Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning Chapter 7 International Law Its Legal, Ethical, and Global Environment MARIANNE M. JENNINGS 7 th Ed.

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 2 Sources of International Law Common Law. –England. –United States. Civil or Code Law. –Statutes or codes are very detailed; little reliance on precedent. –France, Germany, Spain.

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 3 Islamic Law. –Religious tenets integrated. –Combination of Islamic law and colonizers’ laws. Former Communist countries. –In Transition. Sources of International Law

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 4 LLanguage. EEnvironment & Technology. SSocial Organization. CContexting. AAuthority. NNonverbal Behavior. TTime Concept. Sources of International Law

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 5 Contracts for the International Sale of Goods (CISG). –Governs the sale of goods internationally. –Currently adopted by 53 countries, including the United States. –Similar to Article 2 of the Uniform Commercial Code. Sources of International Law

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 6 International Monetary Fund (IMF) and the World Bank. –The IMF is designed to foster International trade through currency stability. The IMF creates the International Bank for Reconstruction and Development (The World Bank) which allows members to draw on line of credit to stabilizes currency exchange rates. Sources of International Law

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 7 Treaties. –General Agreement on Tariffs and Trade (GATT). –Multilateral treaty with 125 member nations that created the Work Trade Organization (WTO). European Union (EU). –Created by treaty of Rome. –Set as major goal unified monetary and fiscal policies and the creation of the Euro Dollar. Sources of International Law

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 8 North American Free Trade Agreement (NAFTA). –Became effective in –Treaty between Canada, Mexico and the United States. –Set to eliminate all Act tariffs between member countries with 15 years. Sources of International Law

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 9 Sources of International Law Prohibition on Trade: Individual Nation Sanctions. International Monetary Fund. The Kyoto Treaty. OPEC.

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 10 Case 7.1 U.S. v. Kay (2004). –Did the Defendants payments to Haitian officials “assist in obtaining or retaining business”? –What benefit did ARI gain from these transactions? –In your opinion, did Defendants violate the FCPA? Foreign Corrupt Practices Act

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 11 Principles Sovereign Immunity. –Each nation is sovereign. –Other nations do not take jurisdiction over a country’s internal operations, laws, and people. –Does not apply to contractual relations. Expropriation: Act of State Doctrine. –Act of foreign governments are recognized as valid whether or not such actions would be legal in the United States.

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 12 Expropriation Case 7.2 Riedel v. Bancam (1986). What are the bases for his suit against Bancam in Ohio? Does Mexico have sovereign immunity for its expropriation of the bank?

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 13 Protection for U.S. Property Hickenlooper Amendment to Foreign Assistance Act of –Allows president to sanction countries that take property of U.S. companies. Treaties afford protections. Overseas Private Investment Corporation (OPIC) is federal agency that provides insurance for U.S. businesses against expropriation.

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 14 Repatriation Repatriation –Limits on removal of profits from country where they are earned. Considered acts of state; cannot be litigated. Forum Non Conveniens –Dismisses cases brought in wrong court Example: India was proper forum to bring suit against Union Carbide for what happened in Bhopal, India.

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 15 Conflicts of Law Case 7.3 Carnival Cruise Lines v. Shute (1991). –Shute was injured while the ship was in international waters. –She filed suit in her home state of Washington. –Court affirmed dismissal of the case because the tickets had Florida as the forum.

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 16 Conflicts of Law. –No two countries have the exact same commercial laws. –Some countries have no commercial codes. Uniform Commercial Code is widely used. Resolving Conflicts of Law. –If the parties agree, autonomy controls. –If parties have not agreed, law of country where the contract is performed will apply. Conflicts of Law

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 17 Antitrust Laws. –All firms doing business here are subject to antitrust jurisdiction. –Export Trading Company Act. Allows joint ventures among competitors. For business in other countries. International Protections

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 18 Protections for Intellectual Property. –International Protections of Intellectual property are constantly being refined Worldwide registration of patents, trademarks and Copyrights may be within reach. International Protections

Copyright ©2006 by West Legal Studies in Business A Division of Thomson Learning 19 Criminal Law Protections –All those present in a country are subject to that country’s criminal law –Subject to all regulations as well International Protections