| [1] Definition |
- A party damaged by trading transaction may institute a trade claim to the party who induced the damage and exercise the right of indemnity.
- The trade claim has to be bilateral and feasibly objective.
- In general, claims are made to the quality terms, quantity terms, and on the packaging terms of the goods of the agreed contract, and the agreement for the execution of contract such as shipping terms, insurance terms and payment terms are followed by transportation contract, insurance contract and correspondent contract which are contingency contract. |
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[2] Cause of claims occurrence |
| (1) Unclear contract terms |
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1. Contract terms : Consideration, Parties, Subject Matters of contract
2. Contract interpretation in principle : Clear statement of governing law
3. Special trait of CIF contract: Passing of risk (Transferring the right of possession is not clearly stated in the Incoterms)
4. Special trait of F.O.B contract
5. Materializing transaction method: Sale by description, Sale by sample |
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1. Difference In conformity with and similar to and the problem
2. Problems with presence of comma
Ex)-Shrimp of East Sea, Water Boiled and Shrimp of East Sea Water Boiled |
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| (3) Difference with commercial practice and law |
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1. Incoterms and UCP
2. Alias New York Convention
3. Alias Vienna Convention |
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| (4) Insufficient credit investigation |
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1. Utilizing credit bureaus of home and abroad
2. Utilizing legations of home and abroad |
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| (5) Difference in weight and measures |
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| - Difference of measure units in quantity |
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- England : 1 Long ton - 2,240lbs. <About 1,016kg>
- U.S.A. : 1 Short ton - 2,000lbs.<About 907kg>
- France : I Metric ton - 2,204lbs.<About 1,000kg> |
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| (6) Ignorance the other countries law |
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| - Trade related law of the other countries |
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| - Food Sanitation Law, Anti-Monopoly Law, Dumping prevention Law, Industry
Property Law etc. |
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[3] Preventing claims |
(1) Sincerity principle
(2) Prohibition of right abuse
(3) Careful selection of the business party and thorough credit research |
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- Financial conditions, Transaction ability, Doubt regular way
- Duality investigation of a bank and a Commerce private detective agency.
- Credit research once in every year
- Credit supplement (Deposit, L/C) |
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| (4) Things to cautious for trade consulting |
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- Estimation
- Firm offer and Counter offer
- Acceptance
- Cleary state inspection clause and terms of quality. |
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| (5) Cleary state claim institute period on a contract. |
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| - Cleary state claiming institution date from the goods receipt from ~ to ~within. |
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(6) Carefully select a Maker
(7) Handling care for L/C |
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- L/C and contract check
- The doctrine of strict compliance
- Clearly state shipping period and L/C validity period
- If sales contract is invalidity, validity of L/C |
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| (8) Indicate more or less mark of quantity |
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- About or Approximately (number of quantity)
- More or Less Terms (Accepting terms when quantity is insufficient) : UCP
Ex)-5% more or less at seller's (or buyer's) option : 5% more or less is for a seller to determine (or Buyer).
- UCP : "about", "Circa" is 10%
- Price: Contract price, shipping or arrival price etc. |
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[4] Instituting claim and the procedure
- Follow agreement for the instituting method if there is an agreement between the parties is not, the following requisites are required in general. |
| (1) Decide who to make claim |
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1. Determine who to make claim if a claim occurs.
2. Principle : Contracted parties
Exception : If the contract parties have no responsibility for the claim occurred, claim may be requested to third parties. |
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- Making claim : Immediately notify the claim occurrence to the other party and institute a claim officially in written statement,
- Claim instituting period |
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1. With agreement : Institute within the period
2. No agreement: Each countries differentiated the period |
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- The U.S. : Within Reasonable Time
- Warsaw Oxford Rules for CIF Contract(1932) : Execute reasonable investigation and notify after 3 days of investigation completion date. |
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| 3. Vienna Convention : Investigate within short period, notify within a reasonable period. In either case, expel period is 2 years. |
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- Prepare claim instituting statement based on the principle however, indicate the both party, transaction fact, dispute occurrence discernment and demand contents.
- For the export/import related claims, contract number, date, items, quantity, the shipping port, the arrival port and include B/L and L/C numbers as well.
- Documentary evidence to prove claim
- All the documents and datums to prove instituting contents and the fact of
the matter.
- Present a surveyor's report if there is quality defect or quantity insufficiency. |
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[5] Things to examine, to correspond when claim is presented |
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1. Is it due to imperfect contract terms?
2. Has it be presented within the reasonable period after the delivery?
3. Is there objective proof of evidence to demonstrate vice?
4. Have the goods inspection executed by public survey organization and within the reasonable period of time?
5. Is the damage requesting amount calculated reasonably and possibility?
6. Has it considered the said contract's special trait?
7. Is the level of vice exceeded the tolerable rate according to the contract or by the transaction custom? |
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1. After examining instituted claim, promptly and persuasively reply of the proof and claim resolving method.
2. In processing claim, the first reply is especially important to resolve.
3. If the other party's intention is unclear or seems to be unreasonable claim as to market claim and such, thoroughly examine the details of claim, the documentations for legitimacy. |
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| - Examples of claim clause |
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- Any claim or complaint by Buyer of whatever arising under this contract, shall be made in cable within one week after arrival of cargo in destination port.
Full particulars of such claim shall be made in writing and forward by airmail to seller within 15days after cabling.
Buyer must submit such particulars as xxxxx Public Surveyor's Report, when the quantity and/or quantity of merchandise is in dispute. |
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[6] Preventing unpaid and the solution |
(1) Things to examine when L/C is accepted (Refer to advising and receiving L/C {10}[3](1))
(2) Correction request on unclear expressions
(3) Processing method of the documents that are inconsistent to the L/C terms |
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| - Immediately examine for any possible vice and re-dispatch the corrected documents to the opening bank or if validity period is still remained, dispatch it to the opening bank through the purchasing bank. The opening bank then can not process it as unpaid if the corrected transportation documents are consistent to the L/C terms. |
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| (4) Corresponding to the unpaid notification after its acceptance |
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<1> When unpaid notification is accepted, immediately dispatch a preamble details in purchasing bank's title to save the unpaid documents until further instruction.
<2> If unpaid processed due to uncorrectable vice, employ solution with importer.
<3> If fail to resolved the matter with a importer, obtain information of the said goods through third parties and examine goods return as well and send instruction to dispose the documents.
<4> If unpaid duration takes longer, delay interest and warehousing fee is large and have to consider of the good's deterioration therefore, employ the solution immediately. |
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[7] Solution methods for claim |
- When claim occurs, arbitration is better than litigation and conciliation is better than arbitration.
- Solution between the parties is better than third parties's intervention and preventing the dispute is better than the solution between the parties.
(1) Solution between the parties |
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1. It is a case when a victim withdrawal to exercise of claim. This can be established when the other party instantly propose compensation for the damage.
2. It is the most desirable solution to dissolve a dispute which secures reliable and continues transaction between the both parties. |
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1. Solution method between the both parties by independent bargaining and concession. In this case, amicable settlement is concluded in general.
2. Three things are required: The both parties should concession for amicable settlement, Conclude dispute, Agree on those meaning. |
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| (2) Solution by third parties intervention |
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1. Intermediation is a advantageous method for a fair third parties organization to intervene to compromise upon the both parties' inquiry which is possible to secure the confidential matters between the parties and maintain the business relationship.
2. Intermediation will fail if there is no cooperation of the both party. There is no compulsion in doing it but the effectiveness will be different depends on the capability of the nominated intermediation organization. |
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1. It is to select a fair third parties as a conciliator upon the inquiry of the both party or of the one side to request to propose a solution for a dispute and the both party make agreement to the conciliation statement created by the conciliator to dissolve a dispute.
2. Once a conciliation proposal come into existence, the conciliation decision will have the same effectiveness as the arbitral award but if failed, select a arbitrators and progress arbitrary procedure. |
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- Arbitration method is to request to dissolve to third parties (arbitrators) rather than a court according to the dispute parties agreement and obey to the award to finalize the dispute.
- With arbitration and conciliation system, the parties may avoid high cost and long term required litigation and proceed a simple low cost speedy procedure while securing confidential matters and dissolve a dispute reasonably. |
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| 2. The strong point of arbitration system |
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a. Voluntary reference
- The essence of arbitration and the strong point of the system is that without special restriction, all the procedure can be decided between the party's agreement.
b. peaceful atmosphere
- Progress non-formal procedure in a peaceful atmosphere.
c. speediness or single trial system (arbitration law the sub-article 11 (5))
d. closed proceedings (Procedure not open to the public)
e. expertness of arbitrators
f. low costs (Economical)
- Since single trial system, expertness of arbitrators and selecting in proxy is recognized without restriction, cost is relatively low.
g. Effects of Arbitral Award internationalism
- There are internal effect and international effect with the arbitral award. |
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| 3. Disadvantages of arbitration system |
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| a. Matter of law or question of law |
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| - Award insist that there could be "imperfection" possibility with matter of law not with matter of facts (or question of facts). But can be realized if form the composition of arbitrary tribunal to the plan. |
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| b. Problems of predictability (Prediction possibility matter for award results ) |
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- Expertises' opinion is in contrast.
- Lack of prediction possibility view - Prediction possibility view.
- There is a view that since the fact and the matter of law are all important, so if arbitration tribunals is composite in organized in harmony, there would be no risks. |
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| a. Legal nature and written statement of arbitration contract |
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- Arbitration is a legal agreement between the arbitrating parties, namely, "arbitration agreement".
- Since arbitration agreement is the essential constituent of arbitration, it requires a written agreement to avoid a dispute. For the written statement, it is acceptable in one clause by exchanged letters, telegraph or Telex
(arbitration law Article No 2 clause). |
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| b. Subject for arbitration contract |
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| - Subject for arbitration contract can be changed according to each countries' law. |
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| c. Requisite for arbitration contract |
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1. Arbitration contract may be understood differently in the aspects of legal nature but it should be understood as "Contract view of administration of
justice ".
2. Materializing requisite of arbitration contract (Materializing requisite of administration of justice)
- For the requisite to materialize arbitration contract, the parties must be capable, there should be no vice with arbitration intention, the contract terms must be feasible, confirmed, legal and there must be appropriateness for the society. (The Article No. 5 of New York Convention).
3. Validity requisite of arbitration contract (Standard requisite)
- For institutional arbitration, the following 3 requisites must be cleary indicated to conclude a validity arbitration contract. |
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1. Arbitration place (This is different from a specific questioning place within the arbitration place or with arbitration place)
2. Arbitration institution (Cleary state the title)
3. Governing law |
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4. Other requisite to progress procedure
- Because of the essence of arbitration, the parties may agree in the prior whether to make arbitration contract or as other special contract for all the process and the prior agrement will have a priority over the provisons of the governing law.
- For institutional Arbitration, the governing law is applied. |
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| d. The kinds of arbitration contract |
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1. Submission to arbitration
- It refers to arbitration contract for the actual existing dispute and the details are up to the parties agreement.
2. Arbitration clause
- Arbitration contract for the future dispute is called arbitration clause. |
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| Ex)-All disputes, controversies, or difference which may arise between the parties, out of or in relation to or in connection with this contract, or for the breach therof, shall be finally settled by arbitration in xxx, xxx in accordance with the Commercial Arbitration Rules of The xxxx Commercial Arbitration Board and under the Laws of xxxx. The award rendered by the arbitrator(s) shall be final and binding upon both parties concerned. |
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3. Examples of arbitration clause for vice
- Incorrect arbitration institution's title |
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1. Arbitration ...by the xxxxx Chamber of Committee...
2. Any disputes...by the commercial Arbitration Institute of xxxxx
3. Any disputes...by decisions of an internationally recognized trade arbitration board located in xxxxx.
4. Arbitration shall take place in Seoul in accordance with Arbitration Law of Korea and Commercial Arbitration Rules of the xxxxxx Commercial Arbitration committee. |
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| - Lack of arbitration institution and the governing law |
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| - Any disputes arising under the Charter to be referred to arbitration in xxxxx(or such other place as may be agreed) one arbitrator to be nominated by owners and the other by Charters, and in case Arbitration shall not agree then to the decision of an Umpire to be appointed by them. The award of the Arbitration or Umpire to be final and binding upon both parties. For the purpose of enforcing any award this agreement may be made as rule of the court. |
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| - Unfair arbitration contract |
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| - All dicisions of "A" with respect to matters relating to a contract shall be final and conclusive except that if "B" submits to "A" within twenty(20) days of the receipt of such decision a formal request for appeal to arbitration with respect to any controversy or claim arising out of or relating to the contract or the breach thereof settlement shall be made by arbitration to be held in xxxxx, xxxxx. The arbitration board is to consist of three persons, on appointed by "A", one by "B" and the third selected and appointed by the other two persons. |
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| e. Effectiveness of arbitration contract and the independence |
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| - Effectiveness of arbitration contract |
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| - If decided to dissolve a contract dispute by arbitration, not only a breach of contract but invalidity of contract and a dispute about cancellation is also included as well. |
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| - Depends on a arbitration contract, it can be interpreted that the effect can be exert to the successor. |
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| - Details of effectiveness with arbitration contract |
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| 1. Effect of direct appeal prohibition |
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| - Effect to exclude the right of action will occur. (Article No. 3 of he arbitration law) Except, if e a arbitration contract is invalidity, effect loss and if performance is impossible. (Alignment evidence). Since the effect is not authorities investigation item of a court the party has to plea in abatement. |
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| 2. Procedure progress of arbitrators |
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| - Selected arbitrators in accordance with a arbitration contract has the right of award. |
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| 3. Property conservation action |
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| - "By a request of the said parties or by one side" property conservation action can be instructed to other party depends on the arbitrators. |
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| 4. Cooperation duty in arbitration procedure |
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| - When arbitration procedure is launched according to a arbitration contract, the arbitration party is obligated to obey the instruction of arbitrators. |
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| 5. International effect in arbitration contract |
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| - Written stated arbitration agreement is recognized to have approval or execution exercise according the New York Convention article no 2. |
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| f. Governing law of arbitration contract |
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- If there is agreement between the parties : Follow the said party's self-government principle.
- If there is no agreement between the parties : Examine synthetic relations for decision (The parties' presume intention, purpose of contract, execution matter etc).
- The governing law and the governing for arbitration procedure of arbitration contract have to be differentiated and applying "law suspension law" for procedure is the principle. |
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| a. Requesting arbitration and Conciliation |
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| 1. Present a arbitration application form with a written statement (Original copy or duplicate) that proves arbitration agreement. |
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- The party's personal information : For case of transaction, dispute occurrence and when applying for arbitration, the said parties' consistency have to be maintained.
- Proxy : Unlike court, arbitration does not required a procedure
proxy or a lawyer.
- The number of copies to be presented for transaction details, the purport of applying and the purpose, supporting evidence : 5 sets of copy are required for all the documents except the single arbitrators (Requires 3 sets). |
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- Arbitration application
- Arbitration agreement or a contract indicating arbitration clause
- supporting documents (Proof of transaction, Surveyor Report etc)
- A letter of attorney is needed if applying by representative.
- Prepaying the arbitration charge |
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3. Place to present the documents : Commercial arbitration board executive office
4. Prepaying the application charge |
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| - The kind of prepaying for arbitration charge |
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1. Arbitration charge : Managing charge (Depends on the requesting amount), Questioning delaying charge.
2. Arbitrators charge: There are questioning charge and award statement preparing charge.
3. Other expenses: Translation, copy, dispatching charges etc. |
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- Expense pre-payer and the paying period: The applicant prepay the above fixed charges at the same time of application (Executive office)
- Calculating arbitration charge : Settle if the procedure is completed with the prepaid amount and if there is balance left, return to the applicant (To the person who prepaid).
- Return |
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1. If a dispute is dissolved before the arbitration application is accepted. (All will be return except 100 US dollar),
2. If a dispute is dissolved before the returning date of the initial name list of arbitrators (Return 2/3 of arbitration charge exceeding US 100 dollars).
3. If a dispute is dissolved before 48 hours of the 1st questioning schedule date (Return 1/2 charge exceeding US 100 dollars). |
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1. Conciliation Procedure may be processed before arbitration procedure according to the parties request.
2. If a conciliation statement is realized, (Both parties should agree), it will be processed as a amicable settlement award (It has same effectiveness as arbitral award). If failed, it will be immediately processed as arbitration procedure and other procedure, charges are applicable to arbitration procedure. |
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| b. Application acceptance notification and selecting arbitration place |
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| - Acceptance notification |
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| - If application requisite is appropriate to the regulations, a executive office accepts the application and notify the fact to the parties involved. |
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| - Arbitration place selection |
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| - If the party involved fail to decide an arbitration place within 14 days (It usually become the questioning place) the executive office may decide one with the authority. |
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| c. Selecting arbitrators and tribunal composition |
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| 1. Select by the party involved. |
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| - If the party involved selects arbitrators or selects a method to decide one, the party should select arbitrators accordingly and notify to a executive office. (Include personal information) |
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| 2. Selecting method by executive office |
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- Upon examining an incident, a executive office carefully select about 5(For one arbitration)~10 (For three arbitration) candidates from the arbitrators nominal list and send back the priority ranking to the both parties involved.
- Consider as same rank if there is no prefer ranking indication. If there is no one that is consistent, if a arbitrators without another view refuse to assumpt of office acceptance or unable to execute duty, an office can not be selected to presented nominated list so a new candidate list has to be send out for selection. |
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| 3. Limitation in selecting arbitrators |
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| - If the nationality of one party of the party involved with arbitration is from overseas, a single or arbitration chair should select from third country per a request of the involved party. |
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| 4. Arbitrators selection notification and inappropriate notification |
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| - When arbitrators is selected, notify to the parties involved. Arbitrators notify to a executive office of ineligibility fact (discrimination etc) if there is any. |
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| 5. Arbitrators eligibility, evasion and covering a deficiency |
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- Non-disqualification person may become an arbitrators, however, a an incumbent judge, a public prosecutor or a government officers are excluded customarily.
- A person who has interest in the result of arbitration or if a person is not residing within the country when selecting, the person can be a arbitrators unless there is an agreement between the parties. (Refer to the article no.19 of governing law) |
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| - Arbitration tribunal is usually composite by 1 or 3 people and they will pledge (to keep confidential, discrimination and excessive profits etc) and accept inauguration. The tribunal has the right to proceed the procedure and the right to award. |
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| d. Presenting a written answer and requesting opposition |
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| - A executive office accepts a written answer from an assailant and the arbitrators candidate nominal list from the parties involved. (Return the written answer to the person reported) |
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| e. Questioning and arbitral award |
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| - A tribunal will determined, A executive office should notify 10 days before the opening commencement (Domestic arbitrations) or 20 days before for international arbitrations. |
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- Preparing a short hand note (To be prepared by a requester)
- Attache a translated sentence (If not required by an executive office or a tribunal, it is not the necessity)
- Interpretation or translation
- Postponing questioning or questioning attendance (Peopled interested in the matter may attend the questioning session but other than that, tribunal's order is to be respect).
- Questioning procedure is not open to the public.
- Summarizing the point of issue : Of the both parties' protest, the arbitrary tribunal may summarize only the point of issue that they acknowledge and once it is summarized, it would be confirmed by the both parties and will be examined, award only for the summarized issues. |
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- Questioning starts by roll call of the incident and the parties involved. verification, presenting evidence (Will be accepted and examined while all the arbitrators and the parties involved are in presence).
- Fail to appear by one side party of the involved parties (Procedure will be in progress). concluding questioning (A tribunals proclaim conclusion). Reopen questioning (Before award, a tribunal may decide reopening of questioning) |
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| 4. Procedure not follow by questioning |
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| - Arbitrators may be proceeded by a written statement examine according to an agreement of the parties involved. |
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| 1. Amicable settlement award |
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| - While proceeding arbitrary procedure if incident settle amicably, indicate amicable settlement clause as award upon request. (Same effectiveness with award) |
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| 2. Procedures for Decision |
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- Award period : If there is no agreement between the parties involved, it will be for 3 months from the arbitrations took place. (The Sub-Article No.11-5 of arbitrations law).(For this provision, there are a doctrine of enforce provision doctrine and instruction provision doctrine).
- Ranges of award : Within the requested contents or arbitration contract range, it can be commended to exercise as actuality performance, compensation or as remedy.
- Majority rule : As long as it is not regulated as arbitrary contract or by law, the rule will be applicable. If it is same number as right or wrong, the arbitration contract will lose effect. (The Sub-Article No. 11-2 of arbitrations law).
- Formality of award and the purport of essentials : Award must be always prepared in a written statement. As long as there is not other agreements between the parties involved in arbitrations, "the purport of essentials" must be indicated. (The Sub-Article No.11-1 of arbitrations law). When a arbitration tribunals are organized with non-law specialists, there is concern about judgement omit (A ground for filing a lawsuit of arbitrary award cancellation). The original sentence will be sent to a competent court to keep, an exemplified copy will be sent to the parties involved and the treasured copy will be kept by the arbitration board. |
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| 6. Effectiveness of arbitrary award and New York agreement |
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| a. Effect and execution of arbitrary award |
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| - Internal effectiveness and execution |
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1. The arbitrary award has the same effect as the final and conclusive judgement of the court. Since it is same as the final judgement of the court it is "single trial system" (The Article No 12 of arbitrations law)
2 Arbitrary award is authorized with the materielle Rechtskraft but not the executive power(Another words, the name of debt). The execution is possible with an appropriate ruling of the court. |
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| - International effectiveness and execution |
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| - Member nation of New York agreement is granted to approve arbitrary award and execution. |
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| - Realizing agreement and the necessity |
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| - In 1958. 6. 10., 48 countries' (Advanced and underdeveloped countries and republic, democratic countries) representatives participated in New York UN conference to adopt The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards and in 1959. 6. 7, it came into effect officially. |
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| - Agreement admission and reservation declaration |
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1. According to the mutual benefits attention fundamental rule, the agreement governs award and execution that was granted within the treaty powers territory.
2. The agreement governs only the disputes that are regarded as the commercial affairs of the countries declared which are related to law. |
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1. Legal effectiveness of agreement--Varies from each countries regulations.
2. The effects of arbitrary award--Between the treaty powers, the arbitrary award is granted and the execution is also guaranteed. |
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| - Important details of agreement |
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1. Applying range
- As long as a arbitration agreement is made in a written statement and ad hoc, institutional arbitrations, the execution or an approval is acknowledged regardless of contract or not.
2. Conversion of proof of statement
- For approval and execution request form, either the orignal copy of arbitration agreement and a duplicate original sentence should be presented to the court of exercising country.
3. The principle of self-government of the parties involved will be applied and the Geneva protocol or agrement will loss effect between the countries of agreement treaty powers. |
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| - Requisite and procedure in approval and execution |
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| 1. Requisite in approval and execution |
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- Arbitrary contract should be valid,
- arbitrary procedure should be legal,
- award should have definite force and binding force,
- should not violate the public order(New York agreement The article no 5). |
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| 2. Procedure in approval and execution |
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| - Should institute a lawsuit of execution judgement request for appropriate judgement. However, it can not be severe than a domestic arbitrations award's execution procedure. (New York agreement Article No. 3, Article No. 14 of arbitrations law) |
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| 3. Reason for execution refusal |
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- Other than public order violation, there are following 5 items
(New York agreement The article no 5 clause 1.). |
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- Either arbitrations agreement is invalidity or ,
- when one side of the involved party can not consent to the arbitrations.
- If award is inconsistent to the favor contents,
- Select arbitrators, Arbitrations procedure is inconsistent to the parties involved,
- or when the award has no binding force against the involved parties. |
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| c. Lawsuit for arbitrary award cancellation |
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| - Definition and requisite |
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| - As a meaning that a country is reserving a ground whether the arbitrary award is appropriated to the law of the order, it is "lawsuit of formation". It is possible to institute "lawsuit of cancellation" according to the ground regulated in the Article No. 13 of arbitrations law (Lawsuit of arbitrary award cancellation). |
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| - If the lawsuit of cancel is final & conclusive judgement, the arbitrary contract lose its effect. However, the arbitrary award is unchangeable. Another words, only if it is canceled or not canceled can be decided. |
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| 7. Quick procedure system |
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| - Requesting amount that is under fixed amount and with a domestic arbitration (Arbitrations between the parties involved with a residence or a business place) or arbitrations in the overseas with a agreement of the parties involved. |
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| - For expedite procedure, 1 (one person) arbitrators award, determine by summarizing an issue before questioning, 1 time questioning in principle, Award within 10 days of questioning took place. |
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1. A method that solves matters compulsorily by a national organization court's decision
2. It has obstacle which a jurisdiction can not be reached to the country involved and since there is no administration of justice agreement with foreign countries, a judgment for approval and execution through litigation in the overseas can not be guaranteed. |
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[8] Procedure for breached goods |
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- Breached goods are referring to the goods occurred a claim another words, the goods that are inconsistent to a contract details.
- There are many different methods to solve such claims depends on the situations.
In this section, the procedure about to be explain here is regarding goods that developed claim due to inconsistency of the export/import goods and to solve the matter, the party agreed to replace the export goods with the same goods or to reimburse (when exporting) the payment for the said goods or to collect payment
(when importing). |
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<1> Breached goods occurred notification (Foreign importer)
<2> Breached goods processing method agreement
<3> When replacing export with the same kind but different goods and when returning export earning |
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| - Export replacing goods and return export earning |
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- It is possible to ship the replacing goods in the prior when replacing export with other replacing goods and receive the breached goods in the later time.
- If returning export earning, breach goods must be re-import. |
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<4> Breached goods arrival
<5> Bonded areas storage
<6> Import declaration
<7> Customs duty and tax payment
<8> Import permit
<9> Breached goods release
<10>Carry in replacing goods to bonded areas and payment confirmation other than trading.
<11>Export declaration and remitting export earning
<12>Export declaration acceptance and send declaration proof
<13>Shipping replacing goods
<14>Customs refund |
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| - Customs refund of replacing goods |
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| - Customs refund for the replaced goods can be subjected for refundment only if the breached goods are re-imported in accordance with the related laws and provisions. |
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| - When re-importing the exported breached goods (Character and the shape should be same as exporting), import license is waived in accordance with the related regulations, customs clear with a commissioner confirmation only. Same instruction is applied to exporting the replacing goods. |
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| - Taxation period exemption for re-importing |
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| - When importing the breached goods, only the goods that are under ~ years from the same goods export license date ca be exempted for the taxation benefit. (Except, when customs duty was already refunded or if the goods are exported from a bonded factory, the customs duty has to be paid for the said part). |
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<1> Breached goods occurred notification (local importer)
<2> Breached goods processing method agreement
<3> If replacing import is for the same kind of different goods and if collecting paid import earning |
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| - Replacing import and collect import earning |
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| - If not possible to import the same kind of different goods, import earning must to be collected. |
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<4> Carrying in the breached goods to bonded areas
<5> Export declaration |
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| - If re-exporting the imported breached goods, export license is exempt in accordance with the related regulations. |
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| <6> Refunding customs etc, |
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| - Customs refund for breached goods |
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- If exporting the breached goods, the goods must be carried into the bonded areas within ~ years from the import declaration acceptance date to receive customs refund for the breached goods.
- If the goods are unavoidable but to extinct or dispose, the goods should be carried in to a bonded areas within ~ months from the import license date and if approved by a commissioner in advance for extinct or dispose, the customs refund can be received. |
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<7> Breached goods shipping
<8> Replacing goods arrival and sending the breached goods shipping documents
<9> Replacing goods bonded areas warehousing and collecting earning
<10>Import declaration |
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- Since less quantity occurrence is not regarded as the breached goods when importing, the quantities must be confirmed before import declaration is accepted.
- If the breached goods occurred before import declaration is accepted, return goods clearance procedure has to be undergone. |
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<11>Customs duty and tax payment
<12>Import declaration acceptance and sending proof of declaration
<13>Release replacing goods |
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[9] Reference |
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- Governing law, proper law, applicable law should be clearly stated in the contract.
Ex)-This contract shall be governed by and construed in accordance with the Laws of xxxxx.
- If the party involved fail to clearly state the governing law in the contract, there must be a law (or a commercial practice) that could be acknowledge by the parties and if not, 'lex loci actus' is applied |
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| (2) UNCITRAL(UN commission on international trade law) |
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- UNCITRAL is found on 1966. 12.17 by UN general meeting 2205(XXI)vote.
- The duty of UNCITRAL is to seek for gradual harmony and to facilitate unionization of the international commercial transaction (Trade) law.
- Achievement of UNCITRAL |
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1. convention on the Limitation Period in the Int'l Sale of Goods, New York, 1974
2. UNCITRAL Arbitration Rules, 1976
3. UN Convention on the Carriage of Goods by Sea(Hamburg Rules, 1978) : The agreement is to replace Brussels agreement of B/L in 1924 and to attempt to divide risks equally between a shipper and a shipowner which was unclearly regulating by existing law.
4. UN Convention on Contracts for the Int'l Sea of Goods, Vienna, 1980) :
The agreement handles duties and obligations and contract establishing between a Seller and a Buyer for the international transactions.
5. UNCITRAL Conciliation Rules, 1980 : To settle disputes in comradeship. |
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[10] The present condition of a member nation of New York agreement (2004. 3. 134 countries currently) |
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Ex-Import Procedure(to Way of Payment)
Export-Import procedure according to the Irrevocable Documentary Credit method
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