Reminder of Correct Use of IncotermsEvery ten years approximately, INCOTERMS are revised in order to remain up to date with the current world trade practices. FIATA (International Federation of Freight Forwarders Associations) has recently reminded that previous INCOTERMS edition is not automatically replaced by a new version. This means that, the INCOTERMS edition should be indicated to use an INCOTERMS rule or term correctly. For example:
- "FOB Shanghai per INCOTERMS 2000" or "FOB Shanghai INCOTERMS
1990" are both valid uses of INCOTERMS should a seller and buyer be in
- To use the latest edition of INCOTERMS, a seller would have to clearly mention "FOB Shanghai per INCOTERMS 2010". According to FIATA, this is one of the aspects of INCOTERMS most misunderstood by shippers and consignees who still inadvertently use outdated traditional INCOTERMS terms used prior 1936 together with made-up terms of their own.
If you want a term from INCOTERMS 2010 rules to apply to your contract, you should make this clear in the contract, through such words as "the chosen IINCOTERMS rule including the name place, followed by INCOTERMS 2010'' ; a good example of such precision should be ''FCA 38 Cours Albert 1er, Paris, France, per INCOTERMS 2010".
The terms of sale should always be stipulated on both export quotation (and pro forma invoice if issued) and the commercial invoice. By clearly stating the terms of sale on these documents, the seller, buyer and any banks or intermediaries (like a freight forwarder) are all made aware of exactly who has the responsibility to perform different actions as the goods move from the seller's facility to the buyer's facility.
For further information or assistance, please contact a UPS SCS representative.
UPS Supply Chain Solutions®
Source: FIATA - http://www.fiata.com/index.php?id=325; International Chamber of Commerce
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