The paper examines the problems with respect to the application of the UN Sales Convention (CISG) by virtue of its Article 1(1)(b). To that effect, the author analyzes the legal nature of this provision, describes the prerequisites for its application and explains the relevance of different rules of private international law for the application of the CISG. A special attention is given to the effects of Article 95 reservation. The author presents arguments against a widely spread opinion that the Article 1(1)(b) is in itself a conflict-of-laws rule, suggests that this provision is suitable to be applied both by courts and arbitral tribunals and explains the importance of the rules on classification and renvoi for the application of the CISG. With respect to the effect of Article 95 reservation, the author gives precedence to the position of the applicable law, rather than the law of the forum, concerning this reservation.