Incoterms
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Incoterms
Incoterms, or International Trade Terms, are a set of rules established by the International Chamber of Commerce (ICC) that are used in international trade to define the responsibilities and obligations of the buyer and seller in a commercial transaction. They were created to avoid misunderstandings due to different commercial interpretations in different countries and to simplify international contracts.These terms regulate aspects such as the distribution of responsibilities, transport and customs costs, and transport risks. By using Incoterms, clear rules are established that help avoid confusion and conflicts between the contracting parties.Incoterms simplify contracts by introducing the acronyms of the specific term agreed between the parties. Their legal force comes from the agreement between the parties and they are recognized internationally.
What are Incoterms for?
Incoterms are a set of standardized rules that help facilitate international trade by clearly defining the responsibilities and obligations of the parties involved in a commercial transaction. Their use helps to avoid misunderstandings and conflicts, and provides a solid basis for international commercial contracts.
The Inconterms in force now
The changes introduced to Incoterms 2020 by the International Chamber of Commerce (ICC) respond to several challenges and needs of the global market:
- Transport security: The changes aim to improve security in the transport of goods between countries, ensuring that responsibilities are clearly defined and distributed between the seller and the buyer.
- Ease of documentary credit transactions: The aim is to streamline and make more secure commercial transactions involving documentary credits, providing a clear framework of responsibilities for both parties.
- Growth of the global economy: Incoterms 2020 are designed to adapt to the constant growth and change in the global economy, allowing any place in the world to participate in international trade effectively.
Complete list of Incoterms 2020
The implementation of the new Incoterms list, which will take place on 1 January 2020, has led to the publication of the final version of the list during the second half of this year, with the modifications mentioned above.However, these would not be the only changes, as it is planned to include a series of guidelines related to security during the transport of goods, rules on the type of insurance to be contracted for transport, better integration of the Incoterms with the respective international sales contracts and a series of instructions to better adapt to the changes planned in the Incoterms for the next decade. Thus, the final list of Incoterms is presented as follows:
- EXW (Ex works): The seller only has the obligation to make the merchandise available to the buyer in the warehouse. The buyer is responsible for collection and transport to their country and assumes all costs.
- FCA (Free Carrier) The seller undertakes to deliver the goods at an agreed transport point in the country of origin, taking charge of their storage at the indicated location.
- FOB (Free on Board) The seller is responsible for delivering the goods on board the vessel contracted by the buyer. The delivery note on board can be made from January 1st, which is important for collection purposes.
- CFR (Cost and Freight): The seller is responsible for transport to the port of destination for maritime transport, and the risk is assumed by the buyer from the moment the merchandise is on the vessel in the country of origin.
- CIF (Cost, insurance and freight): It does not undergo significant changes, since its main use is for commodities, which would entail a high cost if it were changed. The policy is issued in the name of the buyer at 110%, covering the London Institute Clause C insurance.
- CPT (Carriage Paid to): The seller is responsible for the transportation costs to the agreed destination, and the risk is assumed by the buyer from the moment the merchandise is transferred to the first carrier in the country of origin.
- CIP (Carriage and Insurance Paid To): This has been incorporated into the London Institute Clause A, meaning that the seller takes out comprehensive insurance and issues it in the name of the buyer.
- DPU (Delivered at Place, Unloaded): With this clause, the seller's responsibility ends upon delivery of the merchandise at the agreed point, including the export process and transit customs, but not customs clearance at destination.
- DAP (Delivered at Place) The seller covers all transportation and insurance costs, except import costs.
- DPP (Delivered at Place Paid): This is a new feature in Incoterms 2020 and replaces the old Incoterm DDP. It involves delivery to an agreed point other than a transport terminal, and customs charges are the responsibility of the seller.
- DTP (Delivered at Terminal Paid): Another novelty derived from the old DDP, where the seller assumes customs duties and delivers to a terminal in the buyer's country.
En conclusión, los Incoterms son una herramienta esencial para garantizar claridad, seguridad y eficiencia en las operaciones de comercio internacional. Con la versión 2020, se ha logrado una mejor adaptación a las necesidades actuales del mercado global, facilitando las transacciones y reduciendo riesgos. Comprender y aplicar correctamente los Incoterms permite a las empresas optimizar sus operaciones y fortalecer sus relaciones comerciales en un entorno globalizado.
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