Ingles
Legal
International
Trade Law: General overview
International Trade Law is a combination of privately negotiated contractual
arrangements and varied national and international laws that come together
to govern the cross border trade of goods and services.
Multilateral treaties in which the U.S. is a participating country, notably
the U.N. Convention for the International Sales of Goods and the U.N.
Convention on the Recognition and Enforcement of Arbitral Awards, yield
often-unanticipated results in private contractual relations and play
an important role in shaping the outcome of international trade transactions.
Adding further to the mix is a series of federal laws and regulations
that prescribe international trade controls and international trade procedures,
which are very often quite complex, somewhat confusing and not always
fully transparent.
The state of the existing laws and regulations, notwithstanding, importers
and exporters who disregard the importance of strict compliance with international
trade laws and regulations do so at their own peril, in that these laws
and regulations are actively and vigorously enforced by the U.S. Government
and by foreign Governments. Thus, strict compliance with international
trade laws and regulations, while not in its own right a mandatory legal
obligation, is the only way to go for importers and exporters who wish
to avoid fines, penalties, incarceration and suspension and/or revocation
of their international trading privileges.
Laws, Regulations and Doctrine
Foreign Corrupt Practices Act
(FCPA)
The Foreign Corrupt Practices Act (FCPA) is a U.S. law that makes it illegal
for a U.S. person (citizen or company) or any person who acts on behalf
of a U.S. person to offer, to pay, to promise to pay or to authorize another
person to pay money or of anything of value to a foreign government official
for the purpose of obtaining or retaining business.
The Anti-boycott Act
The Anti-boycott Act is a U.S. law, which makes it unlawful for a U.S.
person (citizen or company) to participate in other countries' boycotts
of a country that is not subject to a U.S.-sponsored boycott. The most
significant boycott involved is the Arab League's boycott of Israel.
The U.N. Convention on Contracts for the International
Sale of Goods (CISG)
The CISG is an international set of rules designed to provide clarity
to most international sales transactions involving the sale of goods.
The CISG went into effect on January 1, 1988, with the United States as
a party. Most Western countries are now signatories to the CISG. The CISG
can be both a discretionary and mandatory set of rules. It is discretionary
when both parties agree to be bound by its rules; it has mandatory application
when the parties do not choose to use it but become bound to it by virtue
of its automatic application. As a result of the mandatory application
of the CISG, most international sale of goods contracts with parties in
western countries will be subject to the CISG, unless specifically excluded
in accordance with the CISG's terms.
Dispute resolution
The methods commonly used to resolve disputes are: Litigation, arbitration
and mediation. The Arbitration is preferred for dispute resolution in
international business transactions.
ARBITRATION
Arbitration is a dispute resolution method whereby a panel of one or three
neutral third parties (known as arbiters or arbitrators): (a) presides
over a hearing during which the disputants present their cases; and (b)
renders a ruling, which is binding on the parties.
MEDIATION
Mediation is a dispute resolution method whereby a neutral
third party (a mediator) assists the disputants in negotiating a settlement,
which is not binding on the parties.
New York Convention
The New York Convention is a common term of reference for the Convention
on the Recognition and Enforcement of Foreign Arbitral Awards, which provides
for signatory countries a set of uniform rules for the recognition and
enforcement of arbitral awards from foreign jurisdictions.
PROCEDURAL RULES USED FOR ARBITRATION OF INTERNATIONAL
TRADE DISPUTES
The procedural rules of the International Chamber of Commerce are currently
the most commonly used procedural rules in the arbitration of international
business disputes, but the International Commercial Rules of the American
Arbitration Association are gaining in prominence.
COMITY OF NATIONS
Comity of Nations is a concept under which the acts or practices of nations
are based on good will and mutuality, rather than strict application and
enforcement of rules of law.
INCOTERMS
INCOTERMS are standardized shipping terms defined by the International
Chamber of Commerce, e.g., F.O.B., C.I.F., EX
WORKS, etc. The terms divide the responsibility for the cost
of carriage, and liability for the safety of the goods between the buyer
and seller. Contrary to general belief, INCOTERMS do not determine when
title to goods passes. This is either determined by the applicable governing
law, the CISG or specific provisions contained in the agreement.
DOCTRINE INVOLVED IN TITLE TRANSFERENCE
Risk of loss: Transfer of title affects
the parties' rights in the event of total or partial loss and damage or
destruction of the goods.
Rejection of goods: Once it has occurred,
transfer of title may preclude the buyer from rejecting the goods despite
valid complaints of quality, quantity or description.
Payment for goods: Once the buyer
acquires title, the seller can sue the buyer for non-payment.
Rights of action: After acquiring
title, the buyer can enforce its property rights against others through
court action or otherwise.
ROMALPA CLAUSE
A Romalpa clause is a title retention clause, which serves to separate
the passing of title, and risk of loss and which provides that until payment
is received, title remains with the seller. The following is an example
of a Romalpa clause. Risk of loss and damage shall pass to the Buyer upon
delivery. Title shall pass to the buyer upon payment in full.
CARRIAGE OF GOODS BY SEA ACT (COGSA)
The Carriage of Goods by Sea Act is a U.S. statute that defines terms
and establishes liability for carriers engaged in international maritime
transportation. The act limits the carrier's liability to $500 per shipping
package, and restricts the filing of claims against the carrier.
WARSAW CONVENTION
The Warsaw Convention is a private international law treaty creating certain
uniform rules for the liability of international air transport operators.
The rules include limitations on liability for injury to passengers or
cargo.
FORCE MAJEURE CLAUSE
1. A force majeure clause excuses nonperformance arising out of causes
beyond either party's control and without any fault or negligence on the
part of the non-performing party (so-called "Acts of God").
2. A force majeure affects both buyer and seller. For the seller, force
majeure may affect its ability to deliver and/or service the goods. For
the buyer, force majeure may affect its ability to take delivery and/or
to pay for the goods.
3. If the parties are not specifically protected by a force majeure clause,
then they are left to rely upon the doctrine of frustration for excusing
performance in an appropriate case.
GENERAL AVERAGE
General Average is an equitable system that provides for contribution
to be given by all interested parties when an accidental loss of ship,
cargo, or freight arises as the result of an extraordinary sacrifice,
reasonably and voluntarily incurred, in time of peril for the safety of
the common adventure.
EXPROPRIATION
Expropriation is either the taking of property by a state or its agent,
or the permanent transfer of the power of management or control in exchange
for adequate and prompt compensation.
APOSTILLE
An apostille is a certificate that authenticates a notarial act performed
in one of the more than 60 countries that subscribe to the Hague Convention
Abolishing the Requirement of Legalization for Foreign Public Documents.
A list of apostille-issuing authorities for nations that are parties to
the referenced Hague Convention can be obtained from the State Department's
Fax on Demand Service (202-647-3000).
SOVEREIGN INMUNITY
Sovereign Immunity is a legal doctrine that a sovereign cannot be sued
without its content. The modern version of this is that a state cannot
be sued for its public acts, but may be sued with regard to its private
acts (JURE GESTIONIS) such as operating a national airline.
TREATY
A treaty is a formal agreement entered into between states in order to
define or modify their mutual duties and obligations. Although, there
are no technical rules in international law as to treaty form, generally
a treaty consists of a preamble, the body, final clauses, and concludes
with a testimonium and signatures. Ratification by each of the signatory
states is usually required. A treaty may terminate by expiration, dissolution,
voidance, or cancellation pursuant to the Vienna Convention on the Law
of Treaties.
UCP 500
UCP 500 is a term of reference for the Uniform Customs and Practices For
Documentary Credits, which are widely accepted rules published by the
International Chamber of Commerce governing the use of letters of credit
in international trade.
TOTALIZATION AGREEMENT
A totalization agreement is a type of international social security agreement
that the U.S. has entered into with various countries for the purpose
of addressing the problems of double social security coverage and fragmented
social security coverage, which are often encountered by U.S. citizens
or U.S. residents who are employed in foreign countries.
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