Global Trading Rules & Process

1. Global Trading Rules & Process • This presentation includes; • Intl trading Laws, • Trade Payment modes, • Transportations • Trade Insurance • Trade Dispute resolutions.

2. International business law • International law • Need for international law • Conflict of laws • International private law • International public law • International economic law

3. International Business Law 2009

4. A. WHAT IS INTERNATIONAL LAW? • B. THE MAKING OF INTERNATIONAL LAW • C. SOURCES OF INTERNATIONAL LAW • D. THE SCOPE OF INTERNATIONAL LAW IN ACTUAL PRACTICE • E. INTERNATIONAL PERSONS • F. THE RIGHTS OF INDIVIDUALS UNDER INTERNATIONAL LAW • G. LEGAL SYSTEMS IN THE WORLD

5. Conflict of laws • Effectiveness of law in other sovereign nations • Laws differ in different nations • Conflict of laws arises between states • Need for rules in the international plane

6. Canada, urged to extradite accused smuggler （2006-05-23 (Xinhua) • -- The Chinese government has urged Canada to extradite alleged smuggling kingpin Lai Changxing as soon as possible to face trial in China, • Lai is accused of leading a ring which conducted, in collaboration with corrupt officials in coastal Xiamen City, the biggest smuggling operation uncovered in China since 1949. The case involved goods worth 10 billion U.S. dollars. • Lai fled to Canada with his family in 1999. He has been trying to gain refugee status in Canada. • Liu said the Chinese government had taken a firm stance on the issue and has reiterated the stance to the Canadian government.

7. The CBSA's denial of releasing Gao Shan based on claims that his bail money is illegally obtained could mean Canada is finally determined to deal with Chinese fugitives hiding in Canada, not hoping the drama of Lai Changxing to repeat.While other countries such as the US has been cooperating with China in extraditing fugitives, Canada and…… Canada is thus deemed "fugitives' heaven" for harbouring these suspected criminals.……

8. A. WHAT IS INTERNATIONAL LAW? • Defined: The body of rules and norms that regulates activities carried on outside the legal boundaries of nations. • Three international relationships are governed by international law: • Those between nations and nations. • Those between nations and persons. • Those between persons and persons.

9. A. WHAT IS INTERNATIONAL LAW? • Is International Law Really Law? • It is because nations regard it as something they are obligated to respect. • Distinguish: Comity • Comity is courtesy. It is the practice between nations of treating each other with goodwill and polite. • Comity is NOT law because countries do not regard it as something they are obligated to respect.

10. B. THE MAKING OF INTERNATIONAL LAW • There is no formal international law-making machinery • The basic mechanism for creating international law is: The consent of the international community.(example: Diplomatic privilege, • 1961 Vienna Convention on Diplomatic Relations)

11. General consent--State practice: • Multilateral treaties • statement: diplomatic exchanges, formal instructions, judiciary decisions • Inaction • Particular consent • Declarations of government , domestic legislations… • Arbitration tribunals

12. C. SOURCES OF INTERNATIONAL LAW • Sources listed in Article 38(1) of the Statute of the International Court of Justice: • International conventions. • International custom. • General principles of law. • Judicial decisions. • Teachings of publicist.

13. C. SOURCES OF INTERNATIONAL LAW • 1 Treaties and Conventions - The most important sources of international law. • Treaties: agreements between one or more nations. • Conventions: agreements sponsored by international community

14. C. SOURCES OF INTERNATIONAL LAW • Reasons for binding effect of treaties • Shared sense of commitment. • Because one country fears that if it does not respect its promises, other countries will not respect their promises. - Rules governing treaties: • Traditionally customary. • Now codified in the Vienna Convention on the Law of Treaties (in force since 1980 ). • Case 1-1. Legal Status of Eastern Greenland • The effect of an authorized oral commitment made by a gov’t official … is deemed to be binding .

15. Binding effect of the pact • State may choose to bind itself through signature, but also by ratification or accession國家可以選擇通過簽署條約以約束自己，更可採取「認可」或「加入」Ratification is act where state declares itself bound by treaty「認可」是指國家宣布自己受限於某條約Instrument of ratification deposited with designated state or I.O

16. C. SOURCES OF INTERNATIONAL LAW • Custom Rules that have been around for a long time or which are generally accepted.

17. two elements — one behavioral and one psychological: • 1) Usus (Latin for: usage): • Is the consistent and recurring action (or lack of action if the custom is one of noninvolvement) by states. • 2) Opinio juris sive necessitatis (Latin for: Of the opinion that the rule is proper and required): The custom must be regarded by states observing it as one that they must obligatorily follow.

18. Exceptions to the application of custom 1) Persistent objector: A state that persistently objects to a practice during its formative stages will never become a party to it. • 2) A state allowed by the international community to deviate from a customary practice. • Case 1-2. The Asylum Case

19. C. SOURCES OF INTERNATIONAL LAW • 2 Customary rule • Pacta sunt servanda • is a basic principle of international law and civil law. It is Latin and it means "pacts must be respected" by all sides. With reference to international agreements, "every treaty in force is binding upon the parties to it and must be performed by them in good faith" (Vienna Convention on the Law of Treaties, 1969, art. 26, and the Vienna Convention on the Law of Treaties between States and International Organizations or between International Organizations, 1986, art. 26). All serious state and international organizations observe this fundamental and basic principle of international law. If a state does breach the agreements she had inked or promises she had given, no state will trust her in future

20. C. SOURCES OF INTERNATIONAL LAW • Domestic laws ( foreign related) • General Principles - those legal principles common to nation states. • Interpretation of treaties, customs, and general practice • Judicial decisions • Teachings (publicists )

21. D. THE SCOPE OF INTERNATIONAL LAW • The Practice in International Tribunals • Municipal law is regarded as subordinate (subservient) to international law. • States have a general obligation to bring their municipal law into compliance with international norms. • Procedurally, municipal law is treated as “mere fact.”—the onus of proof

22. Polish nationals in Danzing case , PCIJ Reports vol. 1930, series B No. 17, p332(1930):‘it should be observed that a state cannot adduce as against another state its own Constitution with a view to evading obligation incumbent upon it under international law or treaties in force’

23. D. THE SCOPE OF INTERNATIONAL LAW • The Practice in Municipal Courts: • International law is regarded as (correlative). • Court determines if a particular international law has been received into the municipal jurisprudence. • If it has, the Court applies it as if it were a locallaw and not a mere fact.

24. D. THE SCOPE OF INTERNATIONAL LAW • Determining if International Law has been Received Into the Local Jurisprudence • Customary international law: • Doctrine of Incorporation: a custom is automatically part of a nation's laws as long as it is not inconsistent with those laws. (Majority rule) • Doctrine of Transformation: a custom is not part of a nation's laws until expressly adopted by legislative or (legislative) act, or by local usage. (Minority rule)

25. As for treaties: • Reception rules depend upon two factors: • (i) The nature of the treaty; and (ii) The constitutional structure of the ratifying state. • 1] The nature of treaties — they may be: • Self-executing treaty: One that contains a provision that says the treaty will apply in the parties’ municipal courts without their having to adopt any domestic enabling legislation. • Non-self-executing treaty: One that has no such provision. • 2] The structure of states • — constitutions may assign to one or more state organs (or branches) the responsibility for entering into treaties.

26. Making and effectiveness of the pact • Bilateral treaties produced by foreign ministries or embassies. • Multilateral treaties made through conferencesSigning of treaty does not indicate acceptance of treaty by signatoryMerely indicates authentication of text. Usually two-thirds of conference must authenticate text

27. State may choose to bind itself through signature, but also by ratification or accession • Ratification is act where state declares itself bound by treatyInstrument of ratification deposited with designated state or I.O.Ratification allows parliament to consider treaty • Accession is act of state that did not negotiate original treaty. • One or more parties to treaty may object to certain of its provisions. Reservation allows reserving state to exclude or modify provisions as to that state.

28. E. INTERNATIONAL PERSONS • States • Intergovernmental organizations (IGOs) • Nongovernmental organizations (NGOs) • Business organizations • Sole proprietorship • Partnership • Company--MNC • Individuals

29. E. INTERNATIONAL PERSONS • States • Defined: Political entities that have all of the following characteristics – • A territory. • A population. • A government capable of entering into international (community). • A government capable of controlling its territory and people.

30. E. INTERNATIONAL PERSONS • Kinds of states: • Independent: free from political control of other states. • Dependent: have formally surrendered some of the their political and governmental functions to another state. • Inchoate: lack some _conditions_ required to be a state.

31. E. INTERNATIONAL PERSONS • International Organizations • Permanent organizations set up by two or more states to carry on activities of common interest. • Inter-government organization • Non-government organization • Characteristics: • Permanent. • Set up by two or more states. • Pursue matters of common interest to the creators. • Function ___ as independent international persons.

32. E. INTERNATIONAL PERSONS • Examples: • European Union • United Nations • Creation:essentially in the same fashion as a corporation.— charter

33. E. INTERNATIONAL PERSONS • Legal capacity of IGOs: • the right to carry on diplomatic relations with states and to sue or to be sued in international tribunals. • Sources of legal personality: • Constituent treaty • Case law • Acquired by recognition. • Automatically from its own state members .Becoming a state implies recognition of the igo . • Exceptional: in U.K. a special certification should be given by the gov’t to recognize the legal capacity of the igo . • When specifically granted by non-member states.

34. E. INTERNATIONAL PERSONS • Nongovernmental Organizations (includes Non-profit NGOs and for-profit NGOs) Set up by individuals or groups • Governed by the law of the country where the NGO is incorporated • Ex.: Amnesty International, Greenpeace • States are usually not parties of NGOs Non-profit NGOs: • serve as independent agencies for private national groups in international affairs • For-profit NGOs: businesses operating internationally • Other names: • Multinational Enterprises (MNEs) • Transnational Corporations (TNCs)

35. INTERNATIONAL REGULATION OF MULTINATIONAL ENTERPRISES • Several International Organizations Have Promulgated Rules of Ethical Behavior for Multinational Enterprises, including: • Organization for Economic Cooperation and Development (OECD). • International Labor Organization (ILO). • International Chamber of Commerce (ICC). • These are only Suggested Rules • Binding international codes do not exist as yet.

36. HOME STATE REGULATION OF MULTINATIONAL ENTERPRISES • The most important forms of home state regulation are: • 1) Regulation of competition. • 2) Regulation of injuries caused by defective products. • 3) Prohibition of sharp business practices. • 4) Regulation of securities. • 5) Regulation of labor and employment. • 6) The establishment of accounting standards. • 7) Taxation.

37. Some of these rules are applied extraterritorially by home state • most notably: • 1) Regulation of competition. • 2) Regulation of injuries caused by defective products. • 3) Prohibition of sharp business practices. • The country that has been most willing to apply its laws extraterritorially has been the United States. • 1) The European Union, to a lesser extent, has also begun to apply its internal regulations extraterritorially.

38. The Host nation’s Regulation • Local regulation: A host state may regulate a foreign firm that is doing business within the state • Extraterritorial regulation: A host state may some-times seek to regulate the foreign firm. • Consent to the Jurisdiction of the Host State. • Common Enterprise Liability • Piercing the Company Veil

39. Piercing the Company Veil • Ignoring the corporate structure of a company (i.e., “piercing the company veil”) and exposing the shareholders to personal liability. • E.g. The commingling of corporate and personal assets.

40. F. RIGHTS OF INDIVIDUALS UNDER INTERNATIONAL LAW • Traditional view: no rights, only duties. • Evolving view: • Individuals have basic human rights • Individuals may sue state in some international tribunals • Icsid-- oecd

41. G. COMPARISON OF MUNICIPAL LEGAL SYSTEMS • The Romano-Germanic Civil Law System • The Anglo-American Common Law System • The Islamic Law System • Review of Chinese law

42. Comparative Law: The study and analysis of the different municipal law systems. • a. Legal “families”: • 1) Romano-Germanic Civil Law. • 2) Anglo-American Common Law. • 3) Islamic Law. • b. These are divided into subfamilies. • c. There are also hybrids. • d. There are also some practices that are unique to a particular country.

43. Civil law system • Derived from Roman law. It is a complete code of written laws whose primary source of law is legislation. It is inquisitorial in form and forms the basis of the legal systems of most western European countries. Japan and the former colonies of France, Spain and Portugal in Latin America, the near East, Indonesia, Thailand, Vietnam and parts of Africa

44. Countries with Civil Law systems distinguish between the civil law and public law. • 1] Public law evolved separately from the movement for codification of civil or private law. • a] Civil law (for civilian lawyers) is only the law contained in the codes and its auxiliary statutes (that is, the law of persons, family law, property law, succession law, the law of obligations, commercial law, labor law, and criminal law). • b] Public law is constitutional and administrative law.

45. Common law system • Derived from case law (or precedent) and statute. It is accusatorial in form with an emphasis on remedies. It forms the basis of English law and can be found in the U.S. , as well as Commonwealth nations including Canada, Singapore, Malaysia, New Zealand, India, Pakistan

46. These courts were important in developing case law — precedents • This is the principal factor that distinguishes the common law from the R-G civil law. • The “common law” must be distinguished from the law which evolved out of: • Equity: A principle of justice developed by the king’s chaplain, or chancellor, to provide parties with a remedy when none was available in the king’s courts • Admiralty (the laws governing sailors) and other specialized jurisdictions.

47. The common law is not easily received by other countries because: • 1] It is based on a matrix of case law and statutes. • 2] It uses the jury system and the doctrine of supremacy to limit the actions of the government. • 3] It uses a complex terminology. • The civil law is widespread because it is the easier of the two legal traditions for a country to receive. • 1] It is encapsulated in convenient codes. • 2] It deals primarily with private law that is of little threat to the local political system. • The civil law countries (most of the rest of the World) are not connected by any political or historical connection.

48. Introduction to the legal system in China • Legislative Branch • The National People’s Congress (NPC) is deemed to be the “highest organ of state power” • Judicial Branch • The judicial system of the PRC consists of the people’s courts, the Supreme People’s Court, the people’s procuratorates, the Supreme People’s Procuratorate. • Executive Branch • The State Council is the government of the PRC under the authority of Articles 85-98. It is the highest organ of state administration (Art. 85). The State Council consists of the Premiers, Vice-Premiers,

49. Sources of law in china • Constitution • NPC Statutory law and other legislative enactment • the General Principles of Civil Law of the People’s Republic of China, Civil Procedure Law of the PRC • International law • Case law ?

50. LECTURE 2: INTERNATIONAL ORGANIZATION • IMF • WTO • EU • OECD • APEC • NAFTA