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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Bureau of Industry and Security Issues Agenda For Sold-Out Export Controls Update Conference

The Bureau of Industry and Security has posted on its website the agenda and program summary for the sold-out annual Update Conference on Export Controls and Policy that will be held from August 31 to September 2, 2010 at the Grand Hyatt Hotel in Washington, DC.

Because the number of persons interested in attending Update again exceeded the number of slots available, BIS held a lottery this week to determine those that would be eligible to register.

Those persons that submitted an interest form but were not selected have been placed on a waiting list. BIS expects space to free up the week of July 26th and those persons who are placed on the waiting list will be advised if space becomes available to register.

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New Charges Filed by U.S. Grand Jury Against Irish Trading Company and its Executives for Exporting Military Aircraft Parts to Iran

The Justice Department announced today that a federal grand jury in Washington, D.C., has charged Mac Aviation Group, a Sligo, Ireland-based trading company, and two of its officers in a 27-count superseding indictment with purchasing F-5 fighter aircraft parts, helicopter engines and other aircraft components from U.S. firms illegally exporting them to Iran via companies in Malaysia and the United Arab Emirates.

Among the alleged recipients of the aircraft parts was a company was designated by the U.S. for being owned or controlled by entities involved in Iran’s nuclear and ballistic missile program.

The defendants, Thomas and Sean McGuinn, were originally charged in July 2008 in a sealed 25-count indictment with two counts of conspiracy, 19 counts of violating the International Emergency Economic Powers Act (IEEPA) and Iranian Transactions Regulations, four counts of false statements and forfeiture allegations.

According to the original indictment, beginning in 2005 and continuing through 2008, the defendants solicited purchase orders from customers in Iran for U.S.-origin aircraft engines and parts and then sent requests for aircraft components to U.S. companies. These parts included helicopter engines, aircraft bolts and vanes, and canopy panels for the F-5 fighter aircraft. The defendants wired money to banks in the U.S. as payment for these parts and concealed from U.S. sellers the ultimate end-use and end-users of the purchased parts. The defendants caused these parts to be exported from the United States to Iran via third countries, including Malaysia.
The superseding indictment alleges that from 2005 and continuing until 2006, the defendants caused canopy panels designed for the F-5 fighter aircraft to be exported from the United States to Iran in violation of the Arms Export Control Act (AECA). The defendants allegedly stated that the end user for the F-5 panels was Nigeria. Instead, the panels were sold by the defendants to a company in Tehran, Iran. The purchase was allegedly arranged through the Iran Aircraft Manufacturing Industrial Company (HESA), which was added to OFAC's SDN List in September 2008 for providing support to the Iranian Revolutionary Guard Corps.

The defendants were previously charged with purchasing 17 helicopter engines from Rolls Royce Corporation in Indiana for $4.27 million dollars on behalf of an Iranian trading company, some of which were ultimately sent to HESA, and also causing U.S.-origin airplane vanes and bolts to be exported from the United States to Iran.

If convicted, the defendants face a maximum sentence of 10-20 years in prison for each of the IEEPA counts, 10 years in prison for the AECA charge, 5-20 years in prison for each of the conspiracy counts, and five years in prison for each of the false statement counts.

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Obama Provides Update on National Export Initiative and Names Members of President's Export Council

Today President Obama provided a progress report on the National Export Initiative (NEI), the President’s goal of doubling exports and supporting several million new jobs over five years. In addition, the President introduced the members of the President's Export Council (PEC), a group of business and labor leaders who will offer advice from outside of the Administration.

The Chair and Co-chair of the PEC are James McNerney, Chairman, President and CEO, the Boeing Company and Ursula Burns CEO, Xerox, who will serve along with 18 other Presidential appointees (full lists below).

Highlights of the NEI progress report (full PDF version here) include:

• Improved advocacy efforts on behalf of U.S. exporters: The Department of Commerce has coordinated 18 trade missions with over 160 companies participating in 24 countries.

• Increased access to export financing: Ex-Im has more than doubled its loans to support American exporters from the same period last year, helping to support nearly 110,000 jobs.

• Reinforced efforts to remove barriers to trade: In March, the United States reached an agreement with China to reopen the Chinese market to U.S. pork and pork products. In June, the United States agreed with Russia to reopen the Russian market to U.S. poultry exports. These steps are worth more than $1 billion.

• Enforcement of trade rules:  Last week the WTO ruled that European governments subsidized Airbus’s large civil aircraft.   This ruling is expected to sustain and even restore jobs to American aerospace workers by leveling the playing field for the U.S. aerospace industry. 

• International promotion of policies leading to strong, sustainable and balanced economic growth: These last 18 months have been the most effective period of international economic cooperation in generations with global growth replacing economic contraction.

The 18 additional members of the President's Export Council named today are:

• Mary Vermeer Andringa - President and Chief Executive Officer of Vermeer Corporation.

• Stephanie A. Burns - Chairman, President and CEO of Dow Corning Corporation. 

• Scott Davis - Chairman and Chief Executive Officer of UPS.

• Richard L. Friedman - President and Chief Executive Officer of Carpenter & Company, Inc.

• Gene Hale  - President and Founder of G&C Equipment Corporation. 

• C. Robert Henrikson - Chairman, President and Chief Executive Officer of MetLife, Inc. 

• William Hite - General President of United Association

• Robert A. Iger  -President and Chief Executive Officer of The Walt Disney Company.

• Charles R. Kaye - Co-President of Warburg Pincus.

• Jeff Kindler - Chairman and Chief Executive Officer of Pfizer.

• Andrew N. Liveris - President, Chairman and Chief Executive Officer of The Dow Chemical Company

• Robert A. Mandell - Past Chairman and Chief Executive Officer of Greater Properties.

• Alan Mulally  - President and Chief Executive Officer of Ford Motor Company.

• Raul Pedraza - Founder and President of Magno International L.P.

• Ivan Seidenberg - Chairman and Chief Executive Officer of Verizon.

• Glenn Tilton -  Chairman, President and Chief Executive Officer of UAL Corporation and Chairman and Chief Executive Officer of United Air Lines.

• James S. Turley - Chairman and Chief Executive Officer of Ernst & Young  

• Patricia A. Woertz - Chairman of the Board, Chief Executive Officer and President of Archer Daniels Midland Company.

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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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Today's News and Notes

• President Obama will deliver remarks tomorrow morning at the White House on export promotion and the President's Export Council. He is also expected to name Ford Motor Co.'s President and CEO to the President's Export Council.

•  Reuters: "Iran says planes get fuel; EU bans some for safety" (refutes earlier reports that U.S. sanctions were causing countries not to refuel Iranian commercial aircraft)

• An Iranian-Canadian has been convicted of violating Canadian laws for attempting to export goods to Iran that could be used in nuclear technology. Case marks first time that someone in Canada has been prosecuted for violating Canadian laws implementing U.N. sanctions. Canadian Government press release on this conviction can be found here.
  

• New York Times' lead Op/Ed today: Waiting for a Trade Policy from Obama Administration

• Reuters: China denounces new unilateral U.S. sanctions on Iran

• Heritage Foundation Report- "Unfinished Business: The U.S.-U.K. Defense Trade Cooperation Treaty"
  

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President Obama Signs Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010

This evening President Obama signed into law H.R. 2194, the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010. The text of the President's remarks made at the signing ceremony are as follows:

Good evening everyone. As President, one of my highest national security priorities is to prevent the spread of nuclear weapons. That is why my Administration has aggressively pursued a comprehensive agenda on non-proliferation and nuclear security.

Leading by example, we agreed with Russia to reduce our own nuclear arsenals through the new START Treaty—and I’ve urged the Senate to move forward with ratification this year. And with allies and partners, we’ve strengthened the global non-proliferation regime, including the cornerstone of our efforts—the Nuclear Non-Proliferation Treaty.

Now, in the entire world, there is only one signatory to the NPT—only one—that has been unable to convince the International Atomic Energy Agency that its nuclear program is for peaceful purposes. That nation is Iran. For years, the Iranian government has violated its commitments, defied United Nations Security Council resolutions, and forged ahead with its nuclear program—all while supporting terrorist groups and suppressing the aspirations of the Iranian people.

Since taking office, I have made it clear that the United States was prepared to begin a new chapter of engagement with the Islamic Republic of Iran. We offered the Iranian government a clear choice. It could fulfill its international obligations and realize greater security, deeper economic and political integration with the world, and a better future for all Iranians. Or, it could continue to flout its responsibilities and face even more pressure and isolation.

To date, Iran has chosen the path of defiance. That is why we have steadily built a broader and deeper coalition of nations to pressure the Iranian government. Last month, we joined with our partners at the U.N. Security Council to pass the toughest and most comprehensive multilateral sanctions that the Iranian government has ever faced. And I want to thank our tireless Ambassador to the U.N.—Susan Rice.

As I said last month, we will ensure that these sanctions are vigorously enforced. At the same time, we will work with allies and friends to refine and enforce our own sanctions on Iran. And that is exactly what we have been doing. Here in the United States—and thanks to the efforts of Treasury Secretary Tim Geithner—we have imposed sanctions against more institutions and individuals involved with Iran’s nuclear and missile programs.

Other nations are taking action alongside us, such as Australia, which announced new sanctions, including those against a major Iranian bank and Iran’s shipping company. The European Union is moving ahead with additional strong measures against Iran’s financial, banking, insurance, transportation, and energy sectors, as well as Iran’s Revolutionary Guards. Other countries, such as Canada, have indicated they will also be taking action. In other words, we are ratcheting up the pressure on the Iranian government for its failure to meet its obligations.

Today, we’re taking another step—a step that demonstrates the broad and bipartisan support for holding Iran accountable. I am pleased to sign into law the toughest sanctions against Iran ever passed by the United States Congress—the Comprehensive Iran Sanctions, Accountability, and Divestment Act.

I want to thank all the Members of Congress who worked on behalf of this legislation, including Speaker Nancy Pelosi and Representatives Steny Hoyer and Eric Cantor. Although they weren’t able to join us, I want to acknowledge Senators Harry Reid, Jon Kyl and Richard Shelby. And I want to thank those who led the effort to forge a final bill that received overwhelming bipartisan support—Senator Chris Dodd and Representative Howard Berman.

Consistent with the Security Council mandate, this legislation strengthens existing sanctions, authorizes new ones and supports our multilateral diplomatic strategy to address Iran’s nuclear programs. It makes it harder for the Iranian government to purchase refined petroleum and the goods, services and materials to modernize Iran’s oil and natural gas sector. It makes it harder for the Revolutionary Guards and banks that support Iran’s nuclear programs and terrorism to engage in international finance. It says to companies seeking procurement contracts with the United States government—if you want to do business with us, you first have to certify that you’re not doing prohibited business with Iran.

In short, with these sanctions—along with others—we are striking at the heart of the Iranian government’s ability to fund and develop its nuclear programs. We are showing the Iranian government that its actions have consequences. And if it persists, the pressure will continue to mount, and its isolation will continue to deepen. There should be no doubt—the United States and the international community are determined to prevent Iran from acquiring nuclear weapons.

Finally, even as we increase pressure on the Iranian government, we are sending an unmistakable message that the United States stands with the Iranian people as they seek to exercise their universal rights. This legislation imposes sanctions on individuals who commit serious human rights abuses. And it exempts from our trade embargo technologies that allow the Iranian people to access information and communicate freely. In Iran and around the world, the United States of America will continue to stand with those who seek justice and progress and the human rights and dignity of all people.

So, again, this is not a day that we sought—but it is an outcome that was chosen by the Iranian government when it repeatedly failed to meet its responsibilities. The government of Iran still has a choice. The door to diplomacy is still open. Iran can prove that its intentions are peaceful. It can meet its obligations under the NPT and achieve the security and prosperity worthy of a great nation. It can have confidence in the Iranian people and allow their rights to flourish.

Indeed, Iranians are heirs to a remarkable history. They are renowned for their talents and contributions to humanity. Here in the United States, Iranian-Americans have thrived. And within Iran, there is great potential for the Iranian people to forge greater prosperity through deeper integration with the international community, including the United States. That is the future we seek – one where Iran’s leaders do not hold their own people back by failing to live up to Iran’s international obligations; one where Iran can reclaim its place in the community of nations, and find greater peace and prosperity.

That is the Iranian government’s choice. And it remains our hope that they choose this path, even as we are clear-eyed about the difficult challenges ahead. With that, I will sign this legislation into law.

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