Sri Lanka needs to improve awareness on International Commercial terms (Incoterms) to facilitate trade industry, an expert said. Bank of Ceylon (BoC) Corporate Branch Trade Division last week held a seminar on recent changes on Incoterms for its customers in Colombo.
The speaker at the seminar was BoC Trade Services Chief Manager Ranjith Haputhanthri.
International Commercial terms (Incoterms) are a series of international sales with terms, published by International Chamber of Commerce (ICC) and widely used in international commercial transactions.
These are accepted by Governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade.Haputhanthri said, "In the past Incoterms has often been used incorrectly during contract negotiations."
The buyer and seller often chose Incoterms that do not fit with the agreements, way of transportation. Since the last revision of the Incoterms 2000, the process of international transportation has been developed due to the new techniques of transport, numerous modernizations and commercial practice as well.
"Two new Incoterm rules (DAT) Delivered at Terminal and (DAP) Delivered at Place have replaced the Incoterm 2000 rules (DAF) Delivered at frontier, (DES) Delivered Ex-Ship, (DEQ) Delivered Ex-Quay and (DDU) Delivered duty unpaid. The number of Incoterm rules has been reduced from 13 to 11. This has been achieved by substituting two new rules that may be used irrespective of the mode of transport. Under both new rules delivery occurs at a named destination.
Under DAT at buyer's disposal but ready for unloading," he said.
Haputhanthri said so far Incoterm rules have traditionally been used in international trade. Incoterm 2010 rules formally recognizes that they are available for application to both international and domestic trade. Before Incoterms 2010 rules it would find a guidance note.The guidance note explains the fundamental of each Incoterms rules when it should be used, when risk passes, how costs are allocated between seller and buyer, the guidance notes are not part of the actual incoterms 2010 rules but are intended to help the user to select the appropriate Incoterm rule for the particular transaction.
"Sometimes parties want to alter an Incoterm rule. The incoterm 2010 rules do not prohibit such alterations.
But there are dangers in so doing. In order to avoid unwelcome surprises the parties should make the intended effect of such alterations extremely clear in their contracts," he said.
Related Info :
• The new Incoterms® 2010 rules - Your essential tool to ensure correct application of the Incoterms® rules in global and domestic sales transactions
Very Useful. Thanks.
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