International Trade and Commercial Law Essentials

A. Globalisation and International Trade

• Globalisation: Countries become more connected through trade, technology, culture, and finance.
• Hard Power: Influencing countries through military or economic pressure.
• Soft Power: Influencing countries through attraction, culture, and diplomacy.
• Smart Power: Combining hard and soft power strategies.
• Reshoring: Bringing production back to the home country.
• Nearshoring: Moving production to a nearby country.
• Friendshoring: Moving supply chains to politically allied countries.
• Decoupling: Reducing economic dependence between countries.
• Offshoring: Moving production to another country for lower costs.
• Outsourcing: Hiring another company to perform a business activity.
• Supply Chain Diversification: Using multiple suppliers to reduce risk.
• Deglobalisation: Reduction of global trade and economic integration.
• Economic Nationalism: Protecting domestic industries through tariffs and subsidies.
• Multinational Corporation (MNC): A company operating in multiple countries.
• Foreign Direct Investment (FDI): Investment with ownership and control in a foreign business.
• Global Value Chain (GVC): Production stages spread across different countries.
• Trade War: Mutual imposition of tariffs between countries.

B. Sources of Law in International Trade

• Constitution/Code: The highest law of a country; all other laws must follow it.
• Legislative Enactment: Laws passed by parliament; primary laws set main rules and secondary laws add detail.
• International Treaties: Binding agreements between countries once ratified.
• EU Law (Acquis Communautaire): The entire body of EU law that member states must adopt.
• Jurisprudence/Case Law: Law created by judges through court decisions and precedents.
• Customary Law: Unwritten rules based on long-established practices considered legally binding.
• Conflicts of Laws: Determines which country's law and courts apply when several jurisdictions are involved.
• Substantive Law: Defines rights and obligations.
• Procedural Law: Governs how legal cases are conducted and enforced.
• Civil Law: Law governing disputes between private parties.
• Criminal Law: Law dealing with crimes against society, prosecuted by the state.

C. Contract Law

• Pacta Sunt Servanda: Agreements must be kept once validly signed.
• Rebus Sic Stantibus: Fundamental unforeseen changes may justify modifying or ending a contract.
• Force Majeure: Uncontrollable event preventing contractual performance.
• Hardship Clause: Allows renegotiation when performance becomes much more burdensome.
• Frustration of Purpose: Contract may end if its original purpose disappears.
• Impracticability: Performance becomes extremely difficult or expensive due to unforeseen events.
• Boilerplate Clause: Standard clauses included in most contracts.
• Penalty Clause: Pre-agreed compensation for breach of contract.
• Abusive Clause: Unfair contractual term creating a significant imbalance.
• Hell or High Water Clause: Obligations must be fulfilled regardless of circumstances.
• Duress: Contract signed under threats or violence; contract is void.
• Undue Influence: Abuse of trust or authority to obtain consent.
• Unconscionability: Contract is so unfair that courts refuse to enforce it.
• Consideration: Exchange of value required for a valid common-law contract.
• Good Faith (Bona Fide): Parties must act honestly and fairly.
• Statute of Limitations: Legal deadline to bring a claim.
• Forum Shopping: Choosing the court most favourable to your case.
• Burden of Proof: Obligation to prove a claim in court.
• Preemptive Right (DPS): Existing shareholders can buy new shares before outsiders.
• Due Diligence: Investigation before completing a major transaction.
• Disclosure Letter: Seller reveals exceptions to warranties during a business sale.
• Locus Standi: Right to bring a legal action.

D. Intellectual Property

• Patent: Exclusive right to use and sell an invention for up to 20 years.
• Trademark: Distinctive sign such as a logo, name, or slogan identifying a brand.
• Industrial Design: Protects the visual appearance of a product, not its function.
• Copyright: Automatic protection for original creative works.
• Geographical Indication: Protects products whose quality depends on a specific geographic origin.

E. Competition Law

• Anti-Competitive Agreements: Any agreement between companies that restricts competition.
• Cartel: Secret agreement between competitors to fix prices or share markets.
• Leniency Programme: Reduction or cancellation of fines for reporting a cartel.
• Abuse of Dominant Position: When a powerful company uses its market position unfairly.
• Merger Control: Review of mergers to ensure competition is not reduced.
• Horizontal Merger: Merger between direct competitors.
• Vertical Merger: Merger between companies at different stages of production.
• Concentric Merger: Merger between companies selling related products.
• Conglomerate Merger: Merger between companies in different industries.
• Regulators (CNMC/FTC/SEC): Competition and financial authorities.

F. Customs and Tariffs

• Harmonized System (HS): Global product classification system.
• Combined Nomenclature (CN): EU extension of the HS using 8-digit codes.
• TARIC: EU tariff database including duties and quotas.
• Binding Tariff Information (BTI): Official customs decision confirming classification.
• Authorized Economic Operator (AEO): Certification for trusted companies.
• Single Administrative Document (SAD): Standard customs declaration form.
• Rules of Origin: Criteria to determine a product’s economic nationality.
• Anti-Dumping Duties: Extra tariffs on imports sold unfairly below market value.
• Duty Relief: Mechanism allowing reduced or zero duties.
• Tariff Quota: Limited quantity of imports allowed at reduced rates.
• ATA Carnet: Document allowing temporary imports without duties.
• Free-Zone Areas: Areas where goods are stored without duties or VAT.
• Customs Warehousing: Storing non-EU goods without paying duties until release.
• Inward/Outward Processing: Importing/exporting for processing and re-export.
• Exchange Rate Insurance: Tool to fix exchange rates in advance.
• Risk Analysis: System to identify risky shipments.
• Customs Transit: Moving goods through countries without paying duties until the destination.
• Freight Forwarder: Company organizing international transport.
• Tariff Retaliation: Imposition of tariffs in response to trade barriers.

G. VAT Accounting and Sales

• Output VAT: VAT collected on sales.
• Input VAT: VAT paid on purchases.
• VAT Return: Report calculating the difference between Input and Output VAT.
• Origin Principle (B2C): VAT paid in the seller’s country.
• Destination Principle (B2B): VAT paid in the buyer’s country.
• Export Exemption: 0% VAT on sales outside the EU.
• Intra-EU Supply: 0% VAT on business sales between EU countries.
• Import VAT: VAT paid when goods enter the EU.
• Reverse Charge: Buyer declares VAT instead of the seller.

H. Commercial Terms and Marketing

• Incoterms: 11 rules defining transport, risk, and cost responsibilities.
• Payment Methods: Cash in Advance, Letter of Credit, Documentary Collection, and Open Account.
• Marketing Restrictions: Laws against misleading actions, omissions, and aggressive practices.

I. Geopolitical and Societal Scenarios

• Tech Trade War: An example of Economic Nationalism and Decoupling, leading to supply chain shifts.
• Data Privacy: The evolution of consumer concerns leading to regulations like the GDPR.