Advisers

Dr. Daniel W. Barrenechea

Discipline

Humanities And Social Sciences

Abstract

Amid the ongoing development of the “Belt and Road” Initiative, China’s international trade significantly increases, with FOB, or Free on Board, terms dominating China’s export trade. Under this term, the separation of goods delivered to the carrier and the subject of the sea carriage contract leads to frequent disputes and conflicts among the main bodies of interest in international trade and maritime transportation. Therefore, discussing the transaction risks faced by sellers under FOB terms and preventive strategies is of great significance. This paper focuses on FOB sellers in Shanghai, Guangdong, Fujian, Zhejiang, and Liaoning, China. It uses a questionnaire survey to collect information on the types of risks faced by relevant foreign trade companies as FOB sellers during the maritime transportation of goods due to legal provisions. These include the risk of carriers releasing goods without a bill of lading, the risk arising from disputes over the right to stop the shipment and the right to control the goods, and the risk due to disputes about the right to stop transportation and the right to control the goods. The paper also offered practical risk prevention suggestions for the aforementioned risks, including clarifying the FOB seller’s status as the shipper and clearly defining the rights and obligations of the two types of shippers. It was hoped that this paper’s findings could be beneficial in protecting the seller’s rights and interests in FOB trade and ensuring the smooth progress of trade.

Keywords

sea carriage of goods, fob trade terms, legal loopholes, legal risks, preventive measures