Ch46 Revised

8/8/2019 Ch46 Revised

http://slidepdf.com/reader/full/ch46-revised 1/33

© 2007 West Legal Studies in Business, A Division of Thomson Learning

Chapter 46

International Law ina Global Economy



© 2007 West Legal Studies in Business, A Division of Thomson Learning 2

What is the principle of comity and why do courtsWhat is the principle of comity and why do courtsdeciding disputes involving a foreign law or judicialdeciding disputes involving a foreign law or judicialdecree apply this principle?decree apply this principle?

What is the act of state doctrine? In whatWhat is the act of state doctrine? In what

circumstances is this doctrine applied?circumstances is this doctrine applied? Under the Foreign Sovereign Immunities Act of 1976,Under the Foreign Sovereign Immunities Act of 1976,on what bases might a foreign state be consideredon what bases might a foreign state be consideredsubject to the jurisdiction of U.S. courts?subject to the jurisdiction of U.S. courts?

In what circumstances will U.S. antitrust laws beIn what circumstances will U.S. antitrust laws be

applied extraterritorially?applied extraterritorially? Do U.S. laws prohibiting employment discriminationDo U.S. laws prohibiting employment discrimination

apply in all circumstances to U.S. employees workingapply in all circumstances to U.S. employees workingfor U.S. employers abroad?for U.S. employers abroad?

Learning Objectives




International Law

Law that governs affairs betweenLaw that governs affairs between

nations.nations.

Law that regulates transactionsLaw that regulates transactions

between individuals and businessesbetween individuals and businessesof different countries.of different countries.

No single source of international law.No single source of international law.

No world court responsible for No world court responsible for

interpreting all international law.interpreting all international law.




The United States and Foreign Affairs

The Constitution gives mostThe Constitution gives most

of the power over foreignof the power over foreign

affairs to the federalaffairs to the federal

government.government.

± ± Foreign Commerce ClauseForeign Commerce Clause

± ± Treaty ClauseTreaty Clause




Foreign Commerce Clause

Article I, Section 8, Clause 3 vests Article I, Section 8, Clause 3 vests

Congress with the power Congress with the power ³to regulate³to regulate

commerce with foreign nations.´ commerce with foreign nations.´ Any state or local law that unduly burdens Any state or local law that unduly burdens

foreign commerce is unconstitutionalforeign commerce is unconstitutional

under the Commerce Clause.under the Commerce Clause.




Treaty Clause

Article II, Section 2, clause 2 states that the president Article II, Section 2, clause 2 states that the president

³shall have power, by and with the advice and consent of ³shall have power, by and with the advice and consent of

the Senate, to make treaties, provided twothe Senate, to make treaties, provided two--thirds of thethirds of the

senators present concur.´ senators present concur.´ The president is the agent of the United States in dealingThe president is the agent of the United States in dealing

with foreign countries.with foreign countries.




Treaty Clause (continued)

Under the Treaty Clause, only the federalUnder the Treaty Clause, only the federal

government may enter into treaties withgovernment may enter into treaties with

foreign nations.foreign nations. Under the Supremacy Clause of theUnder the Supremacy Clause of the

Constitution:Constitution:

± ± Treaties become part of the ³law of the land´Treaties become part of the ³law of the land´

± ± Conflicting state or local law is voidConflicting state or local law is void




Sources of International Law

Those things that internationalThose things that international

tribunals rely on in decidingtribunals rely on in deciding

international disputes.international disputes.

± ± Treaties and conventionsTreaties and conventions

± ± CustomCustom

± ± General principles of lawGeneral principles of law

± ± Judicial decisions andJudicial decisions andteachingsteachings




Treaties and Conventions

The first source of The first source of

international law.international law.

They are the equivalents of They are the equivalents of legislation at thelegislation at the

international level.international level.




Treaty

An agreement or An agreement or

contract between twocontract between two

or more nations.or more nations.

± ± Formally signed by anFormally signed by an

authorizedauthorized

representative.representative.

± ± Ratified by theRatified by thesupreme power of supreme power of

each nation.each nation.




Convention

Treaty that is sponsored by anTreaty that is sponsored by an

international organization.international organization.

Treaties and conventions address:Treaties and conventions address: ± ± Human rightsHuman rights

± ± Foreign aidForeign aid

± ± NavigationNavigation

± ± CommerceCommerce ± ± Settlement of disputesSettlement of disputes




Custom (continued)

Two elements must be established toTwo elements must be established to

show that a practice has become ashow that a practice has become a

custom:custom:

1.1. Consistent and recurring action by two or Consistent and recurring action by two or

more nations over a considerable periodmore nations over a considerable period

of time.of time.

2.2. Recognition that the custom is bindingRecognition that the custom is binding

because of legal obligation.because of legal obligation.




General Principles of Law

The third source of international law.The third source of international law.

Consist of principles of law recognized byConsist of principles of law recognized by

civilized nations.civilized nations. These are principles of law that areThese are principles of law that are

common to the national law of the partiescommon to the national law of the parties

to the dispute.to the dispute.




General Principles of Law(continued)

The general principles of law may beThe general principles of law may be

derived from:derived from:

± ± ConstitutionsConstitutions ± ± StatutesStatutes

± ± RegulationsRegulations

± ± Common LawCommon Law

± ± Other Sources of National LawOther Sources of National Law




Judicial Decisions and

Teachings

The fourth source of The fourth source of

international law.international law.

Consist of Consist of judicial decisions and judicial decisions and

teachingsteachings of the most qualifiedof the most qualifiedlegal scholars of the variouslegal scholars of the various

nations involved in the dispute.nations involved in the dispute.

International courts are notInternational courts are not

bound by the doctrine of bound by the doctrine of starestare

decisisdecisis..




International Principlesand Doctrines

The most important principles andThe most important principles and

doctrines applied in the interest of doctrines applied in the interest of

maintaining harmonious relations amongmaintaining harmonious relations among

nations:nations:

± ± The Principle of Comity.The Principle of Comity.

± ± The Act of State Doctrine.The Act of State Doctrine.

± ± The Doctrine of Sovereign Immunity.The Doctrine of Sovereign Immunity.




The Principle of Comity

One nation will defer and give effect to theOne nation will defer and give effect to the

laws and judicial decrees of another laws and judicial decrees of another

country, as long as those laws and judicialcountry, as long as those laws and judicial

decrees are consistent with the law anddecrees are consistent with the law and

public policy of the accommodating nation.public policy of the accommodating nation.




The Act of State Doctrine

Judicial branch of one country will notJudicial branch of one country will not

examine the validity of public actsexamine the validity of public acts

committed by recognized foreigncommitted by recognized foreign

government within its own territory.government within its own territory.

This doctrine is often invoked to protect:This doctrine is often invoked to protect:

± ± Expropriation, andExpropriation, and

± ± Confiscation.Confiscation.




The Doctrine of SovereignImmunity

This doctrine exempts foreign nations fromThis doctrine exempts foreign nations from

jurisdiction in U.S. courts. jurisdiction in U.S. courts.

The Foreign Sovereign Immunities ActThe Foreign Sovereign Immunities Actexpanded the jurisdiction of U.S. courts for expanded the jurisdiction of U.S. courts for

creditors of foreign governments.creditors of foreign governments.




Types of InternationalTypes of InternationalBusiness OperationsBusiness Operations

± ± ExportingExporting, through:, through:

An Agent. An Agent. A Foreign Distributor. A Foreign Distributor.

± ± Manufacturing AbroadManufacturing Abroad, through:, through: Licensing.Licensing.

Franchising.Franchising. Investing in a subsidiary or jointInvesting in a subsidiary or joint

venture.venture.

Doing Business

Internationally




Commercial Contracts in anInternational Setting

Choice of Language Clause.Choice of Language Clause.

Choice of Forum.Choice of Forum.

Choice of Law .Choice of Law .

Force Majeure (impossibility or ³act of Force Majeure (impossibility or ³act of

God´).God´).

Civil Dispute Resolution.Civil Dispute Resolution.




Judicial Procedure

Choice of forum clauseChoice of forum clause

± ± designates the judicialdesignates the judicial

or arbitral forum that hear or arbitral forum that hear

and decide the case.and decide the case. Choice of law clauseChoice of law clause ± ±

designates the law to bedesignates the law to be

applied by the court or applied by the court or

arbitrator in deciding thearbitrator in deciding thecase.case.




International Arbitration

A non A non--judicial method of dispute judicial method of dispute

resolution.resolution.

A neutral third party decides the case. A neutral third party decides the case. The parties agree to be bound by theThe parties agree to be bound by the

arbitrator¶s decision.arbitrator¶s decision.

Faster, less expensive, less formal, andFaster, less expensive, less formal, andmore private than litigation.more private than litigation.




International Arbitration (continued)

Arbitration Clause Arbitration Clause

± ± A clause contained in many international A clause contained in many international

contracts.contracts.

± ± Stipulates that any dispute between theStipulates that any dispute between the

parties concerning the performance of theparties concerning the performance of the

contract will be submitted to an arbitrator or contract will be submitted to an arbitrator or

arbitration panel for resolution.arbitration panel for resolution.




Making Payment onInternational Transactions

Monetary Systems.Monetary Systems.

± ± Foreign Exchange Rates/Markets.Foreign Exchange Rates/Markets.

± ± Correspondent Banks (affiliated banks inCorrespondent Banks (affiliated banks indifferent countries).different countries).

± ± Letters of Credit.Letters of Credit.

Conditional promise by Issuer (Bank) to payConditional promise by Issuer (Bank) to pay

Beneficiary (Seller) on behalf of Account (Buyer).Beneficiary (Seller) on behalf of Account (Buyer).




Nations impose laws and controls toNations impose laws and controls to

restrict or facilitate international business.restrict or facilitate international business.

± ± Investing.Investing. ± ± Export and Import Controls: Quotas, TariffsExport and Import Controls: Quotas, Tariffs

and Antiand Anti--Dumping Rules.Dumping Rules.

± ± International Organizations andInternational Organizations and

Agreements: World Trade Organization, Agreements: World Trade Organization,

European Union and NAFTA.European Union and NAFTA.

Regulation of Specific

Business Activities




U.S. antitrust law applies to the activities of U.S. antitrust law applies to the activities of

U.S. firms even when they are acting abroad.U.S. firms even when they are acting abroad.

Foreign persons and governments can sueForeign persons and governments can sue

under U.S. antitrust laws in U.S. courts.under U.S. antitrust laws in U.S. courts.

Generally, U.S. firms must abide by U.S. antiGenerally, U.S. firms must abide by U.S. anti--

discrimination law, even in their foreigndiscrimination law, even in their foreign

activities, unless doing so would require themactivities, unless doing so would require themto violate the laws of the foreign country.to violate the laws of the foreign country.

U.S. Laws in a Global Context




United Nations

International organization created byInternational organization created by

multinational treaty in 1945.multinational treaty in 1945.

Goals of the United Nations (U.N.):Goals of the United Nations (U.N.): ± ± Maintain peace and security in the world.Maintain peace and security in the world.

± ± Promote economic and social cooperation.Promote economic and social cooperation.

± ± Protect human rights.Protect human rights.




Governance of the United

Nations

The United Nations is governed by:The United Nations is governed by:

The General AssemblyThe General Assembly

± ± Composed of all member nations.Composed of all member nations. ± ± The legislative body of the U.N.The legislative body of the U.N.

± ± Adopts resolutions which have limited force. Adopts resolutions which have limited force.

± ± Resolutions are usually enforced throughResolutions are usually enforced through

persuasion and sanctions.persuasion and sanctions.





Nations (continued)

The Security CouncilThe Security Council

± ± Composed of 15 member nations.Composed of 15 member nations.

Five are permanent membersFive are permanent members

Ten are chosen for twoTen are chosen for two--year year termsterms

± ± Primarily responsible for Primarily responsible for

maintaining internationalmaintaining international

peace and security.peace and security. ± ± Has authority to use armedHas authority to use armed

forces.forces.





Nations (continued)

The SecretariatThe Secretariat

± ± Administers the day Administers the day--toto--day operations of theday operations of the

United Nations.United Nations.

± ± Headed by the SecretaryHeaded by the Secretary--General, who isGeneral, who is

elected by the General Assembly.elected by the General Assembly.




FINITO

33

Ch46 Revised

Documents

Transcript of Ch46 Revised