Deck 47: International Business Law

Question 1

Like domestic law, international law can be easily enforced, because international courts have compulsory jurisdiction.

Answer 1

False

Question 2

Confiscation and expropriation of property by a foreign government violate generally observed principles of international law.

Answer 2

False

Question 3

NAFTA establishes a free trade area among the United States and Mexico but not Canada.

Answer 3

False

Question 4

Governments can use nontariff barriers to give local industries a competitive advantage.

Question 5

Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, and the Age Discrimination in Employment Act apply to U.S.citizens employed abroad by U.S.employers or by foreign companies controlled by U.S.employers.

Question 6

The World Bank established the Multilateral Investment Guarantee Agency to encourage increased investment in developing nations.

Question 7

Sovereign immunity is absolute immunity from the courts of a host country.

Question 8

Under U.S.law, the CISG supersedes the UCC whenever either could apply.

Question 9

Most nations submit their international disputes to the International Court of Justice.

Question 10

Assume the U.S.and Holland are GATT signatories.Under the "most-favored nation" provision, the U.S.tariff on Dutch imported tobacco must be at least as low as that charged on tobacco from any other nation.

Question 11

Businesses wishing to safeguard their technology while doing business in the international sector would not want to consider the use of wholly owned subsidiaries.

Question 12

OPIC was established to facilitate the participation of U.S.private capital and skills in the economic and social development of countries in transition from nonmarket to market economies.

Question 13

Lawsuits based on the commercial activities of a foreign state conducted in the U.S.are subject to the jurisdiction of state or federal courts in the U.S.

Question 14

A specialized U.N.agency or a U.N.organ may seek an advisory opinion from the International Court of Justice, but an individual or a sovereign state may not.

Question 15

The act-of-state doctrine provides that to maintain international relations and trade, a host country must refrain from imposing its laws on a foreign sovereign nation present within its borders.

Question 16

The U.S.Constitution provides that all valid treaties have the legal force of a federal statute.

Question 17

The World Bank established the MIGA to eliminate the practice of dumping.

Question 18

An expropriation, or nationalization, occurs when a government seizes foreign-owned property or assets for a public purpose and pays the owner just compensation for what is taken.

Question 19

The flow of trade is affected by trade barriers on imports and exports.

Question 20

A treaty is an agreement between or among independent nations.

Question 21

Under the provisions of the Foreign Sovereign Immunities Act:

A)all foreign governments are immune from suit by U.S.citizens.
B)U.S.citizens in U.S.courts can always sue most foreign governments.
C)a car used by a foreign embassy in Washington can be seized to settle a judgment against a driver.
D)U.S.courts may take jurisdiction in a suit against a foreign country for commercial acts by that government that have a direct effect on the United States.

Question 22

Because there is no international currency, nations have sought to ease the flow of capital between them.

Question 23

Only approximately 50 nations have become parties to the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States.

Question 24

A letter of credit is a promise by a buyer's bank to pay the seller, provided certain conditions are met.

Question 25

Under the Foreign Sovereign Immunities Act, a foreign sovereign is:

A)immune from all suits in the United States.
B)not immune from suits in the United States involving commercial acts.
C)not immune from any type of suit in the United States.
D)None of the above.

Question 26

Fines imposed on individuals for violating the Foreign Corrupt Practices Act may be paid, either directly or indirectly, by the domestic concern on whose behalf they acted.

Question 27

A goal of the EU is to promote progress by establishing an economic and monetary union.

Question 28

The European Community was formed through a merger between the Common Market, the European Coal and Steel Community, and the European Atomic Energy Community.

Question 29

Section 1 of the Sherman Act provides that U.S.antitrust laws shall have a narrow reach.

Question 30

The Foreign Corrupt Practices Act of 1977 (FCPA):

A)makes it unlawful for an American company or its agents to offer or give anything of value to a foreign official for the purpose of influencing the official's acts or decisions.
B)requires that American companies in foreign countries adhere to the same health and safety standards in that country as they do in the U.S.
C)outlaws American business from engaging in business in countries, which, as determined by the Department, have governments "repugnant to American law and social values."
D)None of the above.

Question 31

An "antidumping" statute:

A)is applied to both foreign companies and domestic companies which charge a higher price for products sold in the U.S.than the price charged abroad.
B)has been declared invalid because of the inherent discrimination against foreign corporations.
C)is administered by the FTC.
D)makes illegal the sale of exported goods from one country to another country at less than normal value.

Question 32

A country may issue foreign citizens visas that permit them to enter the country for identified purposes or for specific periods of time.

Question 33

International contracts should specify the contract's official language and define all of the significant legal terms it incorporates.

Question 34

A multinational enterprise wishing to exploit a patent may choose to sell a foreign company the right to use the property rather than entering the foreign market itself.The sale of such rights is licensing.

Question 35

Peterson, an American exporter, sells lumber to a Japanese importer, using a documentary letter of credit.Typically in this situation, the correspondent bank will be in Japan.

Question 36

The International Anti-Bribery and Fair Competition Act of 1998 was enacted to expand the Foreign Corrupt Practices Act to include:

A)payments made to "secure any improper advantage" from foreign officials.
B)all foreign persons who commit an act in furtherance of a U.S.bribe while in the U.S.
C)domestic officials of international organizations.
D)All of the above.

Question 37

The Foreign Corrupt Practices Act makes it illegal for an American company to offer or pay money to a foreign official to influence a decision of that official even if the offer is not accepted.

Question 38

When a treaty and a right declared under a subsequent federal statute conflict, the treaty must prevail.

Question 39

The legal issues inherent in domestic commercial contracts also arise in international contracts.

Question 40

The judicial branch of the United Nations is called the World Court.

Question 41

The European Community was the predecessor to the:

A)ICJ.
B)GATT.
C)CISG.
D)EU.

Question 42

The seller contracts directly with the buyer in the other country under a:

A)multilateral trade agreement.
B)direct export sale.
C)flow of trade.
D)None of the above.

Question 43

The European Union currently has how many full members?

A)10.
B)15.
C)25.
D)27.

Question 44

How is "sovereign immunity" interpreted under U.S.law today?

A)It gives absolute immunity to a foreign nation from all U.S.laws.
B)It gives immunity to foreign governments for commercial activity carried on in the U.S.by the foreign government.
C)It exempts the public acts of a foreign government, such as those involving diplomatic activity, from all U.S.laws.
D)All of the above.

Question 45

Under a distributorship:

A)the distributor, like an agent, does not take title to the merchandise it receives.
B)the producer bears many of the risks connected with commercial sales.
C)both the producer and the distributor must take special care to ensure that the arrangement does not violate the antitrust laws of their respective governments.
D)multinational enterprises wishing to exploit an intellectual property right sell to a foreign company the right to use such property.

Question 46

A number of countries have joined together in Europe, Asia, Africa, and Latin America to coordinate their regional economies.Which of the following has NOT been an objective of such cooperation?

A)Creation of "regional" legislatures with actual powers.
B)Lowering of tariffs or removing other trade barriers.
C)Promoting common trade policies among members.
D)Establishing an economic and monetary union.

Question 47

NAFTA's objectives include to:

A)create trade barriers between the U.S., Mexico, and Canada.
B)increase investment opportunities.
C)enforce real property rights.
D)All of the above.

Question 48

The ICJ is:

A)the Internal Court of Jurisdiction of the U.N.to deal with disputes within the United Nations organization.
B)a U.S.court created specifically to deal with international contracts.
C)the judiciary branch of the United Nations, which has advisory jurisdiction if requested by a U.N.organ or specialized U.N.agency.
D)one of the many regional trade communities.

Question 49

The international organization which seeks to stabilize currency exchange is the:

A)United Nations Exchange Branch.
B)International Court of Justice.
C)United States Treasury.
D)International Monetary Fund.

Question 50

Foreign issuers of securities:

A)who issue securities in the United States must register them under the 1933 Act unless an exemption is available.
B)whose securities are sold in the secondary U.S.market need not register under the 1934 Act.
C)are exempt from U.S.securities laws.
D)are brought under the antifraud provisions of U.S.securities laws if there is conduct in the United States relating to a violation of federal securities laws; the effects relating to such violation would not be sufficient to cause jurisdiction.

Question 51

The European Union (EU):

A)has approximately 500 million citizens.
B)currently has 32 members.
C)has officially admitted Japan to full membership.
D)is now closed to further membership.

Question 52

Which of the following is correct with respect to the act of state doctrine?

A)It allows foreign countries to be liable for their torts.
B)It allows state governments in the United States to ignore treaties entered into by the United States.
C)It provides that the judicial branch of a nation should not question the validity of actions taken by a foreign government within that foreign sovereign's own borders.
D)It is a very recent addition to U.S.law.

Question 53

Why do governments impose tariffs?

A)To protect domestic industries from foreign competition.
B)To raise revenues.
C)To attempt to improve their balance of trade.
D)Governments impose tariffs for all of the above reasons.

Question 54

In Saudi Arabia v.Nelson, the court held:

A)under the Foreign Sovereign Immunities Act, a foreign state is presumptively under the jurisdiction of the U.S.courts.
B)the Foreign Sovereign Immunities Act provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country.
C)whether a state acts in the manner of a private party is a question of motivation.
D)in determining whether a state engages in commercial activity, the question is whether the foreign government is motivated by profit.

Question 55

The __________ established the MIGA to encourage increased investment in developing nations.

A)World Bank.
B)Regional Trade Communities.
C)United Nations.
D)NAFTA.

Question 56

The Sherman Act:

A)applies to acts committed overseas by U.S.corporations.
B)would not apply to an act committed in the United States by a foreign corporation.
C)would not apply to an act overseas by a 100 percent-owned foreign subsidiary of a U.S.corporation.
D)never applies to acts committed outside the U.S.

Question 57

The United Nations Commission on International Trade Law:

A)was established by the World Trade Organization in 1956.
B)is made up of 70 member states.
C)develops model laws, such as the CISG and the Model Law on Electronic Commerce.
D)All of the above.

Question 58

The basic purpose of __________ is to facilitate the flow of trade by establishing agreements concerning potential trade barriers such as import quotas, customs, export regulations, subsidies, and import fees.

A)WTO
B)Foreign Sovereign Immunities Act.
C)World Bank.
D)None of the above.

Question 59

Any business that engages in transactions involving the movement of goods, information, money, people, or services across national borders is referred to as a:

A)multinational enterprise.
B)joint venture.
C)flow of trade enterprise.
D)flow of capital business.

Question 60

The General Agreement on Tariffs and Trade (GATT):

A)attempts to establish agreements on the practice of "dumping."
B)is a general international antitrust agreement.
C)provides no technical assistance or training for developing countries.
D)has successfully rid international trade of tariffs.

Question 61

Assume a foreign nation has seized all of the property of an American corporation.The nation has assumed ownership of the property for a public purpose and has paid the American corporation what it believes to be fair compensation.Under these facts, the seizure of property is best described as:

A)expropriation.
B)confiscation.
C)force majeure.
D)eminent domain.

Question 62

Kelly has just been appointed the manager of a company that has begun the direct export of its product.What precautions should he take to assure that the company would in fact be paid for its products when the company has never dealt with the buyers before and is new to the international legal environment?

Question 63

Which of the following is true regarding the Foreign Corrupt Practices Act of 1977?

A)It applies only to corporations whose securities are registered under the Securities Act of 1934.
B)It applies only to corporations engaged in foreign commerce.
C)The Act makes it illegal to bribe foreign officials to obtain business.
D)All of these are correct.

Question 64

Define and discuss the doctrine of "sovereign immunity." Discuss how the Foreign Sovereign Immunities Act of 1976 has codified this area of law.Give examples of how the Act works.

Question 65

Assume that Denmark, a member of the European Community, is contemplating the enactment of a protective tariff for its fledgling CD industry due to domestic political and economic pressures.Assume further that the EC has a tariff that it has also enacted for all CD manufacturers within the EC that is considerably lower than the one that is being proposed in Denmark.The policy behind the lower EC tariff is to promote freer trade even at the risk of destroying some of the weaker manufacturers in that organization.In this situation:

A)Denmark could enact the higher tariff since EC members give up no authority to the organization in regulating trade and business practices.
B)Generally, when EC economic policies conflict with the laws of member nations, EC law will prevail.Thus, Denmark's tariff may be illegal.
C)Denmark could petition the United Nations Council of Economic Policy and if it concurs with Denmark, the EC tariff policy would be overridden.
D)Assuming Denmark is a signatory to the WTO, Denmark could retain its higher tariff since the purpose of the WTO is to protect domestic industries by promoting higher tariffs.

Question 66

A foreign company, partially owned by that foreign government, manufactures televisions in the foreign country.The cost to the company for the manufacture of the product is the equivalent of $60 in the U.S.Because of excess production, the firm exports 50,000 sets to the United States where they are sold for $75 each.If the nearest rival U.S.-made set sells for $85, the action of the foreign company:

A)constitutes price-fixing.
B)violates the WTO's antidumping provisions.
C)violates the Sherman Act, because of the involvement of the foreign government in the company.
D)appears to be legal.

Question 67

Discuss how an owner of intellectual property protects those rights in other countries.

Question 68

Which of the following is an objective of the European Union?

A)To create cultural diversity among the member nations to increase tourism.
B)To develop individual national autonomy on justice and home affairs.
C)To promote economic and social progress by creating an area without internal borders and by establishing an economic and monetary union.
D)None of the above.

Question 69

The United States and a Latin American country signed a treaty whereby the United States agreed to assist the Latin American country in controlling drug traffic.The United States, following the treaty, seized 100 square meters of land and bulldozed it, because it was a suspected haven of drug smuggling.The land in question was in Latin America, but belonged to an American citizen.Which of the following is correct?

A)The treaty will supersede any general Constitutional rights because the treaty gave specific authorization for the act.
B)The act was not offensive to the Constitution, because it occurred in Latin America.
C)Constitutional rights apply to people, not to property.
D)Constitutional rights supersede treaties.

Question 70

The U.N.Convention on Contracts for the International Sales of Goods (CISG) includes provisions relating to which of the following?

A)Interpretation and trade usage.
B)Intellectual property rights.
C)Obligations and remedies of sellers, but not buyers.
D)Sharing of profits.

Question 71

The Foreign Sovereign Immunities Act specifically provides that a foreign state shall be immune from neither federal nor state court jurisdiction if the suit is based on which of the following?

A)A commercial activity conducted in the United States by the foreign state.
B)An act that the foreign state performed in the United States in connection with a commercial activity it carried on elsewhere.
C)A commercial activity performed outside U.S.borders that directly affects the U.S.
D)All of the above.
E)(a) and (c), but not (b).

Question 72

Assume the U.S.and the government of San Sebastian broke off diplomatic relations in a dispute over fishing rights.The U.S.blocked exports to San Sebastian.San Sebastian in turn seized and expropriated the assets of several U.S.companies located within the country.One of the companies, Continental Coffee, sued the U.S.government and the government of San Sebastian charging violation of the U.S.Constitution on the grounds of deprivation of property without due process of law.How will the company fare in its case against the U.S.? against San Sebastian? Explain your answer, providing reasons for your decision.

Question 73

"Normal value" is the price that would be charged for the same or a similar product in the ordinary course of trade for domestic consumption in the exporting country, under the World Trade Organization's:

A)tariff regulations.
B)nontariff barrier.
C)Antidumping Code.
D)export controls.

Question 74

Azurzerapi Corporation plans to start marketing products worldwide.What forms of multinational business enterprise should it consider? What are the main characteristics of each form?

Question 75

Which of the following is an objective of the North American Free Trade Agreement (NAFTA)?

A)Create trade barriers to the movement of goods and services across the borders.
B)Promote conditions of fair competition in the free trade area.
C)Decrease investment opportunities in certain parts of the area.
D)Provide adequate and effective enforcement of all types of property rights.

Question 76

In international business transactions, a documentary letter of credit:

A)is a method of payment for goods that reduces the seller's risk from the possibility that the goods will be shipped, but not paid for.
B)is a type of bill of lading.
C)is a guarantee by the seller's bank that it will pay the price of the exported goods if the seller breaches the contract.
D)All of the above.

Question 77

The various forms of MNE include:

A)NASDAZ.
B)NFTRA.
C)EU.
D)Wholly owned subsidiaries.

Question 78

Which of the following is true with regard to securities regulation in foreign markets?

A)Anti-fraud provisions apply where there is conduct in the U.S.relating to a violation of the federal securities laws.
B)Foreign issuers of securities must register them in the U.S.unless an exemption is available.
C)No specific regulations are allowed because of the act of state of doctrine.
D)None of the above.

Question 79

The U.S.Immigration and Naturalization Service issues various types of visas to persons who:

A)are temporarily visiting the U.S.for business or pleasure.
B)enter the U.S.to perform services that the unemployed in this country cannot perform.
C)are transferred to the U.S.by their employers.
D)All of the above.
E)None of the above.

Question 80

The CISG specifically excludes sales of which of the following?

A)Goods bought for personal, family, or household use.
B)Ships or aircraft.
C)Electricity.
D)All of the above.