International Business Law Prof. M.E. Storme 2013-2014

1. International Business Law Prof. M.E. Storme2013-2014

2. SOURCESinternational law v. international sources • Distinction: • Rules of international origin • Rules of international public law (ius gentium) • International public law distinguished from: - (national) public law (constitutional, administrative, criminal, tax, ...) - private law including « international private law »

3. SOURCESthe international legal order (ius gentium) • Classic view: international legal order as legal order between states and/or international organisations / dualism • Nuance 1: private organisations as players; access of private parties to international organisations (incl. courts) • Nuance 2: direct effect of rules of international law in the internal (national) legal order (if accepted by national constitutional law)

4. SOURCESsources of international public law • (Formal) sources of international public law (ius gentium): • Treaties • Customary law, general principles of law • Decisions of internationalorganisations • Soft law

5. SOURCESTreaties (categories) • parties: bilateral, multilateral • domain: commerce, war & peace, diplomatic relations, foreigners ... • legal form: traité-convention (mutual obligations) / traité-loi (introducing legal rules). Some important types: * FNC (friendship navigation commerce); free trade zone or economic union, customs, ... * founding international organisations * investment treaties, state loans * judicial cooperation (e.g. extradition, evidence) * « demarcation » e.g. double taxation avoidance treaties; jurisdiction and enforcement; conflict of law rules * unification of law

6. SOURCESTreaties: unification of law • Domain: • either limited to transnational relationships (international sales, international transport, ...) • or also applicable to domestic ones (e.g. bills of exchange) • Sometimes different versions (creating confusion) • How to interpret: • General rules in the Vienna Convention in the Law of Treaties • In many conventions a clause demanding autonomous interpretation (eg art. 7 CISG, see Ch. 4) • usually no institution with the authority to give a uniform interpretation • exceptions: Benelux Court, Court of Justice EU, etc. • exchange of information (Lugano Treaty, CLOUT and CISG Digest, …)

7. SOURCESSome substantive concepts • Standards of treatment: • minimum standard or equitable treatment • equivalent (« national ») treatment • MFN (most favoured nation) clause – with the possible exception of « preferential treatment » • Sanctions: • determined by treaty provisions • customary law: prohibition of boycott (unless an obligation to boycott is imposed)

8. SOURCES Treaties: effects • Effects in the international legal order: • international liability of states • international jurisdiction (i.a. Permanent Court of Arbitration) • possibly sanctions

9. SOURCES Treaties: effects • Effects in the domestic / national legal order, before the domestic courts (so-called « direct effect  »). Conditions determined by national constitutional law, usually the following: - either implemented or directly applicable by virtue of another rule (adde: doctrine of (vertical) « direct effect » of EU-Directives) - content of the rule must be sufficiently precise and unconditional to be applied without further measures of implementation (self-executing) (NB. This is a question which also arises within a legal order, whether a rule is self-executing or not) • Examples in EU (member st. Legal order): many rules in EU-Treaties. Not: GATT

10. SOURCES International customary law • Conditions • objective element: (widespread) general practice • opinio iuris: accepted as law Often disputed ! Sometimes extended to « general principles of law » as a new kind of natural law • Importance • limited in the field of international economic law • more important in other fields (rights & immunities of states; war & peace; human rights (aspects of), …)

11. SOURCESDecisions of internat.organis. • Sometimes binding: - Decisions concerning the internal operation of an IO - Binding force provided by treaty (see supra on the conditions of direct effect) - e.g. resolutions under Ch. VII UN Charter (Security council). According to art. 103 UN Charter priority over any other rule (thus even ECHR). - e.g. decisions of EU institutions within their competence (as to direct effect, instruments differ – regulations, directives, decisions, ...) - • If not binding: = soft law

12. SOURCES - « Soft law » • Types: • non-binding decisions of International Organisations • non-binding treaties (gentleman’s agreements) • codes of conduct; recommendations • Still softer: legislative guides, … • The ILC (international law commission – expert group of the UN) has prepared many drafts (treaties, articles, principles) – some have been enacted as treaties • (Possible) effects: not legally binding; political consequences; moral effects; commercial pressure; de lege ferenda (model for future rules), chosen as rules by the parties

13. SOURCESThe national legal order • National law includes international public law (and other international sources) as far as « received » (conditions for reception and possible « direct effect » are determined by national constitutional law) • National public law and private law may have sources of international origin (eg human rights, uniform laws, ...) • Application of foreign national law in transnational relationships ? Distinction between public law and private law < next slides

14. SOURCESEffects of national / foreign public law • Public law includes: administrative law, tax law, criminal law, competition law and other economic public law (e.g. import & export regulation, valuta exchange regulation; supervision of financial institutions and markets, expropriation, ...) • Starting point: each country applies only its own public law according to its own criteria of applicability • application is usually territorial, sometimes extraterritorial (e.g. taxes, competition,…). In how far accepted by international law ? • demarcation by treaties (e.g. double tax avoiding treaties; criminal jurisdiction, etc.) • Exceptions (states applying foreign public law): cooperation treaties in matters of public law, e.g. assistance in enforcing criminal sanctions, collecting taxes, extradition, …

15. SOURCESThe (national) ’international private law’ • Private law = property, contract, tort, restitution, company law, trust, intellectual property, …. • Application of private law in transnational relationships is determined by rules of « IPL ». Basically 2 types of rules of IPL: • conflict rules (national or uniform) • substantive rules of IPL (mostly uniform rules) (often applied only after the conflict rule) See topic 3.

16. PLAYERSStates as rule-makers • State as legislator / rulemaker (government) • direct (national sources of national law) • creating international sources: concluding treaties, etc. • ratifying and implementing international sources (incl. uniform law) • founding of, and taking part in international organisations • State as party to conventions of international public law engaging itself in obligations (e.g. commodity agreements, bilateral or multilateral trade agreements, ...)

17. States as trade partners • Purpose: contracts to obtain or sell goods an services for use by the government of by its citizens • Methods: directly as contracting partner or through state companies or mixed enterprises / joint venture (many gradations) • Regulation of the internationale trade (s. further, e.g. public procurement opened to foreign business) • State as contracting party: corruption risk; international rules to fight corruption esp. on the active side. I.a. UNCAC (UN Convention against corruption, in force 2005) • State as contracting party: determine the applicable law(s)

18. States as trade partners • UNCAC (UN Convention against corruption, in force 2005)

19. States as trade partners • UNCAC (UN Convention against corruption, in force 2005) • Ch. 2: preventive measures (i.a. anti-corruption bodies, recruitment principles, codes of conduct for public officials, appropriate system of public procurement, money-laundering prevention, • Ch. 3: criminalization (bribery of officials, diversion of property by public official, trading in influence, abuse of functions, bribery in private sector, laundering of proceeds of crime, obstruction of justice, etc. • Ch. 3: law enforcement: prosecution; freezing seizure and confiscation, compensation for damage, protection of witnesses etc., overcoming bank secrecy, ...) • Ch. 4 international cooperation (extradition, legal assistance, etc.) • Ch. 5 Asset recovery; ..... • Application: i.a. the EU Transparency Directive and Accounting Directive impose disclosure of payments to authorities

20. States - immunities • Immunity from jurisdiction for foreign states before national courts • Starting point: immunity, unless waived • Many restrictions (national law, treaties). • In the US: FSIA (Foreign Sovereign Immunities Act 1976, am. 2008) with exceptions in § 1605 ff, mainly: commercial activity, tort committed in the US, expropriation in violation of international law, terrorism • Result: distinguish actaiure imperii / iure gestionis (already Belgian Cass. 11 June 1903) • Jurisdictional immunity also covers foreign torts (ICJ 3 feb 2012 Germany v. Italy on acts committed by German soldiers in Italy in WW II) • Attempt at harmonisation: UN Convention on Jurisdictional immunities of states and their property 2004 (not in force yet, but cited in ECtHR 29 juin 2011 Sabeh El Leil as customary law) • In general not contrary to art. 6 ECHR if there is no immunity before domestic courts (see ECtHR in McElhinney, in Fogarty, in Al-Adsani).

21. States - immunities • Immunity from enforcement for foreign states • Starting point: immunity • Result: immunity for assets used by the public service (s. eg art. 55 New York Arbitration Convention) • Cass.B. set immunity aside in 3 cases because of lack of effective remedy (art. 13 ECHR). Idem Cass.Fr.

22. States - sovereignty • Starting point of the international public law: • sovereignty also regarding the economic order; • equality of rights under international law, also in relation to (participation in) international trade • Many international treaties provide benefits for « developing countries » (further benefits for LLDC’s, least developed countries) • Disputed « right » to development and « duty » of solidarity (soft law ?)

23. International organisations • Universal organisations (in principle open for all states) • GATT, now WTO (1994), with a General Council and separate Councils for GATT, GATS, TRIPS • UNO, with General Assembly, Security council, EcoSoc • Uncitral (international trade law): treaties and model laws • Unctad (trade & development): granting developing countries access to the world economy • Unidroit: create uniform law (mostly private law) • Hague conference: unification of IPL • Restricted organisations, i.a. OECD, OPEC etc.

24. International organisations • Free trade organisations • Types: free trade zone / customs union / common market / monetary union • Examples: • EU • EFTA, EEA • NAFTA, CAFTA (Central America), Mercosur • ASEAN / SAARC (SAFTA) • …

25. PLAYERS - NGO’s • Private organisations: not subjects of international public law, but governed by national law (although sometimes involved in the activities of I.O.’s) • Some influential NGO’s : - ICC: for standard contracts and uniform rules; Court of arbitration (organising arbitral tribunals) - World economic forum Davos • Comité maritime international: maritime transport conventions • Institut de droit international: tries to « codify » international public law, ….. • ICANN = California corporation (internet corporation for assigned names and numbers) • Multinational enterprises: sometimes conclude contracts « under international law » (with states or IO’s) instead of under national law.