United Nations convention on contracts for international sale on goods (CISG)

The purpose of CISG is to provide a modern uniform and fair regime for contact for
international sale of goods. Thus, the CISG contributes significantly to introduce in certainty
in commercial exchanges and decreasing transaction cost.

Why is it really matter

The contract of sale is the backbone of international trade, in all countries irrespective of their
legal tradition or level of economics development. The CISG is therefore consider one of the
core international trade law convention whose universal adoption is desirable.
The CISG Is the result of the legislative efforts that started at the beginning of 20th
century. The resulting text provides a careful balance between interest of buyer and seller.
It has also inspired contract law reform at national level. the adoption of CISG provides
modern, uniform legislation for international sale of goods that would apply whenever contract
for sale of goods is concluded between parties with a place of business in contracting pace.
In these cases, would apply directly, avoiding recourse to rules of private international law to
determine the law applicant to contract, adding significantly to the certainty and predictability
of international sale of contract.

Key provisions

The CISG governs contract for the international sales for goods between private businesses.
Excluding sales to consumers and sales of services as we as sales of certain specified types of
goods.
It applies to contracts for sale of goods between parties whose places of business are in different
contacting states. Or when the rules of private international law led to the application of a law
of contracting States.
The second parts of the CISG deals with the formation of the contracts which is concluded
by exchange of offers and acceptance.
The Third part of CISG deals with obligation of parties to the contract. obligation of the
sellers includes delivering goods and conformity with the quantity and quality related to the
contact as well as related documents, transferring the property in the goods.

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Obligations of the buyer- it includes payment of the price and taking delivery of the goods.
In addition, this part provided de common rules regarding remedies breach of contract.
The aggrieved party may require performance claimed damages or avoid contract in case of
fundamental breach.
Finally, while the CISG allows for freedom of form of the contract, states may lodge a
declaration requiring the written form.

What Are the Incoterms Rules?

Incoterms are a set of rules published by the International Chamber of Commerce (ICC)
that define the responsibilities between buyers and sellers.
Incoterms offer both parties a simple three-letter shorthand to quickly negotiate all the costs
of getting goods from origin to destination.

#1: EXW (Ex Works)

When you agree to this Incoterm, the buyer is responsible for absolutely everything from:
• Picking up the goods from the seller’s warehouse,
• Running the goods through any export procedures and paying any associated costs,
• Delivering those goods to the appropriate terminal,
• Getting the goods loaded onboard the intended truck, plane, or ship,
• And so on, until the goods reach the final destination.
Some buyers choose EXW because it often means a lower cost from the seller.
#2: FCA (Free Carrier)
This Incoterm may offer buyers a distinct advantage over EXW. Unlike EXW, FCA requires
the seller to deliver goods to a named location, often a terminal or port. The buyer is then
responsible for arranging all transportation from that point forward.
Although it seems like a small difference, this one provision can often save buyers some
money.
.
#3: DAT (Delivered at Terminal)
DAT was replaced in the 2020 Incoterms with DPU (Delivered at Place )

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Unlike EXW and FCA, the DAT Incoterm requires the sellers to pay for all the costs to deliver
a shipment all the way through to the destination terminal. From the destination port, the buyer
has to arrange for loading, delivery, and any associated customs fees for the import.
#4: DAP (Delivered at Place)
Like DAT, the DAP Incoterm dictates that the seller pays for all costs to get goods from their
origin all the way through to the destination terminal. However, the DAP incoterm also
includes:
• Loading the goods on a truck at the destination terminal.
• Delivery to the final destination.
Additionally, any customs import fees and taxes must be paid by the buyer. Although the DAP
Incoterm doesn’t require insurance, the seller takes responsibility for making sure the
goods get all the way to the final destination. Whether sellers opt for insurance coverage is
ultimately their decision. However, if goods are lost or damaged in transit, the seller is
responsible for making it right with the buyer.
#5: CPT (Carriage Paid To)
CPT is almost identical to DAP, in that the seller pays to get the goods to the destination of the
buyer’s choosing.
However, unlike DAP, under the CPT Incoterm, risk transfers to the buyer as soon as the
goods are under control of the carrier at the origin. So, for example, if the goods somehow
get lost or damaged while onboard an ocean vessel, the seller is not responsible. If the buyer
wishes to cover the goods for loss or damage, the buyer is responsible for that cost, as well as
the cost for customs import fees and taxes.
#6: CIP (Carriage and Insurance Paid To)
Under the CIP Incoterm, the seller is responsible for all costs to get goods to a final destination
agreed upon by both parties. However, unlike CPT or DAT, the seller is required to
purchase insurance against loss or damage to the goods until they arrive at the final
destination. Although insurance is included, only minimal coverage is required under the 2010
Incoterms rules, so the seller may want to purchase additional insurance to ensure the full value
is accounted for.
Finally, like the previous three Incoterms we’ve discussed, customs fees and import taxes are
not included.
#7: DDP (Delivered Duty Paid)
Under this Incoterm, the seller is responsible for just about everything:
• All transport costs to get the goods to the named delivery point.
• All responsibility in case of loss or damage along the way.

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 • Plus, any customs fees or import duties.
Although this likely will be the most expensive Incoterm for a buyer, it’s also an all-
inclusive solution that takes care of just about everything. However, as the seller, this
Incoterm can be tricky to navigate, unless you are familiar with the customs and import
procedures of the destination country. Although all the Incoterms we’ve discussed up to this
point can be used for any form of transportation, there are four Incoterms that are restricted
to transportation via sea and inland waterway.
2010 Incoterms Used ONLY for Sea and Inland Waterway Transport
#8: FAS (Free Alongside Ship)
Under the FAS Incoterm, the seller is responsible only for transporting goods to the origin port.
However, from there on out, the buyer is responsible for:
• Paying for the goods to get loaded on the ship,
• Ocean freight costs to the destination and
• Everything else needed to get the shipment to its destination.
#9: FOB (Free On Board)
The FOB Incoterm is very similar to the FAS Incoterm, but it takes it one step further. This
Incoterm dictates that the seller pays to get the goods to the origin port and gets them loaded
onto a ship of the buyer’s choosing. The buyer pays for everything from there, including ocean
freight and any subsequent costs to get the goods to their final destination.
Similar to the FCA Incoterm, this option can often be the most cost-effective one for
buyers since the seller can take care of much of the transport and negotiation in their origin
country.
#10: CFR (Cost and Freight)
When you select the CFR Incoterm, the seller is responsible for the costs associated with:
• Transporting the goods to the origin port,
• Loading them on the right vessel, and
• Ocean freight to the destination port.
However, the buyer has to pay for unloading, as well as any subsequent charges to get the goods
to their final destination.
Unlike CIF, which we’ll cover next, this Incoterm does not include insurance. As a result, the
buyer assumes the risk for the shipment as soon as it’s loaded on board the vessel. If you’re the
buyer, to protect against loss or damage in transit, you may want to consider marine cargo
insurance.
#11: CIF (Cost, Insurance, and Freight)

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Although the Incoterms 2020 rules changed the insurance requirements for the CIP Incoterm,
the insurance requirements for CIF did not change.
CIF is a common Incoterm used in both B2B and B2C transactions. It’s very similar to its sister
Incoterm, CFR. Under the CIF Incoterm, the seller pays for all the costs to get the goods
to the destination terminal. However, unlike CFR, the buyer is also responsible for
purchasing insurance that covers loss or damage up to this point. The buyer is responsible for
the unloading of the goods and its transportation to the final destination, including any
associated risks.

TRANSNATIONAL CORPORATION

UNCTAD defines Transnational Corporation as incorporated or unincorporated enterprises

comprising parent enterprises and their foreign affiliates. A parent enterprise is defined as
an enterprise that controls assets of countries other than its home country usually by
owning a certain equity capital stake. An equity capital stake of 10 per cent or more of the
ordinary Shares or voting power for an incorporated enterprise.

DIFFERENCE BETWEEN MNC AND TNC

MNCs produces commodities/products for domestic consumption of the countries in which

they operate. The TNCs, on the other hand, concentrate on producing products/commodities
ties to meet the markets of third countries, this difference is not normally made while
referring to either MNCs or TNCs.

TNCs IMPACT in a global context

In December 1995, UNCTAD Secretary-General Rubens Ricupero declared that FDI had now
superseded trade as the most important mechanism for international economic integration.

Influence in national affairs

TNCs' influence over countries, particularly those in the developing world, has not been
apparent fully in total economic power.

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TNCs actively connect with developed countries to further their interests in developing states.
In 1954, for instance, the US launched a criticism of Guatemala to prevent the Guatemalan
government from taking compensation and unused land belonging to the United Fruit Company
for redistribution to peasants.

Increasing global integration

TNCs are increasingly global and integrated through direct involvement in international trade
and development...

By the 1960s, an estimated one-third of world trade was intra-company in nature, a

proportion that has remained steady to the present day. The absolute level and value of intra-
company trade has increased considerably since that time. Moreover, 80% of international
payments for technology royalties and fees are made on an intra-company basis

Manipulative price transfers

Concerns stemming from intra-company trade relate to the ability of TNCs to maximise profits
by avoiding both market mechanisms and national laws.

By lowering prices in countries where tax rates are high and raising them in countries with a
lower tax rate.

TNCs and development

Since the 1980s, the involvement of TNCs in international development has accompanied and
encouraged the rise of corporate economic power in the world. With an effort to reduce barriers
to trade and investment in the last decade, TNCs have lobbied actively to shape regional and
international markets, such as Europe's Single Market agreement, the North American Free
Trade Agreement (NAFTA), and the Uruguay Round of the General Agreement on Tariffs and
Trade (GATT).

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TNCs and human health

According to the data, TNC activities generate more than half of the greenhouse gases emitted
by the industrial sector with a serious impact on global warming. TNCs control 50% of all oil
extraction and refining, and a similar proportion of the extraction, refining, and marketing of
gas and coal. Additionally, TNCs have almost exclusive control of the production and use of
ozone-destroying chlorofluorocarbons (CFCs) and related compound.

TNCs are manufacturing most of the world's chlorine, the basis for some of the most toxic and
bio accumulative synthetic chemicals known, such as PCBs, DDT, dioxins and furans,
chlorinated solvents, and thousands of other organochlorine compounds22. The impact of these
chemicals on health may include: immune suppression; birth defects; cancer; reproductive, and
neurological harm; and damage to the liver and other organ.

TNCs and employment

In an era of globalization with reduced constraints on their mobility and the attraction of
cheaper labour in developing countries eager for foreign investment, TNCs are eliminating jobs
in their home countries and shifting production abroad

US-based TNCs have eliminated jobs vigorously at home in past decades. Between 1982 and
1993, for example, American TNCs cut over three-fourths of one million jobs at home but
added 345 thousand jobs outside the country

In less-industrialised regions, the lure for TNCs of lower costs and fewer regulations turned
into promises of decent working conditions, sufficient pay, and job security. More
fundamentally, TNCs got involved in the unemployment problems in Asia, Latin America, and
Africa, where an estimated 38 million new job seekers enter the labour market annually (