Deck 5: The Political, Legal, and Regulatory Environments

Question 1

Many governments in developing countries exercise control over their nations' economic development by passing protectionist laws and regulations.

Answer 1

True

Question 2

Nationalization, expropriation, and confiscation are approved by international law as a legitimate exercise of government power as long as the act satisfies a "public purpose."

Answer 2

False

Question 3

When Barack Obama was sworn in as the president of the United States, he inherited a situation that had confounded his predecessors for half a century.America's complex relationship with Cuba illustrates the impact the political, legal, and regulatory environments can have on international trade and global marketing activities.

Answer 3

True

Question 4

India, Pakistan, Malaysia, Korea, and Japan have common-law jurisdictions.

Question 5

The requirement that all restaurants declare that the meat is "halal" is based on Islamic Laws.

Question 6

When a foreign country expropriates an American corporation, the U.S.court can get involved in arbitration.

Question 7

Some foreign companies reduce earnings by making loans to U.S.affiliates rather than using direct investment to finance U.S.activities.This is known as "earnings stripping."

Question 8

Political risk is the possibility of a change in a country's political environment or government policy that would positively affect a company's ability to operate effectively and profitably.

Question 9

A "civil-law country" is one in which the legal system reflects the structural concepts and principles of the Roman Empire in the sixth century.

Question 10

To establish ownership of a written, recorded, performed, or filmed creative work, it is necessary to apply for and be granted a patent.

Question 11

If a foreign company only has a sign board in any state in the United States, then that company is subject to the jurisdiction of U.S.courts.

Question 12

"Sharia" and "haram" are important concepts in civil-code laws, which are commonly practiced in Middle Eastern countries.

Question 13

The political maneuverings of the Russian government create a high level of political risk.

Question 14

Louisiana is the only state that has not fully adopted the Uniform Commercial Code (UCC)since its laws are heavily influenced by the French civil code.

Question 15

If a foreign company is taken over by the host country government, and some form of compensation is paid, "confiscation" has occurred.

Question 16

If a foreign country decides to take over banking business from private banks to benefit public and pays adequate payment, then it is referred to as nationalization.

Question 17

In China, import duties have dropped since the country joined the WTO.

Question 18

A trademark gives the inventor of a product the exclusive legal right to make, use, and sell an invention for a specific period of time.

Question 19

Companies cannot purchase insurance to offset potential risks arising from the political environment of a country.

Question 20

If a foreign company is taken over by the host country government, and some form of compensation is paid, "expropriation" has occurred.

Question 21

A U.S.company wishing to obtain foreign patent rights must apply to the Paris Union within one year of filing in the United States or risk a permanent loss of patent rights abroad.

Question 22

A patent holder retains all rights for the life of the patent even if the product is not produced or sold.

Question 23

Patents and trademarks that are registered in the United States are protected in all countries of the world.

Question 24

The United Nations Conference on International Trade Law (UNCITRAL)has also been a significant force in the area of arbitration.

Question 25

Under the Alternative Fines Act, fines imposed on individuals may not be paid by their employer or principal.

Question 26

If an American businessperson pays a Russian customs agent a $20 cash "processing fee" to avoid delay in leaving Russia, the American has violated the Foreign Corrupt Practices Act (FCPA).

Question 27

Licensing is a potentially dangerous action: It may be instrumental in creating a competitor.

Question 28

A recent rash of antitrust actions brought in the United States against foreign companies has raised concerns that the United States is violating international law as well as the sovereignty of other nations.

Question 29

The European Court of Justice, based in Luxembourg, is the European Union's highest legal authority.

Question 30

A company hoping to protect its trade secrets from being stolen by a foreign company can seek relief under the TRIPs agreement if both companies do business in GATT signatory countries.

Question 31

Pressures of global competition have resulted in decreased incidences of price-fixing and collusion among companies.

Question 32

Denmark ranks highest in bribery as listed by the Corruption Perceptions Index (CPI)by Transparency International in 2010.

Question 33

In 2009, Etisalat, a telecommunications company in the United Arab Emirates (UAE)urged BlackBerry users to download a software upgrade; it turned out the upgrade contained spyware.

Question 34

A key issue is global patent protection for software.Although copyright law protects the computer code, it does not apply to the idea embodied in the software.

Question 35

In Saudi Arabia, the Communication and Information Technology Commission (CITC)was ready to restrict BlackBerry services citing security concerns since the location of RIM (Research in Motion)servers were in Canada.

Question 36

Formation of a cartel like OPEC, consisting of oil-producing companies, would most likely be illegal in the United States.

Question 37

In order to fight piracy in China, Budweiser beer cans have fluted edges that are difficult to manufacture.

Question 38

Microsoft is subject to U.S.antitrust laws no matter what country it is doing business in.

Question 39

Japan has recently promised to speed up patent examinations, eliminate challenges to patent submissions, and allow patent applications to be filed in English.

Question 40

In emerging countries, journalists may themselves become targets if they criticize the rich or powerful.

Question 41

Any company doing business outside the home country should first carefully study the ________ in the target country.

A)political culture
B)nationalization
C)political risk
D)jurisdiction
E)sovereignty

Question 42

Counterfeiting is:

A)the use of a formal legal document for illegal purposes.
B)the ownership of a written, recorded, performed or filmed creative work.
C)the unauthorized copying or production of a product.
D)the use of a product name that has different meaning than the original brand.
E)the use of a distinctive mark of a brand that is no longer producing the original brand.

Question 43

In 2005, representatives from several wine regions in the United States and the EU signed a Joint Declaration to Protect Wine Place & Origin.In addition, a Wine Accord signed by the United States and EU bans the:

A)use of alcohol in public places.
B)purchase of wine from country of origin.
C)misuse of 16 place names by marketers of wine products that do not originate in those places.
D)misuse of labels which does not include the origin of ingredients.
E)use of word "champagne" on wine made in the United States.

Question 44

Which of the following is not a common-law country?

A)India
B)Pakistan
C)Malaysia
D)Korea
E)Singapore

Question 45

Categories of political risk listed by EIU (The Economist Intelligence Unit)includes all of the following except:

A)war.
B)political turmoil.
C)bureaucracy.
D)corruption.
E)crime.

Question 46

Engineers at a company in a developing country study an American computer chip design, copy it, and produce identical chips that are then sold to local computer makers.What form of intellectual property has been wrongly appropriated?

A)patent
B)copyright
C)trademark
D)trade secrets
E)technological

Question 47

After Fidel Castro took power in Cuba in 1959, his government seized control of American property without paying compensation.Coca-Cola, DuPont, Texaco, and dozens of other American companies have filed claims against Cuba seeking financial settlements.Which of the following terms most specifically describes the action Castro took against these companies?

A)nationalization
B)confiscation
C)expropriation
D)internationalization
E)deportation

Question 48

In a recent case, Revlon sued United Overseas Limited (UOL)in U.S.District Court for the Southern District of New York for breach of contract.UOL countered by asking the court to dismiss the claim since they are not operating in that area.Revlon cited the presence of a UOL sign above the entrance to the offices of a New York company in which UOL had a 50-percent ownership.The court dismissed UOL's claim.This is an issue related with:

A)jurisdiction.
B)antitrust.
C)dilution of equity.
D)bribery and corruption.
E)intellectual property.

Question 49

Harley-Davidson has applied for federal protection of an unusual form of intellectual property; the "soul-pleasing rumble" produced by its motorcycles.What type of protection is Harley-Davidson seeking?

A)copyright
B)trademark
C)license
D)patent
E)trade dress

Question 50

In many parts of the world, sales of unauthorized videos of Hollywood movies cost the movie studios billions of dollars.When illegal copies of movies are made, what form of intellectual property has been wrongly appropriated?

A)patent
B)copyright
C)trademark
D)trade secrets
E)down loading

Question 51

In West Africa, Burkina Faso, the Ivory Coast and Senegal are former French colonies, while Nigeria, Sierra Leone, and Ghana are former British colonies.Based on this information, which of the following would be correct?

A)Burkina Faso, the Ivory Coast and Senegal are civil-code countries, while Nigeria, Sierra Leone, and Ghana are common-law countries
B)Burkina Faso, the Ivory Coast and Senegal are common-law countries, while Nigeria, Sierra Leone, and Ghana are civil-code countries.
C)In West Africa, Ivory Coast and Senegal are the only common-law countries
D)All the West African nations mentioned above are likely to be civil-code countries.
E)All the West African nations mentioned above are likely to be common-law countries

Question 52

Only Sony can use the "Walkman" name on its line of personal stereos.This is because:

A)Sony has a patent on the Walkman.
B)"Walkman" is a registered Sony trademark.
C)Sony has copyrighted the Walkman name.
D)Sony's trade secrets are protected by international law.
E)Sony has an international business license.

Question 53

What happens if a nation has allowed a case against it to be brought before the ICJ (International Court of Justice?

A)American Arbitration Association can be sought for justice.
B)UN Conference on International Trade Law can be approached.
C)International Chamber of Commerce will be another source for seeking justice.
D)European Court of Justice can be approached if the country is in the European Union.
E)The plaintiff nation can seek recourse through the UN Security Council.

Question 54

Located in The Hague, the International Court of Justice (ICJ)is the judicial arm of the:

A)United States.
B)European Union.
C)United Nations.
D)Netherlands.
E)United Kingdom.

Question 55

Islamic law is a comprehensive code based in part on:

A)Anglo-Saxon common law.
B)Roman law and the Napoleonic Code.
C)the Uniform Commercial Code.
D)the Koran.
E)the French Civil Code.

Question 56

Any Western country doing business in Malaysia or the Middle East should have understanding of:

A)the French Civil Code.
B)Anglo-Saxon common law.
C)Islamic law.
D)the Uniform Commercial Code.
E)Roman law and the Napoleonic Code.

Question 57

What type of international disputes would be taken before the International Court of Justice?

A)disputes between two nations
B)disputes between two companies
C)disputes between a company and a nation
D)disputes between a citizen of one country and a company from a different country
E)disputes between profit and non-profit organizations

Question 58

Which of the following would constitute a copyright violation?

A)manufacturing and selling illegal videocassette copies of "Spiderman 2"
B)manufacturing and selling illegal copies of Levi "501" jeans
C)printing and selling illegal copies of Harry Potter books
D)A, B, and C are copyright violations
E)A and B are copyright violations

Question 59

What do value added taxes (VAT)encourage in countries such as China?

A)They make trademarks and copyrights more valuable.
B)They result in cross-border shopping and smuggling.
C)They make it harder to bribe officials.
D)They protect companies from antitrust scrutiny.
E)Global companies refrain from offering bribes.

Question 60

The Uniform Commercial Code (UCC)is fully adopted by all U.S.states except:

A)Virginia.
B)North Dakota.
C)Wisconsin.
D)Louisiana.
E)Montana.

Question 61

Consten, a French company, had exclusive rights to import and distribute German Grundig's electronic products into France.One of the competitors started bringing "parallel imports" into France illegally, importing Grundig product bought from a foreign supplier.Which of the following does not represent an action taken by different legal bodies?

A)Consten's complaint was upheld by two French courts.
B)The Paris Court of Appeals suspended the judgment of the French courts.
C)The Paris Court of Appeal's judgment was based on pending a ruling by the European Commission.
D)The European Commission ruled against Consten on the grounds that territorial protection proved to be damaging to the Common Market.
E)The European Commission ruled that German Grundig was in violation of the laws of the Common Market.

Question 62

When companies operate abroad in the absence of home-country legal constraints, the best choice for ethical conduct would be:

A)to ignore bribery and act as if it does not exist.
B)to maintain home-country ethics worldwide with no adaptations.
C)to abandon any attempt to maintain company ethics.
D)to have a product that is clearly superior to that of the competition.
E)to adapt in varying degrees to local customs and practices.

Question 63

Which of the following is true about protection of computer software?

A)Copyright laws protect both the actual code and the idea embodied in the code.
B)Patent laws protect both the actual code and the idea embodied in the code.
C)Patent laws protect the actual code, while copyright laws protect the idea.
D)Copyright laws protect the actual code, while patent laws protect the idea.
E)License protects both the actual code and the idea embodied in the code.

Question 64

A company stands a better chance of having an international arbitration award upheld if its home-country government has signed:

A)the Paris Convention.
B)the Prague Convention.
C)the New York Convention.
D)the Vienna Convention.
E)the Geneva Convention.

Question 65

According to the Transparency International's Corruption Perceptions Index scores for 2010, the country which was listed as most corrupt was:

A)Iraq.
B)Uzbekistan.
C)Chad.
D)Afghanistan.
E)Somalia.

Question 66

Which of the following statements is correct?

A)The Paris Convention protects patents, the Berne Convention protects copyrights.
B)The Paris Convention protects copyrights, the Berne Convention protects patents.
C)The Berne Convention and Paris Convention are different names for the same thing.
D)Neither the Berne Convention nor the Paris Convention is concerned with intellectual property.
E)The International Union for the Protection of Literary and Artistic Property is different from the Berne Convention.

Question 67

Italy recently introduced the Reguzzoni-Versace Law which is intended to regulate trade in textiles, leather, and footwear.All of the following statements pertaining to the law are correct except:

A)at least four stages of production should occur in Italy for the product to be labeled as "Made in Italy."
B)the countries in which the remaining production stages took place must be identified.
C)Brussels objected on grounds that the law conflicts with restrictions provided by the European Union.
D)EU regulators view the law as "protectionist."
E)the law is more stringent than the existing laws where only one production stage has to occur in the country of origin.

Question 68

The European Commission has jurisdiction over European-based companies as well as non-European ones that generate significant revenues in Europe.If Microsoft applies in Europe, the Commission has a right to all of the following except:

A)it can block a proposed merger.
B)it can block a proposed joint venture.
C)it can approve with minor modifications.
D)it can demand substantial concessions before granting approval.
E)it can refer serious matters to the UN Security Council.

Question 69

Which of the following is true of the arbitration framework created by the New York Convention?

A)Signatory countries can require parties to an arbitration agreement to actually use arbitration.
B)Signatory countries recognize and can enforce arbitration judgments.
C)There are limited grounds for appealing arbitration decisions.
D)The grounds that are recognized are different than the typical appeals that are permitted in a court of law.
E)all of the above

Question 70

Which of the following best describes the legal basis for protection of trade secrets, patents, and copyrights in the United States?

A)Trade secrets, patents, and copyrights are protected by federal statutes.
B)Trade secrets, patents, and copyrights are protected by state law.
C)Trade secrets are protected by state law, while patents and copyrights are protected by federal statutes.
D)Trade secrets are protected by federal statutes, while patents and copyrights are protected by state law.
E)Trade secrets, patents, and copyrights are not protected by any laws.

Question 71

In order to fight piracy in China, Budweiser Beer's approach includes:

A)printing labels in Chinese.
B)changing color of beer cans.
C)beer cans in China have fluted edges.
D)printing labels both in Chinese and English.
E)making beer very cheap in price in China.

Question 72

The U.S.Justice Department objected to a recent patent license agreement between S.C.Johnson & Sons and Bayer AG.The antitrust unit at the Justice department objected to:

A)the duration of the license.
B)the amount of royalties Johnson agreed to pay.
C)Bayer's attempts to circumvent FDA policies.
D)the exclusive nature of the license agreement.
E)the hostile arrangement between Bayer and Johnson.

Question 73

Which of the following is true about revised U.S.patent laws?

A)Patents are valid for 17 years after the patent is granted.
B)Patents are valid for 17 years after the patent is filed.
C)Patents are valid for 20 years after the patent is granted.
D)Patents are valid for 20 years after the filing date of the application.
E)Patents are valid as long as the product is manufactured.

Question 74

The company receiving the most U.S.patents for the year 2009 is:

A)Microsoft.
B)Panasonic.
C)IBM.
D)Toshiba.
E)Intel.

Question 75

OPEC can be considered as a "cartel" which is a group of separate companies that collectively:

A)sets prices, controls output, or takes other actions to maximize profits.
B)dictates how other countries should use their products.
C)produces more products in order to beat the competition.
D)conducts activities that are considered illegal in United States.
E)works on forming a union against management of other companies.

Question 76

The United States has more lawyers than any other country in the world and is arguably the most litigious nation on earth.This is a reflection of:

A)the lack of class action lawsuits.
B)the low-context nature of the American culture.
C)the lack of spirit of confrontational competitiveness.
D)the fact that lawyers cannot undertake cases on contingency fee basis.
E)the fact that conflicts arise more in the United States.

Question 77

Which of the following actions were approved both by the Antitrust Review in the EU as well as in the United States?

A)acquisition of Honeywell (U.S.)by GE (U.S.)
B)joint venture between music businesses of EMI group (Great Britain)and Time Warner (U.S.)
C)merger of Sony Music (Japan)and BMG (Germany)
D)merger of WorldCom (U.S.)and MCI (U.S.)
E)British Airways (U.K.)and American Airlines (U.S.)

Question 78

A proposed merger between two Swiss-based global pharmaceutical companies, Ciba-Geigy AG and Sandoz AG, would be subject to review by regulators from which of the following?

A)European Commission
B)UN Conference on International Trade Law
C)International Chamber of Commerce
D)International Court of Justice
E)none of the above

Question 79

The following criminal penalties may be imposed for violations of the FCPA'S (Foreign Corrupt Practices Act)antibribery provisions except:

A)corporations are subject to a fine of up to $2,000,000.
B)officers, directors, stockholders, employees, and agents are subject to a fine up to $100,000.
C)fines imposed on individuals can be paid by their employer or principal.
D)the fines may be much higher, up to twice the benefit sought by the defendant.
E)in addition to fines, there may be imprisonment for up to five years.

Question 80

As part of their alliance relationship, Northwest Airlines and KLM Royal Dutch set air fare prices jointly and coordinate flight schedules.Normally, such behavior would be considered harmful to competition, but the U.S.government has granted the two airlines special exemptions from laws concerning:

A)intellectual property.
B)antitrust.
C)jurisdiction.
D)licensing.
E)arbitration.