Deck 46: International Business Law

Question 1

Confiscation of property by a foreign government for nonpublic purposes without adequate payment violates generally observed principles of international law.

Answer 1

True

Question 2

The United States has, in 1993, withdrawn from participation in the General Agreement on Tariffs and Trade
(GATT).

Answer 2

False

Question 3

The choice-of-forum clause in an international business transaction will dictate what country's law the forum will apply should a legal dispute arise.

Answer 3

False

Question 4

The Constitution authorizes the president to enter into treaties having the legal force of a federal statute without having to go through the legislative process or without having to receive advice or consent of the federal legislative branch of government.

Question 5

The Wall Street Reform and Consumer Protection Act of 2010 extends the extraterritorial reach of the antifraud provisions of the 1933 and 1934 securities acts with respect to actions brought by the United States and the SEC.

Question 6

NAFTA established a free trade area for the United States, Mexico, and Central America.

Question 7

Parties to an international sales contract may expressly exclude CISG governance from their contract.

Question 8

Under the doctrine of sovereign immunity, domestic courts, in certain circumstances, will exercise jurisdiction over a foreign state or its instrumentalities.

Question 9

A foreign agent is used by multinational enterprises to take title to merchandise and bear the risks connected with international sales.

Question 10

Although under GATT's most-favored nation provision all signatories must treat each other as favorably as they treat any other country, nations may give preferential treatment to developing nations and may enter into free trade areas.

Question 11

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

Question 12

The concept of sovereign immunity provides that a nation's judicial branch should not question the validity of the
actions a foreign government takes within its own borders.

Question 13

In a foreign distributorship arrangement, the foreign distributorship in the importing country purchases the goods from the manufacturer in the exporting country.

Question 14

One risk of investing in foreign states is the risk that the host nation's government may take the investment property.

Question 15

Expropriation of property by a foreign government for a public purpose with the payment of just compensation, but without the consent of the owner violates generally observed principles of international law.

Question 16

The International Monetary Fund was established in 1945 to promote international monetary cooperation and now has approximately 50 member countries.

Question 17

Under U.S.law, the CISG does supersede the UCC whenever the CISG applies.

Question 18

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

Question 19

International courts have compulsory jurisdiction to resolve international disputes, and they have the authority to resolve an international dispute even if the parties to the dispute do not specifically accept the court's jurisdiction over the matter.

Question 20

International law is derived from the Code of Federal Regulations and international legal tribunals.

Question 21

Since its inception in 1946, the U.N.Secretariat has registered and published approximately how many treaties that expressly or indirectly concern international business?

A)100
B)550
C)30,000
D)75,000

Question 22

One of the objectives of NAFTA is to promote conditions of fair competition in the United States, Canada, and
Mexico.

Question 23

The Sherman Act:

A)protects U.S.exports from privately imposed restrictions seeking to exclude U.S.competitors from foreign markets.
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 an U.S.corporation.
D)never applies to acts committed outside the U.S.

Question 24

Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, and the Age Discrimination in Employment Act do not apply to U.S.citizens employed abroad by U.S.employers or by foreign companies controlled by U.S.employers.

Question 25

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

Question 26

An objective of the EU is to promote economic and social progress among member states.

Question 27

The International Court of Justice consists of nine judges, only two of whom can be from the same sovereign state.

Question 28

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 in the United States.

Question 29

The judicial branch for the United Nations is called the International Court of Justice.

Question 30

The European Community (EC) preceded the European Union (EU) and worked to remove trade barriers between member nations.

Question 31

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

Question 32

Sovereign states and individuals may request and receive advisory opinions from the International Court of Justice.

Question 33

A frequently used device to protect domestic business and achieve other social and political goals is the tariff, which is a duty imposed on goods moving into or out of a country.

Question 34

Even if a U.S.company does not export goods, it is influenced by international business through competition from other countries.

Question 35

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

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

Question 36

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

Question 37

The Foreign Corrupt Practices Act of 1977 (FCPA):

A)makes it unlawful for an American company to pay money gifts 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 these.

Question 38

The Overseas Private Investment Corporation (OPIC):

A)is a private company that analyzes and monitors the political climate of countries in which American companies do business.
B)offers insurance to American companies to diminish the risks of expropriation of their property in the countries in which they do business.
C)was successful in lobbying Congress to repeal the Foreign Sovereign Immunities Act which had, in the past, prevented American companies from seeking relief from countries which had expropriated their property.
D)None of these.

Question 39

The General Agreement on Tariffs and Trade is now called the WTO.

Question 40

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 41

Which of the following statements is true?

A)The International Court of Justice renders binding decisions and advisory opinions to the many nations that submit their disputes to it.
B)The International Court of Justice is the judiciary branch of the United Nations, and its judges are elected by a majority of both the U.N.General Assembly and the U.N.Security Council.
C)The International Court of Justice was formed as the judiciary branch of the EC.
D)The International Court of Justice is very useful, in part because nations as well as private individuals and corporations may be parties to an action before the court.

Question 42

Which of the following is not an exception to the act of state doctrine?

A)A sovereign waives its right to raise the act of state defense.
B)A foreign sovereign contracts to sell a service.
C)A foreign sovereign's decides to grant a license to export a natural resource.
D)There is a claim to property based on the assertion that a foreign state confiscated the property in violation of the principles of international law.

Question 43

The European Community was the predecessor to the:

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

Question 44

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

A)Foreign issuers who issue securities in the United States are exempt from the registration requirements of the 1933 Act.
B)Some foreign issuers may avoid registration under the 1934 Act by providing the SEC with copies of all information material to investors that they have made public in their home country.
C)Antifraud provisions of U.S.securities laws do not apply to securities sold in foreign commerce if the courts have found either conduct or effects in the U.S.relating to a violation of securities law.
D)U.S.securities laws have no application to foreign issuers.

Question 45

International agreements in the form of treaties:

A)require approval by a majority vote of the United States Senate.
B)require approval by a two-thirds vote of the United States Senate.
C)require no approval from Congress.
D)are explicitly mentioned in the U.S.Constitution as a power given solely to Congress.

Question 46

The ICJ is:

A)the Internal Court of Justice 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 judicial branch of the United Nations, having voluntary jurisdiction over nations.
D)one of the many Regional Trade Communities.

Question 47

A(n) is a clause apportioning the liability and responsibilities of the parties in the event of an unforeseeable and
Unavoidable occurrence, such as a typhoon, tornado, or other disaster.

A)act of state
B)OPIC
C)letter of credit
D)force majeure

Question 48

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 49

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 these.

Question 50

The World Trade Organization (WTO):

A)is an agency providing insurance to firms involved in international trade.
B)is a general international antitrust agreement.
C)seeks to facilitate the flow of trade by establishing agreements on potential trade barriers.
D)has successfully rid international trade of tariffs.

Question 51

The International Anti-Bribery and Fair Competition Act of 1998 expands the FCPA to include:

A)influencing any act or decision of a foreign official, political party, or political official for the purpose of influencing any decision of that person or party in his or its official capacity.
B)payments made to "secure any improper advantage" from foreign officials.
C)all foreign persons who commit an act in furtherance of a foreign bribe while in the foreign country.
D)inducing a foreign official to use his influence to affect a decision of a foreign government to assist a domestic concern in obtaining business.

Question 52

The CISG was developed by the:

A)UNCITRAL.
B)National Conference of Commissioners on Uniform State Law.
C)EU.
D)World Trade Organization.

Question 53

The act of state doctrine:

A)allows foreign countries to be liable for their torts.
B)allows state governments in the United States to ignore treaties entered into by the United States.
C)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)is a very recent addition to U.S.law.

Question 54

What is "dumping"?

A)The disparaging of the products of a competitor in international trade.
B)A company's selling of its product cheaper in its home market than in its export market.
C)A company's engaging in overproduction in order to flood a market so as to drive down prices.
D)A company's selling of its product for less than normal value in a foreign market.

Question 55

Export controls or restrictions usually result from:

A)national defense considerations.
B)foreign policy considerations.
C)the desire to protect scarce national resources.
D)All of these.

Question 56

In international business transactions, a documentary letter of credit:

A)is a method of payment of 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 these.

Question 57

From a commercial standpoint, which of the following is considered the most important international treaty?

A)The ICJ
B)The EC
C)The WTO
D)The IMF

Question 58

The U.S.belongs to multinational treaties that try to coordinate the application of member nations' intellectual property laws.A principal treaty protecting intellectual property is:

A)the Berne Convention for the Protection of Literary and Artistic Works.
B)the Vienna Patent Treaty.
C)the Paris Convention for the Protection of Copyrighted Works.
D)the Paris Trademark Registration Treaty.

Question 59

Which of the following is true about the European Union (EU)?

A)The EU is the predecessor to the European Community.
B)An objective of the EU is to promote economic and social progress and to establish an economic and monetary union among member nations.
C)The EU has officially admitted Japan to full membership.
D)The EU has ten full member nations and almost forty million citizens.

Question 60

How does a distributor differ from an agent?

A)The agent pays royalties to the multinational enterprise.
B)The distributorship shares profits with the multinational enterprise.
C)The distributor takes title to the merchandise it receives and thereby bears many of the risks connected with commercial sales.
D)The distributor has the power to enter into contracts on the principal's behalf, but the agent does not.

Question 61

The U.S.and the government of Mystic broke off diplomatic relations in a dispute over fishing rights.The U.S.blocked exports to Mystic.Mystic 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 Mystic 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 Mystic? Explain your answer in detail, providing reasons for your decision.

Question 62

An increasing number of Americans enjoy French truffles and are willing to pay a premium price for the product.If the three leading French truffle firms meet in Paris and decide to raise prices in the American market by 15%, does this act violate the Sherman Act?

Question 63

Assume a foreign nation has seized all of the property of an American corporation.The foreign 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 64

The Foreign Sovereign Immunities Act specifically provides that a foreign state shall be immune from neither federal nor state court jurisdiction in certain circumstances.The circumstances include that the suit is based on:

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 United States.
D)All of these.

Question 65

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 these

Question 66

The United States and the country of El Guapo 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 El Guapo, but belonged to an American citizen.Which of the following is most accurate?

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 El Guapo.
C)Constitutional rights apply to people, not to property.
D)Constitutional rights supersede treaties.

Question 67

What is the basic purpose of the World Trade Organization (WTO)?

Question 68

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

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 the area.
D)Immediately eliminate all tariffs between the three countries covered by the agreement.

Question 69

Assume that Denmark, a member of the European Union, is contemplating the enactment of a protective tariff for its fledgling CD industry due to domestic political and economic pressures.Assume further that the EU has a tariff that it has also enacted for all CD manufacturers within the EU that is considerably lower than the one that is being proposed in Denmark.The policy behind the lower EU 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 EU members give up no authority to the organization in regulating trade and business practices.
B)Generally, when EU economic policies and rules conflict with the laws of member nations, EU 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 EU tariff policy would be overridden.
D)Assuming Denmark is a signatory to WTO, it could retain its higher tariff since the purpose of WTO is to protect domestic industries by promoting higher tariffs.

Question 70

Define and discuss the doctrine of "sovereign immunity." Discuss the Foreign Sovereign Immunities Act of 1976.

Question 71

Azurapi Corporation plans to start marketing products worldwide.What forms of multinational business enterprise are available? What factors should influence the decision on the form to use?

Question 72

The World Bank established the to encourage increased investment in developing nations.

A)Overseas Private Investment Corporation
B)World Trade Organization
C)Multilateral Investment Guarantee Agency
D)Commission on International Trade

Question 73

Americana Printing wishes to sell its products in a foreign country.However, it also wishes to retain some input over its operation in that country for quality control reasons.Which of the following forms of business would be the best for Americana?

A)A foreign distributorship
B)Direct sales
C)A licensing agreement
D)Creating a subsidiary in the foreign country

Question 74

The Convention on Contracts for the International Sales of Goods (CISG) includes which of the following provisions?

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

Question 75

Kelly has been appointed the manager of a company that has just 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 buyer before and is new to the international legal environment?

Question 76

A foreign company partially owned by the foreign government, manufactures televisions in the foreign country.The cost to the company for the manufacture of the product in the U.S.is the equivalent of $100.Because of excess production, the firm exports 5,000 sets to the United States where they are sold for $120 each.If the nearest rival U.S.-made set sells for $150, the action of the company:

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