Question 1

Located in The Hague,the International Court of Justice (ICJ)is the judicial arm of the:

Accepted Answer

The International Court of Justice (ICJ) is part of the United Nations (UN) and is located in The Hague, Netherlands. It is the principal judicial organ of the UN and settles disputes between states brought before it.

Question 2

A company hoping to protect its trade secrets from being stolen by a foreign company can seek relief under the TRIPs agreement if both companies do business in GATT signatory countries.

Accepted Answer

The TRIPs agreement is a part of the World Trade Organization (WTO) and applies to all signatory countries, including those that have signed the General Agreement on Tariffs and Trade (GATT). Therefore, if both companies do business in GATT signatory countries, they can seek relief under the TRIPs agreement to protect their trade secrets from being stolen by a foreign company.

Question 3

The governmental action to dispossess a foreign company or investor is known as:

Accepted Answer

Expropriation is the governmental action to dispossess a foreign company or investor of their assets or property within the country's borders with or without compensation. Confiscation, on the other hand, refers to the seizure of illegal or prohibited items by authorities. Compensation may or may not be offered in cases of expropriation. Internationalization refers to the process of expanding a company's operations beyond national borders, while nationalization refers to the transfer of private property or assets to government ownership or control.

Question 4

Various types of political risk insurance to U.S.companies is provided by:

Accepted Answer

OPIC (Overseas Private Investment Corporation) provides political risk insurance to U.S. companies investing in foreign markets. The other options listed provide business and political risk analysis and consulting services, but do not offer insurance coverage.

Question 5

Under the Alternative Fines Act,fines imposed on individuals may not be paid by their employer or principal.

Accepted Answer

The Alternative Fines Act prohibits employers or principals from paying fines imposed on individuals.

Question 6

What do value added taxes (VAT)encourage in countries such as China?

Accepted Answer

Value added taxes (VAT) in countries such as China often result in cross-border shopping and smuggling as consumers seek out lower prices in neighboring countries without such taxes. This can lead to both economic and political issues.

Question 7

According to U.S.laws,there is no restrictions on remittances of royalties received abroad based on the commercial negotiation between licensor and licensee.

Accepted Answer

According to U.S. laws, there are no restrictions on the remittance of royalties received abroad, and it is based on the commercial negotiation between the licensor and licensee.

Question 8

If an American businessperson pays a Russian customs agent a $20 cash "processing fee" to avoid delay in leaving Russia,the businessperson has violated the Foreign Corrupt Practices Act (FCPA).

Accepted Answer

The answer of If an American businessperson pays a Russian...

Question 9

After Fidel Castro took power in Cuba in 1959,his government seized control of American property without paying compensation.Coca-Cola,DuPont,Texaco,and dozens of other American companies have filed claims against Cuba seeking financial settlements.Which of the following terms most specifically describes the action Castro took against these companies?

Accepted Answer

Confiscation refers to the act of taking property without compensation, which is exactly what Castro's government did to American companies in Cuba. Nationalization and expropriation involve the transfer of private assets to public ownership, but usually involve some form of compensation to the previous owners. Internationalization and deportation are not relevant to this situation.

Question 10

What type of international disputes would be taken before the International Court of Justice?

Accepted Answer

The International Court of Justice is a court of last resort for disputes between two nations.

Question 11

Formation of a cartel like OPEC,consisting of oil-producing companies,would most likely be illegal in the United States.

Accepted Answer

The formation of a cartel like OPEC would violate the Sherman Antitrust Act, which prohibits agreements that unreasonably restrain trade or commerce.

Question 12

The United Nations Conference on International Trade Law (UNCITRAL)has also been a significant force in the area of arbitration.

Accepted Answer

UNCITRAL has been a significant force in developing and promoting international commercial arbitration through the creation of the UNCITRAL Model Law.

Question 13

Categories of political risk listed by EIU (Economist Intelligence Unit)include all of the following except:

Accepted Answer

The answer of Categories of political risk listed by EIU...

Question 14

Denmark ranks highest in bribery as listed by the Corruption Perceptions Index (CPI)by Transparency International in 2010.

Accepted Answer

Denmark is actually ranked as one of the least corrupt countries in the world, and ranks among the top countries on the CPI.

Question 15

Bureaucracy is listed as a political risk category by:

Accepted Answer

The answer of Bureaucracy is listed as a political risk...

Question 16

In Saudi Arabia,the Communication and Information Technology Commission (CITC)was ready to restrict BlackBerry services citing security concerns since the location of RIM (Research in Motion)servers were in Canada.

Accepted Answer

This statement is true. The Saudi Arabian government expressed concerns over the location of RIM's servers and threatened to restrict BlackBerry services. The CITC argued that the encrypted data sent by BlackBerry users could not be monitored by Saudi authorities since the servers were located outside the country. Eventually, RIM and the Saudi government reached an agreement to allow limited access to BlackBerry data for security purposes.

Question 17

Despite the positive publicity,the phrases used to describe the arbitrary exercise of state power in Russia include all of the following except:

Accepted Answer

"Political culture" is not a phrase commonly used to describe the arbitrary exercise of state power in Russia. The other choices all have been used to describe this phenomenon. State capitalism refers to the government's control of industry and commerce. Renationalization refers to the process of bringing back privately-owned companies or assets under state control. Kleptocracy refers to a system where the ruling class enriches themselves through corrupt practices. Managed democracy refers to a system where the government controls the electoral and political processes to maintain power.

Question 18

The European Court of Justice,based in Luxembourg,is the European Union's highest legal authority.

Accepted Answer

The European Court of Justice is indeed the highest legal authority in the European Union and is based in Luxembourg.

Question 19

Brazil is not among the emerging market countries who have signed the New York Convention.

Accepted Answer

The answer of Brazil is not among the emerging market...

Question 20

Any company doing business outside the home country should first carefully study the ________ in the target country.

Accepted Answer

Political culture refers to the shared beliefs, values, and practices that shape the behavior of individuals and institutions within a particular political system. It is crucial for a company to understand the political culture of the target country as it can impact economic policies, regulations, and business practices. This understanding can help the company make informed decisions and adapt to the local business environment.

Quiz 5: The Political, Legal, and Regulatory Environments

Located in The Hague,the International Court of Justice (ICJ) is the judicial arm of the: