Updated Information on Incoterms 2010

As indicated in previous posts, Incoterms®2010 will be released in September and will go into effect on January 1, 2011. The following is some additional information on Incoterms 2010 provided by Frank Reynolds, the U.S. delegate to the Incoterms 2010 drafting committee:

1. There will be eleven Incoterms 2010 rules (see below for complete list). Four rules have been deleted while two new rules have been created.

2. Many National Committees (including the U.S.) reported being asked the same questions time after time – such as where Incoterms rules address ownership (note that Incoterms do not address transfer of title/ownership). Since these were covered in the Introduction to Incoterms 2000, it became obvious that many people didn’t bother reading it. Thus, the Introduction to Incoterms 2010 has been reduced and guidance notes have been provided for each rule.

3. Key terminology is now defined in relation to its use in Incoterms rules in the now-abbreviated Introduction.

4. There will be illustrations along with the rules themselves.

5. The delivery point for three rules has been changed.

6. One of the new rules specifically remedies a potential problem with the use of Incoterms 2000 in domestic trade.

Persons located in the U.S. can preorder and purchase the Incoterms 2010 book at the ICC USA's website found here. Persons located in Europe can order the Incoterms 2010 book at the ICC's website.

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Summary of Incoterms 2010

Incoterms for any Mode or Modes of Transport:

EXW - Ex Works

FCA -  Free Carrier

CPT - Carriage Paid To

CIP - Carriage and Insurance Paid

DAT - Delivered At Terminal (new)

DAP - Delivered At Place (new)

DDP - Delivered Duty Paid

Incoterms for Sea and Inland Waterway Transport Only:

FAS - Free Alongside Ship

FOB - Free On Board

CFR - Cost and Freight

CIF - Cost, Insurance and Freight

The reduction in Incoterms from 13 to 11 different terms was accomplished by substituting two new Incoterms, DAT (Delivered at Place) and DAP (Delivered at Place) for DAF (Delivered at Frontier), DES (Delivered Ex-Ship), DEQ (Delivered Ex-Quay) and DDU (Delivered Duty Unpaid).

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Incoterms 2010 to Include Two New Incoterms, DAP and DAT

Last week we announced that the new version of Incoterms®, Incoterms 2010, is on track to go into effect on January 1, 2011.

Since that post, International Trade Law News has learned that the International Chamber of Commerce has released the table of contents to the Incoterms 2010 book which confirms that Incoterms 2010 will consist of only 11 Incoterms, a reduction from the 13 current Incoterms 2000.

The Incoterms 2010 are organized into two distinct categories and will include the following Incoterms:

Incoterms for any Mode or Modes of Transport:

EXW - Ex Works

FCA -  Free Carrier

CPT - Carriage Paid To

CIP - Carriage and Insurance Paid

DAT - Delivered At Terminal (new)

DAP - Delivered At Place (new)

DDP - Delivered Duty Paid

Incoterms for Sea and Inland Waterway Transport Only:

FAS - Free Alongside Ship

FOB - Free On Board

CFR - Cost and Freight

CIF - Cost, Insurance and Freight

The reduction in Incoterms from 13 to 11 different terms was accomplished by substituting two new Incoterms, DAT (Delivered at Place) and DAP (Delivered at Place) for DAF (Delivered at Frontier), DES (Delivered Ex-Ship), DEQ (Delivered Ex-Quay) and DDU (Delivered Duty Unpaid).

Incoterms 2010 will also address duties to provide information regarding security-related clearances, such as Importer Security Filings and other chain-of-custody information.

Contrary to some predictions, Incoterm FAS will remain in Incoterms  2010 since that Incoterm is important in bulk and break-bulk trade.

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Latest News on Incoterms 2010 and Seminar Schedule

It appears that the new version of Incoterms®, Incoterms 2010, is on track to go into effect on January 1, 2011.

According to Frank Reynolds, the U.S. Delegate to the International Chamber of Commerce's (ICC) Incoterms Drafting Committee, the final version of Incoterm 2010 is likely to be officially approved in mid-September.

According to Mr. Reynolds, the revisions Incoterms 2010 "is massive" and "the number, presentation and definition of Incoterms rules have changed."

The United States Council for International Business (USCIB) has recently established an Incoterms 2010 website (www.incoterms2010.org) and is now accepting pre-orders for the paperback version of the official Incoterms 2010 book. According to the USCIB website, Incoterms 2010 will include:

• 11 Incoterms 2010 (a reduction from the 13 current Incoterms 2000)

• New classification to help choosing the most suitable rule in relation to the mode of transport; 

• Information on security-related clearances for shipments;

• Advice for the use of Incoterms in domestic trade.

To educate U.S. businesses on the new rules, USCIB will offer a series of one-day seminars starting in late September 2010 entitled: ICC Incoterms 2010 for Americans. These seminars are accredited by ICC and will be taught by Frank Reynolds. Attendees will receive a copy of the official ICC Incoterms® 2010 book and a companion book, Incoterms® for Americans®, as well as comprehensive seminar notes. To view the seminar schedule and to register online click here.

The Washington, DC area Incoterms 2010 program will be held on November 4, 2010 in Arlington, VA and will be co-sponsored by the National Council on International Trade Development (NCITD).

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Latest Update on Incoterms 2010

Frank Reynolds, the U.S. Delegate to the International Chamber of Commerce's (ICC) Incoterms Committee, has provided International Trade Law News with another update on the status of the revisions currently underway to Incoterms 2000, the standardized trade terms commonly used in international sales contracts.

Mr. Reynolds has advised that the ICC Incoterms Committee's third proposed draft of Incoterms 2010 led to 51 single spaced pages of comments from 23 countries. Those comments were reviewed and the fourth proposed draft was completed in late March. The fourth draft will be submitted to the ICC's Commercial Law and Practice (CLP) Commission in May, the first step in the approval process.

If the draft proposal makes it through the CLP, it will continue through the approval process to the ICC’s Executive Board which is scheduled to meet in September 2010. If all goes well, Incoterms 2010 will be released shortly thereafter with an anticipated effective date of January 1, 2011. If the new version is not approved, it will be sent back to the drafting committee for further work.

As previously reported, the new version of Incoterms will be entitled “Incoterms 2010”, reflecting the release date rather than the date they come into force.

The ICC introduced the first version of Incoterms, short for "International Commercial Terms," in 1936. There are currently 13 Incoterms. Incoterms have been revised six times in order to reflect international trade developments.

Frank Reynolds is the author of several publications, including Incoterms for Americans, a useful publication for U.S. exporters and importers, which will be revised following the publication of Incoterms 2010.

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Incoterms Update: Incoterms 2010 Likely to Take Effect in January 2011

Frank Reynolds, the U.S. Delegate to the International Chamber of Commerce's (ICC) Incoterms committee, has provided International Trade Law News with an update on the status of the revisions currently underway to Incoterms 2000, the standardized trade terms commonly used in international sales contracts.

After receiving a large number of comments from the ICC National Committees, the Incoterms Drafting Group recently completed a third draft of the revised version of Incoterms. After comments on the third draft are submitted by the ICC National Committees, the Drafting Group will meet in March 2010 to prepare a fourth version of the draft revisions to Incoterms.

At this time, it remains the ICC’s goal to release the final version of Incoterms in the fall of 2010 with an effective date of January 1, 2011 (this date is subject to change).

In a change from previous reports, it appears that the new version of Incoterms will be entitled “Incoterms 2010”, reflecting the release date rather than the date they come into force (this is the third name change during this revision). In addition to the information provided in previous updates, Mr. Reynolds has provided the following information on items that may be contained in the final version of Incoterms 2010:

• There will be clear differentiation between the omnimodal terms and those intended only for marine use.
• Cargo security will be covered to the extent possible with differing regulatory systems.
• The preambles to each Incoterm will be expanded to better inform users of its intended use.
• A new term will be included to facilitate use in domestic transactions and those within Customs Unions where no export or import clearance obligations exist (as previously noted there are likely to be fewer than the 13 Incoterms in Incoterms 2000).

According to Mr. Reynolds, the "net result will be a more user-friendly set of terms reflecting up-to-date trade practice."  “The changes are substantial, but the benefits are well worth the effort to learn,” he said.

In order to prepare for 2011 implementation of the revised Incoterms, the United States Council for International Business will be conducting training programs starting in the fall of 2010.

The ICC introduced the first version of Incoterms, short for "International Commercial Terms," in 1936. There are currently 13 Incoterms. Incoterms have been revised six times in order to reflect international trade developments.

Frank Reynolds is the author of Incoterms for Americans, a useful publication for U.S. exporters and importers, which will be revised following the publication of Incoterms 2010.

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Incoterms Update: Next Version of Incoterms Scheduled to Take Effect on January 1, 2011

Here is the latest update on the status of the revisions currently underway to Incoterms 2000.

The Incoterms Drafting Committee recently met to consider the latest draft of the revised version of Incoterms. Several more meetings will be held with a goal of issuing the final version of the revised Incoterms in the fall of 2010. At this point, the goal is to have the revised version of Incoterms go into effect internationally on January 1, 2011.

The next version of Incoterms is likely to be known as Incoterms 2010 (not Incoterms 3000 or Incoterms 2011 as initially proposed and reported).

As we previously noted, a few of the current 13 Incoterms in Incoterms 2000 are likely to be eliminated and there may be at least one new Incoterm.

In order to prepare for 2011 implementation of the revised Incoterms, the United States Council for International Business will provide a number of Incoterms 2011 training programs starting in the fall of 2010.

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Next NCITD Meeting to Feature Speakers on Incoterms and U.S. Customs Outbound Programs

The next meeting of the National Council on International Trade Development (NCITD) will take place on December 9, 2009 in Washington, DC and will feature the following speakers:

• Frank Reynolds, International Projects and U.S. Delegate to the Incoterms Revision. Topic: Incoterms
  

Robert C. Rawls, Outbound Program Manager, US Customs and Border Protection CBP). Topic: CBP Outbound Programs

• Best Practices Roundtable: Expanding U.S. Compliance Programs Globally
  

For information on how to join NCITD or to attend the meeting, see www.ncitd.org or contact the NCITD Secretariat at 202-872-9280.

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Update on Revisions to Incoterms 2000

Frank Reynolds, the U.S. Delegate to the International Chamber of Commerce's (ICC) Incoterms drafting committee, has provided the editor of International Trade Law News with an update on the status of the revisions currently underway to Incoterms 2000, the standardized trade terms commonly used in international sales contracts.

After receiving a large number of comments from the ICC National Committees, the Incoterms Drafting Committee recently completed a second draft of the revised version of Incoterms. After comments on the second draft are submitted by the National Committees, the Drafting Committee will hold a series of meetings to complete a final draft.

Once the final draft is ready it will be circulated for review and approval (likely in in mid-2010), the final version will be subject to the approval of the ICC, with a goal of a January 1, 2011 (1/1/11) effective date (that date is the ICC's current goal and is subject to change).

Mr. Reynolds indicated that because the drafting process is ongoing, there is "little specific information" presently available. However, he added there are a "few reasonably safe predictions," including the following:

• There are likely to be fewer than the current 13 Incoterms 2000.
• Contrary to some predictions, Incoterm FAS will likely remain in the revised version since that Incoterm is important in bulk and break-bulk trade.
• A number of National Committees objected to the proposed Incoterms 3000 title, so the likely replacement will be "Incoterms 2011." This title will reflect the effective year and removes the expectation of a ten-year revision cycle.
• Incoterms 2011 will be more user friendly for both international and domestic business.

In order to prepare for 2011 implementation of the revised Incoterms, the United States Council for International Business will provide a number of Incoterms 2011 training programs starting in the fall of 2010.

The ICC introduced the first version of Incoterms, short for "International Commercial Terms," in 1936. There are currently 13 Incoterms. Incoterms have been revised six times in order to reflect international trade developments.

Frank Reynolds is the author of Incoterms for Americans, a very useful publication for U.S. exporters and importers.

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