TradePost Archives > November 6, 2009 > this article

New Convention on Contracts for International Carriage of Goods Takes Effect

October 27 , 2009
World Trade/INTERACTIVE

A new international agreement that drastically changes the rights and obligations of those involved in the maritime carriage of goods has taken effect after being ratified by 20 countries. The United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, also known as the Rotterdam Rules, aims to create a contemporary and uniform law reflecting modern container transportation practices. Benefits of the convention are expected to include an overall reduction in transaction costs, increased predictability when problems are encountered and greater commercial confidence when doing business internationally.

Although the new rules are now effective in the 20 countries that have signed on to the convention, in the U.S. the Senate will have to approve the agreement and amendments to the primary U.S. maritime regulatory law, the Carriage of Goods by Sea Act, will then be needed to harmonize U.S. law with the agreement’s provisions.