INTERNATIONAL TRADE LAW Nandang Sutrisno Defining International

INTERNATIONAL TRADE LAW Nandang Sutrisno

Defining International Trade Law Simple: Sale and purchase activities from one country to another Broad: Any activities of exchanging goods or services that are commercial in nature or are aimed at gaining economic benefits involving two or more countries. Report of General Secretary of UN (Resolution of GA No. 2102/xx/20, December 1965: International Trade Law: All norms governing trade relationships that are private law in nature and involving several countries. New Development: - Private Law and Public Law - Coexistence

The Scope Sudargo Gautama International Trade Law: 1. International Sales (and Purchases) – The Contract making – Agency Agreement – Exclusive Sales (and purchases) 2. Securities (negotiable instruments) and commercial Bank Loan. 3. The commercial activities governed by the Commercial Code. 4. Insurance 5. Carriage 6. Industrial Property Rights and Copy Rights

Prof. A. de Mestral International Trade Law: 1. General Principles of International Law governing the economic relationships among states. • General Principles of Law • International Agreement 2. Contract Law: • Sales and purchases • Agency • License • Insurance • Transportation • Banking and Finance 3. The export-import of goods law

4. Transnational Corporations Law 5. Dispute settlement law, especially the international arbitration law. 6. Taxation. 7. Foreign Direct Investment 8. Transaction of securities. 9. International Banking and Finance, including IMF and World Bank.

The Significance of International Trade Vital component of national and international economy 1. National and international economic growth – Structural change – Main determinant of economy 2. Initial step prior to international operation of a business – joint venture – FDI – Licensing System 3. Efficient means of international operation Prerequisite: liberalization of trade 4. Integrated part of international business

International Trade Process (Proses Perdagangan Internasional) • • Sale’s Contract Process Letter of Credit Opening Process Cargo Shipment Process Shipping Documents Negotiation Process

Sale’s Contract Process 1 E X P O R T E R PROMOTION INQUIRY 3 OFFER SHEET ORDER SHEET 5 2 4 SALE’S CONTRACT SALE’S CONFIRMATION 6 I M P O R T E R

INTRODUCTION LETTER Dear Sir, Allow us to introduce our company as a manufacturer and Exporter of rattan furnitures to many countries. We are enclosing herewith our colourful brochure of our products for you perusal. We do hope the product will meet your requirement and we shall be very pleased to have your inquiry and valuable order in due time. In case you need any further information, please do not hesitate to contact us. Sincerely yours, PT Rotan Sago ______________ Export manager

INTRODUCTION LETTER Dear Sir, We read your advertisement in Trade and Commerce Magazine and understood that you are a reliable importer of lady’s garment and textile in your country. In this case, allow us to introduce our company specialized in exporting garments and footwear from Indonesia to many department stores as well as to your country. We are very eager to be one of your supplier and therefore we are attaching herewith our leaflet illustrating our latest model and style of Indonesian lady’s garment and fashions. We hope to receive your valuable inquiry and order in the shortest possible time. Truly yours, KOPERASI SANDANG JAYA _______________ Export Department Head

LETTER OF INQUIRY FOR A QUOTATION DAIMEN KABUSHIKI KAISHA 15 CHIODA-KU, TOKYO April 16, 2006 No. Ref. : 031/Ind/2006 Subject : Wood Crafts – Indonesia Messr. PT Kerajinan Kayu Indonesia Jl. Pahlawan No. 10 Yogyakarta – Indonesia Dear Sir, We have been informed by your Commercial Attache here in Tokyo that your company is reliable manufacturer and exporter of wood-crafts in Indonesia.

We are very interested to import those wood-crafts to Japan and therefore, please send us your offer for the following: Articles : 1. Wooden Toys 2. Wooden Animals 3. Other Wooden Gift items Quantity : minimum quantity available for export Shipment: as soon as possible Packing : Export seaworthy packing Please quote CIF Yokohama and specify FOB insurance and freight separately. Hoping to receive your offer soonest. Yours faithfully, DAIMEN KABUSHIKI KAISHA _____________ Import Manager

OFFER SHEET PT KERAJINAN KAYU INDONESIA JL. PAHLAWAN NO. 10, YOGYAKARTA – INDONESIA ________________________________ April 18, 2006 No. Ref : 01/Exp/IX/2006 Subject : Wood Crafts – Indonesia Messrs. DAIMEN KABUSHIKI KAISHA 15 Chioda-Ku Tokyo – Japan Dear Sir, In reply to your inquiry Ref. No. 031/Ind/2006 dated April 16, 2006 we have the pleasure to send herewith our offer (subject to our final confirmation) as follows:

__________________________________ Items No. Description of Goods Quantity Unit Price Total Price __________________________________ 1 Wooden Car 100 Pcs US$ 500 2 Wooden Bird 100 Pcs US$ 500 3 Wooden Pitcher 100 Pcs 10 US$ 1000 US$ __________________________________ Total FOB Tj. Priok US$ 2000 __________________________________ Price : FOB Tj. Priok US$ 2000 Insurance W. A. US$ 40 Freight to Yokohama US$ 160 ______ CIF Yokohama US$ 2200 Packing : Item 1 : each car packed into corrugated kraft box. 10 kraft boxes packed in wooden case.

__________________________________ Packing : Item 2 : each bird packed in corrugated kraft box. 10 kraft boxes packed in wooden case. Item 3 : one set consisting of 2 (two) pieces of pitcher, packed in a wooden case. Shipment : May 15, 2006 The cargo will be shipped in container. Partial shipment is prohibited. Transhipment at Singapore is allowed. Payment Credit on our : By opening an irrevocable and confirmed Letter of favour. Looking forward to your valued order, meanwhile we remain. Sincerely yours, Muhammad Noor -------------Export Manager

L/C OPENING PROCESS IMPORTER (Applicant) 1 OPENING BANK L/C Application 2 OFF SHORE ON SHORE L/C CON FIRM ATION 3 EXPORTER (Beneficiary) L/C Advice ADVISING BANK

CARGO SHIPMENT PROCESS OPENING BANK 4 CARGO DELIVERY 5 IMPORTER CUSTOMS OFFICE OFF SHORE ON SHORE ADVISING BANK 1 EXPORTER SHIPPING AGENT 3 BOOKING BILL OF LADING CUSTOMS OFFICE 2 S H I P M E N T SHIPPING COMPANY

SHIPPING DOCUMENT NEGOTIATION PROCESS Delivery of Shipping Docs. IMPORTER 5 OPENING BANK C O L L E C T I N G OFF SHORE ON SHORE 1 3 NEGOTIATION EXPORTER 2 PAYMENT 4 RE IM BUR SE ME NT ADVISING BANK

EXPORT L/C CYCLE 5 GOODS SELLER BUYER 1 8 S 10 s SALES CONTRACT 6 L/C DOCUMENTS 4 Application 2 3 9 DOCUMENTS L/C 7 DOCUMENTS ADVISING BANK s 11 ISSUING BANK

IMPORT L/C CYCLE GOODS 5 BUYER SELLER 1 10 S SALES CONTRACT 9 Application 8 L/C 2 4 s 6 DOCUMENTS 3 L/C DOCUMENTS 7 11 ISSUING BANK s ADVISING BANK