International Business Law – 2022-2023 – lecture notes
Lecture 1 – introduction to Law & Legal Systems
1. Law
2. Legal Families
3. Sources of Law and obligations
4. Territorial effect of laws
5. Introduction European law; EU institutions
1) LAW
Law: the system of rules which a particular country or community recognizes as regulating
the actions of its members and which it may enforce by the imposition of penalties
Justice: the moral conviction of a group of people expressed in law
Functions of law
- Normative law: Ethics
How the legislator wants people to behave (“just behavior”)
(Wernaart p. 12: “substantive”)
- Formal law: procedural
To maintain the normative rules
Example - normative function
- Human rights originally protected against state power
- Equality principle: everybody will be treated in the same way in similar cases
- No discrimination: for everyone: on the basis of gender, race, religion, political party or
whatever is not allowed Art 1 NL Constitution
- Ethics
- Vs constitutional rights, social rights
Example – conflict solving – preventive
- Example: accession rules (private law/property law)
- The owner of the car becomes the owner of the goods that have been affixed to the frame
(art 3:4 s 2 DCC)
Example – facilitating
- Article 2:3 DCC Private legal persons
- Freedom to organize, freedom of enterprise
Legal certainty – positive law – sources
- Legal certainty
- Example: positive law: law as it presently is
- If you want to know what law presently is you must know where to find the applicable rules
you will search the sources of law
codification (most important in civil law countries)
in common law countries: areas of law built around “precedents” (H/A)
- Also certainty about the exact text
- State control in issuing laws – law journals
- Still “in print” design
,2) LEGAL FAMILIES
- Civil law: in continental Europe beginning in the Middle Ages and based on codified law
drawn from national legislation
- Common law: in England beginning in the Middle Ages and is based on case law and
precedent rather than codified law
- Religious law: a religious system or document being used as a legal source, through the
methodology used varies (Islam: Sharia – Koran)
- New systems: Civil Law (Japan, Poland, China etc.)
Status / law family
- In common law
Historically developed body of law
No quest for ‘principles of law’
Statute law is ‘an infringement to common law’
Only if case law is not sufficient
“disaster becomes law” (US: Enron > Sarbanes Oxley)
+ stricter interpretation of codified law
3) SOURCES OF LAW / OBLIGATIONS HIERARCHY IN CIVIL LAW
- Treaty (several nations) human rights
- Constitution (nation) federal law
- Statutory acts/codes (parliament) state law
- Administrative measures (administration: DNB, AFM)
- Self-regulation / contracts / juridical acts
- Habit (= customary law)
- Status/priority – principles:
- A lower rule should be in accordance with the higher rule
- A newer rule supercedes older rule
- A special rule supercedes a general rule
Examples:
- Covid-19 regs supercede normal procedures;
- In DCC the shareholders appoint the director. In case of a fin ist, the NL
financial supervision act requires AFM/DNB approval of a director before
appointment
- Issues with new rules
- New statute law: certainty but fixation
- Civil law: to prevent excess regulation: NL there must be a proven need for the law
and the need should be compelling
- A new lay may codify pre-existing rules
Or
- A new law changes pre-existing rules – transition period
- Law/language is ‘never’ clear
4) TERRITORIAL EFFECTS OF LAWS
- Autonomy/sovereignty
- Treaties-types
,- Extra-territorial effect
- Autonomy / Sovereignty
- Sovereignty: the power of a country to control its own government within its
borders
-> to design its laws
- Autonomy: the right of self government
- Synonyms / related words:
- “freedom, independence, liberty”
- “EU member states gave partially up on sovereignty”
- Treaties
- Extra-territorial effect
- Examples of Extra-Territorial Effect of Laws:
- FCPA
- ABA + MSA
- GDPR
- FCPA 1977 (US) Foreign Corrupt Practices Act:
- Bribery:
- Making a corrupt payment to a non-US government official for the purpose
of securing an improper advantage or obtaining or retaining business for any
person
- Applicable to:
- US persons and companies, wherever active and any foreign company listed
on US exchange, or individual using US mail, - commerce, - bank accounts
- Anti Bribery Act 2011 (UK) (ABA)
- Bribery:
- Bribing another person
- Being bribed
- Bribing to a foreign public official
- Failing to prevent bribery
- Scope:
- [UK and] committed elsewhere the foreign acting person or company has a
close connection to UK
- EU General Data Protection Regulation (2018) (EU GDPR)
- If a non-EU company offers goods or services to EU customers (B or C)
-> GDPR will apply, even if no data processing takes place in EU
- ‘Brussels Effect’ : the technically good quality EU legislation is ‘copied’ by other
countries across the world
, 5) INTRODUCTION TO EUROPEAN LAW
- Legal reasoning:
- Introduction to european law:
- EU
- 27 countries
- 1/1/20
- Outline:
- Key tenets EU law
- Basis and difference between regs and directives
- EU institutions relevant for corporate law
- 4 freedoms and corporate law
- EU corporate law
- European law key tenets
EU [1958 EEG/1993 EG/2009 EU]
- 27 sovereign nations, bound by:
2 Treaties (TEU and TFEU), covering Free Trade, Customs-union, economic and
monetary union etc
- EU = organization with :
- European Parliament,
- European council,
- Council of European Union,
- European Commission, and
- European court of justice
- Extra layer of regulation in many field
- Mix of inter- and supra governmental
- Principles of proportionality and subsidiarity
- Basis and difference between regs and directives:
Lecture 1 – introduction to Law & Legal Systems
1. Law
2. Legal Families
3. Sources of Law and obligations
4. Territorial effect of laws
5. Introduction European law; EU institutions
1) LAW
Law: the system of rules which a particular country or community recognizes as regulating
the actions of its members and which it may enforce by the imposition of penalties
Justice: the moral conviction of a group of people expressed in law
Functions of law
- Normative law: Ethics
How the legislator wants people to behave (“just behavior”)
(Wernaart p. 12: “substantive”)
- Formal law: procedural
To maintain the normative rules
Example - normative function
- Human rights originally protected against state power
- Equality principle: everybody will be treated in the same way in similar cases
- No discrimination: for everyone: on the basis of gender, race, religion, political party or
whatever is not allowed Art 1 NL Constitution
- Ethics
- Vs constitutional rights, social rights
Example – conflict solving – preventive
- Example: accession rules (private law/property law)
- The owner of the car becomes the owner of the goods that have been affixed to the frame
(art 3:4 s 2 DCC)
Example – facilitating
- Article 2:3 DCC Private legal persons
- Freedom to organize, freedom of enterprise
Legal certainty – positive law – sources
- Legal certainty
- Example: positive law: law as it presently is
- If you want to know what law presently is you must know where to find the applicable rules
you will search the sources of law
codification (most important in civil law countries)
in common law countries: areas of law built around “precedents” (H/A)
- Also certainty about the exact text
- State control in issuing laws – law journals
- Still “in print” design
,2) LEGAL FAMILIES
- Civil law: in continental Europe beginning in the Middle Ages and based on codified law
drawn from national legislation
- Common law: in England beginning in the Middle Ages and is based on case law and
precedent rather than codified law
- Religious law: a religious system or document being used as a legal source, through the
methodology used varies (Islam: Sharia – Koran)
- New systems: Civil Law (Japan, Poland, China etc.)
Status / law family
- In common law
Historically developed body of law
No quest for ‘principles of law’
Statute law is ‘an infringement to common law’
Only if case law is not sufficient
“disaster becomes law” (US: Enron > Sarbanes Oxley)
+ stricter interpretation of codified law
3) SOURCES OF LAW / OBLIGATIONS HIERARCHY IN CIVIL LAW
- Treaty (several nations) human rights
- Constitution (nation) federal law
- Statutory acts/codes (parliament) state law
- Administrative measures (administration: DNB, AFM)
- Self-regulation / contracts / juridical acts
- Habit (= customary law)
- Status/priority – principles:
- A lower rule should be in accordance with the higher rule
- A newer rule supercedes older rule
- A special rule supercedes a general rule
Examples:
- Covid-19 regs supercede normal procedures;
- In DCC the shareholders appoint the director. In case of a fin ist, the NL
financial supervision act requires AFM/DNB approval of a director before
appointment
- Issues with new rules
- New statute law: certainty but fixation
- Civil law: to prevent excess regulation: NL there must be a proven need for the law
and the need should be compelling
- A new lay may codify pre-existing rules
Or
- A new law changes pre-existing rules – transition period
- Law/language is ‘never’ clear
4) TERRITORIAL EFFECTS OF LAWS
- Autonomy/sovereignty
- Treaties-types
,- Extra-territorial effect
- Autonomy / Sovereignty
- Sovereignty: the power of a country to control its own government within its
borders
-> to design its laws
- Autonomy: the right of self government
- Synonyms / related words:
- “freedom, independence, liberty”
- “EU member states gave partially up on sovereignty”
- Treaties
- Extra-territorial effect
- Examples of Extra-Territorial Effect of Laws:
- FCPA
- ABA + MSA
- GDPR
- FCPA 1977 (US) Foreign Corrupt Practices Act:
- Bribery:
- Making a corrupt payment to a non-US government official for the purpose
of securing an improper advantage or obtaining or retaining business for any
person
- Applicable to:
- US persons and companies, wherever active and any foreign company listed
on US exchange, or individual using US mail, - commerce, - bank accounts
- Anti Bribery Act 2011 (UK) (ABA)
- Bribery:
- Bribing another person
- Being bribed
- Bribing to a foreign public official
- Failing to prevent bribery
- Scope:
- [UK and] committed elsewhere the foreign acting person or company has a
close connection to UK
- EU General Data Protection Regulation (2018) (EU GDPR)
- If a non-EU company offers goods or services to EU customers (B or C)
-> GDPR will apply, even if no data processing takes place in EU
- ‘Brussels Effect’ : the technically good quality EU legislation is ‘copied’ by other
countries across the world
, 5) INTRODUCTION TO EUROPEAN LAW
- Legal reasoning:
- Introduction to european law:
- EU
- 27 countries
- 1/1/20
- Outline:
- Key tenets EU law
- Basis and difference between regs and directives
- EU institutions relevant for corporate law
- 4 freedoms and corporate law
- EU corporate law
- European law key tenets
EU [1958 EEG/1993 EG/2009 EU]
- 27 sovereign nations, bound by:
2 Treaties (TEU and TFEU), covering Free Trade, Customs-union, economic and
monetary union etc
- EU = organization with :
- European Parliament,
- European council,
- Council of European Union,
- European Commission, and
- European court of justice
- Extra layer of regulation in many field
- Mix of inter- and supra governmental
- Principles of proportionality and subsidiarity
- Basis and difference between regs and directives:
