incoterms 2010 rules + customs/trade facilitation · 8/5/2016 · incoterms 2010 rules +...
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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
POLICY AND BUSINESS PRACTICES
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.
POLICY AND BUSINESS PRACTICES
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."
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
2016
• Objective: Giving Guide lines for
transporters on the 11 incoterms
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
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.
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
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
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 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
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
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
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
What we achieved in
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
2010 2016Buyer/Seller to Transporter
T
R
E
E
rust
eliability
thics
quilibrium
Building the
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
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
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
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
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
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)
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
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.
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + 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
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
Non container cargo delivery For containers in modern Terminal and
CFS Delivery
=
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
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
POLICY AND BUSINESS PRACTICES
NEW! ICC GUIDE ON TRANSPORT + INCOTERMS 2010 RULES
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)
POLICY AND BUSINESS PRACTICES
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.
POLICY AND BUSINESS PRACTICES
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
POLICY AND BUSINESS PRACTICES
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.
POLICY AND BUSINESS PRACTICES
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.
POLICY AND BUSINESS PRACTICES
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