Question 1

Secure Investments, Inc., a U.S. firm, expands into international markets through a joint venture. In this situation, Secure owns

Accepted Answer

In a joint venture, both parties share ownership, profits, and liabilities. Therefore, Secure Investments, Inc. would only own a part of the operation and share in its profits and liabilities with its joint venture partner.

Question 2

In some cases, foreign states are not immune from the jurisdiction of U.S. courts. These circumstances are governed by the

Accepted Answer

The Foreign Sovereign Immunities Act governs the circumstances under which foreign states are not immune from the jurisdiction of U.S. courts. The Uniform Commercial Code, European Union, and North American Free Trade Agreement do not specifically address this issue.

Question 3

The U.S. corporation Fun Toys, Inc. sets up a firm in China. The parent company remains in the United States and retains complete ownership of the China branch as well as complete authority and control over all phases of the operation. This is

Accepted Answer

In a wholly owned subsidiary, the parent company has complete ownership and control over the branch in another country. This option matches the scenario given in the question, where Fun Toys, Inc. sets up a firm in China but retains complete ownership and authority over it. The other options do not fit the given scenario. A franchise involves granting another party the right to use the parent company's brand name and business model in exchange for fees and royalties. A joint venture involves two or more companies collaborating and sharing ownership and control of a new entity. Direct exporting involves selling goods or services directly to customers in another country, without establishing a physical presence in that country.

Question 4

U.S. Cars, a U.S. firm, owns property in Argentina. The government of Argentina seizes the property. U.S. Cars claims that this is confiscation. The government of Argentina claims that it is expropriation. The burden of proof lies with

Accepted Answer

The answer of U.S. Cars, a U.S. firm, owns property...

Question 5

The United States and other members of a certain organization agree to grant normal trade relations status to each other with regard to imports and exports. This organization is

Accepted Answer

The grant of normal trade relations status is typically made between member countries of the World Trade Organization (WTO), which promotes free trade and monitors trade practices between its members. Other organizations listed do not typically grant normal trade relations status.

Question 6

To obtain a contract with the Chinese government, Bammo Engineering Corporation, a U.S. firm, gives a Chinese official a sport utility vehicle. This may violate

Accepted Answer

The act of giving a gift or bribe to a foreign official to gain business or other advantages is prohibited by the Foreign Corrupt Practices Act (FCPA) of the United States. Thus, giving a sport utility vehicle to a Chinese official by Bammo Engineering Corporation may violate the FCPA. The act of state doctrine refers to the principle that a court of one country should not pass judgment on the validity of an act of another country's government, while the doctrine of sovereign immunity refers to the immunity from legal action enjoyed by a foreign state or its officials in a court of another country. The principle of comity refers to the recognition and respect given by one country to the laws and decisions of another country. However, none of these doctrines are relevant in this scenario.

Question 7

KO Marketing Company, a U.S. firm, signs a contract with Librador Corporacion, a Chilean firm, to give Librador the right to use Innovative's animation techniques and characters in product promotions. This is

Accepted Answer

The contract between KO Marketing Company and Librador Corporacion is a licensing agreement, where KO Marketing Company is giving Librador the right to use their animation techniques and characters (Intellectual Property) in exchange for royalties or fees.

Question 8

WiFi Corporation, a U.S. firm, signs a contract with Bueno Computadores, Ltd., an Argentinean firm, for a shipment and payment for WiFi's goods. This is

Accepted Answer

This is an example of direct exporting, where a company sells its goods directly to a foreign buyer without the need for an intermediary.

Question 9

Soleful Shoes, Inc. owns property in Somalia. The Somalian government seizes the property. In order for the seizure to be considered an expropriation and not a confiscation, the Somalian government must

Accepted Answer

According to international law, expropriation is only legal with the payment of just compensation. Therefore, in order for the seizure to be considered an expropriation and not a confiscation, the Somalian government must pay Soleful Shoes just compensation. The other options regarding advance notice or notifying the U.S. government are not necessarily required for an expropriation to occur.

Question 10

The government of Japan sets a limit on the amount of rice that can be imported from the United States. This is

Accepted Answer

A limit on the amount of a certain good that can be imported is known as a quota.

Question 11

Metallic Metals, Inc., a U.S. firm, files a suit against a Venezuela government agency. The agency has committed a tort in the United States. Under the Foreign Sovereign Immunities Act

Accepted Answer

Under the Foreign Sovereign Immunities Act, a foreign government or its agencies may be immune from the jurisdiction of the U.S. courts, but there are exceptions. One of those exceptions is for torts committed in the United States. Therefore, in this case, Metallic Metals can sue the Venezuelan government agency in the U.S. courts.

Question 12

Wrugged Woolens, Inc., a U.S. corporation, sets up a specialized marketing organization in Scotland by appointing a foreign agent. This is called

Accepted Answer

Indirect exporting involves setting up a specialized marketing organization in a foreign country by appointing a foreign agent. This allows the exporting company to reach foreign markets without actually having to establish a physical presence in the foreign country.

Question 13

Sudan seizes the assets of Triage Medical, Inc., a U.S. firm. Triage's recovery from Sudan in a U.S. court may be prevented by

Accepted Answer

The answer of Sudan seizes the assets of Triage Medical,...

Question 14

UniOil, a U.S. firm, owns property in Venezuela. When the government of Venezuela seizes the property, UniOil asks a U.S. court to order the property's return. The court rules that Venezuela is exempt from the court's jurisdiction. This is

Accepted Answer

The doctrine of sovereign immunity refers to the principle that a government cannot be sued in the courts of another country without its consent. In this case, the court ruled that Venezuela was immune from the court's jurisdiction, meaning that UniOil could not sue the government in a U.S. court for the seizure of its property.

Question 15

Senator Brown and other politicians want to restrict the flow of technologically advanced products and data from the United States to other countries. To restrict or encourage exports, Congress can

Accepted Answer

To restrict exports, Congress can set export quotas, which limit the quantity of a product that can be exported. This would be the most effective measure in restricting the flow of technologically advanced products and data from the United States to other countries. Assessing antidumping duties and imposing export taxes are also possible measures, but may not be as effective as setting export quotas. Doing nothing would not address the issue at hand.

Question 16

Optima Medico Corporation, a U.S. firm, signs a contract with Pharma Beneficial, Ltd., a Canadian firm, to give Pharma the right to sell Optima's products in Canada. This is

Accepted Answer

This is a distribution agreement as it is an agreement between two companies whereby one company sells or distributes the products of another company within a specific geographic location.

Question 17

Call Center Corporation, a U.S. firm, owns property in India. The government of India seizes the property for a proper public purpose and pays Call Center just compensation. This is

Accepted Answer

Expropriation refers to the government seizure of private property for a public purpose, with payment of compensation. Confiscation implies taking control of the property without compensation. Defalcation refers to misappropriation of funds. Dumping refers to selling goods in foreign markets at prices lower than the domestic market prices.

Question 18

Wytex, Inc., a U.S. firm, and Findora Commercial, a Nigerian firm, are parties to a contract that specifies that the official language of the contract is English. This is

Accepted Answer

The specification that the official language of the contract is English is a choice-of-language clause.

Question 19

Vieux Carré S.A., a French firm, imports its goods into the United States and offers those goods for sale at "less than fair value." "Fair value" is the price of

Accepted Answer

The answer of Vieux Carré S.A., a French firm, imports...

Question 20

The United States taxes each barrel of imported oil at a flat rate. This is

Accepted Answer

A tax on imported oil is called a tariff. Tariffs are levied by governments to protect domestic industries and raise revenue. A flat rate tariff applies the same tax to every unit of a given product, in this case, every barrel of imported oil entering the United States.

Quiz 8: International Law in a Global Economy