Session 1 International Business Law Terms

World Trade Organization (WTO)

International organization that establishes trade rules between member countries and helps resolve trade disputes.

GATT

General Agreement on Tariffs and Trade, which sets basic rules for international trade in goods.

Ministerial Conference

The WTO’s highest decision-making body, made up of representatives of its members.

General Council

Body that handles the WTO’s ongoing work between Ministerial Conferences.

WTO Secretariat

Staff who provide administrative and technical support to the WTO.

Non-discrimination

Principle that countries should treat trading partners and foreign products fairly.

Most-favoured-nation treatment (MFN)

A trade advantage given to one WTO member generally must also be given to other WTO members, subject to exceptions.

National treatment

Once imported goods enter the domestic market, they should receive treatment no less favourable than similar domestic goods.

Free trade area

Group of countries that remove trade barriers between themselves while keeping their own trade policies toward outsiders.

Customs union

Group of countries that remove internal trade barriers and apply a common external tariff.

Preferential treatment for developing countries

Special trade advantages or flexibility granted to developing countries.

Tariff / customs duty

Tax charged on imported goods.

Parafiscal charge

Additional compulsory charge, often used to fund a particular organization or activity.

VAT

Value-added tax, a consumption tax that can apply to both domestic and imported goods.

Non-tariff measure

A rule or requirement other than a tariff that affects international trade.

Customs valuation

Determining the value of imported goods to calculate customs duties.

Preshipment inspection

Checking goods before they leave the exporting country.

Import licensing

Requirement to obtain permission before importing particular goods.

Sanitary regulations

Health requirements intended to protect people, animals, or plants.

Quota

Limit on the quantity of goods that may be imported or exported.

Import/export prohibition

Ban on importing or exporting particular goods.

Rules of origin

Rules used to determine which country a product comes from.

Quantitative restriction

Restriction on the amount of goods traded, such as a quota or ban. GATT generally prohibits these, with exceptions.

Dumping

Exporting goods at a price below their normal value, generally their price in the exporting country.

Material injury

Significant harm to the importing country’s domestic industry.

Causal link

Evidence that the dumped or subsidized imports caused the injury.

Anti-dumping duty

Additional import duty used to counter dumping after the required investigation and findings.

Subsidy

A government or public body’s financial contribution that gives a benefit to the recipient.

Specific subsidy

Subsidy aimed at a particular company, industry, group of industries, or region.

Prohibited subsidy

Subsidy conditional on export performance or using domestic goods instead of imported goods.

Actionable subsidy

Subsidy that can be challenged if it causes harmful effects to another WTO member.

Countervailing duty

Additional import duty used to counter harmful subsidized imports.

Provisional measure

Temporary measure applied while an investigation continues.

Judicial review

Examination of a decision by a court to check its legality.

Dispute Settlement Understanding (DSU)

The agreement containing the WTO’s dispute settlement rules and procedures.

Dispute Settlement Body (DSB)

The WTO body that administers the dispute settlement system.

Consultations

Discussions between disputing countries to try to reach an agreement.

Panel

Group of experts that examines a dispute and produces a report.

Rebuttal

A response challenging the other side’s arguments.

Interim report

Preliminary panel report that the parties can review and comment on.

Final report

Panel’s completed findings, which go through the adoption process.

Appellate Body

The body identified in the slides as hearing appeals on legal issues in panel reports.

International Chamber of Commerce (ICC)

Business organization that develops commercial rules and standards, including Incoterms.

UNCITRAL

United Nations Commission on International Trade Law, which works to harmonize international commercial law.

World Customs Organization (WCO)

Organization that promotes cooperation and common standards among customs authorities.

World Bank

International institution that supports development through financing and assistance.

International Monetary Fund (IMF)

International institution that promotes monetary and financial stability and assists countries facing external financing problems.

Jurisdictional immunity

Protection that can prevent a state from being sued in another country’s courts.

Acta jure imperii

Acts a state performs using its sovereign authority, such as governmental functions.

Commercial transaction

Business activity carried out by a state, which may fall outside jurisdictional immunity.

Execution immunity

Protection that can prevent seizure of a foreign state’s property to enforce a judgment.

Waiver of immunity

A state’s agreement to give up an immunity.

Applicable law

The legal system governing a company, contract, or dispute.

Company nationality

A company’s legal connection to a country, affecting certain rights and obligations.

National law

Laws created within an individual country.

International convention

Agreement between countries establishing legal rules.

Vienna Convention of 1980 / CISG

Convention providing rules for certain international contracts for the sale of goods.

Contracting state

Country that has agreed to be bound by a convention.

Private international law

Rules determining which country’s law applies to a situation involving more than one country.

Trade usages

Established commercial practices that may apply to business dealings.

General principles

Broad legal principles used to interpret rules or address gaps.

Lex mercatoria

Commercial customs and principles used in international business.

Contract

Agreement setting out the parties’ rights and obligations.