QUESTION 1 Which of the following statements is most correct a An export can be anything that leaves the United States, and can include flash drives or laptops carried overseas, as well as video conference or faxes b The United States often seeks to apply its export restrictions outside the territories of the U S by issuing blacklists and re export prohibitions on US subsidiaries and other companies that have a link to the U S c A deemed export is an export d Checking OFAC for restricted or blacklisted persons and entities is the minimum a seller should do to satisfy its due diligence requirements to know its customer e All of these statements are correct QUESTION 2 Which of the following statements is most correct a The right to a trade secret expires 20 years after it is discovered b The owner of a copyright does not have any rights in works derived from the original copyright c Unlike a copyright, a US patent does not give the patent owner the affirmative right to make, use or sell his her work The owner has the right to exclude others from making, using and selling its invention that is covered by the patent d A strong Trademark is one that is descriptive and not fanciful QUESTION 3 Which of the following statements is most correct a Employees of Lockheed Martin Corp have a Zoom conference call between its office in Reston, Virginia and its subcontractor in Taipei,Taiwan to discuss the US approved sale of F35 fighter jets intended to send a message to China the US will support Taiwan's independence from mainland China During the conference call, they discuss highly classified information about the the sophisticated technology and software coding, and they display diagrams that illustratehow its software and electronics achieve superior surveillance and reconnaissance capabilities The employees of Lockheed Martin probably violated the Export Regulations because the video call resulted in an export of classified information b While visiting GenDyn facilities in the US, a delegation from India is shown a demonstration of a how a miniature secret gyroscopic circuit that is classified by the US Department of Defense can guide Cruise Missiles to their destination without reference to GPS signals GenDyn did not violate the export regulations because the sensitive information was not taken outside the boundaries of the US c Ms Jones is a software engineer for GenDyn Corp and designs circuits for highly classified gyroscopic electronics that are used in Cruise Missiles She is called to a meeting in Frankfurt, Germany, but first must stop in Moscow, Russia on an unrelated matter She takes diagrams of the circuits with her on a flash drive for her Frankfurt meeting While in Moscow, the compliance officer learns of her stop over in Moscow for the first time, and notifies her that she cannot carry that sensitive information overseas to Russia Ms Jones knows that she has already violated the export regulations by taking the flash drive outside the US Ms Jones can negate or cancel the violation by returning the flash drive back the United States on the return trip, i e , a round trip will correct the violation d If the US Export Regulations impose a standard of strict liability for a violation, then a violation only occurs if the company intended to violate the regulation QUESTION 4 ABC, Inc, a US publicly traded company, submitted a proposal to the China Securities Regulatory Commission (CSRC), China's version of the SEC, to upgrade the stock exchange facilities in Shanghai to allow the issuance and trading of digital securities using Blockchain technology The Request for Proposals specifically states that the installation must be completed before issuance of the ANT IPO The Chief Operating Officer of ABC, after discussing with the CEO and the Board of Directors, invites the Chairwoman of the CSRC,and four of her staff to tour their facilities in California, and pay their reasonable expenses for travel, hotel, and meals While touring the plant in California, ABC shows the Chairwoman plans for the construction and operation of the facility they would build in Shanghai In an effort to impress the visiting team with the company's resources, an ABC Company official also shows her some highly classified plans for the US Department of Defense NSA for intercepting and de cyphering all email and Internet communications that use highly encrypted algorithms, some of which can be used to intercept communications from China While having dinner with the ABC Chief Operating Officer Mr Jones, the Chairwoman expresses great admiration for the wonders of the United States and specifically mentions the beauty of the Rocky Mountains and desire to see Aspen, Colorado Mr Jones says the company can pay the expenses for the Chairwoman and her husband who has accompanied her on the trip (note that ABC is paying the spouse's expenses for this trip) to visitAspen, Colorado while she is in the United States The Chairwoman declines the offer because of urgent business that force her immediate return to Shanghai On her return, she learns that Beijing has canceled the ANT IPO She notifies ABC that they are canceling the project until further notice Which of the following statements is most correct a It is proper (and an affirmative defense) for ABC,Inc to pay for the Chairwoman'stripexpenses (and her staff) provided the expenses are real (not padded ) and are reasonable because the trip is directly related to the business venture But they cannot pay for the trip to Aspen because it is not directly related Nor should they pay the expenses for the husband b Showing the Chairwoman and her staff the plans for deciphering encrypted interceptions is not an export because the information did not leave the United States c The cancellation of the ANT IPOis not a force majeure event because it was foreseeable before it was announced, and hence would not be a basis to cancel the installation contract d ABC's offer to pay for the trip to Aspen is a violation of the Foreign Corrupt Practices Act but would be permissible if the expenses are reasonable under the grease exception e Mr Jones' offer to pay for the trip toAspen is not a violation of the FCPA because she declined the offer QUESTION 5 GenDyn FR is a French company and wholly owned subsidiary of GenDyn GenDyn is a U S company with headquarters in Reston, Virginia GenDyn FR enters into a contract with Croissants, a French bakery in Paris, to sell electronic circuits that are used for satellite GPS navigation in automobiles The contract is fully executed and performed in France Croissants says it will use the circuits to monitor its delivery trucks through out France The circuits are dual use and can easily be modified for use in Cruise missiles for guidance to its target The U S Government notifies GenDyn that the French bakery is re exporting the circuits to Russia which uses them in Russian Cruise missiles, some of which recently were shipped to Iran, a country that is sanctioned by the U S The U S Government orders GenDyn and GenDyn FR to stop the sale, which would be a breach of contract under French law GenDyn FR gives notice that it will stop shipment, but the French purchaser sues for breach of contract, i e , breach of the contract between GenDyn FR and the French bakery The contract has a clause that states French law applies to this contract and all disputes shall be resolved in the courts of France Which of the following statements is most correct a This is an example of the extra territorial application of the U S Export regulations, and it would never be upheld in a U S court of law because GenDyn FR is a French company b The U S Government's order is invalid because it has no jurisdiction over a contract that was executed in France and performed in France, and otherwise, has no connection to the United States The fact that GenDyn FR is a wholly owned subsidiary of GenDyn does not give the US any jurisdiction c If the GenDyn FR sales contract has a strong Force Majeure clause specifically one that suspends performance for a change of law GenDyn FR will have a reasonable defense for suspending its performance under this contract d GenDyn should not comply with the U S Government order because this is a dual use item, and it did not know that the French purchaser was reselling the GPS circuits to Russia It entered into the French contract is good faith which is a valid defense QUESTION 6 Using the International Transaction documents that we discussed in class for Alpha Company and Santa Clause Company, which of the following statements is MOST correct a In the Form 4 Letter of Credit, the Seller s Bank states We confirm the credit and thereby undertake to purchase all drafts drawn as above specified and accompanied by the required documents This statement is Seller's Bank promise and confirmation to pay if it receives a complying presentation that consists of the documents specified in that letter b In Form 4, the Letter of Credit states This credit is subject to the Uniform Customs and Practices for Documentary Credits (2007 edition) International Chamber of Commerce Publication No 600 Seller's Bank was required to use UCP 600 and not UCP 500 because UCP 600 superceded the earlier version and UCP 500 is no longer valid or available c In Form 2 which is Seller's Response to Buyer's inquiry, the Seller states Shipment Approximately 15 days after receipt of your order and Confirmed Irrevocable Letter of Credit If Seller did not make this statement, the transaction would automatically be financed by a Confirmed Irrevocable letter of Credit, as a matter of law, and this statement was not necessary for Seller to obtain a Letter of Credit d Form 1 is Buyer's Offer and if Seller accepts those terms, there will be a contract between Buyer and Seller QUESTION 7 Which of the following statements is most correct a Transactions that have been confirmed and added to the blockchain can easily be altered, simply by changing the data in those blocks This makes the blockchain easy to hack and unreliable b Having a corporate policy on anti money laundering practices is important, but it is more important to have a manual that instructs employees how to avoid detection of illegal money transfers c If the PRC ordered ByteDance to order TikTok to turn over the data on its servers located in Singapore, it most likely would be required to do so because Bytedance is in mainland China and is the parent company of TikTok , and the Chinese government has jurisdiction over it d TikTok was smart in locating its servers in Singapore Neither PRC nor the US can get any of that data because it is outside the physical boundaries for each of those countries QUESTION 8 Which of the following statements is most correct a By definition, counterfeit goods include a trademark that has not been authorized by the trademark owner, and US Customs will not allow their import into the US and will seize them if they are passing through the US ports b The intermediary provision of the FCPA covers bribes paid by third parties on behalf of someone else and, for example, covers bribes by a consulting company The company has no duty to monitor such payments and its willful blindness will be a defense if it did not know the bribes were paid c Gray goods are illegal in the United States because they unfairly compete with original goods made here d The L'Anza, Lever Brothers and Kirtsaeng cases illustrate that manufacturers or publishersare trying to use the intellectual property laws to divide international markets these cases illustrate that they have been successful in limiting parallel imports QUESTION 9 Which of the following statements is most correct a Virtually all violations of the FCPA are also a violation of the books and records provision because the corrupt payments are hidden in the company's accounts by padding expenses or other means to disguise the illegal payments Hence the accounts do not accurately represent the financial condition of the company b AML KYC does not apply to crypto transactions, which is why BTMs ATMs for Bitcoin do not need to file Suspicious Activity Reports (SARs) or Currency Transaction Reports (CTRs) or monitor smurfing transactions c The grease exception to the FCPA allows payments to be made to foreign officials to obtain or retain business, regardless of the amount paid It is a big loop hole in the FCPA d RICO has failed in its attempts to help prosecutors convict organizations for criminal activity QUESTION 10 Which of the following statements is most correct a The grease exception in the FCPA can be used to pay large sums of money to obtain or retain business b It is difficult to bypass the US financial system when US dollars are used for a transaction Hence, use of the dollar is used as a basis for US jurisdiction in prosecuting criminal activity in international transactions The FIFA prosecutions are such an example because the US banking system was used for payments c Cryptocurrencies like bitcoin have no government backing or central bank Central Bank Digital Currencies (CBDC) are similar in that the government does not back those currencies d Smurfing for money transfers is legal and an easy way to circumvent the reporting requirements for transactions in excess of $10,000 QUESTION 11 Which of the following statements is most correct a The red bottom on Louboutin shoes is a valid trademark, despite the fact that color is normally not a valid trademark, because so many people identify that color and locationon the bottom of the shoe with Christin Louboutin, i e , the source of the goods b Trade dress is a form of trademark protection that depends on functionality, i e , a shoe that looks the same but is based solely on functionality rather than decoration will constitute a trade dress violation The Aquazurra case involving Ivanka Trump is such an example c A copyright protects the idea, not the expression of the idea That is the basis of copyright infringment d Color is not a valid trademark Painting a pair of $30 high heels with the Chinese red color used on Louboutins would not be a trademark infringement QUESTION 12 Which of the following statements is most correct a The Hubei case illustrates that decisions by Chinese courts are enforceable in the U S if the Chinese procedures were fair b The results of mediation as a dispute resolution mechanism is enforceable in the courts, just like binding arbitration and litigation in a court c Binding arbitration is not preferred as a dispute resolution method because there is no procedure to enforce that decision d The FCPA requires a corrupt state of mind it is not possible to know what is in someone's mind which is why enforcement of the FCPA has been so unsuccessful QUESTION 13 Buyer and Seller enter into a contract for the sale of 300 LG OLED 4K TV sets sent from Seoul, S Korea to San Francisco, CIF San Francisco (INCO 2000) The sets arrive in San Francisco but are LED High Definition sets (1080p resolution) Buyer claims breach of contract because the contract required OLED sets which have a high contrast and higher resolution The contractincludes a binding arbitration clause Any dispute under this contract shall be resolved by binding arbitration by a panel of 3 persons, one selected by each party and the 3rd selected by the 2 named panelists The proceeding may be held by remote telecommunications such as Zoom or similar means Which of the following statements is most correct a If Buyer wins in arbitration, he can take the binding arbitration decision to a court of law and have it enforced b It was a bad decision to have an arbitration clause because litigation is faster and cheaper c None of these statements are correct d If Buyer wins the arbitration in San Francisco there is no way for him to enforce the decision in Seoul QUESTION 14 Dancing Coin is a startup that intends to offer a new cryptocurrency in the United States It seeks to create a n offshore bank account in the Cayman Islands where all its financial transactions will be conducted It hires Cayman Dreams, a consulting company in the Cayman Islands to set up a banking account and obtain a banking license in the Cayman Islands from the Financial Regulator to handle the buy sell transactions associated with its crypto Cayman Dreams requires a $300,000 deposit into its account and tells Dancing Coin it will take about 2 weeks to obtain the banking license and associated permits It is well known that processing times are usually much longer, on the order of 3 4 months, and many licenses are denied on the suspicion that the accounts will be used for illegal criminal activity Dancing Coin sends the money to Cayman Dreams' account and tells them Great, the faster the better Just do whatever you have to do, and let us know when it's all done We are in a hurry to get this thing launched The license is issued in about 3 weeks Dancing Coin later learns that about $100,000 of the $300,000 it gave Cayman Dreams was used to pay bribes to the Financial Regulator and the staff Which of the following statements is most correct a Cayman Dreams is most likely guilty of paying bribes under the local laws of the Cayman Islands, but Dancing Coin is not guilty because they did not pay the bribes Cayman Dreams paid the bribes b Dancing Coin is most likely guilty of paying bribes but it has an affirmative defense that the payments were reasonable, given how business is done in the Cayman Islands, and the payments were directly related to their business c The payments are subject to the grease exception Neither Cayman Dreams or Dancing Coin did anything wrong d Dancing Coin clearly had no intent to pay bribes and merely used the skills of Cayman Dreams to obtain the banking license Cayman Dreams knows how business is done in the Caymans which is why Dancing Coin hired them Dancing Coin is not guilty of anything e Dancing Coin most likely violated the intermediary provision of the FCPA because it engaged in willful blindness Its consulting agreement with Cayman Dreams should have had terms that require an accounting of how the money is used, a prohibition on cash payments, and conditions that prohibit it from paying bribes or other illegal activity that violate the FCPA Dancing Coin is just as guilty as if it had paid the bribes itself QUESTION 15 Tire Deals Seller in S Korea and USA Tires Buyer in the US, exchange text messages as follows From Seller 1000 all weather Hankook tires CIF (INCO 2000) San Francisco $100,000 USD confirmed LC by our bank BNP Paribas in Seoul, shipped within 7 days after receipt of your acceptance UCP600 Buyer promptly responds Deal USA Tires does a quick check on OFAC about Tire Deals and it comes up clean But, just by chance, USA Tires sees two articles from a Google Search in the Wall Street Journal and Financial Times by independent journalists investigative reporters Both articles connect Tire Deals to two blacklisted Hong Kong officials tied to enforcing and implementing China's new National Security Law Edwina Lam, head of the National Security Division of the Hong Kong Police Force Steve Li Kwai Wah, senior superintendent of the Hong Kong Police Force Nevertheless, Buyer obtains an LC from Citibank in San Francisco and BNP Paribas confirms the LC The LC misspells Buyers name as US Tires instead of USA Tires Tire Deals delivers the tires to the Port of Busan in S Korea for loading onto the SS Big Ship The carrier issues a Bill of Lading stating said to contain 1000 all weather tires BNP Paribas notices the mistake in the LC when it receives the presentation While the tires are on the ship enroute to San Francisco, OFAC issues a revised list of blacklisted companies and individuals, which includes Tire Deals The US and S Korea have both ratified CISG which applies to this transaction Which of the following statements is most correct a Seller was not required to buy insurance for the transaction, so Buyer is taking a risk if the tires are lost at sea b Assume USA Tires learns from a 3rd party that Tire Deals actually shipped summer tires instead of all weather tires USA Tires can obtain an injunction from a court ordering Citibank to not pay because there is a breach of contract Carrier is probably not liable because it doesn't know the difference between all weather tires and summer tires c USA Tires did the right thing by proceeding with the deal after discovering the WSJ and Financial Times articles OFAC came up clean, so USA Tires did all that it was required to do, e g , conduct a reasonable check It can ignore the articles If US Customs blocks the tires in San Francisco, USA Tires can rely on the FM provision in CISG,Article 79, to reject the tires and sue Tire Deals d Under the Bank of China decision, Citibank should pay BNP Paribas because this is a small typo and assuming the other documents in the presentation use USA Tires, Citibank can clearly make sense that the intended Buyer is USA Tires and should pay, i e , Citibank has received a complying presentation The fact that Tire Deals has been added to OFAC will not stop Citibank from paying BNP Paribas

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QUESTION 1 Which of the following statements is most correct: a. An export can be anything that leaves the United States, and can include flash

QUESTION 1

Which of the following statements is most correct:

An export can be anything that leaves the United States, and can include flash drives or laptops carried overseas, as well as video conference or faxes.

The United States often seeks to apply its export restrictions outside the territories of the U.S.by issuing blacklists and re-export prohibitions on US subsidiaries and other companies that have a "link"to the U.S.

A "deemed export"is an export.

Checking OFAC for restricted or blacklisted persons and entities is the minimum a seller should do to satisfy its due diligence requirements to know its customer.

All of these statements are correct.

QUESTION 2

Which of the following statements is most correct:

The right to a trade secret expires 20 years after it is discovered.

The owner of a copyright does not have any rights in works derived from the original copyright.

Unlike a copyright, a US patent does not give the patent owner the affirmative right to make, use or sell his/her work.The owner has the right to exclude others from making, using and selling its invention that is covered by the patent.

A strong Trademark is one that is descriptive and not fanciful.

QUESTION 3

Which of the following statements is most correct:

Employees of Lockheed Martin Corp have a Zoom conference call between its office in Reston, Virginia and its subcontractor in Taipei,Taiwan to discuss the US-approved sale of F35 fighter jets intended to send a message to China--the US will support Taiwan's independence from mainland China.During the conference call, they discuss highly classified information about the the sophisticated technology and software coding, and they display diagrams that illustratehow its software and electronics achieve superior surveillance and reconnaissance capabilities.The employees of Lockheed Martin probably violated the Export Regulations because the video call resulted in an export of classified information.

While visiting GenDyn facilities in the US, a delegation from India is shown a demonstration of a how a miniature secret gyroscopic circuit that is classified by the US Department of Defense can guide Cruise Missiles to their destination without reference to GPS signals.GenDyn did not violate the export regulations because the sensitive information was not taken outside the boundaries of the US.

Ms. Jones is a software engineer for GenDyn Corp and designs circuits for highly classified gyroscopic electronics that are used in Cruise Missiles.She is called to a meeting in Frankfurt, Germany, but first must stop in Moscow, Russia on an unrelated matter.She takes diagrams of the circuits with her on a flash drive for her Frankfurt meeting.While in Moscow, the compliance officer learns of her stop-over in Moscow for the first time, and notifies her that she cannot carry that sensitive information overseas to Russia.Ms. Jones knows that she has already violated the export regulations by taking the flash drive outside the US.Ms. Jones can negate or cancel the violation by returning the flash drive back the United States on the return trip, i.e., a round trip will correct the violation.

If the US Export Regulations impose a standard of strict liability for a violation, then a violation only occurs if the company intended to violate the regulation.

QUESTION 4

ABC, Inc, a US publicly traded company, submitted a proposal to the China Securities Regulatory Commission (CSRC), China's version of the SEC, to upgrade the stock exchange facilities in Shanghai to allow the issuance and trading of digital securities using Blockchain technology.The Request for Proposals specifically states that the installation must be completed before issuance of the ANT IPO.The Chief Operating Officer of ABC, after discussing with the CEO and the Board of Directors, invites the Chairwoman of the CSRC,and four of her staff to tour their facilities in California, and pay their reasonable expenses for travel, hotel, and meals. While touring the plant in California, ABC shows the Chairwoman plans for the construction and operation of the facility they would build in Shanghai. In an effort to impress the visiting team with the company's resources, an ABC Company official also shows her some highly classified plans for the US Department of Defense/ NSA for intercepting and de-cyphering all email and Internet communications that use highly encrypted algorithms, some of which can be used to intercept communications from China.While having dinner with the ABC Chief Operating Officer Mr. Jones, the Chairwoman expresses great admiration for the wonders of the United States and specifically mentions the beauty of the Rocky Mountains and desire to see Aspen, Colorado.Mr. Jones says the company can pay the expenses for the Chairwoman and her husband who has accompanied her on the trip (note that ABC is paying the spouse's expenses for this trip) to visitAspen, Colorado while she is in the United States. The Chairwoman declines the offer because of urgent business that force her immediate return to Shanghai.On her return, she learns that Beijing has canceled the ANT IPO.She notifies ABC that they are canceling the project until further notice.

Which of the following statements is most correct:

It is proper (and an affirmative defense) for ABC,Inc to pay for the Chairwoman'stripexpenses (and her staff) provided the expenses are real (not "padded") and are reasonable because the trip is directly related to the business venture.But they cannot pay for the trip to Aspen because it is not directly related. Nor should they pay the expenses for the husband.

Showing the Chairwoman and her staff the plans for deciphering encrypted interceptions is not an export because the information did not leave the United States.

The cancellation of the ANT IPOis not a force majeure event because it was foreseeable before it was announced, and hence would not be a basis to cancel the installation contract.

ABC's offer to pay for the trip to Aspen is a violation of the Foreign Corrupt Practices Act but would be permissible if the expenses are reasonable under the "grease" exception.

Mr. Jones' offer to pay for the trip toAspen is not a violation of the FCPA because she declined the offer.

QUESTION 5

GenDyn-FR is a French company and wholly owned subsidiary of GenDyn; GenDyn is a U.S. company with headquarters in Reston, Virginia.

GenDyn-FR enters into a contract with Croissants, a French bakery in Paris, to sell electronic circuits that are used for satellite/GPS navigation in automobiles. The contract is fully executed and performed in France.Croissants says it will use the circuits to monitor its delivery trucks through out France.The circuits are "dual use" and can easily be modified for use in Cruise missiles for guidance to its target. The U.S. Government notifies GenDyn that the French bakery is re-exporting the circuits to Russia which uses them in Russian Cruise missiles, some of which recently were shipped to Iran, a country that is sanctioned by the U.S.The U.S. Government orders GenDyn and GenDyn-FR to stop the sale, which would be a breach of contract under French law.GenDyn-FR gives notice that it will stop shipment, but the French purchaser sues for breach of contract, i.e., breach of the contract between GenDyn-FR and the French bakery. The contract has a clause that states: " French law applies to this contract and all disputes shall be resolved in the courts of France."

Which of the following statements is most correct:

This is an example of the extra-territorial application of the U.S. Export regulations, and it would never be upheld in a U.S. court of law because GenDyn-FR is a French company.

The U.S. Government's order is invalid because it has no jurisdiction over a contract that was executed in France and performed in France, and otherwise, has no connection to the United States. The fact that GenDyn-FR is a wholly owned subsidiary of GenDyn does not give the US any jurisdiction.

If the GenDyn-FR sales contract has a strong Force Majeure clause--specifically one that suspends performance for a "change of law"--GenDyn-FR will have a reasonable defense for suspending its performance under this contract.

GenDyn should not comply with the U.S. Government order because this is a "dual use" item, and it did not know that the French purchaser was reselling the GPS circuits to Russia.It entered into the French contract is good faith which is a valid defense.

QUESTION 6

Using the International Transaction documents that we discussed in class for Alpha Company and Santa Clause Company, which of the following statements is MOST correct:

In the Form 4 Letter of Credit, the Seller"s Bank states:

"We confirm the credit and thereby undertake to purchase all drafts drawn as above specified and accompanied by the required documents."

This statement is Seller's Bank promise and confirmation to pay if it receives a complying presentation that consists of the documents specified in that letter.

In Form 4, the Letter of Credit states:

"This credit is subject to the Uniform Customs and Practices for Documentary Credits (2007 edition) International Chamber of Commerce Publication No. 600."

Seller's Bank was required to use UCP 600 and not UCP 500 because UCP 600 superceded the earlier version and UCP 500 is no longer valid or available.

In Form 2 which is Seller's Response to Buyer's inquiry, the Seller states

"Shipment: Approximately 15 days after receipt of your order and Confirmed Irrevocable Letter of Credit."

If Seller did not make this statement, the transaction would automatically be financed by a Confirmed Irrevocable letter of Credit, as a matter of law, and this statement was not necessary for Seller to obtain a Letter of Credit.

Form 1 is Buyer's Offer and if Seller accepts those terms, there will be a contract between Buyer and Seller.

QUESTION 7

Which of the following statements is most correct:

Transactions that have been confirmed and added to the blockchain can easily be altered, simply by changing the data in those blocks.This makes the blockchain easy to "hack" and unreliable.

Having a corporate policy on anti-money laundering practices is important, but it is more important to have a manual that instructs employees how to avoid detection of illegal money transfers.

If the PRC ordered ByteDance to order TikTok to turn over the data on its servers located in Singapore, it most likely would be required to do so because Bytedance is in mainland China and is the parent company of TikTok , and the Chinese government has jurisdiction over it.

TikTok was smart in locating its servers in Singapore.Neither PRC nor the US can get any of that data because it is outside the physical boundaries for each of those countries.

QUESTION 8

Which of the following statements is most correct:

By definition, counterfeit goods include a trademark that has not been authorized by the trademark owner, and US Customs will not allow their import into the US and will seize them if they are passing through the US ports.

The intermediary provision of the FCPA covers bribes paid by third parties on behalf of someone else and, for example, covers bribes by a consulting company.The company has no duty to monitor such payments and its "willful blindness" will be a defense if it did not know the bribes were paid.

Gray goods are illegal in the United States because they unfairly compete with original goods made here.

The L'Anza, Lever Brothers and Kirtsaeng cases illustrate that manufacturers or publishersare trying to use the intellectual property laws to divide international markets; these cases illustrate that they have been successful in limiting parallel imports.

QUESTION 9

Which of the following statements is most correct:

Virtually all violations of the FCPA are also a violation of the "books and records" provision because the corrupt payments are hidden in the company's accounts by "padding" expenses or other means to disguise the illegal payments. Hence the accounts do not accurately represent the financial condition of the company.

AML/KYC does not apply to crypto transactions, which is why BTMs--ATMs for Bitcoin--do not need to file Suspicious Activity Reports (SARs) or Currency Transaction Reports (CTRs) or monitor "smurfing" transactions.

The grease exception to the FCPA allows payments to be made to foreign officials to obtain or retain business, regardless of the amount paid.It is a big loop hole in the FCPA.

RICO has failed in its attempts to help prosecutors convict organizations for criminal activity.

QUESTION 10

Which of the following statements is most correct:

The "grease exception" in the FCPA can be used to pay large sums of money to obtain or retain business.

It is difficult to bypass the US financial system when US dollars are used for a transaction. Hence, use of the dollar is used as a basis for US jurisdiction in prosecuting criminal activity in international transactions.The FIFA prosecutions are such an example because the US banking system was used for payments.

Cryptocurrencies like bitcoin have no government backing or central bank; Central Bank Digital Currencies (CBDC) are similar in that the government does not back those currencies.

"Smurfing" for money transfers is legal and an easy way to circumvent the reporting requirements for transactions in excess of $10,000.

QUESTION 11

Which of the following statements is most correct:

The red bottom on Louboutin shoes is a valid trademark, despite the fact that color is normally not a valid trademark, because so many people identify that color and locationon the bottom of the shoe with Christin Louboutin, i.e., the source of the goods.

Trade dress is a form of trademark protection that depends on functionality, i.e., a shoe that looks the same but is based solely on functionality rather than decoration will constitute a trade dress violation.The Aquazurra case involving Ivanka Trump is such an example.

A copyright protects the idea, not the expression of the idea.That is the basis of copyright infringment.

Color is not a valid trademark.Painting a pair of $30 high heels with the "Chinese red" color used on Louboutins would not be a trademark infringement.

QUESTION 12

Which of the following statements is most correct:

The Hubei case illustrates that decisions by Chinese courts are enforceable in the U.S. if the Chinese procedures were fair.

The results of mediation as a dispute resolution mechanism is enforceable in the courts, just like binding arbitration and litigation in a court.

Binding arbitration is not preferred as a dispute resolution method because there is no procedure to enforce that decision.

The FCPA requires a corrupt state of mind; it is not possible to know what is in someone's mind which is why enforcement of the FCPA has been so unsuccessful.

QUESTION 13

Buyer and Seller enter into a contract for the sale of 300 LG OLED 4K TV sets sent from Seoul, S. Korea to San Francisco, CIF San Francisco (INCO 2000).The sets arrive in San Francisco but are LED High Definition sets (1080p resolution).Buyer claims breach of contract because the contract required OLED sets which have a high contrast and higher resolution.

The contractincludes a binding arbitration clause: "Any dispute under this contract shall be resolved by binding arbitration by a panel of 3 persons, one selected by each party and the 3rd selected by the 2 named panelists. The proceeding may be held by remote telecommunications such as Zoom or similar means."

Which of the following statements is most correct:

If Buyer wins in arbitration, he can take the binding arbitration decision to a court of law and have it enforced.

It was a bad decision to have an arbitration clause because litigation is faster and cheaper.

None of these statements are correct.

If Buyer wins the arbitration in San Francisco there is no way for him to enforce the decision in Seoul.

QUESTION 14

Dancing Coin is a startup that intends to offer a new cryptocurrency in the United States. It seeks to create _an offshore bank account in the Cayman Islands where all its financial transactions will be conducted. It hires Cayman Dreams, a consulting company in the Cayman Islands to set up a banking account and obtain a banking license in the Cayman Islands from the Financial Regulator to handle the buy/sell transactions associated with its crypto.

Cayman Dreams requires a $300,000 deposit into its account and tells Dancing Coin it will take about 2 weeks to obtain the banking license and associated permits.It is well known that processing times are usually much longer, on the order of 3-4 months, and many licenses are denied on the suspicion that the accounts will be used for illegal criminal activity.Dancing Coin sends the money to Cayman Dreams' account and tells them--"Great, the faster the better.Just do whatever you have to do, and let us know when it's all done.We are in a hurry to get this thing launched."

The license is issued in about 3 weeks. Dancing Coin later learns that about $100,000 of the $300,000 it gave Cayman Dreams was used to pay bribes to the Financial Regulator and the staff.

Which of the following statements is most correct:

Cayman Dreams is most likely guilty of paying bribes under the local laws of the Cayman Islands, but Dancing Coin is not guilty because they did not pay the bribes; Cayman Dreams paid the bribes.

Dancing Coin is most likely guilty of paying bribes but it has an affirmative defense that the payments were reasonable, given how business is done in the Cayman Islands, and the payments were directly related to their business.

The payments are subject to the "grease exception."Neither Cayman Dreams or Dancing Coin did anything wrong.

Dancing Coin clearly had no intent to pay bribes and merely used the skills of Cayman Dreams to obtain the banking license.Cayman Dreams knows how business is done in the Caymans which is why Dancing Coin hired them.Dancing Coin is not guilty of anything.

Dancing Coin most likely violated the "intermediary provision" of the FCPA because it engaged in willful blindness. Its consulting agreement with Cayman Dreams should have had terms that require an accounting of how the money is used, a prohibition on cash payments, and conditions that prohibit it from paying bribes or other illegal activity that violate the FCPA.Dancing Coin is just as guilty as if it had paid the bribes itself.

QUESTION 15

Tire Deals/Seller in S. Korea and USA Tires/Buyer in the US, exchange text messages as follows:

From Seller: 1000 all-weather Hankook tires CIF (INCO 2000) San Francisco $100,000 USD confirmed LC by our bank BNP Paribas in Seoul, shipped within 7 days after receipt of your acceptance.UCP600.

Buyer promptly responds: Deal.

USA Tires does a quick check on OFAC about Tire Deals and it comes up clean.But, just by chance, USA Tires sees two articles from a Google Search in the Wall Street Journal and Financial Times by independent journalists/investigative reporters.Both articles connect Tire Deals to two blacklisted Hong Kong officials tied to enforcing and implementing China's new National Security Law: Edwina Lam, head of the National Security Division of the Hong Kong Police Force; Steve Li Kwai-Wah, senior superintendent of the Hong Kong Police Force.

Nevertheless, Buyer obtains an LC from Citibank in San Francisco and BNP Paribas confirms the LC.The LC misspells Buyers name as US Tires instead of USA Tires.Tire Deals delivers the tires to the Port of Busan in S. Korea for loading onto the SS Big Ship.The carrier issues a Bill of Lading stating: "said to contain 1000 all-weather tires." BNP Paribas notices the mistake in the LC when it receives the presentation.While the tires are on the ship enroute to San Francisco, OFAC issues a revised list of blacklisted companies and individuals, which includes Tire Deals.

The US and S. Korea have both ratified CISG which applies to this transaction.

Which of the following statements is most correct:

Seller was not required to buy insurance for the transaction, so Buyer is taking a risk if the tires are "lost at sea."

Assume USA Tires learns from a 3rd party that Tire Deals actually shipped summer tires instead of all-weather tires.USA Tires can obtain an injunction from a court ordering Citibank to "not pay" because there is a breach of contract.Carrier is probably not liable because it doesn't know the difference between all-weather tires and summer tires.

USA Tires did the right thing by proceeding with the deal after discovering the WSJ and Financial Times articles.OFAC came up clean, so USA Tires did all that it was required to do, e.g., conduct a reasonable check.It can ignore the articles.If US Customs blocks the tires in San Francisco, USA Tires can rely on the FM provision in CISG,Article 79, to reject the tires and sue Tire Deals.

Under the Bank of China decision, Citibank should pay BNP Paribas because this is a small typo and assuming the other documents in the presentation use USA Tires, Citibank can clearly make sense that the intended Buyer is USA Tires and should pay, i.e., Citibank has received a complying presentation.The fact that Tire Deals has been added to OFAC will not stop Citibank from paying BNP Paribas.