MARIANNE M. JENNINGS
7th Ed.
Its Legal, Ethical, and
Global Environment
Chapter 7
International Law
Copyright ©2006 by West Legal Studies in Business
A Division of Thomson Learning
Sources of International Law
• Common Law.
– England.
– United States.
• Civil or Code Law.
– Statutes or codes are very detailed; little
reliance on precedent.
– France, Germany, Spain.
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Sources of International Law
• Islamic Law.
– Religious tenets integrated.
– Combination of Islamic law and
colonizers’ laws.
• Former Communist countries.
– In Transition.
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Sources of International Law
L
E
S
C
A
N
T
Language.
Environment & Technology.
Social Organization.
Contexting.
Authority.
Nonverbal Behavior.
Time Concept.
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Sources of International Law
• Contracts for the International Sale of
Goods (CISG).
– Governs the sale of goods internationally.
– Currently adopted by 53 countries,
including the United States.
– Similar to Article 2 of the Uniform
Commercial Code.
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Sources of International Law
• International Monetary Fund (IMF)
and the World Bank.
– The IMF is designed to foster International
trade through currency stability. The IMF
creates the International Bank for
Reconstruction and Development (The World
Bank) which allows members to draw on line
of credit to stabilizes currency exchange rates.
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Sources of International Law
• Treaties.
– General Agreement on Tariffs and Trade
(GATT).
– Multilateral treaty with 125 member nations
that created the Work Trade Organization
(WTO).
• European Union (EU).
– Created by treaty of Rome.
– Set as major goal unified monetary and
fiscal policies and the creation of the Euro
Dollar.
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Sources of International Law
• North American Free Trade
Agreement (NAFTA).
– Became effective in 1994.
– Treaty between Canada, Mexico and
the United States.
– Set to eliminate all Act tariffs between
member countries with 15 years.
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Sources of International Law
• Prohibition on Trade: Individual
Nation Sanctions.
• International Monetary Fund.
• The Kyoto Treaty.
• OPEC.
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Foreign Corrupt Practices Act
• Case 7.1
U.S. v. Kay (2004).
– Did the Defendants payments to Haitian
officials “assist in obtaining or retaining
business”?
– What benefit did ARI gain from these
transactions?
– In your opinion, did Defendants violate
the FCPA?
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Principles
• Sovereign Immunity.
– Each nation is sovereign.
– Other nations do not take jurisdiction over a
country’s internal operations, laws, and
people.
– Does not apply to contractual relations.
• Expropriation: Act of State Doctrine.
– Act of foreign governments are recognized as
valid whether or not such actions would be
legal in the United States.
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Expropriation
• Case 7.2
Riedel v. Bancam (1986).
• What are the bases for his suit against
Bancam in Ohio?
• Does Mexico have sovereign immunity for
its expropriation of the bank?
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Protection for U.S. Property
• Hickenlooper Amendment to Foreign
Assistance Act of 1962.
– Allows president to sanction countries that
take property of U.S. companies.
• Treaties afford protections.
• Overseas Private Investment
Corporation (OPIC) is federal agency
that provides insurance for U.S.
businesses against expropriation.
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Repatriation
• Repatriation
– Limits on removal of profits from country
where they are earned.
• Considered acts of state; cannot be litigated.
• Forum Non Conveniens
– Dismisses cases brought in wrong court
• Example: India was proper forum to bring suit
against Union Carbide for what happened in
Bhopal, India.
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Conflicts of Law
• Case 7.3 Carnival Cruise Lines
v. Shute (1991).
– Shute was injured while the ship was
in international waters.
– She filed suit in her home state of
Washington.
– Court affirmed dismissal of the case
because the tickets had Florida as the
forum.
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Conflicts of Law
• Conflicts of Law.
– No two countries have the exact same
commercial laws.
– Some countries have no commercial codes.
• Uniform Commercial Code is widely used.
• Resolving Conflicts of Law.
– If the parties agree, autonomy controls.
– If parties have not agreed, law of country
where the contract is performed will apply.
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International Protections
• Antitrust Laws.
– All firms doing business here are
subject to antitrust jurisdiction.
– Export Trading Company Act.
• Allows joint ventures among
competitors.
• For business in other countries.
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International Protections
• Protections for Intellectual
Property.
– International Protections of
Intellectual property are constantly
being refined Worldwide registration
of patents, trademarks and
Copyrights may be within reach.
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International Protections
• Criminal Law Protections
– All those present in a country are
subject to that country’s criminal law
– Subject to all regulations as well
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