21. What does exw mean?

An INCOTERMS trade term whereas seller makes the goods available at his premises. The buyer is responsible for all charges.

This trade term places the greatest responsibility on the buyer and minimum obligations on the seller, and it means that a seller has the goods ready for collection at his premises (Works, factory, warehouse, plant) on the date agreed upon and the buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination.

The seller delivers the good at seller's premiese or named place (works, factory and warehouse,etc), but not loaded on collecting vehicles and not cleared for export.

The seller has no obligation to load the goods, even though in practice he may be in a better position to do so. If the seller does load the good, he does so at buyer's risk and cost.

22. What group of Incoterms term is the best option for the purchaser\buyer?

Group "D" -“delivered”, with the seller bearing all the costs (other than those related to import clearance, where applicable) and risks involved in bringing the goods to the named place of destination

DAT Delivered At Terminal

DAP Delivered At Place

DDP Delivered Duty Paid

as they put the most obligations in terms of delivery and insurance on the seller and transfer of risks occurs at moment of specified delivery.

23. How INCOTERMS are linked to CISG?

INCOTERMS are incorporated into the CISG through Article 9(2) which provides that,the parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned. That means any clause stating for instance "EXW" or "fob" without specific reference to INCOTERMS was to be interpreted according to INCOTERMS, as it is most widely known and recognised by world trade community commercial trade terms. In some countries such as Germany or Ukraine, the international commercial practice attains the force of law, i.e. INCOTERMS definitions have the force of law as trade custom.

24. What alternative dispute resolutions techniques do you know?

1-mediation, 2 neutral evaluation

3- mini-trial

other settlement techniques

25. What is CISG and when it applies to contracts of international sale?

The United Nations Convention on the International Sale of Goods (CISG) was signed in Vienna in 1980 and came into force in 1988. The process of drafting and signing the CISG took 12 years, but it built upon twin predecessor instruments that were signed at The Hague in 1964 and were themselves the product of an extensive process of consideration and uniting the efforts of both continental and common law practitioners.

CISG applies to contracts of sale of goods between parties whose places of business are in different States-parties to convention: (a) when the States are Contracting States; or (b) when the rules of private international law lead to the application of the law of a Contracting State. The fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear either from the contract or from any dealings between, or from information disclosed by, the parties at any time before or at the conclusion of the contract.

CISG does not apply to sales: (a) of goods bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use; (b) by auction; (c) on execution or otherwise by authority of law; (d) of stocks, shares, investment securities, negotiable instruments or money; (e) of ships, vessels, hovercraft or aircraft; (f) of electricity.

26. How the international commercial transaction may be defined?

International commercial transactions - business agreements\transactions conducted between parties from different countries on exchange of goods, services or works against consideration between different nationals etc. A transaction though is usually more widely defined in legal science then the contract - an equivalent to this term in Russian is сделка, and in Ukrainian - правочин, угода. International Commercial Transactions include any business transaction between citizens of different countries, and any business transaction between a citizen of one country and the Government of another country or a governmental entity in another country, e.g. province, state, city

An international commercial transaction however is not simply a contract - this term used in business practice and business management theory for describing a process of business. Therefore, the international commercial transaction may be defined as process which usually includes four stages: 1) Preparation before the negotiation - this includes analysis, due diligences and monitoring; 2)Trade Negotiations, 3)Signing one or few Contracts formalising the international commercial transaction; 4)Implementation or execution of the contract.

27. What is preparation before the negotiation as a part of international commercial transaction?

The preparation before negotiations as a stage of international commercial transaction includes analysis, due diligences and monitoring. What needs to be analysed: target country:economic and natural resources,legal environment, infrastructure,climate and geography,cultural background, political climate etc., prospective business partner (credit reference, background information, business range, business culture). Also, very important is an identification and analysis of particular target (a company, business, land etc) etc. At this stage already it is better to involve qualified advisors and negotiators with specialized skills.

It is also crucial to conduct proper negotiations planning - define the specific negotiating objective, state the minimum acceptable level for each of the major items, set time schedules for implementation, budget etc.

At preparatory stage the business shall already assess and discuss the ways to lead the business in a foreign country- and decide on which particular transaction the negotiations should be held. Preliminary structures of future business shall be elaborated, legal and tax environment of the country clarified and preliminary legal due diligences shall be conducted.

28. How the trade negotiations process is regulated by international commercial law?

A conduct of parties to negotiation is regulated differently in different countries, and in some jurisdictions is not regulated at all. Here, the international commercial law comes into picture, as it regulates the legal issues that may arise during negotiation stage and sets the unified standards for whole negotiation process. This is where the good faith principle is very important and serves as protection against misconduct of partners in international business.

This stage includes - Invitation to offer; preliminary due diligences, formation of contract - The offer; The counter offer;Acceptance of the offer; signing memorandum of understanding\letter of intent

One of the most important documents clearly regulating offer-counteroffer-acceptance issues is the UN Convention on International Sale of Goods (1980) or shortly CISG. As of today, it is effective for the 78 countries. Part 2 of the convention actually deals with the trade negotiations stage, calling it a formation of a contract.

29. What documents are prepared during negotiations phase of international commercial transaction?

Invitation offer; due diligence reports; The offer; The counter offer; Acceptance of the offer;Memorandum of understanding; Letter of intent.

30. What is the offer and invitation to offer?

Article 14 of CISG states that a proposal for concluding a contract addressed to one or more specific

persons constitutes an offer if it is sufficiently definite and indicates the

intention of the offeror to be bound in case of acceptance. A proposal is

sufficiently definite if it indicates the goods and expressly or implicitly

fixes or makes provision for determining the quantity and the price. A proposal other than one addressed to one or more specific persons is to be considered merely as an invitation to make offers, unless the contrary is

clearly indicated by the person making the proposal.

31. What is the acceptance of offer to conclude international sale contract? By what legal document\act of international commerce is it regulated?

The acceptance of the offer consitutes formation of contract during negotiations and is regulated by CISG. Article 18 of CISG states that "A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance. Silence or inactivity does not in itself amount to acceptance." An acceptance of an offer becomes effective at the moment the indication of

assent reaches the offeror. An acceptance is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time, due account being taken of the circumstances of

the transaction, including the rapidity of the means of communication employed by the offeror. An oral offer must be accepted immediately unless the circumstances indicate otherwise.

32. What is a counter-offer to conclude international sale contract? By what legal document\act of international commerce is it egulated?

The counter- offer consitutes part of formation of contract during negotiations and is regulated by CISG. Article 19 of CISG states that "A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer. However, a reply to an offer which purports to be an acceptance but contains

additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not so object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance. Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party's liability to the other or the settlement of disputes are considered to alter the terms of the offer materially."

33. What are the types of contracts formalising international commercial transactions?

The type of the contract to be signed and its content depends on results of negotiations and the type of business solutions:

1.Direct export or import of goods- contract of international sale of goods. The most important document which regulates such contract is UN Nations Convention on International Sale of Goods as of 1980\CISG

2.Indirect sales through use of foreign agent to sell and distribute. - contracts of international agency\distributorship agreements.International distribution - distributor is not simply an agent or reseller - it deals with the promotion and organisation of distribution in the assigned territory, usually has a privileged position on the territory of distribution for sale of certain goods from supplier, distributor is usually obliged not to distribute competing products, relationship should be loyal and for certain duration.

3.Manufacture products in the foreign country by either setting up business (local entity or SPV (special purpose vehicle) or by acquiring a foreign subsidiary (acquiring shares or participatory interest) – direct foreign investment contracts, loan and trade finance contracts, import contracts etc

4. Licence to a local producer to produce goods under certain brand - licensing contracts\agreements on trademark use.

5. Forming a joint venture with a foreign entity-joint venture agreement;

6. Appointing a franchisee in the foreign country - international franchising

7. Supply goods or services to a foreign state or public entity - public procurement with foreign participation; government contracts, oil and natural resources concessions

8. Conduct construction works - construction contract

9. Construct or reconstruct infrastructure or its part (water supply networks, gas supply and distribution, airports, ports, hospitals etc) in foreign country - project finance, concessions, public-private partnerships

10. Supply of services - carriage\other trasnportation, consulting, advisory, engineering, financial - leasing, insurance etc.

34. What is international trade finance?

International trade finance is in other words - ways and techniques to finance international commercial\trade transactions. In one form it is quite a precise science managing the capital required for international trade to flow. Yet within this science there are a wide range of tools at the financiers’ disposal, all of which determine how cash, credit, investments and other assets can be utilised for trade.

There are a number of ways in which banks can help clients in their international commercial transactions for a fee:Letters of credit (LC), import bills for collection, shipping guarantees, import financing, performance bonds, export LC advising, LC safekeeping, LC confirmation, LC checking and negotiation, pre-shipment export finance, export bills for collections, invoice financing, and all the relevant document preparation.

35. What is international factoring and forfaiting?

Factoring, or invoice discounting, receivables factoring or debtor financing, is where a company buys a debt or invoice from another company. In this purchase, accounts receivable are discounted in order to allow the buyer to make a profit upon the settlement of the debt. Essentially factoring transfers the ownership of accounts to another party that then chases up the debt.Factoring therefore relieves the first party of a debt for less than the total amount providing them with working capital to continue trading, while the buyer, or factor, chases up the debt for the full amount and profits when it is paid. The factor is required to pay additional fees, typically a small percentage, once the debt has been settled. The factor may also offer a discount to the indebted party.Forfaiting is the purchase of an exporter's receivables – the amount importers owe the exporter – at a discount by paying cash. The purchaser of the receivables, or forfaiter, must now be paid by the importer to settle the debt.As the receivables are usually guaranteed by the importer's bank, the forfaiter frees the exporter from the risk of non-payment by the importer. The receivables have then become a form of debt instrument that can be sold on the secondary market as bills of exchange or promissory notes.

International factoring is regulated by 1988 Unidroit Convention on International Factoring.

36. Which legal act\document regulates the contracts of international agency?

Convention on Agency in the International Sale of Goods (Geneva, 17 February 1983) - the convention applies where one person, the agent, has authority or purports to have authority on behalf of another person, the principal, to conclude a contract of sale of goods with a third party. It governs not only the conclusion of such a contract by the agent but also any act undertaken by him for the purpose of concluding that contract or in relation to its performance. It is concerned only with relations between the principal or the agent on the one hand, and the third party on the other. It applies irrespective of whether the agent acts in his own name or in that of the principal. The Convention does not apply to: (a) the agency of a dealer on a stock, commodity or other exchange; (b) the agency of an auctioneer; (c) agency by operation of law in family law, in the law of matrimonial property, or in the law of succession; (d) agency arising from statutory or judicial authorisation to act for a person without capacity to act; (e) agency by virtue of a decision of a judicial or quasi-judicial authority or subject to the direct control of such an authority.