1. US - UK Boeing
Trade Deal
Igor Ivanenko
Samantha Kussmann
Oleksandr Surkov
Roman Margulis
Marcus Parks

2. Intro
• Trading parties: the US (seller) and the UK (buyer)
• Both are the members of WTO
• 22 billion in export-import relations in 2016 alone
• 13% of import from the U.S. – planes, helicoptersand/or
spacecraft in 2014
• Shares development of common law
• Relationship falls under contract law

3. WTO Agreement that Works
•Plurilateral Agreement on Trade in CivilAircraft
(1980). US and UK among other 32 countries – 0
duties on civil aircrafts
•Relief from customs duty is provided for civil
aircrafts*
No US - UK free trade agreement
No US – EU free trade agreement
BREXIT: US - EU FTA is likely to be prioritized
*Chapter 88 of the Integrated Tariff of the United Kingdom (the Tariff) https://www.gov.uk/guidance/classifying-aircraft-parts-and-accessories
Global Trade Agreements

4. Restrictive Trade Practices
Boeing
anticompetitive
merger case of
1997
Boeing/McDonnel
Douglas Merger:
- allowed in US
- challenged by EU
- Extraterritorial
application?
- Implications on
trade relations
Exclusive Dealing
Airplanes
Parts & Service
Cost of non
compliance
HeavyFines
Market access
disruptions
Reputation

5. International contract
General provisions
Risk to asses
•Physical distance
•Culture differences
•Product specificity
Due diligence
Preliminary measures
•Letter of intent
•Exchangeof offer and acceptance
•Confidentiality clauses and NDA agreements

6. Contract
Subject Matter of Sale
Price, Taxes and Payment
Regulatory Requirementsand Certificates
Detail Specification; Changes
Inspection
Delivery and Insurance
Excusable Delay
Force Majeure
Ownership/Risk Allocation/Insurance
Notices
Confidentiality Agreement and IP Protection
Warranty and Product liability
Miscellaneous (governing law, termination, arbitration clause)

7. Payment Arrangement – Letter of
Credit
Confirmed Irrevocable L/C
•Payment to be made in USD
•Inspectionreport
•Certificate of origin
•Insurance policy
•Standard airworthiness certificate
•Aircraft deregistration
•Air waybill
Strict Compliance
Autonomy Principle

8. Insurance Policy and Currency Risk
Boeing to take out
the policy – Air Cargo
Insurance Policy
UK importer to be the
beneficiary of the
policy
Purchase price
to be adjusted to
reflect exchange
rate fluctuations
up until the date
of payment

9. Intellectual Property
Registration of the brand name “Boeing” in the UK
Restriction of the Reselling
Protection from Infringe on Patent

10. Cannot Sign Exclusive Terms due to
Antitrust Regulations
Product Liability and Warranty is the
Responsibility of “Boeing”
International Partnership

11. Arbitration & ADR
There is a worldwide trend favouring commercial arbitration to
resolve international disputes.
ICC Arbitration Clause:
All disputes arising out of or in connection with the present contract
shall be submitted to the International Court of Arbitration of the
ICC and shall be finally settled under the Rules of Arbitration of the
International Chamber of Commerce by one or more arbitrators
appointed in accordance with the said Rules.

12. Further Stipulations
The law governing the contract: Delaware Law
The number of arbitrators: 3
The place of arbitration: London, England
The language of the arbitration: English

13. Ethics
•The value of
reputation in the
market with no many
players
Global
security
risks
Outsourcing
•Outsourcing failure of
Boeing with their 787
model 4-5 years ago –
it led to delivery
delays (including UK
Buyers)
Corporat
e
governa
nce
Environmental
issues for aviation
•Strict noise regulations
at Heathrow
Topical Issues in International Trade