Chapter 31: International Law in a Global Economy

1

Chapter 1: Legal EthicsCHAPTER 31:

INTERNATIONAL LAW IN A GLOBAL ECONOMY

2© 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Learning Objectives1. What is the principle of comity, and why do

courts deciding disputes involving a foreign law apply this principle?

2. What is the act of state doctrine? In what circumstances is this doctrine applied?

3. Under the Foreign Sovereign Immunities Act of 1976, on what basis might a foreign state be considered subject to the jurisdiction of U.S. Courts?


Learning Objectives4. What types of provisions, or clauses,

are often included in international sales contracts?

5. Do U.S. laws prohibiting employment discrimination apply in U.S. factories abroad?


International Law—Sources and Principles

International law is the result of attempts to reconcile the need of each country to be the final authority over its own affairs and the desire to benefit from relations with one another.



Sources of International Law.– International Customs: evidence of a

general principle accepted as law by the Statute of the International Court of Justice)–Treaties and International Agreements.– International Organizations: mainly

composed of representatives from member nations, usually established by treaty.



International Principles and Doctrines.–The most important principles and

doctrines applied in the interest of maintaining harmonious relations among nations:• Principle of Comity. • Act of State Doctrine. • Doctrine of Sovereign Immunity.



International Principles and Doctrines.–Principle of Comity.• One nation will defer and give effect to the

laws and judicial decrees of another country, as long as those laws and judicial decrees are consistent with the law and public policy of the accommodating nation.



International Principles and Doctrines.–Act of State Doctrine.• Judicial branch will not examine the validity of

public acts by foreign government within its own territory. Often invoked to protect expropriation, and confiscation.• CASE 31.1 SPECTRUM STORES, INC. V

CITGO PETROLEUM CORP. (2011). Why didn’t the court declare the foreign country’s acts illegal?



International Principles and Doctrines.–Doctrine of Sovereign Immunity.• Exempts (or immunizes) foreign nations

from jurisdiction in U.S. courts. • However a foreign state is not immune

from U.S. jurisdiction when:–Foreign state has waived its immunity.



International Principles and Doctrines.–Doctrine of Sovereign Immunity.• A foreign state is not immune from U.S.

jurisdiction when:–Foreign state has committed a tort in

U.S. or violated certain international laws.



International Principles and Doctrines.–Doctrine of Sovereign Immunity.• A foreign state is not immune from U.S.

jurisdiction when:–Foreign state has engaged in

commercial activity within or outside the U.S. that has a “direct effect in the United States.”


• Types of International Business Operations.–Exporting.• Distributorships.• The National Export Initiative (2010).

–Export Promotion.–Increased Export Financing.

Doing Business Internationally


• Types of International Business Operations.– Manufacturing Abroad.• Licensing.• Franchising.• Investing in a Wholly-Owned Subsidiary

or Joint Venture.

Doing Business Internationally


• Nations Impose Laws and Controls to restrict or facilitate international business.

• Investment Protections: expropriation is a major concern.

• Export Controls.

Regulation of SpecificBusiness Activities


• Import Controls.–Quotas and Tariffs. Quotas limit the

amount of goods that can be imported. Tariffs are taxes upon imports.

– CASE 31.2 UNITED STATES V. INN FOODS, INC. (2009). Why are two sets of books illegal?



• Import Controls.–Antidumping Duties: less than fair

value.• Minimizing Trade Barriers.– European Union.– NAFTA. – CAFTA-DR.

• Bribing Foreign Officials.



• Contract Clauses.– Choice of Language. Parties should designate the

‘official’ language of the contract, in case of misunderstanding.

– Choice of Forum: forum-selection clause.– Choice of Law: UCC 1-105.

Commercial Contracts in anInternational Setting


• Contract Clauses.– Force Majeure Clause: sometimes referred to as an

‘act of god.’• Civil Dispute Resolution.– International contracts typically have mandatory

arbitration clauses. But, the issue is always enforcement of the award

Commercial Contracts in anInternational Setting


• Monetary Systems– Foreign exchange market.

• Letters of Credit.– Foreign exchange market.

Payment Methods for International Transactions


Ex. 31-1 Letter–of-Credit Transaction


• Do U.S. laws apply to other nations’ businesses?

• U.S. Antitrust Laws. – Apply if foreign conspiracy has substantial effect

on U.S. commerce.

U.S. Laws in a Global Context


• International Tort Claims: often involve human rights allegations.–CASE 31.3 KHULUMANI V. BARCLAY

NATIONAL BANK, LTD. (2007). How did the bank collaborate with the apartheid regime?



• Antidiscrimination Laws.– Civil Rights Act of 1991 applies Title VII

extraterritorially to all U.S. employees working for U.S. employers abroad (apparently does not apply to domestic nationals working for U.S. firms).


Date post:	25-Feb-2016
Category:	Documents
Upload:	jenski
View:	53 times
Download:	2 times

Chapter 31: International Law in a Global Economy

Documents