ESSENTIALS OF THE LEGAL ENVIRONMENT TODAY, 5E

ROGER LEROY MILLER

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CHAPTER 10

INTERNATIONAL LAW IN A GLOBAL ECONOMY

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LEARNING OBJECTIVES

1. What is the principle of comity, and why do courts deciding disputes involving a foreign law or judicial decree apply this principle?

2. What is the act of state doctrine? In what circumstances is this doctrine applied?

3. Under the Foreign Sovereign Immunities Act, in what situations is a foreign state subject to the jurisdiction of U.S. courts?

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LEARNING OBJECTIVES (CONT’D)

4. What are three clauses commonly included in international business contracts?

5. What federal law allows U.S. citizens, as well as citizens of foreign nations, to file civil actions in U.S. courts for torts that were committed overseas?

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INTERNATIONAL LAW

• If a nation violates international law and persuasive tactics fail, other countries have no recourse except coercive actions.• Sources of International Law• International customs• Treaties and international agreements• International organizations

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INTERNATIONAL LAW

• International Principles and Doctrines• The principle of comity – one nation will

defer to and give effect to the laws of another country, as long as they are consistent with the law of the accommodating nation• Nations comply because the legal

procedures are compatible

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INTERNATIONAL LAW

• The act of state doctrine provides that the judicial branch on one country will not examine the validity of public acts committed by a recognized foreign government within its own territory.• When a foreign government takes private property• Doctrine may immunize a foreign government’s actions

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INTERNATIONAL LAW

• Foreign Sovereign Immunities Act (FSIA)• A foreign state is not immune from the

jurisdiction of U.S. courts when the foreign state:• Has waived its immunity either explicitly or by

implication• Has engaged in commercial activity within the U.S. or

in commercial activity outside the U.S. that has “a direct effect in the United States”

• Has committed a tort in the U.S. or has violated certain international laws

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DOING BUSINESS INTERNATIONALLY

• Exporting• Can take 2 forms: direct and indirect• Distributorships• The National Export Initiative (NEI) –

effort to increase U.S. exports• Export Promotion Cabinet • Export-Import Bank of the United States increased

financing available to small and medium-sized businesses by 50%

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DOING BUSINESS INTERNATIONALLY

•Manufacturing Abroad• Alternative to direct or indirect exporting• Licensing• Subsidiaries

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REGULATION OF SPECIFIC BUSINESS ACTIVITIES

•Nations impose laws to restrict or facilitate international business.• Investment Protections• Export Controls

1. Export quotas2. Restrictions on technology exports3. Incentives and subsidies

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REGULATION OF SPECIFIC BUSINESS ACTIVITIES

• All nations have restrictions on imports.• Import Controls• Prohibited goods• Quotas and tariffs• Political factors• Antidumping duties• International Trade Commission (ITC)• International Trade Administration (ITA)

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REGULATION OF SPECIFIC BUSINESS ACTIVITIES

•Minimizing Trade Barriers• The European Union (EU)• The North American Free Trade

Agreement (NAFTA)• The Central America-Dominican Republic-

United States Free Trade Agreement (CAFTA-DR)• The Republic of Korea-United States Free

Trade Agreement (KORUS FTA)• Other free trade agreements

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INTERNATIONAL CONTRACTS

• Contract Clauses• Choice-of-language clause• Forum-selection clause• Choice-of-law clause• Force majeure clause

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INTERNATIONAL CONTRACTS

• Civil Dispute Resolution• United Nations Convention on the

Recognition and Enforcement of Foreign Arbitral Awards (New York Convention)• Court will compel parties to arbitrate if

four conditions are met.

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PAYMENT METHODS

• Because international contracts involve greater financial risks, care should be taken in drafting contracts•Monetary Systems• Letters of Credit• Parties to a letter of credit• The value of a letter of credit

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EXHIBIT 10.1

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

U.S. LAWS IN A GLOBAL CONTEXT• Extraterritorial application of certain U.S.

laws• U.S. Antitrust Laws• Sherman Act

• International Tort Claims• Alien Tort Claims Act (ATCA)

• Antidiscrimination Laws• Age Discrimination in Employment Act• Americans with Disabilities Act• Title VII of the Civil Rights Act

© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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