International Law (West's Encyclopedia of American Law)
The body of law that governs the legal relations between or among states or nations.
To qualify as a subject under the traditional definition of international law, a state had to be sovereign: It needed a territory, a population, a government, and the ability to engage in diplomatic or foreign relations. States within the United States, provinces, and cantons were not considered subjects of international law, because they lacked the legal authority to engage in foreign relations. In addition, individuals did not fall within the definition of subjects that enjoyed rights and obligations under international law.
A more contemporary definition expands the traditional notions of international law to confer rights and obligations on intergovernmental international organizations and even on individuals. The UNITED NATIONS, for example, is an international organization that has the capacity to engage in treaty relations governed by and binding under international law with states and other international organizations. Individual responsibility under international law is particularly significant in the context of prosecuting war criminals and the development of international HUMAN RIGHTS.
Sources of International Law
The INTERNATIONAL COURT OF JUSTICE (ICJ) was...
(The entire section is 2270 words.)
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International Law (Genocide and Crimes Against Humanity)
International law is the law governing states and other participants in the international community. It is formed largely by agreement among the participants, especially states, to create rules applicable to their affairs and is born out of the necessity to coexist and cooperate.
In early human history, large families and tribes exchanged food, concluded alliances, and fought each other often according to a code of conduct. The creation of organized political entities in the eastern part of the Mediterranean Sea, such as Egypt and Babylon, but also on a smaller scale, Greek city-states, resulted in a comparable system, in more organized forms. In the absence of a central authority, rules governing such relations had a contractual nature, developing a real legal system based on treaties. In ancient India and in China, during certain periods, political units also created and applied law governing their mutual relations.
The Roman Empire was born of treaties between Rome and cities in the neighboring area and then developed into a network of legal relations with other peoples. Later, however, Rome affirmed the ambition to govern the other states that it no longer considered as its equals. It also developed the idea of a jus gentium, a body of law designed to govern the treatment of aliens subject to Roman rule and the relations between Roman citizens and aliens, thus a legal system that was based on its domination.
Approximately three hundred years after the fall of the Roman Empire, distinct kingdoms emerged in Europe in the eighth century. Relations between private persons became progressively more frequent and needed the creation of norms to ensure personal security. This evolution led to the development of generally accepted rules between state entities that affirmed their exclusive power over the territory they dominated. In other words they proclaimed their sovereignty. Scholars of the sixteenth and seventeenth centuries, especially Spanish precursors and later the Dutch jurist Hugo Grotius, systematized the generally applied rules and elaborated a broad theory of law to govern the relations between states in times of peace and war. In 1648 the Peace Treaties of Westphalia (1648) ending the Thirty Year's War, which devastated the center of Europe, established a real international system that was progressively reinforced. Indeed, citizens of different countries cooperated in a growing number of fields, and states recognized their needs by exercising protection over them. In the nineteenth century, after the Napoleonic wars, the Final Act of the Congress of Vienna in 1815 reorganized Europe, establishing rules for diplomatic relations and recognizing that sovereign states had common concerns in matters such as navigation on international rivers.
This essentially European system expanded progressively to the Americas and to other parts of the world. Colonial expansion that provoked competition between European powers also involved the application of international legal rules to other parts of the world, even if it was mainly within the context of relations between colonial powers. By the end of the nineteenth century international law applied to the entire world.
Technological developments in fields such as transportation and communication helped the evolution of international law. World War I was a first step toward globalization and at its end states created the first international political organization in order to maintain peace, the League of Nations. With World War II came the failure of that order that generated hostilities in almost every part of the world. In 1945 the United Nations (UN) Charter created a new organization recognizing the primacy of fundamental values of humanity, such as safeguarding peace and protecting human rights. It also created an elaborate machinery for solving disputes among nations. In the following half-century the UN contributed considerably to the development of international law in different fields, such as the international protection of human rights, the law governing the seas, environmental protection, and the economic development of poor countries.
Definition and Scope
International law is mainly composed of rules adopted by states in the form of treaties, but it also contains customary rules resulting from state practice generally accepted by states and recognized as having a binding character. In addition, general principles of law are considered applicable in the relations between states.
Although international law originally only concerned relations between states as sovereign entities, recently other entities have emerged and been recognized as having a role to play in the international system: international intergovernmental organizations, nongovernmental organizations, businesses, and even individual stakeholders.
Sources of International Law
Traditionally, international law identifies its sources in Article 38(1) of the Statute of the International Court of Justice. Although applying only to the court, Article 38 represents the authoritative listing of processes that are deemed capable of creating rules binding on states. It sets out, in order, general or specialized international conventions (i.e. treaties), international custom as evidence of a general practice accepted as law, general principles of law recognized by civilized nations, and, as subsidiary means, international judicial decisions and doctrine. This enumeration is the accepted minimum, but many scholars contend that it does not reflect either the current international practice or the diverse activities that can contribute to the development of a new rule of law. In particular, it omits all texts, other than treaties, that are adopted by international organizations, although they play more than a nominal role in the formation of international law in general and especially in human rights law and humanitarian law.
According to the Vienna Convention on the Law of Treaties of May 23, 1969, generally accepted as the expression of international law related to treaties, a treaty is an international agreement concluded between states in written form and governed by international law, whether embodied in a single text or in two or more related texts and whatever its particular designation. The last words reflect the variety of terms used for designating a treaty: convention, charter, agreement, covenant, protocol, general act, exchange of letters or notes. The essential criterion of a treaty, whatever its title, is the will of the states to commit themselves. Thus, the often used term the contracting parties designates the states that intend to be bound by a specific treaty. Every state possesses the capacity to conclude treaties.
The consent of a state to be bound by a treaty is expressed by the signature of its duly authorized representative or by the exchange of the text(s) constituting a treaty. As a general rule, treaties that have a major impact on the domestic legislation of the contracting parties are submitted for the approval or ratification of national authorities such as the heads of state of the contracting parties, or of their legislative organ, or both. When the treaty provides for it, states that did not sign the original agreement can become parties by accession.
Unless the treaty prohibits it, contracting parties may make reservations. A reservation is a unilateral statement made by a state, when signing, ratifying, accepting, approving, or acceding to a treaty, whereby it purports to exclude or to modify the legal effect of certain provisions of the treaty, in their application to that state. Nevertheless, as stated by the International Court of Justice in its advisory opinion related to the Reservations to the Convention on the Prevention and Punishment of the Crime of Genocide (May 28, 1951), the object and purpose of a convention can limit the freedom of a state to make reservations. The intention of the treaty's authors to have as many states as possible participate must be balanced by ensuring that the very objective of the treaty is not undermined or destroyed.
One of the fundamental principles of international law is that every treaty in force is binding on the parties to it and must be performed by them in good faith. A party may not invoke the provisions of its internal law as justification for its failure to perform a treaty. In principle, a treaty has no retroactive effects, unless a different intention surfaces from it or is otherwise established. It shall be interpreted in good faith in accordance with the ordinary meaning given to its terms and in light of its objective and purpose. A treaty generally does not create either obligations or rights for states that are not parties to it without their consent; however, rules of customary international law in a treaty will have independent force of law.
A treaty may be amended by agreement between its parties. The termination of a treaty or the withdrawal of a party may take place in conformity with the provisions of the treaty concerning its termination or by consent of all parties. If the treaty contains no provision regarding its termination and does not allow for denunciation or withdrawal, it in principle cannot be denounced.
International law contains various rules that may invalidate certain agreements, making their provisions have no legal force. Treaties, for instance, can be invalidated if an error led to a state's consent to be bound by it or the state has been induced by fraud to conclude a treaty. An additional factor that can result in the invalidity of a treaty is the corruption or coercion of a representative of a state. A much discussed principle is that of jus cogens, according to which a treaty is void if at the time of its conclusion it conflicts with a peremptory norm of general international law. Such a norm of general international law must be accepted and recognized by the international community of states as a norm from which no deviation is permitted. Although no treaty has identified any norm as one of jus cogens, there is general agreement that the prohibition of genocide is such a norm. This means that any treaty to commit genocide would be void.
Treaties can be bilateral if only two states conclude them, or multilateral. The number of the contracting parties to multilateral agreements may be very high. Several conventions with a worldwide scope, such as the Convention on Biological Diversity of 1992, are binding on almost all the 189 member states of the UN. The Convention on the Rights of the Child has been accepted by all but two states (the United States and Somalia). The Convention against Genocide has 133 parties as of September 2003.
Treaties may include different parts. Their text generally starts with a list of the contracting parties followed by a preamble that in itself has no binding character but explains the reasons why contracting states accept the obligations imposed by the treaty. The main part of the treaty is divided into articles that sometimes constitute chapters. The technical provisions frequently form one or several annexes to the treaty. They have the same binding character as the main text, but often they can be more easily modified.
A growing proportion of treaties only establish the principles of cooperation between contracting parties and are instead completed at the time of their adoption with additional treaties, generally called additional protocols or simply protocols. The European Convention on Human Rights has thirteen protocols, adopted between 1952 and 2003. Despite the links protocols generally have with the main treaty, legally they are independent from it and the whole of such texts can be considered as a treaty system creating a special regime.
During the last half of the twentieth century a fundamental characteristic of treaties was modified. In conformity with the traditional contracts approach originating with Roman law, treaties were as a rule based on reciprocity. This means the contracting states had to offer advantages equivalent to those that they received from the other contracting parties. The emergence and universal recognition of values common to humanity, such as maintaining peace, protecting human rights, and safeguarding the environment, promoted the drafting and adoption of treaties that include no reciprocity. Thus by virtue of such treaties, the contracting states accept obligations without any direct and immediate counterpart. Such obligations include respecting fundamental rights and freedoms of all persons under the treaty's jurisdiction, protecting biological diversity, and respecting international norms prohibiting the production and use of certain substances or weapons. International conventions prohibiting and punishing genocide and crimes against humanity fall into this category.
Other sources of international law
A large number and wide variety of international legal rules are generated by means other than the explicit consent of states expressed in treaties. Customary law was for centuries the main source of international laws, but essential parts of it, such as the rules governing international treaties themselves, the rules of diplomatic and consular relations, the law of the sea, and a portion of the rules related to international watercourses, have been transformed into treaty rules by the codification process that is much encouraged by the UN. At the same time rules repeated in a significant number of treaties, such as the principle of prevention and the precautionary approach in treaties related to environmental protection, may be considered as having become rules of customary law with a scope much larger than the treaties that include them. A good example is the Martens Clause, repeated or referred to in most treaties related to armed conflicts. According to it, in cases not covered by international agreements, civilians and combatants remain under the protection and authority of the principles of international law derived from established custom, from the principles of humanity and from the dictates of public conscience.
In addition, resolutions and recommendations adopted by international institutions or conferences, which formally are not binding on the states that participated in their elaboration, the so-called soft law, can be considered in certain cases as creating customary law when state practice supports it.
Other sources of international law that are not based on the consent of states also play a certain role in interstate relations. When they decide disputes involving states, judicial institutionshether national or internationalannot avoid applying general principles of law, such as good faith, the prohibition of abuse of rights, rules concerning evidence, and other procedural rules. In addition, equity may inspire such decisions, but most often reference to equity needs the consent of the states who are parties to a dispute.
Until the middle of the twentieth century it was generally held that only states could have rights and duties in international law. They were thus the only subjects of international law who could create the rules of international law (see above) and have official relations with others on equal footing. As persons of international law, they had to possess a defined territory, a permanent population, and an effective government.
Exclusive control over a territory, or sovereignty, is the essence of a state. It means that the state may adopt and enforce laws within that territory and prohibit foreign governments from exercising any authority in its area. Such exclusive jurisdiction has as its corollary the obligation to protect within the territory the rights of other states and to apply the rules of international law. The territory of a state is defined by borders that separate it from other areas. Within the territory, which includes the air space above the land and the earth beneath it, the state is united under a common legal system. Territory also includes a part of the sea adjacent to the coast up to twelve miles out. A state exercises territorial jurisdiction over all people present on its territory, even if they are not its citizens.
A state also requires a permanent population, the human basis of the existence of a state. Who belongs to the state's population is determined by the rules on nationality that the state itself promulgates, in its discretion. The most common ways in which nationality is conferred on a person are by birth, marriage, adoption or legitimization, and naturalization. When a territory is transferred from one state to another, the population of the transferred territory normally acquires the nationality of the annexing state. There are no legal requirements regarding the ethnic, linguistic, historical, cultural, or religious homogeneity of the population of a state. Issues related to lack of homogeneity of the population, such as the rights of minorities and indigenous peoples, are not relevant as criteria to determine the existence of a state. The size of the population and its territory may be very small: Micro-states with areas less than 500 square miles and populations under 100,000, such as Andorra, Grenada, Liechtenstein, Monaco, Antigua, and Barbuda, are considered states. A state exercises personal jurisdiction over its nationals, as well as over the ships and aircraft flying its flag when abroad.
A government's effective control of territory and population is the third core element that brings together the other two into a state. Internally, the existence of a government implies the capacity to establish and maintain a legal order, including respect for international law. Externally, it means the ability to act autonomously on the international level in relations with other states and to become a member of international organizations. The requirement of effective control over territory is, however, not always strictly applied. A state does not cease to exist when it cannot temporarily exercise its authority because its territory is occupied by foreign armed forces or when it is temporarily deprived of an effective government as a result of civil war or similar upheavals. In any case, in principle, international law is indifferent to the internal political structure of a state. A government must only establish itself in fact; the choice of government is a domestic matter to be determined by individual states. International law does not generally delve into the question of whether the population recognizes the legitimacy of the government in power, although this has been changing in recent years with an increasing emphasis on fair elections and democratic institutions.
The notion of effective government is linked with the idea of independence, often termed state sovereignty. Indeed, a government is considered a real one in international law if it is free of direct orders from and control by other governments. International law however, does not investigate the possibility that a state may exist under the direction of another state, as long as a state appears to perform the functions that independent states normally do.
International intergovernmental organizations
The first international organization was created in 1815 for ensuring the freedom of navigation on the river Rhine. Since 1865 with the establishment of the International Telegraphic (present-day Telecommunications) Union and 1874 with the founding of the Universal Postal Union, international organizations have proliferated. After World War I the League of Nations, the first universal institution with a political character, had the task of maintaining peace and intergovernmental cooperation. Since the end of World War II the UN has sought to ensure a more developed form of collective security. Its Charter attempted to provide it with means of action, including the power to discuss any question having an impact on international relations and to act when peace is at stake. States also created independent but related specialized agencies for ensuring cooperation between governments in a number of fields, such as food and agriculture, health, science, education and culture, meteorology, and civil aviation.
During the period following the adoption of the UN Charter states of different regions created organizations with a more limited territorial scope but broad aims, functions and powers: the Organization of American States, Council of Europe, and Organization of African Unity. These three regional organizations also established special systems for the protection of human rights in their respective areas. In addition, specialized organizations for regional cooperation have been instituted for specific purposes, such as defense (the North Atlantic Treaty Organization, otherwise known as NATO) or the economy (the OECD or European Free Trade Association). Altogether there are approximately five hundred international organizations created by states. Most of them are of a traditional nature; they are in essence based on intergovernmental cooperation. Their institutions generally include an assembly with deliberating power, one or more restricted branches for acting in the name of the organization, and a secretariat. Only rarely do states give an organ or organization power to adopt decisions that legally bind their members. The UN Security Council is an example of an international organ that does have such power.
A new type of international organization created a higher level of cooperation, and the term integration is often used to designate it. It implies the transfer of sovereignty from member states to the regional level. The European Union is the most developed model for such organizations. It includes branches composed of persons who are not government representatives, and it can make binding decisions that have a direct legal effect on individuals and companies. Decisions may be taken by a majority vote and the compliance of member states in meeting their obligations is subject to judicial review.
Whatever their legal status might be, it is recognized that intergovernmental organizations have a legal presence in international law, at least as far as their functions require such a status. This means that they can conclude international treaties among themselves or with states, receive and send diplomatic representatives, and enjoy immunities granted to states and state representatives.
Private international organizations, such as Amnesty International, the Human Rights Watch, or Doctors without Borders, play an active role in international affairs. They are generally called nongovernmental organizations (NGOs) because they are not established by a government or by an agreement between states. Instead their members are private citizens and they are usually created as non-profit corporations under the law of a particular state, such as England for Amnesty International. International NGOs have proliferated considerably during the past few decades and are engaged in a broad variety of different areas, ranging from the legal and judicial field, the social and economic domain, human rights and humanitarian relief, women's and children's rights, education, and environmental protection. In the field of international business important NGOs include the International Chamber of Commerce (ICC), the International Air Transport Association (IATA), and international federations of trade unions and employers. All are incorporated under the law of a particular state, with the possibility of creating substructures in other states. There are no standards governing the establishment and status of international NGOs, and this may cause problems because national laws differ from one country to another.
Intergovernmental organizations may agree to grant NGOs a certain consulting or observer status and thereby a limited international standing, but this does not make them directly governed by international law.
The role of NGOs in the international legal system is an informal one, although their representatives may be included in national delegations that participate in international conferences or meetings of intergovernmental bodies. In practice NGOs have four categories of function. They can propose to governments initiatives related to international cooperation. They can participate in law making, by providing the information and expertise intergovernmental bodies need to draft treaties or resolutions. In some cases NGOs attend meetings of contracting states that discuss compliance with multilateral treaties. Finally, they can inform the public of state or interstate activities and of their results or failures, if necessary by organizing campaigns, and thus exercise in this way an influence on governmental policy. Thereby, if NGOs are not subjects of international law, they can be in some situations very effective, especially those recognized as having a high moral standing.
Individuals and companies
Early international law encompassed individuals in three basic ways. First, states had the right to protect their nationals abroad against the misconduct of foreign authorities, invoking the international responsibility of the territorial state, provided such authorities were acting on behalf of the state. Protecting states could and did ask for remedies. That procedure is called diplomatic protection. It may be exercised only by states, under conditions established by international law. Both international responsibility and reparation belong to the sphere of interstate relations. Second, international law also recognized the immunity and privileges of certain categories of individuals representing a foreign state: heads of state, diplomats, and special envoys on mission in a foreign country. Finally, in times of armed conflict prisoners of war, the wounded, and the sick as well as civilian populations were protected by the rules of international humanitarian law. As a result, doctrine generally held that states were the direct participants (subjects) in the international legal system and they could regulate or protect individuals who were not direct participants but could be the object of state regulation or action.
Modern international law first directly recognized individuals when certain acts were deemed criminal as attacks on international society. Initially, piracy and then slave-trading were outlawed. After World War I those responsible for breaches of international obligations related to armed conflicts were personally accused of war crimes; some of the accused were even condemned to death. After the war the creation of the International Labour Organization called for the implicit recognition of certain rights later called economic and social rights. The UN Charter and Universal Declaration of Human Rights proclaimed in 1948 recognized the fundamental rights of individuals. Conventions with a general scope as well as in specific fields, both at a worldwide level and within regional frameworks, further developed such norms. Recent evolution further developed norms concerning the direct criminal responsibility of individuals under international law.
Present international law thus directly recognizes the rights to individuals and imposes certain duties on them. In terms of rights some of the conventions protecting human rights allow individuals and victims of violations of protected rights to submit their case to specific international jurisdictions. Different nonjudicial systems were also developed to remedy such violations, especially within the framework of the UN. In terms of duties, following the example of the Nuremberg and Tokyo tribunals that judged and condemned the German and Japanese perpetrators of crimes against humanity committed during World War II, international criminal jurisdictions have multiplied. First, they were created for crimes committed in specific areas, such as the former Yugoslavia and Rwanda. Finally, a convention adopted in Rome on July 17, 1998, established a permanent International Criminal Court.
Companies and especially multinational ones may hold more economic and political power than many states, especially within the context of economic globalization. Still, states do not accept them on legally equal footing. As such, they generally do not benefit from the protection of human rights and as a rule they are not criminally responsible before international tribunals. States and international bodies have tried to find a compromise by establishing partnerships with corporations and by formulating codes of conduct of a recommended nature.
In summary, states do not recognize individuals, NGOs, and companies as equal subjects of international law or even as having, like intergovernmental organizations, a specific international legal status corresponding to their functions. Nonetheless, they exercise a real influence on the behavior of states in areas such as economy and policy, especially within the context of sustainable development and globalization. Referred to as the international civil society, they are, however, progressively accepted as important players in international relations.
Some historians and observers take a further step and, given the growing number and expanding complexity of economic and other relations, use the term stakeholders to include all those who are concerned with a particular legal situation. If no one has so far suggested that international law should recognize the new category in legal terms, states as well as international bodies increasingly accept their existence and potential role in the international field.
Ethnic Minorities and Indigenous Peoples
The status and protection of ethnic, linguistic, or cultural minorities in international law emerged in Europe after World War I. After World War II certain rights were granted to such groups, but states were reluctant to take steps that might increase the danger of claims to independence and secession. Owing to efforts made by international bodies such as the UN General Assembly and the Council of Europe, progress was made toward the better protection of minority rights. Such rights are most often conceived of as a category of human rights, to be exercised by the individual belonging to a minority, rather than as rights attributed to a collective entity or group.
Indigenous peoples were virtually unmentioned in international law several decades ago. Although historically important differences may exist between such groups and minorities, from a legal perspective the distinction is not easy to make. International conferences and institutions, however, progressively proclaim and recognize the rights of indigenous and local communities. The question of the international legal standing of indigenous groups is, in fact, a question of the specific rights attributed to them by states. They are not subjects of international law, but actors contributing to the formation of international rules of law.
In conclusion, it may be stated that international law is undergoing a transformation, progressively recognizing the role and place of nonstate actors and the need to implement norms protecting fundamental values, such as peace, human rights, and the environment.
SEE ALSO Crimes Against Humanity; Humanitarian Intervention; Humanitarian Law; Human Rights; International Court of Justice; United Nations; War Crimes
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International Law (Encyclopedia of Business)
International law is often defined as the body of rules and norms that regulate activities carried on outside the legal boundaries of states. More particularly, it is the law that applies to three international relationships: (1) relations among nation-states; (2) relations among individuals (including corporations) and foreign nations; and (3) relations among individuals from different nations.
LEGAL RELATIONS AMONG NATION- STATES
Much of the law governing relations among nation-states developed from history, customs, and traditions that found their way into legal precedents. In cases where nations disagreed over their rights and duties toward one another, consensus slowly developed. For example, when a citizen attempted to bring a lawsuit in his home country against a foreign sovereign, the court would typically deny relief on the ground that the foreign sovereign had immunity as a generally recognized custom of international law.
Customary international law, however, could not answer all of the questions and needs of nation-states and their citizens. Agreements between nations were needed to improve alliances in times of war, or to promote international trade and commerce in times of peace. Thus, countries often entered into treaties of "friendship, commerce, and navigation" (FCN) with other countries. Such treaties define the reciprocal rights and duties of each nation in furtherance of each nation's self-interest. Most FCN treaties cover issues such as the entry of individuals, goods, ships, and capital into the other nation's territory, acquisition of property, repatriation of funds, and protection of each nation's persons and their property in the treaty-partner's nation.
To further improve alliances, trade, and commerce, countries also enter into conventions legally binding agreement between states sponsored by an international organization. Examples of international law conventions include the United Nations sponsored Convention on Contracts for the International Sale of Goods and the Treaty of Rome (which eventually led to the creation of the European Community). Of course, not all conventions are under the auspices of the United Nations (UN), but the UN has sponsored various multilateral agreements among nation-states.
One organization within the United Nations that has fostered the growth of international law is the International Court of Justice (ICJ). The ICJ hears and rules on disputes between nation-states but usually does so only where the respective nations agree that the ICJ has jurisdiction. The ICJ relies on customary international law, treaties, and conventions in making its decisions.
After World War II, when the United Nations was organized, it was envisioned that a World Bank and International Trade Organization (ITO) would also be established. The World Bank came into being as an international lending and development agency to which industrialized nations make contributions for the ostensible purpose of promoting development globally. But in 1948 the U.S. Congress had serious reservations about the wisdom of surrendering any of its sovereignty or discretion over trade matters to an international organization. Under powers delegated to the president in the Reciprocal Trade Agreements Act of 1934, the United States joined in the General Agreement on Tariffs and Trade (GATT), which had been drafted in 1947 in Geneva. The basic purpose of GATT was to move the nations of the world toward lower trade barriers (free trade).
Under GATT, member nations were obligated to give "most-favored nation" treatment to all goods originating in member countries. That is, trade concessions to one member nation would automatically be extended to all others. A series of "negotiating rounds" since 1947 progressively lowered tariff barriers among GATT signatory nations. In the most recently concluded Uruguay Round of GATT, both tariff and nontariff barriers were further reduced. Moreover, the original vision of a global trade organization such as the ITO has been at least partially realized in the agreement to replace GATT with a World Trade Organization (WTO). The WTO incorporates GATT rules, but has considerably more power to set and enforce standards than the previous GATT secretariat in Geneva.
The institutionalization of free trade principles has also been furthered by regional free trade arrangements, such as the European Union and the North American Free Trade Agreement (NAFTA). Nations who belong to either group are also members of the WTO, whose provisions allow that concessions given to other members of a regional trading block do not have to be given to other WTO-member nations. The People's Republic of China, which had not participated in the trade liberalization process of GATT, seems eager to join the WTO, to which 134 nation-states were members as of 1999.
As of 1999, a strong sentiment existed in the U.S. business community to support the admission of China to the WTO in order to open up the Chinese market by lowering or removing tariff and nontariff barriers. China's membership in the WTO would bind it to the dispute resolution process seen in cases such as the U.S.-European Union "banana dispute" or the U.S.-European "beef hormone" dispute.
Under the WTO's dispute resolution procedures, a member-state believing that free trade has been undermined or blocked by another state or group of states can seek to have such barriers (be they tariff or nontariff barriers) declared a violation of WTO principles. If the WTO's Dispute Settlement Body (DSB) agrees with the complaining state, it can authorize retaliatory measures (tariffs, typically) to equal the cost of the trade barriers wrongly imposed.
To illustrate, the United States complained that the European Union (EU) was giving preferential treatment to the importation of bananas from its member-states former colonies in the Caribbean. U.S.-based banana merchants, such as Chiquita and Dole, grew bananas primarily in Central America rather than the Caribbean, and persuaded the executive branch of the U.S. government to ask that the EU abandon its preferential treatment. The DSB ruled that the EU's policies were a violation of its obligations under the treaty, and allowed the United States to impose retaliatory tariffs of up to $191 million. Subsequent to the DSB ruling, Brussels indicated that it would revise its policies, in consultation with Washington and growers in the Caribbean and Latin America, rather than appeal the ruling within the WTO.
The new dispute resolution mechanisms of the WTO have thus met an early test. Nonetheless, in the aftermath of the U.S.-EU trading tensions such as the "banana dispute," there was some concern that the free trade regime is somewhat fragile and cannot withstand frequent and abrasive disputes between major trading partners. Time will tell how well the WTO dispute resolution procedures will settle such turbulent tensions.
LEGAL RELATIONS AMONG INDIVIDUALS AND NATION-STATES
One of the traditional principles of international law is that rights granted under international law are given to nations, not individuals. Violations of international law by nations that affect individuals (or corporations) must be raised, if at all, by a nation on behalf of its citizen.
A "citizen" of a country normally includes individuals and corporations. While many corporations doing business globally tend to think of themselves as multinational (having no particular allegiance or duties toward any particular country), the reality is that corporations must often depend on national governments to protect their rights. For example, where patented or trademarked products are counterfeited, the company whose patent or trademark has been misused will have to seek the protection of a certain country's laws. If that protection is not forthcoming, the company will often request that its home government (with whom it has the closest or most powerful connections) advocate its interests in treaty or convention negotiations. Protection of intellectual property, for example, was one of the principal areas of concern for industrialized nations in the Uruguay Round of GATT.
Similarly, where a corporation chooses to engage in foreign direct investment in a foreign country, political uncertainties and legal risk have frequently resulted in a loss of assets through expropriation or nationalization. In such cases, diplomatic efforts of the home country have been enlisted to recover adequate compensation. Or, if a corporation with a large number of employees in the United States experiences a serious competitive threat from products originating in another country, one time-honored strategy has been to seek protective legislation from the home country government.
The free trade movement has at least partially limited the success (or validity) of such efforts, but even GATT allowed exceptions for member nations to impose antidumping duties or countervailing duties where the country of origin has provided unfair subsidies for the product, or the product is being sold at below home country cost to establish a foothold in a new foreign market. The WTO rules preserve these exceptions.
Companies seeking to do business outside their home country have encountered many legal difficulties other than tariffs, antidumping duties, or countervailing duties. Technical and nontariff barriers to trade often exist in the export market, barriers such as government procurement rules (requirements that a certain percentage of business must be given to home countries), byzantine licensing and procedural requirements, and restrictions on the mobility of key personnel. Exports may also be limited by political and strategic considerations: since the 1950s, for example, the United States has had various statutes and executive orders establishing export controls for political reasons.
Some of the export control laws include the Export Administration Act of 1969, the International Emergency Economic Powers Act, the Trading with the Enemy Act, and various executive orders under each. When U.S. Embassy personnel were held hostage in Iran, President Jimmy Carter ordered a cessation of all trade with Iran. A number of U.S. companies with contracts pending in Iran were adversely affected. When the Soviets invaded Afghanistan in 1980, U.S. companies with subsidiaries abroad were ordered by President Carter to cease doing business on the Soviet oil pipeline that was to serve Europe and bring much-needed hard currency to the Soviets. A French subsidiary of the U.S. company, Dresser Industries, had a pending contract with the U.S.S.R. Dresser U.S. was informed by the U.S. government that it must act to prevent its subsidiary from dealing with the Soviets. Dresser, its French subsidiary, and the government of France all resisted the application of U.S. law to a French company, and ultimately their resistance succeeded after the subsidiary was restructured to reduce formal control by Dresser U.S. When President George Bush ordered cessation of all business with Iraq after its invasion of Kuwait, a number of U.S. companies were affected.
These incidents illustrate a principal difficulty of international law: much of it is made by national legislatures and courts, and one nation's laws may reach beyond its own boundaries, or attempt to. When, for example, the U.S. public learned that many U.S. corporations were obtaining and retaining business in foreign countries by means of bribes or kickbacks, the U.S. Congress enacted the Foreign Corrupt Practices Act (FCPA). The FCPA criminalized the act of making payments to foreign government officials for the purpose of obtaining or retaining business. A U.S. company found to have made such payments could be prosecuted in the United States for actions taken outside U.S. territory. Thus, the FCPA is an example of "extraterritorial" application of U.S. law.
Under customary international law, the basic principle of sovereign jurisdiction to prescribe and enforce law is territorial. International law also recognizes the nationality principlehe right of a sovereign to make and enforce law with respect to its own citizens (nationals). Not only the FCPA, but also U.S. antitrust law, securities law, and employment discrimination law may apply to actions of U.S. companies outside U.S. territory. In the case of U.S. antitrust law, the action alleged to be a violation of the Sherman Act or the Clayton Antitrust Act must have a "direct effect" on the United States for extraterritorial application to be upheld. For employment discrimination cases, a U.S. company must adhere to the provisions of Title VII of the Civil Rights Act of 1964 (as amended) with respect to a U.S. citizen employed by that company overseas.
Conflicts between U.S. law and the law of foreign states has led to certain nations blocking the application of U.S. law by statute. Blocking statutes typically limit the extent to which U.S. plaintiffs can obtain evidence through discovery and make it difficult to enforce a U.S. judgment outside of the United States. For example, French blocking statutes make it extremely difficult for the plaintiff in a U.S. court proceeding to obtain the requisite documents to prove his or her case. Even where Congress clearly intends U.S. law to have extraterritorial application, U.S. courts are reluctant to apply it where doing so would raise a clear conflict or implicate foreign policy concerns in any way.
Where U.S. companies and individuals actually have an adversarial relationship with a foreign nation, either sovereign immunity or the Act of State Doctrine may apply. In the case of a claim in U.S. courts against a foreign sovereign, plaintiffs must show that the case falls within one of the exceptions to sovereign immunity listed in the Foreign Sovereign Immunities Act of 1976 (FSIA). Under the FSIA, which adopts the restrictive theory of sovereign immunity (rather than the absolute theory), governmental activities are generally immune, whereas private or commercial kinds of activities are not. Under the FSIA, a foreign sovereign that engages in a commercial activity that has a direct effect on the United States cannot avail itself of the sovereign immunity defense in U.S. courts. The majority of industrialized nations follow the restrictive theory of sovereign immunity, either by statute or judicial precedent.
In certain cases, deciding a lawsuit in U.S. courts may require that the public act of a foreign sovereign (on its own territory) be declared invalid by the court. In such cases, the Act of State Doctrine may be invoked by the court to avoid coming to a decision on the merits in a way that would discredit the public act of the foreign sovereign. The Supreme Court has declared in numerous cases that it is not constitutionally proper for a U.S. court to decide a case in a way that would invalidate the public act of a foreign sovereign; this, it believes, would infringe upon the proper prerogatives of the executive and legislative branches of U.S. government. For the Act of State Doctrine to apply, it is not necessary that the foreign sovereign be a named defendant; it is only necessary that the court be unable to find for a certain party without questioning the lawfulness of a public act of a foreign sovereign on its own territory.
LEGAL RELATIONS BETWEEN INDIVIDUALS FROM DIFFERENT NATIONS
Quite apart from governing relations among nation-states, or between individuals and nation-states, international law began centuries ago to develop rules for dispute resolution between citizens of different states. When Europe entered the Renaissance period, Roman and Germanic legal systems were not adequate to handle the needs of a growing transnational commercial community. As a result, the guilds and merchant associations began forming their own customs and rules for fair dealing, and soon had their own courts. These rules, sometimes known as lex mercatoria (or Merchant Law), became influential and were eventually applied in both church and governmental courts. Many of the lex mercatoria concepts can be found today in the United Nations Convention on Contracts for the International Sale of Goods.
One of the common problems that arise in international commercial transactions is determining where the dispute between citizens of different states should be heard. Without a contractual choice of forum, issues of personal jurisdiction often arise. For example, a Japanese company may find itself sued in a U.S. court for a small valve that was incorporated in a wheel by a Taiwanese manufacturer, then incorporated in a motorcycle by a different Japanese company. If the motorcycle is sold in the United States, and the wheel malfunctions, the tire valve manufacturer may find itself in a U.S. court. The U.S. Supreme Court has declared that, in fairness, a company must deliberately target the U.S. market to be held legally accountable in the United States. Mere predictability that its product may wind up in a certain market is insufficient to give the court valid personal jurisdiction over the nonresident company. Of course, if a company goes to another country to do business (either directly or through agents) and is sued there, courts generally will assume personal jurisdiction over the nonresident company.
For disputes between parties to a contract, the parties may have chosen to avoid any questions of personal jurisdiction by specifying the judicial forum where any disputes arising between them will be settled. Courts have typically upheld these "choice of forum" clauses in commercial contracts, as well as clauses that specify which law (e.g., German law, U.S. law, or Mexican law) will be applied in resolving the dispute.
International companies may entirely avoid judicial settlement of their dispute by choosing arbitration. This can be done prior to any disagreement by including a pre-dispute arbitration clause in the contract, or may be done after a dispute arises. In this way, a more neutral forum is often selected, so that the "home court" advantage does not favor either disputant. Often, the parties will have preselected a set of procedural rules to follow, such as those of the International Chamber of Commerce, or those of United Nations Commission on International Trade Law. The arbitration process is aided by the UN-sponsored United Nations Convention on Recognition and Enforcement of Arbitral Awards (sometimes known as the New York Convention), which has been ratified by most major trading nations. If a Japanese and German firm agree to arbitrate their dispute in Los Angeles, California, for example, either party may proceed under the agreed-upon rules (even without the cooperation of the other party), obtain an arbitral award, and have it enforced in any signatory nation without the need to rehear the facts and issues of the dispute.
SEE ALSO: International Commercial Arbitration
[Chris A. Carr and
[Donald O. Mayer]
August, Ray. International Business Law: Text, Cases, and Readings. Upper Saddle River, NJ: Prentice Hall, 1997.
"The International Practice of Law." In The International Lawyer's Deskbook, edited by Lucinda A. Low, Patrick M. Norton, and Daniel M. Drory. Washington: Section of International Law and Practice, American Bar Association, 1996.
Richards, Eric L. Law for Global Business. Burr Ridge, IL: Irwin, 1994.
Schaffer, Richard, Beverley Earle, and Filiberto Agusti. International Business Law and Its Environment. Cincinnati: West Publishing, 1999.