INCOTERMS 2020 OVERVIEW - PAT CORBIN

04 FEB 2020

Incoterms®2020 publication, the eighth edition since 1936, is more widely applicable and easily understood.  The 11 articles to the 11 terms more prominently position the place of delivery and the risk of transfer point.

The European-based Drafting Committee, which consists of five lawyers, highly qualified in all aspects of European corporate trade that operates mainly in an open-account environment.  European trade, ports and terminal procedures function differently to Africa and this difference has had a strong influence on the structure of the Incoterms® rules.   Substantial disagreement on the use of the Incoterms® rules flows from regional traders’ written and verbal input to the Drafting Committee over 15 years not being considered.   For example, the recommended FCA term is regionally considered as EXW loaded and is not appropriate for international trade. 

ICCSA regularly receives enquiries for views on Incoterms® transactions where potential costs, arising from traders’ exposure, particularly on the passing of risk, can arise.  The complex commitments on entering into a buyer-seller transaction require both parties to fully understand the agreed Incoterms® as they greatly favour the seller.  For this reason, Incoterms® publications are in demand worldwide to enable both buyers and sellers to understand their commitment when entering into a contract.

ICCSA is particularly concerned about issues affecting our deep-sea container shipments for general cargo and the impact on SMMEs since our trade is very dependent on bank finance.  

Locally any party is able to lecture on Incoterms but not under the name of ICC.  It is important that the terms are considered in the context of African trading methods and the more prominent role played by government authorities and shipping lines.  

Local lecturers need to be aware of the context of the way we transact.  Their application for ICC Academy certification will only be approved by the ICC National Committee if there is evidence of this understanding.

ICCSA will be arranging workshops to highlight the many expensive experiences brought to our attention by sub-Saharan traders. 

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International Chamber of Commerce South Africa.