incoterms 2010 rules + customs/trade facilitation · 8/5/2016 · incoterms 2010 rules +...

INCOTERMS 2010 RULES + CUSTOMS/TRADE FACILITATION

Global Shippers’ Forum Annual MeetingPresented by

Rohan Masakorala ICC working group (Paris)

28-30 July 2016 | Colombo, Sri Lanka

POLICY AND BUSINESS PRACTICES

Emily O’CONNOR| Senior Policy Executive| Banking Commission| Commercial Law and

Practice Commission

Dona Hammami :HEAD CUSTOMS & TRADE FACILITATION International Chamber of Commerce

VICE PRESIDENT Global Alliance for Trade Facilitation


ABOUT ICC

ICC is the world business organization, speaking on behalf of

businesses of all sizes, from all sectors and from all parts of the world.

Founded in 1919 with the mission to promote international trade and

investment as a driver of economic growth, job creation and

sustainable development.

ICC’s global network has grown to over 6.5 million companies, local

and national chambers of commerce and business associations in

more than 130 countries worldwide.

ICC is the main voice of the business community at the WTO, the WCO

and many other intergovernmental organizations.


NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES

Standard solution for buyers and sellers to

divide costs, and risks when goods are

TRANSPORTED from seller to buyer

"Bad things happen when contracts do not

align, and the parties to one do not

necessarily understand the obligations set

forth in the other."



2016

• Objective: Giving Guide lines for

transporters on the 11 incoterms



2016 Book: What does it mean for shippers?

• For shippers (global buyers and sellers) theses guidelines will help get

cost effective, risk managed and transparent transportation solutions

and to use the best commercial term.

• The importance is that depending on the bargaining power of the buyer

or the seller to obtain best cost of transportation they can increase

trade and access new markets. In this connection the responsibly of

contracting parties including the transporter has been brought into

define the incoterms in relation to the contract of carriage.



Created by a joint drafting group

and international experts of the

ICC Commercial Law and Practice

Commission and the ICC

Commission on Customs and

Trade Facilitation , this new guide

aims to take the guess work out of

what is involved for an

independent carrier to implement

a transport contract against the

backdrop of a contract for the sale

of goods involving an Incoterms®

rule. In clarifying some of the main

issues that arise when

using Incoterms® 2010 rules and

contracts of carriage, parties can

feel at ease knowing their

transactions will run smoothly.

Paris 2014

http://www.iccwbo.org/About-ICC/Policy-Commissions/Commercial-Law-and-Practice/Incoterms%C2%AE-Drafting-Group/

http://www.iccwbo.org/about-icc/policy-commissions/commercial-law-and-practice/

http://www.iccwbo.org/about-icc/policy-commissions/customs-and-trade-facilitation/

http://www.iccwbo.org/products-and-services/trade-facilitation/incoterms-2010/the-incoterms-rules/



Practical guidance for transport and logistics providers on the

Incoterms ® 2010 rules

Developed by international group of ICC transport and legal

experts

Responds to most common questions in the transport context

Easy-to-use format, simple and clear explanations



2016

• For transporters

1.To guide on the best practices

2.To avoid confusion on cost, risk and liability

3.To obtain the proper documents for transportation

4.To establish transparency and accountability

5. Standardization and reduce cost

6. Ensure market driven pricing and competition



What we achieved in



2010 2016Buyer/Seller to Transporter

T

R

E

E

rust

eliability

thics

quilibrium

Building the



The contract

(17) Regardless of whether it is the seller or the buyer that

contracts with the carrier, it is crucial to understand the full

scope of the carrier’s obligation when entering into a

contract



2016

• Carriers must understand the total voyage, delivery points

acceptance points and customs clearances

• The carrier charges have to be directed to the contracting party for carriage

as per the services rendered and the liability, cost and risk taken on behalf of their

contracting party at delivery or receiving points.

• The contracting party of sales of goods, may decide to divide carriers cost

accordingly irrespective of the Incoterm



Sales contract vs Transport contract

One important difference between sales of goods law and transportation law is

that sales of goods is covered by only Vienna convention on contract called

International sale of goods (CISG)

The situation is different for the carriage of goods as it is covered by many

conventions and regional and national laws. (7,8)



This guide is to illustrate some of the issues between the incoterms and the contract of carriage

Contracts of sale and transport can be tricky even for the most experienced

professionals. The slightest of errors may cause substantial repercussions such

as detained shipments, spoiled supply chain planning and unwanted costs and

delayed payments. Here to bridge the gap between expectations and execution

is the new ICC Guide on Transport and the Incoterms® 2010 Rules.



F Terms - Collect

C & D Terms- Prepaid

E Term - Either

Freight under incoterms

Any mode

EXW,FCA,CPT,CIP,DAT,DAP,DDP

Sea and inland waterways

FAS,FOB, CFR,CIF



Non container cargo delivery For containers in modern Terminal and

CFS Delivery

=



1.How are goods handed over to the carrier?

2.When and how are goods made available to the consignee?

3.Who shall pay the price of transport?

4.What additional price can be added to the transport?

5.Is there a variable part to the price for transport (i.e. ‘adjustment factor’ )?

6.When is the price for transport payable?

7.How are the goods to be packed?

8.Is the seller or the buyer responsible for customs clearance?

9.Who is responsible for stowage and cargo security?

10.What sort of transport document should be issued by the carrier?

The 10 questions and answers that the transporter should know against each Incoterm



What about insurance?

There is a special note on insurance except for CIP.CIF

In all other terms insurance has to be agreed upon by buyer and seller

Depending on the mode of transport as per applicable convention (86)

CUSTOMS &TRADE FACILITATION

28-30 July 2016 | Colombo, Sri Lanka



KEY ISSUES – WTO TRADE FACILITATION AGREEMENT (TFA)

One of the key priorities for ICC right now is the WTO Trade Facilitation Agreement – its overall impact will

hopefully be a very positive one on your daily lives. The World Trade Organization’s Trade Facilitation Agreement

(TFA) provides a unique opportunity to enable trade by making cross-border trade easier, quicker and less costly

for businesses around the globe.

In ratifying the TFA countries will commit to a series of reforms to reduce red-tape at borders—from measures on

the release and clearance of goods through to enhanced cooperation between border agencies. The TFA also

contains provisions that provide developing countries with the required capacity building and support to implement

the Agreement.

It is widely acknowledged that the private sector can play a strategically important role in the implementation of

trade facilitation reforms that deliver real and meaningful benefits for businesses, governments and consumers.

It is in this context that three major private sector organizations—the World Economic Forum (WEF), the

International Chamber of Commerce (ICC) and the Center for International Private Enterprise (CIPE)—together

with the governments of Canada, Germany, Australia, the United Kingdom and the United States joined forces

in the Global Alliance for Trade Facilitation.


KEY ISSUES – WTO TRADE FACILITATION AGREEMENT (TFA)

Full implementation of the

Agreement could reduce trade

costs by an average of 14.3%

TFA reforms could create

around 20 million jobs — the

vast majority in developing

countries


KEY ISSUES – AUTHORIZED ECONOMIC OPERATORS (AEOS)

To promote global harmonization and secure maximum benefits ICC has set out

eight recommendations for successful AEO programmes (Authorised Economic

Operators) encouraging policymakers as follows:

1. OFFER CLEAR BENEFITS

Ensure quicker release of goods, self-assessment and

relief from bond requirements.

2. FOLLOW WCO SAFE FRAMEWORK

Don't diminish trade facilitation for non-AEO traders

and SMEs

3.DESIGN WITH BUSINESS

Customs-business cooperation is key - utilize chamber

of commerce networks.

4.COMPLEMENT EXISTING PROGRAMMES

Make AEO status compatible with other domestic trade

compliance schemes

5. RECOGNIZE STATUS BEYOND CUSTOMS

AEO status should have effect with all border agencies.

6. ENSURE CUSTOMS CAPACITY

Ensure capacity to implement effectively - including

training.

7. FACILITATE FOREIGN RECOGNITION

Expand mutual recognition between countries for

regional coherence.

8. OPEN UP AEO STATUS TO ALL

Include all supply chain operators, not just importers

and exporters.


KEY ISSUES – CUSTOMS VALUATION DATABASES

ICC is concerned about the increasing number

of countries that use Customs valuation

databases in violation of the WTO regulations

by setting reference or minimum prices for

import declarations.

Harmonized and predictable Customs

valuation rules are essential to smooth trade

flows, apparent deviations from international

agreed upon rules and regulations would stifle

international trade and economic growth.


ICC drafts, maintains and revises the

Incoterms rules, used around the world by

traders large and small every hour of every

day.

Information on the Incoterms rules, and how

to purchase the rules and related

publications, trainings and products, can be

found on the ICC website:

http://www.iccwbo.org/products-and-

services/trade-facilitation/incoterms-2010/the-

incoterms-rules/

ICC – CUSTODIAN AND DRAFTER OF THE INCOTERMS RULES

http://www.iccwbo.org/products-and-services/trade-facilitation/incoterms-2010/the-incoterms-rules/



Thank you

incoterms 2010 rules + customs/trade facilitation · 8/5/2016 · incoterms 2010 rules +...

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