Incoterms® rules
The future of the Incoterms® rules in space
In part two of A Day in the Life of Incoterms, the International Chamber of Commerce (ICC) spoke to Daniela Maria Rojas Garcia about the future of the Incoterms® rules in space.
50 years ago, Neil Armstrong became the first person to land on the moon. The Apollo 11 space mission captured the hearts and minds of the world – inspiring a new generation of scientists, innovators, and entrepreneurs.
In the same spirit, a new generation of entrepreneurs are competing to win the next space race. Technological advancements, cheaper costs, and support from national governments have transformed space travel from Hollywood fantasy to commercial reality. From tourism to trade, space will provide business, governments, and society with new development opportunities. As space development progresses, what rules will govern relations between states? How can businesses resolve disputes originating from outer space? What happens when the delivery of a shipment from Panama to Hong Kong is intercepted in space?
These are some of the questions that Daniela Maria Rojas Garcia, a recent air and space law graduate, is seeking to answer. While others are devoting their attention to space luggage fashion and rocket ship designs, Ms Rojas Garcia is more interested in the regulatory aspect of space travel.
“In the future, we are going to start having extra-terrestrial transport,” said Ms Rojas Garcia. “We need to consider not only how transport is going to be made, but also responsibility, transfer of risk, and allocation of costs.”
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The Incoterms® rules in Latin America
Originally from Colombia, Ms Rojas Garcia received her Bachelors degree in Law from the Universidad Externado de Colombia in Bogotá. While at the Universidad Externado de Colombia, Ms Rojas Garcia received an international specialisation in Transport law. As a student specialising in transport law, Ms Rojas Garcia discovered the importance of the Incoterms® rules in the classroom and through real-world experiences in Colombia.
“When I was studying general transportation law in Colombia, I had my first look at the Incoterms® rules [in my] logistics, infrastructure, and multimodal transport lectures,” Ms Rojas Garcia explained. “From that point forward, we started studying not only the multimodal transportation itself, but the whole structure of trade transactions…in that moment I started to understand what the Incoterms® rules are.”
From Ms Rojas Garcia’s experience in Colombia, the Incoterms rules provided business with further clarity and predictability in a regulatory environment that oftentimes lacks sufficient standards. “We have lots of flows and critical points for improvement – not only in Colombia, but in Latin America as a whole,” she stated. “I saw from early on that parties were very willing to apply the Incoterms® rules and deal with each other in a very international manner.”
Following graduation, Ms Rojas García remained in Bogotá, where she worked in international arbitration and dispute resolution at Zuleta Abogados with Mr Eduardo Zuleta and Mr Rafael Rincón. There she dealt with matters of international and investment protection arbitration, mergers and acquisitions and transportation.
The Incoterms® rules in air and space
Due to the competitive nature of international arbitration, Ms Rojas Garcia decided that she wanted to become an expert in a specialised field of law. Therefore, after nearly four years of working in arbitration in Bogotá, Ms Rojas Garcia decided to travel over 8,000 km to pursue a Master of Laws (LLM) degree at Leiden University in the Netherlands.
“I ended up going with air law initially, and that’s how I picked the LLM programme at Leiden, and it turns out I also like space law,” explained Ms Rojas Garcia. “I took space law in my second semester of the programme – now I have a specialisation in both air and space law.”
As an emerging field of law, Ms Rojas Garcia believes that new regulations and legal standards concerning activity outside of Earth will continue to develop. At the moment, the disputes involving activities in space are very limited with parties usually finding ways to settle disputes, according to Ms Rojas Garcia.
“The industry is so young, [so] no one wants to fight yet, and everyone is cooperating,” she said. “When there is a problem with a contract, usually the parties will settle it in a way that allows for the project to continue, so we don’t have a lot of disputes in the space sector at the moment.”
With regard to international legal standards, the space field relies upon a series of treaties developed as far back as the 1970’s and 1980’s. All of these treaties, according to Ms Rojas Garcia, usually involve state to state obligations, yet make no reference to the legal obligations and responsibilities of private entities operating within space.
“Now, all of the extra-terrestrial activities are supervised by states, but can be performed by a private entity,” explained Ms Rojas Garcia. “This is why very soon this kind of transportation of goods and people will be very feasible.”
What is the future of the Incoterms® rules?
In the absence of standards, Ms Rojas Garcia believes that the Incoterms® rules can clarify the costs, risks, and responsibilities for traders operating in space. “It is very useful that all parties engaged in international trade speak the same language, even if it’s not completely unified or binding to apply to specific terms,” explained Ms Rojas Garcia.
To keep pace with the ever-evolving conditions of global trade, the Incoterms® rules have been continuously updated to confront new challenges faced by importers or exporters around the word. In the coming age of space trade, the inherent relationship between an importer and exporter will still exist, yet new complications could emerge.
In response to these potential challenges, Ms Rojas Garcia stresses that the Incoterms® rules must updated accordingly. “The most important part of the Incoterms® rules is that they really adapt to the parties’ needs,” she said. “The moment they stop adapting, they [will] stop becoming useful…international trade does not have the luxury to have terms that are out of date.”
Not only will the Incoterms® rules need to account for a new arena of trade, but they also must be able to adapt to the speed of space trade, according to Ms Rojas Garcia. “[Trade] between countries going outside of the Earth and coming back in will be much faster than going straight (across) Earth’s surface,” explained Ms Rojas Garcia. “Transportation will become more immediate [and] you will need to respond just as fast.”
Listen to ICC’s conversation with Ms Rojas Garcia on the A Day in the Life of Incoterms® rules podcast.
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