Graphic Business News

ICC releases new commercial trade terms

By: Mclean Kwofi
Mrs Agnes Asamoah Duku (middle), head of Ghana Shippers Authority's delegation at the launch interacting with Mr Christoph Martin Radtke (right), Representative of ICC after the launch.

Traders who use Incoterms for their business transactions can now have the benefits of their goods being unloaded at their preferred and agreed destination under the latest version of Incoterm rules.

This followed the renaming of Incoterms DAT (Delivered at Terminal) featured in the 2010 to DPU (Delivered at Place Unloaded) in the Incoterm Rules 2020, released by the International Chamber of Commerce (ICC) on Thursday, October 24 in Dakar, the capital of Senegal.

The new Incoterms, which are a revision of the 2010 version, are international trade terms on contract of sale which provide certainty and clarity to businesses trading across borders everywhere in the world. Although the new version takes effect in January 2020, users can start using it before next year.

Incoterm is an acronym standing for international commercial terms. Incoterm is a trademark of the International Chamber of Commerce, registered in several countries across the world

The incoterms rules feature abbreviations for terms, such as FOB (Free on Board), DAP (Delivered at Place) EXW (Ex Works), CIP (Carriage and Insurance Paid To), which all have very precise meanings for the sale of goods around the globe.

Name change
The name change is a key feature of the new version and it underlines the fact that delivery can now happen anywhere, and not just at a transport terminal as with DAT in the 2010 version.

This means DPU is now the only rule that requires the seller to unload the goods at their destination, and under this arrangement the seller bears all risks involved in bringing the goods to and unloading them at the named place of destination.

In this Incoterms’ rule, therefore, the delivery and arrival at destination are the same and the seller should, therefore, ensure that they are in a position to organise unloading at the named place.

Should the parties intend that the seller does not bear the risk and cost of unloading, the DPU rule should be avoided and DAP (Delivered at Place) should be used instead.

This rule may be used irrespective of the mode of transport selected and may also be used where more than one mode of transport is employed.

ICC representative
In his opening address at the launch, the Special Representative of the General Secretary of ICC, Mr Francois Georges, said the Incoterms 2020 feature many changes to the sequencing and presentation of the rules, and a welcome expansion of the explanatory notes.

He said there had been very few substantive changes from the Incoterms 2010 version.

"There are still eleven rules which are still divided into four water rules and seven rules that can be used with any transport mode. No rules have been removed or added, but one rule has been renamed."

He explained the Incoterms 2020 rules now covered the situation where either the buyer or the seller transported the goods using their own vehicles, without engaging the services of a third party

“There is more detail on allocation of costs arising from security-related obligations,” he added.

Clarity in new version
The Managing Director (MD) of the Senegalese Shippers Council (COSEC), Mr Mamadou Ndione, whose office is the host of the launch, indicated that the new version was to provide certainty and clarity to businesses trading across borders everywhere.

As a result, he said traders in Africa, especially, should take advantage of the latest version which clearly defined the delivery point and the seller and buyers' responsibilities, risks and costs of transactions.

He said the new version of the international trade terms present opportunities for the private sector in African countries to use and take advantage of its benefits.

“We are now in a new era where global competition is growing rapidly, companies in Africa should position themselves well to benefit from it,” he said.

Open for investment
The President of the Republic of Senegal, Mr Macky Sall, in a speech read on his behalf, stated that Senegal was proud to welcome about 1,000 stakeholders in the shipping industry from Africa and beyond to its territory.

He said businesses in Africa needed to position themselves to grow as the continent had become a destination for investment in the world.

“Senegal has opened the doors of Africa to the world for growth,” the President added.