A practical guide to international trade law

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International trade ensures the exchange of goods between different countries around the world. In order to maintain commercial relations, this sector is governed by a set of rules constituting international trade law. The following is a guide for those who wish to learn more about this subject.

What is international trade law?

International trade law or international business law is a branch dealing with inter-country trade relations. It is therefore the legal basis for international transactions, the objective being to facilitate trade. To achieve this objective, international trade law requires knowledge of the other aspects of law, namely:

– private law, whether it be private international law, corporate law or business law;

– commercial law;

– tax law ;

– international payment law.

The practice of international trade is therefore based on the mastery of trade-related subjects. Training in this field will give access to a master’s degree in international trade law.

Know the international trade terms (InCoTerms)

The mastery of incoterms is an integral part of this type of training leading to a master’s degree. It is a set of codes designed to govern the distribution of goods to establish a contract between the seller and the buyer. The contract therefore refers to the conditions of carriage and delivery, the cost of carriage and the insurance covering the goods. These international delivery terms are divided into 2 categories, including multimodal incoterms and maritime incoterms. These codes are available in English and French. However, regardless of the language used, they can be modified every 10 years.

Multimodal incoterms

They regulate the obligations between seller and buyer, the distribution of risks and costs. Among the multimodal incoterms are:

– EXW or factory: this means that the seller’s intervention is limited to his factory and that the customer takes care of the rest of the operations;

– FCA or Free Carrier: to designate that the seller delivers the goods to the means of transport chosen by the buyer. Delivery can also be made to a place of shipment, such as the forwarder’s office;

– CPT for Carriage paid to: in this case, the seller ensures the delivery, but the risks are at the buyer’s expense;

– CIP or Carriage and Insurance Paid to: all transportation costs until the goods are delivered are at the seller’s expense. Depending on the contract, he may or may not ensure the unloading;

– DAP or Delivered At Place : it is the complement of the CIP, knowing that this incoterm foresees a delivery at destination without unloading;

– DIP (Delivered at Place Unloaded): the seller ensures the unloading of the goods;

– DDP (Delivered Duty Paid): in this case, the seller is responsible for the entire delivery and the risks are at his expense. The goods are therefore delivered to a given location, cleared through customs and unloaded.

Maritime Incoterms

These codes apply if the seller is moving the goods to a sea or river port. These are:

– FAS or Free Alongside Ship: the responsibility of the seller stops when the goods are in the port;

– FOB, Free On Board: the transfer of responsibility takes place when the goods are loaded on board the ship;

– CFR for Cost and Freight: the cost of transport is borne by the seller, while the risk is borne by the buyer;

– CIF or Cost Insurance and Freight: benefits from the same conditions as the CIP.

Use of standard contracts

The use of standard contracts is intended for VSEs and SMEs. As a small company, this type of structure does not require lawyers. For their commercial business abroad, these companies can therefore use these contracts, which are pre-established models. In the practice of international trade, these can be obtained from the International Chamber of Commerce. It should be noted, however, that the content can be modified according to the context. Both parties can thus include additional clauses.

Knowledge of trade treaties

An education in international trade law also includes knowledge of trade treaties. It is an agreement to facilitate trade between different countries. Trade treaties may be designed to reduce tariffs or simplify export procedures. For example, the European Union has a treaty between its members. These agreements are usually negotiated by public and private sector actors. They are notably established by the Ministry of Commerce or by individuals who are experts in international trade law.

What are international conventions?

International conventions are agreements made between several countries. They define the rights and obligations of all parties in a commercial transaction. Although they are numerous, knowledge of these conventions is an integral part of a training in international business law.

Model laws and international commercial arbitration

Model laws are established with the aim of developing legislation in certain countries. The objective is to adapt to the needs of international trade operations. This sector is governed by the 1985 UNCITRAL Model Law. It should be noted, however, that each country may or may not adhere to these proposed laws. In addition, international arbitration makes it possible to find common ground between the various parties in the event of a dispute.

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Updated 19 April 2023