The International Chamber of Commerce (ICC) has published a new edition of Incoterms, which took effect from 1 January 2011. Incoterms® 2010 have been updated to represent changes in global trading in light of increased electronic communications and fresh security concerns.
Incoterms were created by the ICC to provide a universally clear way of defining the duties of both buyers and sellers under contracts for the sale of goods. A three letter rule can efficiently inform the reader who is responsible for the cost of transportation, who bears the risk and where the goods are to be delivered.
The latest edition of Incoterms has consolidated the rules and classified them according to the mode of transport relevant to the reader. Additionally, guidance notes help buyers and sellers to choose a suitable rule for their own contract.
There are now 11 rules detailed in the publication with two new additions. Delivered at Terminal (DAT) and Delivered at Place (DAP) are the new rules.
Electronic means of communication have been given the same standing as their equivalent paper component and the definition of an electronic communication has deliberately been left open to avoid the new Incoterms becoming outdated prematurely.
Both buyers and sellers now have a positive duty to provide each other with information about export/import clearance. This obligation is a new aspect to the Incoterms which reflects the enhanced security checks that are beinundertaken around global ports.
It is important to bear in mind that whilst Incoterms are an efficient aid to international trading contracts, they do not provide an alternative to a full contractual agreement detailing (amongst other things) price, warranties and law and jurisdiction matters.