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
The seller’s bank acting as an advising bank agrees to transmit the funds received from
the buyer’s bank to the seller provided the terms of the letter of credit have been
satisfied completely.
a. True
b. False
In a common law system, the judge has the power to control the conduct of the trial and
empowered with authority to examine witnesses and demand tangible evidence from
the plaintiff and defendant.
a. True
b. False
NAFTA tolerates the imposition of regulations when based on health regulations and
safety standards which are not implemented as non-tariff barrier.
a. True
b. False
When a law or regulation of the federal government directly conflicts with those of a
U.S. state or local government, the federal law will generally prevail. This is known as:
a. federal preemption
b. federal preference
c. federalism
d. none of the above
Insurance is available from the U.S. AID to U.S. firms against the expropriation of their
property by a foreign government.
a. True
b. False
When a party takes a negotiable document as a good faith purchaser, it generally
acquires even greater rights in the document than the one from whom it had been
negotiated.
a. True
b. False
In a California lawsuit between a U.S. resident and a manufacturer based in Taiwan,
what might limit the jurisdiction of the California court?
a. The Due Process Clause of the Fourteenth Amendment.
b. Sovereign immunity.
c. The Hague Convention on Taking Evidence Abroad.
d. Comity.
e. All of the above.
Once parties have initiated litigation in the United States, they cannot agree to have the
dispute arbitrated.
a. True
b. False
U.S. multinational corporations are generally safer in building a factory in a foreign
country that has entered into an investment treaty with the United States than in a
country that has no such treaty.
a. True
b. False
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.
The GATT 1994 Agreement on Import Licensing Procedures provides strict guidelines
for licensing paperwork.
Licenses can be refused if any of the procedures are not strictly followed.
a. True
b. False
Dividends paid from a foreign subsidiary to the U.S. parent company are not taxable
under U.S. law.
a. True
b. False
Countries A and B both produce coffee. Both countries belong to GATT. Country A
imports coffee from B. Once B’s coffee enters A’s stream of commerce, under the
national treatment provisions of GATT:
a. Country A cannot subject B’s coffee to higher internal taxes or charges than its
domestic coffee.
b. Country A may now charge higher internal taxes or charges on B’s coffee in order to
discourage coffee drinking since the goods have already passed the border.
c. Country A cannot subject B’s coffee to any internal taxes or charges, even if it does so
to domestic coffee.
d. None of the above is correct.
In response to the petition for relief filed by Harley-Davidson Motor Company:
a. A ban on imported motorcycles above 700 cubic cent. was implemented.
b. The commission recommended that declining incremental duties on imported
motorcycles be imposed for five years.
c. Honda agreed to stop the export of its larger motorcycles for five years.
d. The president threatened severe trade sanctions on Japan if they did not stop their
dumping of motorcycles on the American market.
As a general rule, firms are responsible for the torts committed by their foreign
subsidiaries under the alien tort claims act but not by their foreign branch offices.
a. True
b. False