This 24 hour course is dispensed at the MBA Institute in Paris to fourth-year undergraduate students.

Its objectives are:

- to introduce participants to the basic rules applicable to international trade and financing agreements,

- to present the basic rules of public international law,

- to introduce the students to the law of international organisations,

- to introduce students to the regulation of international trade and international finance.

Frequent recourse is made to economic analysis to explain legal rules.

The class is divided into two groups: finance and marketing, with each attending four classes.
 
 

In addition to the book of readings which will be distributed to participants, ample use should be made of the materials on the Professor's Webliography on International and Comparative Business Law, in particular the sections on Public and private international law and on International trade

For additional readings, sudents are referred to Richard Schaffer, Beverly Earle, and Filiberto Agusti, International Business Law and its Environment, South-Western, New York, 2005 in particular chapters 1, 2, 3, 9, 10, 11, 12, 16, 17, 18, 9 and 22.
 
 

SESSIONS ONE AND TWO (6 class hours):

Topics:

International financial system
Currency controls

Web research:

The International Monetary Fund
International Finance Corporation
One regional development bank

Case studies:

Exchange controls
Money laundering and corruption

Assignment 1:

Dallal and the Iranian Bank (See article 8 section 2 of the Articles of Agreement of the International Monetary Fund)

An Iranian resident, Mr. Dallal, goes to a bank in Iran in 1978 and requests that the bank issue to him two banker's cheques for $ 200,000 each drawn on the Iranian bank's account in New York with a New York bank. Without further formality the Iranian bank debits Mr. Dallal's account at its branch in Tehran and issues to Mr. Dallal the two cheques.

When Mr. Dallal reaches New York and presents the cheques for payment at the counters of the Iranian bank's New York bank, he is informed that the Iranian bank has sent instructions not to pay the cheques.

When Mr. Dallal sues the Iranian bank before the New York courts, the bank raises as a defense that the exchange controls of the Central Bank of Iran require that all transactions other than those for payment of imports of goods and services and other current transactions

As no authorization had been obtained from the Central Bank of Iran for the issue of the cheques payable in New York, the Iranian bank said that their issue was in violation of the exchange controls of Iran.

Iran and the United States are members of the IMF. Apply article VIII of the articles of the IMF to this problem.
 

SESSION THREE (3 class hours):

Topics:

Money laundering and corruption

Web research:

OECD The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions
The Financial Action Task Force on Money Laundering

Case studies:

World-Wide Coin Investments
Le risque pénal dans les relations d'affaires avec la République Populaire de Chine

Based on the information in these reports are any of the parties guilty of either corruption or money laundering as defined under the OECD treaties? Support your answer with arguments.

Heat is on Attorneys in Drug Trafficking - Florida lawyer is accused of taking 'dirty money'
Chevron Fixes Everything With Money

Assignment 2:

A Chinese civil servant promises to award to a French exporter a major contract but requests that the French company set up a program of internships in France for his four grandchildren.

The Vice-President International has proposed to accept the contract, and to welcome in France the grandchildren of the civil servant while paying them the minimum wage and bearing all their costs of living. According to the CFO, the actual cost will be less than their face value in that the payments would be tax deductible.

The VP-Legal has doubts about the legality of the operations and asks you, as lawyer of the company, what should  be the company's decision.

Suppose that the norms of the OECD Convention with respect to corruption are applicable in French law but not in Chinese law.

Is the French company a potential target of pursuits?

Assignment 3:

A lawyer receives in his office the visit of one of his best clients who informs him that be intends to engage his services to assist in mounting an operation in Hong Kong.

The client informs the lawyer that he has amassed some € 100,0000 in cash from retail sales in his chain of boutiques in France.

The client intends to carry the amount in cash on the occasion of several trips to Hong Kong over the course of the next year. He intends to deposit the cash in accounts opened by a Hong Kong company which he will effectively control through nominee shareholders and nominee directors.

The Hong Kong company will then lend money to the French company (which will of course claim the interest as a deduction).

The client asks the lawyer first, what is the maximum amount of cash that can be carried out of French territory without making a delcaration thereof to the Customs authorities. Also, he wants the French lawyer to introduce him to a lawyer in Hong Kong who will take care of constituting the company.

If you were the French lawyer, what would you do?
 

SESSION FOUR (3 class hours):

Topics:

The corporation in international law
Bankruptcy
Nationalization

Web research:

Metaleurop
International Center for the Settlement of Investment Disputes (ICSID) de la Banque Mondiale

Assignment 4:
Barcelona Traction Light and Power, International Court of Justice

A group of shareholders who are citizens of Belgium invest in a company
incorporated in Canada, the only business of which consists in the production and distribution of electricity in Spain. The operations in Spain are carried on through a branch of the Canadian company.

At a certain point in time, a group of Spanish holders of bonds issued by the Canadian company sue the Canadian company before the Spanish courts alleging that the Canadian company has defaulted on the payments on the bonds. The Spanish court of first instance finds in favour of the Spanish bondholders, declares the Canadian company in default on the bonds, seizes the Canadian company's assets in Spain, auctions them off, and declares the Canadian
company bankrupt.

What are the recourses of the Belgian shareholders and what are their chances of success?
 

SESSIONS ONE AND TWO (6 class hours):

Topics:

Regulation of international trade (GATT/WTO)

Web research:

World Trade Organization
NAFTA
ASEAN
APEC

Assignments 1 and 2

WTO panel reports:
Japan v European Union - the Screwdriver case
Mexico v United States - the dolphin case

Assignments 3

The China Textile problem

Find on the web the Accession of Agreement under which China entered the WTO in 2001.
Identify the protection mechanisms.

Based on your research of textile imports into the European Union, make a determination what if any protectionist measures may be adopted in compliance with the Accession Agreement?
 

SESSION THREE (3 hours)

Topics:

World Intellectual Property Organisation, What is intellectual property
(Gateway setion)
Patents
Utility Models
Industrial designs
Trademarks
Know How
Copyrights
Software
Data bases
Microprocessor designs
Plant varieties

Web research:

Digital music rights
 

SESSION FOUR (3 hours)

Distribution networks
e-commerce

Web research:

Articles 81 and 82 of the consolidated version of the Treaty establishing the European Economic Community

Case studies:

Louis Vuitton c eBay / Tiffany v eBay

Assignment 4:

Une société française Fashion Heaven lance une activité d'achat et de vente de vêtements et d'accessoires de grandes marques françaises.

La société s'approvisionne en marchandises dans des solderies à Paris moyennant quoi elle les achète à des prix correspondant à environ 10% du prix de détail original.

Ces marchandises sont authentiques en ce qu'elles sont introduites dans le commerce par les titulaires de marques eux-mêmes. Mais considérant que ce sont des marchandises soldées (fins de séries, marchandises légèrement défectueuses, etc.), elles sont vendues aux soldeurs à des prix extrêmement bas.

La société Fashion Heaven les revend sur e-bay.com et ebay.fr. Pour la promotion des articles offerts sur ebay, le persponnel de la société réalise ses propres photos des produits et, en plus, achète des photos "runway" auprès de sociétés spécialisées. Pour chaque article proposé sur le site d'ebay, elle écrit un texte promotionnel affiché sur ebay dans lequel est mentionnée la marque du produit offert. Les textse vantent la qualité des produits et la renommée de la marque pour mieux vendre les produits. Rien ne transparaît dans les textes sur ebay sur le fait que les produits offerts sont du "second choix".

La société Fashion Heaven réalise des marges très importantes et développe un commerce florissant.

Mais au fil des mois, de plus en plus de produits contrefaits font leur apparition sur ebay jusqu'à en noyer le site d'ebay sans que le consommateur non spécialisé puisse aisément distinguer les produits authentiques des produits contrefaits.

Sous les menaces chaque jour plus graves des titulaires des grandes marques, ebay décide d'interdire toutes les ventes de vêtements de marques par des fournisseurs autres que les titulaires des marques elles-mêmes ou leurs concessionnaires officiels.

Du jour au lendemain, Fashion Heaven est interdite d'accès au site d'ebay et son chiffre d'affaire tombe à zéro.

Est-ce que la société Fashion Heaven a des recours? Contre qui? Avec quelles chances de succès?
 
 

At the end of the course, a written exam is held. The exam consists of theoretical and practical questions as well as case studies. Below is one of the questions that will appear on the exam for 20% of the grade.

In the final evaluation account is taken of participation in class work and discussions, in particular the assignments submitted during the course.
 

PRE-ASSIGNED EXAM QUESTION

Taxation as a trade weapon

The States comprising the European Union charge a value added tax on all sales within their territories but exports from the EU are exempted from the value added tax. Please note that the government in the United States earns its tax revenues mostly from taxes on income whereas the EU countries earn their tax revenues in about the same proportion from the value added tax. Thus more than 40 of tax revenue is charged on account of taxes on income in the US and on sales in the EU; taxes on sales represent about 8 % of taxes collected in the US and taxes on income amount to about 10% in the countries of the EU.

For its part, the United States set up a special tax régime for its exporters. The rules allowed US firms to set up foreign subsidiaries, called foreign sales corporations (FSCs).

The US firm would charge its exports to the FSC which would then reinvoice to the actual buyer abroad. Alternatively the US firm could simply pay a commission on its foreign sales to the FSC. The income of the FSC was treated in a favorable manner. Normally the income of such a passive company as the FSC would be imputed to the US taxpayer even if the income was not actually paid out, and then it would be taxed at the taxpayer's normal rate. With FSCs only one third of their income was thus imputed to the US parent/exporter, and furthermore when any income was paid from the FSC to the US parent, it was exempted from tax in the US.

Discuss the conformity of each of these measures with respect to the rules of the GATT.