Guide to. Export-Import Basics Vital Knowledge for Trading Internationally. Third Edition. The world business organization

Transcription

1 Guide to Export-Import Basics Vital Knowledge for Trading Internationally Third Edition International Chamber of Commerce The world business organization

2 Table of Contents A Note on Terminology 3 Foreword 13 Introduction 15 Chapter One Beginnings: an Introduction to Export-Import Practice Scope of book Why export and import? The benefits of international trade 17 a. Exporting 17 b. Importing The need fora professional approach The risks of exporting and importing 19 a. Transport-related risks 19 b. Credit risk or non-payment risk 20 c. Quality of goods risk 20 d. Exchange rate risk 20 e. Unforeseen events 20 f. Legal risks. 20 g. Investment risks The role of standard documents and systems Cultural and language differences Solutions: examples of risk management for export-import Typical export transactions The case of a documentary sale Common variants on the basic export sale Other types of international transactions/agreements International organizations and chambers of commerce Chambers of commerce ICC, supplier of tools and standards for international trade International organizations The multilateral framework for world trade: the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) 39 a. The GATT and free trade 39 b. The World Trade Organization (WTO) (Geneva) 40

3 Chapter Two The Export-Import.Legal Framework Introduction to legal concepts and terminology Different legal systems The value of a precise, written contract Written vs. oral contracts The key contracts related to export transactions Avoiding conflicts between contracts Jurisdiction and choice of law Performance and remedies for breach of contract Practical aspects of performance and breach Contract formation and pre-contractual liability Pre-contractual actions Offers/tenders Acceptance Letters of intent and other preliminary agreements Model or standard contracts in international trade Model or standard form contracts '54 Chapter Three Resolving International Business Disputes 59 Discuss dispute resolution during contract negotiation and drafting 59 After a dispute arises Working it out - contractual foresight and adaptation clauses Talking it over - waiver, re-negotiation, assistance of an expert and ADR Waiver Re-negotiation Seeking the assistance of an expert DOCDEX ADR The ICC ADR Rules General Commencing ICC ADR proceedings The procedure in ICC ADR proceedings Result of ICC ADR proceedings The ICC Dispute Board Rules International litigation Litigation Whereto bring suit: jurisdiction and choice of forum Choice of law and applicable law Enforcement of judgements 68

4 6. International commercial arbitration Benefits of international commercial arbitration Potential disadvantages ICC Arbitration Introduction ICC arbitration clause ICC Court and Secretariat The Arbitrator(s) ICC arbitration procedure Other arbitration institutions and rules 76 Chapter Four International Contracts of Sale and General Conditions The law governing the contract of sale 77 The Vienna Convention on Contracts for the International Sale of Goods (CISG) The contract of sale Basic elements Checklist-key clauses in international sales contracts Elements of a sale contract; the ICC Model Contract General conditions of sale (or purchase) The purpose of general conditions of sale (or purchase) The "battle of the forms": obtaining agreement to general conditions ICC Model General Conditions of Sale, a balanced set of clauses Industry-specific general conditions - UNECE and others Sales contracts online: the way of the future Trade terms for international contracts - Incoterms Introductory The contract of sale and the contract of carriage: Incoterms, liner terms. and charter party terms Summary of Incoterms The Four Basic Incoterms Groups: "E"-, "F"-, "C- and "D"-Terms 95 Incoterms definitions - the preambles to the 13 current Incoterms Incoterms categories 103 The difference between C- and D- terms Division of costs, risks and responsibilities Miscellaneous points Extracts from the Introduction to Incoterms

5 Chapter Five Agency, Distributorship, Franchising and Occasional Intermediary Contracts Agency Agency and distributorship in the range of possible distribution options Choosing between agency and distributorship Drafting agency and distributorship contracts Legal principles of agency contracts Basic duties of agent and principal Agency and law/regulation: the case of the European Agency Directive 86/653 of 18 December Agency - antitrust rules of the European Union (Article 81 - Regulation n 2790/1999) The ICC Model Commercial Agency Contract (ICC Publication No. 644) Key clauses in agency contracts Distributorship contracts-the ICC Model Distributorship Contract Characteristics of exclusive distributorship contracts Key clauses in distributorship agreements EU competition law ICC Short Form Model Contracts - International Commercial Agency/International Distributorship International franchising Introduction Different types of franchises and franchising structures The ICC Model International Franchising Contract The ICC Model Occasional Intermediary Contract (Non-circumvention and non-disclosure agreement) 146 Chapter Six International Payment Options Overview of payment, finance and security for international transactions Credit management and export credit insurance Credit management Export credit insurance (or "trade credit insurance") Documentary sales and payment-, shipping documents The key documents Method of operation of the basic payment mechanisms Payment on Open Account Payment in Advance Collection - Documentary Collection/Clean Collection Documentary credits (letters of credit): An in-depth look Introduction 167

6 5.2 Rules for letters of credit: the UCP Basic Concepts and Terminology Example: procedure for an irrevocable confirmed credit The two fundamental principles of documentary credit practice Checklist: Recommendations for Letter of Credit Practice The electronic supplement to UCP 600 (eucp) History "Presentation", not "issuance" "Part- or all- electronic presentations" Specific incorporation of the eucp Other key issues Major elements of the eucp International Standby Practices (ISP98) History Reasons for developing ISP Incorporating ISP Improvements over UCP provisions Major elements of ISP Managing currency and exchange rate risks Transaction risk Translation risk (also known as balance sheet exposure) Economic risk 193 Chapter Seven Short-term Trade Finance: Factoring and Forfaiting Pre-financing and collection of receivables: The various options Factoring: the major features Definition Market scope Factoring in practice Advantages and disadvantages Forfaiting: an in-depth look Definition Market scope Forfaiting in practice Advantages of forfaiting Forfaiting rules and guidelines Forfaiting and the risk of money laundering 209

7 Chapter Eight Security for International Transactions Guarantees and bonds Introduction ICC rules Worldwide acceptance of demand guarantee rules Guarantee/bond terminology The parties Types of guarantee/bond Main uses of guarantees Demand guarantee operation and procedure - direct vs. indirect Export Credit (Trade Credit) Insurance Introduction Basic form and content of the insurance protection Discretionary limits Credit information Length of credit term/maximum credit term Maximum extension period Collection of insured debts 225 Chapter Nine International Transport Transport management 227 a. The fundamental cost principle: volume discounts 227 b. Transport costs' impact on the price of goods 228 c. Speed of delivery 228 d. Stock and inventory management 229 e. Packaging 229 f. Customs 229 g. Payment systems 229 h. Collaboration vs. competition International treaties and conventions 230 a. Sea transport 230 b. Airtransport 231 c. Rail transport 231 d. Road transport 231 e. Multimodal transport The UNCTAD/ICC Rules for Multimodal Transport Documents Carrier's liability Charter parties 233 a. Introductory 233 b. Distinction between bill of lading and charter party 233 c. Incorporating the terms of the charter party into the B/L,- arbitration clauses

8 6. Freight forwarders Introductory Different functions and types of forwarders Shipping documents Miscellaneous documents The bill of lading Sea transport Overview of basic commercial practice Sea freight Containerized and multimodal transport Containers and Incoterms Overview of basic commercial procedure Airtransport Introductory Overview of airtransport procedures Road and rail transport Road haulage Rail transport Cargo insurance 251 a. Duty to insure vs. commercial need to insure 251 b. Splitting of insurance cover according to division of risk 252 c. Insurable interest 253 d. "Open" cover or "floating" policies 253 e. Cost of insurance 254 f. Incoterms and insurance Customs 255 a. Amount of duty b. Country of origin 256 c. Bonded warehouses 257 Chapter 10 Information and Communication Technologies and International Trade ICTs, the Internet and international trade transactions ICTs & the Internet: how the supply chain has been transformed Electronic contracting Electronic signatures, authentication and digital identity management Information compliance issues Protection, transfer and management of information in international electronic transactions 264 Data protection and privacy issues and regimes 264

9 3. Telecoms infrastructure and services issues Telecommunications liberalization Multilateral trade negotiations: telecommunications and e-business Broadband deployment Voice over Internet Protocol (VoIP) Storage of traffic data for law enforcement purposes Technical coordination and management of the Internet Internet Protocol Version Internationalized Domain Names (IDNs) Policy-shaping forums, initiatives and approaches World Summit on the Information Society (WSIS Geneva 2003, Tunis 2005) Business Action to Support the Information Society (BASIS, an ICC initiative) Internet Governance Forum (IGF) The UN Global Alliance for Information and Communication Technologies and Development (GAID) Organization for Economic Co-operation and Development (OECD) Asia-Pacific Economic Cooperation 276 Glossary 277 Index