International Trade Law
Exam Bank
Course Introduction
International Trade Law examines the legal principles and frameworks that govern the exchange of goods, services, and capital across international borders. The course explores the roles of key institutions such as the World Trade Organization (WTO), regional trade agreements, and national regulatory bodies in shaping global trade policies. Students will study topics including tariffs, non-tariff barriers, dispute resolution, trade in services, intellectual property rights, and the impact of trade law on developing countries. Through case studies and analysis of contemporary trade disputes, the course provides a comprehensive understanding of how legal rules affect economic relations and the challenges of balancing free trade with national interests and social objectives.
Recommended Textbook
International Business Law and Its Environment 8th Edition by Richard Schaffer
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Page 2
Chapter 1: Introduction to International Business
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Q1) Exporting is the shipment of goods or rendering of services to a foreign buyer located in a foreign country.
A)True
B)False
Answer: True
Q2) The type of risk that includes controls on exports,imports,controls on the movement of currency,restrictions on licensing and investment,and controls over physical property located in a country is:
A) Legal risk.
B) Political risk.
C) Economic risk.
D) Currency risk.
Answer: B
Q3) International licensing agreements pertain to forms of intellectual property such as:
A) Books, songs, inventions.
B) Trademarks, copyrights, patents.
C) Real estate, personal property.
D) Contracts.
Answer: B
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Page 3
Chapter 2: International Law and the Worlds Legal Systems
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Q1) Moral conduct is the preeminent concern in Islamic law.
A)True
B)False
Answer: True
Q2) Only states (nations)can be parties to a case before the World Court.
A)True
B)False Answer: True
Q3) The IMF assists member countries that are having balance of payment difficulties.
A)True
B)False Answer: True
Q4) In the United Nations General Assembly,all nations have an equal vote.
A)True
B)False Answer: True
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Page 4
Chapter 3: Resolving International Commercial Disputes
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Q1) ADR refers to:
A) Alternative (or Alternate) Dispute Resolution.
B) Alternative Disruption Requirement.
C) A Data Reference System.
D) Atlantic Development Relations.
Answer: A
Q2) Settlement of a dispute by arbitration never makes the decision binding.
A)True
B)False
Answer: False
Q3) In Japan,the authority and control over gathering the evidentiary facts are vested only in the lawyers.
A)True
B)False
Answer: False
Q4) Choice of forum clauses fix in advance where the case will be heard by contract.
A)True
B)False
Answer: True
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Chapter 4: Sales Contracts and Excuses for
Nonperformance
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Q1) Write that same contract using CISG law.
Q2) If a question arises over a trade usage,the CISG provides that:
A) No reference to trade usage is allowed by a court.
B) A court can look at those trade usages that the parties knew or ought to have known and are regularly used in the industry.
C) A court can look at those trade usages to which the parties agree to be bound.
D) Both B and C.
Q3) The Convention on Contracts for the International Sale of Goods (CISG)was developed to give U.S.business an advantage in international sales contracts.
A)True
B)False
Q4) Under CISG,all of the following are requirements to excuse nonperformance of a contract except:
A) An impediment is beyond a party's control.
B) An impediment was not reasonably foreseeable at the time contract was concluded.
C) Notice of the impediment was given to the other party.
D) The impediment is of such a monetary value as to shock the conscience.
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Chapter 5: The Documentary Sale and Terms of Trade
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Q1) All Incoterms are intended for use with ocean cargo.
A)True
B)False
Q2) A entrusts a shipment of eel skins to an ocean carrier and obtains a bill of lading.The carrier delivers the goods to B without asking B to produce the document.Without knowledge of what has occurred,A sells the bill of lading to C,who is a good faith purchaser.In this case:
A) C may not reclaim the goods because they have already been delivered by the carrier.
B) C has a cause of action against the carrier for misdelivery.
C) C has a cause of action against A for fraud.
D) The carrier is liable for a crime committed against A.
E) All of the above.
Q3) When would and would not a bill of exchange constitute bearer paper?
Q4) Under contract terms "DES Stockholm," the seller must pay the ocean freight to Stockholm,but the buyer pays the unloading charges at the Stockholm terminal.
A)True
B)False
Q5) Draft a bill of lading.
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Chapter 6: The Carriage of Goods and the Liability of Air and Sea Carriers
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Q1) The U.S.law that governs the liability of an ocean carrier for transporting goods from one U.S.port to a foreign port is the:
A) The Hague Rules.
B) The Uniform Commercial Code.
C) The Harter Act.
D) The Carriage of Goods by Sea Act.
Q2) Write an insurance policy for air or sea carriage.
Q3) The perils clause in a marine insurance contract covers which of the following:
A) Explosion.
B) Pilferage.
C) Acts of war.
D) Jettison of the cargo during a storm.
Q4) The three types of losses generally covered by marine insurance policies include all but which of the following:
A) Total losses of all or part of a shipment.
B) Weighted average losses.
C) General average losses.
D) Partial or particular average losses.
Page 8
Q5) Revise an insurance policy for carriage to make it more beneficial to the insured.
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Chapter 7: Bank Collections, Trade Finance, and Letters of Credit
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Q1) The issuing bank will honor the draft as long as the documents appear to be in good order on their face and correspond to the terms of the letter of credit,regardless of the conditions of the goods received.
A)True
B)False
Q2) The seller in a letter of credit transaction is called the:
A) Account Party.
B) Beneficiary.
C) Importer.
D) Issuer.
Q3) The U.S.Export-Import Bank is the largest U.S.export financing agency that can provide:
A) Financing through the World Bank.
B) Financing for imports by U.S. firms.
C) Guarantees on loans made by commercial banks.
D) All of the above.
Q4) Describe the benefits and risks of banker's acceptance financing and accounts receivable financing.Under which form of financing will a bank be liable for defective goods?
Q5) Draft a letter of credit.
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Chapter 8: National Lawmaking Powers and the Regulation
of Ustrade
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Q1) The primary instrument for effectuating trade relations is the protocol.
A)True
B)False
Q2) There is very little debate over how the U.S.Constitution divides power over foreign affairs and foreign trade between the Congress and the president.
A)True
B)False
Q3) Which of the following is true about IEEPA?
A) IEEPA was used as the basis for presidential sanctions against Iraq, South Africa, Libya, and Haiti, among others.
B) Sanctions are administered through the Department of Justice.
C) IEEPA sanctions can be rendered void by majority vote in the General Assembly.
D) Termination of U.S. companies' business contracts with countries such as Iraq or Libya can result in successful "takings" claims against the United States.
E) Two of the above.
Q4) Weigh the relative merits and detriments of FCN treaties.
Q5) Weigh the relative value and risks of fast-rack regulation.
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Chapter 9: Gatt Law and the World Trade Organization:
Basic Principles
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Q1) Compare and contrast Japan's former Large-Scale Retail Stores Law with its present Large-Scale Retail Store Location Law.
Q2) GATT envisages a process of tariff bargaining,and this is accomplished through a hit-and-miss process of tariff reductions and increases called "rounds."
A)True
B)False
Q3) Explain the similarities and differences between "like products" and "directly competitive products."
Q4) A "free trade" nation has no barriers to trade.
A)True
B)False
Q5) The concept that runs throughout the GATT requires that the products of all nations be treated equally and without discrimination by importing nations.This is the principal behind:
A) Nullification and impairment.
B) Most-favored-nation trade.
C) Ad valorem tariffs.
D) Nontariff trade barriers.
Q6) Compare and contrast unconditional and conditional MFN trade.
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Chapter 10: Laws Governing Access to Foreign Markets
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Q1) Agricultural products,in general,have few barriers to trade placed upon them.
A)True
B)False
Q2) The symbol of an approved product in Japan is the government-authorized Japan Industrial Standards Mark.
A)True
B)False
Q3) In EU Measures Concerning Meat and Meat Products,the WTO Dispute Resolution Panel decided:
A) The EC's regulation permitting zero residue violates the SPS agreement because internationally accepted standards permit residue.
B) Where no internationally accepted standards exist, the EC ban on that hormone was not allowed because it was not based on a risk assessment using scientifically accepted principals.
C) The decision of the Dispute Resolution Body was overturned by the WTO Appellate Body in January of 1998.
D) Both A and B are true.
Q4) In what ways are quotas and numerical restrictions similar yet different?
Q5) Compare and contrast some of the remedies and sanctions under Section 301.
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Chapter 11: Regulating Import Competition and Unfair Trade
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Q1) What are the similarities and differences between unfair trade and fair,but economically damaging trade?
Q2) If domestic workers are damaged by foreign competition,they may be entitled to federal worker adjustment assistance.
A)True
B)False
Q3) In the Bulk Aspirin from China case,the ITA decided to treat the private exporters the same as the government-owned exporters.
A)True
B)False
Q4) If a country is not a member of GATT,under U.S.law a countervailing duty can be imposed without regard to whether a U.S.firm is injured or not.
A)True
B)False
Q5) Consider the relative merits of including debt expenses in the calculation of the fair market value of an imported product.Consider this both in terms of the business exporting the good and the business importing the good.
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Chapter 12: Imports, Customs, and Tariff Law
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Q1) The Mod Act increased customs enforcement powers and stiffened penalties for violators.
A)True
B)False
Q2) Imported goods may be entered into the U.S.by the purchaser,consignee,or customs broker.
A)True
B)False
Q3) A protest of entry is filed by the importer against the Customs Service when:
A) A dispute arises regarding liquidation.
B) A dispute arises regarding the port at which the goods were received.
C) The importer wishes to refuse delivery and possession of the goods.
D) All of the above.
Q4) Country-of-origin information impacts all of the following except:
A) The applicability of a countervailing duty.
B) The applicability of a quota.
C) The tariff classification of the article.
D) The rate of duty on an import.
Q5) Compare and contrast GSP status with normal trade relations status.
Q6) Contrast the traditional "name,character,and use" test with that used presently.
Page 14
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Chapter 13: The Regulation of Exports
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Q1) EPCI controls were instituted to stem the flow of currency to the third world countries.
A)True
B)False
Q2) Diversion refers to the illegal placement of goods in the hands of an individual for whom an export license would not be granted because of the type of product,the product's end use,or the country involved.
A)True
B)False
Q3) Multilateral controls are typically subject to self-regulation (via each home country). Outline an (alternative)internationalized process to address situations where one partner to such an agreement believes that another partner to the agreement is not enforcing the agreement or is doing so unevenly.
Q4) One current export control issue pertains to the level of control imposed on encryption software.
A)True
B)False
Q5) Compare and contrast unilateral export controls with multilateral controls.
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Chapter 14: North American Free Trade Law
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Q1) Under NAFTA,a service provider still has to have an office or residence within the borders of a country in order to do business in that country.
A)True
B)False
Q2) Tariff-rate quotas are fixed-rate tariffs on agricultural goods.
A)True
B)False
Q3) Presume that the Caribbean countries have been granted NAFTA membership.Design a plan for phasing them into membership.
Q4) Create a regulation regarding reciprocity of professional licenses.
Q5) Mexico's marking and labeling requirements are very easy to comply with and help promote trade with both the U.S.and Canada.
A)True
B)False
Q6) In what ways is the Mexican Tariff Schedule similar and different from that of the U.S.?
Q7) Some have advocated extending NAFTA to other countries in the region.Weigh the competing considerations in doing so.
Page 16
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Chapter 15: The European Union and Other Regional Trade Areas
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Q1) Similar to courtroom practices in the U.S.,the legal proceedings in the European Court of Justice allow for the calling of witnesses,the production of documents,the hiring of experts,and cross-examination.
A)True
B)False
Q2) The trend for regional economic integration is apparent worldwide.
A)True
B)False
Q3) The representatives who serve on the European Commission are appointed by:
A) The representative's own government.
B) The Assembly.
C) The Court of Justice.
D) The Council.
Q4) The act that made it easier for the Council to act by requiring only a qualified majority for many types of directives was:
A) Autonomous Council Act.
B) Free Trade Act.
C) Binding Directives Act.
D) Single European Act.
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Chapter 16: International Marketing Law: Sales Representatives,
Advertising, and Ethical
Issues
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Q1) In a prosecution for violating the FCPA,the defendant's conduct will be excused if he or she can prove that the payment was paid as a result of extortion by the foreign official.
A)True
B)False
Q2) The FCPA is a multilateral agreement among member nations of the United Nations.
A)True
B)False
Q3) Sales representatives that perform specific acts at the specific direction of the company they represent are considered:
A) Agents of the company.
B) Principals of the company.
C) Independent contractors of the company.
D) None of the above.
Q4) Only payments in excess of $5,000 are subject to criminal prosecution under the FCPA.
A)True
B)False
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Q5) Compare and contrast U.S.and European regulations aimed at advertising to children.
Chapter 17: Licensing Agreements and the Protection of Intellectual Property Rights
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Q1) Most international licensing agreements require the licensee to maintain the confidentiality of the licensor's technology.
A)True
B)False
Q2) Under a bilateral agreement concluded in 1994 between the U.S.and the EU:
A) U.S.-made liquor can be branded as "scotch whisky," or "cognac."
B) EU made liquor can be branded as "bourbon" or "Tennessee whiskey."
C) Both A and B.
D) Neither A nor B.
Q3) The three regulatory schemes for a technology transfer agreement range from least prohibitive to most prohibitive in which of the following choices:
A) Notification/registration, no regulation, preapproval.
B) Preapproval, notification/registration, no regulation.
C) No regulation, notification/registration, preapproval.
D) No regulation, preapproval, notification/registration.
Q4) Draft a bill to address the problem of gray market goods (or that enacts the Lever Rule -- students will need to do outside research regarding the Lever Rule).
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Chapter 18: Takings and National Controls on Foreign Direct Investment
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Q1) Under the modern traditional theory of the taking of property,a sovereign may take private property only where:
A) The property is taken for a public purpose.
B) The taking is nondiscriminatory.
C) The taking is accompanied by a prompt, adequate, and effective compensation.
D) All of the above.
Q2) OPIC insurance does not provide coverage against the loss of assets by U.S.firms in the case of the nationalization of farms or factories held in a foreign country.
A)True
B)False
Q3) Artificially manipulated pricing between related corporations is known as transfer pricing.
A)True
B)False
Q4) The precise structure of inactive investment in a foreign nation depends largely on the treatment of the structure under the tax laws of the host country and the U.S.
A)True
B)False
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Chapter 19: Labor and Employment Discrimination Law
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Q1) In Germany,companies that employ more than 2,000 workers must have supervisory boards with 25% representation from labor and 75% representation from shareholders.
A)True
B)False
Q2) In Germany,the supervisory board of directors is responsible for representing shareholder interests.
A)True
B)False
Q3) The European Union treaties do not address discrimination on the grounds of nationality.
A)True
B)False
Q4) A number of countries in Europe require a two-tiered board of directors.The two-tiered boards are:
A) A supervisory board and a management board.
B) A minority board and a majority board.
C) An elected board and an appointed board.
D) A labor board and an administrative board.
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Chapter 20: Environmental Law
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Q1) Reflecting on the "Circle of Poison," draft a bill regarding pesticide exports.
Q2) Many foreign nations attract investment because of their less demanding labor and environmental laws.
A)True
B)False
Q3) The cornerstone of U.S.environmental regulation of exports is the concept of:
A) Receiving the prior informed consent of the foreign countries to which the exports are going.
B) U.S. firms may not export any hazardous materials that they could not sell in the United States.
C) Advance permission to export from the Environmental Protection Agency.
D) Receiving advance permission from the United Nations before exporting hazardous or toxic materials.
Q4) Within the European Union,an environmental action program came about because of:
A) The Uruguay Rounds.
B) The United Nations.
C) The Bill of Rights.
D) The Single European Act.
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Chapter 21: Regulating the Competitive Environment
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Q1) The European Union's sophisticated antitrust law is based on and implemented through Article 1 and Article 2 of the Clayton Act.
A)True
B)False
Q2) The European Commission is even less flexible with respect to know-how transfer agreements than it is to patent licenses.
A)True
B)False
Q3) In what instances would both the U.S.and EU extraterritorial jurisdiction of competition laws apply? Would only one apply?
Q4) The European Union regulation that deals with "A concentration which creates or strengthens a dominant position...(impeding)competition...in the common market..." is:
A) EU Antitrust Act.
B) EU Workers Regulation.
C) EU Unfair Trade Regulation.
D) EU Merger Regulation.
Q5) Compare and contrast the EU implementation within the community test with the U.S.effects test.
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