By: Carsten Lexa, LL.M.
The Incoterms (“International Commercial Terms”) are a series of international sales terms, published by the International Chamber of Commerce (ICC) and widely used in international commercial transactions. These sales terms that govern delivery duties, transportation duties, duties regarding customs clearance and regarding transfer of risk have been revised. They will be published officially at the end of September 2010 and will become valid on January 1st, 2011. Here is what is new:
1. Four sales terms have been removed – DAF (“delivered at frontier”), DES (“delivered ex ship”), DEQ (“delivered ex quay”) and DDU (“delivered duty unpaid”) will be replaced by two new terms, DAP (“delivered at place”) and DAT (“delivered at terminal”). Therefore, there will be eleven sales terms altogether, compared to thirteen sales terms with the Incoterms 2000.
2. There will be more clear distinctions between the so called “blue terms” for shipping by ship and the terms for multimodal shipping. The explanations for the sales terms will provide indications which sales terms to use for which mode of transportation (multimodal terms: EXW, FCA, CPT, CIP, DAP, DAT, DDP; blue terms: FAS, FOB, CFR, CIF).
3. The sales terms FOB, CFR and CIF have been adjusted or additional explanation have been provided. The point is for example that regarding FOB the transfer of risk has been happened formerly on if the goods had passed the vertical of the ship´s rail – it was similar with CFR and CIF. Now it is made clear that the transfer of risk does only happen if the goods have been set down on the ship. Another small part of the risk has been transfered to the supplier.
4. Additionally, the new sales terms now contain suggestions that in modern container traffic the sales terms CFR and CIF are barely helpful, because the circumstances in modern container ports no longer do justice for the determination of the transfer of risk by means of the loading of the ship (now: set down of the goods on the ship). It is recommended to use in container traffic the sales terms CPT or CIP (in these cases the transfer of risk happens in case of surrendering the goods to the carrier).
5. The new set of sales terms will also take more strongly into account “supply chain security” and electronic documents.
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