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Know your BIFA STC: Definitions and Application – Clause 1
In this edition of Know Your BIFA Standard Trading Conditions we deal with Clause 1 of the first main section
In the last edition of BIFAlink we outlined how the BIFA Standard Trading Conditions (STC) could be called the rules of the game of freight forwarding and provided information on their origins. The key aspect of the last article was that the BIFA STC have to be incorporated in all of the contracts that the freight forwarder makes with his or her customers in order to be effective. We also highlighted that the BIFA STC start with a statement that makes the customer aware of certain aspects of liability and insurance, together with a clear indication that in certain circumstances the customer indemnifies the freight forwarder. In this edition we deal with Clause 1 of the first main section of the BIFA STC that is headed Definitions and Application. Clause 1 defines the meanings of some words used in the BIFA STC: CLAUSE 1 In these conditions, the following words shall have the following meanings: ‘Company’ – the BIFA Member trading under these conditions; ‘Consignee’ – the Person to whom the goods are consigned; ‘Customer’ – any Person at whose request or on whose behalf the Company undertakes any business or provides advice, information or services; ‘Direct Customs Agent’ – the Company acting in the name of and on behalf of the Customer and/or Owner with HM Revenue and Customs (‘HMRC’) as defined by the Taxation (Cross- border Trade) Act 2018, or as amended; ‘Goods’ – the cargo to which any business under these conditions relates; ‘Person’ – natural person(s) or any body or bodies corporate; ‘LMAA’ – the London Maritime Arbitrators Association;
‘SDR’ – are Special Drawing Rights as defined by the International Monetary Fund; ‘Transport Unit’ – packing case, pallets, container, trailer, tanker or any other device used whatsoever for and in connection with the carriage of Goods by land, sea or air; ‘Owner’ – the Owner of the Goods or Transport Unit and any other Person who is or may become interested in them. The above definitions are wider than their natural meaning. To indicate that they are defined words, they are shown in the STC as beginning with a capital letter and the clauses should be read bearing in mind these definitions. Most of these definitions may seem straightforward and self-explanatory; however, it is worth understanding what a Direct and an Indirect Customs Agent is, and what an SDR is, before considering the BIFA STC clauses further. Most BIFA Members act as a Direct Customs Agent when undertaking entry processing. However, there are circumstances where a declarant can only be an Indirect Customs Agent. This topic will be covered in detail when we look at Clause 7, but there is a useful guide on
the appointment and responsibilities of a Customs Agent at www.bifa.org > Information > BIFA Good Practice Toolbox An SDR could be called an artificial currency. It was created by the International Monetary Fund in 1969. The value of the SDR is determined by the value of several currencies important to the world’s trading and financial systems. Initially its value was fixed, so that 1 SDR = 1 US Dollar, but this was abandoned in favour of a currency basket after the collapse in 1973 of the then internationally agreed fixed exchange rate system. The SDR value is currently based on the daily value of a ‘basket’ of five currencies, being the euro, US Dollar, Japanese Yen, Chinese Renminbi and the Pound Sterling, on the basis of exchange rates quoted at noon each day on the London market. This basket is re-evaluated every five years. The rate of exchange between the Pound Sterling and the SDR is published every month in BIFAlink together with a conversion to the main Convention liability amounts.
Next month we will examine Clause 2 of the BIFA STC.
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April 2022
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