XYZ Company (XYZ) is a U.S. company that makes communication software used in a variety of consumer goods manufactured and sold in the United States. XYZ recently learned that one of the manufacturing firms it supplies, ABC Company, is exporting finished goods to a country, called Sanctioned Nation, where U.S. goods and component parts are prohibited because of numerous conflicts with the U.S. government. In other words, ABC Company is doing business with Sanctioned Nation with whom doing business is prohibited (Reed et al., 2005).

Practical Application Scenario Critical thinking questions:

(1) Assuming you are the CEO of XYZ Company, how would you advise the company to proceed based on the facts of the scenario?

(2) Does XYZ Company have any moral or legal responsibilities?

(3) How should XYZ Company protect itself under these circumstances?

(4) Are American business practices impacted by conflicts between governments in which engaging in international trade is both sanctioned and prohibited by the federal government (Lee, n.d.)?

(5) What is the importance of the three principles related to international commerce and the importance of sanctions, Comity of Nations, Act of State Doctrine, and Sovereign Immunity (Lee, n.d., "Topic: 11.2 General Principles of International Law")?