Business Law is International Law

My grandfather had a shoe store in a small town in Granada. He bought his shoes from a manufacturer in Granada, employed his workers from Granada, and his clients were all from Granada. That scenario of a purely domestic economic enterprise is virtually impossible to envision today.

Today very few businesses are purely domestic.  In my law practice I see corporations which might have been incorporated in Andorra, conduct online sales in the United States and Spain, employ phone operators in Colombia, Argentina, and Pakistan, and source their goods from countries all over the world. In this international market, the smallest firms are affected by global competition and events around the World.

It is vital, therefore, for anyone involved in business, whether as an executive, a consultant, an attorney, an economist, etc., to understand how critical it is to have an understanding of international law and the global economy in order to be effective in the economic marketplace.

For those of us who work with corporate clients, the impact of economic interdependence makes it indispensable to learn and have an understanding about international markets, international laws, and the cultural differences among countries that make it different, for example, to conduct business in Mexico as opposed to Japan.

Given that international laws will impact our lives and economic endeavors in ever more ways, it is in the best interest of all citizens to be informed about the operation of international law. In the commercial context international law must be understood as a body of norms that affect business behavior just like domestic laws, but with an impact that extends beyond national borders.

Is it possible to create a set of international laws by which all businesses are bound?

How would these laws be enforced?

5 thoughts on “Business Law is International Law

  • September 4, 2012 at 3:42 pm
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    Definitely should be a set of standards that inform and regulate international trade relations. However, although there are internationally accepted standards in this regard, some with binding, there is no mechanism or institution that can coerce and therefore enforce these standards effectively. The law by definition entails the possibility of enforcing it. Without this possibility, legal norms lose their effectiveness, and left defenseless to the party to fulfill its contractual obligations . My grandmother used to say there is no greater injustice than justice late or incomplete. However, in the international context can be very complex the compliance of international sanctions. One solution might be, once the Court with ruling jurisdiction (whichever) reach the final decision (and not appeal is possible), this ruling should be referred to a (especial) court or organism specialized of implementing and executing international court’s decisions. This special court should be in any country and should have the jurisdiction and mechanisms to compelled to the unsuccessful party at trial, the effective compliance to the Final Decision of the International Court.

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    • September 5, 2012 at 7:58 am
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      Beatriz, you make very good points. It is certainly true that a lack of enforcement of international law leads to a loss of credibility of the international institutions that create the laws. The idea of forming a special court or organism specialized on deciding international disputes is what the United Nations had in mind when the International Court of Justice was created. However, you probably mean a court that has jurisdiction over individual parties, instead of having only jurisdiction over nations, as the ICJ currently has. Setting aside the logistic and political obstacles in creating such court, the question remains, how would the judgments be enforced? How do we create an effective enforcement mechanism at the international level?

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  • September 5, 2012 at 12:46 am
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    Is it possible to create a set of international laws by which all businesses are bound?
    How would these laws be enforced?

    I think that perhaps the best model we have for such an organization which could regulate and enforce the rules, regulations, and laws of international business and trade would be the World Trade Organization (WTO). The WTO, or a similar organiaztion, could be influential enough, large enough, and strong enough to compel companies which want to engage in international business to have to join the organization, or else suffer being left out in the cold (i.e without the connections to properly engage in international business). However, one of the rules of joining such an organization would be that all companies would have to abide by certain rules, regulations, and laws. The way that this could be enforced would be through warnings to companies which failed to follow the rules. For example, a company which hired contractors who employed children could be given a warning to cease working with any contractor who employed children. The next action could be leveraged fees and fines for companies which continued to break the rules. The final punishment would be to be evict from the organization companies which failed to abide by the rules and failed to comply after warnings and fines.
    Such an organization however would have to be managed by a international group of managers to insure that one nation, or a group of nations, are not favored over others.

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    • September 5, 2012 at 8:10 am
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      Neil, I agree with you, the WTO is an organization that is very effective in regulating international trade. Economic sanctions in the form of countervailing measures seem to work very well with member nations of the WTO. However, it is important to keep in mind that for major business organizations to want to become part of the type of organization you propose there must be a benefit to them. In addition, these private organizations must have total trust in the structure and mission of the organization. However, if those obstacles could be overcome, your idea is a very good one.

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  • September 14, 2012 at 7:39 pm
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    That is a goal that has been put out there by the WTO as it operates under a set of combined laws and regulations in which all member states are compelled by. By imposing a set of ‘rules for entry’ the WTO expects a country to abandon or alter its own laws or regulations in order to meet the WTO’s mutual ones. However, its true that we are all the same yet we are different. The concept of doing business is the same worldwide – The seller tries to get merchant A to the buyer (domestically or internationally) in return for a sum of money, although the way in which it is done can vary in different parts of the world. Certain countries are used to their own customs and practices, which can differ from another’s (the power and influence of a government on its nation, the value of its natural resources, corruption and the extent of which it exists in a country, punctuality, priorities, etc.) I think a country’s culture and traditions influence its people in business as well because the way in which people deal with each other in a country varies than that of another country. A business lunch in America takes around an hour more or less whereas in Spain it can take 3-4 hours) The Chinese, Arabs, Americans and Indians are all people who come from completely different backgrounds, with different formalities and traditions (I did not mention the Spanish because of its relevance to the Arabic culture) the ways in which business is discussed and done in each country varies hence you cannot expect them all to formulate under the same set of laws and regulations. Despite this, I think to a certain extent a set of international laws is vital and essential because without them the world of commerce would be chaotic and that would make the concept of trade difficult and eventually undermine it.

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