Choice-of-law clause
When two parties establish an international contract and set forth which country's law will govern in the case of a dispute
Letter of credit
A commercial device used to guarantee payment to a seller in an international transaction
Most-favored-nation clause
A principle of trade without discrimination established by the General Agreement on Tariffs and Trade (GATT); all member countries must grant each other equal treatment, and give no special trading advantages to another nation
Dispute settlement body (DSB)
Provided by the World Trade Organization (WTO), enables member countries to resolve trade disputes by appointing panels to hear disputes concerning allegations of GATT agreement violations, then adopting or rejecting the panels' decisions
Special drawing rights (SDRs)
Provided by the International Monetary Fund (IMF), allows a country to borrow money from other IMF members or from the IMF in order to permit that country to maintain the stability of its currency's relationship to other world currencies
Export sale
A direct sale to foreigners in another country, export is subject to tariff but firm is not subject to local taxation
Agent
A person or firm with the authority to make contracts on behalf of another (the principal)
Distributor
Takes title to goods and bears the financial and commercial risks for subsequent sale
Licensing
Transfer of technology rights in a product so that it may be produced by a different business organization in a foreign country in exchange for royalties and other payments as agreed
Franchising
A form of licensing that involves granting permission to use a trademark, trade name, or copyright under specified conditions
Joint venture
When two firms agree to perform different functions for a common result, governed by contract
Foreign-freight forwarders
Experts on U.S. Dept of Commerce export license requirements, provide assistance to exporters needing help in determining whether an export license is needed
Intellectual property rights
Consist of trademarks, copyrights, and patents, protected by U.S. law
Gray market goods
Foreign made goods imported into the U.S> to compete against a U.S. manufacturer's goods, prevented by Tariff Act of 1930 and Lanham Act
Effects doctrine
Grants U.S. courts jurisdiction and allows the application of antitrust laws to conduct outside of the United States where the activity of the business firms outside the U.S. has a direct and substantial effect on U.S. commerce (modified so that effect mu
Jurisdictional rule of reason
Applies when conduct taking place outside the U.S. affects U.S. commerce but a foreign state also has a significant interest in regulating the conduct in question, balances the vital interests involved
Comity
A principle of international law that means the laws of all nations deserve the respect legitimately demanded by equal participants in international affairs
Act-of-State doctrine
A common defense raised to international application of U.S. antitrust laws; declares every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgement of another government'
Sovereign Compliance Doctrine
Allows a defendant to raise a defense to an antitrust action the fact that the defendant's actions were compelled by a foreign state, requires compulsion by the foreign government
Sovereign Immunity Doctrine
States that a foreign sovereign cannot be sued unless an exception to the Foreign Sovereign Immunities Act of 1976 applies, includes commercial conduct of a foreign state
Secrecy Laws
Confidentiality laws applied to home-country banks
Blocking laws
Prohibit the disclosure, copying, inspection, or removal of documents located in the enacting country in compliance with orders from foreign authorities
Tariff
A tax placed on imports and exports
Dumping
Selling goods in another country at less than their fair value; prohibited in the U.S. by the Tariff Act of 1930
Expropriation
When a host government takes over a foreign subsidiary in a country
General Agreement on Tariffs and Trade (GATT)
A multilateral treaty consisting of numerous multilateral agreements negotiated since 1947, includes 126 member governments. Fundamental principles are: Trade without discrimination and protection through tariffsI
World Trade Organization (WTO)
Took over responsibility for policing the objectives of the former GATT organization in 1995, goal is to liberalize world trade and make it secure for furthering economic growth and human development
International Monetary Fund (IMF)
Purpose is to facilitate the expansion and balanced growth of international trade and shorten the duration and lessen the disequilibrium in the international balance of payments of members; accomplishes this by administering a complex lending system
World Bank
Facilitates the lending of money by capital surplus countries to countries needing economic help and wanting foreign investments
Organization of Petroleum Exporting Countries (OPEC)
A producer cartel whose main goal was to raise the taxes and royalties earned from crude oil production and take control from the major oil companies over production and exploration
United Nations Convention on Contracts for the International Sale of Goods (CISG)
Sets forth uniform rules to govern international sales contracts, national law is sometimes required to fill gaps. Often viewed as a neutral body of law, but parties must include an "opt-out" provision if they want to avoid jurisdiction
United Nations Conference on Trade and Development (UNCTAD)
Prime objective is to achieve international redistribution of income through trade, represents the interests of less developed countries
European Union (EU)
Made up of a council that sets policy guidelines, a commission that implements the council's decisions and initiates action against violations, a parliament with an advisory legislative role and limited veto powers, and a court of justice that makes up th
North American Fair Trade Agreement (NAFTA)
Agreement between Mexico, Canada, and the US, effective January 1, 1994, that eliminates all tariffs among the three countries for products that originate among one of the three countries over a 15 year period
Export Administration Act
The principal stature imposing export controls on goods and technical data, states no license is required unless explicitly stated on the Commerce Control List.
Foreign Corrupt Practices Act
Restricts U.S. firms that are doing business abroad from paying public officials bribes in order to get business contracts from the foreign government