Deck 5: The Political,legal,and Regulatory Environments

Question 1

A recent rash of antitrust actions brought in the United States against foreign companies has raised concerns that the United States is violating international law as well as the sovereignty of other nations.

Answer 1

True

Question 2

A patent holder retains all rights for the life of the patent even if the product is not produced or sold.

Answer 2

True

Question 3

If a foreign company is taken over by the host country government,and some form of compensation is paid,"confiscation" has occurred.

Answer 3

False

Question 4

A "civil-law country" is one in which the legal system reflects the structural concepts and principles of the Roman Empire in the sixth century.

Question 5

The requirement that all restaurants declare that the meat is "halal" is based on Islamic Laws.

Question 6

A key issue is global patent protection for software.Although copyright law protects the computer code,it does not apply to the idea embodied in the software.

Question 7

Flush with dollars from oil exports,the Russian government lifted all currency controls and made the ruble freely convertible in world markets.

Question 8

Kleptocracy refers to rampant corruption and bribery.

Question 9

Nippon Paper Industries was found guilty in a U.S.court of conspiring with other Japanese companies to raise fax paper prices in the United States.

Question 10

British Petroleum,British Airways,and Rolls-Royce were some of the companies that were privatized under so-called Thatcherite economics.

Question 11

India,Pakistan,Malaysia,Korea,and Japan have common-law jurisdictions.

Question 12

Antitrust laws in the United States and other countries are designed to combat restrictive business practices and to discourage competition.

Question 13

Now that Latvia has joined the Euro zone it is expected that higher interest rates will promote further economic growth.

Question 14

To establish ownership of a written,recorded,performed,or filmed creative work,it is necessary to apply for and be granted a patent.

Question 15

A trademark gives the inventor of a product the exclusive legal right to make,use,and sell an invention for a specific period of time.

Question 16

If a foreign company is taken over by the host country government,and some form of compensation is paid,"expropriation" has occurred.

Question 17

The high level of political risk currently evident in Russia can be attributed in part to excessively low taxes on business operations.

Question 18

"Sharia" and "haram" are important concepts in civil-code laws,which are commonly practiced in Middle Eastern countries.

Question 19

Affluent Russians can now shop at Versace,Burberry,Bulgari,and other exclusive brands.

Question 20

When many nations reach advanced stages of economic development,their governments declare that any practice or policy that restrains free trade is legal.

Question 21

The United Nations Conference on International Trade Law (UNCITRAL)has also been a significant force in the area of arbitration.

Question 22

The governmental action to dispossess a foreign company or investor is known as:

A)compensation.
B)confiscation.
C)expropriation.
D)internationalization.
E)nationalization.

Question 23

What do value added taxes (VAT)encourage in countries such as China?

A)They make trademarks and copyrights more valuable.
B)They result in cross-border shopping and smuggling.
C)They make it harder to bribe officials.
D)They protect companies from antitrust scrutiny.
E)Global companies refrain from offering bribes.

Question 24

Brazil is not among the emerging market countries who have signed the New York Convention.

Question 25

Despite the positive publicity,the phrases used to describe the arbitrary exercise of state power in Russia include all of the following except:

A)state capitalism.
B)political culture.
C)renationalization.
D)kleptocracy.
E)managed democracy.

Question 26

Bureaucracy is listed as a political risk category by:

A)BERI (Business Environment Risk Intelligence).
B)PRS Group.
C)EIU (Economist Intelligence Unit).
D)WTO (World Trade Organization).
E)OPIC (Overseas Private Investment Corporation).

Question 27

A company hoping to protect its trade secrets from being stolen by a foreign company can seek relief under the TRIPs agreement if both companies do business in GATT signatory countries.

Question 28

Any company doing business outside the home country should first carefully study the ________ in the target country.

A)political culture
B)nationalization
C)political risk
D)jurisdiction
E)sovereignty

Question 29

Various types of political risk insurance to U.S.companies is provided by:

A)BERI (Business Environment Risk Intelligence).
B)PRS Group.
C)EIU (Economist Intelligence Unit).
D)WTO (World Trade Organization).
E)OPIC (Overseas Private Investment Corporation).

Question 30

If an American businessperson pays a Russian customs agent a $20 cash "processing fee" to avoid delay in leaving Russia,the businessperson has violated the Foreign Corrupt Practices Act (FCPA).

Question 31

According to U.S.laws,there is no restrictions on remittances of royalties received abroad based on the commercial negotiation between licensor and licensee.

Question 32

Located in The Hague,the International Court of Justice (ICJ)is the judicial arm of the:

A)United States.
B)European Union.
C)United Nations.
D)Netherlands.
E)United Kingdom.

Question 33

Under the Alternative Fines Act,fines imposed on individuals may not be paid by their employer or principal.

Question 34

What type of international disputes would be taken before the International Court of Justice?

A)disputes between two nations
B)disputes between two companies
C)disputes between a company and a nation
D)disputes between a citizen of one country and a company from a different country
E)disputes between profit and non-profit organizations

Question 35

In Saudi Arabia,the Communication and Information Technology Commission (CITC)was ready to restrict BlackBerry services citing security concerns since the location of RIM (Research in Motion)servers were in Canada.

Question 36

Formation of a cartel like OPEC,consisting of oil-producing companies,would most likely be illegal in the United States.

Question 37

Denmark ranks highest in bribery as listed by the Corruption Perceptions Index (CPI)by Transparency International in 2010.

Question 38

After Fidel Castro took power in Cuba in 1959,his government seized control of American property without paying compensation.Coca-Cola,DuPont,Texaco,and dozens of other American companies have filed claims against Cuba seeking financial settlements.Which of the following terms most specifically describes the action Castro took against these companies?

A)nationalization
B)confiscation
C)expropriation
D)internationalization
E)deportation

Question 39

The European Court of Justice,based in Luxembourg,is the European Union's highest legal authority.

Question 40

Categories of political risk listed by EIU (Economist Intelligence Unit)include all of the following except:

A)war.
B)political turmoil.
C)bureaucracy.
D)corruption.
E)crime.

Question 41

Any Western country doing business in Malaysia or the Middle East should have an understanding of:

A)the French Civil Code.
B)Anglo-Saxon common law.
C)Islamic law.
D)the Uniform Commercial Code.
E)Roman law and the Napoleonic Code.

Question 42

Counterfeiting is:

A)the use of a formal legal document for illegal purposes.
B)the ownership of a written,recorded,performed or filmed creative work.
C)the unauthorized copying or production of a product.
D)the use of a product name that has different meaning than the original brand.
E)the use of a distinctive mark of a brand that is no longer producing the original brand.

Question 43

The unauthorized publication or reproduction of copyrighted work is referred to as:

A)associative counterfeit.
B)imitation.
C)mistake.
D)trade secrets.
E)piracy.

Question 44

The German civil-law tradition prevails in all of the following countries except:

A)Poland.
B)Hungary.
C)Czech Republic.
D)Scandinavia.
E)Germany.

Question 45

In West Africa,Burkina Faso,the Ivory Coast and Senegal are former French colonies,while Nigeria,Sierra Leone,and Ghana are former British colonies.Based on this information,which of the following would be correct?

A)Burkina Faso,the Ivory Coast and Senegal are civil-code countries,while Nigeria,Sierra Leone,and Ghana are common-law countries.
B)Burkina Faso,the Ivory Coast and Senegal are common-law countries,while Nigeria,Sierra Leone,and Ghana are civil-code countries.
C)In West Africa,Ivory Coast and Senegal are the only common-law countries.
D)All the West African nations mentioned above are likely to be civil-code countries.
E)All the West African nations mentioned above are likely to be common-law countries.

Question 46

Which of the following is not a common-law country?

A)India
B)Pakistan
C)Malaysia
D)Korea
E)Singapore

Question 47

In many parts of the world,sales of unauthorized videos of Hollywood movies cost the movie studios billions of dollars.When illegal copies of movies are made,what form of intellectual property has been wrongly appropriated?

A)patent
B)copyright
C)trademark
D)trade secrets
E)down loading

Question 48

The company receiving the most U.S.patents in 2009 was:

A)Samsung Electronics.
B)IBM.
C)Microsoft.
D)Canon.
E)Panasonic.

Question 49

What happens if a nation has allowed a case against it to be brought before the ICJ (International Court of Justice)and then refuses to accept a judgment against it?

A)American Arbitration Association can be sought for justice.
B)UN Conference on International Trade Law can be approached.
C)International Chamber of Commerce will be another source for seeking justice.
D)European Court of Justice can be approached if the country is in the European Union.
E)The plaintiff nation can seek recourse through the UN Security Council.

Question 50

In 2005,representatives from several wine regions in the United States and the EU signed a Joint Declaration to Protect Wine Place & Origin.In addition,a Wine Accord signed by the United States and EU bans the:

A)use of alcohol in public places.
B)purchase of wine from country of origin.
C)misuse of place names by marketers of wine products that do not originate in those places.
D)misuse of labels which does not include the origin of ingredients.
E)use of word "champagne" on wine made in the United States.

Question 51

Islamic law is a comprehensive code based in part on:

A)Anglo-Saxon common law.
B)Roman law and the Napoleonic Code.
C)the Uniform Commercial Code.
D)the Koran.
E)the French Civil Code.

Question 52

In a recent case,Revlon sued United Overseas Limited (UOL)in the U.S.District Court for the Southern District of New York for breach of contract.UOL countered by asking the court to dismiss the claim since they are not operating in that area.Revlon cited the presence of a UOL sign above the entrance to the offices of a New York company in which UOL had a 50-percent ownership.The court dismissed UOL's claim.This is an issue related with:

A)jurisdiction.
B)antitrust.
C)dilution of equity.
D)bribery and corruption.
E)intellectual property.

Question 53

The Uniform Commercial Code (UCC)is fully adopted by all U.S.states except:

A)Virginia.
B)North Dakota.
C)Wisconsin.
D)Louisiana.
E)Montana.

Question 54

Which of the following would constitute a copyright violation?

A)manufacturing and selling illegal videocassette copies of "Spiderman 2"
B)manufacturing and selling illegal copies of Levi "501" jeans
C)printing and selling illegal copies of Harry Potter books
D)A,B,and C are copyright violations.
E)A and B are copyright violations.

Question 55

Research in Motion (RIM),a Canadian company which markets BlackBerry Messenger,is very popular with politicians and business people because it offers advance encryption that provides data security.This can be a disadvantage for some countries because:

A)it is too complex to understand.
B)governments use strict control for security reasons.
C)the software can be easily downloaded.
D)the accessibility is very poor.
E)there is competition from local manufacturers.

Question 56

Only Sony can use the "Walkman" name on its line of personal stereos.This is because:

A)Sony has a patent on the Walkman.
B)"Walkman" is a registered Sony trademark.
C)Sony has copyrighted the Walkman name.
D)Sony's trade secrets are protected by international law.
E)Sony has an international business license.

Question 57

Harley-Davidson has applied for federal protection of an unusual form of intellectual property;the "soul-pleasing rumble" produced by its motorcycles.What type of protection is Harley-Davidson seeking?

A)copyright
B)trademark
C)license
D)patent
E)trade dress

Question 58

In accordance with GATT,new U.S.patents are granted for a period of ________ years from the filing date.

A)10
B)17
C)20
D)27
E)30

Question 59

Engineers at a company in a developing country study an American computer chip design,copy it,and produce identical chips that are then sold to local computer makers.What form of intellectual property has been wrongly appropriated?

A)patent
B)copyright
C)trademark
D)trade secrets
E)technological

Question 60

A formal legal document that gives an inventor the exclusive right to make,use,and sell an invention for a specified period of time is known as:

A)patent.
B)copyright.
C)trademark.
D)trade secret.
E)trade dress.

Question 61

When companies operate abroad in the absence of home-country legal constraints,the best choice for ethical conduct would be:

A)to ignore bribery and act as if it does not exist.
B)to maintain home-country ethics worldwide with no adaptations.
C)to abandon any attempt to maintain company ethics.
D)to have a product that is clearly superior to that of the competition.
E)to adapt in varying degrees to local customs and practices.

Question 62

Which of the following is true of the arbitration framework created by the New York Convention?

A)Signatory countries can require parties to an arbitration agreement to actually use arbitration.
B)Signatory countries recognize and can enforce arbitration judgments.
C)There are limited grounds for appealing arbitration decisions.
D)The grounds that are recognized are different than the typical appeals that are permitted in a court of law.
E)all of the above

Question 63

Which of the following is true about revised U.S.patent laws?

A)Patents are valid for 17 years after the patent is granted.
B)Patents are valid for 17 years after the patent is filed.
C)Patents are valid for 20 years after the patent is granted.
D)Patents are valid for 20 years after the filing date of the application.
E)Patents are valid as long as the product is manufactured.

Question 64

The U.S.Justice Department objected to a recent patent license agreement between S.C.Johnson & Sons and Bayer AG.The antitrust unit at the Justice department objected to:

A)the duration of the license.
B)the amount of royalties Johnson agreed to pay.
C)Bayer's attempts to circumvent FDA policies.
D)the exclusive nature of the license agreement.
E)the hostile arrangement between Bayer and Johnson.

Question 65

As part of their alliance relationship,Northwest Airlines and KLM Royal Dutch set air fare prices jointly and coordinate flight schedules.Normally,such behavior would be considered harmful to competition,but the U.S.government has granted the two airlines special exemptions from laws concerning:

A)intellectual property.
B)antitrust.
C)jurisdiction.
D)licensing.
E)arbitration.

Question 66

OPEC can be considered as a "cartel" which is a group of separate companies that collectively:

A)sets prices,controls output,or takes other actions to maximize profits.
B)dictates how other countries should use their products.
C)produces more products in order to beat the competition.
D)conducts activities that are considered illegal in the United States.
E)works on forming a union against management of other companies.

Question 67

Which of the following statements is correct?

A)The Paris Convention protects patents,the Berne Convention protects copyrights.
B)The Paris Convention protects copyrights,the Berne Convention protects patents.
C)The Berne Convention and Paris Convention are different names for the same thing.
D)Neither the Berne Convention nor the Paris Convention is concerned with intellectual property.
E)The International Union for the Protection of Literary and Artistic Property is different from the Berne Convention.

Question 68

The following criminal penalties may be imposed for violations of the FCPA'S (Foreign Corrupt Practices Act)antibribery provisions except:

A)corporations are subject to a fine of up to $2,000,000.
B)officers,directors,stockholders,employees,and agents are subject to a fine of up to $100,000.
C)fines imposed on individuals can be paid by their employer or principal.
D)the fines may be much higher,up to twice the benefit sought by the defendant.
E)in addition to fines,there may be imprisonment for up to five years.

Question 69

Consten,a French company,had exclusive rights to import and distribute German Grundig's electronic products into France.One of the competitors started bringing "parallel imports" into France illegally,importing Grundig product bought from a foreign supplier.Which of the following does not represent an action taken by different legal bodies?

A)Consten's complaint was upheld by two French courts.
B)The Paris Court of Appeals suspended the judgment of the French courts.
C)The Paris Court of Appeal's judgment was based on pending a ruling by the European Commission.
D)The European Commission ruled against Consten on the grounds that territorial protection proved to be damaging to the Common Market.
E)The European Commission ruled that German Grundig was in violation of the laws of the Common Market.

Question 70

Which of the following actions were approved both by the Antitrust Review in the EU as well as in the United States?

A)acquisition of Honeywell (U.S. )by GE (U.S. )
B)joint venture between music businesses of EMI group (Great Britain)and Time Warner (U.S. )
C)merger of Sony Music (Japan)and BMG (Germany)
D)merger of WorldCom (U.S. )and MCI (U.S. )
E)British Airways (U.K. )and American Airlines (U.S. )

Question 71

Italy recently introduced the Reguzzoni-Versace Law which is intended to regulate trade in textiles,leather,and footwear.All of the following statements pertaining to the law are correct except:

A)at least four stages of production should occur in Italy for the product to be labeled as "Made in Italy."
B)the countries in which the remaining production stages took place must be identified.
C)Brussels objected on grounds that the law conflicts with restrictions provided by the European Union.
D)EU regulators view the law as "protectionist."
E)the law is more stringent than the existing laws where only one production stage has to occur in the country of origin.

Question 72

The European Commission has jurisdiction over European-based companies as well as non-European ones that generate significant revenues in Europe.If Microsoft applies in Europe,the Commission has a right to all of the following except:

A)it can block a proposed merger.
B)it can block a proposed joint venture.
C)it can approve with minor modifications.
D)it can demand substantial concessions before granting approval.
E)it can refer serious matters to the UN Security Council.

Question 73

Which of the following is true about protection of computer software?

A)Copyright laws protect both the actual code and the idea embodied in the code.
B)Patent laws protect both the actual code and the idea embodied in the code.
C)Patent laws protect the actual code,while copyright laws protect the idea.
D)Copyright laws protect the actual code,while patent laws protect the idea.
E)License protects both the actual code and the idea embodied in the code.

Question 74

The United States has more lawyers than any other country in the world and is arguably the most litigious nation on earth.This is a reflection of:

A)the lack of class action lawsuits.
B)the low-context nature of the American culture.
C)the lack of spirit of confrontational competitiveness.
D)the fact that lawyers cannot undertake cases on contingency fee basis.
E)the fact that conflicts arise more in the United States.

Question 75

A company stands a better chance of having an international arbitration award upheld if its home-country government has signed:

A)the Paris Convention.
B)the Prague Convention.
C)the New York Convention.
D)the Vienna Convention.
E)the Geneva Convention.

Question 76

A proposed merger between two Swiss-based global pharmaceutical companies,Ciba-Geigy AG and Sandoz AG,would be subject to review by regulators from which of the following?

A)European Commission
B)UN Conference on International Trade Law
C)International Chamber of Commerce
D)International Court of Justice
E)none of the above

Question 77

Which of the following best describes the legal basis for protection of trade secrets,patents,and copyrights in the United States?

A)Trade secrets,patents,and copyrights are protected by federal statutes.
B)Trade secrets,patents,and copyrights are protected by state law.
C)Trade secrets are protected by state law,while patents and copyrights are protected by federal statutes.
D)Trade secrets are protected by federal statutes,while patents and copyrights are protected by state law.
E)Trade secrets,patents,and copyrights are not protected by any laws.

Question 78

The company receiving the most U.S.patents for the year 2009 is:

A)Microsoft.
B)Panasonic.
C)IBM.
D)Toshiba.
E)Intel.

Question 79

In order to fight piracy in China,Budweiser Beer's approach includes:

A)printing labels in Chinese.
B)changing color of beer cans.
C)beer cans in China have fluted edges.
D)printing labels both in Chinese and English.
E)making beer very cheap in price in China.

Question 80

According to the Transparency International's Corruption Perceptions Index scores for 2010,the country which was listed as most corrupt was:

A)Iraq.
B)Uzbekistan.
C)Chad.
D)Afghanistan.
E)Somalia.