Draft Law of Ukraine

"On Forwarding Activity"

This draft governs relationships arising in the process of rendering forwarding services during transportation of cargoes by all kinds of transport, except for pipelines.

According to the draft forwarding activities are understood as entrepreneurial activities in rendering complex services in organizing and ensuring transportation of exported, imported, transited and other cargoes in keeping with the forwarding agreement.

Forwarding services are services associated with organization and ensuring transportation of cargoes, packaging, sorting, consolidation, storage of cargoes, conduct of customs procedures during international transportation, organization and provision of works in loading/unloading at cargo terminals, elevators, sea and river ports, licensed and customs warehouses, organization of fright flow and its support with shipping documentation, as well as additional consultative, advice and other services rendered to the client under the forwarding agreement.

General conditions (the list of forwarding services and conditions of fulfillment) of forwarding activity are approved by the Ministry of Transport of Ukraine and are binding for parties to the forwarding agreement, if the agreement contains the relevant reference. This norm will give the parties an opportunity to abridge the text of forwarding agreement and to preserve, however, its content in full.

Forwarding services rendered on the territory of Ukraine to a non-resident shall be considered export services.

According to this draft carrier shall have the right to retain the client’s cargo being in its disposal until repayment of the premium and reimbursement of expenses incurred by the forwarder in the interests of client or presentation of due security ensuring fulfillment by the client of own obligations in the part of payment of premium and reimbursement of the mentioned expenses unless otherwise provided by the forwarding agreement. This norm cannot be interpreted unilaterally. On the one hand, such measure of client’s responsibility will stimulate the client to fulfill contractual obligations in good time and in full volume. On the other hand, a forwarder has the right (stipulated both in legislation and in the text of the entered agreement) to recover from the client a fine or a surcharge for failure to fulfill contractual obligations. Besides, pursuant to art.10 of the draft, forwarder’s duties shall be considered fulfilled only after the cargo is passed to the owner thereof or to his authorized assignee. If the forwarder retains the cargo then such retaining will be considered incomplete fulfillment of his duties, and this may result in application of punitive measures by the client.

Forwarder shall render forwarding services in conformity with the forwarding agreement and client’s instructions which shall be agreed upon the forwarder pursuant to the procedure established in the agreement.

Forwarder is not obliged to examine authenticity or bear any responsibility for the content of shipping documents provided by the client to carry out transportation, or to conclude on behalf of the client any insurance agreement, unless such is stipulated by the forwarding agreement.

According to this draft if the forwarding agreement fails to stipulate amount of forwarder’s premium then such amount shall be determined on the basis of the price that, under similar circumstances, is valid for analogical services in the locality where the cargo is supposed to be handed over to the person indicated in the agreement on the date such requirement is met voluntarily or on the date of issuance of court decision if the requirement has not been met voluntarily.

In this draft law there are some biased regulations. For example, art.12 specifies that it is possible to present a claim and to bring a suit against forwarder, but there is no indication as to the possibility to apply the same measures against the client.