International Trade and Cross-Border Transactions
International Trade and Cross-Border Transactions tests Incoterms, CISG, payment, export controls, and sanctions.
Core rules
- Incoterms 2020 allocate cost, risk, and delivery: EXW, FCA, FOB, CIF, DAP, DDP. They do not govern title or payment.
- CISG applies to international sales of goods between parties in contracting states unless excluded. It fills gaps with good-faith and reasonableness standards; it does not cover consumer sales or certain service contracts.
- Letters of credit under UCP 600: banks pay against complying documents, independent of the underlying contract.
- Export controls: EAR for dual-use items, ITAR for defense articles; OFAC sanctions; FCPA anti-bribery and books-and-records.
- Dispute resolution: arbitration under the New York Convention; choice of law and forum clauses.
Worked example
A U.S. seller sells goods CIF Rotterdam. The seller pays freight and insurance to Rotterdam, but risk passes when goods are loaded on the vessel at origin. If the ship sinks en route, the buyer bears the risk and claims on the insurance, not the seller.
Traps
Incoterms do not resolve title. FOB is not interchangeable with FCA. A CISG exclusion must be clear. Letters of credit are document-driven, not goods-driven. Sanctions can reach non-U.S. subsidiaries and third parties.