INTERNATIONAL BUSINESS LAW MGMT 109
Summer 2017 CLASS ONE – UCLA LIVE CLASS

I. INTRODUCTION / SYLLABUS / VIDEO – Questions?

II. BRIEFING CASES – Review Format

A. Parties(plaintiff - defendant)
B. Facts (what did they do)
C. Procedure (lower court decision/appealed)
D. Issue (social problem)
E. Decision (final decision)
F. Reasoning (Rule, Application, Conclusion)

III. Subjects we will be studying:

A. International Law & Organizations
B. European Union
C. International Litigation
D. Intellectual Property
E. Labor & Employment
F. Commercial Transactions & Contracts
G. Taxation of Inbound & Outbound Transaction (127C)

IV. TRADE

A. Exporting – shipment of goods to foreign buyer in their country

1. TYPES: Direct & Indirect
   • Direct: Sell directly to foreign buyer or agent.
     Eg. Apple sells Iphone to people in Beijing
   • Indirect: Sell to 3rd party broker, who in turn sells to foreign buyer.
     Eg. Apple sells Iphone to distributors in Beijing who will sell phones to people later
   • GLOBAL SOURCING: (locate & purchase goods in foreign markets)

B. Importing – buying goods from foreign buyer & entering them into another country (including US)

C. GOVERNMENT CONTROLS ON TRADE: How regulated/controlled?

1. Tariffs: Taxes/duties on imported items — Raises revenue -Protects local markets

2. Non-Tariff Barriers:

   • Technical Barrier
     Eg. Spanish Ham use different way to cut, so they comply the way FDA need, in order to import in US
   • Quota (limiting the number of a particular products)
   • Embargo (禁令) US embargo Cuba, embargo usually done by the president. Now becomes a law (now the congress need to approve to )
   • Boycott (联合抵制)

3. Question: Can a U.S. state impose tariffs on goods from another US State?

V. INTELLECTUAL PROPERTY: (licensing)

Revenue stream to get the % every time local company make.
They have better understanding in culture etc to sell/ to translate the contents.

1. Deals with
   • Trademarks,
     unique name and logo of a company, eg. Nike the name, the swoosh, colors
   • Copyrights,
     create works, song/movie/novel
   • Patents,
     drug to cure cancer
2. What are International Licensing Agreements?
3. How does Franchising Work:
   Franchise is the agreement include licensing. Agree to sell the usually in geographic area. Franchisee pay 3-5% growth revenues (not net rev).

case: RAYMOND DAYAN case page 9

The fact: Dayan formed a law sue, asked for the injunction for the termination from McDonald. McDonald end up winning in the lower court and Dayan appeal.

Issue: Can a company terminate the franchise agreement when the franchisee does not follow certain agreement? Do franchise need to

When Appeals, 3 results:

1. Affirm (upper court agree with lower courts, McDonald win )
2. Reverse ( does not agree lower court, Dayan win ) Reverse + remand ( disagree, but let lower court make new decision)
3. Modify (accept part, reverse part)

VI. FOREIGN DIRECT INVESTMENT: (FDI)

1. How does that differ from Trade?
   (investment in a business in a foreign country as opposed to just selling/buying their products)

2. How is this accomplished by many large corporations?

   • Susidiaries
     US co. want to do business in china, so they own a company called CHINA co., the stockholder of CHINA co. is US co. CHINA co. is wholely foreign owned enterprise WFOE
   • Branch
     US co. go to china and register as US co. in china.
   • Joint Ventures,
     Partnership with local company
     successful case: japan Disney is owend by a local company
   • Acquisitions 兼并, 购并,
     Uber buy part of Didi in China

3. How do we feel about foreign firms investing in the US?

Biggest taxi company: Uber
Biggest retailer: Amazon
Biggest hotel owner: Airbnb

• Government control of FDI:
• What is “local participation”?
  (foreign country insists on % ownership by their citizens)

  1. 25%-50% of the company has to be owned local
     (local has not incentive to own local business any more, they just want to collect money, things happens when foreign company pulls out)

  2. repatriation (profits): cannot take the profit out when make profit. (Pepsi in Russia can only buy vodka to sell, no profit can be taken out)

  3. Nationalization

VII. DEVELOPING ECONOMIES

1. What are these countries? (Brazil, Mexico, China, India, etc.)

2. Special Problem: Controls on Investment in these Countries…

• What kinds of things do they do?
  • Local Participation: What is that?
  • Repatriation of Profits
  • Nationalization/Expropriation

VIII. MANAGING RISKS OF FOREIGN INVESTMENT

1. How can American firms minimize risks inherent in foreign investment?

   • Advance Planning: (check out laws, requirements of foreign country)
   • Shift the Risk: How is this accomplished? (contract negotiation.)
   • Insurance: Like risk of damage of goods at sea.

2. Language & cultural barriers – another roadblock:
   Let’s look at the GASKIN case on p. 18
   the fact: issue: are we bound to contract when we don’t understand that language when signing. people’s responsibility to understand the content

3. Currency Risks: Exchange problems & currency controls

IX. PUBLIC INTERNATIONAL LAW

1. Definition – How do we define?
   Rule that has been accepted by the international community

2. How do we determine what international laws apply?(sources)

   • Customary International Law
   • International Agreements, Agreement is not a law
   • Treaties(条约, a law)
     treaty can be bilateral(2 countries) or multilateral(more than 2 countries).
   • a conventions(协定) is open treaty, a type of Treaties that countries can join anytime.
   • Protocol: amendment to a treaty
   • Common Principles of the world’s major legal systems
     murder etc.

a treaty is equal to a statute/law
the most recent law wins when two treaty and law are against each other

3. What is Public (as opposed to private) International Law?
   Governs relationships between countries

4. Interpretations: How is International Law usually interpreted – by the high courts of individual nations.

case PAQUETTE HABANA

X. THE LAW OF TREATIES

1. International law has been “codified” in the Vienna Convention:
   Treaties must be followed by its signatories

2. What is “multilateral” vs. “bilateral” treaty (examples?)

3. Treaties Impact on Business:

   • Tax issues
   • Free Trade
   • Global Warming