The International Chamber of Commerce (ICC) has published revisions to its international commercial terms, also known as Incoterms, that will go into effect on January 1, according to the Shipping Gazette.
Incoterms are standard trade definitions most commonly used in international sales contracts. The rules are devised and published by the ICC, which has copyrighted the term, and are usually revised every decade to better align with evolving trade practices, the report said, citing American Shipper.
"Before ICC developed the Incoterms rules, the different terms were often subject to varying interpretations in different countries, often giving rise to disputes and litigation," ICC chairman Rajat Gupta was quoted saying.
"Today the Incoterms rules for the usage of terms such as Ex Works (EXW), Free on Board (FOB), Cost and Freight (CFR) and Cost, Insurance and Freight (CIF) are part of the recognised canon defining the responsibilities of buyers and sellers in transactions for the sale of goods worldwide."
The revised list, Incoterms 2010, contains a series of changes, such as a reduction in the number of terms to 11 from 13. The DAF, DES, DEQ, and DDU designations have been eliminated, while two new terms, Delivered at Terminal (DAT) and Delivered at Place (DAP), have been added.
They attempt to better take into account the role cargo security and electronic data interchange now play in international trade. A panel of eight ICC delegates have studied four rounds of revisions since 2007 to produce the updated terms, the report added.
– Source: Shipping Gazette