International Affairs

Export

The success of a company relies upon it having good business contacts and being sufficiently aware of business opportunities. The CCI Magdeburg provides support for local businesses which operate in international markets and wish to conduct business there. We can supply information on importing and exporting, the European internal market, invitations to tender and support programmes as well as on extending into new markets and finding business partners. The German chamber organization currently receives support from its 90 chambers abroad (www.ahk.de) in eighty different countries. In addition to supplying useful addresses and putting businesses in touch with general or specialist business partners, they can also offer a range of much more sophisticated services. You should also consider approaching Germany Trade and Invest (www.gtai.de), which has the latest information on foreign markets as well as providing systematic access to tenders and requests for goods. Attending trade fairs can be a useful way of meeting potential partners or selecting suitable products (www.auma.de).

The Basics

The following information is not specific to any particular country, as the fundamental principles apply to the establishment of international trade relationships in general.
Regardless of the target country, it is important to clarify that, as far as the practical management of import and export trade is concerned, most of the regulations relating to the movement of goods to and from third countries are either governed by or based on EU law. However, in addition to this, individual member states of the European Union have their own national legislation which can sometimes differ considerably from one country to another, but which must also be observed in the appropriate circumstances. It is important to establish early which laws apply, if one wishes to make the transition from business concept to reality as smooth as possible.

Incoterms®

Businesses often know nothing about the different trading practices of their foreign counterparts. By reaching a contractual agreement to handle deliveries in accordance with Incoterms® (officially known as ‘Incoterms® 2010 by the International Chamber of Commerce [CCI]’), misunderstandings and differing interpretations of the other party’s delivery clauses can be avoided or at least minimized. Incoterms® mainly serve to regulate some of the terms of delivery and acceptance for buyers and sellers engaged in foreign business transactions. However, they also establish the point at which risk is transferred from the seller to the buyer and define the allocation of costs for transporting and insuring the goods. The Incoterms® published by the International Chamber of Commerce in Paris (www.iccwbo.org) are used to simplify foreign trade. However, they will only become part of the contract by explicit agreement. It is also important to specify which version of the Incoterms® is being used. Since 1 January 2011, this has been Incoterms® 2010.
However, the Incoterms® do not cover all the clauses required for an international sales contract. That is why it is advisable to settle any other matters no later than at the contract stage, although preferably beforehand, at the offer stage. These include terms of payment, delivery deadlines, warranty and guarantee obligations, etc. In cross-border contracts, the following areas are also of especial importance.

Standard Terms and Conditions

For Standard Terms and Conditions to be valid, they must meet widely differing criteria in different jurisdictions. In order to ensure the validity of these Standard Terms and Conditions, it is therefore essential to verify in every case that they are compatible with the law in force in the country concerned.

Choice of Law

When entering into cross-border contracts, the parties often overlook the question of which national law should apply. The best choice to make will depend on individual circumstances. The contracting parties usually have the opportunity to decide which legal system to adopt, and should take advantage of this.
If the contracting parties neglect to do so, international private law should be consulted to determine which country’s laws should be applicable. The conflict-of-law rules enshrined in the country’s legislation will play a key part in this decision. These determine which legal system should apply to issues of a cross-border nature.

Arbitration / Legal Venue

Arbitration has become an established alternative to normal legal channels when it comes to international business transactions. One of arbitration's advantages is that the parties themselves can choose the arbitrator, the type of proceedings and how they are conducted. In most cases, it also provides a faster and more cost-effective solution than bringing proceedings before a foreign court. Information on the German Institution for Arbitration (Deutsche Institution für Schiedsgerichtsbarkeit e.V.) is available online.
It is important to ensure that the arbitration award will be recognized and enforced by the courts of the contractual partner’s home country. This issue, as well as the choice of a suitable arbitration system, must be clarified before a binding arbitration clause is included in the contract.

Producer’s Liability

Nearly every country has its own producer’s liability legislation, either in the form of specific laws (such as is the case in EU countries) or as part of its consumer protection legislation. Almost without exception, the burden of proof is on the manufacturer and/or importer or seller if personal injury or material damage is caused by a faulty product. Since legislation, the administration of justice and the level of any compensation to be paid differ from country to country in this area, a market-related risk assessment should be carried out for hazardous products before they are first put on sale, and in certain circumstances an agreement on the (albeit only internal) sharing of risk between the manufacturer and the distributor should be included in the contract.

Industrial Property Rights

For many companies, patents, utility models, designs, trademarks and copyright play a key role in their success in foreign sales markets. Consequently, it is important to protect one’s own trademarks both at home and abroad, i.e., in the EU and worldwide, and to word contracts with foreign trading partners in such a way as to prevent any abuse of one’s own rights by the other party to the contract or a third party. Detailed information on this can be obtained from the German Patent and Trademark Office (Deutsches Patent- und Markenamt).

Export Procedures

Any goods not placed under outward processing customs procedures or a transit procedure are governed by the export procedures of the European Union. This means that a declaration must be made to the customs office responsible for supervising the place where the exporter is established or where the goods are packed or loaded for export shipment. The exporter is deemed to be the person on whose behalf the export declaration is made and who is the owner of the goods or has a similar right of disposal over them at the time the declaration is made. If this person is established outside the Community according to the terms of the contract governing the transaction, the contracting party established in the EU shall be deemed to be the exporter.
Certain goods require an export license. This applies in particular to military weapons, goods with a military use, certain chemicals and chemical equipment, but also hi-tech goods of strategic military and/or security relevance. Goods requiring an export license are listed in the Foreign Trade and Payments Act (Aussenwirtschaftsgesetz), the Foreign Trade and Payments Ordinance (Aussenwirtschaftsverordnung), Council Regulation (EC) No 428/2009 on dual-use items, and amendments to these documents, as well as in the Export Control List (Annex AL to the German Foreign-Trade and Payments Ordinance). Additional information on German export control legislation can be found at the website of the Federal Office of Economic Affairs and Export Control (BAFA).