Question 1

Weigh the strengths and weaknesses of the various methods that a business may use to ensure access to hard currency.

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Question 2

Under the Foreign Sovereign Immunities Act, a federal court would not have jurisdiction over a foreign nation unless:

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The Foreign Sovereign Immunities Act provides that a federal court would have jurisdiction over a foreign nation if the foreign government's actions constitute a commercial activity. This means that if a foreign government engages in commercial activities within the United States, such as conducting business or entering into contracts, they can be subject to jurisdiction in a US court. This is one of the exceptions to the general rule of foreign sovereign immunity, which otherwise protects foreign governments from being sued in US courts. Choices A, B, and D are not correct, as they do not accurately describe the circumstances under which a federal court would have jurisdiction over a foreign nation under the Foreign Sovereign Immunities Act.

Question 3

Identify countries that have views regarding the taxation of e-commerce that are most (or least) favorable to U.S. e-merchants.

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Question 4

Compare and contrast the partial sale, trade sale, and concession models of privatization.

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Question 5

Suppose that you plan to set up a subsidiary in a foreign country. Devise a list of the types of tax incentives you seek to accrue.

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Question 6

The difficulties associated with private political risk insurance include all of the following except :

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Private political risk insurance typically has a more streamlined and faster approval process compared to public insurance agencies, which often have more bureaucratic procedures.

Question 7

Weigh the relative benefits and detriments of changing from a sales tax to a value-added tax. What other information would be important to you in making this assessment?

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Question 8

Write a memo to the legislature advocating the adoption of a particular tax exemption system.

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Question 9

Weigh the relative benefits of political risk insurance from government agencies and private insurers.

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Question 10

Write a treaty provision regarding the taxation of e-commerce.

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Question 11

Compare and contrast different types of passive investments and the risks and benefits associated with each.

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Question 12

Explain the differences among the three main theories of compensation for government takings of foreign-owned properties.

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Question 13

Presume that you are considering investing in a foreign business/industry that is about to undergo government privatization. Draft a set of negotiation objectives you wish to address with the government.

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Question 14

Considering the different types of currency risk associated with foreign transactions, which is most salient for a U.S. business?

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Question 15

Compare and contrast the traditional and modern traditional theory of takings.

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Question 16

Political risk or investment insurance is available in the United States through a U.S. government agency known as:

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The correct government agency that provides political risk or investment insurance in the United States is the Overseas Private Investment Corporation (OPIC). The other choices are not valid agencies.

Question 17

Explain and assess the different methods that a business may employ to reduce the political risk associated with a foreign investment.

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Question 18

California Agricultural Aircraft Services, Inc. (CAAS) is a California corporation headquartered in Sacramento. CAAS leases aircraft to crop dusting businesses through California. CAAS entered into a contract with Shànghai Aircraft Company (SAC), a state-owned enterprise organized pursuant to the laws of the People's Republic of China. The contract provided for the manufacture by SAC and purchase by CAAS of ten crop dusting aircraft at a price of U.S. $2.1 million, a savings of approximately $200,000 compared to crop dusting aircraft available from other manufacturers. One of the aircraft delivered to CAAS was subsequently leased to Central Valley Crop Dusting, Inc. (CVCD), a California corporation. One month later, this aircraft crashed during a CVCD spraying operation resulting in a complete loss of the aircraft and serious injuries to the pilot. The pilot stated that the engine lost power and then caught on fire while he was attempting an emergency landing. Subsequent investigations by federal and state authorities determined the sole cause of the crash to be catastrophic engine failure. CVCD and its pilot subsequently initiated litigation in the San Joaquin County Superior Court against CAAS, claiming breach of numerous provisions within the lease agreement, strict product liability and negligence. CAAS immediately notified SAC regarding the litigation and requested indemnification, but SAC did not respond to this request. CAAS is now contemplating joining SAC as a co-defendant to CVCD's lawsuit. What defense could SAC assert to the exercise of personal jurisdiction by the San Joaquin County Superior Court? What does this defense provide? Would this defense be successful in this case? Why or why not?

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Question 19

Draft a model law (plan or treaty) for government privatization. This may be done with an eye toward privatizing through national or foreign investment.

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Question 20

Assess the arguments for and against taxing e-commerce at an international level as opposed to a domestic level.

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Quiz 18: The Legal Environment of Foreign Direct Investment