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D. Global Business Law and International Institutions
1. A “taxonomy” of international organizations
2. Forms of influence
(a) Influences on national economic conditions
(b) Regulatory influence
E. Global Business Law and Other Issues of
International Law
1. The future of the nation-state
2. A withering of multilateralism?
3. The North-South divide
4. Security and terrorism
5. Global climate change and other environmental
issues
F. Concluding Observations
8
1. China and international business
2. Thumbnail sketch of the Chinese legal tradition
III. Business and Culture in a Global Context
A. Cross-Cultural Negotiations: General Principles
B. Cross-Cultural Negotiations: Specific Examples
IV. Getting Help: Local Counsel, Freight Forwarders, and
Other Sources of Assistance
A. Local Counsel
B. Freight Forwarders and Other Facilitators
C. International “Agents” and Distributors
D. Official Support from Government Agencies
PART TWO
INTERNATIONAL COMMERCE — EXPORT TRANSACTIONS
9
B. Noteworthy Features — Performance
1. Manner and place of delivery
2. Time of delivery
3. Notice under the CISG
4. Time and place of payment
5. Currency in which the price is to be paid
C. Noteworthy Features — Breach and Remedies
1. Significance of the fundamental breach concept
2. Buyer's right to avoid the contract for non-delivery
3. Buyer's right to avoid the contract for quality
defects
4. Seller's right to cure
5. Seller's right to avoid the contract
6. Buyer's right to compel performance
7. Seller's right to compel performance
8. Non-avoidance damages
9. Avoidance damages
10. Mitigation
11. Remedy of reduction of price
12. Anticipatory breach
D. CISG–UCC Differences and Similarities
E. Pros and Cons of the CISG in Operation
V. Related Commercial Rules: The UNIDROIT Principles
and the UN Limitation Period Convention
A. The UNIDROIT Principles of International
Commercial Contracts
B. The UN Limitation Period Convention
1. Aims, history, and status
2. Substantive summary of the Limitation Period
Convention
VI. Closing Observations
10
3. Getting to the 2010 version of Incoterms
B. Details of the Eleven Incoterms (2010)
1. Groups, terms, and frameworks
2. Practical implications and observations
(a) The extremes: EXW and DDP
(b) Incoterms and mode of transport
(c) Limits of Incoterms
(d) Passage of cost and risk in CIF
(e) Incoterms and transport documents
(f) Right of inspection
(g) Choosing the best Incoterm
(h) The future of Incoterms
3. Incoterms and the UCC
III. Drafting of Other Contract Terms: Guides and Practical
Applications
A. Governing Law
1. Factors for choosing a governing law
2. Limits on free choice by the parties
3. Specific governing law formulations — with and
without CISG
B. Choice of Forum
C. Nonperformance, Force Majeure, and Hardship
1. Nonperformance
2. Force majeure
3. Hardship
D. Notice
E. Corrupt Practices
IV. Conclusion
11
A. International Letters of Credit in a Nutshell
B. The Principle of Strict Compliance
C. The Independence Principle and Its Exceptions
IV. Related Matters: More on Bills of Lading, Letters of
Credit, and Liability of Carriers
A. Functions and Varieties of Bills of Lading and Other
Transport Documents
1. Negotiable and non-negotiable bills of lading
2. Other types of transport documents
3. National and international rules on bills of lading
and liability of carriers
B. Standby Letters of Credit and Back-to-Back Letters
of Credit
1. Standby letters of credit
2. Back-to-back letters of credit
V. Conclusion
12
Aspects of Customs Procedure and Export Controls
A. Customs Classification and Duty Determinations
B. Export Controls — A Thumbnail Sketch
C. Other Nuts-and-Bolts Issues of Trade Regulation
1. Foreign Trade Zones
2. Anti-boycott rules
V. Government Assistance for International Sales: A Glance
at Official Export Inducements
A. Export Inducements under US Tax Laws
B. Export Inducements through Government Financing
C. Export Inducements under US Antitrust and Banking
Laws
D. Export Encouragement through Government Agency
Assistance
VI. Conclusion
PART THREE
TRANSNATIONAL LICENSING, FRANCHISING, AND PROTECTION OF
INTELLECTUAL PROPERTY RIGHTS
13
Agreement
V. Conclusion
PART FOUR
FOREIGN DIRECT INVESTMENT
14
4. Merger and acquisition — disadvantages
5. Merger and acquisition — documentation
(a) Consideration
(b) Assumption of liabilities
(c) Warranties
(d) Covenants
(e) Conditions
(f) Closing
(g) Indemnification
6. Merger and acquisition — Indonesia as an
illustration
7. Joint venture — nature and scope
IV. Joint Ventures: Legal Issues and Agreements
A. Key Legal Issues in Joint Ventures
1. Structure
2. Tax
3. Liability
4. Resources: funding and capitalization
(a) Initial contributions
(b) Future contributions
(c) Details and refinements in the capitalization
plan
5. Management and control
6. Dispute resolution
7. Transferability and termination
8. Hiring local legal counsel
9. Other issues in forming an international joint
venture
(a) Informational preparation
(b) Strategic planning
(c) Selecting a partner
B. Drafting Equity Joint Venture Agreements
1. Building up to the joint venture agreement
2. Contents and structure of the joint venture
agreement
V. International Project Finance: Special Considerations and
Opportunities
A. Introduction: Aims, Nature, Risks, and Structures
1. Defining “project finance”
2. The nature of and demand for infrastructure
projects
15
3. Risks
4. Project structure
B. Project Financing through Commercial Lending —
The Syndicated Loan
1. Overview — the need for syndicated lending
2. Responsibilities of the lead bank
3. Syndicated loan documentation
C. Project Financing through Sales of Registration-
Exempt Securities
1. Introduction
2. Private placements and Section 4(2)
3. Offshore sales and Regulation S
4. Rule 144A
5. Other issues relating to securities regulation
D. Summary on Project Financing
VI. Conclusion
16
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III. Host-Country Restrictions and Risks Relating to FDI
Operation and Withdrawal
A. Restrictions on FDI Management
B. Performance Requirements
C. Currency Restrictions and Risks
1. Nonconvertibility risk
2. Exchange rate fluctuation risk
D. Other Risks to FDI from Host-Country Developments
1. Political risk
(a) Conceptual definitions and species of “political
risk”
(b) Expropriation, exchange controls, and political
violence
(c) Distinguishing political risk from other risks
(d) De-constructing the distinctions
2. Expropriation
IV. Home-Country and Multilateral Regulation of FDI
A. Regulations on FDI by Investors' Home Countries
1. Prohibitions on corrupt practices and anti-
competitive behavior
2. Prohibitions on behavior violating international law
B. Multilateral Regulation of FDI
C. Self-Regulation by Multinational Corporations
1. Company-specific codes of conduct
2. Other voluntary corporate code initiatives
V. Conclusion
17
A. Lawfulness
B. Compensation
C. Defenses
1. The Act of State doctrine
2. The concept of sovereignty and the doctrine of
sovereign immunity
3. The Calvo doctrine
IV. Insurance and Hedging
A. OPIC
B. MIGA
C. Private Insurance for FDI Risks
D. Hedging Against Currency Risks
V. Conclusion
PART FIVE
CROSS-CUTTING ISSUES IN GLOBAL
BUSINESS LAW
18
B. The 1988 Amendments to the FCPA
1. Affirmative defenses
2. Exception for “routine governmental action”
3. Amending the bribery standard
4. Amendments to the accounting standards
C. Administrative and Enforcement Mechanisms
1. Elements for successful government enforcement
2. The SEC's role in FCPA compliance
3. The Justice Department's role in FCPA
enforcement
(a) Initiation of an investigation
(b) Unique aspects of the FCPA investigative
procedure
(c) Remedies and penalties
(d) The review procedure
4. Practical considerations — planning to mitigate
FCPA liability
IV. The OECD Anti-Bribery Convention
Documentary Appendices
Appendix #1 CISG (Vienna Sales Convention)
Appendix #2 UNIDROIT Principles
Appendix #3 UN Limitation Period Convention
Appendix #4 CIF, INCOTERMS 2010
Appendix #5 UCP
Appendix #6 COGSA
Appendix #7 Hague Rules (& Hague-Visby Rules)
Appendix #8 Hamburg Rules
Appendix #9 UNCITRAL Model Law on Electronic
Commerce
Appendix #10 UETA
Appendix #11 Mexican Foreign Investment Law
Appendix #12 Exon-Florio Amendment and FINSA (USA)
Appendix #13 World Bank Guidelines on the Treatment of
FDI
Appendix #14 NAFTA Investment Provisions
Appendix #15 US Model BIT
Appendix #16 UFCMJRA (USA)
Appendix #17 LCIA Rules of Arbitration
Appendix #18 New York Convention
Appendix #19 ICSID — International Convention on the
19
Settlement of Investment Disputes
Appendix #20 Hague Convention on the Taking of Evidence
Abroad
Appendix #21 FCPA
Appendix #22 OECD Anti-Bribery Convention
Selected Bibliography
Index
20
List of Illustrations,
Tables, Diagrams, Readings,
Sample Documents, and Song Lyrics
Note: This list does not include the documents appearing in the
Documentary Appendices.
Illustrations
Illustration #1A Coulson Coathanger Company wants to “go international”
Illustration #2A Gower Group asks about dealing with foreign legal
systems
Illustration #3A AmSport buys bicycles from Mexico
Illustration #3B CISG applicability, first fact pattern
Illustration #3C CISG applicability, second fact pattern
Illustration #4A GeoStat sells GPS equipment to a buyer in Rotterdam
Illustration #5A GPS equipment to the Netherlands: GeoStat uses a
documentary sale
Illustration #5B Using a standby letter of credit in an Indonesia road
project
Illustration #6A Marketing Nebraska computers in Malaysia: transactional
questions
Illustration #6B An Ohio furniture company sells via its website
Illustration #6C Marketing Nebraska computers in Malaysia: regulatory
questions
Illustration #7A Coulson Coathanger Company: licensing production in
Japan
Illustration #7B Coulson Coathanger Company: drafting the licensing
agreement
Illustration #8A Purdue Palace Hotel Company takes its winning style
overseas
Illustration #9A AmSport considers an FDI in Malaysia
Illustration #9B AmSport works on a joint venture contract: capitalization
issues
Illustration #9C NatWest serves as lead bank in a syndicated loan for road
works
21
Illustration #10A AmSport worries about government regulations affecting
FDI
Illustration #10B Micronesia considers FDI regulations
Illustration #10C Designing FDI regulations for Micronesia
Illustration #10D An Indonesian joint venture faces exchange rate
fluctuation risk
Illustration #10E Forms of “market risk” for a Japanese FDI in Indonesia
Illustration #11A AmSport asks about FDI protections
Illustration #12A AmSport considers suing its bicycle supplier for breach
Illustration #12B Drafting a dispute-resolution clause for AmSport sales to
Korea
Illustration #13A Special payment for investigative services in Istanbul
Tables
Table #1.1 Comparison of various forms of transnational business
transactions
Table #3.1 Participation in the Limitation Period Convention
Table #6.1 Sales representatives, distributors, and employees: some key
comparisons
Table #6.2 Checklist of provisions for international sales representative
agreement
Table #6.3 Sample page from the HTSUS
Table #7.1 Comparison of various forms of transnational business
transactions (updated and elaborated)
Table #7.2 Checklist for agreement for licensing of production abroad
Table #8.1 Checklist for an agreement for international franchising
operation
Table #13.1 Perceived corruption around the world — 1996 rankings (ten
least corrupt and ten most corrupt)
Table #13.2 Perceived corruption around the world — 2016 rankings (ten
least corrupt and ten most corrupt)
Diagrams
Diagram #1.1 The “world” of international, comparative, and foreign law
Diagram #1.2 Selected “taxonomy” of international organizations
Diagram #3.1 Operation of CISG provisions on applicability
Diagram #4.1 Incoterms in a nutshell
Diagram #5.1 A documentary international sale-of-goods transaction
22
involving a confirmed letter of credit
Diagram #9.1 Joint Venture A (narrow focus of operations)
Diagram #9.2 Joint Venture B (broad range of operations)
Diagram #10.1 General trends in the restrictiveness of FDI regulation by
host countries
Diagram #10.2 Levels of restrictiveness of FDI regulation by host countries:
the Public Code, the Operational Code, Aspirational Declarations, and the
Edge of Discouragement
Diagram #12.1 Comparison of litigation, arbitration, and mediation: the
required level and continuity of consent to be bound by a decision
Diagram #12.2 Decision tree for considering options for dispute resolution
Readings
Reading #2.1 Making Global Deals: Navigating Culture, Ideology,
Language, Attitude, and Style
Reading #2.2 “Contexting”, “Face-Saving”, and Other Aspects of Global
Negotiations
Reading #2.3 Country-Specific Observations about International
Negotiations
Reading #2.4 Selecting and Engaging Local Counsel
Reading #3.1 Regulation (EC) No. 593/2008 (17 June 2008) on the Law
Applicable to Contractual Obligations (Rome I) (excerpts)
Reading #3.2 Restatement, Conflict of Laws (Second), 1971 (excerpts)
Reading #3.3 Inter-American Convention on the Law Applicable to
International Contracts (1994) (Mexico City Convention) (excerpts)
Reading #3.4 CISG Provisions on Applicability (Articles 1–6)
Reading #3.5 Case Abstract, UNCITRAL Texts (CLOUT) — Abstract No.
104, ICC Arbitration Case No. 7197 (1991)
Reading #3.6 CISG versus UCC: Key similarities and differences
Reading #5.1 J.H. Rayner and Company, Ltd. v. Hambro's Bank Ltd.
Reading #5.2 Voest-Alpine International Corporation v. Chase Manhattan
Bank
Reading #5.3 Beyene v. Irving Trust Company
Reading #5.4 Maurice O'Meara Company v. National Park Bank of New
York
Reading #5.5 Sztejn v. J. Henry Schroder Banking Corp.
Reading #5.6 Sample terms in a bill of lading
Reading #5.7 Standby Letters of Credit: Forms, Types, Uses, and
Documentation
23
Reading #9.1 Structuring and Drafting an International Joint Venture
Agreement
Reading #9.2 Sample International Joint Venture Agreement
Reading #10.1 Filártiga v. Pena-Irala
Reading #10.2 Beanal v. Freeport-McMoran, Inc.
Reading #10.3 Reebok Human Rights Production Standards
Reading #11.1 North American Free Trade Agreement, Statement of
Administrative Action—Chapter
Reading #11.2 Bilateral Investment Treaties 1959–1991 (1992)
Reading #11.3 Bilateral Investment Treaties, 1959–1999
Reading #11.4 Bilateral Investment Treaties 1995–2006
Reading #11.5 US Bilateral Investment Treaties (BITs)
Reading #13.1 Stuart Eizenstat, Bribery of Foreign Public Officials: Hearing
Before the Senate Foreign Relations Committee, 105th Cong. (1998)
Sample Documents
Sample Document #5.1 Letter from Potential Buyer Requesting Proforma
Invoice
Sample Document #5.2 Proforma Invoice
Sample Document #5.3 Purchase Order
Sample Document #5.4 Contract Document
Sample Document #5.5 Letter from Confirming Bank to Seller
Sample Document #5.6 Packing List
Sample Document #5.7 Commercial Invoice
Sample Document #5.8 Certificate of Origin
Sample Document #5.9 Dock Receipt
Sample Document #5.10 Certificate of Inspection
Sample Document #5.11 Bill of Lading
Sample Document #5.12 Insurance Certificate
Sample Document #5.13 Draft
Song Lyrics
Song #2.1 Don't Know Much About History (But I want to avoid a “D”)
[History of the Civil Law Tradition in Song]
Song #5.1 It's a Documentary Sale!
Song #11.1 I've Been Working on an FDI
24
Preface to the Fourth Edition
John Head
I urge readers not to skip this Preface. Even though it can seem tedious
to look at a preface, I hope in this one (less than three pages long) to
highlight some specific characteristics about this book generally and this
Fourth Edition in particular. These points could be helpful before using
the book.
Peculiar Practicality. This book might not be unique, but I believe it is
unusual for the insistently practical approach that it takes to presenting a
broad range of quite detailed material. Because I have a double intended
audience—that is, I am writing both (1) for practitioners who currently
need details about international business law and (2) for students aspiring
to become familiar with its contours—I have placed overwhelming
emphasis on a cluster of values:
25
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on ennallaan, ja minun on vaikea käsittää, että olen ollut useita
vuosia poissa. Lähenemme kaupunkia, ja kiihtymykseni yltyy
minuutti minuutilta. "Bore" viilettää täydellä höyryllä, ja kuitenkin
peräti vitkallisesti! Vihdoin olemme sivuuttaneet Lilla Värtanin, ja nyt
kiertyy kuin taikasauvan loihtimana eteeni kaunein ja
unohtumattomin kaikista maisemista, mitä olen tällä pitkällä matkalla
nähnyt, Tukholma! Ihan edessämme kohoavat eteläiset vuoret
rakennusryhmineen, huippuineen ja torneineen, ja niiden oikealla
puolella leviää siltojen välinen kaupunki, Ritariholman kirkko,
Isokirkko ja Saksalaisen kirkon tornit, joiden katot nousevat
Skeppsbro-kadun vanhain kunnianarvoisain julkipuolten ja linnan
suorien ääriviivojen yläpuolelle. Ylähangan puolella ovat
Kastellholmin ja Skeppsholmin saarten kaupunginosat,
kansallismuseo ja Kaarle XII:n tori, jolla nuori kuningas seisoo
jalustallaan, kädellään yhä osottaen itään.
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