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| Doing Business |
Ukraine: Forms |
Ukraine: Digest |
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| Bulletin #6 2008 |
#2 2006 |
#1 2004 |
World LinkSpring'08 |
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 Forwarder Law, September 2008
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FCR in Ukraine
Technological progress results in development of the social relations. New forms of transport documentation appear in the field of forwarding. And even nowadays Ukraine adopts the world experience in application of the traditional forms.
The present article is dedicated to the FCR FIATA. FCR is the oldest form of forwarding documents adopted by FIATA in 1955. FCR FIATA is a non-negotiable instrument that is documented by a forwarder undertaking the consignment under irrevocable shipping instructions. FCR is a forwarder’s certificate of receipt proving that the goods are accepted by the forwarder in due packaging and in proper quantity specified in the document. Thus, the forwarder confirms receiving the merchant’s irrevocable instructions.
What does it mean - “irrevocable instructions”? It is clear that irrevocability of the instructions is rather conditional. They may be cancelled, but only if FCR has been returned to the forwarder that is to execute the client’s instructions on their cancellation and has no any antecedent instructions. Nevertheless, the forwarder issues the FCR to the exporter and quite often, the exporter’s bank plays the role of a holder as exporter may transfer it to draw out the money from a letter of credit. Banks accept FCR if it is provided by the letter of credit. Under availability of the FCR should be understood the contract implementation by the exporter.
The rules of the FCR usage in Ukraine are contained in Clause 2.1 of the Rules and Recommendations on Usage of FIATA Documentation and Forms, adopted by the protocol #5 dd. July 16, 2003 of the Governing board of the The Association of International Freight Forwarders of Ukraine (AIFFU). There is an Addendum #2 “Forwarding Contract Requirements in Connection with FIATA FCR Issue” to the abovementioned Rules and recommendations. AIFFU is a non-governmental organization. Its regulations are binding only to its members.
The legislative regulation of forwarding activity is stipulated by the Civil Code of Ukraine (articles 929 – 935), the Commercial Code of Ukraine (article 316), the Law of Ukraine “On Forwarding Activity” of July 1, 2004. The draft of the Rules of forwarding activity was submitted to the Cabinet of Ministers of Ukraine. There are some statements concerning FCR and some other forms of the FIATA forwarding documentation in these Rules. Nevertheless, the aim of institutionalization of these forms of documentation shall not be achieved if the mentioned Rules are confirmed as Art. 9 of the Law “On Forwarding Activity” stipulates a rule according to which transporting and goods documents are to ascertain by the laws of Ukraine. The Cabinet of Ministers was entrusted only to organize the application of unified forms and documentation, used in international practice of forwarding activity in Ukraine.
Coming from the above we must say that in spite of the multitude advantages of the FIATA documentation, it is rarely applied to in Ukraine.
We represented foreign financial institutions and importers in a number of disputes arising out of FCRs issued by Ukrainian freight forwarders. The practice shows that when the dispute arises, only some forwarders respect the FCR and obligations arising thereof. Quite often, when the cargo disappeared, forwarders refused to recognize the FCR as a valid and binding document under Ukrainian law. They argued that the instructions of the FCR holder with regard to the cargo were not binding upon them since they had a written agreement with a principal (exporter or cargo owner) and only instructions of the principal had to be validly accepted.
In case of a conflict between the financier which holds the FCR and the principal having the written agreement with the forwarder, the latter almost always accepts the instructions of the principal. Meanwhile, this position contradicts to one of the key purposes of the FCR saying that the goods accepted by the forwarding company under FCR become beyond control of the exporter (cargo owner).
Thus, the Ukrainian practice recognizes the FCR as a valid and binding tool. However, to get the result, one must be ready to come over many obstacles in the long run.
Arthur Nitsevych
Partner, International Law offices, CNI
nitsevych@interlegal.com.ua
www.interlegal.com.ua
© 2008
Arthur A. Nitsevych
Partner,
International Law Offices | |
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| 20 november 2008 The law firm International Law Offices became a contributor of the annual project of the professional investigative edition Doing Business 2009.
Doing Business 2009 is a joint publication of the group the World Bank, the International Finance Corporation and Palgrave Macmillan.
Doing Business 2009 is the sixth in a series of annual reports investigating the regulations that enhance business activity and those that constrain it. The present publication covers data on economies of 118 countries from Afghanistan to Zimbabwe.
The publication presents 10 stages of the life of a business.
more details… | |
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| 14 november 2008 “BUSINESS IN UKRAINE” is the first brochure representing collected works of the authors of International Law Offices that opened series of the same name.
Publication was timed to the event organized by International Law Offices – the conference Doing Business in Ukraine: Odessa and Odessa region that was held in October of 2008.
Creators of the present publication are considerable composite authors of the firm that have done their best to consolidate the whole materials prepared and published in various Ukrainian and foreign editions during 2006-2008.
more details… | |
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| 30 october 2008 In 2008 International Law Offices made its contribution into the large-scale printing project Getting the Deal Through series, section Shipping, by publication of the information review on Ukraine in this professional edition that is one of the influential in Europe and in the world in publication of reviews on shipping. Getting the Deal Through prepares comparative analysis for practice lawyers and corporations in different sectors of the economy in some countries.
more details… | |
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| 28 october 2008 Use of the FCR in Ukraine
By partner Arthur Nitsevych
Published in Forwarderlaw.com – the comprehensive resource for legal information on freight forwarding global logistics.
16th of September, 2008
The present article written by partner of the Law Firm International Law Offices Arthur Nitsevych, CNI, is dedicated to the FIATA FCR.
“…Technological progress results in development of the social relations. New forms of transport documentation appear in the field of forwarding. And even nowadays Ukraine adopts the world experience in application of the traditional forms. ..”
The full text of the article you may find
here
or at the web-site of ILO in Articles & Publications directory.
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| 18 september 2008 International Law Offices , Ukraine support Royal Haskoning in due diligence work within the frame of projects credited by EBRD and European
institutions.
Royal Haskoning is an independent, worldwide operating
consultancy firm. The firm was founded in 1881 in the Netherlands. At
present, 4300 employees combine a wide range of knowledge and experience.
Royal Haskoning offers multidisciplinary and integrated services locally,
based on experience built globally. RH says that ":.experience in working in
Ukraine learns that the language issue is the key issues to overcome in each
and any assignment..." RH has established, over the last couple of years a
useful local network of professionals working in the maritime industry".
Such staff plays a very important role in supporting the technical team in
undertaking their due diligence work. In addition RH maintains "a close
business relationship with Limited Liability Company "International Law
Offices" (ILO), who are the lead legal service provider in the country's
maritime and ports sector. ILO operate a full-fledged office in Odessa and the company is able to provide the team with all the necessary logistics
support in the country."
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| 15 july 2008 A new article of Arthur Nitsevych, partner of ILO, was published in June 2008 in the magazine PROJECT FINANCE and was dedicated to the Public-private partnership opportunities in Ukraine.
The public-private partnerships (PPP) concept has been widely spread around the world in recent years. In view of the economic upturn in Ukraine the state and municipal property in different sectors requires reconstruction, innovation, high operation and maintenance standards. Let’s review the viability of legal framework schemes to get the idea if projects may be procured.
The full text of the article is on the web-site in Articles & Publications directory.
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