Exporter's Liability for Abandoned Cargo

Interesting question from a reader:

In October 2011, my company sent a cargo of copper samples from the port of Callao, Peru to the port of Odessa, Ukraine. We used a local customs agents for the paper work and loading of the cargo, and the Freight Carrier is XXXXXXXXX.

The cargo arrived in January to Odessa, and since then, it has not been claimed by the buyer, who is a Ukrainian company.

We paid all the freight charges (Freight Prepaid) to the local customs agents, so we understand that once shipped and delivered, we dont have any more liability for the cargo, as we are not the owners.

It has been months the cargo is unclaimed, and the local customs agent is demanding us to pay storage and demurrage fees for all this time. They say that according to Ukrainian legislation, it is not possible to leave a cargo without a buyer, so the “solutions” they give us are to get a new buyer at destination to claim the cargo, or return the cargo to Callao, Peru.

My question is if in Ukraine the institution of the “legal abandonment” of cargo exists or not? In Peru, for example, if cargo isn’t claimed within 30 days of arrival to port, it falls into legal abandonment, and the State owns it, and can sell it or destroy it.

Isn’t there an Incoterms or other ICC rule that establishes the abandonment of cargo, or excludes liability for the exporter in those cases?

I’ll start by saying that my expertise is in United States import and export regulations.  I am not an expert in Ukrainian customs regulations.  That said, I would volunteer the view that I don’t believe this is a customs issue.  If the entry is appropriately filed, the duties fully paid, and customs is blessed it with a release, I don’t believe the customs authorities would care one way or another what becomes of the cargo.  But as I said, I am not an expert, but I am insanely curious, so I invite other readers to comment.

Now, if not a customs matter, I would think that the pressure is being applied by either the carrier and/or the local port authorities.  Either one would be tired of looking at this cargo lying around, grateful that it wasn’t a load of perishable seafood, but still thinking they are owed something for having it take up space for so long in their facilities.  I would think this would be addressed in their terms and conditions on the back of the bill of lading, and I would suspect that there are provisions for their assuming ownership after a period of time at which point they can auction it off to the highest bidder in an effort to reclaim some of the storage revenue to which they are entitled.  But again, I am not an export in international contract law, so again I invite comment.

I would caution about assuming too much from Incoterms or the ICC.  Neither of these fine institutions are regulatorily binding, but only recommend processes to assist in international transactions, and provide shorthand terminology to ease communications.

I’m sorry I cannot offer a more profound response.  Not even a Geek has all the answers all the time.  Hopefully some of our viewing audience can.

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