Slide international trade transactions (tailieuluatkinhte com)

Drafting and Negotiating International Commercial Contracts, ICC 2010. • United Nations Convention for Contracts on International Sales of Goods (CISG), Vienna,1980. • UNIDROIT, Principles of International Commercial Contracts, Roma, 1994 and 2004. • Vu Huu Tuu, Foreign Trade Techniques, Hanoi, 2007. • Pham Duy Lien, International Trade Transactions, Hanoi, 2012

INTERNATIONAL TRADE TRANSACTIONS

Faculty of Economics and International Business

phanhien@ftu.edu.vn

• UNIDROIT, Principles of International Commercial Contracts, Roma, 1994 and 2004.

• Vu Huu Tuu, Foreign Trade Techniques, Hanoi,

2007

• Pham Duy Lien, International Trade Transactions, Hanoi, 2012

Course Description

1 Study Objectives

- Gaining theoretical knowledge and practice of international

trade transactions.

- Skills in drafting and operating contracts for sales of goods.

- Well-doing business in different markets of commodities,

trade partners, culture, etc.

2 Methodology

- Two-way attending lectures on the class.

- Self-studying and exploiting materials suggested by the

teacher.

- Analyzing case studies and team working.

Course Description

Assessment Rate Form of

Assessment

Time allowance Class participation 10% small tests

Chapter 1: An overview on Trade

& Modes of International Trade

Chapter 1

MODES OF INTERNATIONAL TRADE TRANSACTIONS

FUNDAMENTALS OF INTERNATIONAL TRADE

1 Concepts

International trade in goods and service: purchase, sale,

exchange of goods and service across national

FUNDAMENTALS OF INTERNATIONAL TRADE

3 Main questions

-What do we trade??

-Who trades with whom?

-How to trade??

-What are benefits and risks??

4 International trade in goods of Vietnam: Năm 2017 cũng

ghi nhận một kỷ lục mới của xuất nhập khẩu Việt Nam khi tổng mức lưu chuyển hàng hóa xuất, nhập khẩu vượt mốc

400 tỷ USD

FUNDAMENTALS OF INTERNATIONAL TRADE

• Kim ngạch hàng hóa xuất khẩu ước tính đạt 213,77 tỷ USD, tăng 21,1% Kim ngạch hàng hoá nhập khẩu năm 2017 ước tính đạt 211,1 tỷ USD.

• Hoa Kỳ vẫn là thị trường XK dẫn đầu với 41,5 tỷ USD, tăng 8% so với năm 2016 Tiếp đến là EU đạt 38,3 tỷ USD, tăng 12,8%; Trung Quốc đạt 35,3 tỷ USD, tăng 60,6%; thị trường ASEAN đạt 21,7 tỷ USD, tăng 24,5%; Nhật Bản đạt 16,8 tỷ USD, tăng 14,2%; Hàn Quốc đạt 15 tỷ USD, tăng 31,1%.

• Trong khi, Trung Quốc vẫn là thị trường nhập khẩu lớn nhất của nước

ta trong năm 2017, với kim ngạch đạt 58,5 tỷ USD, tăng 16,9% so với năm 2016; tiếp đến là Hàn Quốc đạt 46,8 tỷ USD, tăng 45,5%; ASEAN đạt 28 tỷ USD, tăng 16,4%; Nhật Bản đạt 16,5 tỷ USD, tăng 9,7%; EU đạt 12 tỷ USD, tăng 7,7%; Hoa Kỳ đạt 9,1 tỷ USD, tăng 4,9%.

KIM NGẠCH XUẤT KHẨU HÀNG HÓA CỦA VN

Tỷ đô la MỸ

CÁC MẶT HÀNG XUẤT KHẨU CHỦ LỰC CỦA

VIỆT NAM NĂM 2016

International Commecial Laws and

regulations

1 The United Nations Commission on

International Trade Law

2 ICC - International Chamber of Commerce

3 The International Institute for the Unification of

Private Law ( Unidroit)

4 The Hague Conference on Private International

Law

5 Vietnam Commerce Law 2015 and

governmental documents Decree No.187/2013 ND-CP dated November 20, 2013

I TRADITIONAL MODE OF INTERNATIONAL

 GOODWILL AND FREEDOM

COUNTRY BORDERS

of price and other conditions for this order We lookfoward to receiving your reply soon.

1 DIRECT TRANSACTIONS

- A proposal for establishing the deal

- Created by the Buyer.

- No engagement of the Buyer.

- No requirement on formation and content.

Q/A : It is good to send many enquiries for collecting information , isnt’ it? Why?

1 DIRECT TRANSACTIONS

1.2 OFFER

A proposal for concluding a contract

addressed to one or more specific persons

constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to

be bound in case of acceptance A proposal

is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price

1 DIRECT TRANSACTIONS

OFFER CLASSIFICATION

1 Based on the Offeror

Offer and Order/ Selling and purchasing offer

2 Based on implementation method:

Passive offer and Active offer

3 Based on level of biding on the parties:

Free offer and Firm offer

3.Delivery: as soon as possible

We look forward to receiving your firm order.

1 DIRECT TRANSACTIONS

VALIDITY OF AN OFFER

• Good Faith, goodwill and freedom

• Fully reach the offeree

• Legal: Party, Goods, Format and Content

Q/A; What is a legal offer? Based on which laws? sg

1 DIRECT TRANSACTIONS

Viena Act 1980, Article 15.

(1) An offer becomes effective when it reaches the offeree.

(2) An offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer.

1 DIRECT TRANSACTIONS

Article 16

(1) Until a contract is concluded an offer may be

revoked if the revocation reaches the offeree before

he has dispatched an acceptance.

(2) However, an offer cannot be revoked:

(a) if it indicates, whether by stating a fixed time for

acceptance or otherwise, that it is irrevocable; or

(b) if it was reasonable for the offeree to rely on the

offer as being irrevocable and the offeree has acted

in reliance on the offer.

1 DIRECT TRANSACTIONS

1.3 COUNTER OFFER

Counter Offer is bargaining process of price and other contracting conditions and terms

Vienna Act 1980, Article 19: A reply to an offer which

purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer.

1 DIRECT TRANSACTIONS1.4 ACCEPTANCE

- Consent to the offer.

- Express the offeree’goodwill to conclude a Contract.

Q/A: How to make an acceptance?

- Absolute Acceptance

- Acceptance with some changes and/or additions.

 Primary content of the offer: Counter-Offer

 Others : An acceptance unless the Offeror rejects.

1 DIRECT TRANSACTIONS

EFFECTIVENESS OF AN ACCEPTANCE

 Legal acceptance

 Not depend on any conditions or terms.

 Accepted by the last offeree

 Acceptance must reaches to the offeror

 Accepting in the validity time of the offer

1 DIRECT TRANSACTIONS

Vienna Act 1980 Article 19

(2) A reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect.

1 DIRECT TRANSACTIONS

(3) Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party’s liability

to the other or the settlement of disputes are considered to alter the terms of the offer materially.

2.An order is a firm offer T/F ? Why?

3.A counter offer will make a firm offer to be a free offer T/F? Why?

2 INTERMEDIARY TRANSACTIONS

1.1 Definition

Transactions made by the Seller and the Buyer with connecting activities of the third party He is an commercial intermediary.

1.2 Characteristics

- Based on authorizations.

- Dependent relationship

2 INTERMEDIARY TRANSACTIONS

VN Commercial Law 2005, Article 3:

Commercial intermediary activities mean activities carried out by a trader to effect

commercial transactions for one or several

identified traders, including representation for

traders, commercial brokerage, goods sale or purchase entrustment, and commercial agency

A Career in Ship Broking?

1 What is a shipbroker?

A shipbroker is someone who arranges the ocean transport of goods and commodities by sea, the employment of a vessel or buys and sells ships on behalf

of his clients.

2 What do they do?

Shipbrokers act as intermediaries between shipowners

and charterers or the buyers and sellers of ships The

broker is involved in many stages of a deal: presenting the

business to potential clients, negotiating the main terms of

a contract or sale, finalising the details of the contract and following the deal through to its conclusion

2 INTERMEDIARY TRANSACTIONS

1.3.2 Agency

- Agent is a trader who acts under the authorization of the principal It is stipulated in the Agency Agreement

- Involve in the making and implementing the signed Contract.

- Agent is a party in the agency contract

2 INTERMEDIARY TRANSACTIONS

Article 166.- Commercial agency

Commercial agency means a commercial activity whereby the principal and the agent

agree that the agent, in its own name, sells or

purchases goods for the principal or provides services of the principal to customers for remuneration.

2 INTERMEDIARY TRANSACTIONS

1.4 Agency Contract

a.Formation

VN Commercial Law 2005, Article 168:

Agency contracts must be made in writing or

in other forms of equivalent legal validity.

b Legally regulated contents

2 INTERMEDIARY TRANSACTIONS

1) Opening

2) Effectiveness and Expiry Date

3) Agency Area

4) Rights and Obligations of the Agent

5) Rights and Obligations of the Principal

6) Price

7) Remuneration and Cost

8) Conclusion and Termination of the Contract

9) Signatures

- Exporter is Importer in parallel

- Money is mean of calculation not payment.

II COUNTERTRADE

- Focusing on the utility not value of the goods.

- Balance Trading : goods, costs, conditions of

transactions.

Q/A: When do you participate in countertrade?

1.3 Classification

 Barter

1.4 Contract for Counter Trade

- Two list of goods: Sending and Receipt.

- Contract performance security: deposits, penalty and

reciprocal L/C

III RE-EXPORT 1.1 Definition

It is a commercial activity in which the trader exports the previously imported goods for earning his profits.

III RE-EXPORT 1.3.2. Transfer of goods through border-gate

Export Country

Re-expt Country

No Customs Procedures

For Imp And Exp

Areas for transshipment of

Goods at Vietnamese ports

III RE-EXPORT

1.4 Performance the re-export trading

- Drafting, negotiating and concluding

IV INTERNATIONAL PROCESSING

1.1 Definition

Commercial processing means a commercial activity whereby a processor uses part or whole of raw materials and materials supplied by the Principal to perform one or several stages of the production process at the latter's request in order to receive remuneration (VN Commercial Law 2005).

IV INTERNATIONAL PROCESSING International Processing = Commercial

Processing performance+ International Factors.

54

(1) Raw /semi products materials + standard

(2) Finished goods

(3) Processing charges and/or costs

IV INTERNATIONAL PROCESSING

1.2 Characteristics

- Trading and manufacturing combination

- Processing remuneration equals to value of

consumed labor

- Processing materials ownership not

transferred from the Principal to the processor during the processing time.

IV INTERNATIONAL PROCESSING

- Vietnam: priorities in tax and customs regulations.1.3 Classification

1.3.1 According to the number of parties in

processing

- Two parties The Processor and the Principal

- Many parties : Principal with several processors

(transition Processing)

IV INTERNATIONAL PROCESSING

1.3.2 According to the materials ownership

- Send processing materials and Receive

IV INTERNATIONAL PROCESSING

1.3.3 According to processing price

IV INTERNATIONAL PROCESSING

1 Name, address of parties

2 Name, quantity of procesed products;

3 Processing prices;

4 Time and mode of payment;

5 List, quantity, value of materials imported and

those manufactured domestically (if any) for processing; material consumption and waste levels;

IV INTERNATIONAL PROCESSING

6 List and value of equipments and machinery

leased, lent, or given (if any) for processing;

7 Measures to deal with wastes and principles for

dealing with equipments and machinery leased

or lent and abundant materials after procesing contract is ended;

8 Place and time of delivery;

9 Product’s brand and origin;

10.Contract effectiveness

KIM NGẠCH XUẤT KHẨU HÀNG HÓA CỦA VN

Tỷ đô la MỸ

CÁC MẶT HÀNG XUẤT KHẨU CHỦ LỰC CỦA

VIỆT NAM NĂM 2016

IV OTHER SPECIFIC TRANSACTIONS

1 AUCTION OF GOODS

2 BIDDING FOR GOODS

3 GOODS EXCHANGE

4 FRANCHISE

IV 1 AUCTION OF GOODS

1.1 Definition

VN Commercial Law, Article 185:

Auction of goods means a commercial activity whereby sellers themselves conduct or hire

auction organizers to conduct public sale of goods to select purchasers that offer the

highest prices

IV 1 AUCTION OF GOODS 1.2 Characteristics

- Special Transaction: public sale of goods;

demand higher than supply.

non-standardized, high value.

- Transacted price : usually higher than market

price.

IV 1 AUCTION OF GOODS

1.3 Classification

- Trading Auctions.

- Non- Trading Auctions.

1.4 Mode of auction performance

- Upward

1.5 Auctions Conducting

IV 2 BIDDING FOR GOODS

1.1 Definition

VN Commercial Law, Article 214

Bidding for goods or services means a commercial activity whereby a party purchases goods or services through bidding (referred to as

bid solicitor) in order to select, among traders participating in the bidding (referred to as

bidders), a trader that satisfies the requirements

set forth by the bid solicitor and is selected to

enter into and perform a contract (referred to as

bid winner)

IV 2 BIDDING FOR GOODS

1.2 Characteristics

- Special Transaction: public purchasing of

goods, supply higher than demand

- Bidding price: usually lower than market one.

- Goods: various, high value , capital and

technology intensive

- Follow Bid Guides/regulations of some

internationals organizations as WB, ADB, JCB

IV 2 BIDDING FOR GOODS

1.3 Classification

1.3.1 According to the number of bidders

- Open Bidding

- Restricted Bidding

1.3.2 According to the implementation of Bidding

- One Stage Bidding or Two stages Bidding

- One Dossier and Two Dossiers

IV 2 BIDDING FOR GOODS

IV 2 BIDDING FOR GOODS

8 Bid Opening

9 Consideration of bid dossiers upon bid opening10.Minutes of bid opening

11 Evaluation and comparison of bid dossiers

12.Amendment of bid dossiers

13.Classification and selection of bidders

14.Notification of bidding results and entry into

contracts

15.Contract performance security

IV 3 GOODS EXCHANGES

1.1 Definition

Goods Exchange is a special market in which

the parties agree to purchase and sell a defined quantity of goods of a defined type through the appointed brokers of Goods Exchange

1.2 Characteristics

- Specific place and time of performance

- Goods: big volume, standard and uniform

IV 3 GOODS EXCHANGES

- Conducting under the G.E regulations: time

trading, delivery date, trading sizes of goods, clearing procedures,etc.

- G.E price is good reference for international

traders

Q/A: Why G.E is a special mode of transaction?

IV 3 GOODS EXCHANGES

1.3 Basic business in Goods exchanges

1.3.1 Spot Transaction: Goods Delivery and

Payment shall be made just after concluding the Contracts

1.3.2 Forward Transaction

Price determined at the contracting date but the

delivery of goods at a specific point of time in

the future under the contract.