Deck 22: The International Legal Environment of Business

Question 1

There is a well-developed system of international courts used to settle international commercial disputes.

Answer 1

False

Question 2

Major areas in which WTO members could not agree to reduce trade barriers are the film and music industries.

Answer 2

True

Question 3

In the Middle Ages, the private international law of commercial transactions was known as the lex populi.

Answer 3

False

Question 4

If a member country of the World Trade Organization claims another country has violated WTO rules, the issue will be investigated by a three-member arbitral panel.

Question 5

International business does not generally involve greater difficulties than operating a domestic business.

Question 6

A tariff is a duty or tax most commonly imposed by a government on exported goods.

Question 7

The GATT organization was renamed the International Trade Organization.

Question 8

The main sources of international trade law are the laws of the individual countries, the laws embodied in trade agreements, and the rules enacted by trade organizations.

Question 9

A "specific tariff" is a lump-sum or fixed amount tax applied to a product.

Question 10

The World Trade Organization works to bring together producers and customers from different countries by running large "trade shows" around the world.

Question 11

International business transactions involve risks that are financial, political, and regulatory.

Question 12

Most tariffs between the countries that belong to NAFTA were supposed to be eliminated by 2009.

Question 13

WTO member countries agreed to completely eliminate tariffs on beer, steel, farm equipment, furniture, and toys.

Question 14

NAFTA is a free trade agreement between the U.S., Canada, and Great Britain.

Question 15

Legal rules governing international business transactions were developed for the first time in the late 1800s.

Question 16

A "specific tariff" involves a tax based on a percentage of the price of the product.

Question 17

The United Nations is the main source of international courts used to settle international commercial disputes.

Question 18

Tariff imposed on imports must be paid before the goods officially enter the country.

Question 19

The United Nations is the main source of international trade law used in global commerce.

Question 20

The management of international business risks involves considerations of currency exchange and of differences in legal systems.

Question 21

The U.S. replaced its tariff classifications with the Harmonized Tariff Schedule, a uniform system of goods classification used by custom officials worldwide.

Question 22

The International Trade Commission may impose an antidumping duty on goods imported to the U.S. that are being sold for less than the price charged in the home market. By law, the duty is to be triple the cost difference.

Question 23

The Supreme Court has noted that the Customs officials who assign tariff classes to imported goods must be given deference by the courts in how Customs interprets the law of tariffs.

Question 24

Most business disputes in the tariffs area arise over the classification of products under the tariff schedules.

Question 25

In U.S. v. Mead Corp. the Supreme Court held that Customs classifications of products are best treated like interpretations of policy statements.

Question 26

U.S. producers have the right to go to the International Trade Commission to request a tax be imposed on products from foreign countries that it claims are being subsidized by a foreign government in production.

Question 27

Products may be completely banned from importation into the U.S. if they hurt national security.

Question 28

Dumping occurs when a company sells its products for less money in a foreign market than it charges for those same goods in its home market.

Question 29

The International Trade Commission may impose an antidumping duty on goods imported to the U.S. that are being sold for less than the price charged in the home market.

Question 30

Antidumping orders issued by the International Trade Commission usually concern a restriction on goods being "dumped" into the U.S. market for free.

Question 31

In U.S. v. Mead Corp. the Supreme Court held that Customs classifications of products are due Chevron deference when challenged.

Question 32

If a foreign company is guilty of dumping its products in the U.S., the International Trade Commission can impose taxes on the good being brought into the country.

Question 33

The International Trade Commission may restrict imports to help foreign companies better compete in U.S. markets.

Question 34

The government publishes duties and taxes it imposes on imported products in the Federal Register for importers to check to see the relevant tariff.

Question 35

Foreign automobiles that do not meet U.S. auto safety and pollution regulations may not be imported into this country.

Question 36

An "ad valorem tariff" is based on a percentage price of a product.

Question 37

The Department of Commerce may investigate to see if a foreign government is providing a subsidy to their producers that allows the good to be sold for less than its real cost of production. If so, a tax may be imposed on the imported good.

Question 38

A foreign trade zone is where businesses can import goods for processing, assembly, or warehousing, without paying duties until the finished products are sent to the market.

Question 39

An "ad valorem tariff" is a lump-sum or fixed amount tax applied to a product.

Question 40

Products made from endangered species are prohibited from being imported into the U.S. for sale.

Question 41

Under the Export Administration Act, there may be no restriction on the exporting of goods from the U.S. to other countries.

Question 42

Foreign trade zones are ports of entry that assess special duties or tariffs on products entering them that are less than the duties imposed on general trade zones.

Question 43

A person who knowingly violates the licensing procedures for exporting goods may be imprisoned.

Question 44

Duty-free ports where no tariffs are charged for imported goods do not exist.

Question 45

The sale of restricted goods, such as military equipment, applies to sales from the U.S. to other nations, but cannot control resale of the goods once outside of the U.S.

Question 46

Foreign trade zones are ports in a country where any products may be imported and sold without any taxes that would otherwise apply to imports.

Question 47

The two basic ways of selling products in foreign markets are to export products to the country or manufacture products in the country for distribution there.

Question 48

The Department of Commerce maintains a Restricted Export Security List (RESL) that states what goods are restricted in sales to other nations.

Question 49

In contrast to the wholly owned subsidiary, a joint venture may involve a loss of managerial control.

Question 50

When the value of a country's exports exceeds the value of its imports, the country runs a trade deficit.

Question 51

Japanese firms moved manufacturing facilities to the U.S. in fear that Congress would impose high tariffs on products made in Japan.

Question 52

Most countries prefer to have wholly-owned subsidiary plants in the country rather than joint ventures.

Question 53

Duty-free ports are ports of entry that assess special duties or tariffs on products entering them that are less than the duties imposed on general trade zones.

Question 54

The International Trade Administration is the major export promotion agency of the U.S. government.

Question 55

The International Trade Administration helps U.S. companies market their products in foreign countries.

Question 56

The Export Administration Act is primarily concerned with controlling the export of endangered species the U.S.

Question 57

A significant problem facing software companies is international piracy of their products.

Question 58

The Department of Commerce maintains a Commodity Control List that states what goods are restricted in sales to other nations.

Question 59

Many companies prefer joint ventures rather than wholly-owned subsidiaries in other countries because the joint venture gives the parent company more control.

Question 60

If a good exported from the U.S. is on the Commodity Control List, it will require an export license from the Department of Commerce before it is sold and shipped.

Question 61

The most controversial aspect of the Foreign Corrupt Practices Act is the bookkeeping requirement.

Question 62

The most controversial aspect of the Foreign Corrupt Practices Act is the "knowing" requirement.

Question 63

The Foreign Corrupt Practices Act prohibits companies from importing foreign goods that might corrupt the morals of Americans.

Question 64

The Foreign Corrupt Practices Act allows U.S. firms in other nations to make bribes of foreign officials needed to get paperwork or other routine matters approved.

Question 65

Contract manufacturing involves a contractual arrangement where one business grants another business access to its patents and other technologies.

Question 66

The U.S. is estimated to be one of the top two or three least corrupt countries in the world.

Question 67

A major drawback to contract manufacturing compared to other forms of international operations is that it usually involves a high level of capital investment.

Question 68

A licensing agreement is a contractual arrangement where one business grants another business access to its patents and other technologies.

Question 69

The most visible U.S. franchises in the international market are gasoline stations.

Question 70

A franchise is a form of a licensing agreement.

Question 71

A problem with a licensing agreement can be the loss of patents and other technologies.

Question 72

The United Nations Convention Against Corruption has been widely adopted around the world and appears to have a very high level of enforcement.

Question 73

A U.S. manufacturing firm that has made significant use of contract manufacturing is the Nike shoe company.

Question 74

The United Nations Convention Against Corruption was rejected by Congress as inferior to the Foreign Corrupt Practices Act.

Question 75

The FCPA requires all companies to create internal accounting controls that will provide reasonable assurances that company transactions are authorized and that company assets are traceable.

Question 76

Under the Foreign Corrupt Practices Act it is illegal for an agent of a business to bribe a foreign government official.

Question 77

The United States is rated the least corrupt country in the world.

Question 78

A U.S. manufacturing firm that has made significant use of franchising in foreign markets is the Nike shoe company.

Question 79

Denmark is rated the least corrupt nation in the world.

Question 80

Afghanistan is rated one of the most corrupt nations in the world.