For years and years and years, the Yankees built their farm system through international free agency. They were in contention every year and forfeiting their low first round picks to sign top free agents all the time, though they were able to spend freely in international free agency to compensate. That’s why so many of their top prospects from 1998-2012 or so were international signees. Alfonso Soriano, Wily Mo Pena, Robinson Cano, Chien-Ming Wang, Melky Cabrera, Jesus Montero, and so on.
Nowadays teams can’t spend freely internationally. The new Collective Bargaining Agreement implemented a hard spending cap.