Professional Documents
Culture Documents
Spring 2015
Ceren Canet SAHIN
Purpose
Improve security, loyalty and justice between
economic agents
In fact there is a global lack of sources for ITL,
there is no big organization producing
regulations. If there is a globalization of
exchanges, there is no a globalization of law.
Sources
Regulations at different levels:
National law
EU sources
International sources
Transnational sources
THE CONTRACT!
Strategic Counseling to
International Clients
This part is designed to introduce foreign lawyers to
international legal issues faced by international
organizations wishing to invest in abroad.
This chapter provides a fundamental working knowledge
of the varied aspects of establishing a business plan and
prepares foreign attorneys for advising their clients on
the subject area.
B. Importance of guanxi
Chinese contract is a relationship. Connection is so important for them,
even more than law.
People are very well connected.
guanxi is a kind of credit, it is the key word of Chinese business
relationship.
For example, there are 2 ways to create a foreign company in China:
- Equity joint-venture: there are advantages in the field of labor law, tax
law or property law because of quanxi. Chinese people want you to do
joint-venture, because they want to learn new technologies, methods, vs.
- WFOE (wholly foreign owned enterprises): you lose all of these
advantages that quanxi provides.
More examples
Japon
India
Spain
Tax Jurisdiction
Can activities be conducted in the US, be
varied out in a manner that does not
constitute a taxable presence?
How to avoid double taxation?
Subjects
1. Commercial terms
2. Bills of Lading
3. Payment by Letters of Credit
4. Intl IP Law
5. Breach of Contract and the Remedies
6. International Arbitration
I. Introduction to ITL
What is Intl trade?
What is Intl Trade Law?
II. The Unification
Free Trade vs. Protectionism
From GATT to WTO
Purpose of the uniformity, UCC and CISG
III. Sources of ITL
National law, EU Sources, International and Transnational Sources, Lex
mercatoria
IV. Actors of ITL
I. Introduction to ITL
A) What is International Trade ?
The exchange of goods and services between
countries
Global events effects
Ex. Political change in labor law
Goods: food, clothes, oil, wine
Services: tourism, banking, transportation
Advantages
A country may import things which it cannot produce
Maximum utilization of resources
Benefit to consumer
Reduces trade fluctations
Utilization of surplus produce
Fosters International trade
Disadvantages
Import of harmful goods
It may exhaust resources
Over Specialization
Danger of Starvation
It may lead to war
Reasons
Protect domestic industries
Protect domestic employment
Strategic reasons
Political pressures
Protect culture
Prevent Dumping selling goods in the destination
country below cost to break into that market
Trade Liberization: aims to free up world trade and break down the
barriers to international trade
Basic philosophy rests on the principle of comparative advantage
GATT (1947)
Uruguay Round 1994 set up the WTO
WTO provides the forum through which trade issues can be
negotiated and works to help implement and police trade
agreements
Potential benefits
Promotes intl specialization and increases world output
Promotes efficient use and allocation of world resources
Allows developing countries access to the heavily protected
markets of the developed world thus helping promote
development
Facilitates the working of the intl market system and the working
of price signals to ensure efficient allocation of resources, intl
competition and the associated benefits to all
Between 1947 and the last year of GATT there were 8 rounds of
negotiations between the participating countries.
The first 6 rounds were related to curtailing tariff rates. 7th
round included the non tariff obstacles.
The 8th round was entirely different from the previous rounds
because it included a number of new subjects for consideration.
This 8th round was known as URUGUAY ROUND.
The discussions at this round only gave birth to WORLD TRADE
ORGANISATION (WTO).
WTO
The World Trade Organization (WTO) deals with the
global rules of trade between nations.
Its main function is to ensure that trade flows as
smoothly, predictably and freely as possible.
WTO is an organization for liberalizing trade, a forum
for governments to negotiate trade agreements and a
place for them to settle trade disputes
At the heart of the system known as the
multilateral trading system are the WTOs
agreements, negotiated and signed by a large
majority of the worlds trading nations, and ratified in
their parliaments.
WTO Principles
Non discrimination
Free Trade: Promote free trade between nations through
negotiations.
Stability in the trading system: Member countries are committed
not to raise tariff and non tariffs barriers arbitrarily.
Promotion of Fair Competition: WTO provides for transparent, fair
and undistorted competition.
It discourages unfair competitive practices such as export subsidies
and dumping.
TRIPPS, The agreement requires member countries to provide
patent protection to all products or processes in all fields.
TRIMS, refers to certain conditions or restrictions imposed by a
government in respect of foreign investment in the country.
Evaluation of WTO
The WTO members now account for over 97% of the
international trade indicating the potential of bringing
about an orderly development of international trade.
Benefits of WTO:
GATT / WTO has made significant achievements in
reducing tariff and non tariff barriers to trade.
Developing countries too have been benefiting
significantly.
Liberalization of investments has been fostering
economic growth of a number of countries.
It has a system in place to settle trade disputes
between nations.
It has a mechanism to deal with violation of trade
agreements.
Drawbacks:
Negotiations and decision making in the WTO are
dominated by the developed countries.
Many developing countries do not have the
financial and knowledge resources to effectively
participate in WTO discussions and negotiations.
Due to the dependence of developing countries
on the developed ones, the developed countries
are able to resort to arms twisting tactics.
national rules
The Uniform Commercial Code (UCC)
Sale of Goods Act 1979
UCC
UCC objectives
Structure
Commercial utility
Aid to courts
Commercial practice
Remedies
Intl Influence
Article 2 had some influence on the drafting of the United Nations Convention on
Contracts for the International Sale of Goods (CISG), though the end result
departed from the UCC in many respects.
UNIDROIT Principles
1994 revised 2004 and 2010
Restate intl contract law and practice
Wider than the CISG as not limited to intl
sales transactions, but apply to all types of
intl commercial contracts
Harmonization aims to :
create consistency of laws, regulations, standards and practices, so
that the same rules will apply to businesses that operate in more
than one member State, and so that the businesses of one State do
not obtain an economic advantage over those in another as a result
of different rules.
reduced compliance and regulatory burdens for businesses
operating nationally or trans-nationally.
What is WTO?
It is an organization for trade opening.
It is a forum for governments to negotiate trade
agreements.
It is a place for them to settle trade disputes. It operates a
system of trade rules.
Essentially, the WTO is a place where member
governments try to sort out the trade problems they face
with each other.
UNIDROIT
Set up in 1926 as an auxiliary organ of the League of Nations, the Institute was,
following the demise of the League, re-established in 1940 on the basis of a
multilateral agreement, the UNIDROIT Statute.
Its purpose is to study needs and methods for modernizing, harmonizing and coordinating private and in particular commercial law and to formulate uniform law
instruments, principles and rules to Achieve those objectives.
About UNCITRAL
The core legal body of the United Nations
system in the field of international trade law. A
legal body with universal membership
specializing in commercial law reform worldwide
for over 40 years.
UNCITRAL's business is the modernization and
Harmonization of rules on international business.
Trade means faster growth, higher living standards, and new opportunities through
commerce. In order to increase these opportunities worldwide, UNCITRAL is
formulating modern, fair, and harmonized rules on commercial transactions. These
include:
About ICC
The International Chamber of Commerce [ICC] was founded in 1919 and is based in Paris.
The purpose: to serve world business by promoting trade, investment, open markets for goods and
services, and promote the flow of capital.
ICC important role:
for disseminating information and policies and legal rules internasiona trade among entrepreneurs
in the world, and
providing training and contract design techniques and other practical skills, such as in the
international trade
CISG
The United Nations Convention on Contracts for the International Sales of Goods of 1980,
and it came into force as a multilateral treaty on 1 January 1988, after being ratified by 11
countries
(is sometimes referred to as the Vienna Convention but is not to be confused with other
treaties signed in Vienna)
Uniform international sales law: CISG establishes uniform-rules for drafting international
sales contracts, and sets the legal rights and obligations of the seller and the buyer under
such contracts. CISG rules apply automatically to the sales contracts between the countries
who have ratified the convention.
Ratified by 83 countries
Major absentees
Hong Kong, India, South Africa and the United Kingdom
The absence of the United Kingdom, a leading jurisdiction for the choice of
law in intl commercial contracts, has been attributed variously to:
The government not viewing its ratification as a legislative priority,
a lack of interest from business in supporting ratification,
opposition from a number of large and influential organisations,
a lack of public service resources,
and a danger that London would lose its edge in intl arbitration and
litigation
Scope of application:
applies only to Contracts of Sale of Goods
Cross-border sales, except consumer
contracts
Rules on: formation of the contract, obligations
of the parties and the consequences of breach