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Module 1 Sapna
Syllabus
Legal environment of international business, international law and organizations, resolution of international dispute.
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Trade
Exporting Importing Government controls over trade: tariffs and non-tariff barriers Role of trade in services
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Trade
Exporting: shipment of goods or the rendering of services to a foreign buyer Importing: process of buying goods from a foreign supplier and entering them into the customs territory of a different country
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Trade
Boycott: a refusal to do business with certain firms on political or other grounds
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Trade: exporting
Direct: often use foreign sales agents Indirect: use export trading companies
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Managing Risk
Managing language and cultural differences Managing currency and exchange rate risk
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Managing Risk
Political risk? Terrorism? Causes? How to handle?
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Managing Risks
Currency/Exchange Rate Risks Transaction Risks * litigation risk: Gaskin
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Political Risks
Managing political risk Managing risk of foreign law and courts: choice of law and forum clauses Risk of international hostilities
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Ethical Issues
Bribes? Child labor? Different working conditions and wages? Corporate response?
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Conclusion
Knowledge of global environment: stay current by reading from many sources Trade, licensing and investment How to manage risk? Good research, understand risk, know the law and use a contract to protect you and help you manage risk.
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Treaties
Treaties are binding agreements between two or more nations Convention is a treaty Bilateral vs. multilateral treaties Protocol is an agreement on matters less significant than those addressed in a treaty
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Treaties
Vienna Convention of the Law of Treaties: codified in 1980 the customary law regarding treaties Pacta sunt servanda: the pact must be respected and be followed in good faith Jus cogens: there are certain fundamental rights or minimum standards that should be respected
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Class Activity
What is International Court of Justice? Functions?
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Methods of Resolution
Litigation/ Legal Action Alternative dispute resolution (ADR) (arbitration, mediation, other)
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Litigation
Jurisdiction raises the fundamental question: does the court have the power to hear the case?
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Jurisdiction:
Territorial: power to hear cases related to crimes committed within a territory Subject matter: jurisdiction over certain types of cases like contracts etc Diversity of citizenship: federal courts have jurisdiction over matters between citizens of different states or citizens of one state and a foreign country when controversy exceeds $75,000
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Jurisdiction:
In Personam jurisdiction means over the person it means the power of a nation to create laws that proscribe conduct and to act over individuals, corporations, or their property in the application or enforcement of those laws. When used in reference to a court, it is the power of a court to hear a caseto IAME-MIB-GLE 54 adjudicate.
Minimum contacts
Due process clause of the Fourteenth Amendment of the U.S. Constitution has been interpreted to require that before a person or company be brought before a court, it must have had some contacts with the place or forum. based upon a notion of fairness Many other countries have similar concept
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Bremen v. Zapata
Facts: 1967 Zapata (Texas corp.) entered into contract with a German corp., Unterweser. U was supposed to tow a rig from Louisiana to Italy. Storm intervened and Z instructed U to drop off damaged rig in Florida. Contract had a forum selection clause stating disputes would be heard by London Court of Justice.
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Bremen v. Zapata
Z sued in U.S. federal court. U moved to dismiss. U filed in London. The U.S. district court and the court of appeals sided with Z and denied Us motion to stay the U.S. proceedings. Issue: Does the forum selection clause control requiring any disputes to be heard in London?
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Bremen v. Zapata
Holding: yes, the forum selection clause controls. What result? Why did courts used to be hostile to forum selection clauses?
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Conflict of laws
Absent a choice of law clause, generally the court will apply the law of the state, country or jurisdiction that has the closest relationship to the transaction.
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Questions??
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