Changes in ICC Rules in 2020
The International Chamber Of Commerce and Change of Incoterms in 2020
Changes in ICC Rules in 2020
Contents
-What is ICC ( International Commerce Chamber)?
-What is Incoterms?(International Chamber Of Commerce Terms?
-History Of Incoterms (1923-2020)
-The Changes in Incoterms 2020
-What is DAT?
-DAT usage between incoterms
-DAT obligations(Seller/Buyer)
-DAT responsibility chart
-Why DAT term changed into DPU in 2020 Incoterms?
What Is ICC?(International Chamber Of Commerce)
The International Chamber Of Commerce is an entity which is founded in 1919 Atlantic City then its headquarter moved in to Paris/France.
The ICC’s main three objective is;rule setting, dispute resolution, and policy advocacy.The international trade members associations and countries are willing to obey these rules even it is voluntary. And ICC rules are become a part of international trade with over countless thousand transactions between nations.
The ICC is actually is a supporting unit of United Nations and the World Trade Organization (WTO) the and many other intergovernmental bodies, both international and regional, such asG20 on behalf of international business.In short ICC is the voice of business in World platforms.
INCOTERMS;
The ICC’s incoterms journey had began 1923 with study of the which transportation ways are used for international trade.And in 1928 the study had widened with 30 countries needs in international trade.
International Chamber of Commerce has revealeved the terms and rules for both importer and exporters in 1936 and it named by shortening the International chamber of commerce terms as INCOTERMS.
The incoterms rules changed in time the first incoterms rules are 1936 incoterms rules which includes the terms which still exist untill this day the first terms are; FAS,FOB, C&F,Ex Ship and Ex Quay these terms are used for seaway transportation (trade) between nations.
Due to World War 2 the 1936’s incoterms are become deficient because of the railway usage for supply is came to the international trade way.
After these changes in 1953 ICC issued the situation and debuted three new rules additionaly to the incoterms which was, DCP(Delivered Costs Paid),FOR(Free on Rail) and FOT (Free on Truck).
In 1967 ICC launched the third revision of the Incoterms rules, which dealt with misinterpretations of the previous version. Two trade terms were added to address delivery at frontier (DAF) and delivery at destination (DDP).
Of course as everything does the international trade is developing and using the techonology so in 1974 the ICC needed to revise the incoterms because air transportation became a popular way of transportation between the nations in international trade.ICC had added FOB airport rule in incoterms. This rules meant to clerify the difference between regular FOB by adding the name of vessel to the rule.
Another revision was needed with the handling of goods in containers and new documentation processes. And in 1980 a new verison added and in this edition introduced the trade term FRC (Free Carrier… Point at Named), which is not actually taken by the ship's side but provides goods at a shore reception point, such as a container site.
After 10 years in 1990 ICC reformed the rules again to make it easy for understanding by the members so they end up with free at … term to free at carrier which means which vessel is used is called carrier is will be ruled as the same rule.
By changing time by time incoterms revisions are became like it will be revised in 10 years or something like that ICC revised their rules in a period of 10 years.In 2000 The "License, Authorizations and Formalities” section of the FAS and DEQ Incoterms® rules has been amended to comply with the way most customs authorities deal with exporter and importer issues.
The 2010 Incoterms is the latest version of incoterms until 1 January of 2020 this version includes;
The DAT term firstly mentioned inIncoterms 2010 with DAP .
These two new rules are replaced with DAF, DES, DEQ(Delivery Ex Quay) and DDU which is mentioned earlier in 2000’s incoterms rules .
The Incoterms 2020
And here is a final version of Incoterms is Incoterms 2020 it just established and it will be on use on 1st of January 2020.The changes of 2020 incoterms is;
A change was made in FCA due to the increase in the number of instances in which export transactions were requested at the seller position or at the bank location that provided financial support but our sellers could not provide it. The importer is now able to order the exporter to form his own bill of lading after loading; No liability is assumed by the exporter with this amendment. The minimum insurance requirement for CIP and CIF at different levels was set. Although the minimum insurance level of CIF export transactions is the, the minimum insurance level in CIP exports is regulated to be covered by "All Risks.. Incoterms 2010, carrier coverage; it did not make interpretation on the means of transport of the importers and exporters. Due to the growth of the economies, each enterprise created its own transport system, and there could be discrepancies on Incoterms. Thanks to the new updates, changes have been made in exporting and importing transportation works, making delivery on their own side. During the process of foreign trade transactions, additional rules were added for the specific requirements for each delivery method. Prior to the entry into force in January 1, 2020, businesses were provided with simple examples and explanations to help them understand Incoterms 2020. Of course, the new booklet also contains notes on what happened in the previous one.
The booklet, which also refers to who will be responsible for the expenses made in foreign trade transactions, also provides information about the exact value of the expenses, and the costs of which. DAP and DAT have been relocated in the rankings by simple renaming without changing their properties. DAP and DAT were replaced by names. Forms of Delivery 2020 (Incoterms® 2020) The committee also prepared an International Chamber of Commerce (ICC) agreement with the SmartINCOs ® initiative. The first step was taken to adapt all export (sales) contracts that could be added in accordance with Incoterms® to the digital world. In order to reduce costs and other barriers to micro, small, medium and larger businesses, an agreement has been reached with the Perlin software company in Singapore for the SmartINCOs® initiative to advance this concept architecture. The platform will use sensor data and application program interfaces (API) to stream data to automation, sustainability and other environmental, social and government performance indicators to facilitate trade.
The Change Of DAT to the DPU
What is DAT?
Delivered At Terminalrefers to the seller delivering the goods, once unloaded from the arriving means of transport. Goods are placed at the disposal of the buyer at the named terminal, at the named port or place of destination.
DAT is used irrespective of the mode of transport selected and may also be used where more than one mode of transport is utilized. The specific point within the terminal at the place of destination should clearly be specified as agreed upon.
DAT requires the seller to clear goods for export, where applicable, without any obligation to clear the goods for import, pay import duty or carry out import customs formalities.
Sellers Obligations in DAT
•Goods, commercial invoice and documentation
•Export packaging and marking
•Export licenses and customs formalities
•Pre-carriage and delivery
•Loading charges
•Main carriage
•Delivery at named terminal at port or place of destination
•Proof of delivery
Buyer Obligations in DAT
•Onward carriage ("Onward Carriage” indicates the movement of goods after the maincarriageof the shipment.)
•Import formalities and duties
•Cost of pre-shipment inspection
•Delivery to buyer
The Usage of DAT between Incoterms
Here is a chart of usage of incoterms between nations in International Trade
The DPU (DAT is the name according to 2010 incoterms) is used %2 in general international trading but that’s not means that rules is uncessary or useless it just directly proportional to the seaway/roadway usage in international trade.
And DAT is also consumer sided incoterm because when it used in transportation the seller takes the much of responsibility and expense of the carriage.
The Responsibilities Between Seller/Buyer In DAT Incoterm
The DPU(DAT) incoterm has a buyer efficient with less responsibility and risk taking compare to other transportation terms. The seller has the most of the responsibility and work while the trade is in action.(packaging,loading,charges etc.)
Why DAT Changed Into DPU
The IncotermDAT expands to become theDPU(Delivered at Place Unloaded). The destination can be any place and not just a terminal. However, if the place is not a terminal, the seller must verify that the place where the goods are to be delivered is a place where he is able to unload the products
Before the changes terminal meant to be a warehouse or airport , dock etc. Now the rule is widen and this terminal can be any place regarding to agreement.
Conclusion;
The ICC is a foundation which tries to control the World Trade mechanism and tries to invade everyone into the international trade.
ICC makes regulations and creates rules to make safe and easy trade for every country.They researching the needs of traders to accomplish the economic activities much more efficiently.They also make explanations and charts for everyone to understand the rules of international trade.They also not standing with the rules where they are they also evolve and change in time with answering needs of time and developing technology.
The DAT is changed into DPU because of the one of the main mission of the ICC which is ‘’ make clear understanding and use of incoterms for everyone’’ so they needed make much more clear the understanding of ‘’unloaded’’ and ‘’any place are acceptable as terminals’’ terms from the beginning of the article. And the change of a name also clears the main difference between DAP and in old saying DAT.
Sources;
https://icc.tobb.org.tr/icct-kurulusyapi.php
http://logic.sf.bg.ac.rs/wp-content/uploads/Papers/LOGIC2015/ID-54.pdf
https://dergipark.org.tr/tr/download/article-file/577270
http://halleycables.com/img/cms/INCOTERMS%202010%20Guide.pdf
https://en.wikipedia.org/wiki/International_Chamber_of_Commerce
https://100.iccwbo.org/timeline
https://en.wikipedia.org/wiki/Incoterms
https://iccwbo.org/resources-for-business/incoterms-rules/incoterms-rules-history/
http://www.mainfreight.nl/en/info_point/info_point_transport/incoterms.aspx
https://pdfs.semanticscholar.org/f03b/22ff092f0fc9da0537869569d93907f73c16.pdf