First, it is important to highlight that, when you talk about “Vienna Convention” you need to clarify specifying the topic, for there are many editions to this Convention and each one deals with a different subject. There are, for example: the Vienna Convention on Diplomatic Relations, the Vienna Convention on Consular Relations; the Vienna Convention on the Law of Treaties;; the Vienna Convention for the Protection of the Ozone Layer; the Vienna Convention on Civil Liability for Nuclear Damage; the Vienna Convention on Road Traffic, etc. Among these there is the Convention to which this article refers, the Vienna Convention on Contracts for the International Sale of Goods (CISG), and is in fact called “United Nations Convention on Contracts for the International Sale of Goods”.
This convention was drawn up in April 11th 1980 during the United Nations Convention on Contracts for the International Sale of Goods, with the support of the United Nations Commission on International Trade Law (UNCITRAL), and came into force in January 1st 1988, aiming at adopting uniform rules regarding contracts for the international sale of goods which would take into account the different social, economical and juridical systems, contributing to the elimination of juridical obstacles to international exchanges and promoting the development of international trade.
Today, around 75% of countries have adhered to the Convention. In whole it is 85 signing countries, among them Brazil’s chief trading partners like China, the United States, Mercosur members, Chile, Canada and many European nations. Brazil was the 79th country to sign the convention in march 2013, but the document only came into force in April 1st 2014, and was promulgated by Dilma Rousseff by Decree number 8.327 in October 16th 2014.
The Convention contains 101 articles divided in four parts: Part I refers to the application of the Convention and general dispositions. Part II pertains to the rules on the formation of contracts for international sale of goods, while Part III establishes the basic rights and obligations for the buyer (importer) and seller (exporter). At last, Part IV contains the final dispositions of the Convention, which relate subjects as: when and how it will come into force, accepted reservations and declarations, and the application of the Convention to international sale contracts in which both States have the same or similar laws on the same subject.
What about the Incoterms?
At this point the following question may come up: “if this convention refers to the duties of seller and buyer, how do the use of Incoterms fall in place?”
As it is known, the incoterms are sale contract articles that deal with the moment where damage risk is transferred from the seller to the buyer (this moment and place is called the “delivery” of the goods), and also which costs and from what moment on each party takes it over from the beginning to the end of the process. Today there are eleven terms, created by the International Chamber of Commerce (ICC) in Paris, which are dealt by the importing and exporting agents according to their abilities to take on responsibilities for cost and risk. These terms are periodically updated (generally, every ten years) as new socioeconomic, political and logistic situations come up, among others.
What happens is that the Vienna Convention, due to its intention of being comprehensive and juridically fair, has posted a very straightforward text and, since incoterms are subject to periodical alterations, the Convention text would risk becoming outdated and the ICC would be the most adequate forum to deal with the details of incoterms definitions in an accurate and up-to-date way. The Convention authors thus decided to adopt clearer rules on risk transfer, adapting them to the needs of each deal. Another factor that may have influenced this is the fact that the use of incoterms is defined as non-compulsory and therefore would make it difficult for this to be subject of a convention that aims at standardizing international sale contracts law. We may conclude, therefore, that the incoterms may be considered as viable and useful instruments to the regulamentation of risc transfer in international sale contracts in a more detailed and specific way than the convention, and the relation between this convention and the incoterms themselves is complementary.
Did you know all these details about the Vienna Convention? Leave your comment. In the next article we will talk about its influence in Brazilian international sale contracts.