Slide 1IntroductionIntroductionWhat is International (Business) Law?Why does it matter?Slide 6Principal DifferencesTrade RegulationTrade RegulationsThe Purpose of Trade RegulationsSlide 11Import Controls - TariffsSlide 13Slide 14Trade regulationsTrade RegulationInternational and Regional Trade AreasInternational TreatiesInternational OrganizationsWhat is the WTO?Basic Principels of the WTO SystemWTO Dispute SettlementWTO RulesMost favorite Nation Clause (MFN)National Treatement Clause (NTC)ExceptionsArt. XX GATT General ExceptionsCase studyCase Study « U.S.-gasoline »International Sales AgreementsTypical Legal Issues in International SalesGoverning LawCISGTRANSACTIONS COVERED IN CISGCISG - Opting In and OutChoice of law under CISGTRANSACTIONS COVERED IN CISGInternational Trade IssuesSlide 39ExpropriationForeign ImmunitySlide 42Slide 43INTERNATIONAL LAWChapter 81/14/19 Dr. Gerlinde Berger-Walliser1Introduction•Todays lecture:•Introduction•What is International Business Law?•Why does International Business Law matter?•Legal Systems of the world•International Courts•International Trade Regulation, Focus: WTO•International Sales Agreements•Governing Law/CISG•Choice of Forum•Language and Currency•Letter of Credit•International Trade Issues•Repatriation of Profits•Expropriation•FCPA•Extraterritoriality1/14/19 Dr. Gerlinde Berger-Walliser2INTRODUCTIONWhat is International (Business) Law?1/14/19 Dr. Gerlinde Berger-Walliser3What is International (Business) Law?•Defined: The body of rules and norms that regulates activities carried on outside the legal boundaries of nations.•Three international relationships are governed by international law: •Those between nations and nations.•Those between nations and persons.•Those between persons and persons.4Why does it matter?•Fundamental differences between the world legal systems •Deals can cross borders quickly, lack of awareness•Long arm statutes leading to legal and ethical responsabilty abroad•Trade regulations directly influence the profitability of business1/14/19 Dr. Gerlinde Berger-Walliser56WORLD LEGAL SYSTEMS Legal systems around the worldSource: http://www.droitcivil.uottawa.ca/world-legal-systems/eng-monde.htmlPrincipal Differences Civil Law •Written laws = main legal source•Codes•Inquisitorial system•No discovery•No jury in most casesCommon Law•Jurisprudence = main legal source•Few codes•Adversary system•Discovery•Jury trial7TRADE REGULATIONDomestic rules1/14/19 Dr. Gerlinde Berger-Walliser8Trade Regulations•What are trade regulations?•Export controls: prohibit certain products from leaving the country for economic or safety reasons•Import controls: prohibit certain products from entering the country for economic or safety reasons•Why do they exist?1/14/19 Dr. Gerlinde Berger-Walliser9The Purpose of Trade RegulationsExport controls•National Security•Retaliation - Countries may set tariffs against others if they feel a trading partner has not played by the rules.•Protection of scarce resourcesImport controls•Protecting domestic production•Protecting domestic employment by keeping labor and industry confined instead of moving production across borders for cheaper labor•Protecting consumers – safety standards•Protecting infant or struggling industries – by not allowing foreign companies to undercut domestic prices1/14/19 Dr. Gerlinde Berger-Walliser10Trade Regulation -- Export Controls•Export Administration Act of 1985•This act balances the need for free trade with important requirements of national security.•Allows the federal government to restrict exports if they endanger national security, harm foreign policy goals or drain scarce materials.•Controlled Commodities List•Made by the Secretary of Commerce; lists restricted items, which may not be exported without a license.•Arms Export Control Act•Permits the president to make a second list of controlled items, all related to military weaponry.Import Controls - Tariffs•Tariffs•A duty (tax) imposed on goods entering a country.•Tariff is calculated based on classification and valuation of the item being imported.1/14/19 Dr. Gerlinde Berger-Walliser12•Duties for Dumping and Subsidizing•Dumping is selling goods in a foreign market for less than normal price to drive out local competition.•The US Department of Commerce will impose a dumping duty when they suspect that the low prices are intended to harm American companies.•Subsidized goods are those for which the home government has given a benefit (such as low taxes). •Subsidized goods are charged a countervailing duty to equalize the prices.Trade Regulation -- Import Controls•Quotas•A quota is a limit on the quantity of a particular good that may enter a nation.•Quotas may grow a certain percentage per year, or stay the same.Trade Regulation --Import Controls/ Nontariff Barriers•Import Ban•An import ban means that certain goods are flatly prohibited.Trade regulations•Are trade regulations good or bad?•Free trade vs. protectionism•Trade liberalization•Free Trade agreements, Custom Unions, Integrated Markets1/14/19 Dr. Gerlinde Berger-Walliser15TRADE REGULATIONInternational Rules1/14/19 Dr. Gerlinde Berger-Walliser16International and Regional Trade Areas•GATT•NAFTA•ASEAN•MERCOSUR•EU•Bilateral trade agreements (FTAs) see http://trade.gov/mas/ian/build/groups/public/@tg_ian/documents/webcontent/tg_ian_005310.pdf •U.S.-E.U. trade agreement negotiationshttp://www.dw.de/americans-germans-disagree-on-details-of-eu-us-free-trade-agreement/a-17554679 1/14/19 Dr. Gerlinde Berger-Walliser17International Treaties•Bi-or multilateral agreement between States•Negotiated by the executive•Signed by the President (or designated representative)•Send to the Senate Committee of Foreign Relations•Approved by the 2/3 of the Senate•Ratified by the President1/14/19 Dr. Gerlinde Berger-Walliser18International Organizations•Organization with an international membership, scope, or presence•International