International Law in a Global Economy

Chapter 24

• International Law: formed as a result of international customs, treaties, and organizations - that governs relations among or between nations.

• National Law: law of a particular nation.

Introduction

International Law

• 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.

International Law

• Sources of International Law.–International Customs.–Treaties and International

Agreements.–International Organizations.

International Law

• Common Law and Civil Law Systems.–Common Law Systems: courts

independently develop rules by stare decisis for certain areas of law, not covered by statutory law.

International Law

• Common Law and Civil Law Systems.–Civil Law Systems: Most of Europe,

Asia, Africa, Latin America based on Roman civil law or “code law.”

International Law

• Common Law and Civil Law Systems.–Islamic Legal Systems: sharia legal

code is based on religious principles that govern a Muslim’s way of life.

International Law

• International Principles and Doctrines.–The Principle of Comity. –The Act of State Doctrine. –The Doctrine of Sovereign

Immunity.

International Law• Principle of Comity.

–One nation will defer and give effect to the laws and judicial decrees of another country.

International Law• Act of State Doctrine.

–Judicial branch of one country will not examine the validity of public acts by foreign government within its own territory.

–Often invoked to protect expropriation, and confiscation.

International Law• Doctrine of Sovereign Immunity.

–Exempts foreign nations from jurisdiction in U.S. courts.

–A foreign state is not immune from U.S. jurisdiction when:• (1) The foreign state has waived its immunity.

International Law• Doctrine of Sovereign Immunity.

–A foreign state is not immune from U.S. jurisdiction when:• (2) The foreign state has engaged in “commercial activity” within or outside the U.S. that has a “direct effect in the United States.”

International Law• Doctrine of Sovereign Immunity.

–A foreign state is not immune from U.S. jurisdiction when:• (3) The foreign state has committed a tort in U.S. or violated certain international laws.

Doing Business Internationally

• Types of International Business Operations.–Direct Exporting. –Indirect Exporting.

•Agency Relationship with Foreign Firm.

Doing Business Internationally

• Types of International Business Operations.–Distributorships.–National Export Initiative.

•Export Promotion (US Commerce Dept)

• Increased Export Financing.

Doing Business Internationally

• Types of International Business Operations.–Manufacturing Abroad.

•Licensing.•Franchising.• Investing in a Wholly-Owned Subsidiary or Joint Venture.

Regulation of SpecificBusiness Activities

• 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.•Prohibited Goods (e.g., Trading with the Enemy Act of 1917).

•Quotas and Tariffs. Quotas limit the amount of goods that can be imported. Tariffs are taxes upon imports.

Regulation of SpecificBusiness Activities

–Import Controls.•Political Factors (Retaliation).•Antidumping Duties: less than fair value.

Regulation of SpecificBusiness Activities

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

International Dispute Resolution

• International trade agreements usually include arbitration provisions.

• New York Convention.–(1) Written or recorded agreement.–(2) Agreement provides for arbitration.–(3) One party is not a U.S. citizen.

International Dispute Resolution

• Effect of Choice-of-Law and Choice-of-Forum Clauses.–If there is no arbitration clause,

litigation may take place within the jurisdiction agreed-to by the parties in the contract.

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

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

substantial effect on U.S. commerce.• International Tort Claims.–

U.S. Laws in a Global Context

• 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).

U.S. Laws in a Global Context

International Law in a Global Economy

Chapter 24