International law
Chapter 1: Introduction
Main factors of growth of global marketing:
- Liberalization of de trade
- The sharp reduction in transportation and communication costs
- The end of the cold war -> allowing countries to reduce their military and increase
investment
- EU, Japan, and US seen a decline in their shares of world export in favour of emerging
and developing countries in Asia (China)
China -> cheap, trad-oriented, decrease transportation costs
2010 -> global trade is stalling
-------> western countries realized that globalization doesn’t product only winners
More trade barriers
Success or failure of an individual contract determined by:
- Terms of the agreement
- Economic
- Geopolitical
- Environmental
- Societal
- Technological changes
Most important European law areas:
- Trying to ensure fair competition on the markets, abuse of a dominant market
position is forbidden, price-fixing agreements are forbidden
- Free movement of goods, persons, services and capital
Risks in international trade:
- War
- Embargo
- Export ban
- Seller -> contract of sale -> buyer
- Exchange rate fluctuations
- Import tariffs
- Import quota
- European regulations regarding free trade, competition and state aid
- Prohibition to exchange foreign currency
Risks with political environment and with economic environment
Political risks:
- Foreign policy, war embargo restriction on trade
- Domestic policy
- Economic policy
Restriction on trade -> to protect your own country against competition
Trade war= an economic conflict between countries which results in extreme protectionism
Behind the border measures= part of long-term policies aiming at boosting domestic
industries. By giving state aid, tax advantages, local content rules or governmental
preference to national companies
,Categories of measures restricting trade:
- State aid to national companies
Makes it difficult for foreign companies to compete with their products
- Competive devaluation
Print more money -> depreciation the currency against others and it makes it
cheaper for foreigners to buy products coming from the devaluating country
------> others will do the same -> hyperinflation
- Consumption subsidy
When a government subsidizes consumption -> bad news for competitive products,
they will become more expensive
- Export subsidy
When a country subsidizes a export product -> competitors in the importing country
is in a disadvantageous position (prices higher)
Protect the exporting industry, but hurt the local industry
- Export taxes or restriction
Reasons why government aim to control the export of goods:
o Restrictions on the sale of technology or weapons to other countries to
protect national security
o Preservation of natural resources
o To encourage the supply of raw materials to local industries
- Import ban
Used by government for seeking to protect existing domestic industries and reduce
the country’s dependence on import
It is good for the domestic producers -> sell products more easily and with higher
prices
- Investment measures
Countries implement a legislation which prohibits foreigners form investing in certain
industries or owning it
- Local content requirement
For example -> in France the advertising needs only France languages
- Migration measure
Allowing fewer immigrants into the country, to protect their own workforce
Economic aspect -> it is cheaper
Social aspect -> they steal their jobs
- Other service sector measures
For example -> own national bank, no foreign banks in the country
- Public procurement
‘Buy local ‘
- Quotas and tariff measures
Quota limits the quantity of a certain product which can be brought into the country
-> tax so the product is more expensive
- Sanitary measures
Governments controls if the food is safe to eat
- Sub-national government measure: technical barrier to trade
Quality marks/certifications for products
,Domestic policy risks:
- Piracy
- Terrorism
Economic policy risks:
- Capital controls
- Nationalization
Protection for these risks -> trade credit insurance= an insurance which protects the seller
against non-payment by the buyer
Buyer doesn’t pay? -> trade credit insurance pays the seller an agreed percentage of the
seller’s claim
Main difference between credit insurance and factoring:
Factoring -> the seller immediately sells his right for payment of the goods to the factoring
company
Credit insurance -> an insurance against non-payment and the insurer only pays the seller if
his buyer doesn’t pay
Big three private insurers:
- Altradius
- Coface
- Euler Hermes
Features credit insurance:
- Policy conditions are of utmost importance
- Credit insurance never covers 100% of the risks
- Credit insurers have credit limits per policy, per customer, per country
Three limits:
o A policy limit, maximum amount a credit insurer is liable for under a policy,
regardless of the number of transactions and amount of losses
o A country limit, maximum amount a credit insurer is liable in respect of a
particular country under a policy, regardless of the number of transactions
and amount of losses in that country
o A credit limit for each debtor
- Credit insurance policy covers the whole turnover of the seller
, Two problems when drafting a contract between two parties form different countries:
1. Legal systems differ from one country to another
2. Legal terminology has a different meaning from one legal system to another, which
can make translating English terminology into another language difficult
5 categories of system laws:
- Civil law, roman law and is written down
- Common law, judge-made law. Countries decide a case on the basis of earlier
jugdement
- Customary law
- Muslim law
- Mixed law
Chapter 1: Introduction
Main factors of growth of global marketing:
- Liberalization of de trade
- The sharp reduction in transportation and communication costs
- The end of the cold war -> allowing countries to reduce their military and increase
investment
- EU, Japan, and US seen a decline in their shares of world export in favour of emerging
and developing countries in Asia (China)
China -> cheap, trad-oriented, decrease transportation costs
2010 -> global trade is stalling
-------> western countries realized that globalization doesn’t product only winners
More trade barriers
Success or failure of an individual contract determined by:
- Terms of the agreement
- Economic
- Geopolitical
- Environmental
- Societal
- Technological changes
Most important European law areas:
- Trying to ensure fair competition on the markets, abuse of a dominant market
position is forbidden, price-fixing agreements are forbidden
- Free movement of goods, persons, services and capital
Risks in international trade:
- War
- Embargo
- Export ban
- Seller -> contract of sale -> buyer
- Exchange rate fluctuations
- Import tariffs
- Import quota
- European regulations regarding free trade, competition and state aid
- Prohibition to exchange foreign currency
Risks with political environment and with economic environment
Political risks:
- Foreign policy, war embargo restriction on trade
- Domestic policy
- Economic policy
Restriction on trade -> to protect your own country against competition
Trade war= an economic conflict between countries which results in extreme protectionism
Behind the border measures= part of long-term policies aiming at boosting domestic
industries. By giving state aid, tax advantages, local content rules or governmental
preference to national companies
,Categories of measures restricting trade:
- State aid to national companies
Makes it difficult for foreign companies to compete with their products
- Competive devaluation
Print more money -> depreciation the currency against others and it makes it
cheaper for foreigners to buy products coming from the devaluating country
------> others will do the same -> hyperinflation
- Consumption subsidy
When a government subsidizes consumption -> bad news for competitive products,
they will become more expensive
- Export subsidy
When a country subsidizes a export product -> competitors in the importing country
is in a disadvantageous position (prices higher)
Protect the exporting industry, but hurt the local industry
- Export taxes or restriction
Reasons why government aim to control the export of goods:
o Restrictions on the sale of technology or weapons to other countries to
protect national security
o Preservation of natural resources
o To encourage the supply of raw materials to local industries
- Import ban
Used by government for seeking to protect existing domestic industries and reduce
the country’s dependence on import
It is good for the domestic producers -> sell products more easily and with higher
prices
- Investment measures
Countries implement a legislation which prohibits foreigners form investing in certain
industries or owning it
- Local content requirement
For example -> in France the advertising needs only France languages
- Migration measure
Allowing fewer immigrants into the country, to protect their own workforce
Economic aspect -> it is cheaper
Social aspect -> they steal their jobs
- Other service sector measures
For example -> own national bank, no foreign banks in the country
- Public procurement
‘Buy local ‘
- Quotas and tariff measures
Quota limits the quantity of a certain product which can be brought into the country
-> tax so the product is more expensive
- Sanitary measures
Governments controls if the food is safe to eat
- Sub-national government measure: technical barrier to trade
Quality marks/certifications for products
,Domestic policy risks:
- Piracy
- Terrorism
Economic policy risks:
- Capital controls
- Nationalization
Protection for these risks -> trade credit insurance= an insurance which protects the seller
against non-payment by the buyer
Buyer doesn’t pay? -> trade credit insurance pays the seller an agreed percentage of the
seller’s claim
Main difference between credit insurance and factoring:
Factoring -> the seller immediately sells his right for payment of the goods to the factoring
company
Credit insurance -> an insurance against non-payment and the insurer only pays the seller if
his buyer doesn’t pay
Big three private insurers:
- Altradius
- Coface
- Euler Hermes
Features credit insurance:
- Policy conditions are of utmost importance
- Credit insurance never covers 100% of the risks
- Credit insurers have credit limits per policy, per customer, per country
Three limits:
o A policy limit, maximum amount a credit insurer is liable for under a policy,
regardless of the number of transactions and amount of losses
o A country limit, maximum amount a credit insurer is liable in respect of a
particular country under a policy, regardless of the number of transactions
and amount of losses in that country
o A credit limit for each debtor
- Credit insurance policy covers the whole turnover of the seller
, Two problems when drafting a contract between two parties form different countries:
1. Legal systems differ from one country to another
2. Legal terminology has a different meaning from one legal system to another, which
can make translating English terminology into another language difficult
5 categories of system laws:
- Civil law, roman law and is written down
- Common law, judge-made law. Countries decide a case on the basis of earlier
jugdement
- Customary law
- Muslim law
- Mixed law
