International Law
What affects men sharply about a foreign nation is not so much finding or not finding familiar things; it is
rather not finding them in the familiar place.”G.K Chesterton, British Author
“The greatest meliorator of the world is selfish, huckstering trade.”
Ralph Waldo Emerson, American Philosopher and Poet
Exporting: Shipping goods or services out of a country
Importing: Shipping goods or services into a country
Export Administration Act of 1985◦ Balances the need for free trade with important
requirements of national security◦ Permits the federal government to restrict exports
if they: Endanger national security Harm foreign policy goals Drain scarce materials
◦ Controlled Commodities List Made by the Secretary of Commerce Lists restricted items which may not be exported
without a license
Arms Export Control Act◦ Permits the president to make a second list of
controlled items, all related to military weaponry
Tariff: A tax imposed on goods when they enter a country◦ Classification - A customs official inspects the
merchandise as it arrives and classifies it, in other words, decides precisely what the goods are
◦ Valuation Ad valorem: Customs officials impose duties
“according to the value of the goods”
Duties for dumping and subsidizing◦ Dumping: Selling merchandise at one price in the
domestic market and at a cheaper, unfair price in an international market US Department of Commerce will impose a dumping
duty when they suspect that the low prices are intended to harm American companies
◦ Countervailing duties: A tariff on subsidized goods
General Agreement on Tariffs and Trade (GATT)◦ Created the WTO to stimulate international
commerce and resolve trade disputes World Trade Organization (WTO): Organization
created by GATT to stimulate international commerce and resolve trade disputes
Regional agreements◦ North American Free Trade Agreement
(NAFTA): A treaty eliminating almost all trade barriers, tariff and nontariff, between the United States, Canada, and Mexico
◦ European Union (EU): Twenty-seven countries belong to the EU, including Great Britain, Germany, France, Italy, and Spain, as well as Latvia and Slovakia
The sales contract◦ What law governs?
Texas law French law An international treaty United Nations Convention on Contracts for the
International Sale of Goods (CISG): Applies automatically to any contract for the sale of goods between two parties from different countries if each operates in a country that is a signatory Signatory: A nation that signs a treaty
The parties must decide:◦ What law governs◦ Where disagreements will be resolved
Parties must select:◦ A language for the contract - Vital because legal
terms seldom translate literally◦ A currency for payment - Vital because the
exchange rate may alter between the signing and payment
Letter of Credit
• A commercial device used to guarantee payment in international trade
Negotiable Bill of Lading
• A document which describes exactly the goods received—their quantity, color, quality, and anything else important
Draft
• A formal order, based on the letter of credit
Repatriation of profits: Occurs when an investing company pulls its earnings out of a foreign country and takes them back home
Expropriation: Government’s seizure of property owned by foreign investors◦ Nationalize: Action in which a government
assumes ownership of property◦ Confiscation: Government takes property
without fair payment
Sovereign immunity: Holds that the courts of one nation lack the jurisdiction (power) to hear suits against foreign governments◦ Foreign Sovereign Immunities Act (FSIA): A
statute which states that American courts generally cannot entertain suits against foreign governments
◦ Three possible exceptions when seeking compensation for foreign expropriation: Waiver Commercial activity Violation of international law
◦ Overseas Private Investment Corporation (OPIC): Insures U.S. investors against overseas losses due to political violence and expropriation
Foreign Corrupt Practices Act (FCPA): Makes it illegal for an American businessperson to give “anything of value” to any foreign official in order to influence an official decision◦ Has two principal requirements:
Bribe Recordkeeping
◦ Not all payments violate the FCPA A grease or facilitating payment is legal
◦ A payment does not violate the FCPA if: It was legal under the written laws of the country in
which it was made
Extraterritoriality: The power of one nation to impose its laws in other countries◦ International subsidiaries: That many
American companies do business through Foreign companies controlled by these American
companies
““Overseas investment, like sales Overseas investment, like sales abroad, offers potentially great abroad, offers potentially great
rewards but significant pitfalls. A rewards but significant pitfalls. A working knowledge of international working knowledge of international law is essential to any entrepreneur law is essential to any entrepreneur or executive seriously considering or executive seriously considering
foreign commerce.”foreign commerce.”