Type: Business
Pages: 4 | Words: 1062
Reading Time: 5 Minutes

The modern world has been marked up with the development of international business. The practices that are applied in international business are results of globalization processes and the procedures that enable controlling international business. The latter are covered by the international business law which is part of international law. But unlike the sources of international law, international business law sources vary differently. Therefore, the aim of this paper is to provide the description of the various international law sources that relate to international business.

The paper identifies the practices of international law that exist in international business and looks at some of them in detail. The sources of international business law are compared and contrasted. Also, the extent to which the international law treaties that have been approved worldwide affect the development of international business law is explored.

The purpose of the research is to provide a comprehensive analysis of different international business law sources and to identify those treaties that have played the most important role in the development of international business. The relationship between international law and international business law in particular is also examined.


In general, globalization processes affect the way business is done internationally. Multinational companies usually pay a close attention to the way and direction in which globalization is developing. International law is usually divided in this respect into public international law and private international law. It is hard to say which of the two has more impact on international business development, but the public international law affects businesses through means of various treaties which are usually hard to explore and which can be amended potentially.

Private international law entails all the national laws of particular country which might have impact on the international business development. Specific laws approved at the national level of the country may impact the business only if it has relation to this country. Still, most business development managers consider national legislation prior to making all sort of decisions which might considerably affect their businesses in the future.

For this reason, it is possible to conclude that private international law does not have a significant impact on the overall development of international business worldwide. As August, Mayer & Bixby (2008) believe, private international law is much more complex in terms of amendments, but is much easier to be handled at the local level.

This is not the case with public international law. For this reason, the most important sources of international business law are derived from public international law (Carr & Stone, 2010). The sources of international business law include international custom regulation, international agreements and treaties including regional institutions, international organizations and various conferences, and national legislation of the particular country. The latter, as pointed out above, does not usually verify as the weightiest source.

Chuan (2009) suggests that the sources of international law affect the organizational structure of international companies, international trade processes, and business operations both from abroad and with foreign countries. The remarkable example of this fact is the way that treaties and international agreements operate. International oil trade is dominated by the international treaties like the OPEC which not only regulates the quotas for trade but also determines the oil trade process in non-member countries. In a global world, international trade is affected by the actions of international treaties even if the countries are not part of the treaty but still belong to the industry.

Treaties usually have country-level effect, but the recommendations are usually directed towards individual businesses. The fine example is the Convention on Global Warming. The regulations which are imposed on the countries are the regulations for the businesses in these countries. Compared with national legislation which is also a source of international business law, treaties are more powerful and affect multiple locations. Also, the violation of any form is usually regarded as unlawful, and the country including all the companies within its territory usually suffers from the severe consequences including fines and embargoes.

Carr & Stone (2010) determine the start of the international business law concerning trade with the appearance of GATT (Global Agreement on Tariffs and Trade) which then created the World Trade Organization. Nowadays the organization is the most powerful international institution in international trade which not only recommends but also regulates the existing trade policies for multinational companies.

However, international trade is not the only form of international business. The other forms mentioned are the foreign direct investment and technology transfer and license trade. The agreements for these forms of international business usually involve national legislation of the member countries and are based on the existing practices among member countries. However, the guidance from such international agreements does not carry regulatory content.

The only two forms of international business which are strictly regulated and controlled by the international business law sourced in this case are franchising and international piracy. Copyright and intellectual property is nowadays protected worldwide. And there is also a general trend in the international business towards copyright protection.

One of the remarable tendencies of international law that should be mentioned is their ability to co-exist. Many treaties and international agreements are combined with the national regulations under various circumstances. According to De Ly, one example is that ‘the Convention on Contracts for the International Sale of Goods (CISG) is not a monolithic system; from the outset it envisaged coexistence with other sources of law as well as with private self-regulation’.

This can be explained by the fact that international business law was dominated by the sources of private international law in many countries of the world. Such process was in many cases opposing the norms of international treaties and agreements. For this reason, international business law has been handled in a way that for some cases the sources are combined in order to avoid conflicting norms and issues.


In general, international treaties have regulatory character. However, this character shapes the way businesses operate worldwide. Multinational companies are not able to open their premises in the country unless they study the national legislation of this country and unless they figure out all the treaties and international agreements in which this particular country has membership and address them.

The detailed exploration of the international treaties is a must for international businesses nowadays. Combined with the complexity of many issues that are on the crossroads between various sources of international law, the role of international treaties as a primary source of international business law is growing.

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