Question 1

An export sale normally requires at least four documents.These include all of the following EXCEPT

Accepted Answer

The four documents required for an export sale are the contract of sale, the bill of lading, the insurance policy or certificate, and the invoice. The letter of credit is often used in international trade to minimize the risk of non-payment, but it is not necessarily required for every export sale.

Question 2

In Canada,a foreign corporation must be licensed or registered to acquire standing to bring a lawsuit in Canada.

Accepted Answer

Under Canadian law, foreign corporations must be licensed or registered in order to be able to bring a lawsuit in Canada. This requirement is meant to ensure that foreign corporations are subject to Canadian laws and regulations, and that they are not engaging in unauthorized activities within Canada. Without a license or registration, a foreign corporation would not have standing to bring a lawsuit in Canadian courts.

Question 3

A portfolio investment is essentially a passive investment,normally in the form of government or corporate bonds or listed securities.

Accepted Answer

A portfolio investment is indeed a passive investment that typically involves buying and holding government or corporate bonds, mutual funds, or stocks listed on a stock exchange for a long-term period to earn returns in the form of capital gains or dividends. The investor does not actively participate in the management of the underlying assets.

Question 4

Conditions attached by a host country to a foreign investment are usually referred to as performance requirements.

Accepted Answer

Performance requirements refer to conditions imposed by a host country on a foreign investor, such as requirements to use domestic inputs, export a certain amount of goods, or transfer technology.

Question 5

Foreign direct investment (FDI)is not normally conducted through the establishment of

Accepted Answer

Foreign direct investment is typically conducted through the establishment of a branch, subsidiary, or joint venture. Hostile takeover, on the other hand, is not a common method of FDI as it involves forcefully acquiring control of a company without the consent of its management or board of directors.

Question 6

A free trade area is one in which customs duties are always imposed.

Accepted Answer

A free trade area is a group of countries that have agreed to reduce or eliminate trade barriers between themselves, including customs duties. Therefore, customs duties are not always imposed in a free trade area.

Question 7

Export Industries Ltd.,a Canadian corporation with a factory in London,Ontario,agrees to sell a customer in Germany 2000 microwave ovens FOB Lufnaia Airlines,Toronto,Pearson Airport.Which of the following statements is correct?

Accepted Answer

B) Export is liable for the goods until they are loaded into Lufnaia Airlines. This is because "FOB" (Free On Board) specifies that the seller's responsibility ends when the goods are loaded onto the transportation vehicle, in this case, Lufnaia Airlines at Toronto Pearson Airport.

Question 8

The forum non conveniens principle allows a court to refuse to hear a proceeding because another jurisdiction is more appropriate or more closely connected to the matter.Factors relevant to determining which of the multiple forums is more appropriate include all of the following EXCEPT

Accepted Answer

Factors relevant to determining which of the multiple forums is more appropriate include the convenience, location, and expense for parties and witnesses, the avoidance of multiple proceedings, the law to be applied to the dispute, and the ability to enforce any resulting judgment. The plaintiff's status as a frivolous and vexatious litigant is not a relevant factor in determining the appropriate forum.

Question 9

The World Trade Organization provides two procedures for the resolution of disputes between countries.One way is to request the WTO Council to appoint a "panel" to adjudicate the dispute; the other way is

Accepted Answer

The consultation and conciliation procedure is the diplomatic solution that the WTO provides for the resolution of disputes between countries. A panel adjudication is an option if the diplomatic solution fails or is not acceptable to the parties involved. The other options mentioned (B, C, D, and E) are not provided by the WTO for the resolution of disputes.

Question 10

Under Chapters 19 and 20 of NAFTA,in the event of a dispute,the Extraordinary Challenge Committee is the first body before which an arbitration is heard.

Accepted Answer

Under Chapters 19 and 20 of NAFTA, the first body before which an arbitration is heard is a Binational Panel, not the Extraordinary Challenge Committee.

Question 11

Courts require that an action have some "connecting factor" or a "real and substantial connection" with the country or province in which the party seeks to bring the action.The question of whether a court will hear an action and allow a lawsuit to proceed in the court of that jurisdiction is called

Accepted Answer

The term used for a court's decision to hear an action and allow a lawsuit to proceed in the court of that jurisdiction is "assuming jurisdiction". Courts require some "connecting factor" or a "real and substantial connection" with the country or province in which the party seeks to bring the action before assuming jurisdiction.

Question 12

Aside from establishing a branch or subsidiary in a foreign country,an FDI is conducted by means of a partnership.

Accepted Answer

The answer of Aside from establishing a branch or subsidiary...

Question 13

SlamDunk Inc.,a Vancouver,B.C.,firm,agrees to sell to SuperVideo Ltd.of Barcelona,Spain,500 video games with DDP terms.This means that SlamDunk will arrange for and pay the cost of shipping,the insurance,and the

Accepted Answer

The answer of SlamDunk Inc.,a Vancouver,B.C.,firm,agrees to sell to SuperVideo...

Question 14

The invoice is of special importance in the international sale of goods.It not only provides information to the parties to the transaction,but also

Accepted Answer

The answer of The invoice is of special importance in...

Question 15

Countertrade

Accepted Answer

The answer of Countertrade
...

Question 16

Where a Canadian company makes an investment in a foreign country,Canada is considered to be the "host" country.

Accepted Answer

When a Canadian company makes an investment in a foreign country, the foreign country is considered to be the "host" country, not Canada. Canada would be the "home" country of the investing company.

Question 17

Dumping is the process where

Accepted Answer

Dumping is when a foreign firm sells goods in a country at a lower price than what they sell for in their domestic market. This can be harmful to domestic producers who cannot compete on price and may lead to the imposition of countervailing duties by the government.

Question 18

Foreign direct investment to a Canadian investor

Accepted Answer

Foreign direct investment (FDI) is characterized by the intention to have an effective voice in the management of the enterprise. This differentiates it from portfolio investments, where the investor's primary concern is financial return rather than control over the company's operations.

Question 19

The decision to invest in a foreign jurisdiction carries with it many risks.The possibility of the host country government assuming ownership of a foreign investor's assets is referred to as

Accepted Answer

Expropriation refers to the host country government taking over the assets of foreign investors. This is a significant risk that investors must consider when investing in a foreign jurisdiction. The other options (A) forum non conveniens, (B) national party autonomy, (D) joint venture, and (E) export subsidy do not relate to the government taking over assets.

Question 20

Notwithstanding that an action at law between contracting parties in different countries is brought in one country,the court of that country may decline jurisdiction on the basis of forum non conveniens.

Accepted Answer

This statement is true. The doctrine of forum non conveniens allows a court to decline jurisdiction if it determines that another country or court is a more suitable forum to hear the case.

Quiz 31: International Business Transactions