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FIATA Updates Model Rules on Freight Forwarding Services

Cape Town:

Port Wings News Network:

The International Federation of Freight Forwarders Associations (FIATA) on 3 October 2019 released an updated version of the FIATA Model Rules for Freight Forwarding Services during its 2019 World Congress in Cape Town, South Africa.

This revision took into account various changes in the business landscape and legal requirement of the logistics and freight forwarding industry in the past 20 years.

FIATA MODEL RULES

The first FIATA Model Rules, formulated in 1996, were a critical benchmark for global freight forwarding associations and enterprises to draft their own trading terms and conditions.  The Model Rules even affected national laws governing the industry in some countries. The Rules stipulated general principles on the rights, obligations and liabilities of forwarders and their customers, whether the forwarder was acting as the shipper’s agent or as contractual carrier. In particular, they cover the basis of liability, exclusions and monetary limits of liability for forwarders.

Richard Gluck, Chair of FIATA’s Advisory Body Legal Matters, explained, “ABLM’s Model Rules update committee considered a series of new business practices and regulatory requirements in the industry that have evolved since the Model Rules were first published more than twenty years ago. For example, the updated Model Rules introduce a broader definition of notices ‘in writing’ to allow for new means of electronic communication to be used in the industry. Because other specific legal requirements vary from country to country, such as those applicable to data protection or statement of verified gross mass of the cargo, forwarders are also urged to update relevant articles in their service agreements based on their own business models and applicable laws in the country or regions where they operate.”

Babar Badat, FIATA President, commented, “The Model Rules along with the FIATA documents such as the FIATA Multimodal Transport Bill of Lading, play critical roles in setting basic service standards and aligning the forwarder’s responsibility on a global scale. FIATA will keep updating these documents to reflect new business practices and regulatory requirements.”

An explanatory note is being published to introduce the changes, along with best practice guidelines on how to make best use of this document by freight forwarders and associations.

FIATA Publishes Best Practices on Prevention of Bribery

During its 2019 World Congress in Cape Town, South Africa, FIATA also released a best practices paper on prevention of bribery. This paper aims at addressing the challenge of corruption and bribery in the international logistics and freight forwarding industry.  It provides practitioners with advices on internal control measures against bribery and on cooperating with other stakeholders to prevent it.

The Corruption Perceptions Index 2018 of Transparency International reported that more than two-thirds of 180 countries and territories covered by the Index scored below 50 on a scale of between 0, highly corrupt, and 100, very clean, revealing that the world economy is still heavily burdened by corruption. As a sector deeply involved in cross-border trade and frequently interacting with public officials, the international logistics and freight forwarding industry has a relatively high risk of exposure to corruption or bribery.

Richard Gluck, Chair of FIATA’s Advisory Body Legal Matters, stated, “Our member companies requested a guide to combat bribery and corruption. This best practices paper, developed with support from FIATA’s Customs Affairs Institute, emphasizes the significance of establishing and implementing a systematic anti-bribery policy in the enterprise, with a strong leadership commitment against bribery behaviour.  It recommends adoption of clear rules on sensitive issues like gift-giving, facilitation payments and employment of third-party service providers. Recommended processes to deal with bribery solicitations from public officials are also included to help members in such situations.”

FIATA President Babar Badat commented, “Fighting against corruption and bribery is critical to create a level-playing field for the logistics and freight forwarding industry and to lower the costs of trade for the entire supply chain. No one can win this fight on their own. FIATA will continue to work with all stakeholders and strive for a better business environment for the industry.”

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