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Legal person as a subject of international economic relations

Legal person as a subject of international economic relations
Marukyan Gayane, associate professor, candidate of jurisprudence, candidate of , associate professor

Kh. Abovyan Armenian State Pedagogical University, Armenia

Championship participant: the National Research Analytics Championship - "Armenia";

 

International economic relations are traditionally realized  through the participation of national entities which have mutual  interdependence in production. One of the essential features of the development of international economic relations is reflected in the appearance of legal entities, representing   specific  status of  its participants (such as States, intergovernmental organizations).Such a legal entity is considered to be international, thus  suggesting a more complex form of international economic cooperation among its members . Need for creating such  an international legal entity today is generated by  special economic conditions risen at the moment of its resolution.One of such type of  conditions can serve the need for a large scale industrial and social projects and programs , however  the economic interest of the participants in the final result of their activity is motivated  by  making a profit .An important condition for the entry of a legal entity into an  international economic relations is the presence of  sufficient portion of legal  capacity. In the theory of civil law are  distinguished general and special legal capacity of  legal entities.

In general  a legal person  has the right  to acquire civil rights and fulfill his  civic duties as a physical person, except such rights and obligations wherethe natural capacities of  a person is a precondition[1]. In  case of special legal capacity  the legal entity has the right  to enter into such legal relationship, which is  necessary to achieve what is stated by the law[2].  For the period of the formation of capitalistic relations the legal capacity of  entities was a special characteristic feature. For the present stage of the world economy  the main tendency  is the legalization of general legal capacity of entities, facilitating the movement of capital in search of  application of  the most  profitable  sphere. According to R. Webers, subjects of legal relations may even have only legal capacity if this capacity can complement the entire range of activities and exclude from the list  the question of  disability[3].

State recognition of legal capacity of foreign legal entities is a necessary condition for the possibility of making deals with the subjects of that  State , as well as for the implementation of their activities on the territory of that State.

      Because of this national doctrines relate differently to the problem of recognition of foreign legal entities. In some states (primarily in the UK and the United States)a foreign legal entity is recognized only if it acquired the rights of a legal entity in the state which  is officially recognized by that very  State . In this case , however, if, for example , in the U.S. courts of first instance denied the recognition of foreign legal entities , referring to the fact that these entities were created in accordance with the legal system of the State , whose sovereignty is not recognized by the U.S. , the higher courts do not recognize such an argument because support for such a position would lead to a situation of legal uncertainty and instability of the trade circulation.

In other countries ( e.g. France ) legal entities of foreign states are recognized only on the basis of the international agreement with that State . In the third group of states the issue of recognition of foreign states is conditioned by the principle of maintaining reciprocity  However the reciprocity is not only the fact of the mutual recognition of legal entities ,but also matching  the proportion  of legal capacity for this type of legal entity in both states .

In the practice of international trade circulation there are cases when an entity of one country is planning to implement activities in the territory of another state without the creation of a separate legal entity inside that state. Such cases fall under the special regulation of the national legislation  of that state .

In relation to international trade circulation the definition of "nationality” (" belongings") of a legal person is a serious question. In some cases, it is important to determine to which state   belongs the legal entity. Most often belonging affects the establishment of the legal capacity of the personality, thus it is necessary to determine which entities can be regarded as legal persons of the State. The classical doctrine of private international law defines personal law of a legal entity according to his   belonging, thus nationality, and this means that the definition of the legal status of the organization associated with the establishment of personal status, responding to the question of whether the organization relates  to legal entities, what is  the volume of its capacity and procedures for settlement of its authorities, how it arises and ceases to exist. Legal personality is determined by its nationality, thus has the right to a separate state. Traditionally, to determine the state belongings of the organization, the following conflict principles are used: a) incorporation, according to which the nationality of the legal person is determined by the place of its registration, public institutions b) the location of the administrative (managerial )center, according to which the nationality of the legal person is determined by the place of the real location of the executive body of the legal entity, and c) the place of activity.

Clarification of nationality of the legal  person is required to determine the administrative regime of a foreign legal entity in the state. Legal doctrine offers four approaches for solution of the problem. V.L.Tolstyh mentions in particular the following approach to the problem: the  criteria of incorporation, the criterion of the location of the administrative body or residency criteria, the criteria for a place in core activities,  the monitoring criteria[4], but, as he continues to mention, no one of the criteria is able to answer fully to the  requirements of the problems[5].

On this issue V.M.Koretsky notes, "they are all still insufficient, because endeavor to cover the whole phenomenon under the precondition of summing all cases under the same category"[6].

National entities which are considered as foreign with respect to the place of their activities face the problem of its recognition, which finds its legal solution in the national law and orders of the states. National legal entity (including transnational corporations, multinational enterprises) as a member of the foreign trade activity, regardless of its size, realizes its activity  in well-known legal forms.

Quite different is the case with legal entities established by the virtue of an international treaty, since the order of their creation and activity is regulated by international treaties having precedence over national law. The conflict of regulation of international and national legal status of an international legal entity has a  "hidden" character because its legal status is not defined at all.The current  situation with the uncertainty of the legal status of international legal personality has led to the following series of questions requiring practical solution : 1) the possibility of combination of the status of international legal person with the national legal form, 2)whether the international entity is  the carrier of international personality ,3) permissible is the  spread of the international legal  entities which were  created only by the virtue of  an international treaty, according to national rules ( laws) applicable to non-residential  legal entities, 4)what is the procedure of taxation of international legal personality and actions of the tax immunity

To answer the above mentioned  questions it is necessary is to find out in which cases the legal entity is considered to be international.The legal status of the participant in international relations gives the opportunity to participate in international public and private law relations. Thus, the legal entity is manifested in international economic relations and thus claims the definition of "international" (international legal person, an international company ) in the following three ways:

1) intergovernmental organization as the subject of powerless relations of civilized character;2 ) a legal entity which has acquired its legal personality in an international treaty , but has a certain state belonging; 3 ) a legal person who has received his legal personality only by virtue of the establishment of an international treaty and has no nationality.

All three legal entities will be considered international, as the basis of their creation stands an international treaty . One should distinguish between legal persons operating at the national level, but created within the national legal order and the international legal entities established in force or in the presence of a treaty or other international constitutive act and enter into international economic relation To answer the question whether the legal person has a national belonging , it is important to find out what kind of legal act ( which level ) makes the company a legal personality.

            The emergence of international legal person is conditioned by  economic processes aimed at bringing together actors and capital rather than legal reform status of participants in international relations. Until now, the national law admitted only foreign legal entities or international organizations on its territory, recognizing the legal personality of the latter. Therefore, with respect to international legal entity the right to use the national way of " equalizing " it with a domestic legal entity, which resulted in the incorporation of international legal personality in the legal form of the entity of the national law of the country for incorporation.

Undoubtedly, the law is more important to create new tools and legal mechanisms than mix and build on existing ones. Economic content of the property is expressed in terms of a certain mode of appropriation, so the method for assigning features underlie legal forms of legal entities as specific social actors, thus  media ownership. Consequently, each is characterized by its own economic substance and legal form. For example, arising in the field of international economic relations to the phenomenon of international legal person, must be inherently different from the previous legal regulation of the status and operation mode. However, if we assume that  an  inappropriate form is implemented, it may be a situation where the international legal person loses the ability to perform its functions . In order to eliminate possible problems in the practice of international legal personality, namely, in the exercise of commercial activities, it is necessary to develop a new approach that would lay in the legal regulation of the special status of the subject in both the national and international legal systems. The concept of the new approach is also about creating a new legal form of a unified international legal personality.

 

Refences:

1. Comments to Civil Code of RF,O.A. Sadikov, M., 2005, P. 152.

2. E.A. Sukhanov Civil law, P.1, M., 1998, pp. 114-116, the same in Civil law, manual, A.P. Sergeev, U.K. Tolstoy, M., 2002, P. 108-114.

3. Vebers Y. R.Legal personality of citizens in the Soviet civil law.1976, P.24.

4. Tolstyh V.L.International private law: Collision regulation. SPB., 2004, PP. 404-409

5. Tolstyh V.L., the same place, PP. 403-404.

6. Koreckiy V.M. Essays on Anglo-American doctrine and practice of private international law. Book 1, P.32.

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Comments: 4

Baran Mariya

Статья написана на достаточно высоком научном уровне. Присутстувует логика изложения материала и авторское видение решения проблемных аспектов. Успехов!

Baran Mariya

Гаяне, к большому сожалению я почему-то не могу оценить Вашу работу "звездочками". Я сообщила об этом оргкомитет! Надеюсь, что это не повлияет на Ваше участие в первенстве! Еще вчера на моей странице Вашей работы вообще не было (или я ее не видела!!!!!!!)! Возможно именно поэтому у Вас только две оценки! Еще раз успехов в научных поисках!

Zulfugarzade Teymur El'darovich

Весьма интересная и познавательная работа представлена автором. Представляется, что выводы и предложения, изложенные в работе, обогатят науку и практику, послужат новым импульсом в развитии Международного частного права, позволят повысить правовой статус юридических лиц как субъектов международных экономических отношений.

Marukyan Gayane Soso

Спасибо за то что обратили внимание на мою статью и прокомментировали. Надеюсь, что анализ и предложения, которые я в результате анализа послужат новым импульсам для развития статуса юридических лиц в частном обороте.
Comments: 4

Baran Mariya

Статья написана на достаточно высоком научном уровне. Присутстувует логика изложения материала и авторское видение решения проблемных аспектов. Успехов!

Baran Mariya

Гаяне, к большому сожалению я почему-то не могу оценить Вашу работу "звездочками". Я сообщила об этом оргкомитет! Надеюсь, что это не повлияет на Ваше участие в первенстве! Еще вчера на моей странице Вашей работы вообще не было (или я ее не видела!!!!!!!)! Возможно именно поэтому у Вас только две оценки! Еще раз успехов в научных поисках!

Zulfugarzade Teymur El'darovich

Весьма интересная и познавательная работа представлена автором. Представляется, что выводы и предложения, изложенные в работе, обогатят науку и практику, послужат новым импульсом в развитии Международного частного права, позволят повысить правовой статус юридических лиц как субъектов международных экономических отношений.

Marukyan Gayane Soso

Спасибо за то что обратили внимание на мою статью и прокомментировали. Надеюсь, что анализ и предложения, которые я в результате анализа послужат новым импульсам для развития статуса юридических лиц в частном обороте.
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