Basic question: How do states and international institutions try to influence transactions b/w private parties?
Private party transactions do not take place in a vacuum!!
Some of the Different Actors in International Trade
Interplay between the President and Congress:
The President does not have ultimate authority to negotiate w/ foreign trade. Congress may intervene. But, this may also give the President an extra bargaining chip. Or is Congress undermining the President?
More emphasis on trade restricting policies
From the developing perspective:
Developing countries want to protect their infant industries
Some developing countries see trade as theft
Most favor trade restrictions, due to suspicions about trade, such as environmental concerns, economic monoculture, etc.
ACCOMODATION BY NATIONAL INSTITUTIONS
§ Executive Branch
§ National Jurisdiction over International Transactions
§ Choice of Law, Comity and Public Policy
§ Private Choices of Law and Forum
§ Parallel Proceedings
§ Foreign Sovereign Immunity
§ Act of State Doctrine
§ Official Corruption
Executive Branch (pp. 139-160)
Domestic legal systems are the dominant force in structuring international business Tx.
Must look to which country will have jurisdiction over the Tx
Must at least comply with that country’s criminal and tax laws, as well as other relevant regulations
The Executive branch is the branch most directly concerned with int’l commerce.
Role of Domestic legal systems:
Intervene to preserve order in emergency situations
Impose regulations for routine day-to-day practices
2 structural questions underlie nearly every int’l business Tx:
To what extent will a state attempt to impose its rules on matters that take place outside its territory? – Outbound issues
To what extent will a state recognize the interest of other national legal regimes as to matters that take place within its territory? – Inbound issues
How have U.S. legal institutions adopted to int’l commerce?
The U.S. has a smaller portion of its economy devoted to int’l commerce than many other countries – thus, its laws are more geared toward domestic issues than most other countries?
Many other nations have studied and sometimes copied the U.S. legal institutions
Much int’l commerce involves the U.S. and thus comes w/in the jurisdiction of U.S. law
Many lawyers who work in int’l commerce law were trained in the U.S.
U.S. v. Curtiss-Wright Export Corp. (1936):
The Executive’s power to represent the nation in int’l relations did not derive solely from the Constitution, and thus doesn’t face the same limitations imposed on domestic actions
The Executive branch has authority to deal unilaterally in int’l commerce
Article I §8: Congress has power to regulate commerce w/ foreign nations
The President negotiates the trade agreements, and then they must be approved by majorities of both houses of Congress, and are implemented through regular legislation.
Spectrum of Executive branch’s power:
Explicit congressional authorization ßà explicit congressional prohibition
Express & specific authority required (Congress)
Authority required, broadly construed (Judicial branch has ultimate authority)
Authority not required, contradiction prohibited (Executive has more power)
Authority not required, contradiction permitted (Executive has most power)
When the President acts w/ the authority of Congress, he acts w/ authority of both branches; but if he acts solely on basis of constitutional authority, his power is at its lowest ebb. Relying solely on constitutional authority, a President would be likely to lose b/c of the S. Court’s narrow view of Executive power.
Dames & Moore v. Regan, Secretary of Treasury (go back and fill in missing details!)
Supreme Court of the United States (1981)
Iran in the 1970’s: hundreds of U.S. companies investing billions of $
IEEPA froze Iranian assets
Did the Pres have the authority to suspend claims pending in American courts?
IEEPA authorized nullification of the attachments, but it did not authorize suspension of the claims.
Hostage Act does not authorize suspension of the claims, either.
Even though neither the IEEPA nor the Hostage Act constitutes specific authorization of the President’s action suspending claims, both the IEEPA and the Hostage Act are highly relevant – they indicate congressional acceptance of a broad scope for executive action in this situation.
Historical analysis suggests legislative intent to approve the practice of claim settlement by executive agreement
Prior S. Ct. cases have recognized that the President does have some measure of power to enter into executive agreements w/out obtaining advice and consent of the Senate
United States v. Pink (1942)
Long-continued practice raises a presumption that the President has such authority
1. Specific Case
3. Emergencies – Congress cannot anticipate emergencies;
heir nationality than it is for citizens, b/c a corporation can set up a subsidiary in another country. But U.S. can also regulate foreign companies whose parent companies are headquartered in the U.S.
Midland Bank v. Laker Airwarys LTD (Relate to Antitrust & Monopolies section!)
Laker goes bankrupt
The Liquidator discovers evidence of conspiracy by airlines (both U.S. and European) flying overseas routes to bankrupt Laker by use of predatory fares – this was a breach of U.S. antitrust legislation
U.S. has more stringent antitrust laws than England
Difficult to establish allegations of conspiracy – must get into files of other party, and the U.S. has more liberal rules of discovery than England
U.S. attorneys advised the Liquidator that he could also sue Midland Bank b/c it had w/drawn financial support from Laker, in circumstances from which a U.S. federal district court might infer a combination or conspiracy w/ the airlines to bankrupt Laker
Midland was outraged, and denied all charges
Midland seeks an injunction against this suit in an English court – originally granted, but after appeal by Laker, it was denied
The facts do not justify making a charge of conspiracy against Midland – an injunction should be granted
Under int’l law, the U.S can regulate activities of foreign corp w/ substantial contacts w/ the U.S. But the U.S. cannot regulate activities of foreign corp w/ no contacts.
Emphasis should be on minimizing extraterritorial jurisdiction in order to avoid int’l bickering among countries.
EEOC v. Arabian American Oil Co.
U.S. Supreme Ct, 1991
Issue: whether Title VII applies extraterritorially to regulate employers who employ U.S. citizens abroad (an outbound application of U.S. law)
An issue of statutory interpretation – did Congress intend for Title VII protections to apply to U.S. citizens employed by American employers outside the U.S.
There is a presumption against extraterritoriality
Holding: No, Title VII does not apply extraterritorially