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  • Members give US green light to impose countermeasures on EU in aircraft subsidy dispute October 14, 2019
    WTO members agreed at a meeting of the Dispute Settlement Body (DSB) on 14 October to authorize the United States to impose countermeasures on European Union goods and services trade with the US up to a value of USD 7,496.623 million annually. The authorization was granted in line with a WTO arbitrator decision issued on […]
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  • Online registration opens for conference to mark 30 years of Trade Policy Review Mechanism October 14, 2019
    Online registration is now open for a conference to be held on 27 November 2019 at the WTO to mark the 30th anniversary of the WTO’s Trade Policy Review Mechanism (TPRM). The conference will focus on the role of the TPRM in providing enhanced transparency, accountability and monitoring of the multilateral trading system.
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  • DDG Wolff: The multilateral trading system will endure and will adapt October 14, 2019
    Speaking at a conference on global trade held at Chatham House, London, on 14 October, Deputy Director-General Alan Wolff said that at a time of slowing global economic growth and political uncertainty the WTO is even more essential, with its rules providing fairness and preventing discrimination. He stressed the importance of discussions aimed at strengthening […]
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  • New book shares lessons learned from helping labour markets adjust to globalization October 11, 2019
    A WTO publication on policies implemented by governments to help labour markets adjust to globalization was launched at the Public Forum on 11 October. It examines case studies on labour adjustment programmes and provides an extensive review of literature on this topic to highlight how governments are working to make international trade more inclusive.
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Incoterms



 

The International Commercial Terms

 

International Commercial Terms (Incoterms ® 2010) are issued by the International Chamber of Commerce and define the conditions under which international trade transactions take place.

In other words, the Incoterms ® 2010 determine crucial aspects such as the time of the transfer of the risks, which party is liable for cost of transports, insurance costs and custom clearance to name but a few. 

By contrast with domestic transactions, exportation or importation of goods are characterised by a high level of complexity.

Indeed, as you can see in the figure below, an international transaction has to go through several steps likely to be a source of problems.

 

 

Since the Incoterms ®2010 is a standard accepted worldwide, professionals willing to avoid any ambiguity within their International sale contracts, can rely on this strong framework and thereby optimise their risk management processes.

Overall, we can distinguish between two types of Incoterms:

  • – Any mode of transport
  • – Maritime transport applicable for Sea and Inland Waterway

 

 

Incoterms 2010 table

Incoterms 2010 table

 


 

In addition, Incoterms ® rules can be divided 4 groups :

 

Group E: Goods at the buyer’s disposal in the Seller’s premises.

Ex Works (Low commitment)

 

Group F: Main carriage paid by the Buyer

FCA, FOB, FAS (moderate commitment)

 

Group C: Main carriage paid by the Seller

CFR, CPT, CIP, CIP (High commitment)

 

Group D: Seller’s responsible up to agreed delivery address

DAT, DAP, DDP (Very High commitment)

 

 

Attention should be paid to the fact that the transfer of ownership is not determined by the Incoterms rules, but by the terms and conditions of the sales contract.

 

Moreover, it is of paramount importance to clearly specify the Incoterms ®2010 version applicable in the sales contracts. Indeed, since prior versions (such as 2000, 1980 versions for instance) might imply different obligations, by embedding the Incoterms ®2010 version in the sales contract, professionals ensure that business relationships are based on clear-cut set of rules.

In addition, it must pointed out that that electronic documents are considered as an equivalent of paper format provided that the Seller and the buyer agree to use this method of communication. ( must be specified in the contract)