2.

9 Elements of international trade

1. Theoretical aspects
2. Technical aspects
3. Administrative aspects
4. Market aspects
5. Legal aspects
6. Financial aspects

In international commercial operations , that is, imports and exports of products ,

factors, elements, institutions and other entities intervene that make up the
mechanism of the operation of international trade .
From the beginning of the search for markets , through the negotiation and ending
with the delivery of the merchandise, the factors and elements are many and each
of these elements must be known.
The importance that international trade has had, has and will have, forces us to get
a little more involved in knowing this important economic area that has become a
pillar of the countries' economy .
To better understand the functioning of international commercial operations and
merchandise, we can classify the factors involved in 6 major elements, which
constitute the complete operation.
We could classify these 6 elements into:
 1. Theoretical aspects
 2. Technical aspects
 3. Administrative aspects´
 4. Market aspects
 5. Legal aspects
 6. Financial aspects
Each of these elements are different from each other but are related to each other,
so that a malfunction in one will influence a malfunction in another.
We will briefly explain each of the 6 elements mentioned above.
Theoretical aspects
In this aspect, we can include international trade theories , which are scientific
syntheses that attempt to explain the functioning of international trade in a
scenario, we can say, ideal. There are 6 main theories of international trade:
The absolute advantage : Argues that countries have different capacities to
produce goods efficiently . Due to these differences, a country must specialize in
producing and exporting goods in which it is efficient, and import those in which
another country is efficient in its production .
Comparative advantage : According to this theory , it is convenient for a country to
specialize in the goods that it produces more efficiently and buy from other
countries what it produces less efficiently, even if this means buying from other
countries goods that it could produce itself. with more efficiency.
Hecksher Ohlin Model : This commercial model establishes that commercial
advantages are due to a set of factors, different in each country. Thus, nations are
equipped with diverse factors and this diversity of factors explains the differences
in the production costs of a good; The more abundant a factor is, the cheaper it is
to produce a good.
Michel Porter's Diamond : The model aims to go beyond the explanations given by
the theory of comparative advantage and the HO model. Porter's model attempts
to explain that the trade advantages that some countries have over others go
beyond productivity and factor endowment. The model explains that
competitiveness factors also intervene that make one country more efficient than
another.
Product life cycle : This theory states that commercial schemes are influenced by
the place where new products are introduced.
New theory of international trade : The new theory of trade states that thanks to
trade, a nation specializes in those goods in which it achieves an economy of scale
, thus reducing its production costs . At the same time , it acquires or imports those
goods in which it does not achieve an economy of scale.
Another of the most important theoretical factors is international trade policy ,
which are the actions that governments take to promote their foreign trade.
We can divide commercial policies into two:
Tariff policy : Made up of taxes on foreign trade .
Non-tariff policy : Consisting of the set of measures established by governments to
control the flow of goods between countries, either to protect the productive plant
and national economies, or to preserve the assets of each country.
The next theoretical factor is the world economic structure , which is important to
know the trade trends of countries. We can divide the structure into two parts: the
economic systems and the levels of economic integration .
There are basically two economic systems: the capitalist system , which
emphasizes free enterprise and capital as the generation of wealth. On the other
hand, socialism , which emphasizes collective ownership of the means of
production, that is, there is no private property.
Regarding levels of integration , it is a term used to describe the different aspects
through which the economies of countries become more homogeneous, that is,
they tend to have a common economic policy .
The last theoretical element is international trade organizations . They are
institutions that regulate, promote and supervise the correct functioning of
international trade .
There are three organizations that directly influence international trade : The World
Trade Organization , The International Chamber of Commerce and the World
Customs Organization . There are other organizations that arise from regional
trade agreements, such as ASEAN, EFTA, among others.
Technical aspects
In this aspect, there are all the operational elements that make up international
trade. Basically, there are 5 major technical areas, within which documents ,
procedures, logistical factors, among others, intervene.
The 5 major areas are:
Tariff Classification : Foreign trade operations generate customs taxes called tariffs
through tariff classification. All merchandise that can be marketed are identified by
an internationally accepted numerical code . This code is what is known as the
tariff fraction.
Customs Operation : These are the set of acts, procedures and payments that
must be carried out at customs. When goods enter or leave countries, they and
those who carry out these activities must comply with a series of procedures
established in the law of each country so that these operations are carried out in an
orderly, legal and, above all, controlled manner. Among these customs procedures,
the clearance of goods stands out, which can be import clearance or export
clearance. Customs is the main institution in charge of enforcing these procedures.
Logistics : They are the set of actions aimed at optimizing the correct flow of
goods, from their production to their consumption . In this part, the most important
elements are transportation , packaging, proper handling of the merchandise, as
well as an adequate flow of information that allows these activities to be carried out
efficiently and optimally.
One of the most important logistics concepts to know in the study of international
trade are the International Trade Terms (INCOTTERMS). These are a set of rights
and obligations that the parties to a commercial transaction must comply with.
Knowing this set of rules helps a lot in understanding international trade.
International Transport : Set of means and documents necessary for proper
transportation of goods. It is one of the most important elements of international
trade logistics . In this part, it is about knowing the most suitable means of
transport for a certain type of merchandise, the correct packaging and the transport
documents that are used depending on each means of transport, in addition to the
characteristics of each transport document.
Customs assessment : We already mentioned that international commercial
operations generate tariffs. These tariffs are determined through the tariff fraction
of the merchandise, based on a taxable base. Customs valuation is the set of
criteria used to determine the tax base, and consequently, customs tariffs.
Administrative aspects
In this part, aspects not so much of a technical nature , but rather administrative,
are analyzed.
This chapter can be divided into two parts. The first, the formation of the export
price , which is one of the pillar elements when carrying out an international trade
operation. The second, international payment methods.
Regarding the formation of the export price, the price of goods is perhaps the most
important element of commercial transactions, since both the exporter/seller looks
for a price at which he/she will obtain a good profit, and the importer/buyer looks
for a Not very high price, accessible to your interests.
There are two schemes to form the export price; the costing scheme and the
pricing scheme. The first starts from a base, to which costs and the desired profit
are added, which must be reasonable. The second scheme starts from a sales
price, from which the costs incurred are discounted until leaving only the profit
allowed by the market .
It is worth mentioning that for a company or person that has little or no experience
in international trade, the most recommended export price formation scheme is the
costing scheme.
Speaking of international payment methods, there are 5 payment methods in
international trade.
 Check.
 Bank Draft.
 Pay order.
 International bank collection.
 Letter of credit .
They are all different in terms of safety and operation. Of all of them, the safest,
and therefore the most used, is the letter of credit. The letter of credit, also called
documentary credit, is the most used form of payment in international trade, since
it is the one that provides greater security and confidence to both the purchasing
party (importer) that they will receive the agreed upon merchandise in a timely
manner . and agreed place, as well as to the selling party (exporter) that they will
receive payment for the merchandise in the agreed time and manner.
Market aspects
It can be said that many marketing concepts are the origin of commercial
operations. The search for new markets , entry strategies , and their distribution
are involved in what we call export marketing. In order to successfully carry out an
export operation, you must previously know the market on which said operation is
going to focus.
Focusing on international trade, there are two fundamental concepts: market
research and forms of entry into international markets.
A market study is the set of actions aimed at obtaining information about a market
into which one plans to enter. It is important to obtain information about the market
to which you plan to export because carrying out a commercial operation in the
local market is not the same as in a foreign market. Therefore, the market study
must be thorough enough to provide adequate information to determine the most
appropriate and least risky form of entry in economic terms.
The forms of entry into international markets are the set of actions that will be
carried out to penetrate the foreign market, based of course on the results of the
market research carried out previously.
Legal aspects
One of the most important aspects in international trade is the legal aspect. The
legal aspect is made up of the set of regulations to which international trade
operations are subject, providing them with a framework of legality .
We can divide this aspect into two large parts: international regulations and local
regulations.
International regulations are made up of Free Trade Agreements and commercial
and economic complementarity agreements that countries enter into to promote
and improve their foreign trade.
Local regulations, for their part, regulate commercial operations within the limits of
a country, therefore, their scope is strictly local.
Local regulations can be divided into:
 Operational Laws: They regulate the entry and exit of goods to a certain
territory, establishing a legal framework to comply with in terms of customs,
transportation, and measurement . etc
 Administrative Laws: They regulate aspects such as facilities and promotion of
trade, in addition to establishing foreign trade policies in that country.
 Tax Laws: They regulate the collection of taxes on foreign trade.
 Decrees: Decrees are administrative acts usually promoted by the executive
branch , that is, the president in republican countries or his equivalent in any
other form of government , and which, generally, have a limited regulatory
content for a certain period or situations.
 Agreements: An agreement is a decision made jointly by two or more people, by
a board, assembly or court. This is also the name given to a pact, treaty or
resolution of organizations, institutions, public or private companies .
 Rules and criteria: A set of rules that regulate, clarify and instruct in the
management of the provisions established both in international treaties and
agreements and in local regulations.
Another legal aspect that is part of this element is international commercial
contracts . International contracts are an agreement of wills between two parties
that agree to the delivery of merchandise and payment for it at a certain time and
under certain conditions.
There are several types of commercial contracts, the most important and most
used in international trade being the contract for the sale of goods. INCOTERMS
play a very important role in the execution of a contract for the sale of goods, since
they are obligations and rights that are predetermined and accepted by an
international commercial organization, which makes their execution and, above all,
their compliance easier.
Financial aspects
The financial aspect in international trade is fundamental. The financial and
economic factors to which international trade operations are subject must be
known.
The financial factors that directly influence international commercial transactions
are:
Exchange rate and currencies : One of the fundamental elements in international
trade, due to the importance it has in transactions. The exchange rate The
exchange rate is the number of units that have to be delivered of one currency to
obtain another.
The exchange rate is fundamental because it directly affects the commercial
competitiveness of a country. An increase in the exchange rate benefits imports
because it makes them cheaper, while a fall in the exchange rate benefits exports ,
as they have more local value since they receive payment for them in US dollars.
Financial instruments : Also called financial derivatives, they are a set of contracts
that have two functions : protection of economic variables and speculation.
There are four different types of financial derivatives;
1. Forward contracts: Contract that negotiates the delivery of an underlying
(merchandise) and payment for it between two parties on a future date, at a price
established in the contract. These contracts are over-the-counter, that is, they are
not regulated by any financial institution.
2. Futures: They are similar to the previous ones, with the difference that they are
regulated by financial institutions.
3. Options: These are contracts that establish the right but not the obligation to buy
or sell an underlying asset through the payment of a premium that provides that
right.
4. Swaps: They are a contract that establishes an exchange of cash flows between
two companies to face unforeseen economic situations.
Principle of purchasing power parity : It can be said that it is one of the
fundamental pillars that make commercial exchange between countries exist. This
principle tries to explain the benefits of foreign trade through the price differentials
of goods in different countries. The most important concepts in this principle are
the cost of production, transaction costs ( insurance , transportation, taxes, etc.).
In itself, the principle of purchasing power parity is an indicator that allows
identifying the purchasing capacity of certain products in a given country.

2.9.1 International purchase and sale contracts

1. International contracts:
Although the Peruvian Civil Code defines the concept of contract in Art. 1351, as
"...the agreement of two or more parties to create, regulate, modify or extinguish a
patrimonial legal relationship", and indicates the main named contracts, does not
refer to the characteristics of unnamed contracts, deducing that the provisions of
the indicated code are also applicable to the latter; However, in national legislation
there are no legal references to unnamed contracts of an international nature , with
exceptions, such as JOINT VENTURE, INTERNATIONAL LEASING contracts and
some others that are mentioned in national legislation.

1.1 DEFINITION
International contract is an agreement free of will, for consideration, intended to
transfer goods , services or knowledge between subjects domiciled in different
States and legal regimes, which carry out a real tradition of said species or rights
from the territory of one State to the territory of another. , or that they agree from
different states, or that the tradition is executed in a territory other than that from
which the obligation arose.
1.2 ELEMENTS
The common essential elements are: consent, cause and object.
Freely expressed consent characterizes all international business . However, this
should not lead us to support the theory of "absolute sovereignty of the autonomy
of the will", since increasingly, with more reasons, the trend of the "objectification of
the contract" is making its way, that is, linking the effects and the legal treatment of
commercial operations to the objective elements of the acts by which the
relationships are constituted. By virtue of this recognition of contractual freedom ,
subjects can determine the content of contracts regulated by law or an international
treaty, even creating the negotiating structure of even unnamed commercial
operations.
The cause or purpose is always patrimonial, there is an animus lucrandi that
motivates this type of business . That is the distinctive note of international
commercial contracts and what makes them dynamic.
The purpose of international contracts is to transfer goods or services from one
country to another; which means going through different economic regimes, as well
as different customs and practices. The object sold is considered the most
important element for the purposes of international classification and based on the
movements it undergoes, internal sales can be distinguished from international
sales (1).
1.3 CONTRACTUAL CLAUSES
The clauses are the ordered expressions of each of the stipulations agreed upon
and admitted by the parties.
There are different clauses that make up international contracts: preliminary,
objective, specific and style.
- PRELIMINARY CLAUSES:
They serve to illustrate the cause that motivates the business, identify the parties
involved and their representativeness.
. Intention clause: It is the one where the intention, cause or motivation that
promotes or originates the contract is expressed.
. The capacity of the parties: It is a condition and element that gives validity to the
contract. The capacity of subjects to contract obligations. It is the first situation that
is addressed when formalizing a business.
. The form of the act: Any form that binds the parties is admitted and is operable in
international trade transactions.
- OBJECTIVE CLAUSES
They are those that refer to the goods or services that are being negotiated, as well
as the payment conditions, at the time and place of delivery. These clauses are:
merchandise, price and payment.
. Merchandise clauses : The types of merchandise that are being negotiated are
indicated. The quality , origin, color , technical characteristics, brands , names,
container, packaging, the brand , whether it is a good or service , identified in the
tariff nomenclature , etc. must be specified.
. Price clause : It is freely agreed upon by the parties and given by the
international market position. It must be indicated per unit for the total contract.
. Payment clause : It is the one where the way in which payment will be made is
stipulated. Indicate the term, the payment method and the means of payment to be
used, that is, whether it will be made through a letter of credit or collection
documents, bank transfer or credit card payment, the payment method being very
limited in cash.
1.4 SPECIFIC CLAUSES
They are those stipulations applicable to any type of contract. They are the
following: legality , jurisdiction, penalizing, remunerative, contingencies, arbitration
and diplomatic.
- Legality Clause
It is one of the stipulations that represents the greatest difficulty when entering into
a contract, because the laws of your country must be mentioned as those
applicable to the contract. However, a distinction must be made between
international contracts that arise from a normal internal norm and those that are
subject to a special statute or international treaty.
- Jurisdiction Clause
The court that would resolve a conflict in the event that it arises during the term of
the contract is established.
- Penalty Clause
This is a clause that is frequently required by the buyer's side, to protect itself from
any partial non-compliance in the technical specifications of the goods or the
delivery period.
- Remuneration Clause
Since the contract is a reciprocal stipulation of obligations and rights, it is natural
that if one of the parties to protect itself stipulates or negotiates a penalty clause,
the other, to maintain the balance of the contractual relationship, suggests a
remuneration clause. If the first seeks compensation when the other partially
breaches a contract, it is also fair that the other receives a reward when with
diligence, promptness and care it exceeds the limits under which it has been
contracted.
- Contingency Clause
The purpose of this clause is to provide for those circumstances that the parties
cannot manage and that affect the performance of the contract. Using this clause
will avoid any difficulties that may arise during the contractual life. This is a clause
that will avoid possible misunderstandings.
- Arbitration Clause
This clause can be agreed, drafted or negotiated in any way that the parties agree
and its purpose is to avoid action in the ordinary courts, to leave the solution of any
disagreement in the hands of friendly arbitrators.
- Style Clause
Style clauses are those that are usually placed in contracts and that do not deserve
discussion or agreement of the parties, since their practice and extension equally
compromise the parties involved. Generally these are the <<Fortuitous Event>> or
<< Force Majeure>> clauses, which, by registering them in the contract, affect or
favor the parties equally when the event they foresee occurs.
- General Clauses
The issue of general clauses, also called conditions or standard clauses, raises a
problem that has fascinated not only legal theory and obviously lawyers, but has
recently worried exporters. Both seek precision about the place and conditions in
which the contract is to be executed, as well as the applicable law and the
appropriate judges to resolve a conflict or interpret the intention of the parties.
Added to this is the frequency with which some companies have been using so-
called pre-established contracts.
General clauses are those printed stipulations that are accredited at the time of
submitting the offer or placing a purchase order. Its use is very frequent in
insurance contracts, where it is added at the end, to the policy, always with minor
characters, a set of limitations, reservations or exonerations, to which the
insurance company is not subject and which are assumed to be of free acceptance
of the parties and consequently valid. (2)
2. VIENNA CONVENTION 1980 ON CONTRACT FOR THE INTERNATIONAL
PURCHASE AND SALE OF GOODS
The purpose of this international instrument is to simplify the sale and purchase of
goods that cross international borders, by subjecting it to the same uniform legal
rules . The convention applies to almost all sales transactions in which both the
exporter and the importer operate in or have acceded to one of the ratifying
countries, or in which the contract is governed by the law of one of the ratifying
countries. those countries.
2.1 CONTENT
The convention comprises four parts:
a) Scope of application and general provisions. It includes the first 13 articles.
There it is established that it will apply exclusively to international sales contracts;
The criteria are defined to judge when a contract is international; certain types of
sales are excluded, due to their form or object, and the rules are also established
to interpret and integrate the convention and to interpret sales contracts.
b) Formation of the contract. Arts. 14 to 24. It contains all the rules relating to the
requirements for making the offer, the possibility of revoking or withdrawing it, the
way of carrying out general acceptance, and the moment of perfection of the
contract. As a general principle, it establishes that the offer, as well as the
acceptance, take effect when they reach the recipient.
c) Purchase and sale of merchandise. Arts. 25 to 88. It is the largest part: It is
subdivided into 4 chapters. The first establishes general rules on the purchase and
sale contract: it defines what is understood as essential breach, establishes that all
communication between the parties takes effect at the time it is issued, that the
contract is modified by mere agreement between the parties, and the cases in
which it is possible to claim specific performance of the contract. The second
chapter, obligations of the seller, specifies the content of the obligation to deliver
the goods, the place, time and manner in which it must be done; defines the
seller's responsibility for the quality of the goods and for the rights and claims of
third parties over them, especially those derived from intellectual property , and
establishes the remedies that the buyer has in the event of non-compliance by the
seller. The fourth chapter refers to the buyer's obligations: it specifies the content
of his obligations to pay the price and receive the goods, as well as the remedies
that the seller has in case of non-compliance. The fourth chapter, on the transfer of
risk, with the criterion that this operates, in general, when the seller specifies and
places the goods in the hands of the carrier who will take them to the buyer or
makes them available to the buyer. The fifth chapter gives common rules for the
obligations of the buyer and the seller: it defines the recourse they have in case of
foreseeable non-compliance of the other or non-compliance with a delivery in a
contract of successive deliveries; indicates the criteria for evaluating damages and
for charging default interest, as well as cases of exoneration of liability for non-
compliance and the effects of termination of the contract.
d) Final provisions . Arts. 89 to 101. It is established that the Secretary General of
the UN is the depositary of the convention; The reservations that states can make
are specified, the way in which they must ratify, approve or adhere to it, and the
moment in which it will come into force (3).
2.2 THE CONVENTION AS AN AUTONOMOUS LAW
The convention having a scope of application different from that of national law and
constituting a differentiated legal stratum, must be interpreted, not in light of the
principles , history , rules, criteria and solutions of national law, but in light of its
own principles and its own history, as provided in its own article 7. The first
paragraph of that article says that the convention must be interpreted "taking into
account its international character." This means, by argument to the contrary, that it
cannot be interpreted as national law (4).
2.3 SCOPE OF APPLICATION
The convention regulates the international purchase and sale of merchandise, that
is, goods, it does not refer to the transfer of services. The first article establishes
that it will only apply to international sales contracts, that is, to contracts whose
parties are established in different states. This is the only criterion to define if the
sale is international. The convention does not define what an establishment is, but
by using this word, it makes it clear that it sets aside the concept of domicile.
Establishment means a stable, permanent place for conducting business (5).
Excluded sales : Art. Second, it excludes the application of the convention with
respect to certain types of sales, either due to the purpose of the parties, due to the
form of the contract, due to the type of merchandise, or due to the content of the
contract. The first exclusion is regarding purchases made for personal , family or
domestic use. Auction sales , this is because these operations have a peculiar
formation process . The seller does not know who the buyer is and, therefore, does
not know whether the convention applies or not, until the deadline to present the
best offer expires. Judicial sales, which can also extend to sales of merchandise
seized by Customs . Sales of money and securities ; sales of ships and aircraft;
electricity sales; sales of things that the seller must manufacture; sales of goods
and services.
Unregulated aspects of the sales contract: Validity of the contract or some of its
clauses means that it does not provide anything about the causes that may
invalidate a validly contracted contract or clause of a sales contract. The challenge
of an apparently valid contract will be governed by the applicable national law, that
is, in accordance with it all problems related to the existence, nullity or voidability of
the contract will be resolved, such as those derived from the error in determining
the object, immorality or illegality of the contract, deception or intimidation, capacity
of the parties, powers of the representative, etc., but not for those derived from lack
or defect of form. Validity of commercial uses, the parties are bound by the uses
that have been agreed or established between them, and by the uses generally
observed in international trade that they should be aware of, and that the
Convention considers tacitly agreed upon.
Voluntary exclusions : Exclusion from all or part of the convention may be tacit or
express. The effects of this exclusion, in terms of determining what the law
applicable to the contract will then be, are governed by what the parties
themselves expressed or by the rules of private international law (6).
Reservation that will not apply due to the rules of private international law :
The Convention has a reservation contained in Art. 95, which provides for the
possibility that any State, at the time of acceding to the Convention, declares that it
will not be bound when the rules of Private International Law lead to the application
of the law of a contracting State. That is to say, the validity of the Convention will
only be admitted when only the states are contracting states (7).
2.4 GENERAL PURCHASE CONDITIONS
Exporters and importers often do not pay due attention to the "general conditions"
governing their international trade transactions. And yet these conditions, which
are often written in small print on the back of the sales offer or acceptance form
and later become part of the sales contract, can have major financial
consequences for both parties involved. . The "general conditions" constitute the
basic set of clauses that determine the rights and obligations of the buyer and the
seller in relation to aspects such as the quality and quantity of the goods to be
supplied, their packaging and labeling. pre-shipment inspection, shipping
documents, means of delivery, transfer of risk, acceptance of goods, warranties,
price, payment, remedies for breach of contract and applicable procedure to settle
disputes. The conditions governing such matters may involve financial liability for
the parties. Beginning exporters and importers in developing countries, in
particular, may not be aware of the existence of these conditions or their
importance in trade operations. It is therefore important that they become familiar
with their purpose and content, as well as how to establish and apply them.
Content of the general conditions:
The exporter or importer from a developing country preparing to prepare a set of
general conditions may be inspired by those established by other companies
engaged in international trade. But you will have to consider them only as a source
of ideas, since each company needs to have its own set of conditions, adapted to
its commercial and production situation and the national laws and regulations that
may be applicable (8).
2.5 INTERPRETATION OF THE CONVENTION
The great contribution of the Convention in establishing a uniform regime for
international sales, which, thanks to the acceptance it is receiving, may soon
become the world regime for international sales contracts. Establishing your own
regime for international sales means recognizing that this type of business must
have regulations that are different from the regulations for national sales. This, of
course, will lead to there being two regimes for sales, one national and the other
international, but this is not an inconvenience, but a necessity derived from the
peculiarity of international trade.
The main problem that the validity of the Convention will pose is to form, from it, a
common interpretation or doctrine on international sales contracts. As it will be
applied and interpreted by judges, arbitrators and jurists belonging to different
countries and educated in different legal traditions, it is very possible that they will
interpret it according to their own traditions, and not with the international criteria
that it postulates.
The rules of interpretation are an essential part of the Convention; the parties to a
contract that will be governed by it cannot agree that the Convention will be
interpreted by rules other than those specified in the Arts. 7, 8 and 9.
The principles of interpretation establish two criteria: the Convention must not be
interpreted in light of one or another national law or that international interpretation
must be done autonomously, that is, interpreted by the Convention itself. The first
thing is to unravel the literal meaning of the text ; go to the legislative history of the
Convention, among others. The other criterion to be applied is good faith as a
principle of interpretation, determined in relation to the peculiar conditions and
demands of international trade.
The applicable uses include the practices established between two parties, the
widely known and regularly observed uses in a given commercial branch. Among
the most well-known and accepted uses are INCOTERMS (International Trade
Terms), developed by the International Chamber of Commerce of Paris (9).
2.6 CONTRACT FORMATION
The agreement covers many of the basic procedures that every merchant should
know. For example: Does an international sales contract have to meet special form
requirements? The agreement gives a negative answer to this question. Very
different types of verbal agreements can bind both parties, as well as in writing:
from an email to a formal document. However, there is a clause in the convention
under which a ratifying country can insist that contracts concluded with parties
located in its national territory be formulated in writing.
- THE OFFER:
It is a unilateral declaration or proposal directed by the buyer or seller for the
execution of an international sales contract. According to Art. 14 of the Convention
must have three requirements:
. Be addressed to one or more people : The offer to a specific person does not
cause any difficulty in interpretation. But the offer addressed to several specific
people presents difficulties of this type. One is that it can be interpreted as a single
offer addressed to several people, or as several offers, of the same content, each
directed to a specific person.
. Be sufficiently precise : Considered as such when the proposal indicates the
goods, indicates the quantity and price, expressly or tacitly, or provides a means to
determine them.
. That indicates the intention of the offeror to be bound in the event of
acceptance : The need to record the will to be bound by the person making the
offer, if it is accepted, is what distinguishes a true offer from the offer. simple
proposal to start negotiations for a future agreement.
- THE ACCEPTATION
It must be an assent not conditioned on another act of the offeror or acceptor.
Assent to the offer may be expressed in a statement or act of the offeree and, in
certain cases, by silence; however, mere silence or inactivity alone does not
constitute acceptance. The main effect of acceptance is to perfect the contract.
The deadline for acceptance is the right time. The convention adopts the theory of
reception of acceptance as the determining moment of its effectiveness , instead of
the theory of emission, typical in Common Law systems . Acceptance takes effect
when it reaches the offeror. The Convention defines this moment, depending on
whether the offer is verbal, written and provides a deadline, or written without
stating a deadline. Late acceptance does not produce effects as acceptance, but
constitutes a counteroffer, which the original offeror can accept or reject; If the
recipient of the counteroffer (original offeror) accepts, the contract is perfected
when acceptance reaches the counteroffer (10).
2.7 PERFECTION OF THE CONTRACT
Under the agreement, the contract becomes effective, or is perfected, when an
exporter or importer makes an offer and the other party accepts it. To do this, it is
necessary that both the offer and the acceptance reach the person to whom they
are addressed. An offer may be canceled at any time prior to the importer sending
its acceptance and an acceptance may be withdrawn before it reaches the
exporter. For this reason, in the period of time between sending the acceptance
and receiving it, the importer can withdraw his acceptance, but the exporter cannot
cancel his offer.
There are, however, two exceptional cases in which the offer is irrevocable
whatever the circumstances. The first occurs when the person making the offer
(the exporter, for example) expresses this by setting, for example, a deadline for
acceptance. The second occurs when the importer could reasonably assume that
the offer was irrevocable and has acted on this basis. (It is not indicated in the
agreement when such an assumption may be reasonable).
2.8 OBLIGATIONS OF THE SELLER
The seller's obligations are: to deliver the goods, deliver the documents related to
them and transfer ownership , contract transportation and insurance , safeguard
the goods that the buyer has not collected and take measures to reduce the losses
that may be suffered as a result of non-compliance with the contract. buyer.
- DELIVERY THE GOODS
This is the specific obligation of the seller and what is considered characteristic of
the purchase and sale contract. The parties invoke one of the Incoterms as a
delivery method.
. Content of the obligation to deliver : The content of this obligation is
distinguished, depending on whether it is a sale that involves the transportation of
goods or does not involve it. In the first case, the delivery of the goods consists of
placing them in the hands of the first carrier so that they can be transferred to the
buyer. In the second, it consists of making them available to the buyer in a specific
place.
. Purpose of delivery : The seller is obliged to deliver the goods whose quantity,
quality and type correspond to those stipulated in the contract and which are free
of any rights and claims of a third party.
. Excess delivery : Excess delivery constitutes a breach of contract, a lack of
conformity of the goods, the same as the delivery of goods in a smaller quantity
than agreed. The buyer may accept or reject, totally or partially, the excess amount
delivered. If he accepts the excess, he may, however, claim compensation for any
lawsuits that result from it.
. Place of delivery : In international sales, it is advisable to distinguish between
the place to which the goods must be delivered (delivery place) and the place to
which they must be sent (destination). In most sales, the seller has the obligation to
deliver the goods to a carrier at a certain location so that he can take them to a
certain destination.
. Time of delivery : It is the date that has been determined in the contract or that
can be determined in accordance with it.
. Early Delivery : It constitutes a breach of contract, since it can cause the buyer
inconveniences, such as incurring unforeseen storage costs or having to pay the
price, if it was agreed to pay it against the delivery of goods, earlier than expected,
with the consequent financial disadvantage. . Therefore, the buyer has the right to
reject early delivery and, if accepted, to claim any damages that this may cause.
- HIRE TRANSPORTATION AND INSURANCE
They are obligations borne by the seller that only arise by special agreement
between the parties, so if there is not one, it is understood that the buyer will have
to pick up the goods or hire the transportation to move them and the corresponding
insurance.
- DELIVER THE NECESSARY DOCUMENTS
The contract can indicate the documents that the seller must provide to the buyer,
such as invoice , bill of lading, insurance policy, certificate of origin or quality,
health certificate, or even operation and use manuals . The seller must deliver the
necessary documents to have control of the goods, that is, those necessary to
receive them from the carrier and pass them through Customs .
2.9 OBLIGATIONS OF THE BUYER
There are two main ones: paying the price and receiving the goods. Other
obligations: duty to preserve the goods, which occurs when the buyer has
possession of the goods that, for one reason or another, is going to return to the
seller, the requirement to take measures to reduce losses, specify the goods,
provide the seller models , technical specifications, packaging or materials , hire
transportation or pay certain loading or unloading expenses of the merchandise.
- PAY THE PRICE
It is an obligation to give.
. Content of the obligation: It consists of giving the amount of money that had
been agreed upon as the price. Payment implies the buyer carrying out other prior
and necessary conduct for this purpose, such as the purchase of foreign currency ,
the contracting of a letter of credit or a bond.
. Determination of the price: The price that the buyer must pay is the one agreed
in the contract. It may be that a specific price has been agreed upon, in which case
no doubt arises in this regard or that the parties agree: a) contracts with a
determinable price, or b) contracts with an open price. The way of determining the
price can be agreed expressly or tacitly. The price can also be determined by
means of merchandise, for example grains. Open price contracts are sales
contracts in which the amount of the price or an explicit means of setting it is not
determined. This happens mainly in cases of emergency purchases or
merchandise with known characteristics and prices .
. Place of payment of the price: In international trade it is increasingly common to
agree on payment against delivery of documents, which is usually agreed in one of
two ways: payment against documents, payment by letter of credit, although
payment against delivery of goods. If payment against documents or delivery of
goods is not agreed, other forms may be agreed, such as payment in advance, or
payment, in one or more exhibitions, within a period after delivery of the goods. In
these cases, the place of payment of the price is the seller's establishment.
. Time for payment of the price: If the contract does not specify the time for
payment of the price, distinguishing whether it is a sale that involves or does not
involve the transportation of the goods. The general rule is what is commonly
called cash purchase, that is, the price must be paid at the time the buyer receives
the goods. If the contract does not involve the transport of goods, since the buyer
will collect the goods at the place where they are located or at the seller's address,
the price must be paid at the same time that the seller places the goods at the
disposal of the buyer. When the contract involves transportation, that is, when the
seller has to deliver the goods to a carrier, payment of the price must be made
when the buyer receives the goods or documents representing them.
2.10 BREACH OF CONTRACTUAL OBLIGATIONS
Failure to comply with the seller's or buyer's obligations gives rise to the affected
party being able to demand contractual liability , with the procedures that the
Convention itself provides. Depending on the severity of the damage caused by the
other party, the Convention qualifies non-compliance as essential, substantial, or
simple non-compliance. Complementary to this rule of determining breach by the
objective damage caused to the other party, is the rule of limiting the termination of
the contract for breach to cases in which a fundamental breach occurs. A
fundamental breach is defined as a breach that causes the other party such harm
as to substantially deprive it of what it had the right to expect under the contract.
Partial breach contains the cases of: partial delivery of the goods, partial breach of
any of the parts of the contract with successive deliveries, partial payment of the
price and breach of a contract with payment of prices in installments.
- REMEDIES IN CASE OF NON-COMPLIANCE BY THE SELLER
The specific remedies that the buyer has are: request compensation for damages;
demand compliance with obligations, which may take the form of demanding the
replacement or repair of goods that do not comply with the contract; set an
additional period for the seller to fulfill its obligations; declare the termination of the
contract, without affecting the seller's right to remedy the breach, proportionally
reduce the price of goods that do not comply with the contract; reject early or
excess delivered goods; require non-compliance guarantees; If the seller refuses
to reimburse you for conservation costs, you may retain the goods; and due to the
seller's delay in collecting the rejected goods, he can: sell the goods and retain part
of the price.
- REMEDIES IN CASE OF NON-COMPLIANCE BY THE BUYER
The specific remedies that the seller has for the buyer's breach are: demand
compensation for damages; demand compliance with the contract; set an
additional period for the buyer to fulfill his obligations; declare the termination of the
contract unilaterally make the specification of the goods; In the event of
foreseeable non-compliance by the buyer, the buyer may claim performance
guarantees; In the event of the buyer's refusal to reimburse conservation costs, the
buyer may retain the goods; and if the buyer delays receiving the goods, he can
sell them and retain part of the price (11).
2.11 TRANSFER OF RISK
In any export operation, the point of delivery of the goods is essential. This can be
any point located between the premises of the exporter and those of the importer.
Typically, the risk of loss and damage is transferred from the exporter to the
importer at the same time the goods are transferred. The provisions of the
agreement on this matter are relatively succinct. (Uniform delivery terms are
already widely used in international trade, and will likely continue to do so.)
The basic clause of the agreement is that, if a contract for the sale of goods
involves their transportation, the exporter will have to deliver them to the first
carrier. At that same moment the risk is transferred. If there is no such transport,
the goods must be delivered, as appropriate, to the place of manufacture or
production or to the place where the exporter operates. In the latter case, the risk is
transferred to the importer when the goods are made available to him at the
exporter's premises, provided that his failure to take charge of them implies his
violation of the contract. For example, if a deadline for delivery is stipulated in the
contract, the risk will not be transferred immediately by providing the goods at an
earlier date.
If the goods are to be received at a place other than the exporter's premises - the
place of manufacture, for example - the risk will not be transferred until the importer
is satisfied that the goods have been made available to him and that the date has
expired. of delivery. (Exporters must send a notice indicating that the goods are
available, and ensure that this notice has been sent and, if possible, that it has
been received.)
2.9.1
3. INTERNATIONAL JURISDICTION REGARDING INTERNATIONAL
PURCHASE-SALE
International trade disputes are those that fall within the scope of conflict of interest
between parties, in the execution of international trade contracts. These conflicts
are generally private in nature and the first problem they face is determining the
most appropriate way to resolve the dispute that has arisen. In this regard,
international trade law establishes the following ways to resolve these disputes:
3.1 DIRECT NEGOTIATIONS
Open direct negotiations between parties in order to propose and dialogue to
reach, in the event that these negotiations are successful , the birth of the
transaction between the parties with which the conflict and controversy is resolved,
if this does not occur then the procedure proceeds. breakdown of negotiations and
in that case it goes to the mechanism of;
3.2 CONCILIATION
Conciliation, choosing a third natural or legal person of an impartial nature, who will
act as the mediator of the dispute, trying to get the parties to open their
negotiations again and will propose some satisfactory solutions for both parties, the
council of the conciliator is not obligatory for the parties, who may or may not apply
said advice, and may or may not reach a transaction. If this occurs, the controversy
will have been resolved, otherwise conciliation and in that case the parties may
choose either the mechanism of;
3.3 ARBITRATION
Arbitration, that is, choosing a third natural or legal person to constitute an
arbitration court for that case, with the power to issue an arbitration ruling that
resolves the controversy, said arbitration ruling will be called "arbitration award"
and will have the same effectiveness as a judicial sentence, or they can also
choose the;
3.4 JUDICIAL WAY
Through judicial means, in such case they will initiate a corresponding trial before
the court to which jurisdiction legitimately corresponds, said court will issue a
judicial ruling that once enforceable will be mandatory and coercive for the parties,
thus resolving the controversy. In no case is it appropriate to act simultaneously on
the same matter in the arbitration and judicial channels, since they are alternatives
(12).
4. USUAL DOCUMENTS FOR INTERNATIONAL SALES
In every international transaction, a series of documents arise that make up a
homogeneous set of information regarding the goods and the way in which they
have been packaged, handled, shipped and insured.
The various factors involved in the negotiation process and in the operational
phase of international sales give rise to various documents, of which we will
mention those of international application.
We will distinguish two types of documents:
- REQUEST FOR QUOTE
It corresponds to the communication made by a natural or legal person to an
exporter or manufacturer requesting an offer for the supply of a certain product ,
under certain conditions.
Price order notes typically cover the following information:
- Location, merciology of the required product, with an indication of its quality, type,
variety or model , for which reference can be made to the product code or the
international standard to which its manufacturing or production must comply.
- Delivery opportunity: that is, it must be indicated in what period the product needs
to be available, partial shipments will be accepted or if a single shipment is
needed.
- Reception port where you want the merchandise to be destined.
- Purchase and Sale Clause based on INCOTERMS 2010 or the acceptable
alternatives that the supplier could offer.
- Payment method requested, it is normal in this sense to request payment facilities
from the supplier and when comparing the different offers, this is a definitive factor
of the business.
- Request for samples, catalogues, plans or other data that must be attached to the
offer by the supplier.
- Modes of transport that will be accepted alternatively and that can be quoted.
- Information on Freight Reserves that would be affected by the import , so that the
supplier can quote or forecast shipments by that means.
Type of packaging that is preferred, for example, the use of containers of a certain
length can be expressly indicated, as it is more convenient for the buyer.
The request for prices becomes more agile as the relationship between the parties
strengthens, and may gradually lead to a direct personal or telephone request from
the buyer. The usual thing may be a brief email message setting out the type of
merchandise needed, but ignoring the other information since its application is left
to commercial custom between the parties. This commonly occurs when there is a
Register of qualified Suppliers for various products and an active flow of trade is
developed with them.
- OFFER LETTER :
The quote must meet the same previous requirements and in international
negotiations both means are usually used in addition: first sending a telex
anticipating the offer and then sending the client an extension letter-offer explaining
the anticipated terms; or send a proforma and then complete with this offer letter to
give more seriousness to the business.
The substantial elements of the Offer Letter are as follows:
- Description of the merchandise in detail, indicating the quality , packaging,
standard to which it corresponds; accessories and spare parts that are
incorporated in the shipment.
- Shipping plan
- Port of embarkation and port of destination
- Offer alternatives, that is, products similar to the basic offer that can optionally be
purchased instead of the main one.
- Description of the required shipping instrument, specifying, for example:
Confirmed, transferable, irrevocable Letter of Credit payable at origin upon
presentation of shipping documentation opened on Banco del Estado de Argentina
by a first-class Bank.
If there is a form of payment on credit, the term and required conditions must be
indicated, that is, interest , guarantees, etc.
- Alternative transportation routes, with the corresponding variation in estimated
freight and insurance costs .
- Validity of the quote measured from the date of preparation.
As can be deduced from the aspects noted above, the Offer Letter has more
information so that the client can decide about the business. Subsequently, once
the buyer's response has been received, the exporter usually sends the proforma
invoice which, as we have said, is more punctual and concise. But we have also
reiterated that for the sake of speed in the negotiation , the offer letter is sometimes
ignored and the proforma is used directly; Let's say more: in some areas, the
telephone offer and verbal acceptance will be enough to give way to the
operational phase with the implementation of the agreed payment method.
- THE PROFORMA INVOICE
The proforma invoice is one of the forms that the international quote can take and
therefore must comply with the basic requirements that any offer abroad must
meet.
It is therefore a document where a seller details the goods, specifying the price
they have for a certain period that is also indicated. This document is always
nominative, that is, it is sent to a potential buyer and the same offer conditions
cannot be freely extended to a third party, unless accepted by the seller.
The proforma invoice is informative in nature but at the same time implies a
commitment from the offeror in the sense of respecting the conditions inserted for
the entire validity period that it has freely and unilaterally established.
In addition to its function as an offer document, the proforma invoice serves as an
auxiliary element for obtaining or processing the necessary import licenses; They
are also used to open the credentials. In this sense, the proforma invoice is
complementary to the offer made by another means, for example an offer letter or
telex.
The proforma invoice generally contains the following data:
- Individualization of the seller, with his postal address , telephone number , fax
and any history that allows his location. This information is usually pre-printed on
an ad-hoc form.
- Number, place of issue and date.
- Natural or legal person to whom the offer is addressed, identified by name or
company name, address, telephone, fax.
- Description of the merchandise, with indication of type, quality, model , form of
presentation, tariff position at the NANDINA heading level.
- Quantity quoted and shipping method.
- Port of embarkation and destination, based on INCOTERMS 2010, that is,
mentioning the sales clause next to the offered price.
- Type of packaging that will be used, the number of packages that will result and
their dimensions.
- Unit and total sales price at FOB level and, where applicable, estimated freight
and insurance costs.
- Payment condition offered and the payment instrument required. For example:
"Cash; Credit at sight on the Peruvian State Bank": This is important when the
exporter needs to receive the letter of credit from his bank to subsequently manage
pre-shipment credits .
- Delivery time of the quantity offered or shipping plan indicated in a generic way,
for example: "100 boxes per month".
- Validity of the Quote: when this function is fulfilled, the proforma invoice must
have a term expressed in so many calendar days from the date, or specifying the
expiration date. Until that day, even the consignee may exercise his right to accept
the price and conditions offered.
- PURCHASE ORDER
When analyzing international negotiation, it is worth noting the importance of the
Acceptance of an Offer and its implications. The Purchase Order is the document
in which the buyer's free and unilateral decision to accept the conditions of the
offer is reflected and established, that is, the quality, price, payment method and
other aspects contained in the negotiation.
The Purchase Order is usually requested to be endorsed by the Consulate of the
buyer's country in the seller's country, in order to make the supplier's signatures
more reliable, since in this way this document gains more seriousness and can be
used by the buyer to advance the management of export promotion credits that
exist in the country of the exporter-seller.
The Purchase Order is also commonly referred to as Order Confirmation and
contains information similar to that of the quote, but firmly establishing the definitive
conditions of the sale. In normal imports , this document closes the international
contract, replacing a formal contract , acting as a tacit contract, which is implicit in
all the documentation exchanged.
- PURCHASE AND SALE AGREEMENT
When the parties decide to complete the negotiation by signing a formal contract,
the International Contract arises, which we have not referred to in this manual . We
will point out as a summary that an International Contract will normally contain the
following main aspects:
- Details of the merchandise, technical and packaging specifications, supply
quantity.
- Means of Transportation, delivery plan.
- Unit and total price according to the agreed Clause.
- Guarantees to be provided, fines for non-compliance; arbitration clauses;
renounces diplomatic channels.
It is advisable to legalize the signatures of the Contract mainly when it is signed by
a Representative of the Seller or Contractor, for which the signatures of the
Contract are certified before a Notary Public or Commercial Bank and then the
process is completed at the respective Consulate.
This allows you to have an absolutely legal document that allows you to carry out
banking procedures such as previously registering the Exportation in order to be
able to access the banking market before the shipment of the merchandise; or
request an advance of money as pre-financing for exports, both from national and
external sources.
- The Quote Request
- Offer Letter
- Proforma invoice
- Purchase order
- Purchase Order
- Contractual Guarantees
Within the documents we will highlight the following:
- BOARDING DOCUMENTS
- Packing list
- Maritime Bill of Lading
- Road Bill of Lading
- International Air Waybill
- Railway Waybill
- Commercial invoice
- Insurance Policy or Certificate
- Certificate of origin
- Note of expenses
- Consular Invoice
- Other certifications
These documents constitute the series of documents representative of the
shipment and delivery of the merchandise: but there are other collateral documents
that are important to highlight, since they link the private transaction with the
intervention of the State in the Foreign Trade of the different countries. Among
these documents we will point out the following:
- COLLATERAL DOCUMENTS:
- Cargo manifest
- Reception Ticket
- Cargo Tallys
- BANKING - PORT - CUSTOMS OPERATIONAL DOCUMENTS.
Bank documents issued at the buyer's bank:
- Import Report
- Request to open a letter of credit
- Coverage form
- Deferred coverage payment chart
- Collection management notices
- Visible Commerce Expenditure Form.
Bank documents issued by the exporter's bank:
- Export Registration
- Request for pre-boarding credits
- Letter of instructions for documentary collection
- Negotiation Letter
- Final settlement
- Visible Commerce Income Form
Customs documents:
- Export declaration
- Import declaration
- Lien Settlement Form
- Recognition Record
- Complementary Declaration (13).
POSITIVE EFFECTS OF ADHESION TO THE VIENNA CONVENTION ON
INTERNATIONAL PURCHASE AND SALES.
4.1 FORMS OF ACCESSION OR RATIFICATION OF THE TREATIES IN THE
PERUVIAN CONSTITUTION OF 1993.
Treaties are a source of international law and, as such, generate legal norms that
bind States that accept them. From another point of view, treaties are the preferred
way in which a State's foreign policy is formalized. The first definition comes from
an analysis from International Law; The second originates from a vision from
Constitutional Law . In both cases, the importance of adequate, precise and
coherent regulation of the treaties in the Constitution stands out.
The 1979 Constitution dealt with treaties in a special chapter of Title II ("Of the
State and the Nation "), in seven successive articles. The 1993 Constitution brings
together these regulations in three articles, in addition to having important
mentions on the subject in article 200 inc. 4 (on constitutional guarantee actions )
and in the IV Final Provision. As can be seen, the reductionist desire of the
constituent of '93 also affected the chapter on treaties, since it brought together in
a single article (57) three completely different topics from each other and
eliminated two others, one of them of particular importance.
The modifications produced in the constitutional regulation of treaties have, like
most of the reforms produced, positive points. These refer mainly to matters of
form. The setbacks, unfortunately, are not in form but in content.
4.1.1 FORMAL MODIFICATIONS THAT CLARIFY THE CONSTITUTIONAL
TEXT
a) Standardization of the term "treaties", by eliminating synonyms (such as
"agreements" or "agreements") that lent themselves to confusion.
b) Elimination of the adjective "international", since every treaty is international in
itself.
c) Expansion of the concept "treaties" to agreements made with other subjects of
International Law, other than States (such as international organizations ).
d) Elimination of the supremacy of certain types of integration treaties, a situation
that generated confusion in their application.
e) Separation of the chapter corresponding to the treatment of asylum and
extradition, correctly placing them in the chapter on fundamental rights .
4.1.2 SUBSTANTIAL MODIFICATIONS
a) Better system for defining the powers of Congress, when approving treaties.
This is achieved through an exhaustive enumeration, leaving all remaining issues
in the hands of the so-called "executive agreements."
b) Explicit establishment of control over the constitutionality of the treaties, through
the corresponding action before the Constitutional Court.
4.1.3. MODIFICATIONS THAT INVOLVE RETARDS
a) Extension of the presidential powers to approve and denounce treaties, without
the need for prior approval from Congress. This generates a limitation of the
oversight functions of Congress, which has been recently demonstrated with the
issue of foreign debt .
b) Elimination of the supremacy of the treaty over the law .
c) Elimination of the constitutional rank granted to the precepts contained in human
rights treaties.
4.1.4 THE HIERARCHY OF THE TREATY: THE TREND OF THE PREVALENCE
OF INTERNATIONAL LAW (CONTINUES DESPITE PERU)
Verdros affirmed the existence of a radical and a moderate monism. While the first
postulates that International Law is always superior to Internal Law (and that,
therefore, any state norm contrary to International Law is null), the moderate
monists point out that the hierarchy of International Law can only be qualified by
Internal Law. of each State. Both trends reaffirm the incorporation of international
law into domestic law, where they vary is in their location and internal
organization .
The discussion on the criteria for organizing international standards in Domestic
Law has been resolved by the various modern constitutions in very different ways.
England: Prevalence of Domestic Law. Legislation incompatible with a treaty must
continue to apply unless modified or repealed by new legislation.
USA: International Law is incorporated into Domestic Law, but treaties have the
status of law,
Therefore, a subsequent law can modify a treaty or suspend its application.
France: Article 55 of its Constitution: The treaty prevails over any rule of Internal
Law, prior or subsequent.
Germany: Like France , even with the rules of Customary International Law (art. 25
of the Basic Law of Germany )
These various formulas are summarized in the following options:
to. Systems that place treaties and internal laws on the same hierarchical level.
b. Systems that establish the superiority of treaties over domestic law.
c. The systems that grant treaties (or certain types of them, we would add)
constitutional status.
d. The systems established by treaties with supraconstitutional rank.
Although some constitutions clearly establish which of the four alternatives has
been chosen for the given country, the question is how to define the hierarchy of
an international treaty in a Constitution that does not pronounce on the matter?
Two things can happen here: that a Constitution indicates that the treaties are
incorporated into Domestic Law (without specifying the hierarchy) or that it simply
does not mention the matter or does so implicitly.
The Peruvian Constitution of 1979 was ascribed to the current that granted
supremacy to treaties over domestic laws and that, in the specific case of human
rights , that supremacy was constitutional. According to this, the content of the new
Constitution would be assigned to the first of the mentioned systems, that is, the
one that recognizes treaties as solely law.
This emerges from the reading of paragraph 4 of article 200 of the Constitution,
which establishes the origin of the action of unconstitutionality against norms with
the rank of law, among them, treaties. Taking the reasoning further, this means
that a municipal ordinance or a general regional rule, having the same status as a
treaty, could suspend the effects of that treaty in relation to the municipality or
region in question. (1)
4.2 THE DS 011-99-RREE APPROVES PERU 'S ADHESION TO THE
CONVENTION AND OFFICIAL Nº 0-3-A-RREE PROVIDES ITS ENTRY INTO
EFFECT ON APRIL 1, 2000.
The government of Peru through the issuance of the DS 011-99-RE, dated
February 18, 1999, approved the accession of Peru to the " United Nations
Convention on Contracts for the International Sale of Goods, which was adopted in
Vienna on April 1, 1980, considering it convenient to the interests of Peru, the
adhesion to the aforementioned international instrument.
This accession was carried out within the framework of article 57 of the Political
Constitution of the State, which establishes the power of the President of the
Republic to celebrate or ratify treaties or adhere to them without the requirement of
prior approval of Congress in matters not contemplated in the art. 561 of the
Magna Carta, that is, when they do not deal with matters such as human rights,
sovereignty , dominion or integrity of the State, national defense, financial
obligations of the State, when treaties that create, modify or repeal any law and
those that require legislative measures for its execution.
This new way of approving treaties by the President of the Republic without the
prior approval of Congress, only with the obligation to report to Congress, is also
supported by the provisions of art. 1181 paragraph 11) of the 1993 Constitution,
which indicates the powers of the President of the Republic, insofar as he is
empowered to direct foreign policy and international relations , and celebrate and
ratify treaties.
The way to regulate the acts related to the national perfection of the treaties
concluded by the Peruvian State is regulated in Law No. 26647, published in the
Official Gazette "El Peruano" on June 28, 1996.
This Law establishes the acts related to the national perfection of the treaties
concluded by the Peruvian State, which include the rules of internal approval of the
treaties, the publication of their full text and the dissemination of their entry into
force and incorporation into law. national.
The art. 21 of Law N1 26647, indicates that the President of the Republic, when
treaties do not require legislative approval, the President of the Republic ratifies
them directly, by Supreme Decree, in accordance with art. 57 of the Magna Carta.
In accordance with the provisions of art. 61 of Law No. 26647, the sector in charge
of communicating the entry into force of the treaties is the Ministry of Foreign
Affairs, as soon as the conditions established in the treaty have been met, it will
communicate through the official newspaper "El Peruano" to from which it is
incorporated into national law.
In accordance with the device outlined in the previous paragraph , the Ministry of
Foreign Affairs communicated through official letter No. 0-3-A-RREE in the Official
Gazette "El Peruano" on July 4, 1999, the entry into force of the convention. of the
United Nations on contracts for the international sale of goods, for April 1, 2000.
4.3 POSITIVE EFFECTS OF THE CONVENTION ON INTERNATIONAL TRADE
IN GOODS
International trade in goods has an ideal legal instrument to facilitate commercial
transactions between the countries of the world, since the date and gradual
implementation of the convention on the international sale of goods, adopted in
Vienna in 1980, the effects that has resulted in the rectification of the first 10 states
that occurred in 1988, can be summarized as follows:
a) The Convention constitutes an international sales regulation, which regulates
the contract as a whole, independently of any national legislation, to which the
Convention never resorts; The Judge does not have to determine the competent
law that governs the contract since the Convention is sufficient on its own.
b) The Convention is presented as a regulation compatible with the most diverse
legal systems, whether they are of the Romano-Germanic or Anglo-Saxon
tradition.
c) The parties to an international sales contract, which is governed by the
Convention, will use the rules of interpretation that it establishes.
Convention stipulates and not by other rules such as that of the national law of the
interveners.
d) International sales contracts governed by the convention do not require special
forms; they can be done in various ways such as: verbal agreements, in writing, by
email or others.
e) The significance of the Convention acquires its real dimension when we note
that the majority of world trade is regulated by its provisions. Countries with
traditions as diverse as China , Egypt , Iraq , the United States , Canada, the
Russian Federation, most of Western Europe and much of Latin America are
members of the Convention, and as such subject to their courts interpreting the
body. international regulations.
f) The Convention applies to sales contracts between companies that have their
places of business in different countries, provided that these countries have
adopted the Convention. Freedom of contract, however, is a fundamental principle
of the Convention, and the parties can accept or modify the effects of its
provisions. Basically, the Convention simplifies contract negotiation and dispute
resolution.
g) Although there are examples of ancient treaties in more than one language, the
interpretation of authentic multilingual texts reaches a turning point during this
century with the configuration of large international organizations with multiple
participants and more than one official language. It will then be there that situations
will be noticed that range from a simple translation error to the presumption of the
existence of malicious intent in the translation.
In this case, it is convenient to specify that when a treaty is multilingual it means
that there are versions in several languages. This imposes a distinction between
the versions of the resulting text: the authentic text will be the binding version of the
treaty in each of the languages in which it has been declared as such. The official
text, on the other hand , is a text signed by the negotiating States but not accepted
as binding and the official translation is a simple translation, although made by a
government or an international body.
The Convention recognizes as binding texts those made in the six official UN
languages, all of which are equally authentic. The texts of the Convention in
Arabic, Chinese, English , French, Russian and Spanish have equal and equivalent
value , without it being admissible to give primacy to any of them. Despite its
enormous diffusion, there is no mandatory authentic version in the German
language. References to texts published in these or other languages, therefore,
only serve as helpful translations but do not constitute authentic and binding texts.
Finally, it is important to note that not all contracts and related issues are governed
by the Convention. For example, sales to consumers, validity issues, the effect of a
sale on third-party claims, and death or personal injury caused by defects in the
product sold are excluded. Likewise, auxiliary contracts to international sales;
insurance, transportation, letters of credit, among others.
4.4 THE CONVENTION AND ELECTRONIC DATA EXCHANGE (EDI).
The Convention allows the formalization of the International Sales Contract in
various ways, without obliging the parties to a specific form, but rather leaves it to
their choice how to do so.
Modern International Commerce has opted for EDI electronic data interchange,
which eliminates the use of paper in the transmission of data between buyers and
sellers.
EDI consists of trading without using paper. It is an exchange of commercial
information using electronic means between those involved in a commercial deal,
intermediaries, public authorities, etc. according to a structured format and without
the need for any human interpretation or retranscription.
The time and effort involved in typing, printing, copying, collating and checking,
correcting, stamping, signing, checking, filing and locating the mass of paperwork
required by every international business operation is very big.
In an international trade operation, 30 to 40 documents circulate, in more than 360
copies between 27 interlocutors located in different countries. If one of them does
not receive the information it needs to perform its function in a timely manner, the
movement of goods may be interrupted, which will contribute to congestion in ports
and warehouses , keep trucks immobilized at the border , lead to a risk of theft or
damage, will cause delays and cause customer dissatisfaction.
The solution consists of eliminating the manual manipulation of information and
transmitting it directly from one computer to another, thereby eliminating the costs
and delays inherent in printing, mailing, receiving documents and retranscribing the
information. The order produced by the buyer's computer conforms to the format,
and handles the codes, of the seller's computer. There are no errors or
human interpretations when the order leaves the supplier's path.
4.5 THE CONVENTION AND UNFAIR COMPETITION IN INTERNATIONAL
PURCHASE AND SALE
International practices that distort free competition in international trade are:
Dumping , subsidies or subsidies, commercial fraud , undervaluation and
overvaluation.
4.5.1 DUMPING
Strictly speaking, dumping is the sale of items in foreign markets at lower net unit
prices than those paid by domestic consumers. In a broad sense, it is that policy or
policies that tend to artificially lower the export price of certain merchandise.
Initially consumers will benefit from this artificially low price, but in the long run, this
practice puts competitors out of the market and then raises prices at will.
Dumping, in addition to seeking to put competing companies out of the market,
may have the objective of having large inventories or stocks.
There are three types of dumping:
- Sporadic or occasional dumping : This would be that which occurs when a
company projects its seasonal balances abroad at lower prices, without harming its
usual markets. As we said previously, the only aim is to eliminate a stock by
alleviating the financial burden that this implies.
- Predatory dumping : It is that which allows competitors to be displaced from the
market by selling at a price lower than cost with the express purpose of winning the
market. Once this goal is achieved, prices rise to recover previous losses. From
this approach, predatory dumping falls within monopolistic measures.
- Persistent dumping : It would occur when an exporter sells hard at prices lower
than those of the domestic market, taking advantage, for example, of the
advantages of an economy of scale . Generally, the company can set a different
price for certain countries considering the special situations that occur in them and
in this way make the decision on the price with which it will enter said market.
To characterize dumping, two copulative requirements must be met: that the export
price be lower than the comparable price in the course of normal commercial
operations for a similar product in the exporter's domestic market; and, that the
sale causes damage to the economy of the purchasing country.
We know that the International Organizations ( GATT ) that oversee International
Trade allow us to defend ourselves against dumping action by imposing anti-
dumping duties on such merchandise, which must correspond to the difference
between the export price and the normal value of the product. This normal value
must be the lowest price existing in the selling country.
Another way to defend against dumping is to establish official minimum CIF import
prices, which consists of establishing an index value on which the percentage
determined in the tariff must be applied when the CIF price of the imported product
is lower than said value.
4.5.2 SUBSIDIES OR SUBSIDIES
Governments adopt subsidy policies for certain sectors of their economy, not
always granted with technical criteria, but due to the political influence of industrial
sectors and constitutes unfair competition to the extent that it affects an export
price artificially under the subsidies can be direct. or indirect. A typical direct
subsidy is the export bonus; and indirect, the protection of the international market
through quotas, tariffs , or other restrictive mechanisms that allow higher prices to
be set for the industry , reducing foreign competition.
4.5.3 COMMERCIAL FRAUD
It is the intentional act by which the government is defrauded of income or tariffs, or
of monitoring the laws. If they commit these acts, generally, to: lower the cost of
tariffs, avoid national taxes , take advantage of the laws of other countries and
import prohibited or restricted merchandise.
4.5.4 UNDERVALUATION
The declared value of the goods is deliberately lowered to lower the cost of paying
customs duties. Undervaluation implies damage to the treasury in relation to the
lower income from ad-valorem taxes on imports, and also constitutes unfair
competition against other importers in good faith. There are various modalities, the
best known are: use of repeated invoices for the same shipment, the originals are
hidden in the cargo; mixture of goods that pay a lower tariff with others that pay a
higher tariff, etc.
4.5.5 OVERVALUATION
It is the attribution of excess value of the merchandise customs paid to the seller.
These practices are carried out to avoid national taxes, to launder money because
they lower the cost of customs tariffs (when tariffs depend on the imported
volume ).
4.6 BENEFITS OF THE CONVENTION IN PERUVIAN FOREIGN TRADE
The approval by our country of the United Nations Convention on the International
Sale of Goods has the importance and meaning of adapting us to uniform
substantive regulations for our foreign trade operations, thus reducing the
imposition of other legislation on transactions. international commercial
transactions, and guaranteeing prior knowledge of the operators regarding the
legal regime to which the international purchase and sale operation will be subject.
The country's accession to the convention will facilitate Peruvian foreign trade, by
granting it greater legal security in international commercial transactions, because
it will resort to said legal instrument permanently, both for the celebration of the
international sales contract, to carry out the agreements stipulated in said contract
and to resolve probable conflicts and controversies that arise from non-compliance
by the buyer or seller, resorting to the solution previously established by the
convention.
The fact that Peru has acceded to the convention directly benefits Peruvian
importers and exporters or residents in the country, and indirectly benefits the
Peruvian State, by producing greater revenue and the consumer in general with
the entry into the country of better quality goods. quality, as well as an incentive for
exporting entrepreneurs to sell their products abroad, generating greater foreign
exchange income and job creation.
The positive effects of Peru's accession to the Vienna Convention on International
Sales are the same as those produced in the context of international trade carried
out by the ratifying countries. These effects have been indicated in point 4.3 of this
chapter.