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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Today's News and Notes

• McCarthy Tétrault Newsletter: Sanctions Alert: The Brave New World of Doing Business with Iran by Canadian attorney John Boscariol (very good information from the Canadian export controls perspective).

• Indo-Asian News Service - U.S. Expects India to Enforce Iran Sanctions.

• Compliance Week: Audit Committee Checklist - FCPA Compliance.

• Peter M. Perez named as U.S. Department of Commerce's Deputy Assistant Secretary for Manufacturing. 

• July issue of Commerce Department's International Trade Administration's Update publication can be found here.

• U.S. Exporters should be aware that the processing fees to obtain an ATA Carnet increased on July 1st. Further information on the new fee schedule can be found here.

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CBP Issues Report on Import Activity During First Half of Fiscal Year 2010

U.S. Customs and Border Protection (CBP) recently issued its Import Trade Trends report for the first six months of fiscal year 2010. A copy of the complete report can be found below.

Some of the highlights of the report include: 

• After a decline in imports in 2009, imports are now at levels last seen in fiscal year 2006. 
• Total value of imports processed by U.S. Customs and Border Protection was slightly more than $1.7 trillion in fiscal year 2009, a 25 percent decrease from the previous year. 
• By year end 2010, it is projected that the value of imports will increase 6 percent, totaling $1.8 trillion.
• Consistent with recent years, only 29 percent of imported goods were dutiable. The remaining goods were duty free or free under tariff preference programs.
• During the first six months of fiscal year 2010, CBP collected $15 billion in revenue for the U.S. government. It is projected that $31 billion will be collected by year end, an increase from FY 2009.
• A total of $130 million in antidumping/countervailing duties were collected during the first half of fiscal year 2010, down slightly from the same period last year.
• Based on a random sampling, 98.6 percent of the fiscal year 2010 imports were materially compliant with all U.S. trade laws and regulations. This compliance rate is slightly higher than recent years.
• During the first six months of fiscal year 2010, approximately $30 million in penalties have been assessed against non-compliant importers (CBP assessed more than $120 million in penalties to non-compliant importers in FY 2009).
• Entry volume at the mid-point of fiscal year 2010 is 13 million. By year end, 27 million entries are expected, an increase of 5 percent from fiscal year 2009.
• China surpassed Canada as the United States’ top source of imports in fiscal year 2009, and is projected to maintain its lead through fiscal year 2011.
• Participants in CBP’s trade and security partnership programs (C-TPAT and ISA) account for
  more than 50 percent of the value of all imports that are shipped to the U.S. Sixty-five percent of the importers who ship goods to the U.S. do not participate in C-TPAT or ISA.
• The top 100 importers account for 30 percent of the overall dollar value of both imports and duties and top 1000 importers account for 60 percent of overall dollar value of imports and duties.

U.S. Customs Import Trends FY 2010 Mid-Year Report

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New Market Exporter Initiative Launched Today by U.S. Department of Commerce and U.S. Postal Service

The U.S. Department of Commerce and the U.S. Postal Service (USPS) today announced the launch of the New Market Exporter Initiative (NMEI), an initiative intended to help boost U.S. exports.  The NMEI is intended to identify current USPS customers who are exporting their goods in an effort to help them expand their reach to additional international markets. 

The Commerce Department entered into a similar partnership with UPS earlier this year.

Under the partnership agreement signed today Postmaster General John Potter and Commerce Secretary Gary Locke, the two organizations will work to provide foreign market expertise to small and medium-sized enterprises interested in expanding into new markets, providing simplified access to the free resources and tools available through the U.S. Commercial Service.

According to a joint press release, in the first phase of the partnership efforts will focus on those businesses currently shipping to one foreign market through the USPS. In subsequent phases, they efforts will focus on small and medium-sized enterprises to identify key markets, build market entry strategies and provide the guidance needed to take products and services from the U.S. to additional markets.

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Cloud Computing and U.S. Export Controls Audio Conference to be Held on July 15, 2010

Export controls consulting firm MK Technology is presenting an audio conference on July 15, 2010 entitled: Cloud Computing and U.S. Export Controls.

The program, which will be moderated by MK Partner Frank Record, will be presented by Robert Rarog, a senior Advisor to MK who has extensive experience with information technology-related export controls.

The issues to be reviewed during the audio conference include:

• Cloud Computing: Definitional Issues
• Cloud Computing Services and Export Regulation
• Cloud Issues and the Bureau of Industry and Security
• Effect of Multiple Export Control Systems on Business Models
• The Cloud and Expectations of Due Diligence
• The Cloud and the Future of Export Controls

For further information and to register, click here.

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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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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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