Saudi Arabia has joined the UN Convention on Contracts for the International Sale of Goods (CISG), an international treaty that seeks to offer a framework for global goods contracts, according to a statement by the United Nations Information Service on 21 August.
The Convention will come into force in the kingdom (except for its part III), on 1 September 2024, the statement read. Saudi Arabia will be the 96th nation to join the treaty.
The CISG seeks to offer a code of legal rules governing the establishment of contracts for the international sale of goods, the obligations of the buyer and seller, solutions for breach and other aspects of the contract.
In June, Saudi’s cabinet approved the Kingdom’s accession to CISG proposed by the National Competitiveness Center in cooperation with United Nations Commission on International Trade Law. Saudi authorities also approved the Civil Transactions Law, which sets out rules and regulations for commercial contracts in June.
Analysts say that the CISG will boost the kingdom’s legal environment which could prompt more trade and foreign investment.
In its analysis on 21 August, Dentons global law firm said that Saudi Arabia’s accession to the CISG will increase certainty in commercial exchanges and decrease transaction costs.
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“It will ease doing business with KSA [Saudi Arabia] and alleviate some concerns regarding dispute resolution in sale of goods contracts. The accession to the CISG should provide greater comfort to international investors due to the increased transparency this development creates,” Dentons said.