Chapter 10 Electronic Commerce and International Trade
1) Electronic commerce consists of:
A) the purchase and sale of goods and services at a retail level, but also the goods and services interchanged between businesses.
B) the laws regulating the internet and internet transactions.
C) the laws to restrict internet gambling, pornography, and defamatory material.
D) the digital communication between government agencies.
E) the laws of what jurisdiction should apply to internet transactions.
Answer: A
Diff: 2 Type: MC Page Ref: 316
Skill: Recall
2) Which of the following is true with respect to the application of tort law to the internet?
A) It is unlikely that courts will be willing to expand existing tort law to encompass new technologies.
B) The principle of defamation will apply to the internet just as it does to any other form of communication, but the problems of jurisdiction and whom to sue will create significant obstacles.
C) Companies that sell their products over the internet cannot be held liable under the laws of negligence if those products cause injury.
D) Since common law provides adequate protection, no new statutes need to be passed to provide additional protection.
E) Because the internet provides direct and inexpensive access to a massive audience, torts such as deceit, negligent misstatement, and defamation as well as normal civil and criminal remedies do not apply.
Answer: B
Diff: 2 Type: MC Page Ref: 317, 321
Skill: Recall
3) With regard to the internet, which of the following statements is true?
A) Regulatory steps have been taken to overcome all problems associated with jurisdictional issues.
B) Judicial action is allowed only if the person being sued is a resident of that jurisdiction.
C) A major problem is to determine what laws apply to the internet and internet transactions.
D) Valid laws apply to the internet, and there have been no difficulties in determining what laws apply to the internet and internet transactions.
E) Determining where an action should be brought has not presented any legal problems.
Answer: C
Diff: 2 Type: MC Page Ref: 317
Skill: Recall
4) Which of the following statements is incorrect in relation to the internet and computer fraud?
A) There is no satisfactory means of regulating the internet.
B) Finding and identifying the perpetrators of computer fraud presents a primary challenge.
C) New technologies have provided satisfactory means of regulating the internet.
D) Prosecuting in the appropriate jurisdiction makes it difficult and costly to reduce computer fraud.
E) Internet users need to be very careful with whom they deal and to whom they provide personal information.
Answer: C
Diff: 2 Type: MC Page Ref: 326
Skill: Recall
5) A Canadian company published an article on the internet defaming an Australian resident. The Australian resident brought action against the Canadian company. With regards to internet jurisdiction, which of the following statements is true?
A) Since the plaintiff lives in Australia, and the defendant is based in Canada, a third neutral country would be the appropriate jurisdiction.
B) The Canadian company’s appropriate defence would be to point out that it is impossible to know and comply with the laws of every jurisdiction, and therefore it is not liable.
C) Since the plaintiff lives in Australia, and the harm was done in that country, there is a sufficient connection between the defamation and that country, and the case would be heard in an Australian court.
D) Since the plaintiff lives in Australia, and the harm was done in that country, there is no connection between the defamation and Canada, and appropriately there is no jurisdiction.
E) Since the company is Canadian, the most convenient jurisdiction would be the province in which the Canadian company resides.
Answer: C
Diff: 3 Type: MC Page Ref: 318, 319
Skill: Applied
6) With regard to internet jurisdiction, which of the following statements is true?
A) Every jurisdiction has a different set of laws, and each internet user should conform to the local laws of each nation, state, or province.
B) Judicial action is allowed only if the person being sued is a resident of that jurisdiction and directly involved.
C) Canadian courts are willing to find jurisdiction where there is a real and substantial connection between the act complained of and the province.
D) Many jurisdictions have passed long-arm statutes allowing them to take jurisdiction only if the person being sued is a resident of that jurisdiction.
E) Valid laws apply to the internet, and there have been no difficulties in determining what laws apply to the internet and internet transactions.
Answer: C
Diff: 2 Type: MC Page Ref: 318
Skill: Applied
7) Dan, a Canadian resident, has decided to create a website offering products and services to consumers in certain European markets. Which of the following is true with respect to the jurisdictional issues that arise?
A) Because the website is created to do business in other jurisdictions, the laws of those jurisdictions will apply to the transactions unless it is clearly stated otherwise in the contract.
B) Disclaimers posted on Dan’s website will protect him if the content of his website turns out to constitute an offence in the European markets in which he is operating.
C) The laws of the jurisdiction of residence always govern.
D) Dan could not be prosecuted for an activity that is against the law in a European jurisdiction, as long as that activity is acceptable in Canada.
E) It is sufficient for Dan to follow the rules of his own jurisdiction.
Answer: A
Diff: 2 Type: MC Page Ref: 318, 319
Skill: Applied
8) With regard to the Ontario Consumer Protection Act, which of the following statements is true?
A) The Act specifically provides that the rights set out in it apply only if the seller resides in Ontario at the time of the transaction.
B) The Act specifically provides that the rights set out in it apply to all consumer transactions where the consumer or the other party is located anywhere in Canada at the time of the transaction.
C) The Act specifically provides that the rights set out in it apply only if the consumer resides in Ontario.
D) The Act specifically provides that the rights set out in it apply to all consumer transactions where the consumer or the other party is a Canadian resident.
E) The Act specifically provides that the rights set out in it apply to all consumer transactions where the consumer or the other party is located in Ontario at the time of the transaction.
Answer: E
Diff: 3 Type: MC Page Ref: 318, 319
Skill: Applied
9) When a foreign judgment is obtained against a business or individual, which of the following statements is true?
A) If the business has no assets in the foreign jurisdiction or if there is no treaty in place to allow for enforcement, enforcement is a substantial threat.
B) Whether a business resides in a foreign or domestic jurisdiction presents no problems regarding enforcement.
C) Since the business resides in a foreign jurisdiction, there is no threat of enforcement.
D) Since the judgment is obtained in a foreign jurisdiction, the business or individual may be extradited to face criminal charges.
E) If the business has assets in the foreign jurisdiction or there are treaties in place to allow for enforcement, it is quite likely that the foreign judgment will be enforced.
Answer: E
Diff: 3 Type: MC Page Ref: 319, 333, 334
Skill: Applied
10) Which of the following statements is incorrect regarding the enforcement of a Canadian judgment abroad?
A) While it may be difficult to enforce such a judgment, there are important treaties in place that allow for such enforcement.
B) Generally, courts are more willing to enforce judgments for money that can be enforced against the assets of an individual or business.
C) Courts tend to be more reluctant to enforce non-monetary judgments against individuals (as compared with monetary judgments).
D) There is a growing trend to enforce injunctions.
E) Generally, courts are becoming more reluctant to enforce injunctions.
Answer: E
Diff: 2 Type: MC Page Ref: 319, 333, 334
Skill: Recall
11) You decide to register a domain name “Delicious_breads_R_us.com,” although you neither own a bakery nor have any legitimate use for the domain name. Subsequently you receive a complaint alleging that you have registered the name in bad faith. The complainant does not hold a registered trademark in the name nor do they have a domain name registered, but they have used the business name “Breads R Us” for many years. Which of the following statements is true?
A) You are a cybersquatter.
B) Your domain name dispute must be litigated in court.
C) You can claim good faith justification for your use of your domain name.
D) You have a real property right in the name.
E) The complainant does not have any legitimate claim on the domain name.
Answer: A
Diff: 2 Type: MC Page Ref: 320
Skill: Applied
12) Which of the following statements regarding cybersquatting is true?
A) Cybersquatters capture domain names that rightfully belong to no one.
B) Businesses that did not register their domain names have no recourse against someone else appropriating their names and registering them first.
C) A business is entitled to its own unique domain name regardless of who registered it first.
D) Registration of domain name precludes someone from registering a similar name to confuse visitors to the business’s website.
E) Similar domain names are registered so that visitors making slight but expected mistakes are intercepted and redirected to a competing business.
Answer: E
Diff: 2 Type: MC Page Ref: 320
Skill: Recall
13) The most common type of tort on the internet is:
A) inducing breach of contract.
B) battery.
C) defamation.
D) conspiracy.
E) cybersquatting.
Answer: C
Diff: 2 Type: MC Page Ref: 321
Skill: Recall
14) In the context of employment and use of the internet, which of the following is true?
A) Employers can be liable when their employees misuse the internet.
B) Viewing an employee’s Facebook account is considered a criminal offence.
C) Employers cannot be held liable when their employees misuse the internet.
D) An employer need not have a clear and comprehensive policy prohibiting misuse of company resources such as the internet.
E) Email should be encouraged over other forms of communication, because it is inherently private.
Answer: A
Diff: 1 Type: MC Page Ref: 322
Skill: Recall
15) While at work, Neil would spend a considerable amount of time on the internet. After multiple warnings, Neil was fired from his job as a result. To get back at his boss, Neil anonymously posted several untrue and offensive messages about his boss to an internet discussion board frequently visited by his employer’s customers and suppliers. Which of the following is true?
A) Neil’s internet service provider, not Neil, is the one facing liability for defamation, because it is the one technically publishing the offensive material.
B) If Neil’s former boss notifies Neil’s internet service provider about the offensive messages, the internet service provider should not remove the messages because free speech is the cornerstone of the internet.
C) Because the messages were posted anonymously, Neil could not be held liable for such discussion board postings.
D) Neil’s internet service provider could be forced to disclose the source of the discussion board postings.
E) Because the internet remains largely unregulated, neither Neil nor his internet service provider could be held liable for such discussion board postings.
Answer: D
Diff: 2 Type: MC Page Ref: 322, 323
Skill: Applied
16) Deceitful practices and fraud are ongoing concerns for those transacting business on the internet. Pat has recently been the victim of such a scam. He gets into a heated discussion with a friend over the application of current consumer protection laws to online transactions. Which of the following statements is correct?
A) Although new legislation may be enacted in the future, general consumer protection legislation has yet to be extended to online transactions in any Canadian jurisdiction.
B) Consumer protection law in respect of online transactions is governed by the federal Universal Internet Transactions Act (UITA).
C) While case law applies to online activities, statute law-such as sale of goods legislation-does not apply to such transactions.
D) Provinces are adopting federal Uniform Electronic Commerce Act guidelines.
E) Provincial consumer protection legislation has been ineffective in protecting consumers with respect to internet transactions.
Answer: D
Diff: 3 Type: MC Page Ref: 323
Skill: Applied
17) The objective, in Canada, of the Uniform Electronic Commerce Act (UECA) is primarily:
A) to define what constitutes a violation of privacy.
B) to make electronic documents and signatures as binding on parties as written ones.
C) to restrict internet pornography.
D) to restrict internet gambling.
E) to provide a series of remedies for internet commerce retail abuses primarily from “offshore” enterprises.
Answer: B
Diff: 2 Type: MC Page Ref: 323
Skill: Recall
18) Which of the following statements would be true with regard to the Uniform Electronic Commerce Act (UECA)?
A) A signature equivalent may be a password or some other form of encryption.
B) An offer will be accepted and a contract formed only when the offer is sent and accepted by snail mail, and not email.
C) A password or encryption does not authenticate an electronic document.
D) The UECA changes the law with respect to the requirement of written documents and signatures.
E) The use of electronic documents is not allowed with regards to online purchase of goods.
Answer: A
Diff: 2 Type: MC Page Ref: 323
Skill: Recall
19) Which of the following statements correctly illustrates a legal signature for online commercial transactions?
A) signing your name at the bottom of a standard form, and then not mailing it to the business
B) clicking an “I Reject” dialogue box
C) opening an online shopping basket, and adding several items to the basket
D) attaching a signature on your computer screen
E) attaching an electronic signature to an electronic document
Answer: E
Diff: 2 Type: MC Page Ref: 323
Skill: Applied
20) Which of the following is true with respect to the application of contract law to the internet?
A) Online communications are governed by the “post-box rule.”
B) No jurisdiction has passed any legislation making electronic communications the equivalent of written documents for legal purposes.
C) Clicking an “I Accept” button on a website is considered the equivalent of achieving the consensus element of a binding contract.
D) If the basic requirements of acceptance are not met, an offer accepted by email is binding on both parties.
E) Internet contracts are governed by the federal Uniform Electronic Commerce Act in effect throughout Canada.
Answer: C
Diff: 2 Type: MC Page Ref: 324
Skill: Recall
21) Which of the following statements regarding online transactions is true?
A) Conducting transactions online negates the need to satisfy the normal requirements of a contract.
B) Electronic signatures are not effective in determining the capacity of the parties entering into a contract.
C) Common law has established the equivalency of electronic documents to written ones.
D) The post-box rule applies to both non-instantaneous and instantaneous methods of communication.
E) Clicking an “I Accept” button may constitute valid acceptance of the terms of an agreement.
Answer: E
Diff: 1 Type: MC Page Ref: 324
Skill: Recall
22) Joe sends Sanjay an offer via email from his Toronto office. The offer contains a provision indicating that the offer expires at 5:00 p.m. Toronto time. Sanjay, who lives in Vancouver, replies and accepts Joe’s offer at 4:00 p.m. Vancouver time. Joe receives Sanjay’s email acceptance at 9:00 a.m. the next day. Which of the following statements is true? (Note the three-hour time difference between Toronto and Vancouver.)
A) Joe’s offer had expired.
B) A binding contract had been formed, once Joe opened Sanjay’s email acceptance the next day.
C) Once Sanjay sent the email, a binding contract had been formed regardless of what time Joe received the email.
D) Joe and Sanjay had a binding contract, since Sanjay had accepted by 4:00 p.m. Vancouver time.
E) The contract became binding once Joe made the offer.
Answer: A
Diff: 2 Type: MC Page Ref: 324
Skill: Applied
23) With regard to online contracts, which of the following statements is accurate?
A) Consumers cannot be held liable for terms that they did not actually read.
B) The electronic equivalent of small print is the part of a document that cannot be seen on the screen.
C) Canadian consumers may have to have their claims heard in foreign jurisdictions.
D) Exemption clauses in electronic contracts do not have to be brought to the attention of the person accepting.
E) An electronic document becomes effective only once the consumer is provided with a paper copy.
Answer: C
Diff: 2 Type: MC Page Ref: 324
Skill: Recall
24) Which of the following is used to authenticate the identity of a party to an online contract?
A) file formatting
B) information encryption security
C) digital certificate
D) a court order
E) digital waterboarding
Answer: C
Diff: 2 Type: MC Page Ref: 324
Skill: Recall
25) With respect to the online contracts, which of the following statements is true?
A) Determining where the contract was formed is important in determining the legality of the contract.
B) Determining where the contract was formed is not important in determining which jurisdiction’s consumer protection legislation applies.
C) Online contracts do not require all essential elements of a contract, such as consensus, capacity, and legality.
D) The legal status of online contracts is determined by common law.
E) Determining where the contract was formed is not important in determining the capacity of the parties to the contract.
Answer: A
Diff: 2 Type: MC Page Ref: 325
Skill: Recall
26) Click Enterprises operated a software and internet business in Ontario to facilitate the illegal copying and downloading of movies in both Canada and the United States (including New York State). Disney Enterprises brought action against Click in New York. Which of the following statements is true?
A) An Ontario court will enforce a New York judgment since Click’s involvement indicated a real and substantial connection between the conduct complained of and New York State.
B) Even though Click’s involvement in the United States consisted of selling its product directly to residents of the United States, the question of jurisdiction would be solely determined by Click’s nationality.
C) An Ontario court will not enforce a New York judgment regardless of any circumstances.
D) Click’s involvement in the United States was not direct, since the firm operated in Canada, and as a consequence Disney’s action in New York State would not be successful.
E) New York State has no jurisdiction since Click is a Canadian company.
Answer: A
Diff: 3 Type: MC Page Ref: 324, 325
Skill: Applied
27) Which of the following statements is true?
A) Online dispute resolution services are now available for electronic transactions.
B) The legal status of online contracts is determined by common law.
C) Arbitration has not been proved to be a valuable tool for ecommerce disputes.
D) Online dispute resolution services are very costly and time consuming.
E) Online disputes are often self-regulated.
Answer: A
Diff: 1 Type: MC Page Ref: 325
Skill: Recall
28) Which of the following issues is not covered in Canada’s anti-spam legislation?
A) unsolicited commercial email
B) collection of personal information
C) spyware
D) identity theft
E) downloading of music, games, and movies
Answer: E
Diff: 2 Type: MC Page Ref: 326
Skill: Recall
29) After years of consultation and debate over Canadian copyright reform, Bill C-11 was finally passed in June, 2012. This amendment to the Copyright Act is intended to control the downloading of all of the following except:
A) music.
B) games.
C) movies.
D) other forms of information and data.
E) viruses.
Answer: E
Diff: 2 Type: MC Page Ref: 326
Skill: Recall
30) With regard to international business transactions, which of the following statements is true?
A) There is no international court that deals with private disputes between businesses.
B) There is a set of international laws that applies to all international transactions.
C) The World Trade Organization litigates private disputes between businesses.
D) The buyer must look to the local court in the seller’s jurisdiction to resolve his or her problems.
E) The General Agreement on Tariffs and Trade deals with private disputes between litigants.
Answer: A
Diff: 2 Type: MC Page Ref: 328
Skill: Recall
31) When comparing international contracts with domestic contracts, which of the following statements is true?
A) International contracts have no international court to litigate private matters, while domestic contracts have the Canadian judicial system to litigate private matters.
B) International contracts are less complex than domestic contracts.
C) Domestic contract disputes can be resolved by the World Trade Organization.
D) International contract disputes can be resolved by the World International Court of Trade Appeals.
E) Domestic contracts are more complex because they have special problems such as transportation and insurance.
Answer: A
Diff: 2 Type: MC Page Ref: 328
Skill: Applied
32) When dealing with international business transactions, knowing and complying with both local and Canadian policies and laws is an important consideration. This generally will include all of the following except:
A) arrangements for financing.
B) ensuring that contractual terms limiting liability are included in agreements.
C) ensuring adequate insurance coverage is acquired.
D) ensuring that a process for arbitrating disputes is clearly set out.
E) ensuring that foreign officials who can impact on the success of the business are appropriately taken care of.
Answer: E
Diff: 2 Type: MC Page Ref: 328, 329
Skill: Recall
33) In which of the following ways can Canadian businesses become involved with businesses in different countries?
A) Canadian businesses can be involved in joint ventures with a business in a foreign country.
B) Canadian businesses can import or export goods.
C) Canadian businesses may have licensing agreements of intellectual property with foreign businesses.
D) Canadian businesses may become involved in providing or acquiring services from other jurisdictions.
E) All of the above
Answer: E
Diff: 2 Type: MC Page Ref: 328, 330
Skill: Recall
34) Mr. Smith and Sr. Zarza are negotiating an international contract for the sale of wicker furniture. They have agreed that, while they hope there will be no disputes, they want to include terms in the contract that would ensure that any disputes would be resolved favourably with limited time delay and minimal expense. Which of the following set of terms should they include in their contract?
A) limited liability, insurance, and mediation of disputes
B) unlimited liability, insurance, and arbitration of disputes
C) limited liability, payment in 90 days, and arbitration of disputes
D) limited liability, insurance, mediation of disputes, and payment in 90 days
E) limited liability, insurance, and arbitration of disputes
Answer: E
Diff: 2 Type: MC Page Ref: 331
Skill: Applied
35) E & J Mining will be involved in several large mining projects in a number of developing countries. One of these countries is suffering from some political instability, and the company is concerned about potential expropriation or political violence that could disrupt its operations. Which of the following resources would most likely be able to offer insurance to E & J, given the nature of the risks it could face?
A) the Export Development Bank
B) the International Chamber of Commerce
C) Foreign Affairs and International Trade Canada
D) The Organisation for Economic Co-operation and Development
E) the RCMP
Answer: A
Diff: 2 Type: MC Page Ref: 329
Skill: Applied
36) Mandu lives in Toronto and would like to take advantage of a business opportunity to import goods from a company in China. In order to avoid the possibility of a dispute between himself and the foreign company, he should:
A) include a provision in the contract stating that the law of a particular jurisdiction will govern the transaction in the event of a dispute.
B) make no reference in the contract with respect to jurisdiction.
C) include a provision in the contract stating that the International Court of the World will have jurisdiction.
D) include a provision in the contract stating that the contract is subject to the exclusive jurisdiction of Ontario.
E) include a provision in the contract stating that the contract is subject to the exclusive jurisdiction of China.
Answer: A
Diff: 3 Type: MC Page Ref: 331
Skill: Applied
37) Tony is a resident of Ontario, and Singh is a resident of England. They contract to sell Tony’s car to Singh, who is emigrating to Canada. The contract contains a provision stating that the contract is “subject to the laws of the Province of Ontario.” Which of the following statements is accurate?
A) The clause will determine that Ontario laws will govern the transaction.
B) The clause gives exclusive jurisdiction to the courts of England, but they must apply Ontario laws.
C) The clause will render the contract void, since a person cannot determine the jurisdiction that will govern the transaction.
D) The clause will determine that Ontario courts have exclusive jurisdiction.
E) The clause will determine that Ontario courts have exclusive jurisdiction, unless challenged by Singh in England.
Answer: A
Diff: 3 Type: MC Page Ref: 331
Skill: Applied
38) Alternate dispute resolution generally consists of negotiation, mediation, and/or arbitration. When dealing with international disputes, arbitration is particularly appropriate due to the potential expense and delay associated with litigation in a foreign court. The best way to avoid the risks of dealing with foreign courts involving international disputes is to:
A) ensure that a provision is included in any contract requiring disputes arising from the transaction be submitted to an arbitrator.
B) ensure that any dispute be litigated immediately in Canada requesting that the court order arbitration.
C) bring a motion in the foreign jurisdiction for immediate determination as to what law applies.
D) ensure that offshore bank accounts are set up to avoid easy seizure resulting from a foreign judgment.
E) ensure that the best local lawyers are hired in the foreign jurisdiction before any dispute arises so as to prevent the opposing party from retaining them later.
Answer: A
Diff: 2 Type: MC Page Ref: 331
Skill: Recall
39) Which of the following provided rules to guide international bodies handling arbitrations?
A) the International Chamber of Commerce
B) the United Nations Commission on International Trade Law
C) the National Arbitration Forum
D) the International Commercial Centre Arbitration
E) the American Arbitration Association
Answer: B
Diff: 1 Type: MC Page Ref: 332
Skill: Recall
40) Helen is the owner of a Japanese company that manufacturers car audio parts. Several months ago she received a favourable award in an arbitration in Japan against a Canadian car manufacturer for unpaid bills. The Canadian manufacturer has several assets in Canada, but none in Japan. Which of the following statements is true?
A) The award must be enforced in Japan, but since the Canadian manufacturer has no assets in Japan, it is highly unlikely that Helen will ever receive the award.
B) The award cannot be enforced since the dispute was settled by arbitration.
C) The award must be enforced in Japan, and since the Canadian manufacturer only has assets in Canada, it is highly unlikely that Japan will litigate further.
D) The award cannot be enforced in Canada since it took place in Japan.
E) The award can be enforced by a court anywhere in Canada.
Answer: E
Diff: 3 Type: MC Page Ref: 333
Skill: Applied
41) Factors determining jurisdiction include:
A) where the contract was to be performed.
B) where the contract was formed.
C) which jurisdiction is most closely connected.
D) where the parties reside.
E) all of the above.
Answer: E
Diff: 2 Type: MC Page Ref: 334
Skill: Recall
42) In determining jurisdiction, which of the following statements is true?
A) Where the contract was formed is not a factor in determining jurisdiction.
B) Where the seller resides is the most critical factor in determining jurisdiction.
C) Where the contract is to be performed is a factor in determining jurisdiction.
D) Where the goods are located is not a factor in determining jurisdiction.
E) Where the buyer resides is the most critical factor in determining jurisdiction.
Answer: C
Diff: 2 Type: MC Page Ref: 334
Skill: Recall
43) The test for territorial competence refers to:
A) the process of determining when the local courts have jurisdiction regarding international transactions.
B) the process of determining when the Supreme Court of Canada has jurisdiction.
C) the process of determining the most effective means of alternative dispute resolution.
D) the process of determining the nature of specialty contracts.
E) the process of enforcing an arbitration award.
Answer: A
Diff: 3 Type: MC Page Ref: 334
Skill: Applied
44) The test for simplifying the process of determining when the local courts have jurisdiction is referred to as:
A) alternative dispute resolution.
B) international court order.
C) reciprocal enforcement agreement.
D) territorial competence.
E) judicial competence.
Answer: D
Diff: 1 Type: MC Page Ref: 334
Skill: Recall
45) Once a foreign judgment has been obtained, which of the following statements is correct?
A) Courts are reluctant to enforce arbitration awards.
B) Foreign courts will not enforce a judgment even if a judicial competence enforcement agreement is in place.
C) Foreign courts will enforce a judgment if a reciprocal enforcement agreement is in place.
D) Foreign courts will always enforce a judgment based on legal principles they do not recognize.
E) Awards of internationally recognized arbitrators cannot be enforced by filing with a local court.
Answer: C
Diff: 2 Type: MC Page Ref: 336
Skill: Applied
46) Why is it often easier to enforce the awards of internationally recognized arbitrators than the judgments of foreign courts?
A) There is a great deal of suspicion related to foreign court judgments and possible corruption, while arbitration is deemed to be more ethical.
B) Arbitration awards are viewed as more fair than court judgments.
C) There are more comprehensive agreements and conventions between nations in place that allow for such enforcement.
D) The United Nations Commission on International Trade Law requires this enforcement.
E) The International Chamber of Commerce requires this enforcement.
Answer: C
Diff: 2 Type: MC Page Ref: 337
Skill: Recall
47) The General Agreement on Tariffs and Trade (GATT) required that a member nation grant all other members the same tariff advantage; this is referred to as:
A) export preferential status.
B) territorial competence.
C) alternative dispute resolution.
D) anti-dumping agreements.
E) most favoured nation status.
Answer: E
Diff: 1 Type: MC Page Ref: 338
Skill: Recall
48) The objective of the World Trade Organization is to:
A) reduce trade barriers, contribute to the process of globalization, and provide a dispute resolution process for member countries.
B) promote regional trade agreements.
C) promote trade barriers so as to protect domestic industries.
D) promote the reduction of world agriculture prices.
E) reduce trade barriers and encourage the practice of dumping.
Answer: A
Diff: 2 Type: MC Page Ref: 338, 339
Skill: Recall
49) Which of the following statements with regard to the North American Free Trade Agreement (NAFTA) is true?
A) NAFTA in essence restricts the World Trade Organization agreement.
B) NAFTA is an agreement between Canada, the United States, and Mexico to eliminate trade with other countries not party to the agreement.
C) NAFTA is an agreement between Canada, the United States, and Mexico to eliminate trade barriers and promote free trade among/between the three countries.
D) NAFTA provides for no dispute resolution mechanism.
E) NAFTA is concerned solely with trade barriers, and not with environmental protection or labour standards issues.
Answer: C
Diff: 2 Type: MC Page Ref: 339
Skill: Recall
50) Which of the following is correct with regard to Canada’s Corruption of Foreign Public Officials Act?
A) Similar legislation in the United States has been much less effective than Canada’s legislation.
B) The Act has not been aggressively enforced by the RCMP.
C) This Act will make it a crime to bribe foreign officials, but it has not yet taken effect.
D) This Act was passed pursuant to the World Trade Organization’s pressure to reduce bribery.
E) This Act only applies to countries where corruption is a significant problem.
Answer: B
Diff: 1 Type: MC Page Ref: 340
Skill: Recall
51) Unfortunately it has become well known that success in bidding on foreign contracts has resulted in the bribing of officials in foreign countries. As a result of investigations into these practices, the Corruption of Foreign Public Officials Act was passed, pursuant to which Canada will assume jurisdiction when there is evidence of bribery committed:
A) by any Canadian citizen on Canadian soil.
B) by any non-Canadian citizen of an official in charge of a domestic company.
C) in any foreign nation by a Canadian company.
D) in a foreign nation by a foreign company.
E) solely as a result of an internet transaction.
Answer: C
Diff: 2 Type: MC Page Ref: 329
Skill: Recall
52) With regard to regulation concerning exports and imports, which of the following statements is true?
A) Imports coming into Canada are regulated primarily by the Customs Act.
B) There is a large number of federal statutes that affect the export of Canadian products to other countries.
C) Customs officials have limited enforcement powers concerning imported goods.
D) There are more federal statutes that affect exports than imports.
E) NAFTA is only concerned with exports and not imports.
Answer: A
Diff: 1 Type: MC Page Ref: 341
Skill: Recall
53) With regard to the Customs Act, which of the following statements is true?
A) The main function of customs officials is to support Canadian businesses in developing foreign markets.
B) Export Development Canada enforces regulations regarding imports.
C) The Canadian Border Services Agency empowers customs officials to enforce regulations restricting what can be imported.
D) NAFTA and WTO regulations override any regulation as set out by the Customs Act.
E) Customs officials are empowered to enforce various regulations restricting the export of goods.
Answer: C
Diff: 2 Type: MC Page Ref: 341
Skill: Applied
54) The term dumping refers to:
A) buying goods from China and selling them in Walmart.
B) selling goods in a foreign nation at prices that unfairly compete with products manufactured in that market, usually due to subsidies, unusually low wages, or the sale of excess production.
C) selling goods produced in China at lower prices than domestically produced goods.
D) selling goods in a foreign nation at prices above the price sold domestically.
E) buying goods at low cost and selling them for a higher price domestically.
Answer: B
Diff: 1 Type: MC Page Ref: 341
Skill: Recall
55) Canada is party to a number of international treaties, including:
A) European Common Trade Area
B) World Trade Organization
C) North and South American Trade Treaty
D) United States Trade Agreement
E) South American Free Trade Agreement
Answer: B
Diff: 1 Type: MC Page Ref: 341
Skill: Recall
56) A major problem concerning the internet is to determine what laws apply to the internet and internet transactions.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 317
Skill: Recall
57) Long-arm statutes refer to rules used to resolve questions as to which jurisdiction’s laws are to be applied to a particular issue.
Answer: FALSE
Diff: 2 Type: TF Page Ref: 318
Skill: Recall
58) Canadian courts may decline jurisdiction if the court can be convinced that it would be more reasonable for some other jurisdiction to deal with the matter, especially where an action has already been started in that other jurisdiction.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 318, 319
Skill: Recall
59) Ontario’s Consumer Protection Act specifically provides that the rights set out in it apply to all consumer transactions where the consumer or the other party is located in that province at the time of the transaction and that the rights set out in the Act apply despite any agreement to the contrary.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 318, 319
Skill: Recall
60) When a foreign judgment is obtained against a Canadian business, the business is often protected by Canadian laws that rarely allow enforcement of such judgments.
Answer: FALSE
Diff: 1 Type: TF Page Ref: 319, 333, 334
Skill: Recall
61) Cybersquatting captures domain names that rightfully should go to others.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 320
Skill: Recall
62) Businesses can find themselves liable for defamatory statements made by an employee.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 322
Skill: Recall
63) It has been proposed in Bill C-11 that internet service providers (ISPs) would be required to disclose user identities in cases of defamation or other internet offences, but the ISPs would be insulated from any liability.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 326
Skill: Recall
64) Traditional contract rules only apply to written contracts and not to internet transactions.
Answer: FALSE
Diff: 2 Type: TF Page Ref: 323
Skill: Recall
65) A signature equivalent for electronic documents might be a password or some other form of encryption.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 323
Skill: Recall
66) Hitting the “I Accept” button on a website is equivalent to an acceptance of the seller’s offer.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 324
Skill: Recall
67) Whether a contract or another form of internet communication, Uniform Electronic Commerce Act (UECA) provisions determine that a message is sent as soon as it is committed to the system and is received as soon as it is read by the recipient.
Answer: FALSE
Diff: 2 Type: TF Page Ref: 324
Skill: Recall
68) An electronic signature provides a digital certificate that authenticates the identity of a party to the contract.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 324
Skill: Recall
69) PayPal and other similar services are foolproof methods to ensure the consumer gets what he or she has paid for.
Answer: FALSE
Diff: 2 Type: TF Page Ref: 325
Skill: Recall
70) Determining where the contract was formed is an important factor in determining the laws of what jurisdiction will apply to the transaction.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 325
Skill: Recall
71) Online dispute resolution services for electronic transactions are less expensive and less time consuming than traditional court processes.
Answer: TRUE
Diff: 1 Type: TF Page Ref: 325, 331
Skill: Recall
72) Alternate dispute resolution has been effective in settling certain types of internet disputes.
Answer: TRUE
Diff: 1 Type: TF Page Ref: 325, 331
Skill: Recall
73) The Canadian government was successful in forcing the Canadian components of eBay to disclose their financial records on certain “power sellers” to Revenue Canada.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 326
Skill: Recall
74) An international court to litigate private disputes between businesses doing business between jurisdictions exists within the World Trade Organization.
Answer: FALSE
Diff: 2 Type: TF Page Ref: 328
Skill: Recall
75) In most cases, it is best for parties to a contract to include a provision in the agreement to have any disputes between them arbitrated, usually using one of the international arbitration services available for that purpose.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 331
Skill: Recall
76) Bilateral investment treaties (BITs) and foreign investment and promotion agreements (FIPAs) are government initiatives designed to stabilize the investment environment for corporations doing business abroad, especially for those involved in mining and natural resource extraction in countries where the political climate is unstable.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 328, 329
Skill: Recall
77) International business contracts may also include specialty contracts such as a bill of lading, letters of credit, or insurance.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 330
Skill: Recall
78) Canadian courts do not provide for the enforcement of international arbitration awards pursuant to international treaties.
Answer: FALSE
Diff: 2 Type: TF Page Ref: 331, 332
Skill: Recall
79) A factor in determining jurisdiction with regards to international transactions is where the contract was formed.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 334
Skill: Recall
80) A provision in the contract setting out the law of what jurisdiction is to govern an international contract is useless since the jurisdiction will be determined by common law.
Answer: FALSE
Diff: 2 Type: TF Page Ref: 334
Skill: Recall
81) A factor in determining jurisdiction with regards to international transactions is the nationality of the seller.
Answer: FALSE
Diff: 2 Type: TF Page Ref: 334
Skill: Recall
82) Territorial competence refers to the laws determining the legality of international transactions.
Answer: FALSE
Diff: 2 Type: TF Page Ref: 334
Skill: Recall
83) Foreign courts will enforce a judgment if a reciprocal enforcement agreement is in place.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 336
Skill: Recall
84) Canada has accepted the United Nations Convention on Contracts for the International Sale of Goods, and statutes have been implemented at both the federal and the provincial levels declaring the convention to be law in those jurisdictions.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 338
Skill: Recall
85) Contract terms will override the provisions of the International Sale of Goods Act.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 338
Skill: Recall
86) One of the objectives of the World Trade Organization is to reduce trade barriers.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 338, 339
Skill: Recall
87) The World Trade Organization is limited only to the trade of goods.
Answer: FALSE
Diff: 2 Type: TF Page Ref: 339
Skill: Recall
88) The Customs Act empowers customs officials to enforce regulations restricting what goods can be imported.
Answer: TRUE
Diff: 2 Type: TF Page Ref: 341
Skill: Recall
89) The Patriot Act empowers customs officials to enforce regulations restricting what goods can be imported.
Answer: FALSE
Diff: 2 Type: TF Page Ref: 342
Skill: Recall
90) “Existing laws have proven useless with respect to the internet.” Discuss the accuracy of this statement.
Answer: It is inaccurate. The various forms of existing law, including civil remedies for fraud, breach of contract, and tort, as well as most forms of criminal law and federal and provincial regulation, apply to transactions and activities conducted online. The difficulties consist primarily in determining the laws of what jurisdiction should apply and enforcement. The laws in place are often not readily adaptable to the new technologies and regulators have been slow to respond. However, that is changing. It should be noted that Web 2.0 now allows many more varieties of online communication, making it even more difficult for government controls to be effective.
Diff: 2 Type: ES Page Ref: 316, 317
Skill: Applied
91) Discuss the problems associated with business and the internet.
Answer: A major problem is to determine what laws apply to the internet and internet transactions. Also, it is often not clear whom to sue or where an action should be brought. There is a considerable problem for local jurisdictions with respect to taxation. Finally, businesses may be held liable for employee misuse of company internet and email communications.
Diff: 2 Type: ES Page Ref: 317, 322, 326
Skill: Applied
92) Discuss the unique challenges that the internet presents with respect to the law and how such challenges are being addressed.
Answer: Students should highlight the key challenges raised by the internet in a legal context. One of the greatest challenges obviously relates to jurisdiction. Online activities do not fit neatly within established geographic boundaries, making it difficult to determine which jurisdiction’s laws are to be applied. There are also difficulties that arise as a result of the anonymity associated with the persons involved in online activities. Whether such anonymity is real or imagined, dealing with persons of uncertain identity raises additional challenges. Because of the vast amount of information and data easily transmitted over the internet, intellectual property issues are clearly present. Issues of privacy, the threat of computer viruses and related problems, and payment over the internet are all the subject of much concern for businesses today. In addition, all of the general business law issues—related to contracts, torts, criminal and regulatory offences, consumer protection, etc.—are also present in, and sometimes magnified by, online business transactions.
Students should note that laws and regulatory processes are working hard to catch up with an area that has grown at a phenomenal rate. It is important that students recognize that existing laws go a long way in establishing rights and obligations for parties doing business online, and new statutory provisions are being enacted to address particular concerns. Good students will point out that enforcement is not perfect, however, and individual businesses are well advised to take steps to protect themselves through proper the exercise of appropriate technological and organizational safeguards.
Diff: 2 Type: ES Page Ref: 317-326
Skill: Applied
93) Explain the concept of long-arm statutes.
Answer: Long-arm statutes refer to laws passed by many jurisdictions, allowing them to take jurisdiction even when no resident is directly involved. The result is that business people providing an internet service from one area where the activity is completely legal may find themselves sued or criminally prosecuted in other jurisdictions where they did not know they were breaking the law.
Diff: 2 Type: ES Page Ref: 318
Skill: Applied
94) Describe the concept of cybersquatting.
Answer: Each domain name is a unique address, giving rise to considerable conflict. Since only one business can have that domain address, conflicts arise when less well-intentioned individuals register the domain names first and then, in effect, hold the names for ransom. Sometimes similar names are registered so that visitors making slight mistakes are intercepted and redirected to a competing business.
Diff: 2 Type: ES Page Ref: 320
Skill: Applied
95) Describe the most common type of tort on the internet.
Answer: Defamation is the most common type of tort on the internet due primarily to the ease of widespread distribution. Online defamation can take many different forms, ranging from a remark in a private email, to chat room conversations, to postings on social networks and blogs, to an article posted on a business’s website.
Diff: 2 Type: ES Page Ref: 321
Skill: Applied
96) Employers are particularly vulnerable to the misuse of their computer resources by employees. Discuss.
Answer: There are dangers for businesses that are not careful about their internet and email communications. Not only will an employee making a defamatory statement be liable, but the business that employs him or her may be liable as well, especially if company email services or websites are used to publish the offending statements.
Diff: 2 Type: ES Page Ref: 322
Skill: Recall
97) Discuss any liability faced by the internet service provider (ISP) in cases where defamatory or other offensive statements are made on the internet.
Answer: This is an area of controversy. It is likely that the ISP will be obligated to disclose the identity of users that are accused of defamation or other internet offences. A proposal in Bill C-11 would insulate ISPs from liability, but it would require them to disclose the users’ identities.
Diff: 2 Type: ES Page Ref: 326
Skill: Recall
98) Discuss the validity of online transactions, and the related issues that arise in transacting business over the internet.
Answer: Students should point out that online transactions often involve contracts, and that the online environment does not undermine their validity. The elements required for a valid contract remain, although certain additional issues are raised. Offers accepted by email or through a website will be effective as long as the usual requirements are present. Good students will note that clicking “I Accept” (or the equivalent) can constitute valid acceptance. Buyers are well advised to ensure that they carefully review licence terms (and other provisions) prior to acceptance (as with any contract). Students should also point out that capacity issues are heightened in an online environment, as it difficult to know whether the person engaging in an online transaction is sufficiently old enough and possesses the mental faculties to enter into the transaction. Further issues arise when there is a requirement of writing. Many jurisdictions have passed legislation making electronic documents and signatures equivalent to written documents. Sale of goods law and consumer protection law remain relevant to this area.
Diff: 2 Type: ES Page Ref: 323-325
Skill: Applied
99) Discuss the federal Uniform Electronic Commerce Act (UECA).
Answer: The UECA has no legal standing, but it serves as a model for the design of provincial legislation throughout Canada. The object is to make electronic documents and signatures as binding on the parties as are the written ones. In general, the UECA and provincial acts recognize electronic or digitally stored documents and signatures as satisfying those requirements. A signature equivalent may be a password or some other form of encryption, which is controlled by the author of the document (and possibly verified by a trusted third party). The password or encryption would authenticate the document and give it the same status as one that was written and signed. Note that this does not apply in all cases and some types of documents still have to be in writing and signed to be valid.
Diff: 2 Type: ES Page Ref: 323
Skill: Applied
100) Describe electronic signatures with respect to capacity.
Answer: Electronic signatures are most effective in identifying people if used in conjunction with trusted third parties who provide a digital certificate that authenticates the identity of a party to the contract. It assists in determining a person’s age or mental capacity.
Diff: 2 Type: ES Page Ref: 324
Skill: Applied
101) Discuss alternate dispute resolution with respect to international transactions.
Answer: Alternate dispute resolution methods such as negotiation, mediation, and arbitration are useful in seeking a resolution to an international dispute. Arbitration is particularly appropriate in such cases. This avoids the risks and potential expense and delay associated with the litigation process when dealing with foreign courts. Online dispute resolution services are available for electronic transactions and are considerably less costly and less time consuming than traditional court processes.
Diff: 2 Type: ES Page Ref: 325, 331
Skill: Applied
102) Discuss Bill C-28, Canada’s anti-spam legislation, which was passed into law in December 2010.
Answer: The intent of this Act is to prohibit unsolicited commercial email, prohibit false and misleading representations, prohibit the collection of personal information, impose liability for abuses, and control other abusive practices such as identity theft, phishing, and spyware. The CRTC, the Privacy Commissioner, and the Competition Bureau have been given additional powers under the Act to investigate, regulate, and provide remedies. It remains to be seen how effective this regulation will be. The Canadian Bar Association has argued that the Act goes too far in interfering with the Charter protection of free speech.
Diff: 2 Type: ES Page Ref: 326
Skill: Recall
103) Discuss the international court with respect to international business transactions.
Answer: There is no international court that deals with private disputes between businesses doing business between jurisdictions. Rather, the parties must look to local courts in either jurisdiction to resolve their problems.
Diff: 2 Type: ES Page Ref: 328
Skill: Recall
104) Explain how Canadian businesses can become involved in business in different countries.
Answer: The most common way involves the exporting and importing of goods. Another way Canadian business can become involved in foreign countries is through dealings with intellectual property including copyrights, patents, and trademarks. This usually involves licensing agreements of intellectual property. Canadian businesses will also become involved in providing or acquiring services from other jurisdictions such as call centres for banking or warehouse distribution centres. They may also become involved in activities in other countries such as mining and resource exploration development and management.
Diff: 2 Type: ES Page Ref: 328, 330
Skill: Applied
105) Discuss the role of governments when companies engage in large projects abroad.
Answer: Governments will often become involved when the project is big enough, entering into BITs (bilateral investment treaties) and FIPAs (foreign investment and promotion agreements) designed to stabilize the investment environment for companies doing business abroad, especially for those involved in mining and natural resources extraction in countries where the political climate is unstable.
Diff: 2 Type: ES Page Ref: 328, 329
Skill: Recall
106) Discuss various forms of specialty contracts that may be involved in international business transactions.
Answer: A bill of lading contract establishes the rights and obligations of the parties and the carrier when goods are shipped through a third party carrier. A letter of credit contract is used where a third party is to ensure that the selling party is paid when the purchasing party is satisfied. An insurance contract is used to cover the risks of the transaction.
Diff: 2 Type: ES Page Ref: 330
Skill: Applied
107) Discuss the advantages of arbitration in international business.
Answer: Arbitration is particularly appropriate when dealing with international disputes, since the risks and potential expense associated with the litigation process are amplified significantly when dealing with foreign courts. An arbitration clause can avoid litigation. The main advantages of arbitration are the reduction of risk, respecting mutual obligations and rights, and the minimal costs.
Diff: 2 Type: ES Page Ref: 331, 332
Skill: Recall
108) In determining jurisdiction for international business disputes, what factors will the court consider?
Answer: The court will consider where the contract was formed, where it was to be performed, where the parties and witnesses reside, where the problem occurred, where the goods or property are located, whether the choice of either party would benefit the stronger, and which jurisdiction is most closely connected to the case.
Diff: 2 Type: ES Page Ref: 334
Skill: Applied
109) Discuss the concept of territorial competence.
Answer: A Supreme Court of Canada decision and recommendations by the Uniform Law Conference of Canada simplify the process of determining when the local courts have jurisdiction through a test called territorial competence.
Diff: 2 Type: ES Page Ref: 334
Skill: Recall
110) Explain the following statement: “Once a judgment has been obtained, there remains the problem of enforcing it” with respect to international disputes.
Answer: Enforcement is not a serious difficulty where the losing party has assets in the jurisdiction where the judgment was rendered. The problem arises when the party obtaining the judgment from a court in one jurisdiction wants to enforce it in another. At the outset, a court in one jurisdiction simply does not have the power to make an order enforceable in another. There are conventions between nations whereby foreign courts will enforce a judgment if reciprocal enforcement agreements are in place.
Diff: 2 Type: ES Page Ref: 335, 336
Skill: Applied
111) Explain the role of Incoterms in international transactions covered by the International Sale of Goods Contracts Convention Act.
Answer: The International Sale of Goods Contracts Convention Act sets out how and when a contract is formed, who bears the risk and when risk is transferred, and the remedies available in the event of breach. To facilitate this Act and the transactions taking place that are covered by it, standardized definitions and rules of interpretation have been developed to make the interpretation of such contracts clearer and thus avoid disputes. When disputes do arise, these rules make the resolution much simpler. These definitions and rules are called Incoterms.
Diff: 2 Type: ES Page Ref: 338
Skill: Applied
112) Describe the General Agreement on Tariffs and Trade (GATT).
Answer: GATT was an agreement that developed after World War II. Over the years, parties to GATT met regularly and negotiated to reduce trade barriers in the form of tariffs and encourage trade between member nations. The idea was to promote fair trade, encourage balanced competition, and prohibit or control abusive practices.
Diff: 2 Type: ES Page Ref: 338, 339
Skill: Recall
113) Describe the World Trade Organization (WTO).
Answer: The General Agreement on Tariffs and Trade (GATT) has since been incorporated into the WTO, whose objectives are to reduce trade barriers, foster cooperation, and contribute to the process of globalization. WTO is an organization of countries as opposed to GATT, which was an agreement between them. WTO adds a dispute resolution process, and covers subjects beyond goods, including financial and other services and intellectual property.
Diff: 2 Type: ES Page Ref: 338, 339
Skill: Recall
114) Describe the North American Free Trade Agreement (NAFTA).
Answer: NAFTA is an agreement among Canada, the United States, and Mexico, and is designed to promote easier trade relations between the three countries, eliminating trade barriers in the form of tariffs and duties as much as possible and promoting free trade between the three countries. NAFTA also allows some professionals greater access to the other nations, allowing them to move more freely and practise their professions in the three countries. Environmental protection provisions and labour standards are included in the agreement. NAFTA also provides for a dispute resolution mechanism.
Diff: 2 Type: ES Page Ref: 339
Skill: Recall
115) Dzijacky Inc. was a successful manufacturer of maple-based products sold in Canada. The owner decided to venture into exporting, as the Canadian market was limited and he had the capacity to produce much more than he could sell in Canada. When he met you at a social event, he shared his plans with you and asked if you could tell him where he might get export assistance. What advice would you offer to Mr. Dzijacky?
Answer: Students should be aware of at least two primary federal government departments that offer services to assist companies during business in Canada and abroad. These are the Department of Foreign Affairs and International Trade and Industry Canada. They offer advice on regulations that apply to various activities in Canada as well as best practices for Canadians doing business abroad. Students should also mention customs brokers and freight forwarders. They might indicate that there is a government website to see treaties to which Canada is a signatory, as some of the treaties apply to trade.
Diff: 2 Type: ES Page Ref: 340, 341
Skill: Applied
116) Provide two examples of how regulations in place in other countries can have an impact on Canada.
Answer: Global warming initiatives designed to reduce harmful emissions are being set out in international protocols, and the resulting national regulations need to be taken into consideration when operating a business. There is a growing movement to impose liability on domestic companies and individuals for human rights violations that take place in their operations abroad. This may also require new audit and reporting requirements on companies with respect to foreign operations. Students may be able to identify other examples not covered in the chapter from their knowledge of world events.
Diff: 2 Type: ES Page Ref: 341, 342
Skill: Applied
117) “Money laundering is a major activity in international trade.” Comment on this statement.
Answer: Money laundering is a growing practice and is often related to international trade (where money is obtained in various criminal activities). Governments are increasing their investigations of money laundering, which can take place by over- or undercharging for goods and services supplied, by issuing multiple invoices for those services, or by falsely describing goods and services that are supplied.
Diff: 2 Type: ES Page Ref: 341
Skill: Recall
118) The regulation of imports coming into Canada is primarily regulated by the Customs Act. Explain the Customs Act.
Answer: The Act empowers customs officials to enforce various regulations restricting what can be imported or imposing duties of varying amounts on those goods. Custom officials have significant enforcement powers that may lead to confiscated goods and imposition of penalties for failure to properly comply with the declaration permit and duty regulations.
Diff: 2 Type: ES Page Ref: 341
Skill: Recall
119) Discuss changes to Canada’s Competition Act and penalties associated with violations.
Answer: Canada recently amended the Competition Act so that it now has the world’s greatest restrictions on the creation and operation of cartels. Anyone found guilty of agreeing to fix prices, control markets, or restrict output can be imprisoned for up to 14 years and/or face fines of up to $25 million.
Diff: 2 Type: ES Page Ref: 342
Skill: Recall
