Department WIRTSCHAFT

1. International Business LawThe Law of International Economic Liberalisation and IntegrationInternational ManagementMichael Gille, Winter Semester 2009/10 Department WIRTSCHAFT

2. Aims of this course • Introduction to important aspects of international law bearing on international economic affairs • Basic understanding of core legal concepts • Working knowledge in selected fields of international law • Orientation for business activities in multi-polar world

3. Outline • Basic Concepts of Public International Law • WTO Basics – The Multilateral Trading System • EU Law – Core Ideas • Summary

4. I Basic Concepts of Public International LawI.1 International Law – Overview Three important fields of “international law”: • Public international law or international public law or – rather outdated – law of nations: deals predominantly with the relationships between states • Supranational law or the law of supranational organi-sations: regional agreements where laws of nation states are held inapplicable when conflicting with a supranational legal system, i.e. certain powers surrendered by the member states • Conflict of laws or private international law or inter-national private law: Which jurisdiction governs a legal dispute?

5. I Basic Concepts of Public International LawI.2 Sources of International Law • Art. 38 of the Statute of the International Court of Justice defines the sources of international law: • Treaties and other bilateral agreements to which sovereigns are signatories and which govern the issue • Multinational agreements among sovereigns which govern the issue • Customary international law, e.g. general practices of states, accepted as if they were law and followed not out of habit or expediency, but because considered law (customary rules that govern treaties are contained in the Vienna Convention on the Law of Treaties, ratified by more than 100 countries) • General principles common to mature legal systems • Subsidiary determinations of law (cases, i.e. court decisions)

6. I Basic Concepts of Public International Law I.3 The Main Actors: States • Nation-states are the fundamental entities of public international law • Requirements to qualify for being a nation-state: • defined territory over which the sovereign exercises control – i.e. sovereignty over land, sea, and air • definite population of people • under control of its own government • capacity to engage in international dealings with other states (for details see next slide) • Recognition neither creates nor constitutes a state • Non-recognition does, de jure, not question statehood • A government is a separate entity from the state

7. I Basic Concepts of Public International Law I.4 Capacities, Rights and Obligations of States • Capacities, rights and obligations of states include: • General authority over its nationals • Sovereignty over its territory • Status as a legal person, i.e., states have the capacity to • join with other states to make international law • enter into (international) agreements • become a member of international organisations • be subject to legal remedies • pursue legal remedies • acquire, own and transfer property

8. I Basic Concepts of Public International Law I.5 The Question of Statehood • The question of statehood arises often in the following situations: • break-up of an existing state into a number of states • secession by part of a territory of an existing state • foreign control is exerted • states merge • states form a union • The right of peoples to self-determination is a – strongly contended! – right under customary international law: • Originally, instrument against colonialism and foreign subjugation • Problem: separatism, i.e. linguistic, ethnic, religious, etc. groups claim statehood

9. I Basic Concepts of Public International Law I.6 International Organisations • According to the UN charter, there are two kinds of international organisations (IOs): • international governmental organisations and • non governmental organisations • International governmental organisations (IGOs) • established by states • powers given by states, specified, e.g., in the organisation´s charter • Non-governmental organisations (NGOs) • tolerated and sometimes supported by states

10. I Basic Concepts of Public International Law I.7 IGOs and NGOs • Approx. 2.000 international governmental organisations (IGOs), which have been established by intergovernmental agreements and whose members are states (e.g. OPEC, Commonwealth of Nations, UN, NATO, WTO, EC, AU) • Approx. 6.000 non-governmental organisations (NGOs, e.g., Greenpeace, AI) – members: associations or individuals • NGO´s are established • by individuals or groups • no involvement of governments/intergovernmental agreements • governed by the law of the country where the organisation is incorporated

11. I Basic Concepts of Public International Law I.8 Some Definitions • ”Institution drawing membership from at least three states, having activities in several states, and whose members are held together by a formal agreement” (Encyclopaedia Britannica) • “An organisation set up by agreement between two or more States” (Akehurst) • “A non-State entity with international legal personality separate from that of the States which established it.” (Aust) • A body • based on a formal instrument of agreement between the governments of nation states • including three or more nation states as parties to the agreement • possessing a permanent secretariat performing ongoing tasks (Yearbook of International Organisations, 2007/2008)

12. I Basic Concepts of Public International Law I.9 Legal Status of an International Organisation • IO (IO, NGO) usually established by a constituent document (e.g. a charter, a treaty or a convention) • Signing of the constituent document by the founding members leads to legal recognition of the IO • Once established IOs are subjects (entities) of international law • IOs can, in principle, enter into agreements among themselves or with states • The rules adopted are binding on the participating states/members of the IO under public international law

13. I Basic Concepts of Public International Law I.10 Legal Status – Example “The Group shall have international legal personality. In the territory of each member, and subject to its national legislation, the Group shall, in particular, […], have the capacity to enter into contracts, to acquire and to dispose of movable and immovable property, and to institute legal proceedings.” (Art. 16 of the Agreement Establishing the Terms of Reference of the International Jute Study Group – an intergovernmental organisation founded under the auspices the UNCTAD)

14. I Basic Concepts of Public International Law I.11 Some Categories of IGOs • General IGOs that are devoted to political cooperation, security, and promotion of economic, social, and cultural development include: • Council of Europe, African Union, Arab League, Organisation of American States, Commonwealth of Independent States (former republics of the Soviet Union) • Specialised IGOs deal with issues of mutual interest such as European Space Agency and International Criminal Police Agency (INTERPOL) • Regional economic IGOs – e.g., the EU

15. I Basic Concepts of Public International Law I.12 Nongovernmental Organisations (NGOs) • Nonprofit NGOs serve as coordinating agencies for private national groups – e.g.: • Amnesty International (AI), • the International Committee of the Red Cross (ICRC) • For-profit NGOs, known as transnational corporations, multinational enterprises/corporations/companies (MNEs/MNCs), are businesses operating joint ventures in multiple countries. • Status of for-profit NGOs controversial

16. I Basic Concepts of Public International Law I.13 What is an International Agreement? (1) • International organisations must be distinguished from (international) agreements/treaties/conventions • „Contract“ under public international law • Many international agreements do not establish an IGO or NGO, e.g., • NAFTA (North American Free Trade Agreement) • Double Taxation Treaties • International agreements usually administered by their parties • No legal recognition as an entity

17. I Basic Concepts of Public International Law I.14 What is an International Agreement? (2) • International agreements can be entered into by • states, • IGOs and/or • NGOs • Various expressions used: (international) agreement, treaty, convention, exchange of letters, covenant, exchange of notes, memorandum of understanding, protocol etc. • Bilateral, trilateral, multilateral agreements

18. I Basic Concepts of Public International Law I.15 Example: The UN • Most important IGO • Its charter is a multilateral treaty • Operates though its organs, i.e. an agency that carries on specific functions within a larger organisation • UN organs are • the General Assembly, • the Security Council, • the International Court of Justice, • the Trusteeship Council, and • the Economic and Social Council

19. I Basic Concepts of Public International Law I.16 UN Agencies • Various autonomous organisations (also IGOs) have entered into agreements with the UN to be UN agencies The UN´s specialised agencies

20. I Basic Concepts of Public International Law I.17 Monism and Dualism • Monism: • international law and national law are two components of 'law' • in case of conflicts international law prevails • Dualism: • denies that international law and national law operate in the same sphere (although it does accept that they deal with the same subject matter) • international law and national law independent of each other, i.e. the are not in the same hierarchical order • In most countries: moderate dualism, i.e. dualism but the entity/state has to make sure that its laws are in line with its international obligations • Individuals have no direct rights under traditional view of public international law

21. I Basic Concepts of Public International Law I.18 Case Study Questions Sei Fuji v. State • Does California´s alien land law violate the UN Charter? • If it does, is the UN Charter automatically applicable? • Does the California law violate the US Constitution? Matimak Trading Co. v. Khalily and DAY Kids Sportswear Inc. • Is Hong Kong a state? • Is Matimak a UK citizen? • Does US code, title 28, § 1332 (a) (2) allow stateless persons to sue in a US federal court?