Incoterms 2010
From Supply Chain Management Encyclopedia
Short History
The Incoterms® 2010 rules are the International Chamber of Commerce (ICC) rules for the use of domestic and international trade terms. Historically, beginning from 1936, different editions and revisions of Incoterms have been carried out to update the rules in accordance with current international trade practices and technological changes (namely, Incoterms versions of 1953, 1967, 1976, 1980, 1990, and 2000 were in use before the current version - Incoterms® 2010.The latest revision, - the Incoterms® 2010 rules, - take account of contemporary changes in transport practice, together with the spread of customs-free zones, increased use of electronic communication and security issues became more important due to the international terrorism development.
Incoterms Defined
Incoterms are a collection of international rules (coded in three-letter acronyms: from EXW till DDP), with voluntary character for parts, that set the range of commercial clauses included in international sale and purchase contract; easy to understand for both contract parties as well as for a third party (e.g., case of arbitration).Incoterms are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities and clarify when the transfer of ownership of the merchandise takes place; are used in conjunction with a sales agreement or other method of transacting the sale. In other words Incoterms are formalized convenient terms of trade regulated by the International Chamber of Commerce (ICC) which specify and split the responsibilities of the exporter and the responsibilities of the importer in an international transaction. Therefore, in accordance with the rule of Incoterms selected it should be clear: Which tasks will be performed by the seller/exporter Which tasks will be performed by the buyer/importer Which activities will be paid by the seller/exporter Which activities will be paid by the buyer/importer When the transfer of risk for the goods will take place
