Awareness on incoterms vital - BoC official
Gayan Kanchana
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. |