Every country has its own regulations, specifications and goals when it comes to international trade, which is why many business owners feel nervous and uncertain when it comes to following regulations in international freight. Because of this, it is extremely important to have specific rules to unify the trade and sales of goods internationally – the International Chamber of Commerce (ICC) has been committed to the facilitation of international trade since 1936 through Incoterm (international commercial terms) rules.
What are Incoterm rules?
Incoterm rules are the terms of trade for the sale of goods internationally – they are known and implemented by all of the major trading nations in the world. Whether you are filling a purchase order, packaging or labelling a shipment for freight transport or preparing a certificate of origin at a port, the Intercom rules are there to guide you. However, it is important to note that Incoterm rules do not involve pricing or the method of payment that is used in the transaction, and they do not deal with the transfer of ownership of goods, breach of contract, or product liability – those need to be considered in the contract of sale.
As mentioned before, different countries have different trading practices and legal interpretations – due to that, countries necessitated a common set of rules. The Incoterm rules were first created in 1936, and have been periodically updated as events in international trade require attention. Amendments were made in 1953, 1967, 1976, 1980, 2000 and 2010.
Why are Incoterm rules important now?
On January 1st of 2020, a new set of Incoterm rules will go into effect. A lot has changed since 2010, and with advances in technology, commercial border modernization is required. The terms consist of 11 rules and important changes, including recognizing sellers who use their own transport to deliver goods, renaming the term Delivered at Terminal (DTA) to Delivered at Place Unloaded (DPU) and the fact that now, buyers can instruct their carriers to issue a bill of lading with an on-board notation to the seller under the FCA (Free Carrier) term. If you are interested, you can read the detailed Rules and Terms here.
At Thompson Ahern, we always want to ensure that our customers are aware of the newest requirements or regulations in the industry. We are a full-service provider ready to assist with any import/export requirements your business may need. We believe that both our customers and employees should have all of the knowledge possible to make their experience smooth and positive. We hope this information was useful to you, and if you have any questions, feel free to contact us at firstname.lastname@example.org.
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