Incoterms
The 7th review (revised) Incoterms clauses of the International Chamber of Commerce were published at the end of September. The revised (revised) version considers new practices in trade and transport. Incoterms regulates the distribution of transportation costs, risk transfers, and details of activities in national and international sales transactions. Obligations of buyers and sellers are clearly described for each clause, compared to the 10-point diagram, as well as illustrated explanations to facilitate the selection of the correct Incoterm. Before each clause, there is an application note and the main contents are summarized.
Incoterms are not a law, but must be agreed upon between the buyer and seller in addition to the contract of sale. It becomes effective if it is fully agreed between the buyer and the seller. Legal and special provisions in certain contracts between the parties replace Incoterms.
DSLV commentary; according to some conditions (for example: EXW ), customs clearance procedures for export, obtaining export permit (license), etc. The buyer has to provide However, as a general rule, according to customs and foreign trade laws, the seller and the exporter are responsible for them. In this regard, the buyer's obligation is void.
The agreement on an Incoterms clause should be:
3-letter abbreviation/ clear description of the location / Incoterms status (no expiration date of the old Incoterms) Example: FCA Bonn, Factory II, Example Street 7, ICC Incoterms 2010
An overview of the changes:
In the revised (revised) Incoterms 2010, the terms were reduced from 13 to 11.
new clauses
Four conditions have been repealed, whereas 2 new clauses have been created: DAP (Delivered At Place) and DAT (Delivered At Terminal) have replaced DAF, DES, DEQ and DDU and can be applied in any mode of transport.
DAT clause means that the goods are provided (delivered) to the buyer at the destination to be unloaded by the transport vehicle, replacing the previous DEQ clause, and unlike DEQ, it can be used multimodally (for multiple vehicles).
Clause DAP means the delivery (delivery) of goods to the buyer at a specified point for unloading by the means of transport. DAP has replaced the previous DAF, DES, and DDU.
In both cases, the seller bears the costs of transporting the goods to the designated location / risks of terminal-related loss.
The new structure of the clauses
Innovations in Incoterms 2010 also include the division of clauses into seven multimodal clauses applicable to all modes of transport and four clauses applicable only to the sea and inland waterway.
Clauses covering all modes of transport:
EXW – Ex Works Factory Delivery
FCA – Delivery Next to Free Carrier Transport Vehicle
CPT – Carriage Paid To Freight Paid
CIP – Carriage and insured paid to Freight and Insurance Paid
DAT – Delivered At Terminal
DAP – Delivered At Place
DDP – Delivered Duty Paid Duty Paid
Clauses covering sea and inland waterways only:
FAS – Free Alongside Ship
FOB – Free On Board Delivery by Loading (Passed the Railing)
CFR – Cost and Freight As Cost and Freight Paid
CIF – Cost, Insurance and Freight Cost, Insurance and Freight Paid Not considering the ship's rail as the risk transfer point
In terms of risk transfer, FOB, CFR and CIF have also been modernized. Provided that they have not passed the ship's rail until now, the seller has undertaken all the damage and loss in the goods. With the new Incoterms 2010, the risk transfer takes place only after the goods are loaded on the ship correctly.
Security enters Incoterms
Prevention of terrorist attacks in the international transport chain has been an important issue for a long time. Incoterms 2010 takes these developments into account, adding lines to certain clauses (A2/B2 or A10/B10 at certain points), where necessary, which party will bear the costs of security-related measures.
Insurance coverage
Only the CIP and CIP terms require the seller to insure the goods. The seller must provide an insurance contract against the loss and damage that the buyer will encounter during the transportation of the goods. In CIF and CIP terms, the buyer should be aware that the seller is obliged to take out a minimum coverage insurance. This is because for certain, particularly bulk goods, minimum coverage may be possible. The customer must fulfill a broader or their own extra insurance arrangement.