Major International Treaties in Regard to International Trade KOSTADIN KRASTANOV INA PANOV ADELINE GASPARD PETROV SORIN DANIIL GOLDIN KALOYAN IVANOV.

Major International Treaties in Regard to International Trade

KOSTADIN KRASTANOV

INA PANOV

ADELINE GASPARD

PETROV SORIN

DANIIL GOLDIN

KALOYAN IVANOV

International Law

International law is a body of law formed as a result of international customs, treaties and organizations.

National law is the law of a particular nation

International law may be public, creating standards for nations it may be private, establishing standards for private transactions that

cross national borders

Sources of International Law

International customs evidences of a general practice accepted as law.

Treaties and International Agreement a treaty is an agreement or contract between two or more nations

that must be authorized and ratified by the supreme power of each nation.

International Organizations and Conferences refer to an organization composed mainly of officials of member

nations and usually established by treaty.

Legal principles and doctrines

The principle of comity one nation will defer and give effect to the laws and judicial decrees

of another country as long as they are consistent with the law and public policy of the accommodating nation.

The act of State Doctrine is a judicially created doctrine that provides that the judicial branch

of one country will not examine the validity of public acts committed by a recognized foreign government within its own territory.

Legal principles and doctrines

The Doctrine of Sovereign Immunity when certain conditions are satisfied, the doctrine of

sovereign immunity exempts foreign nations from the jurisdiction of the US courts. However, a foreign state is not immune from the jurisdiction of US courts when it has:

waived its immunity either explicitly or by implication

engaged in commercial activity within USA or in commercial activity outside the USA that has a direct effect in the USA

committed a tort in the USA or has violated certain international laws.

Doing Business Internationally

Export

Foreign Production

Licensing and Franchise

Export

Direct Export A company signs a sales contract with a foreign purchases that

provides for the conditions of shipment and payment for the goods.

Indirect Export If sufficient business develops a company could assign employee as

a foreign agent who would develop a marketing organization there.

Distribution agreement When a company decides to appoint a distributor located in the

foreign country.

Manufacturing AbroadLicensing

Giving license to a foreign company to use a copyright, patent, trademarked intellectual property or trade secrets.

Calls for payment of royalties(so many cents per unit produced; % of profits)

The firm that has the license profits from an already built product, name, reputation.

Manufacturing AbroadFranchise

A type of licensing, that allows the licensed party to use trademark, trade name or copyright, under certain conditions and limitations.

The return for the franchiser is a fee, based on % of gross or net sales.

Manufacturing AbroadWholly Owned Subsidiary

Establishing a wholly owned subsidiary firm in a foreign country.

Usually in Europe such ventures are in the form of societe anonyme, much similar to the US corporations.

Under such subsidiary the facilities remain under the original company ownership, and total authority and control.

Regulation of specific business activities

On investment

On export control

On import control

To minimize trade barriers

Investment

Investing abroad is risky Expropriation

Remedies exist Lump-sum settlements

Guaranties of compensation or insurances for citizens’ exist

Export controls

U.S Constitution Art 1 , sect. 9

No taxes but use of other devices Quotas

Restriction

Incentives and subsidies

Import controls

Strict prohibition No illegal drugs, books insurrection against the U.S, no danger

products , no products from enemies , no products that infringe the U.S patent

Quotas and tariffs

Antidumping duties International trade commission ( ITC)

International trade administration ( ITA)

Minimizing trade barriers through trade agreements

Trade barriers = restriction on import

Elimination of barriers = Essential

World trade organization ( WTO)

EU ( treaty of Rome – 1957) Common market

Free trade zone

Council of ministers

European court of justice

Minimizing trade barriers through trade agreements

NAFTA ( 1994) Regional trading

Canada , U.S, Mexico

Elimination of tariffs and of citizenship requirement for licensing attorneys, accountants, physicians and other prof.

CAFTA-DR ( 2005) Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras,

Nicaragua and U.S

Reduce trade tariffs

Improve market access

The Sarbanes – Oxley Act

The Sarbanes-Oxley Act came into force in July 2002 and introduced major changes to the regulation of corporate governance and financial practice.

The most important sections are usually considered to be 302, 401, 404, 409, 802 and 906.

Generally, this act is designed to improve the quality and clarity of financial reporting and auditing of public companies

The Sarbanes – Oxley Act302

Periodic statutory financial reports are to include certifications that: The signing officers have reviewed the report  The report does not contain any material untrue

statements or material omission or be considered misleading 

The financial statements and related information fairly present the financial condition and the results in all material respects 

The Sarbanes – Oxley Act401

Financial statements are published by issuers are required to be accurate and presented in a manner that does not contain incorrect statements or admit to state material information.

These financial statements shall also include all material off-balance sheet liabilities, obligations or transactions.

The Sarbanes – Oxley Act404

Issuers are required to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting.

The registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.

The Sarbanes – Oxley Act409

Issuers are required to disclose to the public, on an urgent basis, information on material changes in their financial condition or operations.

These disclosures are to be presented in terms that are easy to understand supported by trend and qualitative information of graphic presentations as appropriate.

The Sarbanes – Oxley Act802

This section imposes penalties of fines and/or up to 20 years imprisonment for altering, destroying, mutilating, concealing, falsifying records,

documents or tangible objects with the intent to obstruct, impede or influence a legal investigation.

This section also imposes penalties of fines and/or imprisonment up to 10 years on any accountant who knowingly and wilfully violates the requirements of maintenance of

all audit or review papers for a period of 5 years

International Tort Claims

Recently International application of tort liability has grown in significance as an increasing number of US plaintiffs are suing foreign entities for the torts committed overseas Often, these cases involve human rights violations by foreign

governments.

The Alien Tort Claims Act (ATCA) Adopted in 1789 and allows even foreign citizens to bring civil suits in

US courts for injuries caused by violations of the law of the nations/ a treaty of the United States.

Lately, it has been substantially used to bring legal actions against companies operating in other countries, e.g. in cases related to environmental destruction.

Case Study: Doe v. Unocal

In September 1996, four Burmese villagers filed suit against Unocal and its parent company, the Union Oil Company of California under the ATCA rules. The suits alleged various human rights violations, including forced

labor, wrongful death, false imprisonment, assault, intentional infliction of emotional distress and negligence, all relating to the construction of the Yadana gas pipeline project in Myanmar.

In 1997, a U.S. federal district court in Los Angeles agreed to hear Doe v. Unocal. The Court ruled that corporations and their executive officers can be held legally responsible under the Alien Tort Claims Act for violations of international human rights norms in foreign countries, and that U.S. courts have the authority to adjudicate such claims

Case Study: Doe v. Unocal

In 2000, the district court dismissed the case on the grounds that Unocal could not be held liable unless Unocal wanted the military to commit abuses, and that plaintiffs had not made this showing.

However, Plaintiffs appealed this decision, and on September 18, 2002, a three-judge panel of the United States Court of Appeals for the Ninth Circuit reversed portions of the district court’s decision, allowing the lawsuit against Unocal to go forward

After that, the parties announced that they had reached a tentative settlement, including compensation for plaintiffs and provision for funds enabling plaintiffs and their representatives to develop programs to improve living conditions, health care and education and protect the rights of people from the pipeline region

That’s all folks!

Apparently, the human body comprises about 70 percent of water, so without knowing your own rights, you’re just a sort of vertical puddle