Introduction to International Commercial and European Law
Summary study book Introduction to International Commercial and European Law of M.W. Mosselman (Hoofdstuk 1, 2, 3, 4, 5, 6 & 7 ) - ISBN: 9789462511712, Edition: 2, Year of publication: - (Chapter 1 to 7)
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EUROPEAN LAW BEFORE INTERNATIONAL LAW!
1.1 Risk in international trade
The success or failure of doing international business is not only
determined by the type of sale but also the risk it brings in the foreign
country these risk are subbed in three relations:
- Foreign policy risks
GREATEST risk in this segment is trade restrictions, these make importing
and exporting very difficult, happens when a country is going through a
crisis;
War, embargo (Iran, North-Korea);
Competitive devaluation
(country decides to print more money, makes it easier to import products
from this country);
Subsidy
Export taxes or restrictions
- restriction on tech and weapons for national security
- preservation of natural resources
- encourage supply to local industries
Import ban to protect domestic industries
Investment measures which prohibit foreigners from investing in certain
industries
Local content requirement
(a country can ban a language in advertising)
Migration measure
(not to many migrants to secure work)
Other service sector measures
(states that rescued banks with in crises now make it harder for foreign
banks to compete)
, Public procurement
principle of ‘’buy local’’ and using equipment that is made in the domestic
country (In the US ships need to be manufactured in de US if they want to
export by ship)
Quotas and tariff measures
A quota limits the quantity of a certain product which can be imported into
the country. Quotas and tariffs reduce quantity of import, raises the
domestic price, decreases the domestic welfare of consumers and raise
welfare domestic producers (sensitive for corruption).
Sanitary measures
Making sure the country has food (can be used as excuse to protect
domestic producers)
Sub-national government measure
Basically checking if an imported are within the levels of a countries
permitted to certain product (for EX: if the product contains more
chemicals then permitted etc.)
- Domestic policy risks
A recent example of revolt and civil war is Syria/Libya which shows how
risky it can be to trade with certain countries
Piracy
Piracy is a risk to trade, think about Somalia, Nigeria, Indonesia
Terrorism
Terrorism is a great risk to commercial transactions, not so much against
the goods that are exported but the people working in the exporting
(kidnapping)
- Economic policy risks
A change in the economic policy of a country ca have a major impact on
an individual transaction
Capital controls
In certain circumstances a capital controls to stop money from leaving the
country . These measures are taken when investors lose confidence that
they will get their money back.
Nationalization
If a government nationalizes a company, in most cases it expropriates the
owners so the government will be the owner of the company.
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