I. What are Incoterms:
Incoterms (stands for International Commerce Terms – International Trade Terms) is a set of international trade rules that are widely recognized and used around the world. Incoterms prescribe the rules related to prices and the responsibilities of the parties (sellers and buyers) in an international commercial activity.
What are Incoterms?II. Features of Incoterms:Incoterms are commercial practices, not mandatory. Only when the parties to the contract stipulate the use in a contract of sale of goods, will it become a mandatory condition, binding the obligations and responsibilities of the parties to the contract. Versions were born. the latter does not negate the validity of the earlier versions. Therefore, when used, it is necessary to specify which version of Incoterms is applied for comparison, to determine the responsibilities of the parties. Incoterms only explain the most general issues related to the delivery of goods, such as: which party is obligated to hire a means of transport or buy insurance, when the seller delivers the goods to the buyer and how the costs are divided among the parties. However, other issues such as prices, payment methods, loading, unloading and unloading of goods, storage and warehousing, depend on the agreement of the parties expressed in the contract or according to the customs of the port. business lines and customs of the host country of the parties to the purchase and sale. The two parties may increase or decrease their responsibilities and obligations for each other depending on their strong (weak) position in the transaction, but they must not change their position. change the nature and conditions of the delivery facility.
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The increase or decrease of responsibility and obligation (if any) needs to be specified in the contract of sale. Incoterms only determine the time when the risk of goods is transferred from the buyer to the seller, not the time of transfer. title to the goods, as well as the consequences of breach of contract. These matters are often covered by other provisions of the contract or in the law governing the contract. The parties should also be aware that the applicable local law may invalidate any content of the contract, including the previously selected Incoterms. It depends on whether the goods are being transported. Which means of transport (air, sea, road, etc.), which type (bulk cargo, container, barge, etc.) have corresponding groups of conditions.III. Similarities and differences between Incoterms 2000 and 20101. Similarities between Incoterms 2000 and Incoterms 2010 There are 07 commercial conditions: EXW, FAS, FOB, CFR, CIF, CPT, CIP Recommended to apply watercraft for the following conditions: FAS, FOB, CFR, CIF with types of transport and multimodal freight forwarding for the terms: CPT, CIP, DDP Both Incoterms 2000 and Incoterms 2010 are not laws. The parties may apply completely, or may apply it in part, but when the application is specified in the foreign trade contract, the different application must necessarily be carefully described in the foreign trade contract.
2. Difference between Incoterms 2000 and Incoterms 2010
|STT||Comparative Criteria||Incoterms 2000||Incoterms 2010|
|first||Number of commercial terms||13 conditions||11 conditions|
|2||Number of groups assigned||04 groups||02 groups|
|3||Grouping method||According to freight forwarder cost and place of risk transfer||By mode of transport: water and other means of transport|
|4||Obligations related to ensuring cargo security||No specified||There are regulations A2/B2; A10/B10|
|5||Recommended where Incoterms are applied||International commerce||International and domestic trade; use in bonded areas|
|6||Regulations on relevant costs||Not very clear||Fairly clear: A4/B4 & A6/B6|
|7||Trade terms DES, DEQ, DAF, DDU||Yes||Is not|
|8||Trade terms: DAT, DAP||Is not||Yes|
|9||Place of risk transfer of terms FOB, CFR, CIF||Railing ships||Finished goods on the ship|
|ten||Regulations on cost division when doing business in the chain (sales in the transportation process)||Is not||Yes|