Incoterms 2010 - New trade rules
The International Chamber of Commerce (ICC) have drafted new Incoterms rules; the Incoterms® 2010, which will come into effect on 1 January 2011.
Incoterms® 2010 replace Incoterms 2000. The Incoterms rules are a standard set of trade terms used worldwide in international and domestic contracts of sale. The first version was published in 1936. The rules have been developed and maintained by experts and practitioners brought together by ICC. The Incoterms rules are recognized by UNCITRAL as the global standard for the interpretation of the most common trade terms.
Compared to Incoterms 2000 the new rules introduce a number of important changes – for example:
- The structure and layout has been changed meaning that there are now two main groups:
Rules for any mode of transport, and
Rules for Sea and Inland waterways transport only
- The number of rules has been reduced from 13 to 11:
“DAT – Delivered At Terminal” is new, and replaces “DEQ – Delivered Ex Quay”
“DAP – Delivered At Place” is new, and replaces “DAF – Delivered At Frontier”, “DES – Delivered Ex Ship” and “DDU – Delivered Duty Unpaid”.
- The “ships rail” has been replaced with placing the goods “on board the vessel”.
- In front of each of the Incoterms® 2010 rules a “Guidance Note” has been added. The Guidance Notes explain the fundamentals of each Incoterms rule. They are not part of the actual rules, but are intended to help the user identify the appropriate Incoterms rule for a particular transaction.
Summary of Incoterms® 2010:
|CPT||Carriage Paid To...|
|CIP||Carriage and Insurance Paid...|
|DAT||Delivered At Terminal... (NEW)|
|DAP||Delivered At Place... (NEW)|
|FAS||Free Alongside Ship...|
|FOB||Free On Board...|
|CFR||Cost and Freight...|
|CIF||Cost, Insurance and Freight...|
As was the case with previous versions of Incoterms they reflect the agreement between buyer and seller only and involve no other parties. The rules reflect and regulate physical consignment of goods when it comes to:
- Passing of risk from seller to buyer
- Who is responsible for taking care of insurance
- Who is to take care of the transport / contract of carriage / freight charges
In order to use the Incoterms® 2010, they must be incorporated into the contract of sales. The reference must be to the specific version of Incoterms. For example:
FCA Strandgade 3, Copenhagen, Denmark Incoterms® 2010
Additional information and a fact sheet can be found on nordea.com/tradefinance - Tools - Incoterms 2010.