International Business Transactions and the Doctrines of Sovereign Immunity and Act of State.

Need help with my writing homework on International Business Transactions and the Doctrines of Sovereign Immunity and Act of State. Write a 2250 word paper answering; Foreign business entities seek to take advantage of the host country by exploiting the host state’s capacity for lowest production cost, highest sales turnover and repatriating their profits to their respective home states whilst the host state aim to make the most of the foreign entities’ operations in its territory to benefit its economy and resist, as far as practicable, repatriation of profits. 2 Even the advent of globalisation and free trade, states remain possessed, although diluted, of inherent powers under legal principles and doctrines that can pose as sources of political risks and instability for international business transactions. These legal principles and doctrines, that transcend national boundaries, are underpinned by the right of the state to protect itself and its citizens.

The ability to anticipate and manage risks and potential conflicts are crucial in the management of international business transactions and economic success largely depends on it. Albeit good contractual planning significantly minimises these potential risks and inevitable conflicts, it is never absolute security from future risks. This is because contract planning is always encumbered by future uncertainties posed not only by economic but, also political and legal changes, such as war, revolution, civil unrest, nationalisation and government acts that can greatly affect the conduct of business.

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One of the legal precepts that international business entities must contend with is the principle of state sovereignty. This principle provides that a state has a right to self-determination and thus, has exclusive control over its territory, property ownership and economy. It is synonymous to state independence allowing the state to fully exert its power, authority, order and legitimacy without being subjected to a higher or external power. As can be gleaned from such a description of the precept, state sovereignty has two aspects: internal and external. The first refers to a state’s ultimate dominion over the fate of its&nbsp.territory and everything within it and is also called political sovereignty whilst the second, also called juridical sovereignty, refers to its equal standing with other states in the global stage.

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