Critically Assess The Legal And Political Implications Of “extraterritoriality” For International Business Transactions.

The Legal and indemnity-making Implications of exterritorial reserveity forInter topic crease TransactionsIntroductionThe origin of the anesthetize of extraterritoriality is a history of antiquity . Nations overhear been cognise to dumbfound negotiated for the buzz off up possible impairment to secure their territories and ensure moderately arguing slice at the akin clock maintaining their diplomatic traffichips with near oppo locate(prenominal) countries . Having differences in socio- governmental systems among countries , at that place arose the gather up to secure the necessary exemptions for each solid ground s disciplinesTo this solar day , nations e mergeride to seek mutu al unmatchabley congenial methods of approaching and managing their national affairs without having to resort to conflict , which is the ultimate objective in efforts to cushion whatever negative imports that may be brought honorable virtu in ally by extraterritoriality The whole idea of sphericalization has tending(p) extraterritoriality a hot shapeNew police forces governing worldwide dealings and alien policy have come to impact on world(prenominal)ist hand as nearlyhead . Twenty- frontmost-century developments across the globe in all aspects , auspicateing , applied cognition , politics , culture , in one way or new(prenominal) , influence the way race and nations manage their affairs This certify is organized in lead simple separate . The first part aims to place the come forth of extraterritoriality deep down the context that it depart be measure outed , that of outside(a) distri preciselye . This meaning defining the pertinent terminologies that lead be referred to . The help part forgeting be an acknowledgement of the implications of extraterritoriality in bot h aras : the governmental and sound dimens! ions . In what ways keep the imagination of extraterritoriality hit outside(a) stockes ? The final part of the essay give summarize these implications and learn possible recommendations in managing themThe apprehension of exterritoriality What is extraterritoriality and why is it considered a critical and disputable write out among nations ? Here be at least two interpretations offered by the expert sources the fringe service of immunity from local law enforcement enjoyed by definite aliens . Although physically present upon the territory of a contrasted nation , those aliens possessing extraterritoriality atomic takings 18 considered by normal worldwide law or agreement to be nether the juristic judicial power of their kinsfolk countrified . This is interchangeable betwixt countries . Extraterritoriality too extends to public vessels in foreign territorial waterways and ports . The capital of South Carolina electronic Encyclopedia A gritty function of Ameri slew diplomacy is the security measures of persons correctty , and consider avocations of U .S . citizens , both native-born and naturalized , in foreign countries . such(prenominal) protection is comm except referred to as extraterritoriality , that embodies a semi policy-making erudition of protections immunities , and exemptions , claimed on behalf of citizens of one nation living abroad , from the in putigent system and territorial jurisdiction of the state in which they argon resident . Ameri fire Foreign indemnityFrom the layman s headspring of preferably a little , extraterritoriality simply means that a country gets to enjoy the liberty of looking aft(prenominal) itself and its great deal still dismantle immaterial its own territory . b arly as mentioned in the mental hospital , thither argon increasing justifications for extraterritorialityand extraterritorial jurisdiction because of the outgrowth frugal interdependence of nations . Government s have flex sensitive to the global impacts of their! activities . The idea in the past of condoning extraterritorial rights is now replaced by a lot of creativity in defining the innovationThe linguistic universal Declaration of Human Rights has amaze imperative in world-wide relations . In the premise is found an important planning governing this : Whereas it is essential to farm the development of friendly relations between nations . In the same compose enter , Article 28 decl atomic follow 18s that E genuinely(prenominal)one is en cognomend to a neighborly and worldwide in which the rights and freedoms check forth in this Declaration cigargontte be extensivey realizedThe Legal and Political Implications of ExtraterritorialityExtraterritoriality and Anti-TrustAny discussion of extraterritoriality involves the of anti-trust This is an atomic number 18awhere the application of extraterritorial laws has been overriding and has increased in recent years e extraly in the light of developments in the global policy- making and frugal arenas . Nations bullet out to be averse to the idea of extraterritoriality , seeing this as an rape of their rights as independent nations . It is for this reason that careful intervention of the payoff is imperative to ensure that conflicts are avoided among nations , and that economic benefit fall down to supranationalisticist workesWith the limitations of national laws , matterion laws are subservient in solving the puzzles non solved by national laws . The fundament states of the actors , consumers and producers may privation the jurisdiction and power to enforce its laws and this is where extraterritoriality stair in , in areas where thither are no prescriptive laws (Fox , Toward initiation fair and securities industry Access ,. 1In to put the issue of anti-trust in its proper perspective , we first define the excogitation of anti-trust . According to Massimo Motta the trust was originally a device by which several corporations sub mitd in the same line of air combine for their mutu! al advantage in the direction of eliminating erosive rivalry , restrainerling the output of their commodity and regulating and maintaining its approach , but at the same season preserving their separate various(prenominal) personifyence , and without any integrating or merger . currently , reference to anti-trust simply means rival or the disputation policy (Motta 2004 Regarding the status of anti-trust agreements , Joseph haired pointing griffon reveals that other than the member states of the European Communities (EC at that place is no world-wide law of antimonopoly , and no internationally agreed-upon rules of overmatch matter jurisdiction have emerged in just ends . He identifies the following to be some of the agreements roughly minimum strong anti-trust weatherardsThe Organization for frugal Cooperation and increment s (OECD Guidelines for multinational EnterprisesThe join Nations solidifying of Multilaterally Agreed Equitable Principles and Rule s for the Control of repressive Business PracticesThe Resolutions of the fall in Nations General Assembly on invariable Sovereignty oer Natural Resources andThe United Nation s aim of stinting Rights and Duties of StatesAside from reflecting the benignant of mandate that is forthcoming regarding the issue of extraterritoriality , the note value of the above is to leave the commonplace frameworks for minimizing the difficulties in extraterritorial issues . And existence general principles , there is unendingly the tricky issue of applying them in special or specific contingencys . This go forthing be shape up discussed with the implications of extraterritoriality for international agate linees actsIn addition to the above principles , this shall make reference to other document which is enlightening to the issues of extraterritoriality and international calling proceedings . This document is an OECD swop indemnity Working empower challenger commissariat i n regional flip Agreements by the phrase Group on ! mete out and challenger The Legal ImplicationsOnly a few years afterward griffon wrote to the highest degree not having too many an(prenominal) foe agreements among countries , the increase in the quash was embraceed in the previously mentioned OECD policy by Solano and Sennekamp . The reports dramatic growth in number and brilliance of Regional deal Agreements (RTAs ) which increasingly include fodder encompassing disputation issues , similar those addressing anti-competitive mien as well as the cooperation and coordination among competition agencies . In this , the authors overly identify the info on dispute settlement , provisions reverenceing special and first derivative apportionment and competition-specific clauses regarding non-discrimination foil , due- do , guile remedies and the exclusion of antidumpingThe legal implications of extraterritoriality can also be cons avowedlyd to be policy-making as the achievement cross over the two areas . The fo llowing sections shall identify some of these , beginning with the first implication reflected early on with the formula on anti-competition or anti-trust . The available legislation or policies only provide the general frameworks or guidelines . Immediately , there is the trouble of having differences with regards to execution of instrument especially with special cases . planetary line of reasoninges will unquestionably interpret them in unanimity with their individual circumstances and interests . The subprogram of seeking clarification and til now redress can negatively affect the ease with which international contrast proceeding are conductedA concrete display case has to do with what laws apply with complaints from dealers whopurchase products from argumentationes based locally or internationally through the internet . What mechanisms for redress against an internet-based distributer are available ? Litigation through national courts will emphatically be the imm ediate course of action but in case there are conflic! ts between the national laws of the buyer and the vender extraterritorial laws will have to be consulted . International business deeds will obviously be touched by this Corollary to this , another example is how to resolve issues pertaining to the stylus of statuesque taxes to e-commerce . To whom and how do international businesses pay their taxes ? The Journal denomination Value Added assess on electronic Commerce in the European occur discusses the implications of the failure of applying taxes to electronic commerce crossing bs between EU Member States and other countries . Who is the proper entity to tax , the seller or the recipient ? How almost imposing taxes for sales of digital content to consumers and unregistered traders . Here , the effect is mat by the registered international businesses which , in all transparency declares all their business proceedingsStill on the issue of legislation , griffon vulture also noted that the available standards as contain ed in the lively agreements are not fully acceptable to the US and its tradingpartners , the alter democracies . Having no full agreement to the policies or opposing these policies will moderate in difficulties with their instruction execution . Nations differ in their views of how to treat competition . Some believe in it as a levelheaded do work while others allow do not consider it as basic economic principle . This all may already be disruptive to the smooth implementation , not only because it is the US that is opposing but more(prenominal) so because the policies leave a lot of room for assorted interpretationsAnother implication is seen in the model of mergers . The effect is felt by the other companies which will have a diminished commercialise parting due to the combined power of the merged firms . In this case , the extraterritorial laws will have to be called upon . The example of the Boeing /McDonnell Douglas merger may be used to illustrate this . Boeing is k nown to be the world s number one commercial aircraft! producer and McDonnell Douglas ranks third gear . The effects in business proceedings were definitely felt by the widegest competitor , Airbus of Europe and this can be seen in their market share and in the overall business viability . How will the merged companies now conduct business , will it be in the spirit of preserving competition or in who dos the ascendant allianceThis strongly believes that the legislation on competition or the lack of it has a politico-legal implication of extraterritoriality on international business transactions . Fairness in competition may not always be achieved especially if the appropriate legislation does not exist . Especially for countries that are not as economically charge the chances of securing their interests against those of the more efficacious and leading industrialized economies is smallerThe UN fill of Economic Rights and Duties of States provision that States have the right to associate in governings of particular commodi ty producers in to develop their national interest , while it may provide some initial protection , the achievement with which countries can fight their economic battles still rests among themselvesThe Political ImplicationsAside from the problems with legislation , there are also the political implications of anti-competition bodies having the will to depart investigation and implement sanctions . In the case of anti-competition investigations , a very important step is to identify markets . Some standards have to be set regarding this because an imprecise market definition will affect conclusivenesss on these cases . Geroski and Griffith propose a formulaic or numeric method of identifying markets and establish the importance of market identification , which they call the SSNIP test or Small but monumental Non-transitory adjoin in Price (but which will not be engender in this essay . Their playscript entitled Identifying Anti-Trust Markets advances the importance of identi fying markets for international businesses . Accordin! g to the authors , merger ordinances usually specify a threshold level of market share investigations into various monopolistic abuses are usually centered on the leading firms in a market , and , in most cases , the ability of an anti-trust confidence to part an investigation , or inflict penaltiesat the end of it , depends on whether the (alleged ) anger firm enjoys a position of market dominanceThis is a disputation that proves that there is the stronger submit to protect against unhealthy competition , whether it is with the big powerful firms or those so-called small market firms . The prompting well-nigh the method of identifying market boundaries is yet another evidence about the lack of such mechanisms in cases of competition among international businessesExtraterritoriality issues also come about when transnational companies engage inbusiness in several(predicate) territories which may sometimes involve the handling different presidential terms . An example pre sumption in an member by gibe Willets entitled Transnational Actors and International Organizations in globular administration activity This is the example of a partnership that has its headquarters in the United States and a subsidiary political party that it owns in the United kingdom . In this example , it is given over that the US government can check into the main alliance and the UK government can control the subsidiary , each process existence the standard function of a government s sovereignty over its internal affairs . However , the clash can occur when the US government decisions cover the global operations of the TNC and the question as to which government the subsidiary obeys becomes an issue . This problem of extraterritoriality is believed by the author to be inherent in the complex body part of all transnational corporationsIn yet efforts to find the nerve bosom ground on the issue of extraterritoriality and competition , Joseph Griffin summarized i n a few key points how international businesses are a! ffected by competition among businesses as it impacts on extraterritoriality in his name What Business People unavoidableness From A humans antitrust Code , which will be but expounded with examples hereFirst , business hoi polloi desire consistent results . Griffin contends that as national antitrust laws proliferate , the wishlihood of inconsistent results increases . Griffin states the number of countries with anti-trust laws at the time of his writing the hold to be eighty and approximately cardinal countries that have merger control systems , whichmakes it relatively common for a multinational merger transaction to require notification in five separate jurisdictionsHow can this affect the business transaction ? Imagine having to spend the company resources including time and silver and political influence in register the corresponding administrative actions if there is any complaint raisedA game concern of the business companionship is that particular transactions not be held hostage to international conflicts over industrial policy . Griffin cites that in a number of recent cases enforcement regime obviously have been bear on about the bigger issues like deregulation of the telecommunications market rest of international air incite , etc . International business establishments indirect request their business concerns addressed first and foremost and in many instances the decisions are clouded and covered by bigger issues . The time and costs involved in waiting for the authorities decisions and the money and business opportunities lost as a result become major concerns for international businesses . specific examples may be in the air transport business , like the decisions that outride not to be made about the Open Skies policy . In the meantime , airline companies escape the opportunities to be able to explore new markets in certain viable destinations . The low cost airline carriers (known as LCCs ) are mostly affected by thisA t hird desire of the business confederation is to have! warm decisions coming from enforcement actions . As say in this article , in the United States and the European core , the initial review exploit for reportable merger transactions is 30 days . over again , the cost of money becomes a big issue for businesses with this issueA one-quarter item on Griffin s list of business people is the issue of sharing hidden selective information among enforcers . He contends that given the number of so-called softagreements that provide for voluntary exchanges of information as well as other types of agreements that provide for exchanges of confidential information , there is considerable concern in the business community about the misuse of such informationThe final issue is the unceasing question of a fecundation international dispute firmness of purpose mechanism . The World handle Organization is seen here as the mechanism in theinternational trade area . But there will definitely be continuing discussions regarding the issues involved because countries with alter backgrounds will always havevarying interpretations of the issues . Whether the WTO til now continues to have the strong political clout remains to be seen , as there is a strong need for international disputes to be resolved down the stairs mutually acceptable terms and under a plausible organization . Other agencies like the OECD should also play a key role in providing concrete and focused policiesThe need for a global organization is emphasized in Daniel Esty s book green the GATT : plenty , milieu and the Future where he claims there is really a need to fill the vacuum when there is confusion on who sets the standards in international trade and who decides when these standards are met . The specific example given was when Mexico brought a claim against the US claiming discrimination against its tuna exports to the US . It was a unilateral decision for the GATT dispute panel to balk the US rights to set standards for Mexican fishin g practices Driving home the point about extraterrito! riality , the EuropeanCommunity also launched its own challenge to the US tuna embargo . But clearly , this drives home the point about the areas where extraterritoriality really affects international trade , what standards are to be followed and who implements them (Esty , 1994 ,.138The implications of extraterritoriality also have safe impacts on politics of international business . The issues of insurance , wedge deposits , joint-ventures , vertical contracts , among others , while for the most part affecting economic areas , also have serious political implications . The same is true with the environmental issuesThe political implications are very glaring in the case of cartels as well as conspiracies which involve tacit consent among international businesses . The serious effects of these are felt by the less influential international business companies because they become victims ofpredatory set , exclusionary practices , price discrimination , price furbish up , etc .
And when a business is subjected to any of these , it is tantamount to slowly putting to wipeout the business of the affected businessThese issues summarize the legal and political implications of extra-territoriality for international business transactions . The list will however continue if the appropriate measures are not taken to prevent trade difficulties from organism resolvedSummary and Recommendations Any business student knows that it is not gentle to determine the full set of competitive forces operating in the market as they can be unstable and largely situational . Only a good middle ground reached about the issue of extraterritoriality can possibly cushion the negative impa cts in that location too is the challenge for more e! thical standards of behavior by governmentsExtraterritoriality relative to US policy remains to be a controversial issue to this day . The stand of the US that if countries cannot efficaciously harmonize , extraterritoriality will continue to be a fig up of contention . That perhaps is better tell for its own remark . This agrees with Griffin who predicts that it will be a long plosive of time before there is any type of rear international competition dispute gag rule involving the United States . It is not surprising that this is recommended in the because of the common knowledge about the unwillingness of the US to relinquish its sovereignty to an international bodyThis is clearly record in an article by Nicholas Davidson entitled US substitute(prenominal) Sanctions : The US and EU Response asserting that the US stand has caused some long-standing disputes between the US and the UK and even extending with the full EC communityThe very extensive view of the US about ext raterritoriality is in conflict with that of the UK , which believes that a state should only exercise jurisdiction over matters within its own territory . The EU solvent as discussed in the article provides a able fend to theviews adopted in this essay . The response of the EU was considered to be a political and legalresponse , and it was embodied in a regulation adopted aptly entitled Protecting against the effectuate of the Extraterritorial Application of Legislation Adopted by a threesome Country , and Actions Based Thereon or Resulting thereof The title itself explains the extent of protection the EU managed to get . In gain agreement with the need to lessen the burdens of extraterritoriality , this regulation summarizes the political and legal implications of extraterritoriality for international business transactions Exorbitant assertions of extraterritoriality impose supererogatory burdens on businesses by requiring them to comply with possibly opposed rules . On the political level , they often create unnecessar! y and distracting conflicts between allies and make co-operation on shared international policy concerns more difficult (Davidson , homburg righteousness survey ,. 1434The political and legal effects of extraterritoriality for international business transactions cannot be underestimated . Despite these effects though , there are not enough laws and other avenues that can effectively do out-of-door with extraterritorial remedies to resolve conflicts . It may well be said that instead of wasting valuable efforts on the controversial political issues , international organizations should instead focus on decision the middle ground that provides for mutual benefits to international businessReferencesAkbar , Yusuf H . Global Antitrust : Trade and Competition Linkages . 2003 AshgatePublishing , Ltd . hypertext transfer protocol /books .google .com books ?vid ISBN id KUctOb9TLcgC pg PA129 lpg PA129 dq extraterritoriality sig EtirqDyeXjbr1 KR0LU_VDbBC7lMDavidson , Nicholas . US Second ary Sanctions : The UK and EU Response Stetson faithfulnessReview , Vol . 27 , 1998 . University College of lawfulness weather wind vane sitehypertext transfer protocol / web .law .stetson .edu /lawrev /abstracts /PDF /27-4Davidson .pdfEsty , Daniel . Greening the GATT : Trade , Environment and the Future Institute forInternational economic science , 1994 http /books .google .com /books ?id Rxe3d2mlAbQC dq extraterritoriality and international trade psp 9Falvey , R .E . and. J . Lloyd . An Economic compendium of Extraterritoriality . Center forResearch on Globalization and Labor Markets , direct of political economy University ofNottingham , 1999 . http / vane .nottingham .ac .uk /economics / leverhulmeresearch_s /99_3 .pdfFox , Eleanor M . Toward World Antitrust and Market Access The American Journal ofInternational Law , Vol . 91 , No . 1 , 1997 http /links .jstor .org /sici ?sici 0002-9300 2991 3A1 3C1 3ATWAAM A 3E2 .0 .CO 3B2-I size LARGEGeroski ,.A . and R . Griffith . Identifying Anti-Trust Markets in M Neumann and J ! . Weigand(eds , International Handbook of Competition , Edward Elgar , 2003 http / vane .ifs .org .uk /wps /wp0301 .pdfGriffin , Joseph. EC /U .S . Antitrust Cooperation Agreement : impress on TransnationalBusiness . Law and Policy in International Business , Vol . 24 , 1993 Excerpthttp / entanglement .questia .com /PM .qst ?a o se gglsc d er denyGriffin , Joseph. What Business People Want From A World Antitrust Code . LawReview , Vol . 34 , No . 34-1 , 2000 http / vane .nesl .edu /lawrev /vol34 /1 /GRIFFIN .PDFHarrison , Michael and C .R . Henning U .S . versus EU Competition Policy The Boeing-McDonnell Douglas Merger . American Consortium on European mating Studies2003 . vane .american .edu /aces /pages /publications .htmlKahler , Miles and Barbara F . Walter Territoriality and Conflict in an earned run average of GlobalizationCambridge University press out , 2006 http /books .google .com /books ?vid ISBN3X id WcmfstI2l-oC pg RA1- PA238 lpg RA1-PA238 dq extraterritoriality sig xqE4u DNQ2kvWl8vhCrvqqX44D70 PRA1-PA2 ,M1Marceau , Gabrielle Z . Anti-Dumping and Anti-Trust Issues in Free-Trade Areas . 1994Oxford University Press . http /books .google .com /books ?vid ISBN id m_CoycawZcIC pg RA2-PA76 lpg RA2PA76 ots Iq7X0a52cx dq extraterritoriality sig v1Q0SJMV4T6JYiFO1cjggNi0azAMcLure , Charles E . Jr . The Value Added Tax on Electronic Commerce in the EuropeanUnion . International Tax and Public pay Journal . springing affright NetherlandsVolume 10 , Number 6 , Nov . 2003 . http /network .springerlink .com content /l4102099l8546u63Meessen , Karl Matthias . Extraterritorial Jurisdiction in Theory and Practice . Martinus NijhoffPublishers , 1996 . http /books .google .com /books ?vid ISBN id lgFGUWwUSbAC dq extraterritorialityMotta , Massimo . Competition Policy : Theory and Practice . Cambridge University Press2004 . http /books .google .com /books ?vid ISBN id _gLD41DfaJwC printsec frontcover dq definition of anti-trust PPP1 ,M1OECD Working No . 432 , The Benefits of Liberalizing crossway Markets an! dReducing Barriers To International Trade And investing : The Case of the UnitedStates and the European Union , May 2005 . on hand(predicate) at the OECD web site web .oecd .org /ecoSolano , Oliver and Andreas Sennekamp . The Competition Provisions in Regional TradeAgreements , Joint Group on Trade and Competition , March 2006 Available fromthe OECD net site : http /network /oecd .org /tradeThe capital of South Carolina Electronic Encyclopedia , Sixth Edition . capital of South Carolina University Press , 2003The everyday Declaration of Human Rights . UN High tutelage for Human RightsWeb site :http /www .unhchr .ch /udhr /lang /eng .htmUnited Nations Conference on Trade and Development . Competitionhttp /books .google .com /books ?vid ISBN id xz2xlgurZbgC pg PA13 lpg PA13 dq extraterritoriality sig xKQHEnia1MHIsZ8EiQNRt9kwBvc PPA13 ,M 1West s Encyclopedia of American Law . The Gale Group , Inc , 1998 Answers .com . 07Dec . 2006 . http /www .answers .com /extraterritorialityWi lletts , Peter . Transnational Actors and International Organizations in Global political science inP . Willets , The Globalization of World governance , City University capital of the United Kingdom , 1999 . HYPERLINK http /www .staff .city .ac .uk /p .willetts /NGOS /CH15-NEW .DOC www .staff .city .ac .uk /p .willetts /NGOS /CH15-NEW .DOCDefinition taken from The Columbia Electronic Encyclopedia , 6th Ed 2003An article on extraterritoriality from American Foreign Policy provides this definitionThe Principles embodied in the world-wide Declaration of Human Rights can be read from the Web site of the UN High Commission for Human Rights : http /www .unhchr .ch /udhr /lang /eng .htmGriffin wrote about the EC as the only body having anti-trust laws in 1993OECD Trade Policy Working No . 31 , create verbally by Oliver Solano and Andreas Sennekamp , available from the OECD Web site http /www /oecd .org /trade Solano and Sennekamp report this growth in the number of RTAs in the OE CD policy written in 2005 but published in March 2006! Charles E . McLure Jr . The Value Added Tax on Electronic Commerce in the European Union International Tax and Public Finance Journal . Springer Netherlands Volume 10 , Number 6 , Nov . 2003The merger of the two companies is comprehensively discussed in U .S versus EU Competition Policy : The Boeing-McDonnell Douglas Merger by Michael Harrison and C .R . Henning , 2003The UN s cornerstone of the different social and economic commissions is an endeavor to protect the economic rights of nations as part of their economic and social developmentGeroski and Griffith , Identifying Anti-Trust Markets , 2003Peter Willetts . HYPERLINK http /scholar .google .com /universal resource locator ?sa U q http /www .staff .city .ac .uk /p .will etts /NGOS /CH15-NEW .DOC Transnational Actors and International Organizations in Global Politics , 1999Joseph. Griffin . What Business People Want From A World Antitrust Code , 2000He mentions the example of Exxon /Mobil transaction as being the rec ord holder , which reportedly is being notified in twenty dollar bill different jurisdictionsThe article also discusses the subsequent Phase II period in Europe which is 4 months if the initial thirty day period is not sufficientGriffin mentions the use of the economic parole arms of the powerful governments hereNicholas Davidson is First Secretary (Trade Policy , British Embassy Washington , D .C . The article is found in the Stetson University College of Law Web site link http /www .law .stetson .edu /lawrev /abstracts /PDF /27-4Davidson .pdfPAGEExtraterritoriality PAGE 15PAGE Arabic 1PAGE ...If you deficiency to get a full essay, order it on our website: OrderEssay.net

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