Deck 46: International Business Law

Question 1

1)The U.S. Constitution provides that all valid treaties, which are agreements among independent nations, have the force of federal statutes.

Answer 1

True

Question 2

8)A specialized U.N. agency or a U.N. organ may seek an advisory opinion from the International Court of Justice, but an individual or a sovereign state may not.

Answer 2

True

Question 3

10)There is an International Organization of Securities Commissions made up of approximately 100 national securities agencies and exchanges which regulates about half of the world's securities markets.

Answer 3

False

Question 4

11)The United States and Germany may request an advisory opinion from the ICJ to settle a dispute over a trade issue.

Question 5

17)The World Bank established the Multilateral Investment Guarantee Agency to encourage increased investment in developing nations.

Question 6

19)Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, and the Age Discrimination in Employment Act apply to U.S. citizens employed abroad by U.S. employers or by foreign companies controlled by U.S. employers.

Question 7

2)NAFTA establishes a free trade area between the United States and Mexico but not with Canada.

Question 8

14)Regional trade communities exist in Europe, North America, Central America, Africa, and Asia.

Question 9

6)Like domestic law, international law can be easily enforced, because international courts have compulsory jurisdiction.

Question 10

3)Under U.S. law, the CISG supersedes the UCC whenever either could apply.

Question 11

12)Expropriation of property by a foreign government for a public purpose with the payment of just compensation, but without the consent of the owner, violates generally observed principles of international law.

Question 12

9)Businesses which wish to safeguard their technology while doing business in the international sector would not want to consider the use of wholly owned subsidiaries.

Question 13

20)The WTO administers trade agreements but does not get involved with dispute resolution.

Question 14

5)Lawsuits based on the commercial activities of a foreign state conducted in the U.S. are subject to the jurisdiction of state or federal courts in the U.S.

Question 15

15)The World Bank established the MIGA to eliminate the practice of dumping.

Question 16

4)The act-of-state doctrine provides that to maintain international relations and trade, a host country must refrain from imposing its laws on a foreign sovereign nation present within its borders.

Question 17

18)Assume the U.S. has granted "most-favored nation" status to Holland. This means that the tariff on Dutch imported tobacco must be at least as low as that charged on tobacco from any other nation.

Question 18

7)Under the act of state doctrine, the United States reserves some areas of jurisdiction over the internal actions of sovereign states.

Question 19

13)Sovereign immunity is absolute immunity from the courts of a host country.

Question 20

16)An expropriation, or nationalization, occurs when a government seizes foreign-owned property or assets for a public purpose and pays the owner just compensation for what is taken.

Question 21

29)Section 1 of the Sherman Act provides that U.S. antitrust laws shall have a narrow reach.

Question 22

22)A multinational enterprise wishing to exploit a patent may choose to sell a foreign company the right to use the property rather than entering the foreign market itself. The sale of such rights is licensing.

Question 23

28)Peterson, an American exporter, sells lumber to a Japanese importer, using a documentary letter of credit. Typically in this situation, the correspondent bank will be in Japan.

Question 24

37)Under the Foreign Sovereign Immunities Act a foreign sovereign is:

A) immune from all suits in the United States.
B) immune from suits in the United States involving sovereign or public acts, but not private or commercial acts.
C) not immune from any type of suit in the United States.
D) None of these is correct.

Question 25

25)The legal issues inherent in domestic commercial contracts also arise in international contracts.

Question 26

40)An "anti-dumping" statute:

A) is applied to both foreign companies and domestic companies which charge a higher price for products sold in the U.S. than the price charged abroad.
B) has been declared invalid because of the inherent discrimination against foreign corporations.
C) is administered by the FTC.
D) makes illegal the sale of exported goods from one country to another country at less than normal value.

Question 27

34)The Foreign Corrupt Practices Act makes it illegal for an American company to offer or pay money to a foreign official to influence a decision of that official even if the offer is not accepted.

Question 28

33)The U.N. Commission on International Trade Law develops model laws, such as the CISG and the UNCITRAL Model Law on Electronic Signatures.

Question 29

21)Governments can use nontariff barriers to give local industries a competitive advantage.

Question 30

26)When a treaty and a right declared under a subsequent federal statute conflict, the treaty must prevail.

Question 31

31)A goal of the EU is to promote progress by establishing an economic and monetary union.

Question 32

36)The International Anti-Bribery and Fair Competition Act of 1998 was enacted to expand the Foreign Corrupt Practices Act to include:

A) payments made to "secure any improper advantage" from foreign officials.
B) all foreign persons who commit an act in furtherance of a U.S. bribe while in the U.S.
C) domestic officials of international organizations.
D) All of these are included.

Question 33

30)The European Community was formed through a merger between the Common Market, the European Coal and Steel Community, and the European Atomic Energy Community.

Question 34

24)Because there is no international currency, nations have sought to ease the flow of capital between them.

Question 35

35)Fines imposed on individuals for violating the Foreign Corrupt Practices Act may be paid, either directly or indirectly, by the domestic concern on whose behalf they acted.

Question 36

32)The judicial branch of the United Nations is called the World Court.

Question 37

39)Under the provisions of the Foreign Sovereign Immunities Act:

A) all foreign governments are immune from suit by U.S. citizens.
B) U.S. citizens in U.S. courts can always sue most foreign governments.
C) a car used by a foreign embassy in Washington can be seized to settle a judgment against a driver.
D) U.S. courts may take jurisdiction in a suit against a foreign country for commercial acts by that government that have a direct effect on the United States.

Question 38

38)The Foreign Corrupt Practices Act of 1977 (FCPA):

A) makes it unlawful for an American company or its agents to offer or give anything of value to a foreign official for the purpose of influencing the official's acts or decisions.
B) requires that American companies in foreign countries adhere to the same health and safety standards in that country as they do in the U.S.
C) outlaws American business from engaging in business in countries, which, as determined by the Department, have governments "repugnant to American law and social values."
D) None of these is correct.

Question 39

27)A letter of credit is a promise by a buyer's bank to pay the seller, provided certain conditions are met.

Question 40

23)A country may issue to foreign citizens visas that permit them to enter the country for identified purposes or for specific periods of time.

Question 41

52)In Saudi Arabia v. Nelson , the court held:

A) under the Foreign Sovereign Immunities Act, a foreign state is presumptively under the jurisdiction of the U.S. courts.
B) the Foreign Sovereign Immunities Act provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country.
C) whether a state acts in the manner of a private party is a question of motivation.
D) in determining whether a state engages in commercial activity, the question is whether the foreign government is motivated by profit.

Question 42

58)The international organization which seeks to stabilize currency exchange is the:

A) United Nations Exchange Branch.
B) International Court of Justice.
C) United States Treasury.
D) International Monetary Fund.

Question 43

47)What form of organization enables a multinational enterprise to retain control and authority over all phases of operation?

A) Direct export sales.
B) Wholly owned subsidiaries.
C) Joint ventures.
D) None of these.

Question 44

55)A clause apportioning the liability and responsibilities of the parties in the event of an unforeseeable occurrence, such as a typhoon, tornado, or other disaster is a(n):

A) act of state clause.
B) OPIC clause.
C) letter of credit.
D) force majeure clause.

Question 45

57)Why do governments impose tariffs?

A) To protect domestic industries from foreign competition.
B) To raise revenues.
C) To attempt to improve their balance of trade.
D) Governments impose tariffs for all of the above reasons.

Question 46

51)Under a distributorship:

A) the distributor, like an agent, does not take title to the merchandise it receives.
B) the producer bears many of the risks connected with commercial sales.
C) both the producer and the distributor must take special care to ensure that the arrangement does not violate the antitrust laws of their respective governments.
D) multinational enterprises wishing to exploit an intellectual property right sell to a foreign company the right to use such property.

Question 47

48)The General Agreement on Tariffs and Trade (GATT):

A) attempts to limit the practice of "dumping."
B) is a general international antitrust agreement.
C) seeks to prohibit discrimination on import regulations and prevent export fees and export quotas through the mechanism of the "most-favored nations" status.
D) has successfully rid international trade of tariffs.

Question 48

60)Which of the following is an objective of the Treaty on European Union?

A) To create cultural diversity among the member nations to increase tourism.
B) To develop individual national autonomy on justice and home affairs.
C) To promote economic and social progress by creating an area without internal borders and by establishing an economic and monetary union.
D) None of these are objectives of the  Treaty on European Union.

Question 49

42)A number of countries have joined together in Europe, Asia, Africa, and Latin America to coordinate their regional economies. Which of the following has NOT been an objective of such cooperation?

A) Creation of "regional" legislatures with actual powers.
B) Lowering of tariffs or removing other trade barriers.
C) Providing adequate and effective enforcement of intellectual property rights.
D) Establishing an economic and monetary union.

Question 50

59)The __________ established the MIGA to encourage increased investment in developing nations.

A) World Bank
B) Regional Trade Communities
C) United Nations
D) NAFTA

Question 51

41)The Sherman Act:

A) applies to acts committed overseas by U.S. corporations.
B) would not apply to an act committed in the United States by a foreign corporation.
C) would not apply to an act overseas by a 100 percent-owned foreign subsidiary of a U.S. corporation.
D) never applies to acts committed outside the U.S.

Question 52

49)The basic purpose of __________ is to facilitate the flow of trade by establishing agreements concerning potential trade barriers such as import quotas, customs, export regulations, subsidies, and import fees.

A) WTO
B) Foreign Sovereign Immunities Act.
C) World Bank.
D) None of these is correct.

Question 53

50)The ICJ is:

A) the Internal Court of Jurisdiction of the U.N. to deal with disputes within the United Nations organization.
B) a U.S. court created specifically to deal with international contracts.
C) the judicial branch of the United Nations, which has advisory jurisdiction if requested by a U.N. organ or specialized U.N. agency.
D) one of the many regional trade communities.

Question 54

54)Which of the following is correct with respect to the act of state doctrine?

A) It allows foreign countries to be liable for their torts.
B) It allows state governments in the United States to ignore treaties entered into by the United States.
C) It provides that the judicial branch of a nation should not question the validity of actions taken by a foreign government within that foreign sovereign's own borders.
D) It is a very recent addition to U.S. law.

Question 55

44)The seller contracts directly with the buyer in the other country under a:

A) multilateral trade agreement.
B) direct export sale.
C) flow of trade.
D) None of these.

Question 56

43)The European Community was the predecessor to the:

A) ICJ.
B) GAAT.
C) CISG.
D) EU.

Question 57

56)Which of the following is true about the European Union (EU)?

A) The EU has over 500 million citizens.
B) The EU currently has thirty members.
C) The EU has officially admitted Japan to full membership.
D) The EU is now closed to further membership.

Question 58

53)How is "sovereign immunity" interpreted under U.S. law today?

A) It gives absolute immunity to a foreign nation from all U.S. laws.
B) It gives immunity to foreign governments for commercial activity carried on in the U.S. by the foreign government.
C) It exempts the public acts of a foreign government, such as those involving diplomatic activity, from all U.S. laws.
D) All of these are a part of the interpretation.

Question 59

45)NAFTA's objectives include to:

A) create trade barriers between the U.S., Mexico, and Canada.
B) increase investment opportunities.
C) enforce real property rights.
D) All of these are objectives.

Question 60

46)Any business that engages in transactions involving the movement of goods, information, money, people, or services across national borders is referred to as a:

A) multinational enterprise.
B) joint venture.
C) flow of trade.
D) flow of capital.

Question 61

65)Assume a foreign nation has seized all of the property of an American corporation. The nation has assumed ownership of the property for a public purpose and has paid the American corporation what it believes to be fair compensation. Under these facts, the seizure of property is best described as:

A) expropriation.
B) confiscation.
C) force majeure .
D) eminent domain.

Question 62

68)The United States and a Latin American country signed a treaty whereby the United States agreed to assist the Latin American country in controlling drug traffic. The United States, following the treaty, seized 100 square meters of land and bulldozed it, because it was a suspected haven of drug smuggling. The land in question was in Latin America, but belonged to an American citizen. Which of the following is correct?

A) The treaty will supersede any general Constitutional rights because the treaty gave specific authorization for the act.
B) The act was not offensive to the Constitution, because it occurred in Latin America.
C) Constitutional rights apply to people, not to property.
D) Constitutional rights supersede treaties.

Question 63

71)Which of the following is an objective of the North American Free Trade Agreement (NAFTA)?

A) Create trade barriers to the movement of goods and services across the borders.
B) Promote conditions of fair competition in the free trade area.
C) Decrease investment opportunities in the area.
D) Provide adequate and effective enforcement of all types of property rights.

Question 64

80)What is the basic purpose of the World Trade Organization (WTO)?

Question 65

76)Discuss how an owner of intellectual property protects those rights in other countries.

Question 66

77)Azurzerapi Corporation plans to start marketing products worldwide. What forms of multinational business enterprise should it consider?

Question 67

79)Kelly has just been appointed the manager of a company that has begun the direct export of its product. What precautions should he take to assure that the company will in fact be paid for its products when the company has never dealt with the buyers before and is new to the international legal environment?

Question 68

69)The Dodd-Frank Act:

A) extends the reach of the antifraud provisions of the 1933 and 1934 Securities Acts.
B) appears to restore to private litigants the right to bring proceedings to enforce the antifraud provisions of the U.S. securities laws in cases with an extraterritorial component.
C) limits the Department of Justice's right to bring proceedings to enforce antifraud provisions of the U.S. securities laws in cases affecting other nations.
D) All of these.

Question 69

63)Which of the following is true with regard to securities regulation in foreign markets?

A) Anti-fraud provisions apply where there is conduct in the U.S. relating to a violation of the federal securities laws.
B) Foreign issuers who issue securities must register them in the U.S. unless an exemption is available.
C) No specific regulations are allowed because of the act of state of doctrine.
D) None of these are true.

Question 70

62)The various forms of MNE include:

A) NASDAZ.
B) NFTRA.
C) EU.
D) Wholly owned subsidiaries.

Question 71

66)The United States belongs to which multinational treaty for patent protection?

A) The Madrid Protocol.
B) The Paris Convention for the Protection of Industrial Property.
C) The Berne Convention.
D) The WIPO Treaty.

Question 72

64)"Normal value" is the price that would be charged for the same or a similar product in the ordinary course of trade for domestic consumption in the exporting country, under the World Trade Organization's:

A) tariff regulations.
B) nontariff barrier.
C) Antidumping Code.
D) export controls.

Question 73

75)Define and discuss the doctrine of "sovereign immunity." Discuss how the Foreign Sovereign Immunities Act of 1976 has codified this area of law. Give examples of how the Act works.

Question 74

70)Assume that Denmark, a member of the European Community, is contemplating the enactment of a protective tariff for its fledgling electronics industry due to domestic political and economic pressures. Assume further that the EC has a tariff that it has also enacted for all electronics manufacturers within the EC that is considerably lower than the one that is being proposed in Denmark. The policy behind the lower EC tariff is to promote freer trade even at the risk of destroying some of the weaker manufacturers in that organization. In this situation:

A) Denmark could enact the higher tariff since EC members give up no authority to the organization in regulating trade and business practices.
B) Generally, when EC economic policies conflict with the laws of member nations, EC law will prevail. Thus, Denmark's tariff may be illegal.
C) Denmark could petition the United Nations Council of Economic Policy and if it concurs with Denmark, the EC tariff policy would be overridden.
D) Assuming Denmark is a signatory to GATT, the General Agreement on Tariffs and Trade, it could retain its higher tariff since the purpose of GATT is to protect domestic industries by promoting higher tariffs.

Question 75

72)The Foreign Sovereign Immunities Act specifically provides that a foreign state shall be immune from neither federal nor state court jurisdiction if the suit is based on which of the following?

A) A commercial activity conducted in the United States by the foreign state.
B) An act that the foreign state performed in the United States in connection with a commercial activity it carried on elsewhere.
C) A commercial activity performed outside U.S. borders that directly affects the U.S.
D) All of these.

Question 76

78)The U.S. and the government of San Sebastian broke off diplomatic relations in a dispute over fishing rights. The U.S. blocked exports to San Sebastian. San Sebastian in turn seized and expropriated the assets of several U.S. companies located within the country. One of the companies, Continental Coffee, sued the U.S. government and the government of San Sebastian charging violation of the U.S. Constitution on the grounds of deprivation of property without due process of law. How will the company fare in its case against the U.S.? against San Sebastian? Explain your answer, providing reasons for your decision.

Question 77

74)The CISG specifically excludes sales of which of the following?

A) Goods bought for personal, family, or household use.
B) Ships or aircraft.
C) Electricity.
D) All of these are specifically excluded.

Question 78

61)In international business transactions, a documentary letter of credit:

A) is a method of payment for goods that reduces the seller's risk from the possibility that the goods will be shipped, but not paid for.
B) is a type of bill of lading.
C) is a guarantee by the seller's bank that it will pay the price of the exported goods if the seller breaches the contract.
D) All of these.

Question 79

67)A foreign company, partially owned by that foreign government, manufactures televisions in the foreign country. The cost to the company for the manufacture of the product is the equivalent of $60 in the U.S. Because of excess production, the firm exports 50,000 sets to the United States where they are sold for $75 each. If the nearest rival U.S.-made set sells for $85, the action of the foreign company:

A) constitutes price-fixing.
B) violates the GAAT anti-dumping provisions.
C) violates the Sherman Act, because of the involvement of the foreign government in the company.
D) appears to be legal.

Question 80

73)The U.N. Convention on Contracts for the International Sales of Goods (CISG) includes provisions relating to which of the following?

A) Interpretation and trade usage.
B) Intellectual property rights.
C) Obligations and remedies of sellers, but not buyers.
D) Sharing of profits.