International Business Law (International Trade Degree-ULE). Lesson 1. (1.1 and 1.2). Notes IBL

el 21 febrero, 2020 en Derecho de los Negocios Internacionales International Business Law. Grado Comercio Internacional, Régimen jurídico del mercado. Grado Comercio Internacional

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(trad B. Valle)

1. Introduction
2. Subjects, object and territorial (cross border ) issues
3. Sources of the Law  (and soft law) of International Business Law.

1. Introduction.

  • Law is the science that deals with facts, acts and relationships between different subjects; and it analyzes them according to legal systems.
  • International Trade is a discipline related to International Transactions of an economic nature.
  • Actors in International Trade include individuals,  companies, States, International Organisations, among others
  • International business law, deals with the relationships between private entities with cross-border implications

    Catedral de Santiago de Compostela. Fachada gótica

2. Subjects, object and territorial (cross-border) issues

  • International Business actors are natural persons and legal persons: citizens, traders, entrepreneurs, companies, groups of companies. It is, therefore, important to identify their legal capacity, nationality, etc.
  • IB deals with the development of trade in a cross border environment; it takes takes place in markets, therefore it must be developed within the Laws of Free Competition, the Laws on Intellectual Property,  the Lawson Financial Stability, etc.
  • IBLrules the relationships between its actors (people, companies, etc)  through contracts, companies, associations, secure payment systems, conflict resolution mechanisms (judicial, arbitration, etc.)
  • IBL involves a  cross-border element that deeply affects international business relations as it is fundamental to identify the applicable legal system or systems to each International Business Law Operation.
    • Ie:,  we must find out which Law is applicable ( that of a specific State, or that of  bilateral Conventions or Treaties, or  that of Conventions approved by an International -Multilateral Organization) Sometimes IBL is ruled by  «soft» norms or recommendations that may have their origin in the State, or in International Organizations, or even in private sector entities.

The main actors of International Business Law are:

a) States
  • The sovereign States are among the Institutional actors of International Law.  They are also actors in International Trade, but they are mainly excluded as subjects of study in this course (IBL), except in so far as they approve Laws and Regulations, they have justice-making powers through Courts of Justice and Judges etc.
  • States regulate IBL issues.
    • In Spain, in accordance with Article 149-1, the State has exclusive competence over (…) : 3 International Relations. 6 Commercial Law. 9. Legislation on Intellectual Property. 10. Customs and tariff regime, foreign trade.
b) International Organisations (and arrangements) of the public sector:  
  • The Members of these  Organizations are mainly States,
  • They belong to the «Public Sector» of the economy
  • They can have quasi legislative power when this power has been recognised to them by the States that create the International Organisation. Most times they prepare International Agreements and Treaties that do not acquire legal mandatory status until they are ratified by the States. Also, the International Organisations are a source of Recommendations, Guides, Model Laws and other pieces of «soft law».
  • Some International Organisations become members of other international Organisations.
  • Examples:
Please note that there are different types of International Organisations. Here, we classify them in «generations»
  • 1st generation of International Organisations. They are created through Bilateral Tariff Agreements.
    • Examples: Common Wealth, Francophonie, etc
  • 2nd generation. They are multilateral/purilateral. Generally they involve the creation of Free Zone Area, which can later evolve into a more complex organisation.
    • Examples are: ASEAN (Association of Southeast Asian Nations); – TLCAN/ NAFTA (North American Free Trade Agreement) whose Members are Canada, EEUU, México – EFTA (European Free Trade Association) whose members are Switzerland, Norway, Liechtenstein, Island
  • 3rd generation. Multilateral/plurilateral. They create a free zone area and also they set  common external tarifs. They can receive legislative powers from its Member States(ie:EU)
    • EU, EUROPEAN UNION. Regional supra-national Organization with legislative powers vested by its Member States
    • MERCOSUR (to a lesser degree)

c) Private Sector Organizations with International Impact and Hybrid Organizations

  • Provate Sector Organisations are those whose  members are Private entities (ie: Companies, Consultants, etc). They are very prestigious. So, their resolutions and documents are great influencers in International Business Law, mainly in the fields of Contracts and Dispute Resolution. They can never power to legislate. They draft Soft Law
    • Example of these Organisations:
    • ICC. International Chamber of Commerce. Founded in 1919 in Paris. It is a known centre of International Arbitration since 1923, it acts as a consultative body to UN since 1946.    ICC drafts Soft Law  in the form of Contractual Clauses  such as the «International Commercial Terms, INCOTERMS widely used in the International Trade of Goods
    • International Standardization Office (ISO),
    • International Financial Reporting Standards Foundation (IFRS)
  • Hybrid Organizations (private- public sector members)
    • International Organizations of Securities Commissions (IOSCO)

1.3 Sources of the Law (and soft law) of IBL

(classroom notes)



(To complete with 1.3/ Sources of IBL in the classroom)

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