Deck 14: Employment Sale of Services

Question 1

The Uruguay Round of GATT did not result in any significant agreements in regard to trade in services.

Answer 1

False

Question 2

Mutual Recognition Agreements (MRA) are aimed at reducing trade barriers in specific industries.

Answer 2

True

Question 3

The leading exporter of services in the world is Japan.

Answer 3

False

Question 4

Approximately 20% of the world trade is in the service sector.

Question 5

Generally, it is easier to find financing for a service export than a product export.

Question 6

The General Agreement on Trade in Services (GATS) contains a most favored nation principle that is similar to that found in GATT.

Question 7

One criticism of the General Agreement on Trade in Services (GATS) is that it does not contain any provisions for increasing the participation of developing countries in trade in services.

Question 8

The General Agreement on Trade in Services (GATS) does not address the international movement of labor.

Question 9

Over half of world trade is handled through sales representatives and distributors.

Question 10

The employment at will doctrine states that all express employment contracts may be terminated at the will of either party.

Question 11

In Germany, the dismissal of an employee can only occur after consultation with a Worker's Council.

Question 12

In Russia, the Russian Labor Code makes it relatively simple for an employer to terminate employment.

Question 13

The World Trade Organization has enacted strict standards for the regulation of labor.

Question 14

The EU European Works Council Directive requires all companies within Europe to institute employee councils in order to provide information and consultation on workforce layoffs and relocations.

Question 15

A non-partnership clause in an independent contractor contract makes it clear that all rights to research and intellectual property rights are to revert to the employer after the contract has expired.

Question 16

The distinction between a dependent and independent agent is important because different tax and labor liabilities are engendered by the distinction.

Question 17

The relationship between a company and its foreign sales representative is known as a commercial agency arrangement.

Question 18

A del credere relationship is one in which an agent guarantees its customer's payments to the principal.

Question 19

In countries like France, a decision not to renew an agency contract is construed as a termination requiring remuneration.

Question 20

In an agency relationship, generally the sales contract is between the principal and the purchaser.

Question 21

In a distributor relationship, generally the sales contract is between the principal and the purchaser.

Question 22

EU law generally views clauses that prohibit a distributor from selling within the territory of another distributor as restrictive trade practices.

Question 23

In regard to distribution agreements, generally, most developing countries allow the contracting parties full freedom to contract and will enforce most restrictive clauses.

Question 24

A non-competition clause in a distribution agreement restricts the territory in which a distributor can sell the principal's product.

Question 25

The Federal Trade Commission regulates advertising in the United States.

Question 26

National self-regulation is the predominant form of policing advertising disputes in Italy.

Question 27

American courts have held that U.S. security laws cannot be applied extraterritorially.

Question 28

The International Organization of Securities Commissions (IOSCO) was established in order to facilitate cross border security offerings and listings by multinationals.

Question 29

In Russia, the fundamental accounting assumption is that financial statements are reviewed so that they are a "true and fair view of financial position, performance, and changes in the financial position of a company".

Question 30

The sale of services in OECD countries account for approximately what percent of the business sector in those countries:

A) 30-40%
B) 40-50%
C) 50-60%
D) 60-70%
E) 70-80%

Question 31

The international sale of services include all of the following except:

A) Tourism
B) Sale of computer hardware
C) Consulting
D) Licensing agreements

Question 32

The Trans-Atlantic Business Dialogue is a non-governmental effort aimed at promoting international cooperation in the area of:

A) Protection of personal data
B) Encryption
C) Intellectual property protection
D) None of the above
E) All of the above

Question 33

In the United States, the service sector accounts for approximately ____ percent of the GNP and ____ percent of employment:

A) 50; 50
B) 60; 40
C) 70; 75
D) 85; 90

Question 34

All of the following service sectors were largely ignored during the Uruguay round of GATT except:

A) Telecommunications
B) Health and education services
C) Energy services
D) Environmental services

Question 35

The EU Directive on Distance Contracts was primarily designed to:

A) Regulate foreign service contracts in EU countries
B) Protect EU consumers from foreign parties
C) Increase service exports of EU countries
D) Promote service imports into EU countries

Question 36

The foundation of the American employment relationship is the:

A) Notion of employment as a property right
B) Lifetime employment
C) Employment at will doctrine
D) None of the above

Question 37

Under the conversion contract in France, a dismissed employee receives:

A) Enhanced governmental unemployment benefits
B) Educational opportunities
C) Severance payments based on seniority
D) A & B only
E) All of the above

Question 38

The development of international norms applicable to labor issues is primarily associated with:

A) International Labor Organization
B) International Federation of Labor
C) World Trade Organization
D) None of the above

Question 39

All of the following trade agreements have included labor clauses except:

A) USMCA
B) EU
C) WTO
D) All of the above have included labor clauses

Question 40

European Union Directive 86/653 provides that agency contracts should provide for a minimum notice of termination. The Directive sets a reasonable notice period at:

A) One month per year of service through the sixth year and six months thereafter
B) One month per year of service through the eighth year and eight months thereafter
C) One month per year of service through the tenth year and ten months thereafter
D) One month per year of service with no cap

Question 41

National agency termination laws are referred to as:

A) Red clause statutes
B) Evergreen statutes
C) Clean and Free statutes
D) Just cause statutes

Question 42

The ________ offers a fee-based service that locates foreign import agents and distributors on behalf of US exporters:

A) International Chamber of Commerce
B) Eximbank
C) Agency for International Development
D) International Trade Administration

Question 43

A dealer who buys goods in order to resell them in his own name is known as a:

A) Foreign sales representative
B) Foreign sales agent
C) Foreign distributor
D) A & B only
E) All of the above

Question 44

Contractual clauses in a distribution agreement that require the distributor or licensee to purchase other items along with the licensed product are known as:

A) Tying clauses
B) Price fixing clauses
C) Non-competition clauses
D) Addition clauses
E) None of the above

Question 45

In the United States, anyone injured by false advertising has a right to private action under the:

A) Tilley Act
B) Lanham Act
C) Hoot-Smalley Act
D) Rodgers Act
E) None of the above

Question 46

Security laws in the United Sates are administered by the:

A) International Organizations of Security Commissions
B) United States Security Commission
C) Chicago Mercantile Board
D) Securities and Exchange Commission

Question 47

The GATT body that focuses on internationalization issues in accounting services is:

A) Working Party on Professional Services
B) International Financial Accounting Council
C) Council for Trade in Services
D) International Accounting Standards Council
E) Financial Accounting Standards Board

Question 48

The movement to harmonize accounting standards and financial reporting is being led by:

A) Financial Accounting Standards Board
B) International Accounting Standards Committee
C) Council for Trade in Services
D) International Financial Accounting Council

Question 49

Under the EU Directive on Distance Contracts, when a supplier has met his obligations with regard to information, a consumer may withdraw from a distance contract without penalty within:

A) 3 days
B) 7 days
C) 30 days
D) 3 months

Question 50

Briefly describe some of the obstacles an employer faces in attempting to terminate an employee in France and Germany.

Question 51

Describe at least five issues that an international agency contract should address.

Question 52

Describe the two-pronged test used to determine whether U.S. securities laws will be applied extraterritorially.

Question 53

Describe three types of clauses in a foreign distribution agreement that need to be carefully drafted in order to pass foreign governmental scrutiny?

Question 54

Apparent authority is when a principal (company) gives express authorization to its agent to undertake certain tasks.

Question 55

One of the most important decisions a small to medium-sized exporter makes is the selection of a foreign distributor.

Question 56

U.S. Commercial Services maintains a database of foreign distributors.

Question 57

Under European law, an exporter may restrict a distributor's sales to the distribution territory assigned to the distributor in the Distribution Agreement.

Question 58

Consignment is the arrangement where an exporter sells goods to a foreign importer but allows the importer to return the goods for a full refund if the goods are not resold the goods within 6 months.

Question 59

The most convenient way of avoiding the prohibition on territorial restrictions in European Union law is through a block exemption.

Question 60

After the expiration of the duration term of a distribution contract if the exporter does not renew the contract it may be liable to pay an indemnity or damages under some European laws.

Question 61

A best efforts clause requires the exporter to provide support to the Distributor.

Question 62

A non-partnership clause in a distribution contract helps characterize the relationship as simply one between a seller and a buyer.

Question 63

Just-in Case contracting is based on sending supplies quickly on an as needed basis allowing purchasers to maintain lower inventories of the supplied goods.

Question 64

The European Union has "evergreen laws" that protect employees, as well as independent commercial agents.

Question 65

Under Italian law, principals and agents each must pay 5% of the commissions or other payments into the country's social security fund.

Question 66

An "escape clause" allows either the principal or agent to cancel their contract for "just cause."

Question 67

A del credere relationship is generally recognized when the agent guarantees its customer's payments to the principal.

Question 68

A management agreement allows a manufacturer-exporter to manage a foreign company or a division within the company.

Question 69

European Union Directive 86/653 provides that an agency contract should be in writing and expressly state the agent's marketing area.

Question 70

It is important for a principal-exporter to include a detailed (grounds for termination) default or termination clause in its agency contract so that it can avoid or minimize indemnity or damage payments under EU "evergreen laws."

Question 71

In 2009, the House of Lords was renamed the United Kingdom Court of Appeals.

Question 72

The meaning of agency varies from country to country.

Question 73

The amount of an indemnity or damages to be paid upon the termination of an agency or distribution relationship is fixed by a schedule maintained by the European Union Commission.

Question 74

An exporter has the following choice in gaining a "non-employment" presence in a foreign country:

A) Commercial Agent
B) Non-Exclusive Sales Representative
C) Distributors
D) All of the Above
E) A & C Only

Question 75

Some of the duties assigned to distributors include:

A) Marketing of products
B) Loyalty (non-competition with exporter)
C) Sell goods in its own name
D) All of the Above
E) A & C Only

Question 76

Matching

-Confidentiality Clause

A) Requires distributor to be other items than he product
B) Focus on customer satisfaction
C) Protects trade secrets of manufacturer-exporter
D) Placing distribution centers closer to customers
E) Distributor agrees to challenge exporter's IPR

Question 77

Matching

-Validity Clause

A) Requires distributor to be other items than he product
B) Focus on customer satisfaction
C) Protects trade secrets of manufacturer-exporter
D) Placing distribution centers closer to customers
E) Distributor agrees to challenge exporter's IPR

Question 78

Matching

-Just-in-Case

A) Requires distributor to be other items than he product
B) Focus on customer satisfaction
C) Protects trade secrets of manufacturer-exporter
D) Placing distribution centers closer to customers
E) Distributor agrees to challenge exporter's IPR

Question 79

Matching

-TQM

A) Requires distributor to be other items than he product
B) Focus on customer satisfaction
C) Protects trade secrets of manufacturer-exporter
D) Placing distribution centers closer to customers
E) Distributor agrees to challenge exporter's IPR

Question 80

Matching

-Tying Clause

A) Requires distributor to be other items than he product
B) Focus on customer satisfaction
C) Protects trade secrets of manufacturer-exporter
D) Placing distribution centers closer to customers
E) Distributor agrees to challenge exporter's IPR