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Utilizing your text, the Bible, and outside research, discuss three (3) biblical examples or principles that are reflected in today’s legal system and how they are relevant in today’s culture. You may also include examples of how our modern legal system does not mirror biblical situations or biblical principles.250-450 WordsLiuzzo, A. L., & Hughes, R. C. (2019). Essentials of Business Law (10th ed.). New York, NY: McGraw Hill Education.Chapter 1, Our System of Law; Chapter 5, Constitutional Law;Chapter 6, Administrative Law;Chapter 36, International Business Law; andExodus 18:13-26 (Court Structure); Romans 13:1-2, 4-5 (Ordained Authority).
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Chapter 36
International
Business
Law
©2019 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted
without the prior written consent of McGraw-Hill Education.
Global Business
Need for international law arose from factors such as:





Increasing volume of international trade and tourism.
Globalization of marketplace.
Growing incidence of multinational business organizations.
Cultural exchanges.
Impact of commercial technology.
English as language of business is increasing, BUT..
cultural differences, disparate legal systems, and
changing monetary exchange rates remain major
obstacles to business internationally.
©2019 McGraw-Hill Education.
36-2
What Is International Law?
International law: Broad study of legal systems
of major countries, treaties, practices, tariffs and
nontariff trade barriers in import and export.
Study of international law includes national and
international organizations regulating personal
and commercial activity that facilitate
international trade.
©2019 McGraw-Hill Education.
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Sources of International Law (1)
International laws result from historic trading
relationships among nations.
Efforts to negotiate peaceful solutions to
international disputes culminated in formation of
the League of Nations following World War I.
• The League was short-lived and failed to prevent
another war.
• United Nations: After World War II, world’s nations
organized a forum for peaceful negotiations that has
evolved into functions such as:
• International Labour Organization (IL), Food and Agriculture
Organization (FAO), and the General Agreement on Tariffs
and Trade (GATT).
©2019 McGraw-Hill Education.
Sources of International Law (2)
Practices and treaties are major sources of
international law, and are recognized in the
Statute of the International Court of Justice (The
Hague, Netherlands).
U.S Constitution (Article II) states treaties are
negotiated by the President and must be ratified
by two-thirds of the Senate present.
©2019 McGraw-Hill Education.
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Applying Other Countries’ Laws
Doctrine of Comity: Major legal principle
involved in international law which holds the
courts of one country should refrain from
deciding cases involving acts of persons from
another country.
• The doctrine is discretionary, and courts of individual
countries decide whether or not to apply it based on
facts of each case.
©2019 McGraw-Hill Education.
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International Trade Institutions
Trade among nations remains a vital ingredient
to the economic health of the world’s population.
• Nations are sovereign, create and interpret their own
laws. Goal is that trade should be governed by
transnational institutions, whose purpose is to maintain
legal and economic order in trade.
Transnational institutions are established
contractually by several countries that agree to
be legally bound by rules of the organization.
• Example: International Air Transport Association
(IATA).
©2019 McGraw-Hill Education.
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World Trade Organization (WTO)
General Agreement on Tariffs and Trade (GATT) (1947) was
entered into by a number of nations.
• GATT provided rules to ensure no discrimination in trade and process
for resolving international trade disputes.
World Trade Organization (WTO) (1995), tariffs had become
less commonplace, most nations recognize GATT was no
longer sufficient, thus formed WTO.
• WTO is responsible for overseeing implementation of all
multinational trade agreements negotiated now or in future.
• WTO (in addition to GATT) has authority for:
• GATS: The General Agreement on Trade in Services.
• TRIPS: Agreements on trade-related aspects of intellectual
property rights.
• TRIMS: Trade-Related Investment Measures.
©2019 McGraw-Hill Education.
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International Monetary Fund (IMF)
International Monetary Fund (IMF)(1944): established to
maintain a stable environment for economies and
currencies of members by providing protection against
large fluctuations in value of one currency to another.
IMF has generally performed its job well, BUT IMF has
come under great pressure due to various economic
downturns in several nations.
• IMF is criticized for failing to respond adequately to economic
challenges created in the early 1990s, subsequent to the
dissolution of the Soviet Union, and heavy borrowing by
developing countries during the mid-1990s.
©2019 McGraw-Hill Education.
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World Bank
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World Bank (1944): to provide relief to countries suffering
from World War II, International Bank for Reconstruction and
Development was created, which is now the World Bank.
• World Bank works closely with IMF to ensure developing
countries have access to funds to stimulate their economies.
World Bank has come under a great deal of criticism for:
• Providing funds to countries with corrupt regimes squandering
funds rather than provide real relief to their economies.
• Providing funds to developing countries, but without showing of
major improvements in these economies.
©2019 McGraw-Hill Education.
Regional Trade Organizations
and Agreements
North American Free Trade Agreement (NAFTA).
• Established to promote trade among United States, Canada, and
Mexico. Focus of NAFTA is strictly on economic trade, rather
than on political interrelationships among the three countries.
• NAFTA provides:
• NAFTA countries will ensure none of their national or local laws
discriminates against goods of the other countries.
• Each country will have greater market access within the borders
of the others.
• Some tariffs, import and export restrictions will be eliminated.
©2019 McGraw-Hill Education.
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European Union (EU)
European Union (EU)(1994), 12 countries in
Europe formed what eventually was to become
“Euroland,” an economic and political
integration of members into one entity.
• The European Union (EU) established a legal and political
relationship among its members promoting economic growth,
social and cultural affiliations.
• For example, the EU created a common currency the Euro (€).
The EU is comprised of 28 independent sovereign
countries known as member states.
• There are five official candidate countries: Iceland, Montenegro,
Republic of Macedonia, Serbia, and Turkey. The United
Kingdom recently voted to exit the EU, the first to do so (2017).
©2019 McGraw-Hill Education.
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International Legal
Environment
Companies conduct business in several
countries face challenge of having to comply
with a variety of legal systems that at times
conflict with one another.
United States requires foreign firms conducting
business in U.S. comply with all regulations that
govern American companies.
Many U.S. companies doing business
internationally face challenge of adapting to local
customs and practices.
©2019 McGraw-Hill Education.
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Example: International
Legal Environment (1)
Facts:
• Johnson Corp., a U.S. firm, entered into a contract with Li
Company, a Chinese firm, where Li Company agreed to
manufacture designer handbags for distribution.
• After it began selling the manufactured handbags, Johnson
Corp. learned Li Company did not obtain necessary permission
from the designer of the handbags, who owned the trademark.
Regardless of the law in China, Johnson Corp. would
be liable for trademark infringement, and for crime of
counterfeiting in the United States, unless they cease
selling the handbags bearing the designer’s logo.
©2019 McGraw-Hill Education.
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Example: International
Legal Environment (2)
Facts:
• Smirdorf, Inc., a Romanian automobile manufacturing company,
is opening a plant in the United States.
Smirdorf will be required to follow all Environmental
Protection Agency regulations pertaining to
emissions; all National Labor Relations Board
regulations pertaining to employees’ right to join
unions; and all Occupational Safety and Health
Administration regulations pertaining to employee
accident and sickness prevention and all local and
state laws, even though it is a company with
Romanian origin.
©2019 McGraw-Hill Education.
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Trade Sanctions
and Embargoes
Many governments place legal restrictions on trade to
achieve desired political results.
Trade sanction: Laws prohibiting trade with specific
countries, sometimes referred to as embargoes.
• These national activities are acceptable under international law
and are incorporated in the United Nations charter.
• UN Charter expressly allows trade sanctions and
embargoes by regional organizations, for example
Organization of American States, Organization for
African Unity, and EU.
©2019 McGraw-Hill Education.
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Export and Import Controls
Tariff: A tax, or other restriction, on imports or
exports to attain revenue and economic results,
such as protecting domestic industries or facilitating
production of certain crops.
Export licenses may be used as an adjunct to
national security.
Quota Systems: Countries, to maintain a positive
balance of trade (that is, the number of dollars of
exports exceeds that of imports), place restrictions
on the numbers and kinds of products that may
enter their nation.
©2019 McGraw-Hill Education.
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Governmental Actions
Many governments attempt to maintain control over
actions of foreign businesses operating within the host
country by controlling ownership of foreign company
assets.
Government Actions can take three forms:
• Expropriation: Act of host country’s taking title to all assets of the
foreign company.
• Confiscation: Host country’s taking title, involuntarily, to all the
assets of the foreign company.
• Domestication: Host country mandates at least partial ownership
of foreign company be sold to local citizens or companies prior to
foreign company’s conducting business in the host country.
©2019 McGraw-Hill Education.
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Boycotts
Boycott: When individuals refuse to purchase
goods made by businesses located in other
countries. This action may or may not be
supported by the government.
• Example: Morandim Corporation, a Canadian
company, manufactures chemicals and regularly sells
these to firms in the Middle East. Several of its Arabic
customers, organized a boycott and now refuse to
purchase Morandim chemicals unless the company
agrees to provide written documentation that it does
not conduct business with firms in Israel.
©2019 McGraw-Hill Education.
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Doing Business in
Foreign Countries
Organizations that decide to conduct business in
foreign countries must follow numerous laws
and regulations. These include:
• Foreign Corrupt Practices Act (FCPA);
• Treaty relating to Contracts for the International Sale
of Goods (CISG); and
• Foreign Sovereign Immunities Act (FSIA).
©2019 McGraw-Hill Education.
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Foreign Corrupt
Practices Act (1977)
Bribery: some countries allow acceptable and expected
payments made to individuals to secure their business.
• In the United States, however, this type of activity amounts
to bribery, which is both illegal and ethically unacceptable.
Foreign Corrupt Practices Act (FCPA), a federal law
established rules and restrictions for executives of
American companies relating to paying persons in
foreign countries to expedite business.
• FCPA has helped executives recognize what is and what is not
acceptable conduct for U.S. firms, irrespective of acceptable
ethical standards in the foreign country.
• FCPA makes it unlawful to bribe foreign government
officials to obtain or retain business.
©2019 McGraw-Hill Education.
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Contracts for International
Sale of Goods
United Nations Convention on Contracts for the
International Sale of Goods (CISG) was a United Nations
treaty drafted to establish a universal set of legal
procedures applied to contracts covering international
transactions.
Countries signing the treaty are bound to terms of CISG.
Since the United States has ratified this treaty, the CISG
supersedes the provisions of the Uniform Commercial
Code (UCC) in certain cases.
©2019 McGraw-Hill Education.
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Foreign Sovereign Immunities Act
36-23
Foreign Sovereign Immunities Act (FSIA) (1976), federal
law, established certain immunity of a foreign sovereign to
lawsuits in U.S. courts for acts occurring after 1976.
A U.S. court may allow a lawsuit against a foreign
sovereign nation to proceed provided plaintiff can prove
the foreign nation engaged in commercial activity:
• Occurred in the U.S. in connection with foreign activity;
• Occurred outside the U.S. caused a direct effect on U.S. commerce;
• Involved antitrust actions; expropriation, terrorism, or torture; or
other torts committed in the U.S.
©2019 McGraw-Hill Education.
International Law and
Intellectual Property
Intellectual property: Includes both artistic and
industrial property rights.
• Copyrights, patents, design rights and trademarks are
principal areas covered.
• Related to these rights is industrial “know-how” or
technology.
World Intellectual Property Organization (WIPO):
Specialized agency of United Nations; that
administers treaties concerning protection of
intellectual property rights.
• WIPO announced formation of a center for arbitration of
disputes involving intellectual property rights.
©2019 McGraw-Hill Education.
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Intellectual Property (1)
Copyrights
• Copyrights protect authors or creators of literary, artistic, or
musical works and computer programs.
• Copyright laws prohibit reproduction or alteration of an
author’s work without their permission.
• Copyrighted materials given at least minimal protection in most
countries.
Patents
• Patents are a legal monopoly granted by a nation to inventors for
a fixed period of years. Manufacturing, using, or selling a
patented product without permission from the inventor is illegal.
• A U.S. firm may take advantage of world markets by licensing
foreign firms to manufacture a patented product or use an
innovative manufacturing process in manufacture of a product.
©2019 McGraw-Hill Education.
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Intellectual Property (2)
Trademarks
• Trademarks, trade names, service marks, and
certification marks are valuable tools used by
businesses to identify their products and services.
• Treatment of trademarks in international commerce
does not greatly differ from domestic law.
• Trademarks are viewed as property and may be
transferred or licensed to others.
• Foreign licensees must meet certain product quality
requirements so the use of the mark does not deceive
consumers or decrease value of the mark to owners.
©2019 McGraw-Hill Education.
36-26
Chapter 6
Administrative
Law
©2019 McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted
without the prior written consent of McGraw-Hill Education.
Administrative Agencies
An administrative agency is a governmental
body responsible for the regulation and
supervision of a particular activity or area of
public interest.
Legislatures lack time and expertise to:


Make necessary rules to govern operations of
complex areas of our social and economic life.
Supervise the many details of complex areas on a
daily basis.
Legislatures delegate these tasks to
administrative agencies, or, regulators.
©2019 McGraw-Hill Education.
6-2
Organization of Governments
Our traditional constitutional governments
operate at federal, state and local levels.
Each level of government has three
branches:
• Legislative
• Executive
• Judicial
Each branch has specific duties and
powers.
©2019 McGraw-Hill Education.
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Legislative Branch
The legislative branch at all levels of
government consists of elected representatives
who have responsibility for passing laws
representing the will of the people.
• At the federal level, the two houses of Congress are:
• House of Representatives
• Senate
• At the state level, the legislative branch is often called
the general assembly.
• It consists of two houses (except in Nebraska).
• At the local level, the legislative branch is often called
a city or a county council (or similar name).
©2019 McGraw-Hill Education.
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Executive Branch
The executive branch at all levels of
government ensures all enacted legislation
is implemented or enforced.
• Federal level: Executive branch is headed by
the president.
• State level: Executive is the governor.
• Local level: Executive is the mayor, county
executive (or individual with similar title).
©2019 McGraw-Hill Education.
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Judicial Branch
The judicial branch of government determines if
there have been violations of law. It also
interprets law as to questions about what the law
means in particular situations.
• Federal level: District courts, appeals courts, and the
U.S. Supreme Court.
• State level: Several levels of courts including trial
courts, appeals courts, and a supreme court.
• Local level: Municipal courts, justice-of-the-peace
courts, and magistrate courts.
©2019 McGraw-Hill Education.
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Functions of Administrative
Agencies
Regulating conduct
• Price, entry into a particular geographical area, or entry into a
particular kind of business.
Satisfying government requirements
• Collection of taxes and revenues through various licensing laws.
Disbursing benefits
• Subsidies and benefits of various kinds to farmers, persons in
need of public assistance, students, unemployed, and elderly.
Providing goods and services
• Electricity, water, sewer, highway maintenance, hospital care,
and public housing.
©2019 McGraw-Hill Education.
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Formation of an
Administrative Agency (1)
6-8
An administrative agency might be formed to protect the
public from certain behaviors.
• Example: From unlawful or deceptive businesses. (Federal
Trade Commission)
The agency would implement law passed by the city
council, to ensure that the businesses comply. (City
Housing Administration)
If the businesses violate law or fail to correct problems,
their business license could be revoked by the agency
and business could be closed.
• Generally, before such measures are taken, business owners
are issued a subpoena, or an order requiring the recipient to
appear at a hearing to account for the actions.
©2019 McGraw-Hill Education.
Formation of an
Administrative Agency (2)
6-9
To comply with the subpoena, the merchant must attend
a hearing at a specified time and place to answer an
agency inspector’s complaints.
Businesses are entitled to Due Process.
• An Administrative Hearing – is a trial-like judicial proceeding
without a jury, in which an administrative agency decides on
matters of regulation or law for which the agency is charged with
enforcement.
©2019 McGraw-Hill Education.
Similarities between Administrative
Agencies and Governments
Executive Function:
• Daily operation of the agency and
establishment of policies and objectives.
Legislative Function:
• Rules and regulations resemble laws passed
by a legislature. Must comply with
constitutions and statutes
Judicial Function:
• Holds hearings and oversees compliance with
decisions.
©2019 McGraw-Hill Education.
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Differences between Administrative Agencies
and Governments Executive Function
Voters have the opportunity to vote the executive into
and out of office. Voters normally do not elect the
administrator of a regulatory agency
There are two general patterns in executive organization
of an administrative agency.
• the executive is appointed by and serves at the discretion of the
elected executive of the government subject to approval by the
legislature. These executives may be removed from office either
with or without cause.
• Congress has created agencies outside the executive branch
headed by individuals. Such boards or commissions carry out
agency executive f …
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