Violation in foreign trade refers to acts that breach contract terms, international trade regulations, customs rules, export controls, or intellectual property rights. Common scenarios include failure to deliver goods as required by a letter of credit, infringement of intellectual property, tariff evasion, violation of anti-dumping agreements, and illegal transshipment. Legal consequences may include fines, seizure of goods, injunctions, loss of import-export qualifications, and even criminal liability. Unlike 'Breach of Contract,' which focuses on contractual obligations, 'Violation' is broader, covering administrative regulations and criminal law. Note: Definitions and penalties for violations vary significantly across countries; companies must understand target market regulations and specify liability for violations in contracts. Additionally, violations may trigger WTO dispute settlement mechanisms. Foreign trade practitioners should establish compliance systems and regularly review transactions to avoid significant losses from unintentional violations.
📝 Examples
1. The company was found by the U.S. Department of Commerce to have violated export control regulations by exporting sensitive technology to a sanctioned country and was fined $2 million. (Note: Violation of export controls, administrative penalty)
2. The importer failed to truthfully declare the value of goods to evade tariffs, was determined by customs to have committed a violation, and the goods were seized with requirements to pay back taxes and fines. (Note: Violation of customs regulations, seizure of goods)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
When using terms in contracts, specify the applicable version (e.g., Incoterms 2020)
For unfamiliar terms, use GlobalSync's multilingual email helper to confirm with your partner