CISG by jurisdiction

Status under the CISG:

Uncertain

The status of Macao, a Special Administrative Region (SAR) of the People's Republic of China, under the CISG is currently uncertain.

Further information:

Background of the current uncertainty regarding Macao's status under the CISG

Macao is currently not mentioned, and has never been mentioned, on the official list of CISG Contracting States kept and communicated to States by the Secretary-General of the United Nations in his role as depositary of the Sales Convention in accordance with Art. 89 CISG and Art. 77(1)(e) of the Vienna Convention on the Law Applicable to Treaties (1969).

Until 19 December 1999, Macao's territory had been administered by Portugal, at that time a CISG Non-Contracting State. (The CISG only entered into force for Portugal much later, on 1 October 2021.) On 20 December 1999, the sovereignty over Macao was transferred to the People's Republic of China through the so-called "handover". Macao thereby became and has since been a Special Administrative Region (SAR) of the People's Republic of China. The People's Republic of China in turn has been a CISG Contracting State already since 1988. The handover thus resulted in the territory of Macao changing from being part of a CISG Non-Contracting State (Portugal) to a CISG Contracting State (China). The effects of this somewhat unusual process are not expressly addressed in the 1980 Sales Convention, resulting in uncertainty about Macao's post-handover status under the CISG.

An important point of this dispute results from the wording of Art. 93 CISG and this provision's applicability, if any, to the status of Macao under the CISG: Art. 93(1) CISG authorizes each Contracting State that has two or more territorial units in which, according to its constitution, different systems of law are applicable in relation to the matters dealt with in this Convention to declare that the Convention is to extend to all its territorial units or only to one or more of them. Art. 31 of the Constitution of the People's Republic of China provides for the establishment of special administrative regions (like the Hong Kong SAR and the Macao SAR) that arguably qualify as "territorial units" in the sense of Art. 93(1) CISG. Furthermore, under the "one country, two systems" principle, the system of law applicable in the Macao SAR relation to sales contracts is different from the system of law applicable in this regard in the PRC. Accordingly, the argument has been made that Art. 93 CISG applies to the post-handover situation regarding Macao. At the same time, the provision was clearly not drafted with a scenario like the "handover" – a CISG Contracting State's post-accession extension by a territorial unit that did not form part of the State when it became a Contracting State – in mind.

The most significant difficulty raised by Art. 93 CISG's potential application to Macao results from Art. 93(4) CISG. This provision reads:

If a Contracting State makes no declaration under paragraph (1) of this article, the Convention is to extend to all territorial units of that State.

If Art. 93 CISG is considered applicable to post-1999 Macao, Art. 93(4) CISG thus by law makes the 1980 Sales Convention applicable to the Macao SAR, unless one reaches the conclusion that the People's Republic of China has made a declaration to the Convention's depositary declaring that the CISG does not apply to Macao. However, none of the declarations made by China in connection with the handover or later explicitly mention the CISG, and it is disputed whether any of the generic clauses in one of China's declarations to the UN Secretary-General can be construed as also referring to the CISG, or as constituting a declaration "equivalent to" the one envisaged by Art. 93(1) CISG.

Furthermore, it should be noted that the PRC in 2022 made a specific declaration to the CISG's depositary regarding the status of the Hong Kong SAR under the CISG, after Hong Kong had (since its "handover" from the United Kingdom to China in 1997) been in a position quite similar to that of Macao today. In this declaration, the PRC formally stated that the Sales Convention would apply to Hong Kong from 1 December 2022 onwards. However, no comparable declaration has (yet) been made by the PRC regarding Macao's status under the CISG.

Against this background, commentators have had to grapple with the question whether parties from Macao should already currently be considered parties that have their place of business in a "Contracting State" for the purpose of Art. 1(1)(a) and (b) CISG, or not. The opinions among commentators are divided in this regard, although a relatively clear majority seems to answer the question in the affirmative. Case law has yet to address this question, and there is currently no known published court decision or arbitral award that has taken a position in this respect.