Incoterms are an important component of international trade. A good commercial invoice includes clearly specified Incoterms. Take the time to review your international documents for accuracy. Here is a primer from the archives on Incoterms. For help contact mitch@52.91.45.227
Incoterms are rules used to facilitate global trade. Incoterms were created and are administered by the International Chamber of Commerce and are updated every 10 years. Incoterms 2010 published by ICC Services Publications, Paris FR is a very good reference. Some of the important points covered in the book are:
- Incoterms must be in the contract of sale to apply
- > 120 countries have endorsed Incoterms 2010
- Now 11 rules in 2 groups
- 2 new rules deal with geographic place
- Incoterms is not a law…older versions can be used as long as all parties agree
- Incoterms replaces Uniform Commercial Code (UCC) in domestic commerce
- for reference www.iccbooksusa.com
- Incoterms cover;
- Who does what
- Who pays for what
- When risk of goods passes from seller to buyer
- Who is responsible for insurance, export clearance, import clearance, and other costs pertaining to delivery of goods
- Incoterms do not cover;
- Ownership or title to goods
- Payment terms
- Detailed requirements
- Complete contract of sale
Incoterms 2010 includes several rules changes:
- Now referred to as rules not terms
- Remove DAF DES DDU DEQ
- New Rules DAT DAP
- 2 Groups…Any Mode and Ocean/Inland Waterway Only
- Any Mode…EXW FCA CPT CIP DAT DAP DDP
- Ocean or Inland Waterway Only…FAS FOB CFR CIF
Attached chart is a quick guide to Incoterms 2010