International Business Law Midterm
Marking Scheme 2024
Arbitrage - ANS-the simultaneous purchase and sale of the same asset in
different markets in order to profit from tiny differences in the asset's listed
price
Article 39 of the ICJ - ANS-Lists the sources of international law. In order of superiority
are: 1. international conventions in treaties, 2. international custom or general practice,
3. general principles of law recognized by civilizations, and 4. judicial decisions and
scholarly writings.
ATA Carnet - ANS-An international customs document that permits duty-free and
tax-free temporary import of goods for up to one year. It eliminates or reduces VAT
charges, customs fees, and bond fees. The initials "ATA" are an acronym of the French
and English words "Admission Temporaire/Temporary Admission." ATA Carnets cover
commercial samples; professional equipment; and, goods for presentation or use at
trade fairs, shows, exhibitions, etc. Items not covered are consumable or disposable
goods, which will not be returned home.
Barter Transaction - ANS-When two parties exchange goods with no cash payments
Bilateral Investment Treaty (BIT) - ANS-An agreement between two countries about the
conditions for private investment across borders. They generally address issues of
convertibility of currency, the repatriation of profits, compensation for expropriation,
protection of intellectual property, and non-discriminatory treatment of foreign investors.
Basket of Risks - ANS-Risks that are associated with business transactions, especially
foreign. Includes constantly fluctuating risks depending on the type of business entity,
the type of good or service being sold, the country of the other party, the country of
performance, and the means of transportation.
Buy-Back - ANS-Type of agreement where exporters of heavy equipment, technology,
or entire manufacturing facilities agree to purchase a certain percentage of the output of
the facility.
Buying Agent - ANS-Agents who find foreign firms to purchase a company's products (
also known as commission agents)
,Concession Agreement - ANS-A formal written agreement between two entities that
outlines the duties of the foreign government and the rights of the company. It also
specifies the level of tariffs to be charged, the rights of the company to repatriate profits,
the host countries commitment to intellectual property protection, applicable level of
taxation, and the government transfer pricing policy
Consignment - ANS-Involves delivery of merchandise with one party, we're by the
export a retains title to the goods that it transfers only when the consignment company
sells the goods
Convertability - ANS-The issue of whether one currency is convertible into another
currency
CIF (cost, insurance, freight) - ANS-A list of documents an exporter must obtain. This
term allocate to the exporter the costs of shipping the goods to a Seaport in the
exporters country, the loading of the ship, and the freight and insurance expenses to the
foreign port of destination.
Counter-Purchase - ANS-An economic transaction in which one party sells good to the
second party and, in return, the first party agrees to purchase goods from the second
party so as to achieve a balance of trade ratio
Countertrade - ANS-Used to overcome currency convertability and repatriation
problems or the capital shortcomings of a foreign party
Currency Option - ANS-a contract a person or company buys that allows the buyer the
option to purchase a foreign currency sometime in the future at today's rate
Currency rate fluctuation - ANS-Devaluation of the currency of payment
Customary International Law (CIL) - ANS-an aspect of international law involving the
principle of custom
Customs Broker: assists importers with the entry of goods into foreign countries, their
classification and valuation, and the payment of duties.
Disagio - ANS-discount of the amount of goods to be purchased to fulfill a countrade
commitment.
Evergreen Laws - ANS-states that the term of an agreement will automatically renew for
some period of time unless one party provides the other party with notice before the end
,of the current term that it does not wish to renew the term of the agreement.
Eximbank - ANS-The export credit agency of the U.S. which guarantees working
capital loans for U.S. exporters, guarantees the repayment of loans, makes loans to
foreign purchasers of U.S. goods and services, and provides credit insurance
protecting U.S. exporters.
Export Management Company (EMC) - ANS-company that exports products on behalf
of indirect exporters
Export Trading Company (ETC) - ANS-An independent distributor that determines what
US products are desired in a given market and then works with US producers to satisfy
the demand.
Exporting-Importing - ANS-international trade between two states, consisting of selling
and transporting finished products from one country to another.
Expropriation - ANS-Forced transfer of assets from a company to the government with
compensation
Foreign Credit Insurance Association (FCIA) - ANS-an association of insurance
companies that offers insurance to U.S. exporters against nonpayment by foreign
customers due to commercial and political risks.
Foreign Direct Investment (FDI) - ANS-represents the capital investments made by
companies in other countries. This includes the purchase of real estate, manufacturing
plants, service and distribution centers, or foreign businesses.
Foreign Distributor - ANS-a merchant who purchases merchandise from an exporter,
resells it at a profit, and generally provides after-sales support and service.
Foreign Sales Representative - ANS-the equivalent of a manufacturer's representative
in its home country. Uses the company's product literature and samples to present the
product to potential buyers.
Forward Contract - ANS-requires two parties to exchange specified amounts of two
currencies at some future time.
Franchise; Franchising - ANS-a method of distributing products or services involving a
franchisor, who establishes the brand's trademark or trade name and a business
, system, and a franchisee, who pays a royalty and often an initial fee for the right to do
business under the franchisor's name and system
Free Trade Agreement (FTA) - ANS-a pact between two or more nations to reduce
barriers to imports and exports among them. Under a free trade policy, goods and
services can be bought and sold across international borders with little or no
government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
Freight Forwarder - ANS-arranges all documentation needed to move a shipment from
origin to destination and assembles documents for presentation to the bank in the
exporter's name.
Futures Contract - ANS-similar to a bond sold prior to maturity. Either party can avoid
their obligations under the contract by selling it in the secondary market.
General Agreement on Tariffs and Trade (GATT) - ANS-a legal agreement minimizing
barriers to international trade by eliminating or reducing quotas, tariffs, and subsidies
while preserving significant regulations.
Global Supply Chain - ANS-the worldwide system that a business uses to produce
products or services
Hedging - ANS-techniques that a foreign importer or exporter can minimize the risk of a
negative currency rate change.
Home Country - ANS-the country where a party or citizen is located.
Host Country - ANS-the foreign country that business is being done
at.
Indirect Exporting - ANS-nvolves the use of an intermediary firm to facilitate the
exporting of a company's goods
International Centre for Settlement of Investment Disputes (ICSID) - ANS-an alternate
way of arbitration to compensate exporters and foreign investors for expropriation.
International Chamber of Commerce (ICC) - ANS-a nongovernmental organization that
works to promote world trade, harmonize trade practices, and provide practical services
Marking Scheme 2024
Arbitrage - ANS-the simultaneous purchase and sale of the same asset in
different markets in order to profit from tiny differences in the asset's listed
price
Article 39 of the ICJ - ANS-Lists the sources of international law. In order of superiority
are: 1. international conventions in treaties, 2. international custom or general practice,
3. general principles of law recognized by civilizations, and 4. judicial decisions and
scholarly writings.
ATA Carnet - ANS-An international customs document that permits duty-free and
tax-free temporary import of goods for up to one year. It eliminates or reduces VAT
charges, customs fees, and bond fees. The initials "ATA" are an acronym of the French
and English words "Admission Temporaire/Temporary Admission." ATA Carnets cover
commercial samples; professional equipment; and, goods for presentation or use at
trade fairs, shows, exhibitions, etc. Items not covered are consumable or disposable
goods, which will not be returned home.
Barter Transaction - ANS-When two parties exchange goods with no cash payments
Bilateral Investment Treaty (BIT) - ANS-An agreement between two countries about the
conditions for private investment across borders. They generally address issues of
convertibility of currency, the repatriation of profits, compensation for expropriation,
protection of intellectual property, and non-discriminatory treatment of foreign investors.
Basket of Risks - ANS-Risks that are associated with business transactions, especially
foreign. Includes constantly fluctuating risks depending on the type of business entity,
the type of good or service being sold, the country of the other party, the country of
performance, and the means of transportation.
Buy-Back - ANS-Type of agreement where exporters of heavy equipment, technology,
or entire manufacturing facilities agree to purchase a certain percentage of the output of
the facility.
Buying Agent - ANS-Agents who find foreign firms to purchase a company's products (
also known as commission agents)
,Concession Agreement - ANS-A formal written agreement between two entities that
outlines the duties of the foreign government and the rights of the company. It also
specifies the level of tariffs to be charged, the rights of the company to repatriate profits,
the host countries commitment to intellectual property protection, applicable level of
taxation, and the government transfer pricing policy
Consignment - ANS-Involves delivery of merchandise with one party, we're by the
export a retains title to the goods that it transfers only when the consignment company
sells the goods
Convertability - ANS-The issue of whether one currency is convertible into another
currency
CIF (cost, insurance, freight) - ANS-A list of documents an exporter must obtain. This
term allocate to the exporter the costs of shipping the goods to a Seaport in the
exporters country, the loading of the ship, and the freight and insurance expenses to the
foreign port of destination.
Counter-Purchase - ANS-An economic transaction in which one party sells good to the
second party and, in return, the first party agrees to purchase goods from the second
party so as to achieve a balance of trade ratio
Countertrade - ANS-Used to overcome currency convertability and repatriation
problems or the capital shortcomings of a foreign party
Currency Option - ANS-a contract a person or company buys that allows the buyer the
option to purchase a foreign currency sometime in the future at today's rate
Currency rate fluctuation - ANS-Devaluation of the currency of payment
Customary International Law (CIL) - ANS-an aspect of international law involving the
principle of custom
Customs Broker: assists importers with the entry of goods into foreign countries, their
classification and valuation, and the payment of duties.
Disagio - ANS-discount of the amount of goods to be purchased to fulfill a countrade
commitment.
Evergreen Laws - ANS-states that the term of an agreement will automatically renew for
some period of time unless one party provides the other party with notice before the end
,of the current term that it does not wish to renew the term of the agreement.
Eximbank - ANS-The export credit agency of the U.S. which guarantees working
capital loans for U.S. exporters, guarantees the repayment of loans, makes loans to
foreign purchasers of U.S. goods and services, and provides credit insurance
protecting U.S. exporters.
Export Management Company (EMC) - ANS-company that exports products on behalf
of indirect exporters
Export Trading Company (ETC) - ANS-An independent distributor that determines what
US products are desired in a given market and then works with US producers to satisfy
the demand.
Exporting-Importing - ANS-international trade between two states, consisting of selling
and transporting finished products from one country to another.
Expropriation - ANS-Forced transfer of assets from a company to the government with
compensation
Foreign Credit Insurance Association (FCIA) - ANS-an association of insurance
companies that offers insurance to U.S. exporters against nonpayment by foreign
customers due to commercial and political risks.
Foreign Direct Investment (FDI) - ANS-represents the capital investments made by
companies in other countries. This includes the purchase of real estate, manufacturing
plants, service and distribution centers, or foreign businesses.
Foreign Distributor - ANS-a merchant who purchases merchandise from an exporter,
resells it at a profit, and generally provides after-sales support and service.
Foreign Sales Representative - ANS-the equivalent of a manufacturer's representative
in its home country. Uses the company's product literature and samples to present the
product to potential buyers.
Forward Contract - ANS-requires two parties to exchange specified amounts of two
currencies at some future time.
Franchise; Franchising - ANS-a method of distributing products or services involving a
franchisor, who establishes the brand's trademark or trade name and a business
, system, and a franchisee, who pays a royalty and often an initial fee for the right to do
business under the franchisor's name and system
Free Trade Agreement (FTA) - ANS-a pact between two or more nations to reduce
barriers to imports and exports among them. Under a free trade policy, goods and
services can be bought and sold across international borders with little or no
government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
Freight Forwarder - ANS-arranges all documentation needed to move a shipment from
origin to destination and assembles documents for presentation to the bank in the
exporter's name.
Futures Contract - ANS-similar to a bond sold prior to maturity. Either party can avoid
their obligations under the contract by selling it in the secondary market.
General Agreement on Tariffs and Trade (GATT) - ANS-a legal agreement minimizing
barriers to international trade by eliminating or reducing quotas, tariffs, and subsidies
while preserving significant regulations.
Global Supply Chain - ANS-the worldwide system that a business uses to produce
products or services
Hedging - ANS-techniques that a foreign importer or exporter can minimize the risk of a
negative currency rate change.
Home Country - ANS-the country where a party or citizen is located.
Host Country - ANS-the foreign country that business is being done
at.
Indirect Exporting - ANS-nvolves the use of an intermediary firm to facilitate the
exporting of a company's goods
International Centre for Settlement of Investment Disputes (ICSID) - ANS-an alternate
way of arbitration to compensate exporters and foreign investors for expropriation.
International Chamber of Commerce (ICC) - ANS-a nongovernmental organization that
works to promote world trade, harmonize trade practices, and provide practical services
