Course of Business Law Before Final Exam

8/13/2019 Course of Business Law Before Final Exam

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BUSINESS LAW

COURSE

SEMESTER I ACADEMIC YEAR 2010/2011

INSTRUCTOR :

TRIYANA YOHANES, SH.,MHUM

ECONOMIC FACULTY OF UAJY


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BUSINESS LAW

COURSE

SEMESTER I ACADEMIC YEAR 2010/2011

INSTRUCTOR :

TRIYANA YOHANES, SH.,MHUM

ECONOMIC FACULTY OF UAJY


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3

Bussines Law = Economic Law

Economic Law comprises :

International Economic Law National/domestic Economic Law

such as Indonesian Economic law


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DEFINITION OF INTERNATIONAL

ECONOMIC LAW

JOHN H. JACKSON :

International Economic Law could be difined asincluding all legal subjects which have both an

international and an economic component.

INTERNATIONAL ECONOMIC LAW COMPRISES :

- INTERNATIONAL PUBLIC LAW AND

- INTERNATIONAL PRIVATE LAWIN THE FIELD OF ECONOMIC RELATIONS.


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Others Definition of IEL

Louis Henkin

International Economic Law could be defined as all ofthe international law and international agreementsgoverning economic transactions that cross stateboundaries or otherwise have implications for morethan one state, such as those involving movements of

goods, funds, persons, intangibles technology, vesselsor aircraft.

VERLOREN VAN THEMAAT:

International Economic Law can be described in overallterms as the total range of norms (directly or inderectlybased on treaties) of public international law withregard to transnational economic relations.


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The History of International

Economic Law

VERLOREN VAN THEMAAT :

Internasional Economic Law has developed since thetwelfth century.

Treaty between the United Kingdom and Burgundy of17 August 1417 contained some basic principles ofinternational trade such as The Most-Favoured-Nation

(MFN) principle.Others princiles were adopted in international tradein that era were recyprocity, cabotage dan freedom ofnavigation.


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JG. STARKE :

The Development of regulation governing international

economic relations indicate that a new branch ofInternational law has emerged, that is, International

Economic Law.

The examples of the instruments of law governing

those economic relations :

-Agreement on the World Bank, IMF & GATT

-Treaty on European Unions-ICSID Convention

-UN GA Resolutions of 1974 on the Establishment of

the New International Economic Order


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International Economic Law as

body of rules and

as branch of International LawAs a body of rules has emerged/developed

since twelfth century (before the World War

II)

As a branch of International International

Law, International Economic Law was

recognized after the World War II.


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SUBJECTS OF THE INTERNATIONAL

ECONOMIC LAW

1. States (the main subject)

2. International Economic Organizations (IBRD,

IMF, WTO, ECOSOC, dll)

3. Private companies (TNC)


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INTERNATIONAL ECONOMIC LAW

(Actual materials from which an

international lawyer determines the ruleapplicable to a given situation)

These materials fall into five principal categories of

forms :

1. Custom

2. Treaties

3. Decisions of judicial or arbitral tribunal

4. Juristic Works5. Decisions or determinations of the organs of

international institutions.

In the field of international relations.


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The Regulation of International Economic

Relations Before the World War IIA

Influenced by the economic theory, which

prevailed in those era, such as :

Mercantilism

The 19thCentury liberalism

The protectionism in the early of the 20th

Century


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Mercantilism (15001850)

The theory and system of political economy

prevailing in Europe after the decline of

feudalism, based on national policies ofaccumulating bullion, establishing colonies and

merchant marine, and developing industry and

mining to attain a favorable balance of trade.

Protectionsm policies were applied by States in

their international trade policies for the purpose

to protect local/domestic industries.


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Liberalism by the 19thCentury

Influenced by the Adam Smiths theory ofliberalism economic theory

Also known as classical liberalism Maximum role of market and competitive forces ineconomy

To supports and promotes laissez-faireeconomomics and private property in the means ofproducts

The States role is limited in the economicsactivities

No barriers to the international trade


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Economic Relations Before the World

War IIAProtectionism by the 20thCentury

In the early of the 20thCentury, for the purpose ofprotecting their national/domestic economics, mostStates in the World applyed protective policy intheir international trade

There were plenty of trade barriers to internationaltrade, which caused international economicsrelations hampered

Before and during the World War II there were nointernational economic cooperations

The World greatest economic depressionhappened

R l ti f th I t ti l E i


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Regulation of the International Economic

Realations after the World War II In the end of the World War II, some big Countries (Allies

States), Such as the US, Canada, the USSR, the UK, etc,held an international Diplomatic Conference in BrettonWoods, NH, USA, for the purpose of overcoming the WorldEconomics depression.

The Result of the International Conference were

establishment of the International Bank for Reconstructionand Development (the World Bank) and the InternationalMonetary Fund

Later, together with the General Agreement on Tariffs andTrade, 1947, the World Bank and & IMF, establised the

Bretton Woods Economic Institutions.

The purposes :

1. Raising the Worlds Economic prosperity,

2. Creating Stabilization of the Internasional Monetary system,

3. Liberalization of the international trade

Th I t ti l B k f R t ti d


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The International Bank for Reconstruction andDevelopment (World Bank)

Established in 1944, based on Articels of Agreementof the IBRD, entried into force at December,27th,1945.

Together with the International Development Agencyand The International Finance Corporation

established the World Bank Groups. Is subsidiary organ of the United Nations

Membership : States members of the IMF are themembers of the World Bank

Headquarters : Washington DC

The World Bank


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The World Bank

Tujuan Bank Dunia (Pasal 1 Articles of Agreement):

1. Membantu pembangunan negara anggota2. Memajukan penanaman modal asing

3. Memberi pinjaman keuangan utk tujuan produktif

4. Memajukan perdagangan internasional dan

memelihara neraca pembayaran5. Mengelola pinjaman utk proyek mendesak &bermanfaat

6. Melakukan kegiatan lain dgn memperhatikanakibat-akibat penanaman modal internasional padakondisi bisnis di negara-negara anggota.

Sekarang : memberi pinjaman untuk membiayaipembangunan Negara-Negara sedang berkembang

di bidang pendidikan, pertanian dan industri


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The World BankArticle I of the Articles of Agreement of the World Bank

The purposes of the Bank are:

(i) To assist in the reconstruction and development of territoriesof members by facilitating the investment of capital forproductive purposes, including the restoration of economiesdestroyed or disrupted by war, the reconversion ofproductive facilities to peacetime needs and the

encouragement of the development of productive facilitiesand resources in less developed countries.

(ii) To promote private foreign investment by means ofguarantees or participations in loans and other investmentsmade by private investors; and when private capital is not

available on reasonable terms, to supplement privateinvestment by providing, on suitable conditions, finance forproductive purposes out of its own capital, funds raised by itand its other resources.

(iii)


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The World BankThe purposes of the Bank are:

(iii) To promote the long-range balanced growth of international

trade and the maintenance of equilibrium in balances ofpayments by encouraging international investment for thedevelopment of the productive resources of members,thereby assisting in raising productivity, the standard ofliving and conditions of labor in their territories.

(iv) To arrange the loans made or guaranteed by it in relation tointernational loans through other channels so that the moreuseful and urgent projects, large and small alike, will bedealt with first.

(v) To conduct its operations with due regard to the effect of

international investment on business conditions in theterritories of members and, in the immediate postwar years,to assist in bringing about a smooth transition from awartime to a peacetime economy.

The Bank shall be guided in all its decisions by the

purposes set forth above


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THE INTERNATIONAL

MONETARY FUND

Established in 1944 together with the World

Bank

Membership : is open to all states which

accept the obligations of the Fund, are able

and willing to carry out these obligations.

A ti l f A t f th I t ti l M t F d


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1. To promote international monetary cooperation througha permanent institution which provides the machineryfor consultation and collaboration on internationalmonetary problems

2. To facilitate the expansion and balanced growth of

international trade, and to contribute thereby to thepromotion and maintenance of high levels ofemployment and real income and to the development ofthe productive resources of all members as primaryobjectives of economic policy.

3. To promote exchange stability, to maintain orderlyexchange arrangements among members, and to avoidcompetitive exchange depreciation.

4.

Articles of Agreement of the International Monetary Fund

Article I - PurposesThe purposes of the International Monetary Fund are:


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4. To assist in the establishment of a multilateral system ofpayments in respect of current transactions betweenmembers and in the elimination of foreign exchangerestrictions which hamper the growth of world trade.

5. To give confidence to members by making the generalresources of the Fund temporarily available to them underadequate safeguards, thus providing them with opportunityto correct maladjustments in their balance of paymentswithout resorting to measures destructive of national orinternational prosperity.

6. In accordance with the above, to shorten the duration andlessen the degree of disequilibrium in the internationalbalances of payments of members.

Articles of Agreement of the International Monetary Fund

Article I - PurposesThe purposes of the International Monetary Fund are:

The Fund shall be guided in all its policies and

decisions by the purposes set forth in this Article.


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The Resources of the IMF

The resources of the IMF are derived from

the subscriptions (quotas) that are

members are required to pay, and

To lesser degree from its borrowings


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The SDRs of the IMF

Special Drawing Rights (SDRs) is an

international reserve asset created by IMF and

allocated to its members to supplement existing

reserve assets.

The SDRs is also the unit account of the IMF.

The value of the unit (SDRs) is determined daily

on the basis of a basket of five currenciestheUS dollar, the Deutsche mark, the Frech franc,

the Japanese yen and the pound sterling.


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FINANCIAL ASSITANCE PROVIDED BY THE IMF

One principal functions of the IMF is to providereserves to countries with liquidity or balance of

payments problem.

Members may draw on its financial resources under

its trances policies, the Extended Fund Facility orother special facilities to meet their balance of

payments needs.

C S O C S O


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TRANCES POLICIES OF THE IMF

A Members having balance of payments difficulties

may avail itself of the credit tranche policies.Credit is made available in four tranches, each

equivalent to 25% of a members quota.

Particularly after the first tranche, these borrowings

are made pursuant to a stand-by or extendedarrangement negotiated between the IMF and themember.

may draw on its financial resources under its trancespolicies, the Extended Fund Facility or other special

facilities to meet their balance of payments needs.The availability of these loans depend on the wether

the member meets certain performance criteria.

Repayment is normally expected in 3 to 5 years


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THE IMF

Extended Fund Facilities

The IMF provides loans under the so-calledExtended Fund Facility

The facility is designed to provide assistance tomembers to meet balance of payments needsfor longer period (4 to 10 years) and a largeramount thans than under its credit tranced

policies.


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Conditionality Doctrine of the IMF

Members should be encouraged to adopt correctivemeasures, which could be supported by use of the

Funds general resources in accordance with the

Funds policies, at an early stage of their balance of

payments difficulties or as a precaution against theemegence of such difficulties.

The Article IV consultations are among the

occasions on which the Fund would able to discuss

with members adjusment programs, including

corrective measures, that would enable the Fund to

approve a stand-by arrangement (Letter of Intent).


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Conditionality doctrine of the IMF

- Requirements/Adjustments were made by theborrowing state and appoved by the IMF

- Not intended to make interventions to theekonomic, political, social system of the

borrowing state member of the IMF.

THE GENERAL AGREEMENT ON TARIFF AND


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THE GENERAL AGREEMENT ON TARIFF ANDTRADE 1947 (GATT 1947)

Came into force on 1 January 1948

Was applied under the Protocol of ProvisionalApplication, 1948.

Until the year of 1994 GATT 1947 (before the

establishment of the WTO) had role as :1. A body of regulation of the world trade

2. A International Trade Organization

3. World trade negotiation forum

4. Dispute settlement body

GATT 1947 promotted the world trade liberalizationthrough reducing/abolishing all of the trade

barriers, tariff and non-tarrif barriers.


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Purposes of the GATT 1947 as stated in the

Preambule of the GATT 1947 :

1. Raising standards of living

2. Ensuring full employment and large and

steadily growing volume of real income

3. Developing the full use of the resources of

the world

4. Expanding the production and exchange ofgoods


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CRITICISM TO THE GATT 1947 AND THE

BRETTON WOODS SYSTEM

Principles of classical of International Economic

Law such as principle of freedom, principle of

legal equality in the law of international trade,

principle of reciprocity were applied.

Had caused :

- The big gap between Developed Countries and

Developing Countries in the economic prosperity- Dependency of the Developing Countries to

Developed Countries in economic relations

MODIFICATION OF THE GATT 1947


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MODIFICATION OF THE GATT 1947

Amendment of the GATT in 1965 by additional of Part

IV : Articles XXXVI to XXXVIII.

Contains among others :

- Realization that majority members of the GATT

are developing and less-developed countries- Commitment of the Developed Countries

members of the GATT to give assistance to thedeveloping countries members

- Developing Countries members needs somefavorable treatments in the international traderelations under the GATT


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THE NEW INTERNATIONAL

ECONOMIC ORDER (NIEO)

The NIEO was an economic order conceptproposed by Developing Countries.

The Developing Countries want to replace theBretton Economic System by the NIEO

Th NIEO P i i l f l t d i


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The NIEO Principles were formulated in

the :

The UN GA Resolution Number 3201 (S-VI), 1 May1974 : Res. on Establishment of the NIEO

The UN GA Resolution Number 3281 (XXIX), 12

December 1974 : Res. On the Charter of EconomicRights and Duties of States,

The UN GA Resolution Number 3202 (S-VI), 1 May

1979 : Res. On the Programme of Action on theEstablishment of the NIEO


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10 Basic Principles of the NIEO

1. Obligation among states to make economiccooperations

2. Developed Countries have obligation to providedevelopment assistance to the DevelopingCountries.

3. The right of economic independence of theDeveloping Countries,

4. Every state has permanent sovereignty over naturalresources, economic prosperity and economic

activities in its territory,5. Favorable special rights of developing countries inthe economic relations,

6. .

10 Basic principles of the NIEO


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10 Basic principles of the NIEO

(continued .)

1. Enhancing the developing countries participation inthe international economic relation, internationalmonetary and the World financial sector

2. Compensation over natural resources of the

occupied countries during the colonialist period,which had been exploited by the colonialist countries,

3. Cooperation in economics and technologies amongdeveloping countries,

4. Sustainable Development5. The common heritage of mankind priciples over the

international territory

Th NIEO C


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The NIEO Controversy :

Developed Countr ies :- Denied the NIEO principles

- The NIEO is dead

Develop ing Coun tr ies :

- The NIEO priciples needs a legal binding

- Long live the NIEO


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Some principles of the NIEO has became

binding international law, such as

- principle of economic sovereignty

- principle of heritage of mankind

- principle of Favorable treatment of the

Developing Countries in the international

economic relations

TRADE NEGOTIATIONS UNDER


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TRADE NEGOTIATIONS UNDERTHE GATT 1947

1. Geneva Round : 19472. Annecy Round : 1949

3. Torquay Round : 1950

4. Geneva Round : 1956

5. Dillon Round : 196019616. Kennedy Round : 19621967

7. Tokyo Round : 19731979

8. Uruquay Round : 1986 1994.

Focus negotiations under the Geneva Round 1947

Kennedy Round (19621970) were reducing tariff

barriers to trade.

Tokyo Rounds 1973 1979


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Tokyo Rounds 1973 1979

Focus negotiations were reducing non tariff barriers to

trade.The Negotiations resulted some Non Tariff BarriersCodesNTB Codes :

Agreement on Implementation of Article VII of the

GATT (Custom Valuation Code),Agreement on Government Procurement

(Government Procurement Code),

Technical Barriers to Trade (Standard Code)

Agreement on Implementation of Article VI, VII andXXIII GATT (Subsidies Code),

Agreement on Implementation of Article VI

(Antidumping Code).

Uruguay Rounds


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U uguay ou ds( Started at Punta del Este - Uruguay 1986 and closed at

MarrakeshMarokko 1994)

The Punta del Este Declaration stated : Negotiationsshall aim to develop understandings and arrangements :

1. To enhance the surveillence in the GATT to enableregular monitoring of trade policies and practices of

contracting parties and their impact on the functioningof the multilateral system,

2. To improve the overall effectiveness and decision-making of the GATT as an institution, including interalia, through involment of Ministers,

3. To increase the contribution of the GATT to achievinggreater coherence in global economic policy-makingthrough strengthening its relationship with otherinternational organizations responsible for monetary

and financial matters.

Outcomes of the Uruguay Round


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Outcomes of the Uruguay Round

The Agreement on Establishment of the World

Trade Organization, with Annexes :1. Annex IA: Multilateral Agreement on Trade in

Goods, comprises of :

GATT 1994 dan 12 agreements of trade in goods.

Annex IB: General Agreement on Trade in Services(with annexes),

Annex IC: Agreement on Trade Related Aspects ofIntellectual Property Rights,

2. Annex II: Understanding on Rules and ProceduresGoverning Settlement Disputes,

3. Annex III: Trade Policy Review Mechanism,

4. Annex IV: Four Plurilateral Trade Agreements

THE WTO


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THE WTO

The function of the GATT as international trade

organization was replaced by The WTO.

TheSecretariat of the GATT at Geneva become the

Secretariat of the WTO.

WTO is a public international public organizations :

153 Countries become the members.

The WTOis the only international body dealing with

the rules of trade between nations. The World Trade Organizat ion(WTO) is an

organization that intends to supervise and liberalize

international trade.


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OFFICE OF THE WTO SECRETARIAT -

GENEVA SWISS

STRUCTURE OF THE WTO


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STRUCTURE OF THE WTO


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The WTO and The General Agreementon Tariff and Trade

GATT 1947 is the origin of the WTO .

Under the WTO Agreement, the GATT 1947become one of the main agreement relating tothe trade in goods

The WTO apply the GATT principles to theinternational trade

Th WTO Th M i A t


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The WTO Three Main Agreements

Relating to the International Trade

1. The General Agreement on Tariff andTrade, 1994

2. The General Agreement on TradeRelated Aspects of Intellectual PropertyRights, including Counterfeit Goods

(TRIPS)3. The General Agreement on Trade in

Services (GATS)

Th G l A t T iff d T d


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The General Agreement on Tariffs and Trade

1994 ("GATT 1994") shall consist of :

a) the provisions in the General Agreement onTariffs and Trade, dated 30 October 1947,

b) the provisions of the legal instruments set forthbelow that have entered into force under the

GATT 1947 before the date of entry into forceof the WTO Agreement.

c) Some Understandings concerning with theinterpretation and waiver of certain articles ofthe GATT 1994.

d) the Marrakesh Protocol to GATT 1994.


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The General Agreement on Tariff andTrade

Comprises of 38 articles

Important Articles :

Article I


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Article I

General Most-Favoured-Nation Treatment

1. With respect to customs duties and charges of

any kind imposed on or in connection withimportation or exportation or imposed on theinternational transfer of payments for importsor exports, and with respect to the method oflevying such duties and charges, and withrespect to all rules and formalities inconnection with importation and exportation,and with respect to all matters referred to inparagraphs 2 and 4 of Article III, any advantage,

favour, privilege or immunity granted by anycontracting party to any product originating inor destined for any other country shall beaccorded immediately and unconditionally tothe like product originating in or destined for

the territories of all other contracting parties.


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Article II

Schedules of Concessions

1. (a). Each contracting party shall accord to

the commerce of the other contracting

parties treatment no less favourable than

that provided for in the appropriate Part of

the appropriate Schedule annexed to this

Agreement.

(b) ..

Tariff binding principle

Article IIINational Treatment on Internal Taxation and Regulation


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National Treatment on Internal Taxation and Regulation

1. The contracting parties recognize that internal taxes andother internal charges, and laws, regulations andrequirements affecting the internal sale, offering for sale,

purchase, transportation, distribution or use of products, andinternal quantitative regulations requiring the mixture,processing or use of products in specified amounts orproportions, should not be applied to imported or domesticproducts so as to afford protection to domestic production.

2. The products of the territory of any contracting party importedinto the territory of any other contracting party shall not besubject, directly or indirectly, to internal taxes or other internalcharges of any kind in excess of those applied, directly orindirectly, to like domestic products. ..

4. The products of the territory of any contracting party importedinto the territory of any other contracting party shall beaccorded treatment no less favourable than that accorded tolike products of national origin in respect of all laws,regulations and requirements affecting their internal sale,offering for sale, purchase, transportation, distribution or use.

Article VIA i d i d C ili D i


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Anti-dumping and Countervailing Duties

The contracting parties recognize thatdumping, by which products of one country areintroduced into the commerce of anothercountry at less than the normal value of theproducts, is to be condemned if it causes orthreatens material injury to an establishedindustry in the territory of a contracting party ormaterially retards the establishment of adomestic industry.

In order to offset or prevent dumping, acontracting party may levy on any dumpedproduct an anti-dumping duty not greater inamount than the margin of dumping in respectof such product.

Article XP bli ti d Ad i i t ti f T d R l ti


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Publication and Administration of Trade Regulations

Laws, regulations, judicial decisions and administrativerulings of general application, made effective by any

contracting party, pertaining to the classification or thevaluation of products for customs purposes, or to ratesof duty, taxes or other charges, or to requirements,restrictions or prohibitions on imports or exports or onthe transfer of payments therefor, or affecting their sale,

distribution, transportation, insurance, warehousing,inspection, exhibition, processing, mixing or other use,shall be published promptly in such a manner as toenable governments and traders to become acquaintedwith them.

Agreements affecting international trade policy which arein force between the government or a governmentalagency of any contracting party and the government orgovernmental agency of any other contracting party

shall also be published.

Article XI


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General Elimination of Quantitative

Restrictions

No prohibitions or restrictions other than duties,taxes or other charges, whether made effective

through quotas, import or export licences or

other measures, shall be instituted ormaintained by any contracting party on the

importation of any product of the territory of any

other contracting party or on the exportation orsale for export of any product destined for the

territory of any other contracting party.

Article XX


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General Exceptions

Members of the WTO may take measures which are

inconsistent with the WTO/GATT Law :

a. necessary to protect public morals;

b. necessary to protect human, animal or plant life or

health;

c. relating to the importation or exportation of gold orsilver;

d. Necessary to protect patents, trade marks and

copyrights, and the prevention of deceptive practices;

e. relating to the products of prison labour;f. imposed for the protection of national treasures of

artistic, historic or archaeological value;

g. relating to the conservation of exhaustible natural

resources


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ArticleSecurity Exceptions

Article XXIIConsultation

Article XXIIINullification or Impairment

Article XXIVTerritorial ApplicationFrontier TrafficCustoms Unions and Free-trade Areas


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THE GENERAL AGREEMENT ON

TRADE IN SERVICES (GATS)

Comprises of 29 articles

With 10 Annexes


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Some background (considerations) on the

regulation of international trade in services under

the WTO Agreement :1. the growing importance of trade in services for the

growth and development of the world economy;

2. Wishingto establish a multilateral framework of

principles and rules for trade in services with a viewto the expansion of such trade under conditions of

transparency and progressive liberalization and as a

means of promoting the economic growth of all

trading partners and the development of developing

countries;

3.

Problems concerning with the gap betweenC


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Developed Countries members and Developing

Countries Members of the WTO

Some developed Countries Members have advanced

technologies, skilled labors, mastering informations,

on the contrary some developing Countries Members

have no good informations, lack of advancedtechnologies, poor in skilled labors.

Due to the lack of technology, skilled labors and

informations, developing Countries Members will suffer

of economic losses from the liberalization of trade inservices

To respond the mentioned problem, the regulation of

trade in services under the GATS contains some

flexsibilities.

Flexsibility of the GATS


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Members are free in detemining sectors of

services which will be liberalized under theGATS

Concerning with trade in services, some basic

principles of the WTO Agreement may not be

applied.Liberalization in services sector done based on

the offers and request system

Any contracting party may determine that some

services in public sector are not subjects to theregulations under the GATS.

Monopoly by Domestic Company in trade of

certain public services is permissible

Important Articles


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Important Articles

Artic le II

Mos t-Favoured-Nat ion Treatmen t1. With respect to any measure covered by this

Agreement, each Member shall accordimmediately and unconditionally to services and

service suppliers of any other Member treatmentno less favourable than that it accords to likeservices and service suppliers of any othercountry.

2. A Member may maintain a measure inconsistentwith paragraph 1 provided that such a measureis listed in, and meets the conditions of, the

Annex on Article II Exemptions.

3. .


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Article III

Transparency

1. Each Member shall publish promptly and,except in emergency situations, at the latest by

the time of their entry into force, all relevant

measures of general application which pertain

to or affect the operation of this Agreement.International agreements pertaining to or

affecting trade in services to which a Member

is a signatory shall also be published. .

2.

Artic le IV


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Artic le IV

Inc reasing Part ic ipation of Develop ing Coun tr ies

1.The increasing participation of developing countryMembers in world trade shall be facilitatedthrough negotiated specific commitments, bydifferent Members pursuant to Parts III and IV ofthis Agreement, relating to:

(a). the strengthening of their domestic servicescapacity and its efficiency and competitiveness,inter alia through access to technology on acommercial basis;

(b). the improvement of their access to distributionchannels and information networks; and

(c). the liberalization of market access in sectorsand modes of supply of export interest to them.

PROGRESSIVE LIBERALIZATION


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PROGRESSIVE LIBERALIZATION

Artic le XIX

Nego t iat ion of Speci f ic Comm itments

1. In pursuance of the objectives of this Agreement,

Members shall enter into successive rounds of

negotiations, beginning not later than five yearsfrom the date of entry into force of the WTO

Agreement and periodically thereafter, with a

view to achieving a progressively higher level of

liberalization.2. .


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Indonesia Comitment

At the Hokong Ministerial Conference,

2005, Indonesia has made comitment to

liberalize somes sector of services,

including construction, telecomunication,business, tourism, education, maritime

transportation.

THE APEC


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APEC was established in 1989 to further enhanceeconomic growth and prosperity for the region and to

strengthen the Asia-Pacific community.APEC has 21 members - referred to as "MemberEconomies" - which account for approximately 40.5%1 ofthe world's population, approximately 54.2%1 of worldGDP and about 43.7%2 of world trade.

APEC is the only inter governmental grouping in theworld operating on the basis of non-bindingcommitments, open dialogue and equal respect for theviews of all participants. Unlike the WTO or other

multilateral trade bodies, APEC has no treaty obligationsrequired of its participants. Decisions made within APECare reached by consensus and commitments areundertaken on a voluntary basis.

APEC has worked to reduce tariffs and other trade

barriers across the Asia-Pacific region, creating efficient

AGREEMENT ON TRADE-RELATED ASPECTS OF

INTELLECTUAL PROPERTY RIGHTS


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INTELLECTUAL PROPERTY RIGHTS

Members,

Desiring to reduce distortions and impediments tointernational trade, and taking into account theneed to promote effective and adequate protectionof intellectual property rights, and to ensure that

measures and procedures to enforce intellectualproperty rights do not themselves become barriersto legitimate trade;

Recognizing, to this end, the need for new rules anddisciplines concerning:

(a) the applicability of the basic principles of GATT1994 and of relevant international intellectual

property agreements or conventions; (b) ..


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TRIPS AGREEMENT, 1994

Article 1 (1) :Members shall give effect to the provisionsof this Agreement. Members may, but shallnot be obliged to, implement in their lawmore extensive protection than is requiredby this Agreement, provided that suchprotection does not contravene theprovisions of this Agreement.


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TRIPS AGREEMENT, 1994

Intellectual Property refers to :1. Copyright and Related Rights

2. Trademarks

3. Geographical Indications4. Industrial Designs

5. Patents

6. Layout-Design (Topographies) of IntegratedCircuits)

7. Undisclosed Information

OF INTELLECTUAL PROPERTY


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OF INTELLECTUAL PROPERTY

RIGHTS

Intellectual Property Rightsrefers to

creations of the mind : inventions, literary

and artistic works, and symbols, names,images, and designs used in commerce.

IPR is divided into two categories :


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IPR is divided into two categories :

1. Copy rights

2. Industrial Property Rights, which includes :a. patent

b. trade secrets

c. industrial design

c. layout-designs of integrated

circuits

e. trade mark

TRIPS


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TRIPS

Art ic le 3

National Treatment

1. Each Member shall accord to the

nationals of other Members treatment no

less favourable than that it accords to its

own nationals with regard to the

protection of intellectual property,

TRIPS


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TRIPS

Art ic le 4

Mos t-Favoured-Nation Treatmen t

With regard to the protection of intellectual

property, any advantage, favour, privilege

or immunity granted by a Member to the

nationals of any other country shall be

accorded immediately and unconditionallyto the nationals of all other Members.

TRIPS


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Art ic le 7

Object ives

The protection and enforcement of intellectual

property rights should contribute to the

promotion of technological innovation and to thetransfer and dissemination of technology, to the

mutual advantage of producers and users of

technological knowledge and in a manner

conducive to social and economic welfare, and

to a balance of rights and obligations.

TRIPS : ARTICLE 40CONTROL OF ANTI-COMPETITIVE PRACTICES IN LICENCING


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CONTROL OF ANTI-COMPETITIVE PRACTICES IN LICENCING

1. Members agree that some licensing practices or conditions

pertaining to IPR which restrain competition may haveadverse effects on trade and may impede the transfer anddissemination of technology

2. Nothing in this agreement shall prevent Members fromspecifying in their national legislation licensing practices orconditions that may in particular cases constitute an abuse ofIPR having an adverse effect on competition in the relevantmarket.

As provided above, a Member may adopt, consistenly with

the other provisions of this agreement, appropriate measuresto prevent or control such practices, which may include forexample exclusive grant-back conditions, conditionspreventing challenges to validity and coercive packagelicensing, in the light of the relevant laws and regulation of the

Member.

ROLE OF THE WTO IN INTERNATIONAL TRADE


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The World Trade Organization (WTO) is the onlyglobal international organization dealing with therules of trade between nations.

The main objective of the WTO Agreements is toassist producers of goods and services, exporters,and importers in conducting their activities.

The WTO provides a forum for negotiatingagreements aimed at reducing obstacles tointernational trade and ensuring a level playing fieldfor all, thus contributing to economic growth and

development.The WTO also provides a legal and institutionalframework for the implementation and monitoring ofthese agreements, as well as for settling disputesarising from their interpretation and application.

Indonesia and the WTO Agreement


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Indonesia is a member of the WTO

based on the

Ratification on the WTO Agreement based on

the Law of RI Number 7, 1994

The Consequence :

Indonesia has obligation to establish all of its

policy, laws and regulations in trade inaccordance with the WTO Agreements.

WTO TRADE POLICY REVIEW BODY

Implementation of the WTO in


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Implementation of the WTO in

Indonesia

Reform all of the trade policy, which didntin accordance with the WTO principles

Abolishing some trade barriers which

hamper the liberalization of the WorldTrade

Enacted some laws as implementation ofthe WTO agreement :

Laws of Intellectual Property Right

Law of Invenstment, ect

Indonesia and the Implementation of the WTO Agreement


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Concerning the implementation of the WTO Agreement,Indonesia abolished most of the non-tariff barriers itcommitted to in Schedule XXI. Furthermore, the Government

has also eliminated import surcharges since June 1996.As a member of the WTO, Indonesia has implemented the

WTO Valuation Agreement since 1 April 1997. Since thattime, the determination of customs value for the importedgoods is based on the provisions of the Agreement.

Moreover, Indonesia created the following instruments in theform of law and regulations, such as Custom LawNo.10/1995; Ministerial Decree of Finance No.690/KMK.05/1996; Circulated Letter of Customs DirectorGeneral No.SE-11/BC/1997; Director General of CustomsDecree No.KEP-14/BC/1997 and No.KEP-21/BC/1997. In linewith the implementation of the Agreement, Indonesia alsorevised its import procedures to accommodate the newcustoms valuation system.

Since 2000, Indonesia has enacted some new laws on IPRand amended existing ones in compliance with WTO/TRIPS

Agreements.

THE REGULATION OF IPR IN INDONESIA


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THE REGULATION OF IPR IN INDONESIA

THE INDONESIAN LAW OF IPR

1. Law Number 29, 2000 on Plant Variety

2. Law Number 30, 2000 on Trade Secret

3. Law Number 32, 2000 on Design Layout ofIntegrated Circuit

4. Law Number 31, 2000 on Industrial Design

5. Law Number 14, 2001 on Patent

6. Law Number 15, 2001 on Mark (TradeMark)

7. Law Number 19, 2002 on Copy Right

R l ti I t t


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Regulation on Investment

Indonesia in 1994, enacted the new law ofenvestment, i.e., Law of RI Number 25,

2007.

The new Indonesian Law of Investmentapply somes basic principles of the WTO

Agreement, such as the MFN and National

Treatment principles (non-discrimination)

A th f ll i ti


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Answer the following questions :

1. What is business law ? (Give adefinition of business law).

2. What do you know about International

Economic Law ?

3. What is the different between law (legal

norms) and morality (the norms of

morality) ?

GROUPS ASSIGNMENT


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GROUPS ASSIGNMENT

Read article VI of the GATT 1994 Discuss article VI of the GATT with all of the

members of your group

Write article, wich will give answers to the

following questions : What does dumping mean ?

How does to determine dumping ?

Is dumping prihibited under the WTO/GATT Law ?

Is all dumping to be condemned ?

What is anti-dumping measures ?

Give an example of dispute concerning with dumping

Article VIAnti-dumping and Countervailing Duties

The contracting parties recognize that dumping by which products of one


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The contracting parties recognize that dumping, by which products of onecountry are introduced into the commerce of another country at less than thenormal value of the products, is to be condemned if it causes or threatensmaterial injury to an established industry in the territory of a contracting party

or materially retards the establishment of a domestic industry. For thepurposes of this Article, a product is to be considered as being introduced intothe commerce of an importing country at less than its normal value, if theprice of the product exported from one country to another

(a) is less than the comparable price, in the ordinary course of trade, forthe like product when destined for consumption in the exportingcountry, or,

(b) in the absence of such domestic price, is less than either

(i) the highest comparable price for the like product for export to anythird country in the ordinary course of trade, or

(ii) the cost of production of the product in the country of origin plus areasonable addition for selling cost and profit.

Due allowance shall be made in each case for differences in conditions andterms of sale, for differences in taxation, and for other differences affectingprice comparability.

In order to offset or prevent dumping, a contracting party may levy on anydumped product an anti-dumping duty not greater in amount than the marginof dumping in respect of such product. For the purposes of this Article, themargin of dumping is the price difference determined in accordance with theprovisions of paragraph 1.

1. What is business law ? (Give a definition of businesslaw)


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law ).

2. Give an explanation about the differences between theWorld Bank and the International Monetary Fund (IMF)

purposes.3. Give your explanation about the conditinality doctrine

of the IMF ?

4. What is the New International Economic Order (the

NIEO) ? Is the NIEO accepted by all countries in theworld ?

5. My a Member of the World Trade Organization (WTO)give different treatment between imported product anddomestic product, which are sold at its domestic

market ?6. What does dumping mean ? Is dumping prihibited

under the WTO/General Agreement on Tariff andTrade (GATT) Law ? Is all dumping to be condemned?

Exercise :


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Answer the following questions

1. Give an explanation about the differencesbetween the World Bank and the IMFpurposes.

2. What do you know about the conditinality

doctrine of the IMF ?3. What is the New International Economic Order(the NIEO) ? Is the NIEO accepted by allcountries in the world ?

4. My a Member of the WTO give differenttreatment between imported product anddomestic product, which are sold at itsdomestic market ?

FREE TRADE AREA


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Establishment of a free trade area has become anew model of economic cooperation in a certain

region in the World beside economiccooperation through the establishment ofcustom union

The purpose of establishing a free area is toeliminate all of trade barriers among the statemembers of such free trade area and implementthe principles of free trade

Examples of free trade area are the CentralEuropean Free Trade Area CEFTA), the North

American Free Trade Area (NAFTA), the SouthAsia Free Trade Area (SAFTA), the GreaterArab Free Trade Area (GAFTA), AFTA, CAFTA,Etc

DEFINITION


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DEFINITION

Free trade areais a type of trade bloc, a

designated group of countries that have agreed

to eliminate tariffs, quotasand preferences on

most (if not all) goodsand services traded

between them. It can be considered the secondstage of economic integration.

Countries choose this kind of economic

integration form if their economical structures

are complementary. If they are competitive, theywill choose customs union

THE INDONESIA MEMBERSHIP IN FREE
http://en.wikipedia.org/wiki/Trade_blochttp://en.wikipedia.org/wiki/Tariffhttp://en.wikipedia.org/wiki/Quota_sharehttp://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Economic_integrationhttp://en.wikipedia.org/wiki/Customs_unionhttp://en.wikipedia.org/wiki/Customs_unionhttp://en.wikipedia.org/wiki/Economic_integrationhttp://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Quota_sharehttp://en.wikipedia.org/wiki/Tariffhttp://en.wikipedia.org/wiki/Trade_bloc


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TRADE AREAS AGREEMENT

Indonesia is a member of :

AFTA

CAFTA

APEC

THE ASEAN FREE TRADE AREA


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Some background

The purposes of the Establishment of the ASEANbased on Bangkok Declaration, 1967 included tostrengthen the economic cooperation among itsmembers and to accelerate the economic growth ofthe countries members.

The ASEAN Economis cooperation wasimplemented by the establishment of theAgreementon ASEAN Preferential Trading Arrangement

(ASEAN- PTA) in 1977but it wasnt success.

In 1991 Thailand raised an idea of establishment ofthe ASEAN Free Trade Area

The AFTA


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The ASEAN Free Trade Area Agreement was

( Agreement on The Common Effective PreferentialTariff Sceme for the AFTA ) signed by the ASEANLeaders in January 1992

The Common Effective Preferential Tariff (CEPT)Scheme is the main mechanism to move ASEANtowards the direction of the AFTA.

The ultimate objective of AFTA is to increase

ASEANs competitive edge as a production basegeared for the world market

The basic feature of the AFTA is the liberalization oftrade in the region

THE AFTAThe AFTA was established to eliminate tariff and


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The AFTA was established to eliminate tariff andnon-tariff barriers among the Southeast Asiancountries with a view to integrating the ASEAN

economies into a single production base andcreating a regional market

The CEPT Scheme for AFTA requires that tariff rateslevied on a wide range of products traded within the

region be reduced to no more than five percent : by 2003 for the six original member of ASEAN, i.e. Brunei,Indonesia, Malaysia, the Philippines, Singapore andThailand,

by 2006 for Viet Nam,

by 2008 for Lao PDR and Myanmar by 2010 for Cambodia.

All import duties would be eliminated by 2010 for the6 original Member Countries and 2015 for the 4

Newer Member Countries of ASEAN.

The China-ASEAN Free Trade Area


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The ChinaASEAN Free Trade Area (CAFTA) is afree trade areaamong the ten member states of the

Association of Southeast Asian Nations(ASEAN)and the People's Republic of China.

The initial framework agreement was signed on 4November 2002 in Phnom Penh, Cambodia, with

the intent on establishing a free trade area amongthe eleven nations by 2010.

The free trade area came into effect on 1 January2010.

The CAFTA is the largest free trade area in termsof population and third largest in terms of nominalGDP.

THE CAFTA
http://en.wikipedia.org/wiki/Free_trade_areahttp://en.wikipedia.org/wiki/ASEANhttp://en.wikipedia.org/wiki/People%27s_Republic_of_Chinahttp://en.wikipedia.org/wiki/Phnom_Penhhttp://en.wikipedia.org/wiki/Cambodiahttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Cambodiahttp://en.wikipedia.org/wiki/Phnom_Penhhttp://en.wikipedia.org/wiki/People%27s_Republic_of_Chinahttp://en.wikipedia.org/wiki/ASEANhttp://en.wikipedia.org/wiki/Free_trade_area


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The free trade agreement reduced tariffs on 7,881product categories, or 90 percent of imported goods,

to zero.This reduction took effect in China and the six

original members of ASEAN: Brunei, Indonesia,Malaysia, the Philippines, Singapore and Thailand.

The remaining four countries will follow suit in 2015.

The average tariff rate on Chinese goods sold inASEAN countries decreased from 12.8 to 0.6percent on 1 January 2010

Meanwhile, the average tariff rate on ASEAN goodssold in China decreased from 9.8 to 0.1 percent.

THE APEC


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APEC was established in 1989 to further enhanceeconomic growth and prosperity for the region and tostrengthen the Asia-Pacific community.

APEC has 21 members - referred to as "MemberEconomies" - which account for approximately 40.5%1 ofthe world's population, approximately 54.2%1 of worldGDP and about 43.7%2 of world trade.

APEC is the only inter governmental grouping in theworld operating on the basis of non-bindingcommitments, open dialogue and equal respect for theviews of all participants. Unlike the WTO or othermultilateral trade bodies, APEC has no treaty obligationsrequired of its participants. Decisions made within APECare reached by consensus and commitments areundertaken on a voluntary basis.

ECONOMIC LIBERALIZATION UNDER

THE APEC


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THE APEC

APEC has worked to reduce tariffs and othertrade barriers across the Asia-Pacific region,creating efficient domestic economies anddramatically increasing exports.

Key to achieving APEC's vision are what arereferred to as the 'Bogor Goals' of free and opentrade and investment in the Asia-Pacif ic by 2010for indus tr ial ised econom ies and 2020 fordeveloping econom ies. These goals were

adopted by Leaders at their 1994 meeting inBogor, Indonesia.

7. Suppose, Republic Indonesia levy tariff and othertaxes of imported cars from Japan different from tariff


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p pand taxes which are levied to the imported cars fromthe United Stated of America and other countriesmembers of the World Trade Organization. DoesRepublic Indonesia violate the GATT/WTO Law ?Give argumentation of your answer.

8. Suppose, for the purpose of protection to the domesticapples (Malang apple), the Government of Indonesiamake a limitation of the number of apples which can

be imported from other Countries Members of theWTO. Does Republic Indonesia violate theGATT/WTO Law ? Give argumentation of youranswer.

9. Give an explanation about the flexibility of the

regulation of trade in services under the GeneralAgreement on Trade in Services.

10. Give at least two examples of the application of theGATT principles in trade of aspects of IntellectualProperty Rights under the TRIPS Agreement.

DEFINITION OF BUSINESS LAW


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DEFINITION OF BUSINESS LAW

BUSINESS LAW = COMMERCIAL LAW

is the body of law that governs business

and commercial transactions. It is often

considered to be branch of civil law anddeal with issues of both private and public

law

BUSINESS LAW


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deal with issues of both private and public law

Issues of public law : WTO Agreement, FreeTrade Area Agreement, Agreement

between/among states in the field of

economic, government regulation on

economic activities, etc

Issues of private law : regulations on

commercial transaction between individuals,

such as, the law of contract on sale of

goods

CONTRACT IN COMMERCIAL


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TRANSACTION

Binding Character of Contract

A contract validly entered into is binding

upon the parties. It can only be modified or

terminated in accordance with its terms orby agreement or as otherwise provided in

these Principles.

Based on pacta sunt servanda principle

CONTRACT LAW


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International contract law

Principles of law governing trans-nationalbusiness transactions :

Private International Law/Conflict of Laws

Indonesian contract law :

Indonesian contract law based on the

Indonesian Civil Code (KUHPerdata/Burgerlijk

Wetboek)

Indonesian contract law based on Adat Law

Definition of Private international law.Also

called conflict of laws
http://www.businessdictionary.com/definition/conflict-of-laws.htmlhttp://www.businessdictionary.com/definition/conflict-of-laws.html


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called conflict of laws.

Part of locallegal systemthat governstheselectionof appropriate law, and validityofjudgmentsandjurisdictionsof local and foreigncourts, in civil casescontaining a foreignelement, such as where a contractmade locally

has to be performed in another country.

The law governing private transactions anddisputes between parties from differing nations.

Generally, this body of law is used to determinewhich law to apply when there is a conflictbetween the domestic laws of the parties.

PRIVATE INTERNATIONAL LAW
http://www.businessdictionary.com/definition/conflict-of-laws.htmlhttp://www.investorwords.com/2866/local.htmlhttp://www.businessdictionary.com/definition/legal-system.htmlhttp://www.businessdictionary.com/definition/govern.htmlhttp://www.businessdictionary.com/definition/selection.htmlhttp://www.businessdictionary.com/definition/validity.htmlhttp://www.businessdictionary.com/definition/judgment.htmlhttp://www.businessdictionary.com/definition/jurisdiction.htmlhttp://www.businessdictionary.com/definition/court.htmlhttp://www.businessdictionary.com/definition/civil-case.htmlhttp://www.businessdictionary.com/definition/element.htmlhttp://www.businessdictionary.com/definition/contract.htmlhttp://www.businessdictionary.com/definition/country.htmlhttp://www.businessdictionary.com/definition/country.htmlhttp://www.businessdictionary.com/definition/contract.htmlhttp://www.businessdictionary.com/definition/element.htmlhttp://www.businessdictionary.com/definition/civil-case.htmlhttp://www.businessdictionary.com/definition/court.htmlhttp://www.businessdictionary.com/definition/jurisdiction.htmlhttp://www.businessdictionary.com/definition/judgment.htmlhttp://www.businessdictionary.com/definition/validity.htmlhttp://www.businessdictionary.com/definition/selection.htmlhttp://www.businessdictionary.com/definition/govern.htmlhttp://www.businessdictionary.com/definition/legal-system.htmlhttp://www.investorwords.com/2866/local.htmlhttp://www.businessdictionary.com/definition/conflict-of-laws.html


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PRIVATE INTERNATIONAL LAW

Characteristic :

is a domestic law

Every state has different privateinternational law

THEORIES OF PRIVATE INTERNATIONAL


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LAW PERTAINING TO CONTRACT

Choice of Law principle Based on the freedom of contract

The parties are free to enter into a contract

and determine its content.

If there is no choice of law, it could be the

law of : The place where the contract was concluded

The place where the contract was performed

Law of international contracts


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Law of international contracts

Unification of law of international contracts :

1. The United Nations Convention on

Contracts for International Sales of Goods(CISG 1980)

2. UNIDROIT Principles of International

Commercial Contracts, 1994

OTHER CONVENTIONS RELATING TO THE

INTERNATIONAL BUSINESS TRANSACTION


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INTERNATIONAL BUSINESS TRANSACTION

The UN Convention on the LimitationPeriod in the International Sale of Goods,1974

The UN Convention on the Carriage ofGoods by Sea, 1978 (Hamburg Rules)

The UN Convention on the InternationalBills of Exchange and International

Promisory Notes, 1988 UNCITRAL Arbitration Rules, 1976

The United Nations Convention on

Contracts for International Sales of Goods


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Contracts for International Sales of Goods

The convention is divided into four parts :1. Part 1 deals with the scope of application of the

convention and general provisions

2. Part 2 contains the rules governing the formation

of contracts for international of sale of goods

3. Part 3 deals with the substantive rights and

obligations of buyer and seller arising from the

contract4. Part 4 contains the final clauses of the

Convention concerning such matters as how and

when it comes into force, etc

SCOPE OF APPLICATION


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(1) This Convention applies to contracts of sale

of goods between parties whose places ofbusiness are in different States:

(a) when the States are Contracting States; or

b) when the rules of private international lawlead to the application of the law of a

Contracting State.

(2) ..

This Convention does not apply to sales:


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This Convention does not apply to sales:

a. of goods bought for personal, family or

household use, unless the seller, at any timebefore or at the conclusion of the contract,neither knew nor ought to have known thatthe goods were bought for any such use;

b. by auction;c. on execution or otherwise by authority of law;

d. of stocks, shares, investment securities,

negotiable instruments or money;e. of ships, vessels, hovercraft or aircraft;

f. of electricity.

Definition


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CISG give no definition about contract, sale andgoods

International means the parties of the contracthave places of business in different States

If a party has more than one place of

business, the place of business is thatwhich has the closest relationship to thecontract and its performance.

If a party does not have a place of

business, reference is to be made to hishabitual residence.

CISG


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This Convention governs only theformation of the contract of sale and therights and obligations of the seller and thebuyer arising from such a contract.

This Convention, it is not concerned with:

the validity of the contract or of any of itsprovisions or of any usage;

the effect which the contract may have onthe property in the goods sold.

Form of Contract


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Form of Contract

Artic le 11 of CISG

A contract of sale need not be concluded

in or evidenced by writing and is not

subject to any other requirement as toform. It may be proved by any means,

including witnesses.

Effectiveness of a Contract


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Effectiveness of a Contract

Article 23 CISG

A contract is concluded at the moment

when an acceptance of an offer becomes

effective in accordance with the provisionsof this Convention.

OBLIGATIONS OF THE SELLER


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The seller must : deliver the goods,

hand over any documents relating to them

and

transfer the property in the goods,

as required by the contract and this

Convention.

The seller must deliver goods which are of


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g

the quantity, quality and description

required by the contract and which arecontained or packaged in the manner

required by the contract.

The place where the seller must deliver the


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goods and handing over of documents

At the place determined by the contract

(delivery contract) :

At the place of the buyerAt a particular place determined by the

contract

Shipment contract :

if the contract of sale involves carriage of the

goods--in handing the goods over to the first

carrier for transmission to the buyer;

Insurance in respect of the carriage

f th d


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of the goods

the seller must insure in respect of the

carriage of the goods,

The seller must, at the buyer's request,provide him with all available information

necessary to enable him to effect such

insurance.

The time of delivery the goods and hand

th d t


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over the document

The seller must deliver the goods: if a date is fixed by or determinable from the

contract, on that date;

if a period of time is fixed by or determinablefrom the contract, at any time within that period

unless circumstances indicate that the buyer is

to choose a date; or

in any other case, within a reasonable time afterthe conclusion of the contract.

Failure in the fulfillment of the sellers

obligation


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obligation

If the seller fails to perform any of hisobligations under the contract or this

Convention, the buyer may:

exercise the rights provided in articles 46 to52; such ask the seller to pay the price,

declare that the contract ovoided or cancelled

claim damages as provided in articles 74 to

77.

OBLIGATIONS OF THE BUYER


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The buyer must :

1.pay the price for the goods and2.take delivery of goods

as required by the contract and this

Convention.

The buyer's obligation to take delivery consists:

in doing all the acts which could reasonablybe expected of him in order to enable theseller to make delivery; and

in taking over the goods.

Remedies for breach of contract by the buyer


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If the buyer fails to perform any of his obligations

under the contract or this Convention, the sellermay:

- exercise the sellers rights such as

asking the buyer to pay the price or

- claim damages

The seller also may declare that the contract is

avoided if there is a fundamental breach of thecontract made by the buyer

The place where the buyer must pay the

price


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price

The place determined in the contract If the buyer is not bound to pay the price at

any other particular place, he must pay it

to the seller: at the seller's place of business; or

if the payment is to be made against the

handing over of the goods or of documents, atthe place where the handing over takes place.

Time of Payment


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The buyer must pay the price on the datefixed by or determinable from the contract

and this Convention without the need for

any request or compliance with anyformality on the part of the seller.

Passing of Risk


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Loss of or damage to the goods after the risk

has passed to the buyer does not discharge himfrom his obligation to pay the price, unless theloss or damage is due to an act or omission ofthe seller.

If the contract of sale involves carriage of thegoods and the seller is not bound to hand themover at a particular place, the risk passes to thebuyer when the goods are handed over to thefirst carrier for transmission to the buyer inaccordance with the contract of sale.

INDONESIAN CONTRACT LAW


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Regulated under the Indonesian Civil Code

(Burgerlijk Wetboek voor Indonesia)

Indonesian Civil Code (ICC) contains three

books:1. Book One : Person

2. Book Two : Property

3. Book Three : Agreement4. Book Four : Proof and Expiration

Book Three of ICCAgreement


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Agreement

Art 1233 :Every agreement is established either by

consent (contract), or by the law.

Art 1234 :

Every agreement is to give something, to

do something or not to do something.

Concerning agreement is established

b h l


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by the law.

Regulated under Chapter Three of BookThree ICC : Art 1352 to Art 1380

Art. 1352 :

Agreement which established by virtue oflaw, arisen only from the law, or from thelaw as the result of the persons action

Examples of agreements are established

by the law.


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Art. 1359 :Every payment presumes a debt; what that hasbeen paid without due can be claimed back.

Art. 1360 :Whoever that by mistake or knowledge hasreceive something that is not payable to him isobliged to return, such thing which must notpayable, to the person from whom he has

received it.

Examples of agreements are established

by the law


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by the law.

Art. 1365 :

Every unlawful action, that bring damage

to other person, obliges the person bywhose fault causing such loss, to

compensate such loss.

Concerning Agreements that established

from Consent/Contract


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Regulated under Section one ofBook Three ICC : Art. 1313 to Art. 1351

Definition of a contract

Art. 1313 :

A contract is an act by which two or more

persons binding themselves to one or

more persons.

Concerning Agreements that established

from Consent/Contract


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General principles of Indonesian contract law : Personalia principle

Mutual Consent

Freedom of a contract Legal binding of a contract

Requirements for the Validity of a contract


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Art. 1320 ICC :For the validity of a contract need four

qualifications :

1. The consent of those who bind themselves2. The capability to make a contract

3. A particular object

4. A lawful causa



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The consent of those who bind themselves

Art 1321 :

There is no valid consent if such consent is given

by mistake, or is obtained by violance extortion or

by fraud



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The capability to make a contract

Evereybody is capable to enter into contract, unless

otherwise declare by the law.

Persons who has no capability to enter into contract :

1. Minor persons,

2. Person put under custody

3. Person to whom the law has restricted to enter intocertain contracts



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A particular object

Art. 1333 :

A contract has to have an object that at least its

type can be determined.

It is not become an obtacle that the quantity is

not certain, provided that the quantity can be

fixed or calculated later on.



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A lawful causa

Art. 1335 :

A contract without any causa, or that has been

made on a false or forbidden causa, shall have

no effect.

Art. 1337 :

A causa is forbidden, if it is forbidden by the law,

or if in contrary to good morals or public order.

Annulment of a contract


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A contract can be cancelled :1. Based on action is done by the parties

or third party

2. Based on the operation of law

Annulment of a contract

Based on the operation of law


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Based on the operation of law

Art. 1444 of ICCContracts, which are made by the minors or

persons under custody, shall be void by

virtue of laws

Theory :

A contract also shall be void by virtue of laws if the

cantract has no particular object or containsforbidden causa.

Annulment of a contract based on

action of the parties


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action of the parties

Art. 1449 of ICC

Contracts, which are made by force,

mistake or fraud, resulting a claim to

nullify it.

Annulment of a contract based on

action is done by third party


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action is done by third party

Art. 1341 of ICCNevertheless, every creditor may propose

for the nullification of any unobligated action

which is done the debtor under whatevername which is disadvantageous to the creditor, .

The provision known as Auctio Paulina. The Court will determine wether the

proposal of nullification will be agreed or not.

Interpretation of contracts


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Art. 1342 If the wordings of a contract are obvious, it is

not allowed to deviate there from by way ofinterpretation.

Art. 1343

If the wordings of a contract are open tovarious interpretations, the meaning of thewordings will be interpreted based on theintention of both parties

Interpretation of contracts


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Art. 1344 The words are used in a contract must be

interpreted in such a way, so the contract is

possible to be performed.

Art. 1346

Anything that ambiguous must be interpreted

according to the local customary of the placewhere the contract is concluded.

Annulment of Agrement

Agreement shall annul (Art 1381 of the ICC) :


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Agreement shall annul (Art. 1381 of the ICC) :

Because of payment

Because of cash payment, followed bypreservation or consignment

Because of debt novation

Because of set-off or compensation

Because of the mixture of debt

Because the indebted property has demolish

Because nullify or revocation

Because of the happening of the revocationcondition

Because of the expiration

1. Give examples of an agreement is established by law andan agreement is established by contract.

2 Jerry make a contract with Tom like that : Jerry will sell a


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2. Jerry make a contract with Tom like that : Jerry will sell anumber of rice to Tom and Tom will pay the price of the

rice Rp. 1000.000,-. Does the contract valid based onIndonesian Contract Law ?

3. Make a simple contract of sale of good between you (asthe seller) and Mr Tan in Singapore (as the buyer), which

contains :a. The title of the cotract

b. The parties

c. The good is being sold

d. The sellers obligations

e. The buyers obligationsf. The termination of the contract

g. The choice of law

h. The settlement of dispute

i The place where the contract is concluded

ExerciseAnswer the followong questions


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1. What is free trade area ?

2. Does establishment of a free trade area violatethe GATT/WTO law ?

3. Give an analysis of the economic benefits ofIndonesia to become a member of the ASEAN

Free Trade Area.4. What do you know about the United Nations

Convention on Contracts for International Sale ofGoods (CISG) ? Give an explanation.

5. According to the CISG, should a contract of saleof goods made in writing form ? Give yourargumentation.

ExerciseAnswer the followong questions


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1. What is International Private Law ?

2. Why does a contract has legal binding ?

3. What are the main obligations of the seller and

the buyer according to the United Nations

Convention on Contracts for International Sale ofGoods (CISG) ?

4. According to the Indonesian Law of Contract,

who has capacity to enter into a contract (to

make contract)

Course of Business Law Before Final Exam

Documents

Transcript of Course of Business Law Before Final Exam