Deck 33: International Business Transactions

Question 1

Export Industries Ltd., a Canadian Corporation with a factory in London, Ontario, agrees to sell a customer in Germany 2,000 microwave ovens FOB Lufnaia Airlines, Toronto, Pearson Airport. Which of the following statements is CORRECT?

A) Export is liable until the goods leave Toronto on the airline.
B) The customer's insurance covers the goods from the time they are separated out and loaded at the London, Ontario factory.
C) Title passes when the goods leave the London factory.
D) Export is only liable if their employees damage the goods prior to their arriving in Toronto.
E) Export is liable for the goods until they are loaded into Lufnaia Airlines.

Answer 1

E

Question 2

A seller in Ontario is sending goods by train to a buyer in Michigan under an FOB contract. The seller's obligations have been satisfied when:

A) the buyer is satisfied with the goods
B) the goods cross the border from Canada to the United States
C) the goods have been delivered to the buyer
D) goods that conform to the contract have been delivered to the rail company
E) the buyer has paid for the goods

Answer 2

D

Question 3

Unlike domestic contracts, international contracts are more likely to involve special problems such as

A) the usual buyer/seller language barrier.
B) the use of carriers, insurers, and banks.
C) the interference of foreign governments and their agents.
D) those created by export houses and freight forwarders.
E) complexities involving transportation, insurance, and financing.

Answer 3

E

Question 4

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

A) for the international electronic data exchange.
B) to the customs authorities in the country of importation.
C) acknowledges that the goods have been picked up by the shipping company.
D) facilitates the financing.
E) operates as a document of title.

Question 5

The best means of establishing the proper law for an international contract is

A) for the parties to leave it by default to the country of signing.
B) for the parties themselves to make express provision.
C) to accept the same country where the contract would be submitted for arbitration.
D) for the parties to leave it up to the rules of the court of jurisdiction.
E) for the parties to make it subject to a "neutral" law.

Question 6

International business transactions require, by definition, parties in

A) both private law and public law.
B) two or more different countries.
C) questions of public international law.
D) agreeing to bilateral treaties and trade agreements.
E) the NAFTA or the GATT treaties.

Question 7

Countertrade

A) requires consuming the goods acquired in exchange.
B) is where a seller agrees to accept trade credits instead of cash.
C) is where payment is made in goods produced or procured by the buyer.
D) is not worthwhile where exchange controls exist.
E) involves less risk than does the simple sale.

Question 8

Public international law is

A) law involving the relationships between states.
B) law involving the relations between citizens of different countries as it concerns their private activities.
C) law involving the relations between the citizens of different countries as it concerns their public activities.
D) law involving the relations between public entities from different countries.
E) law involving the relations between public officials of different countries.

Question 9

Among the world's trading nations, Canada ranks eighth in exports of merchandise and twelfth in exports of services. Regarding these exports,

A) they are dwarfed by the size of Canadian imports.
B) half go to the United States.
C) one- third go to the United States.
D) they are mostly raw materials and minerals.
E) the U.S., the worlds largest exporter, only exports three times as much as Canada.

Question 10

agent in the other country, 3) _ , 4) branch or subsidiary, 5) , and 6) multinational enterprise.

A) production facility; indigenous management
B) representative office; foreign investment
C) sales office; profit center
D) franchising; foreign investment
E) joint venture; regional office

Question 11

The proper "law of the contract" is the law of the country where the

A) contract is to be performed.
B) acceptance of the risk takes place.
C) defendant's business is located.
D) parties to the contract intended.
E) contract was made.

Question 12

Tariffs and import duties in Canada are

A) are for the most part determined unilaterally.
B) administered by Revenue Canada by virtue of the Customs Act.
C) no longer used with Canada's trading partners.
D) currently a major source of federal revenue.
E) used to protect domestic industry from high- tech competition.

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

A) brokerage fee.
B) export license.
C) agent's commission.
D) import duties.
E) inspection fee.

Question 14

Which fo the following has not promoted the interpretation and standardisation of international contractual terms?

A) the harmonisation of national commercial laws
B) the adoption of standard terms known as "Incoterms"
C) the continually evolving ongoing process for obtaining international standards
D) the recent adoption of uniform trade laws such as GATT
E) the widespread adoption of standard form contracts

Question 15

Non- tariff barriers for bringing commercial goods into Canada would include all EXCEPT

A) the enforcing of custom payments.
B) the ordering of import quotas.
C) the requiring of import license.
D) the long waits to get through Customs at the border.
E) the labeling and packaging requirements.

Question 16

A buyer in British Columbia purchases equipment from a manufacturer in China. The contract between the parties stipulates that any dispute between the parties arising out of the transaction will be decided by an arbitrator in Switzerland. The buyer is not satisfied with the quality of the equipment and brings the dispute before an arbitrator in Switzerland. What law will the arbitrator apply to resolve the dispute?

A) the law of British Columbia
B) the law of China
C) the law that has the closest connection with the contract
D) the law of Switzerland
E) the law that the parties agree should apply

Question 17

According to the text, the stages in the evolution of a multinational enterprise are: 1) foreign trade,
2) agent in the other country, 3) __________, 4) branch or subsidiary, 5)_______, and 6) multinational enterprise.

A) production facility; indigenous management
B) representative office; foreign investment
C) sales office; profit center
D) franchising; foreign investment
E) joint venture; regional office

Question 18

Which of the following is NOT one of the services that the Canadian government provides to assist Canadian companies to compete in the global market?

A) Some International aid programs require the money to be used on Canadian products and services.
B) The Export Development Council provide insurance, guarantees, and financial services for Canadian exporters.
C) The federal government provides tax credits for the export sales of Canadian products.
D) The embassy staff abroad collects commercial information and disseminate it to Canadian business.
E) Canadian International Development Agency require a substantial Canadian content.

Question 19

Which of the following documents is NOT usually required for an export sale?

A) invoice
B) insurance certificate
C) customs declaration
D) contract of sale
E) bill of lading

Question 20

To an international seller of goods, the currency used to denominate the price should be currency and the currency to be paid in should be currency.

A) a convenient; U.S. dollar
B) a hedge; ones own domestic
C) a stable; a hedge
D) a stable; a freely convertible
E) a standard "hard"; the same

Question 21

The abbreviation EXW in relation to international trade means the seller should deliver the goods to the buyer's home.

Question 22

Foreign Direct Investment to a Canadian investor

A) would involve owning the stock in a Canadian holding company.
B) is seldom obtained through the establishment of a foreign branch or subsidiary.
C) is where the investor's purpose is to have an effective voice in the management of the enterprise.
D) is where one owns stock listed on a foreign stock exchange.
E) can be obtained by owning shares in a mutual fund devoting itself to foreign investments.

Question 23

Courts do not encourage forum shopping.

Question 24

The government is more restrictive on foreign ownership in some business sectors than in others. Which sector would have the LEAST restrictions?

A) film making
B) tourism
C) book publishing
D) banking
E) fishing

Question 25

Dumping is the process where

A) many consumers are alienated toward the product because of the quality.
B) domestic producers of similar products cannot compete on price.
C) the government is required to impose countervailing duties.
D) a foreign government provides special benefits to its producer in order to assist them to export into Canada.
E) a foreign firm sells goods in Canada at prices lower than it sells these same goods in its own domestic market.

Question 26

Where it is determined that a country has dumped its goods in another country, the recipient country may impose countervailing duties.

Question 27

The practice whereby goods are sold for prices that are below that for which the goods are sold in the country of origin, is called most favoured nation treatment.

Question 28

The GATT and the WTO aim to reduce customs duties.

Question 29

Before a court assumes jurisdiction over an international business dispute, the issue must have a connecting factor.

Question 30

Anti- dumping duties may be levied when one country's goods are dumped in another country.

Question 31

An Import duties is a kinds of non- tariff barrier.

Question 32

Where it is determined that a country has dumped its goods in another country, the recipient country may impose trade related investment measures.

Question 33

The practice whereby goods are sold for prices that are below that for which the goods are sold in the country of origin, is called subsidy.

Question 34

Agricultural products fall within the scope of NAFTA.

Question 35

The disadvantage of commercial arbitration, as a method of resolving international disputes, as compared to court litigation is

A) the public nature of the proceedings.
B) the difficulty in having the awards of the court enforced.
C) that arbitrators generally have less experience in international law than judges.
D) the forfeiture of opportunity to be in one's own "home" court.
E) the slowness in making decisions.

Question 36

NAFTA currently allows anti- dumping and countervailing duties on imported goods between Canada and the U.S. However, in the long term, NAFTA is requiring both countries to

A) establish common rules on subsidies and on anti- competitive practices such as dumping.
B) ensure each other that the national laws of the other country are being constantly updated.
C) apply its own anti- dumping and countervail laws.
D) voluntarily give restitution to each other's claims.
E) do a better job at policing their own borders.

Question 37

Which of the following is prohibited by the World Trade Organisation?

A) currency restrictions on cash imports from Canada
B) import quotas on beer from the United States
C) tariffs on imported steel from Malaysia
D) the creation of regional free- trade areas
E) licensing of international motor transport carriers

Question 38

The World Trade Organisation 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

A) to refer the dispute to the Free Trade Commission for settlement.
B) to submit to the International Compensation Board who will review the matter and publish a report with their recommendations.
C) by arbitration through an international arbitration panel.
D) to turn over the matter to the International Mediation Review Board.
E) a consultation and, if necessary, conciliation procedure- essentially a diplomatic solution.

Question 39

In a countertrade, the seller agrees to accept payment in the form of goods procured or produced by the buyer.

Question 40

The General Agreement on Tariffs and Trade (GATT) which came into existence in 1948, was superceded in 1995 by

A) several regional packs including NAFTA.
B) Tribunal Panels to adjudicate disputes.
C) the World Trade Organisation (WTO).
D) the most- favoured- nation (MFN) treatment.
E) series of "rounds" such as the Uruguay Round.

Question 41

Canada imposes import quotas on certain goods/products, including textiles.

Question 42

What test does Investment Canada apply in order to authorise a foreign acquisition of a large Canadian business?

Question 43

Why is it sometimes important to determine the country of origin of a good imported into Canada?

Question 44

When would a government typically impose measures to deal with dumping or export subsidisation? What measures might this government take?

Question 45

What is the proper law of an international contract?

Question 46

What are "Incoterms"?

Question 47

The WTO promotes the principle of "non- discrimination". What is the principle of non- discrimination? How does that principle affect "most- favoured nation treatment"? How does it affect quotas?

Question 48

Explain the doctrine of forum non conveniens.

Question 49

What is meant by the proper law of a contract?

Question 50

Barrier Exports Ltd., a Manitoba corporation, wants to enter into a contract to export furniture. They received proposals from several foreign companies, all of which have different shipping terms. The terms used include: FOB, EXW, CIF, DDP, FCA, FAS. Define three of these terms and rank them from the one which would likely be most expensive for Barrier Exports Ltd. to the one which would be least expensive.

Question 51

What significant extension of GATT took place at the conclusion of the Uruguay round in 1993? What new organisation took over in 1995 and what is its basic objective?

Question 52

In international disputes, what factors would the court consider in determining the intention of the parties regarding the proper law for the contract?

Question 53

Describe two different ways international business disputes can be resolved.

Question 54

Explain what a Canadian court would do to determine whether to permit the enforcement of a judgment obtained in a foreign country.

Question 55

International transactions result in a wide variety of legal relationships. Name some of the contractual relationships.

Question 56

Regarding foreign investment, which is the distinction between a portfolio investment and a direct investment?

Question 57

In the exporting of services, one area of considerable risk is the transfer of technology and the sale or use of intellectual property. Explain and give examples of how this is true.

Question 58

What is the proper law of an international contract?

Question 59

What information would you expect to see on the invoice used in export transaction?

Question 60

Define and explain the term counter- trade.

Question 61

Explain the test that is applied in Canada before the foreign acquisition of a large Canadian business is authorized.