcement of Foreign Arbitral Awards

International Law Principles

• Sovereign immunity– Equality of countries– Each country sovereign nation– No country subject to another’s laws without

consent– International commercial transactions are

voluntary – subjects country’s government to civil suits

International Law Principles

• Expropriation– Act of State Doctrine– Recognizes as valid acts by other nations even

if illegal in US– Usually challenged when private property is

nationalized

International Law Principles

• Protections of US property– Foreign Assistance Act of 1962 – Hickenlooper

amendment• President can punish nations that expropriate private US

property• Actual expropriation• Effective expropriation

– Clauses in trade treaties– Overseas Private Investment Corporation (OPIC)

• Federal insurer – premiums based on risk• Countries where per capita income is $250 or less • Confiscation, insurrection, repatriation, war, revolution

International Law Principles

• Repatriation– Some nations limit repatriation– Acts of state

• Forum non conveniens– Cases must be brought under the correct

jurisdiction

Conflicts of Law

• No 2 countries have the same laws

• The parties may choose which law applies

• By default, the laws of the country of contract performance apply

Protections in International Competition

• Antitrust laws– US Law

• All US firms• All firms operating in the US• Firms whose business has substantial impact on US

trade• Who can sue

– U.S. & foreign governments– U.S. & foreign businesses– Any other injured party

Protections in International Competition

• Export Trading Company Act of 1982– Allows Jvs between competitors when outside

the US– Must show the firm will not:

• Substantially lessen competition or restrain trade in the U.S. or restrain export trade of a competitor

• Cause unfair competition• Affect the price of goods/services in the U.S.• Resell the exported goods in the U.S.

Protections in International Competition

• Helms-Burton Act– 1996– Punishment for firms that use confiscated U.S.

property• Executives and families may not enter U.S.

• Allows suits against those companies

• Targeted at Cuba

Protections in International Competition

• Intellectual Property– International agreements being negotiated

– Gray Market goods• Goods with U.S. intellectual property protection are are

foreign made & imported without consent of U.S.trademark holder

– Outlawed by U.S. Customs Service

• Criminal Law– Individuals and businesses are subject to host country’s

criminal law

Foreign Corrupt Practices Act

• Applies to all businesses registered under SEC• Illegal to use mails or interstate commerce for bribes• Shareholders, officers, directors

– 5 years in prison– $100,000 fine

• Business penalty – up to $2 million• Exceptions

– Grease payments– Bribes to non-government foreigners– Extortion payments– Payments that are legal within he host country