The International Chamber of Commerce (the ICC) has released a revised set of Incoterms with effect from 1 January 2011.
"Incoterms" are a series of internationally recognised standard terms of trade published by the ICC. Incoterms are often incorporated into contracts dealing with international sales and are accepted by industry and by public authorities worldwide for the interpretation of some of the most commonly used terms in international trade. The rules deal with aspects such as the costs, risks and practical arrangements of the sale of goods and of services relating to the movement of goods. Incoterms are revised about once every 10 years, with the last update taking place in 2000. The latest changes reflect developments in international trade since that date, for example the increased use of electronic documents and the many developments in security.
Some of the key features of the new Incoterms 2010 are as follows:
- In an attempt to make Incoterms easier to use, the rules have now been split into two categories: (a) rules applicable to any mode of transport and (b) rules specific to sea and inland waterway transport. In addition, clearer guidance notes have been provided.
- A number of Incoterms have been revised in order to make clear the allocation for terminal handling charges at the point of arrival and in order to avoid situations where the buyer pays twice for the costs of handling and moving goods at the port of delivery or terminal (once to the seller via the increased selling price, and again to the port or terminal operator).
- Four rules have been abolished and two new rules have been added in their place, reducing the total number to eleven. The new rules are DAT (Delivered at Terminal) and DAP (Delivered at Place). These new rules replace the old rules DAF (Delivered at Frontier), DES (Delivered Ex-Ship), DEQ (Delivered Ex-Quay) and DDU (Delivered Duty Unpaid). The two new rules apply to delivery of goods using any mode of transport and not just by sea vessel. Under the new rules, delivery under DAT takes place when the seller puts the goods at the disposal of the buyer, unloaded at the named terminal. Under DAP, delivery is when the seller puts the goods at the disposal of the buyer at a named place, on a vehicle ready for unloading. The changes should make these rules more useful in a wider context.
- Incoterms now specify that electronic records or procedures must be used where the parties have agreed or where it is customary.
- Security regimes for containers and other cargo have seen significant changes since the previous review of Incoterms. The rules now clarify the allocation of risk and responsibility for security between the buyer and seller. In addition, the buyer and seller are now contractually obliged to assist each other with necessary documentation and information.