Essentials Of Business Law Chapter 31 International Business Law McGraw-Hill/Irwin Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

Essentials of Business LawChapter 31-2 International Law Legal systems of major countries Treaties Practices Tariffs and non-tariff trade barriers Import and export quotas Organizations that regulate commercial activity and facilitate international trade

Essentials of Business LawChapter 31-3 Sources Of International Law Pax Romana  Roman international law controlling trade and commerce in a peaceful way Peace treaties League of Nations United Nations  Organization that is involved in diverse social and economic functions International Labour Organization Food and Agriculture Organization General Agreement on Tariffs and Trade Statute of the International Court of Justice

Essentials of Business LawChapter 31-4 Doctrine Of Comity Legal principle in international law  Courts of one country should refrain from deciding cases involving acts of persons from another country Discretionary doctrine

Essentials of Business LawChapter 31-5 International Trade Vital ingredient to the economic health of the world’s population Transnational institutions  Maintain legal and economic order in international trade  Several countries agreeing to be legally bound by the rules of the organization

Essentials of Business LawChapter 31-6 International Trade Institutions General Agreement on Tariffs and Trade  Provides a set of rules to ensure that there be no discrimination in trade by its signatories  Indicates a process for resolving international trade disputes World Trade Organization  Responsible for overseeing the implementation of all multinational trade agreements  GATS: General Agreement on Trade in Services  TRIPS: Agreements on trade-related aspects of intellectual property rights  TRIMS: Trade Related Investment Measures

Essentials of Business LawChapter 31-7 International Trade Institutions International Monetary Fund  Provides protection against large fluctuations in the value of one currency versus another World Bank  Formed to provide relief to the countries suffering from the ravages of World War II  Works with the IMF to ensure that developing countries have access to funds

Essentials of Business LawChapter 31-8 Regional Trade Organizations And Agreements Provides legal, political, and economic processes to maintain an orderly relationship among the members North American Free Trade Agreement  Promote trade between the United States, Canada, and Mexico  National and local laws do not discriminate against the goods of the other countries  Provides greater market access European Union  Twelve countries in Europe formed an economic and political integration of the members into one entity  Promotes economic growth and social and cultural affiliations

Essentials of Business LawChapter 31-9 Trade Sanctions Legal restrictions many governments place on trade in order to achieve desired political results Trade sanctions  Countries that enact laws prohibiting trade with specific countries Boycotts  Citizens of a particular country refuse to purchase goods made by businesses located in other countries

Essentials of Business LawChapter Export And Import Controls Tariffs  Taxes or other restrictions on imports or exports used to attain economic results Export licenses  Used as an adjunct to national security Quota systems  Used to maintain a positive balance of trade  Places restrictions on the amount of products that may enter into a nation

Essentials of Business LawChapter Governmental Actions Governments maintain control over the actions of foreign businesses operating within the host country by: Expropriation  Host country takes title to all of the assets of the foreign company  Host country compensates the owners of the foreign company Confiscation  Host country takes title to all of the assets of the foreign company  Host country does not compensate the owners of the foreign company Domestication  Host country mandates that at least partial ownership of the foreign company be sold to local citizens or companies

Essentials of Business LawChapter The Foreign Corrupt Practices Act Provides U.S. companies rules to regulate paying persons in foreign countries Unlawful to bribe foreign government officials to obtain or retain business  Money, gifts, or anything of value Payment must be made corruptly for violation of the law

Essentials of Business LawChapter Intellectual Property World Intellectual Property Organization  Specialized agency of the United Nations  Administers numerous treaties concerning protection of intellectual property rights Copyrights  Laws prohibit the reproduction or alteration of an author’s work without his or her permission

Essentials of Business LawChapter Intellectual Property Patents  Statutory privilege granted by a nation to inventors for a fixed period of years  Excludes all others from manufacturing, using, or selling a product without permission from the inventor Trademarks  Used by businesses to identify their products and services  Considered to be property and thus can be transferred or licensed to others  Registration is a prerequisite for ownership and protection of the mark in most countries