74643 - International Business

Learning outcomes

At the completion of the course, students will be able to identify and frame issues related to the global environment in which international companies operate. This includes the ability to understand the implications of operating across national borders, evaluate different internationalisation processes, comprehend the implications of globalisation, cultural, and social differences, and analyse corporate strategies and organisational structures.

Course contents

1. Actors and Sources of International Business.

Introduction; International Trade theories supporting free trade and its critics; Protectionism measures; Actors and Institutions of International business: WTO, WB, IMF, OECD, UNIDROIT, UNICITRAL, ICC; Sources of Law: Treaties, Convention, Standards, Recommendations, Decisions, praxis and usages. Government challenges of privatization and globalization over the last three to four decades: from hard Law to soft law; Government intervention in the economy: Governmental law vs private regulatory mechanisms; Types of law: soft law and hard law and its sources; comparison of soft law, hard law and moral obligations; soft law and legal certainty; other instruments of soft law: rules of organizations, self-regulation, standards, codes of best practice, resolutions, declarations, etc.

2. Regulatory governance by contracts. The contract as a source of law: Lex Mercatoria.

Historical development of the role of the contract: from Roman Law to the great codification of XIX century. The merchant law or transnational law so called Lex Mercatoria. From the postindustrial economy to the era of finance. Objectification of the contract and the decline of the dogma of consent. The new Lex Mercatoria and the general principles of law. Criticisms. Autonomist and positivist approaches to Lex Mercatoria. Main stages of evolution of the United Nation Commission on International Trade Law (UNICITRAL). An analysis of the UNIDROIT Principles 2010 of International Commercial Contracts. The development of certain clauses by the International Chamber of Commerce. Lex contractus and lex fori. The arbitration clause and the choice of an arbitration court. National courts and International Commercial Arbitration. The Convention on International Sale of Goods (CISG). The Incoterms 2010. The Uniform Customs and Practice for Documentary Credits (UCP) 600 drafted by the ICC.

3. The case of the International contract of sale.

Introduction to International commercial transactions. Negotiation, formation, terms and interpretation of International contracts. Delivery and the passing of risk. Incoterms. Ecommerce. Excused performance when circumstances change.

4. International Trade Finance.

Methods of payment in international trade export. Arrangement for payments: documentary collection or documentary credit. The bill of lading. The draft or bill of exchange. Uniform Rules for Collection (URC) 522 drafted by the ICC. The letter of credit. The Uniform Customs and Practice for Documentary Credits (UCP) 600 drafted by the ICC. The standby letter of credit. The doctrine of strict compliance and strict preclusion. The deferred payment letter of credit. The independence principle or autonomy principle and the fraud exception. International guarantees. Bid bonds, performance bonds, retention bonds and advance payment bonds. Finance for exportation: factoring and forfaiting and reverse forfaiting. Countertrade contracts: barter, offset, compensation and counter purchase. Finance for importation: leasing and lease back contracts. Call-off stock and consignment of stock.

5. Global governance of financial markets: the case of Credit Rating Agencies

The Regulatory State and the delegation of powers. Standards for sound financial systems. Legitimacy and accountability of financial authorities supervising financial systems. The particular case of credit rating agencies’ (CRAs) assessment and global risk management.

6. Contractual forms of Multinational Enterprises (MNE).

Distribution agreements. Production agreements. Licensing and transfer of technology. Making international alliances, creating networks and setting up contractual or equity Joint Ventures. The case of project financing and public private partnerships (PPPs). Negotiating equity-based legal forms of JVs. The governance features of JVs and the contractual clauses adopted by the praxis to solve potential conflicts. Shareholders agreement. Company law restrictions to the freedom of bargaining. Modulating financial and administrative rights: the issue of special categories of shares and hybrid instruments.

7. Operating through a company or a group of companies: the MNE.

Setting-up a branch or a subsidiary. Partnerships and companies limited by shares. The concept of legal personality. Holding company and corporate control. Strategic tax and legal planning and restructuring. The lettre de Patronage. Principles of Corporate Governance and Disclosure Rules to protect stakeholders (minority shareholders, creditors, employees) and other constituencies. Governance structures and mechanisms. Protections for minorities to reduce opportunistic behaviour and abuses of majorities. Director’s liability and director’s duty. State’s regulation through tax and competition law. The direction and responsibility of the holding vis-à-vis the controlled companies. The MNE and the environment. Corporate Social Responsibility and ESG (Environment, Social and Governance) Principles. 

8. Artificial Intelligence dominance and international business.

Digital technology in trade finance. Digital tools and platform to bridge the gaps between small and medium enterprises (SMEs) and finance. What is a block-chain; crypto assets and tokens; algorithms and high frequency trading; smart contracts in e-commerce and DAPP technology; distributed ledger technology (DLT); Internet of Things (IOT) and treatment of personal data; Initial Coin Offering (ICO); RFID technology; distributed autonomous organization (DAO) technology; AI and the law, its impact on the law, its pros and contras; criticalities; approach of the regulator to AI.

Readings/Bibliography

The readings and material for the course will be assigned before each class during the teaching term. Here below you can find an extensive list of sources in relation to each topic that will be treated in class.

1. MR. Czinkota, IA. Ronkainen and MH. Moffett, International Busines (8th ed. Wiley 2012) Ch. 2, 3, 6; P.B. Stephan, The World Crisis and International Law (CUP 2023), Ch. 11 'Trade and Investment'; J. Farrall and K. Rubenstein, Sanctions Accountability and Governance in a Globalised World, Cambridge University Press, 2009, Ch. 9; J.F. Morrissey and J.M. Graves, International sales law and arbitration : problems, cases and commentary, Austin, Tex. : Wolters Kluwer, 2008.

2. J. Wiener, Globalization and the Harmonization of Law (Pinter 1999) Ch. 7 “The Lex Mercatoria”, pp. 151-183; P. Verbruggen, Regulatory governance by contract: the rise of regulatory standards in commercial contracts, Recht der Werkelijkheid 2014 (35) 3; J. Dalhuisen, Transnational Comparative Commercial, Financial and Trade law (Hart Publish. 2013) 5th ed, vol. 1, pp. 99-120 and 142-196; F. Galgano (1995) ‘The New Lex Mercatoria’, in Annual Survey of International & Comparative Law: Vol. 2, Issue 1; A-National rules as the applicable law in international commercial contracts with particular reference to the ICC Model Contracts’, Policy and Business Practices, pp. 1-32.

3. H. Wevers, A Basic Guide to International Business Law, Noordhoff Uitgevers 5th ed., 2021, Chapter 2, 5 and 8; R August, D. Mayer M Bixby, International Business Law: Text, Cases and Readings (6th ed. Pearson 2013) Ch. 10; M. Davies and D.V. Snyder, International Transactions in Goods Global Sales in Comparative Context (OUP 2014) Chapters 2; Eun Sup Lee, Management of International Trade, Springer 2012, Chapter 3 and 4.

4. M. Davies and D.V. Snyder, International Transactions in Goods: Global Sales in Comparative Context (OUP 2014) Chapter 4, 5 and 6; Eun Sup Lee, Management of International Trade, Springer 2012, Chapter 5; J. Dalhuisen, Transnational Comparative Commercial, Financial and Trade law (Hart Publish. 2013) 5th ed. vol. 3, Part III, pp. 317-390. 

5. K. Alexander, R. Dhumale, and J. Eatwell Global Governance of Financial Systems: The International Regulation of Systemic Risk, OUP: Oxford 2005, Chapter 2; L. Sasso, Regulating CRAs’ civil liability: a common law vs civil law comparison, working paper, 2024; M. Babic , J. Fichtner and E.M. Heemskerk, ‘States versus Corporations: Rethinking the Power of Business in International Politics’ 52(4) The International Spectator, 2017, pp. 20-43.

6. P.T. Muchlinsky, Multinational enterprises and the law (OUP 2007) 3rd eds. Chapters 2 and 11; A. Comben, Joint Venture & Shareholders’ Agreements, 2005, 2nd ads. Tottel Publishing, pp. 163-255.

7. V.A. Suveiu, Routhledge Handbook of Risk Management and the Law, Taylor & Francis Group 2023, Ch. 2 and 3; P.T. Muchlinsky, Multinational enterprises and the law (OUP 2007) 3rd eds. Ch. 8 and 9; L. Talbot and A. Kokkinis, Great Debates in Company Law, 2nd, Hart, Ch. 6 'Can Companies Be Moral and the Role of Corporate Social Responsibility'; P. Davies, Corporate Liability for Wrongdoing within (Foreign) Subsidiaries: Mechanisms from Corporate Law, Tort and Regulation, NUS Law Working Paper 2023/007; K. Hopt, Groups of Companies - A Comparative Study on the Economics, Law and Regulation of Corporate Groups, 2nd edition Law Working Paper N° 752/2024; L. Sasso, The EU e-waste policy and regulation, in Das, A., Debnath, B., Chowdary, P.A., & Bhattacharyya, S. (eds.) Development in E-waste Management: Sustainability and Circular Economy Aspects (1st ed.), CRC Press, Taylor & Francis Group, 2023; M.J. Trebilcock and J. Trachtman, Advanced Introduction to International Trade Law, 2nd ed. EE 2020, Ch. 11 'Trade Policy and the Environment'.

8. J. Ferencz, J. López-González, and I. Oliván García, Artificial Intelligence and International Trade: Some Preliminary Implications, OECD Trade Policy Paper n. 260 (April 2022); J.P. Meltzer, The impact of artificial intelligence on international trade, Center for Technology Innovation at Brookings, December 2018; M. Lind and W. Lehmacher, TradeTech has huge potential to boost trade - here's what policymakers should know, World Economic Forum (April 2022);EU Commission, Legal and regulatory framework of blockchains and smart contracts 2019.

 

 

Teaching methods

Classes will combine lectures and discussions around selected case-studies and critical issues. Since attendance is compulsory and participation is part of your course grade, students are expected to attend all scheduled class sessions. 

Students will have to engage with the material, participate in class and collaborate. They will have to develop critical thinking in the analysis of the matters discussed in class. The course will examine the topics in context to the extent possible.

Assessment methods

Assuming that the students will come prepared for classes and demonstrate progress and development with the course material, the assessment will be depending on:

40% in-class activities and presentation;

60% one 4.500 words research paper.

 

NON ATTENDING STUDENTS (Erasmus students or engaged in internships)

40% written test of 30 multiple-choice questions on the first part of the program (the readings for this part will be uploaded in Virtuale website);

60% one 4.500 words research paper.

 

Teaching tools

Case studies and lecture slides may be used to support lecture delivery. In that case, these will made available in advance of classes.

Office hours

See the website of Lorenzo Sasso