INTERNATIONAL CHAMBER OF COMMERCE PROPOSES SIGNIFICANT CHANGES TO CURRENT INCOTERMS

Those of us in the sea freight industry may see a change in the current incoterms come 2020. The suggested changes will affect all importers and exports worldwide significantly.

The below points are currently being considered by the ICC (International Chamber of Commerce):

  1. The terms FAS, DDP and EXW are likely to disappear.
  2. Expansion of the FCA term.
  3. DDP will be split between to DTP (Delivered at Terminal Paid) – the seller will be responsible for all costs including customs when goods are delivered at destination terminal and DPP (Delivered at Place Paid) – seller will be responsible for all costs, not just to terminal but to place; e.g. buyers address.
  4. A new incoterm – CNI will be introduced (cost and insurance). This will allow the responsibilities of the seller to be transferred to the buyer at departure port. The exporter will be responsible for the insurance and the buyer for the transportation. The aim of this term is to remove disagreements surrounding payment of duties.

The changes in incoterms will be easier to understand and will attempt to eliminate any current confusion. Another recommendation is for the ICC to address cyber-security. As we head into a digital age, the ICC may introduce an incoterm to address cyber-attacks. As various companies have been subject to these kinds of attacks, the hope is that the ICC will introduce new tools that can decrease the risk of these happening.

The aim of the Drafting Committee is to encourage best practices in the industry and ensure a more practical implementation of the new and amended incoterms.