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Internal law refers to the body of law that governs a given group or entity. It may refer to law that operates within a specific sub-group of a population as a whole. It may also refer to one country's law when multiple countries are involved in actions with each other.
The concept of internal law thus has several different meanings, depending on the context in which it is used. When used in the context of applying to a sub-group, it essentially means that a specific entity or group of entities has chosen to govern itself based on its own laws, in addition to or instead of the laws of the state and government in the country where it resides. For example, in the United States, lawyers have a code of law which applies only to them — the Model Rules of Professional Conduct, which have been promulgated by the American Bar Association. The United States legal system does not enforce these Model Rules of Professional Conduct and the model rules do not apply to widespread society as a whole; they apply only to lawyers and are thus internal law that is used by lawyers.
Corporate entities can create their own internal law, rules and regulations as well. While internal law may exist and may be recognized by a court, such as the manner in which a court recognizes that attorney/client communications are privileged as defined by the Model Rules of Professional Conduct, the internal law of a given organization generally cannot conflict with the laws of the state in which the organization is in. In other words, while entities and organizations can create their own codes of law to live by, those codes of law ultimately must comply with the laws applicable in society as a whole.
In the other context, internal law also refers to a subset of law belonging to a given body. In this case, however, it refers to all the laws that apply to a country when that country is involved in the creation of an international organization or treaty. For example, the United States is involved in several multi-national organizations, such as the World Trade Organization. The United States also makes treaties with other countries on numerous issues, such as the North American Free Trade agreement. Other countries the United States deals with in these environments may have different laws, but the United States is still governed or controlled by its internal laws in dealings with the national entities.