IBT Donono Spring2010

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Spring 2010 International Business Transactions Donoho 19JAN - Documentary Sales Transaction - Buyer is o ligate! to pay "or the !ocuments# Documents themsel$es represent an entitlement to the goo!s No guarantee that you %ill get goo!s as promise! un!er the transaction &nly assurance ' uyer %ill get goo!s as assure! in Bill o" (a!ing )B&(* - Seller %hen goo!s are release! to the ship+ the uyer may re,ect the !ocuments ) reach* In a!!ition to Documentary Sale+ merchants use (etter o" -re!it )(&-* - ./0(A-/S B12/. 3IT4 BAN5 )BBan6* - Seller loo6s to BBan6 "or payment# .elie$es ris6 o" non-payment# - Buyer %ill alle$iate ris6 o" non-con"orming goo!s an inspection certi"icate at least some in!epen!ent party has loo6e! to the goo!# - (essening o" ris6 in international transaction in a %ay that "acilitates international tra!e# 0ro lem 1 - Buyer %ants guano# Searches internet# Sees a!$ertisement# 3ants 200 ags -I7 7ort (au!er!ale 8ra!e A# Seller %ants to sell# )&T4/. ISS1/S* - The goo!s arri$e+ ut he9s alrea!y pai!# Does that mean he9s accepte! the goo!: - Seller has to !eli$er con"orming goo!s !oes that ta6e place %hen uyer gets them or earlier: - 4o% to !etermine that goo!s are non-con"orming: ./A( ISS1/S 1# Bo ) uyer* %ants ;the right< guano )reme!ies ' option "or getting replacement guano $ersus la%suit or reach o" contracts* 2# I" he cannot ;the right< guano+ he may %ant re"un! or %ant to use %rong guano in a !i""erent %ay =# Bo %ants legal a!$ice ' his options un!er the contract ># Sue )seller* %ants the money "or the guano# ?# Sue %ants rapport %ith customer )goo! reputation*# @# Sue is intereste! to 6no% %hat the cost o" legal eApenses )legal a!$ice*# Implie! 3arranty o" Berchanta ility )1--C-on$ention on the International Sale o" 8oo!s* 1# 3hat are the terms o" this contract: Do they inclu!e DIS-(AIB/. o" %arranty )an ;as is< clause*: 2# 3hat is the "orum "or the !ispute: 3hat is the choice o" la%: a# 3hy is this an issue: 0arties ha$e a "ree choice to !etermine %hat la% go$erns# -ontra!iction in rules that %oul! apply in e$ent o" a reach# /ach citiDen has an interest in the choice o" la%# i# /E-/0TI&N T& 0A.TI/S 7.// T& -4&&S/ -4&I-/ &7 (A3 /A# -ontracts "or illegal acti$ity applies in 1S ut not in Bots%ana cannot say that Bots%ana la% %ill apply )certain man!atory terms+ also health an! sa"ety type rules*#
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ii# (a% that applies state that has most signi"icant relationship %ith transaction ).estatement approach or a state9s o%n approach* 1# Su ,ect-matter o" transaction 2# 0lace o" per"ormance =# -itiDenship o" parties ># /1 set o" presumptions to !etermine %hat is the most signi"icant relationship# Juris!iction most closely connecte! Juris!ictions may ha$e "ormalities "or contracting )"ormalities may e !i""erent in !i""erent ,uris!ictions*# - /E# -IS8 !oes not reFuire that contracts e in %riting# 1-- has 0arole /$i!ence .ule an! Statute o" 7rau!s reFuiring certain contracts to e in %riting# Do the parties in the pro lem ha$e a contract: - -IS8 $# 1--# -IS8 1# I" you per"orm a contract+ then there %as a contract# 2# I" there %as not per"ormance+ then %as there a contract: =# 3as the a!$ertisement !e"inite: Does it "it un!er Article 1>)2*: ># (egal IssueG .egar!ing the terms: 3hat happens in the conteAt o" con"licting !ocuments: a# Applica le .ules Determine Terms )7lori!a (a%* i# 1-- )rules "or sale o" goo!s* ii# -IS8 )"e!eral la% i" it applies*# .ules "or sales o" goo!s 1# Both parties ha$e their places o" usiness %ithin !i""erent parties to the treaty# 3hat i" they ha$e more than one place o" usiness: )Article 10 place that has most connection to the transaction*# 3hen parties to the transaction ha$e places o" usiness in !i""erent -IS8 countries 2# -an opt out o" applying -IS8# &ther%ise+ i" contract is silent on %hat la% applies+ un!er such circumstances it applies# =# 0arties not "rom -IS8 country %ill not apply# ># ISS1/G Is mail con"irmation as acceptance or counter-o""er: Bateriality# 21JAN Battle o" the 7orms tra!ers !o not ta6e the time !o engage in long-term negotiations# 3hat happens %hen things go a!: - 4o% %oul! the approach to Battle o" 7orms e !i""erent un!er -IS8 or 1- 2-20H )@H2#20H 7la# --* 3hat the "e!eral la% %oul! pro$i!e un!er -IS8: - Article 19 -IS8# ;As is< clause as a material $ariation creates a re,ection an! countero""er - The uyer per"orms ' acceptance o" the countero""er - -IS8 !oes ha$e implie! %arranties %hich can e !isclaime! )%oul! e an alteration o" parties9 responsi ilities an! %oul! e consi!ere! material*
- 1-- says things are material %hen they %oul! cause un!ue har!ship or surprise );as is< clause %oul! e material*# /A# o" immaterial pro$ision storage costs in e$ent o" !elay+ contact in"ormation+ anything that !oes not go to the heart o" the transaction# 1-1# 0urporte! acceptance %ith a!!itional )or !i""erent* terms ' acceptance+ T41S A -&NT.A-TIIIIIIIII 2# The only Fuestion no% is %hat are the terms# =# No ;BI..&. IBA8/< rule -IS8 1# 0urporte! acceptance %ith mo!i"ication ' re,ection an! countero""er 2# 4as a ;relaAe!< mirror image ecause i" it is a minor+ non-material mo!i"ication o" the contract+ it ecomes part o" the contract# Tra!er ) uyer* must care"ully scrutiniDe the acceptance to see i" there9s something in there that they !o not li6e# - 3hen there is a !iscrepancy original terms apply an! there is a contract &. !e"ault pro$isions apply &. no contract results - AN&T4/. A00.&A-4G I" it is materially !i""erent+ implicitly ma6es it con!itional+ an! i" other si!e per"orms+ they ha$e accepte! the con!itional o""er 1# 3hat happens un!er -IS8 %hen there is !iscrepancy %hen there is an o""er an! acceptanceC a# Baterial: i# .e,ectionC-ountero""er ii# I" other si!e per"orms+ last shot acceptance %ith materially change! terms ecomes contract 2# 1--: a# Di""erence ' still ha$e a contract # Is a!!itional term material out an! original pro$isions apply c# Non-material in unless o ,ecte! to Selling goo!s ;as is< is not goo! "or seller# 8et insurance to co$er "or the losses# T/.BS &7 T.AD/ - Short-han! re"erence allocating rights an! responsi ilities re$ol$ing aroun! issues o" transportation+ ris6 o" loss+ time o" !eli$ery+ etc# - 4a$e !e$elope! in tra!e practice in the course o" usiness# Ba6es "or certainty %hen you ha$e esta lishe! meaning "or term an! you inclu!e this term# 7acilitates tra!e# - States ha$e their o%n !omestic $ersions o" the terms o" tra!e )as in the 1--* - 7&B is !i""erent !omestically than it is in another State+ "or eAample# - I-- esta lishe! IN-&T/.BS 0ri$ate international la% ecome la% o" the contract %hen the parties put them into the contract# .ules that are in!ing on the parties to a contract#
7&B )"ree-on- oar!* -I7 )cost+ insurance+ an! "reight* 420&G 1# J10Cro! !eli$ery in 0.a# /E3 )/A %or6s*# Seller9s o ligations are ,ust to ma6e goo!s a$aila le at his o%n premises# Buyer has to ta6e care o" all other costs# i# 0lace o" !eli$ery %oul! e seller9s place o" usiness# ii# .is6 o" loss %oul! e trans"erre! in !eli$ery# Implicitly transportation %oul! e incurre! y uyer# iii# /E3 may not tell you ho% an! %hen the seller is suppose! to get pai! i$# In the J10+ no transportation costs+ no customs costs co$ere!# $# It9s only a goo! !eal i" you can actually !o this an! i" you can arrange "or it etter than they can# -oul! the uyer !o this cheaper: 2# J11Cro! !eli$ery to $essel in 0.- 0ort =# J1=Cro! !eli$ery $ia seller9s carrier to Destination 0ort ># J1?Cro! !eli$ery to Buyer9s a!!ress - 0rice !i""erence in each $ariation - 0lace o" !eli$ery !i""erence in each $ariation - Transportation arrangements !i""erent in each $ariation 3hat issues shoul! the Buyer e concerne! %ith: 1# .is6 o" loss 2# 0ayment %hen an! ho%: =# Insurance ># 3hich is the est !eal: ?# 3ho arrangesC%ho pays "or transport: @# 3hen !oes !eli$ery ta6e place: 3hen %ill the seller ma6e a$aila le the goo!s )the seller has "ul"ille! his contractual o ligation* H# Inspection: ) e"ore or a"ter paying* K# Acceptance 9# (oa!ing costs+ !elay costs 10# -ustoms+ tari""s+ taAes+ inspection costs 2@JAN 1# Deli$ery at 7actory at Bei,ing /E3# Deli$ery at the seller9s place o" usiness# 2# J11Cro! !eli$ery to $essel in 0.- 0ort# )-ost increase !ue to increase in seller9s o ligation*# Lessel is the point at %hich !eli$ery occurs# )7AS ma6e a$aila le at port# 7&B get it loa!e! on the $essel* =# J1=Cro! !eli$ery to seller9s carrier to Destination 0ort# )-I7 7ort (au!er!ale in!icates the port o" !estination*# ># J1?Cro! !eli$ery to uyer9s a!!ress# - Associate! %ith arrangements "or transportation+ %ho9s responsi le "or it+ an! %hat9s the price# E 7 - D )increasing seller responsi ility*
-I7 - Seller is in usiness an! %oul! e in etter position to arrange transportation 7&B Buyer %oul! asically e responsi le "or arranging transportation "rom point o" !eli$ery )$essel must e there+ other%ise* -I7 Deli$ery ta6es place at the rail o" the ship 7&B Same /E3 & ligations en! at the !oor -&ST is more "or -I7# .is6 o" loss trans"ers at the .AI( "or oth -I7 an! 7&B - /E3 ris6 o" loss trans"ers outsi!e the !oor - D Term seller has the o ligation until they clear customs or ta6e it to Buyer9s a!!ress -I7 Seller ta6es charge o" insurance )can uy !i""erent types o" insurance* -I7 an! 7&B ten! to e relate! to price - 3hen sellers use -I7 term+ arrangement is that uyer %ill pay against !ocuments# - 2ou can as6 "or a !ocumentary sale M uy on a -I7 term )inclu!es implicitly that the uyer pay against !ocuments*# Inspection 1# .ight to inspect e"ore you pay 2# .ight to inspect e"ore you accept a# 7&B presume! that the uyer has the right to inspect )!oes not necessarily mean that the uyer %ill inspect &N D/(IL/.2 AT T4/ .AI(*# # 7&B uyer -AN (AT/. re,ect the goo!s as non-complying c# -I7 uyer %ill pay upon receipt o" !ocuments )no right to inspection*# Documentary sale pay upon receipt o" con"orming !ocuments+ primarily the Bill o" (a!ing )B&(*# 0aying ase! on representations ma!e in the ill o" la!ing# 2ou coul! inclu!e it as one o" the !ocuments# -I7 seller has to pay "or goo!s to uyer9s port 7&B seller has to pay "or goo!s only to seller9s port Inspection rights !i""erent Insurance !i""erent .is6 o" lossC!eli$ery is the same "or oth -I7 !ocumentary sale 7&B not !ocumentary sale CONTRACT REMEDY 3hat !oes the -IS8 pro$i!e %ith regar!s to reach an! reme!ies "or reaches o" contract:
0.&B(/B - Seller -ha$eD# 2000 100N -otton %ith ;Bloc6 usterG 0rou! Sponsor o" the SuperBo%l E(IL< J?C,ersey# Deli$ery y January =0+ 2010# 7&B -arta# - Buyer Sports .ag &n 7e # 2+ uyer has not recei$e! noti"ication o" shipment# 3ANTS T4/ S/((/. T& 0/.7&.B cheaply an! %ith least ris6 an! least eApenses# - -IS8 o""ers reme!ies "or reach# -olom ia an! 1nite! States are parties to -IS8+ so it %oul! apply# Article =0 Seller9s & ligations 1# Deli$er goo!s %hich con"orm to Fuantity+ Fuality+ an! title in the contract at a time set y the contract# a# 0ro lem# January =0+ 2010 is the time y %hich the goo!s shoul! e !eli$ere! in the contract# i# I" not speci"ie!+ Article =1 Seller has to !eli$er goo!s o$er to the "irst carrier# ii# I" time not speci"ie!+ a reasona le time# iii# 8ap "illers also applica le customary practices in that usinesses+ or et%een the parties i" they9$e !ealt together e"ore# # 0ro lem# 7&B term in contract# Lessel to e arrange! y the uyer# i# I" -I7 term Seller must !eli$er appropriate !ocuments in a!!ition to goo!s )particularly %ith B&(*# Article 2? 7un!amental Breach - Su stantially !epri$e the other party %hat the other party reasona ly eApects un!er the contract# )Bene"it o" the argain*# - De"ect cannot e cure! y uyer# 3hether the cure is possi le is potentially rele$ant to %hether the reach is "un!amental# The contract itsel" may help !etermine %hat is "un!amental# I" contract so states "un!amental essence o" the contract# a# Article >9# I" the time "or per"ormance has not yet passe!+ the seller can "iA the !e"ect as long as it !oes not cause un!ue har!ship to the uyer# # Article >K# Su ,ect to Article >9+ the Seller can cure# 3hether you can cure %ill !etermine %hat is "un!amental# 2KJAN Seller has "aile! to !eli$er goo!s %hich con"orm to the contract# 1n!er -IS8+ critical consi!eration is the nature o" the reach# Not all reaches are the same# 3hat is a "un!amental reach $ersus non-"un!amental reach o" the contract:
- -IS8 $ersus 1-- %ith respect to "un!amental reaches 0ro lem 1 - Seller sen!s late !eli$ery )$ersus non-!eli$ery %hich is a "un!amental reach*# - Does late !eli$ery !eny uyer o" reasona le eApectations un!er contract: Terms the more speci"ic the contract is+ the more easily you can ma6e a !e"initi$e !etermination o" "un!mentality# 0arties9 eApectations C 6no%le!ge C constructi$e 6no%le!ge Oo ,ecti$e stan!ar!+ tra!e usageP )i" he is una%are o" the importance o" the !eli$ery !ate+ then is it a "un!amental reach: /Apectation is unilateral i" only uyer 6ne%*# - I" you plan to sue "or late !eli$ery )"un!amental reach reme!y o" a$oi!ance*+ pro$i!e notice to Seller )timely notice o" non-con"ormity*# - -ourts that reach e i!enti"ie! %ith speci"icity so that they may reasona ly "iA it# Article >? .eme!ies "or reach o" contract y the seller )these reme!ies are "or any reach+ not ,ust "un!amental reaches*# - Along %ith any reme!y you pic6+ you can also get !amages as %ell# )A$oi!ance Q !amages+ a""irmation o" contract Q !amages+ speci"ic per"ormance Q !amages* - Su stitute 8oo!s treate! !i""erently than speci"ic per"ormance ) ecause speci"ic per"ormance is a court or!er*# Article >@ Speci"ic 0er"ormance )or !eman! su stitute goo!s+ ut only i" "un!amental* Article >H Notice o" a!!itional reasona le time# I" seller "ails to per"orm %ithin that a!!itional reasona le time+ then contract is a$oi!e!# Article >K -uring reach Article => -uring !ocuments Article =K -ure e"ore !eli$ery Article >9 A$oi!ance in the e$ent o" a "un!amental reach# Both parties are eAcuse! "rom per"ormance un!er contract su ,ect to any !amages that may e !ue# 0ro lem 2 - Breach is goo!s that are non-con"orming# -IS8 %arranty pro$isions )in !e"ining %hether there has een a reach*# 1# &nly 1000 shirts )partial !eli$ery* 2# ?00 shirts are ma!e o" 20N polyester )pro a ly not "un!amental* =# ?00 shirts are incorrectly la el )pro a ly "un!amental* - 0ay "or the part that is goo! - 0rotect goo!s that are not )i" uyer a$oi! the goo!s+ he has to ta6e care o" the goo!s AND mitigate his !amages* - 3hat i" you ha$e !ou ts a out %hether something is a "un!amental reach: AcceptCA""irm Q !amages# I" you9re in !ou t a out "un!amentality a""irm the contract+ ut see6 !amages# The uyer+ i" they can !o something %ith the goo!s+ is pro a ly etter o""#
Steps 1# Buyer gi$es speci"ic notice o" the !e"ect so that the seller can potentially reme!y the !e"ect# 2# Assess %hether these !e"ects are "un!amental reaches# a# -an uyer re"use cure "or non-"un!amental reach: M pro a ly shoul! accept cure# # Buyer can re"use cure "or "un!amental reach# Article ?0 pay "or goo!s that con"orm# )0ayment against !ocuments payment has alrea!y occurre!*# )0ayment against goo!s an! i" upon receipt a""irm contract an! re!uce price y noncon"orming goo!s# &nus on reaching party to eAtract "rom you i" they are %rong*# 027/B Buyer9s an! seller9s reme!ies un!er -IS8 T&DA2G & ligations o" a seller in a contract to intro!uce reme!ies "or reach o" uyer9s o ligations# )(ast time*# &ptions that uyer %oul! ha$e in conteAt o" seller9s reach )!eli$ery o" con"orming goo!s*# .eme!ies a$aila le "or uyer9s reach# 7irst+ %hat are uyer9s most asic o ligations un!er -IS8 an! 1-- )to e !one in accor!ance %ith the contract+ unless contract is silent as to %hen payment %ill e ta6en+ ho% it %ill e ta6en+ or %hen !eli$ery %ill ta6e place+ -IS8 %oul! supply ans%ers# 0resumptions in a sence o" contractual pro$isions*G 1# 0A2 2# Timing o" INS0/-TI&N !epen!s on type o" contracts =# TA5/ !eli$ery 0.&B(/B B12/. ./71S/S T& A--/0T D/(IL/.2 an! ./71S/S T& 0A2 - I" the -ontract ha! een -I7+ then it %oul! ha$e een payment against !ocuments )payment %oul! come e"ore acceptance o" !eli$ery# The uyer9s reach %oul! e a re"usal to pay against !ocuments*# 1# 3hat %ill Seller !o "irst in the e$ent o" the Buyer9s reach: 8IL/ N&TI-/ to the other si!e# 2# Bust ma6e !eterminations as to the NAT1./ &7 T4/ B./A-4# Is the reach a 71NDAB/NTA( B./A-4: &ptions "or the B12/. i" a "un!amental reach )Art# >? -IS8*# A# A$oi! a contract# .eFuires "un!amental reach# &. B# Speci"ic per"ormance# .eFuires "un!amental reach# Art# 2K )local la%+ %hether it ma6es sense+ might inclu!e su stitute goo!s+ !eman! "or su stitute goo!s !oes not reFuire court or!er* &. -# A""irm the contract )accept*#
Q !amages &ptions "or the B12/. i" N& "un!amental reach A# A""irm the contract Q !amages &ptions "or S/((/. in the e$ent o" B12/.9S reach )Art# @1 -IS8* Art# @2# Speci"ic per"ormance "or a S/((/.# Di""erent "rom speci"ic per"ormance y a uyer# S/((/. is "orcing B12/. to pay an! "orcing B12/. to accept !eli$ery# - 1n!er 1--+ you trie! to sell+ you coul! not sell+ "orce uyer to ta6e the goo!s an! pay "or them )not speci"ic per"ormance un!er 1--+ no reFuirements o" uniFuenessCina!eFuate legal reme!y*# - -IS8 also reFuires !uty to mitigate# Art# >H )Q>9* Notice )Qa$oi!ance* Art# >K -ure )@=C@>* Art# >9 A$oi!ance )@>* Art# @= "iA an a!!itional time - I" Buyer has goo!s alrea!y speci"ic per"ormance is easier options# I" they !o not pay "or the goo!s+ you can !eman! the goo!s ac6 )restitution*# /asy to sue them "or the price# - 3hen is re"usal to pay a "un!amental reach: 0ayment is "un!amental+ ut timing o" payment is not "un!amental )not necessarily the essence o" the contract*# - 8IL/ T4/ B12/. A DAT/ -/.TAIN 7I.ST A7T/. 34I-4 7AI(1./ T& 0A2 IS A 71NDAB/NTA( B./A-4I - A$oi! the contract an! uyer has goo!s ' uyer must return goo!s# Best option is to sue "or price an! !amages# Alrea!y ha$e the goo!s# - I" the uyer is insol$ent+ then try to retrie$e goo!s so you can resell them )in this case a$oi!ing the contract is etterI* - 2ou can al%ays see6 !amages# 8eneral measure o" !amages "or reaches is in Art# H># Sum eFual to the loss )inclu!ing lost pro"its*# (IBIT/D B2 7&./S//ABI(IT2 in light o" the "acts that are 6no%n# -IS8 says you get your losses as long as they %ere "oreseea le# 1# -onseFuentials 2# (oss o" "oreseea le pro"its )selling goo!s "or resale+ lose resale $alue in the e$ent o" the reach*# Bust pro$e it# =# Inci!entalsI )Storage+ sa"e6eeping+ eAtra insurance+ a!!itional transportations*# - Su stitute transactions )-&L/.*# Art# H?# Buyer coul! get price o" J/.S/2S "rom a N/3 S/((/.# Non- reaching party has certainty to pro$e# - Seller coul! price o" ha$ing to resell the goo!s+ !i""erence et%een %hat B12/. promise! you an! %hat N/3 B12/. ga$e you# Implicit in these is mitigation# Art# HH a out mitigation o" !amages# -an loo6 outsi!e local region uyer9s reme!ies )see6ing su stitute transactions*# Best price possi le+ e$en non-locally#
- Shoul! also try to cancel su contracts as a %ay to mitigate !amages# At least as6 "or it )in this 0.&B(/B+ as6 Bloc6 uster "or accommo!ation*# CARRIER LIABILITY 0.&B(/B Nauru Seller >000 pairs o" genuine alligator s6in oots+ J100Cpair+ -I7 )!ocumentary sale transactions* Nauru# Shippe! in t%o installments# - Sam Seller %ill ta6e the goo!s to the carrier Big Boats# BB %ill issue a B&(# B&( 1# Document o" title+ ut only i" it is a negotia le B&(# 0omerene Act presumption that B&( %ill e negotia le )unless you say it is speci"ically non-negotia le*# I" not ;toor!er+< ut ma!e out to particular person as consignee+ may e non-negotia le# a# 4ol!er o" B&( has a right to possession )title*# 2# In!icates that I+ the shipper+ put these goo!s in the han!s o" the carrier# =# .e"lects a contract "or carriage )hea$ily in"luence! y -&8SA statutory reFuirement*# - B&( Shipper %ill present them to Buyer# Buyer inspects !ocuments# Buyer %ill !eci!e %hether he %ill pay i" !ocuments con"orm# 4e %ill pay ecause he %ants the goo!s# - 3hat is the Buyer loo6ing "or in the B&(: 1# That goo!s %ere loa!e! on the oat# 2# That con"orming goo!s %ere sent# )B&( is a representation*# Bar6ings that the uyer %ill loo6 "or an! rely on them an! then !eci!e i" he %ants to pay# =# Ruantity )Num erC3eight*+ -on!ition -lean on- oar! goo!s appear to con"orm )as oppose! to clause! ill a unch o" mol!y oAes* 0.&B(/B A# 7irst B&(# ;&n oar!+ 100 oAes sai! to contain gator oots+ in apparent goo! or!er S3(-#< a# Billy -AN sell the B&( to someone else# 4e sells 7irst B&( to Sally# 8oo!s arri$e+ -arrier gi$es to Billy# Is carrier lia le "or misdelivery: B# Secon! B&(# Is carrier lia le "or misdescription: Discrepancy et%een %hat B&( says an! %hat the uyer gets# Does not accurately !escri e %hat came out o" the oat# 3hat is the carrier9s lia ility: 0>7/B Bill o" (a!ing un!er -&8SAG - )34AT* -arrier must issue B&( in!icating %hat the mar6s o" i!enti"ication on the pac6aging o" goo!s )la el*# - )4&3 B1-4* Num er pac6ages or pieces C Fuantity or %eight - )-&NDITI&N* Apparent or!er an! con!ition o" the goo!s# Note i" there is any $isi le !amage# -arrier must con!uct a reasona le inspection o" the goo!s in or!er to "ill out a proper B&(
0omerene Act - Negotia le ma6e out to the or!er o" - Non-negotia le eAplicitly state )!eli$er to the person name! M B&( names a person to %hom goo!s go*# - Deli$er goo!s to properly en!orse! ill o" la!ing 0.&B(/B - 7irst B&( %ill sayG 1# -lean O$ersus "oulCclause!Cmar6e!P )-&NDITI&N* on oar! 2# 100 car! oar! oAes )4&3 B1-4* =# Bar6e! )or sai! to contain ser$es as carrier9s !isclaimer* 10 alligator oots )34AT* ># In goo! or!er Oor a! con!ition !escri e!P )-&NDITI&N* 7irst B&( is gi$en to Billy e$en though he sol! his B&( to Sally - -arrier can choose not to !eli$er to proper o%ner i" they !on9t ha$e proper+ original B&(# Ta6e it to court# - -an ta6e a reasona le time to !eci!e $ali!ity o" a!$erse claim o" someone %ho is purporting to e o%ner %ithout proper B&( - Secon! B&( %ill say the same thing+ eAcept !i""erent as to Fuantity 1# &nly 200 oAes arri$e!# 2# H? oAes ha! sa%!ust =# 2? oAes %ere soa6e! ># 100 ha! imitation alligator-s6in oots 0omerene SK011=)a*# Nonreceipt or mis!escription y carrier )lia le to o%ner o" goo!s or hol!er o" negotia le ill*# - 8oo!-"aith reliance on a representation to your !etriment estop that person "rom relying on the "act that they ma!e a truth - 4ol!er gi$es $alue goo! "aith )no notice* in reliance on B&(# )I" you gi$e $alue "or something+ you9re protecte!# Buil!s con"i!ence in negotia le paper*# /Apan! on -&8SA rail-to-rail an! eAten!e! to other carriers an! shippers# - 0omerene applies %here B&( originates in the 1#S# - -&8SA applies "or outgoing an! incoming# .epresentation in B&( are prima "acie e$i!ence that the carrier recei$e! the goo!s as !escri e! )re utta le presumption carrier can !ispro$e this*# - B&( outsi!e o" 1#S# common la% estoppels "rom 0omerene Act 1# BISSIN8 8&&DS 0omereneC-&8SA )estoppel the plainti"" ga$e $alue to the B&( in goo!-"aith+ relying on representations therein*# -&8SA prima "acie e$i!ence+ re utta le presumption# 2# SA3D1ST ;Sai! to contain#< -oul! eAculpate the carrier ecause they !on9t 6no% %hat9s insi!e# 4o%e$er+ i" the %eight are too !i""erent et%een B&( an! %hen %eighe! on oar!+ might hol! constructi$e 6no%le!ge# =# IBITATI&N ;Sai! to contain#< Lery !i""icult to ma6e carrier lia le#
># S&882 B&E/S -arrier coul! e lia le# /stoppe! "rom !enying that they %ere in goo! con!ition as represente! in B&(# S(3- Shipper9s (oa! 3eight an! -ount# -arrier is representing to the Buyer that the Shipper put the goo!s on oar! an! the count an! %eight carrier %as tol! y shipper# -arrier is not ma6ing representation o" ho% much or many o" the goo!s there are# - I" there are lost goo!s+ no lia ility as to 3/I84T an! -&1NT ) ut not -&NDITI&N*# I" they see !amage )$isi le !amage* they can still e lia le# - (oss o" goo!s )J?00 per pac6age limit unless other%ise agree! to*# 1# -an agree to higher $alue 2# Notice to uyer "or reasona le opportunity to !eclare higher $alue =# Serious !e$iation in eha$ior )%here the carrier misrepresents their o%n eha$ior M say something %eighs 100 poun!s %hen it actually %eighs ?00 poun!s*# ># 0er pac6age )coul! e customary %ay o" shipping units*# 097/B (etters o" -re!its )(&-* .e$ie% - & ligations o" the carrier interme!iary in the transactions# Transactions !epen! on the B&( issue! y that carrier# - 0ossi le lia ilities o" the carrier# Depen!s on thin6ing o" the B&( as a representation+ ut some%hat limite!# - -arrier can !isclaim some o" the representation Fuantity an! num er o" pac6ages# (imit the possi ilities o" lia ility on part o" the carrier# (&- alle$iates inherent ris6 in !oing international transactions# Su stitutes the an6 "or the uyer# Problem Class Buyer )5i!9s .&B 8A* %ants to uy -D .&B .u""9s Bone+ 3in!o%s H -ompati le+ -I7 Sa$annah+ 8A+ !eli$ery on or a out April 1?+ 2009# "rom Seller )-opy-ats Argentina* Seller is %illing to honor as long as there is payment y a con"irme!+ irre$oca le (&-# 1# Buyer %ill contact a an6 )ISS1IN8 BAN5 7irst 7armers Ban6*#
2# Buyer %ill secure a (&- "rom 7armers Ban6 )"orms a -&NT.A-T et%een Buyer an! ISS1IN8 BAN5*# =# Issuing Ban6 %ill e$aluate the Buyer# a# Ban6 may reFuire all the money up-"ront# )Buyer %ill !eposit the money*# # Ban6 may eAten! to Buyer cre!it %here he ma6es installment payments to Ban6# ># Issuing Ban6 %ill then agree to pay Bene"iciary )or Seller* upon presentation o" !ocuments such as )reFuirements are !ri$en y %hat the Buyer nee!s*G a# -ommercial In$oice # -lean+ on- oar! B&( c# Insurance an! certi"icate o" origin !# Dra"t )Bill o" /Achange B&E* Bechanism that allo%s "or payment# ?# Issuing Ban6 %ill then pay Seller# 3hen: a# Sight # Delaye! 0ayment @# Issuing Ban6 agrees to issue (&-# A!$ise the A!$ising Ban6 that the (&- has een opene!# 0romise to pay eAten!s to the Seller $ia the A!$isingC-on"irming Ban6# a# -on"irming Ban6 %ill pay Seller upon presentation o" !ocuments# # Seller has three !i""erent promises to e pai! in con"irme! letter o" cre!it )-on"irming Ban6 0romise+ Issuing Ban6 0romise+ Buyer promise*# 3hat9s the o ligation o" the an6: 3hat are they suppose! to !o: 1ni"orm -ustoms an! 0ractices @00 )1-0 @00*# 0u lishe! y the I-- pri$ate international la%# Incorporate! into the contract# - 1-0 %oul! supplant 1-- i" so state! Article 1># Ban6 must only loo6 at the !ocuments on their "ace# - Strict compliance# Ban6s are simply "unctionaries to see i" !ocuments con"orm# /$en minor !iscrepancies coul! ser$e to ren!er the (&- unpaya le# - Some !iscrepancies are easyG 1# I" it calls "or Inspection -erti"icate an! there is no inspection certi"icate# Simple# Not con"orming# 2# 3hat i" there is a minor misspelling in one o" the !ocuments reFuire! "or (&-: Stan!ar! seems o$erly strict $ie% o" compliance# Is the !iscrepancy one that coul! possi ly inure to the !etriment o" the an6 or the uyer: - A!!ress is %rong in a less meaning"ul !ocument# A!!ress is correct in meaning"ul !ocuments 1#S# courts %ill rule "or compliance# 117/B - Strict compliance stan!ar!# 3hat 6in! o" !iscrepancies matter: - -ommercial in$oice M !escription in a commercial in$oice %hat is presuma ly in the pac6ages# /Aact in con"irmation in %hat the (&- calle! "or# - DescriptionsCinconsistencies in the !ocument M !ata# Description o" the goo!s#
- 3hat i" an6 !i! not see the !iscrepancy: 1# -ompact Disc $ersus -D-.&B 2# 3in!o%s H $ersus 3in!o%s =# .ecei$e! $ersus -lean on Boar! - &riginal $ersus copy# Ban6 coul! !ishonor# - Tra!itional stan!ar! applies# - -ommercial in$oice is !istinct in the !egree o" strictness as oppose! to B&(# Not trying to e precise# Not oun! y (&- Discrepancies et%een commercial in$oice an! (&- calle! "or - 3hether all !ocuments calle! "or are there - I" there are inconsistencies in the !ocuments - B&( an! other !ocuments ha$e to consistent )not necessarily precise* %ith regar! to !escription o" the goo!s - Inspection certi"icate: Strict -ompliance In!epen!ence 0rinciple (&- transaction - Baterial )"un!amental* reach in the un!erlying transaction uyer can a$oi!# - Ban6 !ocuments con"orm+ so the an6 must pay# - Buyer can protect themsel$es y reFuiring !ocuments in the (&- to pre$ent reach 0ro"essor Don 4o Seller Secure (&- 105 -Ds BSB Buyer BSB J105+ 3in!o%s H -D-.&B+ -erti"icate o" &rigin+ -&B B&( 1@7/B (imite! eAception to in!epen!ence principle in the conteAt o" "rau! - Ban6 is eing presente! %ith !ocuments that seem to comply on their "ace %ith %hat9s calle! "or on the (&7la# Stat# S@H?#109# 7rau! an! "orgery in commercial (&-# )1* I" a presentation Oprocess y %hich you collect !ocuments an! you present them as calle! "orP on its "ace O an6s !o not loo6 eyon! "our corners o" the !ocumentsP+ strictly complies %ith the (&-+ B1T reFuire! !ocument Oonly reFuire! !ocuments trigger this statuteP is "orge! Onot an authentic signatureP or materially "rau!ulent+ or honor o" the presentation %oul! "acilitate a material "rau! y the ene"iciary Opossi le limit on the application o" the statuteT i" "rau! is !one y the carrier+ then this statute %oul! not applyP on the issuer or the applicant Othese are generally the parties a""ecte! y the transaction "rau! on these parties triggers this statuteP+ then
a# Issuer S4A(( honor Oi#e#+ !espite the "rau! in paragraph )1*P i" the "ollo%ing parties !eman! that they honor itG i# Nominee O ecause these are people that are relying on the !ocuments in goo! "aith# (a% is protecting the negotia ility o" the transactionP ii# -on"irmer iii# 4ol!er in !ue course i$# Assignee # Issuer may Oan optionP honor or !ishonor in goo! "aith O!e"ine! as honesty in "act# (imit on the option to honor or !ishonorP in any other case O!espite eing noti"ie! o" "rau!P# )2* I" the applicant claims that a reFuire! !ocument is "orge! or materially "rau!ulent+ or that honor o" the presentation %oul! "acilitate a material "rau! y the ene"iciary on the issuer or applicant+ a court o" competent ,uris!iction may temporarily or permanently en,oin the issuer "rom honoring a presentation or grant similar relie" against the issuer or other persons only i" the court "in!s thatG a# .elie" is not prohi ite! y la% # The ene"iciary+ issuer+ or applicant %ho may e a!$ersely a""ecte! is a!eFuately protecte! against loss that it may su""er ecause relie" is grante! c# All con!itions to entitle a person to relie" ha$e een met !# Applicant is more li6ely than not to succee! on the merits 3hat a out a!eFuacy o" reme!y to stop an6s "rom paying (&-: - Seller might e insol$ent: 8oo! argument "or lac6 o" a!eFuate reme!y# - .eme!y in another ,uris!iction: 4a$e to sho% that there is a reason %hy you can9t litigate this in another country# (ea$e the issuer out o" it# - /$i!ent proo" o" "rau! an6 must !ishonor - Ruestion as to %hether there is "rau! an6 may !ishonor IN 8&&D-7AIT4 Stan!- y (etter o" -re!it )S(&-* - 1n!er 1#S# an6ing la%+ 1#S# an6s %ere "or i!!en "rom issuing per"ormance guarantees# A "orm o" "inancial promise only triggere! %hen the principal party !e"aults# - I" a party issues a guarantee they9re saying i" this other guy "ails+ then I9ll pay# Ban6s %ere not allo%e! to issue guarantees# 1se! (&- in a "unny %ay# A/B $# Banesto - IsoluA is seller an! 3A0DA is uyer# S(&- is a %ay to ensure per"ormance# It is "inancial security that the other party %ill per"orm un!er their contract# - 3A0DA is scare! IsoluA %ill e "ail to per"orm un!er their contract# 3ant to ensure that IsoluA %ill per"orm# - 3A0DA reFuires IsoluA to go to a an6 an! get a S(&-# Banesto says %e %ill pay uyer i" IsoluA "ails to per"orm# O0ro a ly shoul! ha$e a neutral party !eci!e that you !i! not per"ormP - Deman! guarantee ecause ser$ices are a huge part o" tra!e# 7rau! eAception applies# &ne o" the things that can happen M
/--ommerce %hat issues come up# 3hat %oul! I e concerne! %ith: (oo6 preliminarily at the statutes# 3hat is the response un!er the /lectronic -ommerce Act: NeAt %ee6G mo$e to go$ernment an! the role o" international organiDations in the regulation o" tra!e# An o$er$ie% o" the 3T&# 1K7/B Sur$ey o" /--ommerce 0ro lem# I# Issues raise! y his pro lems# Does he %ant to get out o" the contract: a# -ontract "ormation# &""er-acceptance )counter-o""er:* Lariation in terms: Battle o" the 7orms: # -ontract "ormalities signature )attri ution Q intent to e oun!* c# Disclaimer o" the 3arranties !# Applica le la% any me!iatory la%s applica le usiness $ersus consumer e# 0olicy Fuestion %here !oes the transaction ta6e place "# Statute o" 7rau!s: g# 0ri$acyC-on"i!entialityCuse o" personal in"ormation h# -ountry o" originC,uris!ictional 3ays to a!$ise this person:
II#
/mail ' signature+ assent to contract "ormation: 7e!eral Statute is actually pre-empte! y STAT/ (A3I Set up asic rules+ ut encourage states to enact 1ITA )uni"orm act*# Just ecause you !i! it through email !oesn9t mean that it9s not a in!ing contract# That alone is not a groun!s "or in$ali!ity# &ther reasons %hy this particular transaction in electronic "orm %oul!n9t e $ali!# - This !oesn9t mean it means all the reFuirements o" la%# Bust e some other reason that the electronic contract is in$ali!# It9s not a "ree-"or-all# There are reFuirements speci"ic "or electronic contracts# - 1N-IT.A( means y %hich you can trace tampering %ith electronic recor!# - /(/-T.&NI- ./-&.D ' it IS a %riting as long as certain pro$isions are met# /lectronic Signature# I agree to e oun! an! this signature i!enti"ies me# In consumer la%+ clic6ing ;agree< is enough# Bay later not e enough into transaction# - B&(# 3ho has the right to possession o" the goo!s: The hol!er o" a properly en!orse! B&(# 4o% !o you en!orse: 2ou )or your agent* %oul! sign it# - Authenticity o" a signature in a B&( is $ery important to a$oi! "rau!# Trans"erring title to goo!s# - /ncryption to authenticate signature#
7&. T4/ 0.&B(/BG 3riting is "ine# /Achange o" !ocuments are "ine# /mail M is it enough to attri ute to him an intent to e oun! ecause 4/ sent the email: - 3hat a out contract "ormation: A!!itional terms M !epen!s on the la%I 1-- a!!itional terms %oul! e out ) attle o" "orms*# -IS8 ser$e as a counter-o""er# - (a% o" 4ollan! )or /1 !irecti$e*: 3oul! this apply: 7&. T4/ 0.&B(/BG -hoice o" la% may e a !ispute! term o" the contract# Depen!ing on %here the suit starts+ a 7lori!a %ill %ant to !etermine %hether choice o" la% %as term o" contract# T4/ 7&.1B 3I(( 1S/ ITS .1(/ T& D/T/.BIN/ 34AT (A3 IT 3I(( 1S/ T& D/T/.BIN/ LA(IDIT2 &7 -&NT.A-T# - 8ra$ity o" interest# 3hich ,uris!iction is most implicate! in this transaction: 0u lic interest+ etc#: Automate! systems# /lectronic agent is a %ay in %hich you eApress assent# - /$en i" it is an automate! agent on the other si!e o" the transactions+ you coul! still e oun!# NeAt %ee6G international regulation+ the role o" go$ernments# 3T&# In terms o" applying la%+ a out the pillars o" the gap )> Article 1+ 2+ 11+ =*# - Bost "a$ore! nation treatment: - National treatment: 2=7/B 0reliminary 0oints on 3T&C8ATT 19>HC199> 1# Tra!e )%hy there is tra!e*# The 7ree-Tra!e 0remise# a# 3T&C3estern /uropean system# 7ree-tra!e is a more or less an un"ettere! goo!# i# -ompetition in the mar6et %ill !ri$e choices as to %here %e promote resources# /77I-I/N-2# ii# /$en i" one country is supreme in e$ery %ay+ you shoul! put more resources into e$erything that you9re goo! at# -&B0A.ATIL/ ADLANTA8/# Tra!e %here you ha$e a comparati$ely greater a!$antage# Despite !isparities in income an! !e$elopment+ !isparities in mar6et %ill allo% such tra!e to ma6e sense# # 3hy restrict tra!e: i# (egitimate pu lic interest )sa"ety+ health+ %el"are*# ii# 4uman rightsI iii# 0rotection on the en$ironmentI i$# /conomic protectionism )illegitimate* 2# The .ole an! status o" international institutions an! treaties# a# Treaty an agreement et%een countries# Not eAactly a contract+ ut has a promise "rom one country to another to !o certain things# i# A source o" international la%# A promise B/T3//N countries# -ontrols eha$ior on an international le$el# ii# Tra!itional Armistice Treaty#
iii# Su ,ect-Batter o" Treaties ha$e really change!# 3hat is their status as la%: i$# Treaties are the Supreme (a% o" the (an! Article @# Treate! the same as any other "e!eral la%# 1# Not all treaties are the same# I" the Senate has gi$en its a!$ice an! consent# Some treaties are automatic la% )sel"-eAecuting*# -lear a out o ligations+ signe! an! rati"ie! ' -ongress inten!e! "or it to e la%# )-IS8*# 2# &thers reFuire implementing legislation# Non sel"-eAecuting# -ongress inten!e! to promise to apply it later# Not inten!e! to ha$e !omestic e""ect# $# /Aecuti$e Agreements# 4istorical anomaly# 0resi!ents enter into agreement %ithout any participation o" Senate# Inherent po%er o" 0resi!ent to negotiate %ith other countries# # -ongress has ultimate authority o$er Tra!e (a%# Article I+ cl# =# Interstate )"oreign country* commerce clause# -ongress !elegates authority to 0resi!ent to enter into 7-N )"rien!ship commerce an! na$igation* an! BIT ) ilateral in$estment treaties*# c# Bo!ern-approach# 7ast-trac6 authority# -ongress passes a statute that tells 0resi!ent to enter into an agreement %ith a country# Then %e %ill su mit treaty teAt e"ore -ongress# Then -ongress %ill $ote in$ol$e!# 0ut it in as legislation# Lote it upC!o%n %ith no amen!mentsCchanges# 3ithin >? !ays+ cannot hel! up in committee or "ili ustere!# Tari""# 1#S# -ustoms Ser$ice -ustoms Sche!uleG ho% much to taA a particular thing# .ules in the 8ATT - Bost 7a$ore! Nation Treaty# No !iscrimination ase! on the origin o" the goo!s# Any ene"it that I gi$e to one country+ I %ill gi$e to all countries# )This right is not a solute*# - Negotiating at -on"erence ratchets the tari""s !o%n# - Intergo$ernmental &rganiDation 3T&# The creature o" a treaty# An institution create! y a treaty# 3hat is the role o" the 3T&: (oo6 to the treaty# StatesCnations create the treaty "or States# - 8ATT legal rules# 3T& institutional "rame%or6# 7orum "or negotiation# BonitorCmanage rules# 2?7/B 3T& !esigne! to ser$e the interests o" mem er states %ith regar! to tra!es 8ATT 19>H create! as an eAecuti$e agreement un!er 1#S# la% a"ter International Tra!e &rganiDation pro$isions !ie! in the Senate# - A!!e! !ispute settlement mechanisms later+ %hich %ere "aulty# /A#G a State that %as calle! into a !ispute !i! not ha$e to su mit themsel$es to !ispute settlement process# All the mem ers o" the 8ATT+ inclu!ing the De"en!ant+ coul! !isagree %ith the result o" the panel unanimity to a!opt panel !ecision to e in!ing# 3ea6 system# 8ATT 199> impro$e! legal regime# 1# /Apan!e! the su ,ect-matter un!erneath um rella o" rules o" the 3T&C8ATT
2# Agreement o" ser$ices+ intellectual property rights =# The only in!ing agreement %as 8ATT 19>H# Di! not ha$e to e a mem er o" su seFuent agreements to e a mem er o" 8ATT# In 199>+ 8ATT reFuire! a!option o" all agreements )or you9re not a mem er*# A(( &N/ 1NI7I/D B&D2 &7 (A3 eApan!e! o$er %hat it %as e"ore# - &rganiDational structure !i$i!e! up y su ,ect-matter# Three segments o" la% 1# 8oo!s most !e$elope! 2# Ser$ices =# Intellectual 0roperty .ights - 0lurilateral# 3hen they a!opte! 8ATT 199>+ they sai! all the agreements %oul! e man!atory+ eAcept "or some o" them )plurilateral agreement*# /A#G go$ernment procurement agreement+ ut not a man!atory agreement un!er 8ATT system# Dispute Settlement 0anel 0.&B(/B Basic 0rinciples o" 8ATT 7oun!ational 0illars o" 8ATT# All pre$ious 8ATT !eal %ith respecting national so$ereignty $ersus "ree tra!e# 1# Non-!iscrimination 2# (east restricti$e alternati$e test )tell States you can !o %hat you got to !o+ ut you must achie$e goals in least tra!e restricti$e means possi le*# No !isguise! goals# =# &riginal 8ATT ' limiting the 6in!s o" restrictions the States coul! engage in )Fuotas+ taAesCtari""s*# -ritical 7acts 1# Australia impose! a an on %il! salmon "rom North 0aci"ic 2# /Aempt !omestic pro!ucers "rom heat treatment reFuirement =# No international stan!ar!s "or the parasites ># Sprea! o" contamination ' i#e#+ empirical e$i!ence that !ri$es restrictions# B1ST 0.&L/ ./AS&N 7&. IB0&SIN8 ./ST.I-TI&NS in N/3 8ATT# - DS0 is man!atory un!er 8ATT 0reliminary -onsi!eration 1# 3ho can sue: &nly Bem er States# Best possi le %ay is to ha$e in!ustry %i!e organiDation to as6 the go$ernment to ring the claim on their ehal" on a topic o" concern# 2# 8ATT 0rocess is Stages an! they are time!# a# Stage &ne# 7ormaliDe! process o" consultations et%een a!$ersarial States# # Stage T%o# 0anel o" three eAperts# T%o si!es must agree on eAperts %ho are "air# 0anel are li6e ,u!ges must ta6e e$i!ence )!ocumentary+ eApert testimonyCa""i!a$its*# De$elop eApertise ,urispru!ence# &""icially+ their opinions are not in!ing eAcept on party# Analytical in!eA use as o!y o" la%+ stare !ecisisI c# & ,ecti$e assessment o" "acts y the panel# 7act-!epen!entI -an they ignore national authorities in researching an! ma6ing ,u!gment:
i# 8ATT panel can secon!-guess priorities o" national authorities:: Accept the "act-"in!ings as long as they are ase! in o ,ecti$e e$i!ence )"actual asis "or !ecisions ma!e y national authorities* to ,usti"y the measure !# .eme!ies i# 0anel %ill tell the o""en!ing state to change its policyI -ease an! !esistI .easona le time to implement change that is necessaryI I" the o""en!ing State !oes not comply+ o""en!e! State may ./TA(IAT/I )3ith!ra%al o" concessions+ agree to compensations# Bust e compara le to the !amage !one#* ii# No "ines iii# No !amages i$# No compensation "or past losses $# 3hat a out a small country )8uam* sanctioning a ig country )the 1#S#*: The 1#S# %ill not care+ B1T there might e political rami"ications in the glo al perspecti$e )long-term !amage to the system*# N&3G Allo% smaller countries to in$o6e specialiDe! sanctions pic6 on one thing that coul! really hurt the o""en!ing State# 0.&B(/B ISS1/SC-(AIBS 1# B7N 2# National Treatment =# /Aceptions Banning importation )or Fuota* Art# EI Ruantitati$e .estriction )general prohi ition o" Fuotas*# )or Tari""CTaA or other restrictions+ such as heat treatment M imposition on restriction on uyCsellCuse o" goo! in mar6et non-tari"" arrier*# 3hen they agree to a concession agree to stic6 %ith itI Art# II B7NG (ess "a$ora le treatment ase! on origin M that is+ !iscrimination et%een 8ATT mem ers - Di""erential treatment et%een importe! goo!s in !omestic mar6et )taAes+ regs+ use* National Treatment# Art# III - 0ossi le health an! sa"ety ,usti"ications Art# EE eAceptions - 7oo! or "oo! resource contamination S0S )sanitary-phytosanitary* Art# EI - Basic i!eaG stop Fuantitati$e restriction# -lear $iolation o" the rules in the 0ro lemI Art# I B7N - 3ith respect to certain categories o" eha$iorG customs !uties+ metho!s o" le$ying !uties+ rules an! "ormalities connection %ith importation an! eAportation )inspections+ !elays+ locations+
%arehousing+ assessments+ $aluation+ time "or assessment* goo!s as they are treate! as they come insi!e the country - Any 6in! o" treatment )"a$or+ pri$ilege+ immunity+ a!$antage catch-all pre"erential treatment*# /$en eAceptions must e applie! non-!iscriminatorily# - Bust e accor!e! to all other contracting parties %ith respect to (I5/ 0.&D1-TS )%hat the hell is a (I5/ 0.&D1-T::::::* - Technical legal !e"initionG all eers are the sameI - 3hat a out %ine: (oo6 at teAt o" 6ey pro$isions# 3hat are the 6ey terms an! phrases+ ho% !o I rea6 it !o%n ho% it operates in the legal sense+ an! %hat terms !o I ha$e to really un!erstan! )%hich ones %oul! reFuire interpretation+ particularly in National Treatment+ Art# III*# - TaAes $ersus &T4/. T./ATB/NTSC./81(ATI&NS: 09BA. - -ountry has legitimate health sa"ety concerns that %ill con"lict %ith 8ATT promises o" "ree tra!e# - 1n!erlying policy issue o" %here these issues shoul! e ma!e# 8ATT priorities: 0ro lem - 0arasites in salmon - Australia an on 0aci"ic %il! salmon ) ut not Atlantic* - 4eat treatment "or all "arm raise! salmon prior to retail sale+ ut !omestic Australian "arms are eAempt - There are no international stan!ar!s - -ontamination ris6+ health ris6s+ $isi le in"estations+ empirical e$i!ence an! science 0reliminary 0roce!ural -onsi!erations# 3ho can sue+ %here+ an! ho% un!er %hat la%G DS1 asics# 1# -o$er !isputes un!er entire legal regime M here tra!e in goo!s lea!ing to application o" rules on such tra!e# 2# 8ATT >H an! relate! agreements inclu!ing S0S# =# States only ># 7ormaliDe! process o" negotiations "irst ?# Ban!atory panels o" = eAperts @# Appeal to permanent appellate o!y H# A!option automatic K# Bin!ing only on parties to !ispute 9# .eme!y: -ease an! !esist 10# 0enalty "or non-complianceG Suspension o" concessions or negotiations -laims 1# B7N )"ocuse! on the importation* rules that apply to goo!s !epen! on %here they come "rom
2# National Treatment )internal regulations to !omestic mar6et* importe! "ish ha! to un!ergo heat treatment =# Ruantitati$e restrictions )Fuotas* De"enses 1# 0ossi le health an! sa"ety ,usti"ications )Art# EE* 2# 7oo! or "oo! resource contamination )S0S* 3hat has to e sho%n: 3hat is a $iolation: )Art# EEIII* - Ruantitati$e restrictions )Fuotas* generally illegal - Tari""s lo%er these - Non-tari"" arriers )NTBs* other %ays go$ernments coul! su tly restrict tra!e - The !ilemmaG legitimate health U sa"ety regulations $ersus protectionist legislature !istorting tra!e - 0olicy ase! eAceptions in Article 20 )protection o" health+ conser$ation+ etc#+ Article 21 on national security*# Article III )taAes+ la%s+ an! Fuantitati$e restrictions shoul! not e applie! to a""or! !omestic pro!ucts protection*# 11BA. &ne mem er o" 8ATT shoul! treat other mem ers o" 8ATT the same )origin*# National treatment not !iscriminating et%een "oreign goo!s an! !omestic goo!s# .ules "or B7NCNT 6ic6 in "or li6e pro!ucts# National treatment 8ATT teAt treats taA !i""erently# 3hat is a li6e pro!uct: .esponses to $iolations to the 8ATT 1# 4ealth+ sa"ety+ pu lic %el"are $ersus 8ATT "ree tra!e )Art# 20*# Allo%s "or countries to $iolate the 8ATT rules %hen the reFuirements o" Art# 20 ha$e een met# 3hat are the reFuirements o" Art# 20: Speci"ic eAceptions ha$e their o%n reFuirements )necessary "or the preser$ation o" human+ animals+ health*# - 1se alternati$e that has least restricti$e tra!e impact )!oes not $iolate B7NCNT* - -an you accomplish goals %ithout an on the pro!uct: )Fuantitati$e* - -annot impose restrictions that creates un,usti"ia le or ar itrary !iscrimination on countries or !isguise! !iscrimination on tra!e
!P! A"reement .elationship et%een S0S Agreement an! 8ATT >H )Art# 20 B7NCNT*: Art# 2)1* Basic & ligations un!er the S0S Agreement# Bem ers ha$e the right to ta6e measures necessary "or the protection o" human+ animal or plant li"e or health+ pro$i!e! that such measures are not inconsistent %ith the pro$isions o" the Agreement# V Bem er states can ta6e measures that are consistent %ith all the reFuirements o" the Agreement# Art# 2)2* Necessary measures to protect human+ animal or plant li"e or health must e ase! on scienti"ic e$i!ence# Art# ?)H* I" scienti"ic e$i!ence is unclear+ you can err on the si!e o" caution# State !oes not ha$e to %ait "or science to catch up to ta6e action an! protect its citiDenry# Art# 2)=* B7NCNTCNo !isguise! restrictions on tra!e )similar to Art# 20 o" 8ATT >H*# No ar itrary or un,usti"ia le restrictions to !iscriminate et%een Bem ers %here i!entical or similar con!itions pre$ail# - .ea! Art# =C? in light o" %hat Art# 2 says# .ea! Art# = an! ? together# - 8ATT >H Art# 20 threats to li"e an! health are any threats to li"e an! health ) roa!er*+ %hereas S0S Art# 2+=+? !eal %ith contaminants+ pests# - TimingG (atter agreement )S0S* re"ers ac6 to the 8ATT# Speci"ic o!y o" la% that a!!resses same concerns in ol! 8ATT >H# Art# = 4armoniDation# 1se international stan!ar!s to !e$elop !omestic mo!els# )1* ).esem le* Base! onG start %ith international stan!ar!s+ gui!elines+ or recommen!ations )2* )Bo!el* -on"orms toG eAact mo!el )=* )Impro$e* Bem ers may intro!uce measures that result in a higher sanitary protections ase! on rele$ant international stan!ar!s+ gui!elines+ or recommen!ations )!iscretionary* 3hat is the conseFuences o" each o" these three choices: )1* Base! on no presumption that stan!ar! %as necessary )no presumption o" $ali!ity* )2* -on"orms to presumption that stan!ar! %as necessary an! ,usti"ie! y science# 7lips the ur!en o" proo"# )=* Impro$e must e ,usti"ie! y science or appropriate ris6 assessment "rom Art# ? )%hich is ase! on scienti"ic ,usti"ication Q other ris6 "actors*# Say you impose a Fuota# 2ou gotta meet reFuirements o" not only Art# 20 o" 8ATT+ ut you also nee! to meet reFuirements o" S0S# -annot impose complying measures in a !iscriminatory %ay eitherI Art# ? .is6 Assessment )1* Su section 1# Shall ensure that you use a ris6 assessment# Ta6e into account the ris6s# .estricti$e measures must e ase! on ris6 assessments# )2* Su section ?# 3hen you !o it+ you shall a$oi! ar itrary an! un,usti"ia le !istinctions in the le$els o" protection that you consi!er appropriate in !i""erent circumstances i" those
!istinctions result in !iscrimination or !isguise! restrictions on tra!e# .ecogniDes $ariations+ ut /$ery state can choose %hat le$el o" protections it chooses "or its citiDens+ B1T you must e a le to ,usti"y it ase! on scienceCris6 assessment# 0.&B(/B - Australia Fuantitati$e restrictions on importation on Atlantic salmon# Art# 11 Fuota prohi ition# - 7arm-raise! salmon importe! heat treatment ) ut not !omestic "arm-raise! salmon*# B7N &riginT NT .estriction on importe! goo!s not impose! upon !omestic goo!s# DIS-1SSI&N 1# Are they similar enough to e li6e pro!ucts "or purposes o" B7N: 0hysically the same: /n! use the same: Does the mar6et treat it the same: Do consumers thin6 o" it the same: 2# Liolations o" the 8ATT# De"enses %oul! e in Art# 20# D/7G 3e9re allo%e! to impose the Fuota ecause it is necessary "or the protection o" human health# 3e !o not ha$e any alternati$es to this# =# /$en i" least restricti$e alternati$e+ you cannot impose i" they !iscriminate et%een -ountry A or B+ or i" it is a !isguise! restriction on tra!e# ># Liolations o" the S0S# 1#S# an! .ussia %oul! argue that Australia has $iolate! S0S Agreement# Impose! healthCsa"ety reFuirements that are higher )no limitations on "ish that are contaminate! %ith parasites*# ?# 4igher: Base! on scienti"ic e$i!ence an! proper scienti"ic ris6 assessment: Beasure has a reasona le relationship %ith %hat science tells us: No+ not in this pro lem# 1@BA. &rganiDational structure o" 8ATT an! 3T&# Basic legal principles )B7N+ National Treatment+ certain Articles %ithin the teAt o" the treaty*# - Basic un!erstan!ing a out 3T& !ispute settlement process# Article EE )eAceptions to 8ATT principles* - Basic o ligations create! un!er S0S agreement# 3hat is reFuire! "or a country to impose protecti$e measures "or health an! sa"ety o" animalsC"oo!s %e consume: .ole o" 1#S# 8o$ernment is customs re"lection o" international o ligations# Three issues in -ustoms 1# -lassi"ication 2# &rigin =# Laluation in or!er to assess tari"" 1#S# Agencies !ealing %ith -ustoms - -ongress regulates tra!e Article I+ SK+ cl# = interstate an! "oreign commerce - -ongress "reFuently has !elegate! its authority to the /Aecuti$e Branch# - Delegation o" authority to agencies# Tra!e -ommission to pre$ent !ecepti$e "rau!ulent practices against consumers# -ongress has !elegate! rule-ma6ing authority to agency#
- International Tra!e -ongress create! another -a inet-le$el o""ice# 1# 1#S# Tra!e .epresentati$e 2# Dept# o" -ommerce =# Dept# o" Treasury ># Dept# o" 4omelan! Security -onsi!er alsoG 1# The Ju!iciary# -ourt o" International Tra!e )on par %ith 7e!eral District -ourt# Article III ,u!ges ha$e een appointe! "or li"etime tenure*# SpecialiDe! court# -ases that in$ol$e issues o" international tra!e# a# 7e!eral -ircuit# -ourt o" Appeals "or tra!e relate! pro lems# # (ast resort %oul! e the Supreme -ourt# 2# In!epen!ent Agency# International Tra!e -ommission# a# -ollects in"ormation important to tra!e # A!minister tra!e reme!y la%# Ruasi-,u!icial "unction# 4o% customs %or6s+ classi"ication %hy is it an issue# &rigin+ $aluation# Classi#ication - 1ni"orm %ay a out tal6ing a out %hat the pro!ucts are# - Sche!ule o" i!enti"iers o" pro!ucts !eri$e! "rom international nomenclature# - .esi!ual categories )other* so that all categories can e !elineate!# - 1se+ material+ an! common name Bi6e# Bi6e inclu!es parts# - -hains - Tires - 4an!les - Betal components use! "or !ri$ing %heels - 8eneral .uleG -ategoriDe parts %ith the %hole# Dri$e the classi"ication to a particular place# 0ro$isoG as long as the part has the essential characteristics o" the %hole goo!# .ule =)a* 1# .elati$e speci"icity test# Bost speci"ic !escription o" a particular component Better $ome Plastics Corp% v% &%!% - 4o% to !e"ine sho%er curtain: -urtain "a ric 12N 1nclassi"ia le last in numerical or!er 12N 0lastic liner =N .ule =) * 1# /ssential character test %hen classi"ie! un!er more than one hea!ing# 3hat is the characteristic that gi$es the goo! its essential character:
.ule =)c* 1# I" =)a* an! =) * in!eterminate+ last in numerical or!er in 8.I# Sho%er curtain essential "unction o" sho%er curtain is represente! y the plastic liner# Importer ma6es !eclaration# -ustoms re"ute it# Importer can as6 "or customs ruling "rom In!epen!ent Agency# I" you !o not li6e the result+ you sue# 4o%e$er+ there is a presumption that customs is correct# -4/L.&N D/7/./N-/# I" customs ta6e a position in!ing throughout 1#S# - &nly change! y announcement# &rigin - Attach a goo! to a country# 8oo!s are o"ten manu"acture! or treate! in more than one country# To the eAtent that a pro!uct is solely %ithin one country+ no origin pro lem# - Banu"acture! goo!s origin issue# - &rigin is -.ITI-A( in !etermining tari""# Another component has to e matche! %ith that to !eci!e %hat the actual tari"" %ill e# 1KBA. !'perior (ire v% &%!% - 3ire is a pro!uct o" Spain or -ana!a: - 8eneral .ule o" &riginG Su stantial trans"ormation test 1# A goo! is a pro!uct o" a country %hen it is su stantially trans"orme! in that country# - Ne% an! !i""erent article %ith a !istincti$e name+ character+ or use - Is it !i""erent %hen you loo6 at it: 0hysically: Altere! in some %ay: Laluation - 3hen uyer an! seller an! relate!+ customs %ill not use the in$oice price# They %oul! use $alue pai! "or i!entical or similar goo!s in the mar6et# Tests out %hether this in$oice et%een relate! parties is a genuine in$oice# )no trans"er pricing* 2=BA. Laluation statute relies on actual transaction $alues an! su tracts out )an! puts in* certain that %ill i!enti"y the $alue o" the actual goo!# - -ustoms ser$ices %ill not use the in$oice $alue# In$oice price might e suspect# /Aport -ontrols .easons "or controls# 1# National security )main reason* 2# 7oreign policy )main reason*
=# Short supply 3ho regulates tra!e - -ongress is the primary source o" tra!e regulation - Delegation )policy !irecti$e "rom -ongress* /E/-1TIL/ B.AN-4 )Dept# o" -ommerce Bureau o" In!ustry an! Security )BIS** /Aport A!ministration Act )/AA*# Not a permanent 1#S# Statute# 4as a sunset pro$ision# -an lapse# )3hen lapse!+ historically the 0resi!ent has reinstate! it ecause o" eAecuti$e !elegation Q resi!ual authority*# Sources un!er %hich -ongress authoriDes the 0resi!ent to act - International /mergency 0o%ers Act - Tra!ing %ith the /nemy Act /Aport A!ministration .egulations )/A.*# Source o" the rules pertaining to eAportation# Bare minimum re"lect the same language use! un!er the statute )/AA*# A!! other rulema6ing stu"" )interpretation+ gui!ance*# - A!ministere! y the BISI BIS regulates those eAports that are su ,ect to /A.# De"ine! y the commerce control list )--(*# - /mphasis on technological goo!s that reFuire licenses - Bonitor eAports o" all 6in! - BIS regulates !ual-use things things that can ha$e !ual applications )military or non-military* &ther agencies are in$ol$e! %ith !istinct sets o" goo!s )munitions an! armaments are su ,ect to Dept# o" State )D&S* ecause they !o not ha$e !istinct !ual-use*# - Nuclear materials are controlle! y the Dept# o" /nergy )D&/* - Drugs an! pharmaceuticals controlle! y the 7oo! an! Drug A!ministration )7DA* 1nilateral controls )1#S# ase!* an! multinational controls )agreements %ith "oreign "rien!ly countries*# -ommon approach to certain 6in!s o" !angerous goo!s# - 3ashner Agreement# Se$eral countries %here 1#S# cooperates an! coor!inate restrictions %ith these other countries !ealing %ith certain goo!s# - 4armoniDation %ith %hat 1#S# an! other countries thin6 are !angerous to !eser$e control an! regulation# 1#S# go$ernment+ unilateral control is (I-/NSIN8# - Not all goo!s reFuire a license# &nly reFuire! %hen regulations reFuire# - (icense represents go$ernment appro$al# -annot eAport this goo! to this !estination unless go$ernment appro$es it# - -an control en!-uses+ con!itions o" eAport+ to %hom it can e eAporte!+ Fuantitati$e an! temporal restrictions# - Su ,ect to /A. !oes not necessarily mean that it has a /--N or on the --(# Does not reFuire permission# I" it is not on the list+ it is a commo!ity calle! /A.99 ) ut secon!ary pro$isions must e "ul"ille! AND eAport !eclaration "orm must e "ille! out so BIS can monitor e$en these eAports*#
Trigger o" (icense .eFuirement# 1# 3hat# Type o" 8oo! )classi"ication* 2# 3here# Destination =# 3ho# /n! 1ser ># 4o%# /n! 1se 4i-Tech or !ual-use goo!s# /ncryption technology+ source co!es+ enco!ing+ etc# /E# ATB to Denmar6# /ncryption has !ual-use# 3e are not concerne! %ith Denmar6+ ut %hat %ill Denmar6 !o %ith the goo!: /m argo# Special restrictions that are generally non-permanent# In response to a national crisis+ might e a temporary restriction on tra!e# 1# Is the 8oo! Su ,ect to /A.: a# 3hat is an eAport: .egulations are concerne! %ith much larger picture than the physical mo$ement o" goo!s# Basically e$erything is an eAport# .elease o" in"ormation un!er the rules to someone )or some%here* outsi!e the 1nite! States+ e$en "oreign nationals resi!ing in the 1nite! States# 2# Does it ha$e an /--N or on the --(: -ategoriDing the pro!uct# =# 3hat are the reasons "or control: )control issues+ i#e#+ nuclear proli"eration+ national security+ anti-terrorism+ etc#* ># -ross .e"erence %ith the -ountry -hart )is this goo! restricte! "or this particular country* ?# Is there a licensing eAception: )(icense reFuire! unless M eAceptions apply* a# (imite! Ruantities # A$aila ility o" the goo!s )other countries a$aila ility in the open mar6ets similar Fuality+ similar con!itions process to pro$e this eAception*# -ommonly a$aila le goo!s# @# /n! userCen! use# -onsult the list# 0rocess# 4o% to get a (I-/NS/I 1# 7igure! out on your o%n+ no eAceptions apply )or you9$e as6e! them*# Bay e ecause user is a suspect person# /Acepte! country# 2# Supply !ocumentation electronically on SNA0-. to acFuire licenseI -ompliance 3hat is a $iolation: /A# I get a license %ith an en!-use restriction# /n!-user is not allo%e! to reeAport to another country# Am I responsi le: 3hen am I responsi le: 3hen am I in $iolation o" the statute "or licensing: 3hat are the responsi ilities o" the eAporter )&ther than strict lia ility "or not ha$ing license*: 3hat are the penalties:
Do restrictions on eAport eAten! to users other than 1#S# citiDen: 2?BA. 3as not here =0BA. 7ree Tra!e Areas eAceptions to 8ATT 7ree Tra!e Area# 8o$ernment in$ol$e! in the technical an! sa"ety reFuirements# - /liminate tari""s an! Fuotas et%een countries in tra!e area )Fuotas not necessarily al%ays eliminate!* - 8enerically+ eliminating tra!e arriers %ithin the region+ %ith a primary emphasis on tari""s# - Internal regulation %ithin the 7TA+ ut the countries maintain in!epen!ent eAternal customs -ustoms 1nion# - 7ree tra!e %ithin "ree tra!e area# - common tari"" sche!ule to countries outsi!e o" customs union - other tra!e-relate! topics eing co$ere! - coul! !e$elop a common policy on anti-trust an!Cor competiton+ or recogniDing intellectual property 420&G 5orean parts into BeAico# BeAico maintains its o%n tari"" sche!ule on this goo! 10N BeAican Tari"" %hen the 5orean parts arri$e in BeAico# Is 5orean pro!uct su ,ect to !uty-"ree internal treatment %hen BeAico transports to the 1#S#: I" yes+ !uty-"ree# I" no+ then 1#S# importer %oul! pay tari"" "or 5orean parts at 1#S# tari"" rate# - 5ey Fuestion is a out origin# 4o% !o you ma6e it a NA7TA pro!uct: /ach country maintains its o%n eAternal tari"" sche!ule# 420&G I" 5orean pro!uct comes into Italy+ Italian pays import tari"" sche!ule+ an! then "ree circulation %ithin -ustoms 1nion# Non-NA7TA pro!ucts eAternal tari"" %oul! still apply as it enters e$ery NA7TA country# 0o%er o" B7N i" you negotiate a ene"it+ it ripples across the entire system# I" you negotiate "ree-tra!e %ith ,ust a "e% goo!s+ you un!ercut le$erage o" B7N# - 8ATT allo%s eAception "or "ree-tra!e i" su stantially all goo!s are su ,ect to !uty-"ree treatment# - Su stantially all arriers to tra!e must e eliminate!# 3ith -ustoms 1nions+ the eAternal tari""s must e consi!er %eighte! a$erage tari""s )tra!e $olumes+ a!! all tari""s*# Those countries aggrie$e! y the ne% structure ha$e the right to complain# Negotiate %ith those countries that are aggrie$e! y the ne% tari"" structure an! compensate them in the tra!e sense#
NA7TA 1# 0hase! in the elimination o" tari""s "or goo!s y sector# 2# In$estment )!esigne! to protect in$estors %hen those in$estors ha$e !isputes %ith the go$ernment*# =# 7oreign 3or6ers )NA7TA Lisa*# ># Intellectual 0roperty ?# Ser$ices @# Si!e Agreements )/n$ironment an! (a or Stan!ar!s* -hapter 19 internal !ispute resolution mechanisms# I" BeAico elie$es 1#S# is $iolating NA7TA pro$isions on any o" these su ,ects+ can ta6e them e"ore a panel o" eAperts use! to ren!er a !ecision to !etermine o" %hether or not 1#S# is $iolating NA7TA agreement# - 1#S# %as rule! to e in $iolation o" BeAican truc6ing situation# BeAican too6 retaliatory measures# - Tra!e reme!y la% coul! e applie! %ithin the mem ers states that coul! $iolate NA7TA# 0ro$i!e that normal processes %oul! e un!erta6en in each mem er country# -oul! ha$e that case appeale! !irectly to international ar itral panel# S6ips o$er !omestic court system# - 0anel re$ie%s to "in! out %hether the a!ministrati$e authority properly applie! the la%s o" the ,uris!iction )"airly an! reasona le*# Do not !eci!e %hat the la% is+ ta6e it as is# Ta6e "acts as they %ere gi$en or !eci!e! )unless "rau! or ias*# - A"ter the panel9s !ecision+ the !ecision can e appeale! to an eAtraor!inary challenge pro$ision# -hapter 20 01A0. -ustoms 1nion a!!s to the "ree tra!e aspect o" "ree tra!e area )7TA*# -ommon eAternal tari""# - /1G a!ministere! y the union itsel"+ all the countries %ithin the customs union %oul! ha$e one single tari"" entering the union# &nce goo! enters the area+ it no longer "aces a!!itional tari""# 7ree circulation# -ustoms unions are a goo! place to !o usiness# - NA7TAG rules o" origin are o" prominent important# Is it a pro!uct o" the 7TA )"or "ree circulation* or "oreign )it %ill e hit y tari""s as it tra$els et%een countries in 7TA*# - Su stantial trans"ormation test harmoniDe! tari"" sche!ule# Not approach ta6en y NA7TA# 7or most goo!s+ they ecome a NA7TA pro!uct ase! on tari"" shi"t# 420&# 7lour "rom /1 use! to a6e ca6es in BeAico# 3oul! ecome a NA7TA pro!uct %hen it shi"ts "rom one tari"" chapter to another chapter# -hapter 11 -hapter 19# Bust e liste! as a Fuali"ying mo$e# A pro!uct might mo$e "rom -h# 11 to -h# 19 ' trans"ormation+ an! thus pro!uct o" NA7TA# - Tari"" shi"t is primary metho!# - Also consi!ers LA(1/ ADD/D# - SpecialiDe! pro!uct test# No origins issues %ithin -ustoms 1nions#
/1# 1# (a%-ma6ing capacity# 4as the po%er to create legislation# Bin!ing rules %ith conseFuences# This legislati$e output is superior %ithin the sphere o" competency o" the union# 0arallels to "e!erations )constitution+ treaties )organic la%*+ institutions an! o!ies that ha$e la%-ma6ing capacity+ an! in!ing la% on national go$ernments an! superior o$er national la%+ an INDILID1A( can act upon it )i#e#+ in!i$i!uals can sue+ an! the national institutions must apply these la%s as recourse "or in!i$i!uals** a# NA7TA !oes not ha$e a la%-ma6ing capacity+ no real !ecision-ma6ing capacity# 2# /uropean -ourt o" Justice )/-J*# Basic "unctions o" the ,u!iciary# 7inal authority o$er interpretation an! application o" /1 la%# 4as the po%er o" ,u!icial re$ie% )national la% is inconsistent %ith /1 la%*# .e$ie%s lo%er court !ecision# =# /uropean 0arliament# Does not really ha$e legislati$e capacity )la% !oes not originate here*# -o!ecision-ma6ing process %ith another la%-ma6ing institution# Bay ha$e the capacity to stop legislation# .epresent the 0/&0(/ o" the /1# ># -ouncil o" Binisters# National go$ernment o""icials )pu lic o""icials "rom each mem er state rele$ant to a particular issue*# These o""icials represent their go$ernments )national interests*# ?# /uropean -ouncil )-ouncil o" /urope is separate an! !istinct "rom /uropean -ouncil* an! /1*# @# -ommission# .epresent the /1# -ommissioners represent interests o" the entire /uropean 1nion# -ontrast /1 %ith 3T&# - 3T& ma!e up o" ureaucrats assigne! !i""erent roles# 3ho !o they represent: - 3hat is their ,o "unction: - 3T& is a6in to a clu # Ser$es interests o" the 3T&# It is not a 1NI&N# It is a !e$ice to ser$e interests o" each mem er states# Do not represent interests o" 3&.(D-T.AD/# 3ant to get %hat they can "or T4/I. country# - No institutional representation o" !i""erent constituency# - 3ant rules to promote "ree tra!e in light o" interests o" each mem er state# 1N - -ertain actors in the 1N that represent the 1N# 7or the most part+ 1N is li6e a clu # /-J $# !ispute resolution in 3T& - /-JG nominate!+ scrutiniDe!+ a!opte!+ an! ser$e "or a term# (a% comes "rom !i""erent sources# - 3T&G has an appellate o!y# Bore permanency+ more uni"ormity o" rule+ more eApertise o$er time+ !e$elope! la% is more consistent an! principle!# 3T& panel !ecisions are not technically in!ing )li6e /-J !ecisions %oul! e in!ing*# Not too much legitimacy ehin! 3T&# - NA7TA# No representation as an entity# Decision-ma6ing capacity is $ery limite!# &$erseen y !omestic la% an! !omestic court# NA7TA ---------------------- 3T& --------------------- /1 - & ,ectors to NA7TA are those %ho are concerne! %ith a""ects on national economies# - Aggregate gain ' in!i$i!ual pain
/E-/0TI&NS 7&. B7N ./R1I./B/NTS# 0re"erences "or 1n!er!e$elope! -ountries# 8S0 )8eneraliDe! System o" 0re"erences*# 420&G -lient %ants a source "or cheap goo!s )or ra% materials*# 8S0 programs are in -olumn 1) * ' D1T2-7.// /NT.2 into the 1nite! States# 1# BD2# Speci"ie! Designate! 0ro!uct )eligi le* 0@A0. - /scape -lause an! anti- oycott legislation 8&N/ "rom Sylla us - Tra!e Ser$ices NeAt - Trans"ers o" TechnologyT intellectual property rightsT reme!ies NeAt Import ra% materials )inputs*+ manu"acture them here+ eAport them# Dra% ac6 !uty originally pai! on ra% materials an! inputs+ an! get reim urse! %hen you eAport manu"acture! goo!s outsi!e the country again# Tra!e .eme!ies Anti-Su si!y an! Anti-Dumping .eme!ies# - .ely on a!ministrati$e processes# - 420&G Agency o" 1#S# go$ernment )share! responsi ility et%een Dept# o" -ommerce an! IT-* %ill in$estigate tra!e $iolations )Fuasi-,u!icial*# 0ro lem - I" -ana!ian pro$i!es "inancial contri ution an! a sor s costs+ you can sell lum er "or less in "oreign mar6ets# - Su si!ies !istorts regular competiti$e playing "iel!# - Allo%ing "or su si!ies 1ND/.BIN/S tari"" sche!ule in 8ATTI .en!ers lo%er tari"" meaning"ulness - -oul! run !omestic competitors out o" usiness (egitimate Su si!y - Social !e$elopment - /conomic !e$elopment )an! other competing concerns* -oul! go to 3T& on -ana!ian $iolation o" S-B agreement# 1# 7ile a petition )a!ministrati$e reme!y* 1#S#-# S1@H1# &ne goes to the A!ministrati$e Authority an! one to the IT-# a# -hec6 petition to see i" )in!ustry support+ intereste! party+ allegations+ pro$i!e su""icient in"ormation "or process to go "or%ar!*
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# A!min Authority loo6s to in"ormation relate! to eAistence o" actiona le su si!y an! amount o" that su si!y c# IT- "ocuses on %hether there is an in,ury to the !omestic 1#S# in!ustry !# In preliminary stage+ reasona le in!ication that there is a su si!y )or in,ury* lo% e$i!entiary ur!en# 3ho can "ile: Intereste! party on ehal" o" in!ustry )2?N o" pro!ucers* )unions+ pro!ucers+ consumers+ manu"acturers+ importers+ "oreign pro!ucers*# a# &n ehal" o" in!ustry support in the in!ustry "or claim )cuts out %i!e-s%ath o" parties inclu!e! in ;intereste! parties< !e"inition*# -oalition generally "orms asis "or in!ustry support# # In pro lem H?N o" 1#S# so"t%oo! pro!uction ' ma,ority o" in!ustry "or support o" claim# AllegationsG a# -ounter$aila le su si!y # ;By reason o"< c# Baterial in,ury )or threat or retar!ation* i# /$en i" you can sho% a material in,ury+ there coul! e other eAplanations "or %hy they are in,ure!# Bust e a connection et%een su si!y an! the in,uries# ii# The material in,ury to the !omestic in!ustry Determination higher ur!en o" proo" %ithin time "rames# a# 1pon "in!ing o" preliminary in!ications that there is a su si!y or in,ury+ importers are reFuire! to post a on! in the amount that %oul! co$er a potential counter$ailing !uty# # 420&G 19N counter$ailing !uty# Increase! it %ith 12N surcharge# 0reliminary !etermination cause! a on! to e impose! to co$er any potential !uties# In,ury reFuirement only applies %hen pro!uct is coming "rom a country su ,ect to the 8ATT rules
S1BSID2 Q INJ1.2 ' 7.&B 8ATT )part o" 1#S# la% ut only "or 8ATT countries* 0rocess y %hich agencies share responsi ility /ssential roles )D&- su si!y+ IT- in,ury* Set o" !eterminations that progress "rom preliminary to "inal 1# Is there a su si!y: 2es+ i" they gi$e a "inancial contri ution# /ach one in this pro lem gi$es a "inancial contri ution# )7air mar6et $alue o" stumpage $ersus -ana!ian stumpage at go$ernment rate* a# Supply %or6ers # (oan that %oul! other%ise %oul! una$aila le c# (oan at !iscounte! interest rate !# 3hat a out roa!s: 2# 3hen is it counter$aila le: a# Su si!y is speci"ic i# /Aport su si!ies )su si!y is ma!e !epen!ent on eAports# 8i$e su si!y i" you eAport*# 0rohi ite!I /Aport !epen!ent in la% )eApressly* or "act
)in!ustry pro!uction cannot e a sor e! in local mar6et+ in "act %ill e reFuire! to eAport+ lin6 this as eAport su si!y*# ii# Import su stitution# Strictly "or i!!en# 8et the su si!y as long as you ha$e a certain amount o" localC!omestic content# 2ou %ill use a certain percentage o" !omestic pro!uctC%or6ers# iii# Domestic su si!y# -ounter$aila le i" it is speci"ic to an in!ustry or enterprise in la% )eApressly* or in "act# 1# Sometimes this is o6ay i" the su si!ies are generally a$aila le# 2# I" eligi ility is automatic )no !iscretionary su si!iDing* 0KA0. - 3hich su si!ies are prohi ite! an! actiona le an! %hich are allo%e!: - 3hat !oes it mean to say that a su si!y is speci"ic "or purposes o" !omestic 8o$ernment su si!y that is limite! to a speci"ic in!ustry or an enterprise# 420&G gi$e -hrysler elo% mar6et loans# - &ther %ays to e speci"ic# 8eneral su si!y may !istort mar6et# But i" !irecte! at speci"ic in!ustry+ suspicion is that they are !irectly eing gi$en competiti$e a!$antage in the international mar6etI - Ba6es sense to use speci"icity as a criterion "or !etermining actiona le su si!y# - Speci"icG more !istorte! %ithin speci"ic in!ustry# 0ro lem+ -lass 21 1# 7orest Access .oa! -onstruction an! Baintenance 0rogram a# /Aport Su si!y: No # Import Su stitution: No c# Domestic Su si!y: Speci"ic to the "orest in!ustry M : Depen!s on ho% you !e"ine the in!ustry# !# )Is it a su si!y: 2es+ "inancial contri ution# .eim ursing them to uil! the roa!s# Bene"it that they %oul! not other%ise ha$e i" not "or the su si!y* 2# 7orest In!ustry -apital TaA -re!it a# Su si!y: 7inancial contri ution# TaA that they %oul! other%ise ha$e to pay: 2es+ ene"it# # /Aport: No c# Import Su stitution: No !# Domestic Su si!y: Any company in the "orest pro!ucts in!ustry# 2es# =# .esearch a# .esearch an! !e$elopment grant is eAcepte! in 1#S#-# (oo6 "or su si!y li6e eha$ior that might e challenge! an! support an import# 1# 7inancial contri ution Q ene"it: 2# Type o" su si!ies that are counter$aila le: =# /Aceptions: ># Then sho% that su si!y causes material in,ury Dumping
- 7oreign country sells eAports in import mar6et at less than "air $alue# 1# -ompare price in "oreign )eAport or home* mar6et )i#e#+ normal price* %ith price in import mar6et )i#e#+ eAport price*# 0rice is ene"icial to consumers# But i" there is some mar6et con!ition that allo%s them to sell at lo%er price in eAport mar6et M N&T D1B0IN8# I" there is su si!y )or some a!$antage* that is allo%ing them to sell elo% cost M - No reFuirement in 1#S# la% or 8ATT that reFuires us to tie !umping to pre!atory practice# - Dumping is not anti-competiti$e# .eme!y is al%ays anti-competiti$e# (&&5 AT T4/ (/8A( D/7INITI&NI 1# -lass or "oreign merchan!ise is eing sol! at less than "air $alue o" sales a# -omparing prices a!,ustments ma!e ase! on !i""erent "actors # I" !i""erence et%een prices are small enough+ they %ill !ismiss the case )perhaps 2N %oul! e consi!ere! !e minimis*# That is+ there must e a !i""erential !umping margin 2# An! there is some material in,ury )or threat o" material in,ury*# This reFuirement came "rom 8ATT# 0ro lem+ -lass 22 1# Non-mar6et economy )go$ernment sets the price# -oul! not "airly compare price to that in eAport mar6et*# I" you cannot use the normal price "or sale in "oreign mar6et: a# 1se thir! country analogous %here a "air comparison can e !ra%n# )alternati$e mar6et*# 4ere+ it %as /1 - J=0 per linear "oot# 1#S# price is J10 per linear "oot# 2# -ausation ) y reason o"* =# Baterial in,ury must e one that is not inconseFuential# a# Lolume )in$entory* # /""ect on Import 0rices c# -on!itions in the actual in!ustry# 3hat 6in!s o" things %oul! e important "actors in terms o" the health o" the in!ustry# i# Jo losses ii# 0lant closures iii# (ess-than-"ull capacity operation )un!er capacity*# i$# In$entories $# (o% pro"it margins )or losses* ># Threat o" material in,ury# No in,ury right no%+ ut that there %ill e tren!s in!icating a potential o" "uture in,ury# (o%ering o$er time o" price# Buil!ing in$entory# ?# .eme!y !uty impose! at or!er %hich %oul! o""set counter$ailing su si!y or %oul! o""set the !umping marginI S6ip o$er anti- oycott legislation 1=A0. 8reen $# Bor6
0ossi le Liolations in 0.&B(/B 1# ;Sales -ommission< a# Ban6 Accounts )t%o an6 accounts+ one o" them in the name o" another pu lic o""icial* 2# 0romotional Tour =# 8i"ts to &""icials ># /Ape!ite! Lisa 0apers ?# &""ers o" /mployment Statute appears to repeat itsel"# Insulate! "rom commerce clause challenges )-ongress po%ers*# 0rosecutors ha$e to !emonstrate ho% the mails an! instrumentalities o" "oreign commerce %ere use!# 1# Issuers o" securities )S/-* a# Di""erence is %ithin the reFuirement o" recor!-6eeping# # 7ailure to 6eep proper recor!s is actiona le )another hoo6 to "in! a company responsi le "or ri ery* 2# Any !omestic concern any in!i$i!ual+ citiDen+ national+ resi!ent+ corporations organiDe! un!er the 1#S# ) asically e$ery o!y*# =# &""er+ gi$e+ promise to pay+ promise to pay+ authoriDation to gi$e ># Something o" $alue ?# To a "oreign o""icial )political party+ o""icial+ can!i!ate* 1nla%"ul "or anyone to gi$eCo""er anything o" $alue toG "oreign o""icial or can!i!ate or thir! person )6no%ing that %ill supply this in"ormation to o""icials or can!i!ate* "or purposes o" in"luencingC$iolating !uties+ or in or!er to o tain usiness# -ompleA !e"inition o" %hat essentially loo6s li6e ri ery# A""irmati$e De"ense - (a%"ul un!er the la%s o" that country - Bona "i!e usiness eApense
1?A0. Intellectual 0roperty .ights 1# 0atents a# 0rotects in$entions )something inno$ati$e* # /Aclusi$e right to eAploit the inno$ation in the territory that grante! you that patent c# I" you %ant to protect a pro!uct in a glo al mar6et+ you ha$e to protect it e$ery%here it %oul! matter !# 2ou also ha$e to "ollo% all the rules an! limitations impose! y the "oreign countries 2# -opyrights
a# 0rotect %or6s o" arts =# Tra!emar6s a# .egister a tra!emar6# T.I0S - %hat coul! e inclu!e! )or eAclu!e!* "rom patenta ility - %hat i" a country "ails to "ul"ill its o ligations to o""er a!ministrati$e reme!y "or tra!emar6Ccopyright $iolations: 8o to the 8ATT 0irate!C-ounter"eit 8oo!s - In"ringement# I" the goo!%ill is !ilute!+ or i" the tra!emar6 %ill ten! to con"use the consumer# 0ro lem 1# Bogus%are -hinese corporation %hich openly copies -Ds - 8oo! is protecte! here# .eme!ies are a$aila le here# - 5i!s .&B coul! go o$er to -hina an! go to a court an! as6 -ourt to ma6e Bogus%are to stop# - &nly i" you secure intellectual property rights in -hina can you en"orce in -hinese court - 3T& an! T.I0s 1#S# still !oes not ha$e to recogniDe some other country9s intellectual property rights unless they ha$e I0 rights in 1#S# as %ell# a# 1#S# 7e!eral -ourt# 0ro lematic "or se$eral reasons# i# slo% process ii# "oreign corporation %ill not comply %ith court or!er iii# "oreign corporation %ill !issol$e an! come up un!er a ne% name i$# har!er to ma6e case against 1#S# corporations in$ol$e! # -ustoms SeiDure i# "or copyrights an! tra!emar6s c# A!ministrati$e .eme!ies !# 7oreign Juris!iction 8ray Bar6et 20A0. I0 rights are territorial# Bust ha$e rights in ,uris!ictions %here you %ant to en"orce it# - 2ou cannot to the 3T& -ustoms 0roce!ures# - -opyrightCtra!emar6s $ersus patents# -ustoms proce!ures are relate! to "ormer# - 0irate! goo!s more o" a practical than legal pro lem# Ba6e sure customs can "in! those goo!s that are in"ringing so they can e seiDe!# A!$ance! in"ormation# 420&G Italian i6e company# Name is LNA# 4as this name tra!emar6e!# (icense the tra!emar6 to e use! in the 1nite! States y a 1#S# manu"acturer )name! LNA 1#S#A#* - 1n!er license you get the right "rom tra!emar6 hol!er to eAploit+ use+ sell )coul! e limite! y contract*#
- De"en!ant is /uro Imports# 4as "or many years een importing tires "or sale in the 1#S# 3hen they go to /urope an! they uy the tires in the open mar6et+ they are not !oing anything improper# - 8ray mar6et pro lem# /uro imports is ta6ing tires "or sale in the 1#S# LNA 1#S#A# %ants to eAclusi$ely sell this racing tire in the 1#S# - 2ou cannot !o a customs seiDure ecause they !o not in"ringe on the tra!emar6 )/uro Imports is selling real LNA tires in the 1#S#+ no contract et%een !e"en!ant an! LNA 1#S#A#* S?2@ -(AIB - 7oreign manu"acture! goo! earing a tra!emar6 o%ne! y a 1#S# company that they ha$e recor!e! %ith customs# 1#S# company has not gi$en permission# -ustoms can seiDe the goo!s# - /Aception is the -&BB&N -&NT.&(I Name %holly o%ne! su si!iary %oul! Fuali"y# De"inition in the regulations ' stan!ar!s o" %hat common controls consists o" )interloc6ing oar!s o" !irectors+ o%nerships o" shares*# - LNA 1SA an! LNA Italy only ha! the same name# But Italian company has no shares or oar! o" interloc6ing !irectors %ith 1#S# company# - 0lainti""s )LNA 1SA* %ants imports seiDe!# -ustoms says they can9t seiDe ecause LNA an! LNA Italy are the same# - 0lainti""s %oul! appeal this "in!ing# The De"en!ant %ill point out the contract arrangements to sho% that Italian company can control %hat 1#S# company coul! !o# - -ourt hel! that it is not enough that there are other practical metho!s to control tra!emar6# Does not sho% o%nership# Depen!s B&./ on o%nership interests $ersus practical control li6e %ithin in a contract# - Since eAception !oes not apply so goo!s %ill e seiDe!# 0ro lemG 5i! .oms# Banu"acture! an! ore a genuine tra!emar6# 1se S?2@# Lever Case - Banu"acture! in Britain# 1#S# licenses company in Britain to ma6e Shiel! an! Sunlight# Then British manu"acturer sen!s ac6 to 1#S# - 8enuine goo!+ "oreign manu"acturer+ importe! ac6 to 1#S# earing tra!emar6+ rought it %ithout consent o" 1#S# hol!er# S?2@ %oul! apply+ eAcept 0roctor an! 8am le %as a""iliate! in /nglan!# - -ommon control eAception applie!# /$en i" you cannot seiDe gray mar6et goo!s+ are there other groun!s to say they cannot e importe!: - (anham Act %as aime! at !eceit or con"using use o" tra!emar6# Basic rights# 8oo!%ill associate!# 2ou coul!n9t seiDe it ecause it %as a genuine goo!# - /$en though it ears a genuine tra!emar6+ ecause there are physical !i""erences+ they must e seiDe! un!er (anham Act "or con"usion ) ut not S?2@ common control eAception*# - S?2@ -ommon control eAception applica le to (anham Act: No+ the goo!s coul! e seiDe!# - 1#S# hol!er o" tra!emar6 runs into common control eAception un!er S?2@# Secon! argument is that they are materially !i""erent+ $alue o" tra!emar6 %oul! e !i""erent# -ourt sai! that this %as "ine an! you coul! eAclu!e them#
-ustoms then came out %ith a ne% rule# Importation o" physically an! materially !i""erent gray mar6et goo!s pro$i!e! that a la el is a""iAe! eAplaining that this is a !i""erent pro!uct )in or!er to protect the 1#S# hol!er*# Copyright? - Goods come in looking the same. Copyright versus trademark? License for the trademark but no permission to use copyrighted material. - Use a different form of IP to protect against importation. his can !ork. - "#haustion of right? $nce you sell it% you cannot control !hat happens to the product do!nstream. he original o!ner&s rights are e#hausted. - Copyrights e#hausted by first sale to the U.'. do!nstream% so no recovery? 0atents - Not su ,ect to seiDure rules# - .eme!ies that $iolate I0 )"ocuse! on patent $iolation* - S==H - Alternati$e to suing "or patent in"ringement )this is Fuic6er+ so it is a goo! alternati$e* 3ho %ill hear the reme!ies: - International Tra!e -ommission )"i$e appointe! commissioners*# Actions are hear! y A!ministrati$e (a% Ju!ges# Bore o" a Fuasi-,u!icial process $ersus !umping hearings# Initial "in!ing must e accepte! y IT-# 3hat must e "oun!: 1# 1n"air practices a# Bust su stantially in,ure or !estroy 1#S# company )!i""erent phrase that this means something other than material in,ury*# This is a se$ere reFuirement# 2# In"ringement $ia imports
3hat are the elements: - Bust ha$e an import - Bust in"ringe a 1#S# patent )"ocus here "or patents+ other reme!ies are su""icient "or copyright an! tra!emar6*+ tra!emar6+ copyright+ !esign+ mas6 %orn - An import must simply in"ringe one o" those rights o" a 1#S# citiDen or corporation )"oreign company %ith 1#S# patents* - I" incorporate! in 1#S#+ that !etermines citiDenship o" corporation - In!ustry relating to that pro!uct eAists in the 1nite! States 1# 0lant 2# /mployment o" people =# /Aploitation o" in$estment 22A0.
3hat the reme!ies might e# 1# IT- has the po%er to issue eAclusion or!ers a# Those !irecte! at the particular goo! )or particular manu"acturer* # 8eneral eAclusion or!er )co$ers the entire country an! all possi le goo!s that might in"ringe that particular I0 right*# 2# 0o%er to or!er cease an! !esist at a particular party )in con,unction %ith eAclusion or!ers*# -i$il penalties can e assesse! against party9s that "ails to comply %ith ITor!ers# a# -oul! e "oun! lia le ci$illy ecause you circum$ente! those or!ers# # .eme!ies are not automatic un!er S1==H# i# 0u lic %el"areC ene"its eAceptions# The IT- can or!er+ unless it "in!s that it is %ithin the pu lic9s interests not to or!er eAclusions# Allo% in"ringing goo!s to still come into the country ecause pu lic nee!s it )health an! sa"ety issue*# ii# IT- or!ers are not "inal until they are appro$e! y the 0resi!ent# This po%er to gi$e "inal appro$al )time perio! %here 0resi!ent can !isappro$e !elegate! to 1#S# tra!e representati$e*# S=01 the 1#S# tra!e representati$e can negotiate %ith "oreign go$ernments to open up mar6ets# &ut%ar! loo6ing# Set o" criteria %here 1#S# tra!e representati$e can in$estigate to see i" retaliatory action is reFuire!# - Liolations o" I0 rights# 8ATTCT.I0S -ountry E is "ailing to pro$i!e a!eFuate reme!ies to en"orce 1#S# patents secure! in E+ or are allo%ing pirate! goo!s to e eAporte! to 1#S# Bring S=01 action challenging %hat E is !oing or not !oing# 3oul! !o$etail %ith actions here to stop importation o" the goo!s# - Super S=01# 3atch or in$estigate countries that are egregious $iolators o" I0 rights#
./LI/3 0ro lem 1 1# Sale o" 8oo!s# Allocation o" terms to a contract+ %e ha$e !one %or6 on Battle o" the 7orms# 0ay attention to terms o" the contract anticipating the Fuestions# 2# Spot the issue# (oo6 at %hat o""er an! acceptance %as# I" they ha! een the same+ !on9t %orry a out %hat are the terms o" the contract# =# 7or eAample+ is ;As Is< !isclaimer part o" the contract: ># Tal6 a out %hat the terms are+ then %hat the reach is+ an! %hat the reme!ies are# ?# Irre$oca le letter o" cre!it )loo6 "or %hat %as reFuire! y (&- to !etermine %hether !ocuments supplie! %ere in compliance %ith (&-* @# -ommercial in$oice has to !escri e the goo!s %ith precision )other !ocuments nee! only e consistent*# H# -arriers possi le lia ility o" carriers# 3hat %ere the representations that %ere ma!e in the B&(: -arrier9s lia ility !o$etails tightly %ith the B&(#
K# Sai! to contain no representation o" %hat is actually recei$e!# Sai! to contain is the same thing as a mar6ing# Bar6e!Cmar6e! %ith ' sai! to contain# Num er Q or!er ' clean B&(# 9# S(3- ' !isclaimer# I !on9t really 6no% ho% many oAes %ere loa!e! or %hat they %eighe!+ ut I %as tol! that they %eighe! E# 4as to e true )that shipper !i! not loa!* to !isclaim lia ility# 10# 3hat is strict compliance: 3hat !o an6s ha$e to 6no%: Some things nonsensical: 0ro lem 1A 1# Di! not !eli$er %hat they promise!# Allegation o" "rau!: T%o possi le to stop payment un!er the (&-# Discrepancy et%een %hat %as calle! "or an! %hat %as presente!# 0lus no% %e ha$e "rau! in the transaction# 7rau! eAception %ill not apply an! o$er%helm the in!epen!ence principle# 0ro lem 1B 1# 7ocus no% on the carrier# Turns out that the oAes %ere !eli$ere! an! the carrier !oes not !isgorge "rom the ship the oAes that %ere actually !eli$ere!# a# T%o soa6e! %ith engine oil # T%o are empty c# T%o are lan6 -Ds# 2# I" they loa!e! them+ an! they %ere empty+ they %oul! ha$e ha! to notice that they %ere empty# .epresentation that it %as "ault+ an! carrier shoul! ha$e 6no%n it %as "alse# =# Soa6e! one apparent goo! or!er not trueI Di! not !o their !uty# ># No carrier lia ility "or lan6 -Ds# 0ro lem 11# Breach# Seller has !eli$ere! noncon"orming goo!# 3hat are the reme!ies an! rights un!er the -IS8: Ruestion 1 &utline o" Issues - Ban6s !o not ha$e to 6no% anything a out the %orl!# They !o not ha$e to !o an in$estigation# They only ha$e to 6no% a out an6ing %orl!# - Typos in (&- little it o" lee%ay - Allegation o" "rau! in the transaction 1--# I" the !ocument is "orge!+ "rau! in the un!erlying transaction+ the an6 must pay certain people any%ay+ ut may re"use payment in other cases# - Noncompliance $ersus "rau! )intent to !ecei$e*# - The an6 may pay as long as it pays in goo!-"aith )or stop or pay*# /$en i" an6 suspects "rau!+ they can still in goo!-"aith su mit payment# - Actual 6no%le!ge o" "rau! negates allegations o" "rau!# - See6 an in,unction against payment# -&8SAC0omerene Act# -an e rea! together# - Applica ility o" 0omerene Act is limite! to B&(s originate in the 1#S# A!!s an eAplicit a!!itional reme!y )creates an estoppel argument*# - B&( is a prima "acie e$i!ence a out %hat %as recei$e! an! its con!ition# It is p" true# I" it sai! 100 oAes in goo! or!er+ there is a presumption that it is true#
- -an e re utte! %ith pro!uction o" a!!itional !ocuments# - S(3- !isclaims this i" it is true that they !i! not loa!# I" true+ then ha$e to pro$e carrier lia ility another %ay# - 3hen goo!s are !amage!# - /stoppel %or6s %hen a person has not gi$en $alue# 3hen sale against !ocuments+ an! they are pai! against !ocuments+ an! then "in!s that the B&( %as noncomplying+ then estoppels can e use!# -ontract Issues - 3hy !oes the -IS8 apply# -ontrast to 1-- approach# - (ast-shot approach o" -IS8 $ersus 1-- pro$ision# .eme!ies - 7un!amental reaches - A""irm an! ta6e !amages - A$oi! )in case o" "un!amental reach* mar6et+ co$er Ruestion 2 Tra!e .eme!ies 1# Dumping 2# Su si!ies National TreatmentCB7N S=01 in$estigation to open up the "oreign mar6et# International rightCagreement ha! een $iolate! or there %as some 6in! o" !iscrimination that %as un,usti"ia le or unreasona le# These %oul! trigger an! in$estigation un!er S=01# - 3hat happens i" it %as 8ATT: Liolation o" 8ATT: -omplaint e"ore the 3T&: -ounter"eit goo!sCgray mar6et goo!s reme!ies 1# .egister tra!emar6 2# SeiDure =# 7e!eral court reme!ies are slo% ># S==H reme!ies Ruestion > Su si!iDe! research grant an! no taAes# Basic su si!y pro lem# 4al" o" normal cost o" pro!uction# Selling at 1C= o" the price in 1#S# than in /urope# Dumping# Baterial in,ury# 4a$e to i!enti"y the in!ustry eing in,ure!# Ruestion ? 8S0 pro lem "ocuse! on rules o" origin# 0ossi le em argo pro lem# =?N $alue a!!e!# -omponent parts# Je%el cases ha$e een su stantially trans"orme! that they ecome a pro!uct o" Jamaica# Then they are out o" luc6# Ruestion @
7oreign corrupt practices# - Lalue eing gi$en %ith purpose that the o""icial e in"luence! in con!uct o" pu lic a""airs in or!er to retain or 6eep usiness# - /AceptG grease payment+ eApe!ite! payment+ routine payment#

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