Cross-border trade in the context of unilateral economic measures

Free trade principles declared at the international level are often confronted with the reality of economic sanctions and restrictions. There is a need for a comprehensive approach to international trade issues that takes into account current realities and the desire to develop open and fair international economic relations. These were the conclusions reached by the participants of the session ‘Cross-Border Trade in the Context of Unilateral Economic Measures’, which took place within the framework of the St. Petersburg International Legal Forum.

The Forum is organized by the Roscongress Foundation with support from the Ministry of Justice of the Russian Federation.

KEY CONCLUSIONS

Cross-border trade develops even in the face of imposed sanctions

“Cross-border trade has experienced quite a serious crisis. It started to experience it from the beginning of COVID, when flight restrictions were introduced, and aircraft stopped carrying cargo. As a rule, these are parcel shipments, piece goods. And then it practically came to naught. It shrank quite seriously. Now we see, on the contrary, a major flourishing of cross-border trade. At the end of last year, we saw a fairly high dynamics. Now we look from month to month, there is an increase of about 50% year-over-year. This sales channel is reviving quite significantly,” Artem Sokolov, President, The Association of Internet Trade Companies.

“International transport corridors have long been a geopolitical and cultural phenomenon. Take for example the Great Silk Road, around which entire states were built... It seems to us that now the time has come when international transport corridors created with our participation, created with the participation of the Russian Federation, can also become a legal phenomenon, creating a legal environment for the development of international trade in new relations, in a new situation, in a situation of multipolarity,” Platon Guryanov, Deputy Head of Legal Department, Russian Railways.

PROBLEMS

Difficulties with contract fulfilment due to the introduction of restrictive measures

“The sanctions against Russian Railways took the form of sectoral sanctions that prevent us from raising debt financing [Russian Railways is under sectoral sanctions imposed by the US, the EU and Switzerland, – Ed.] A trade embargo was imposed, which, on the one hand, restricts transit along international transport corridors and, on the other hand, prevents the import of railway equipment into Russia, which is necessary for transport operations. <…> The impact of sanctions on trade is broader than is directly written into the sanctions acts. Sanctions create an atmosphere of toxicity towards Russian companies. Under the influence of this atmosphere, trading partners terminate contracts, even if this is not stipulated by the sanctions,” Platon Guryanov, Deputy Head of Legal Department, Russian Railways.

“The sanctions or restrictive measures that were introduced against Russia primarily destroyed logistical routes, disrupted financial flows and commodity chains, due to which many Russian entrepreneurs faced the problem of inability or limited ability to fulfil certain obligations under existing contracts,” Timofey Ivanenko, Head of the Center for Legal Assistance and Mediation, Moscow Chamber of Commerce and Industry.

Problems with legal regulation of parallel imports

“We have such a unique jurisdiction in which original goods that are imported into the territory of the Russian Federation without the consent of the right holder are recognized as counterfeit [Clause 4, Article 1252 of the Civil Code, – Ed.]. I do not know of any other jurisdiction where such a conflict exists. It means that the goods are original, but they are counterfeit because the rights holder did not allow them to be imported into the territory of Russia. <…> We are giving a foreign rights holder the opportunity to dictate the conditions not for the protection of his rights, but for influencing the domestic market. Why do we give such such a right to a right holder? Not only does it impose sanctions in a number of cases, but then reinforces them with such internal irregularities in legal regulation. Therefore, it is absolutely necessary to dot the i’s here as soon as possible,” Sergey Puzyrevsky, Secretary of State – Deputy Head, Federal Antimonopoly Service of the Russian Federation (FAS Russia).

SOLUTIONS

Creation of legal infrastructure for international transport corridors

“It is necessary to create international legal norms, treaties, a system of treaties that would create rules of the game that are not subject to sanctions, rules of the game for international transport corridors. It is necessary to include in such treaties or one treaty, an international treaty, a provision that sanctions imposed by states or their blocs are illegal. <…> The second part of the legal infrastructure that international transport corridors need is organizational. There is a need for an international organization that would allow to resolve issues related to the activities of international transport corridors on its platform,” Platon Guryanov, Deputy Head of Legal Department, Russian Railways.

Establishment of criteria for recognizing sanctions as force majeure

“First of all, it should be allowed to establish clear criteria of force majeure with the conditions of the objective reality that has developed at the moment. Secondly, I believe it is necessary to say that it is time to abandon model contracts. At least in the part affected by sanctions restrictions. <…> In my opinion, it is necessary to protect the entrepreneur with regard to the legal regulation of force majeure circumstances and to introduce clear criteria that would allow to recognize sanctions in certain conditions as force majeure,” Timofey Ivanenko, Head of the Center for Legal Assistance and Mediation, Moscow Chamber of Commerce and Industry.

* This is a translation of material that was originally generated in Russian using artificial intelligence.

For more information, visit the Roscongress Information and Analytical System roscongress.org.

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