Question 1

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.

Accepted Answer

GATT's most-favored nation provision does not prohibit nations from giving preferential treatment to developing nations or entering into free trade areas.

Question 2

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

Accepted Answer

While the doctrine of sovereign immunity grants immunity to foreign states and their instrumentalities from the jurisdiction of domestic courts, there are exceptions to this rule that allow for such jurisdiction in certain circumstances.

Question 3

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

Accepted Answer

NAFTA established a free trade area for the United States, Mexico, and Canada. It did not include Central America.

Question 4

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

Accepted Answer

International law is derived from international treaties, customs, and general principles of law recognized by civilized nations. The Code of Federal Regulations is a set of domestic regulations in the United States and does not create international law. International legal tribunals, such as the International Court of Justice and the International Criminal Court, interpret and apply international law, but do not create it.

Question 5

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.

Accepted Answer

Wholly owned subsidiaries can actually provide a higher level of control and protection over technology compared to other forms of international business entry such as joint ventures or licensing. Therefore, businesses may want to consider using them.

Question 6

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

Accepted Answer

In a foreign distributorship arrangement, the foreign distributor buys the goods from the manufacturer in the exporting country and then sells them in the importing country.

Question 7

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.

Accepted Answer

Expropriation of property by a foreign government for a public purpose, with the payment of just compensation, even without the consent of the owner, is generally considered consistent with international law, provided it is done in a non-discriminatory manner and in accordance with due process.

Question 8

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.

Accepted Answer

International courts typically require the consent of the parties involved in a dispute to have jurisdiction. Without such consent, these courts generally cannot compel states to participate in proceedings or enforce judgments.

Question 9

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

Accepted Answer

The United States adopted the CISG as federal law in 1986, and it applies to international sales of goods between parties from different countries that have ratified the CISG. In such cases, the CISG supersedes the UCC. However, if the parties have explicitly opted out of the CISG and chosen the UCC to govern their contract, then the UCC would apply instead.

Question 10

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

Accepted Answer

Confiscation of property without adequate payment is considered a violation of international law. Additionally, if the confiscation is for non-public purposes, it may also be considered a violation of human rights.

Question 11

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

Accepted Answer

The answer of The International Monetary Fund was established in...

Question 12

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

Accepted Answer

This risk is known as expropriation or nationalization, where the host nation's government takes over private assets. It is a significant risk to foreign investors, and proper measures such as political risk insurance and investment treaties can be taken to mitigate this risk.

Question 13

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.

Accepted Answer

The choice-of-forum clause dictates where (in which jurisdiction or court) a legal dispute will be adjudicated, while a choice-of-law clause determines which country's law will be applied to the dispute.

Question 14

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

Accepted Answer

The United States did not withdraw from participation in the GATT in 1993. Instead, it helped to negotiate and sign the Uruguay Round agreements, which transformed GATT into the World Trade Organization (WTO) in 1995.

Question 15

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

Accepted Answer

Unlike domestic law, international law lacks a central enforcement mechanism, and the jurisdiction of international courts is often limited to those states that have consented to their authority. Therefore, international law is not easily enforced.

Question 16

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.

Accepted Answer

The statement is true. The Wall Street Reform and Consumer Protection Act of 2010 does extend the extraterritorial reach of the antifraud provisions of the 1933 and 1934 securities acts for actions brought by the United States and the SEC.

Question 17

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.

Accepted Answer

The answer of The concept of sovereign immunity provides that...

Question 18

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.

Accepted Answer

The Constitution requires the president to obtain the advice and consent of the Senate, with a two-thirds vote, in order to enter into a treaty. This is outlined in Article II, Section 2 of the Constitution.

Question 19

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

Accepted Answer

Parties may opt out of the CISG's application under Article 6 by explicitly excluding its governance in their contract.

Question 20

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

Accepted Answer

A foreign agent is used by multinational enterprises to facilitate international sales and assist in marketing, but they typically do not take title to merchandise or bear the risks associated with sales. This is more commonly done by import/export brokers or freight forwarders.

Quiz 46: International Business Law