20 May 2019
Published also in Business Mirror
THE International Chamber of Commerce (ICC) is preparing for the publication of Incoterms 2020, an update of the renowned regulations that define the responsibilities of buyers and sellers operating in the international trade system.
Facilitating trillions of dollars in global trade each year, the “international commercial terms,” or Incoterms rules, are a commonly accepted set of definitions and rules governing commercial trade activity.
Following a series of studies conducted in the 1920s, ICC discovered discrepancies in the interpretation of commercial trade terms used by traders from different countries. Based on these findings, ICC concluded there was a need for the creation of a common protocol for importers and exporters everywhere.
The first set of Incoterms rules was published by ICC in 1936. Since then, ICC has periodically revised the Incoterms rules to reflect changes in the international trade system. Incoterms 2010 is the most current version of the rules to date. This latest edition of the Incoterms rules included an increased obligation for buyer and seller to cooperate on information sharing and changes to accommodate “string sales.”
For the past decade, Incoterms 2010 has provided critical guidance to importers, exporters, lawyers, transporters and insurers across the world. In its centenary year, ICC is preparing for the official release of Incoterms 2020 later this year. Today, more than ever, participants in the global trade system require guidance and clarity. With the emergence of new technologies, government policies and environment regulations, Incoterms 2020 will provide a common framework for the future of trade. The development of Incoterms 2020 saw extensive consultation among economists, lawyers and trade experts, as well as insight from ICC’s global network of national committees.
The participating national committees, as well as ICC’s Knowledge Solutions Department, have provided substantial contributions to the new Incoterms rules. The final draft, to receive approval by the ICC Executive Board, will be published in 2020. The Incoterms 2020 Drafting Group formed by ICC in 2016 consists of nine experts from around the world, including ICC’s Trade and Investment directors: three from Asia, two from America and four from Europe. In terms of expertise, the Drafting Group features four users of Incoterms rules and five commercial lawyers, who are specialists in international trade.
Since 2016, the Drafting Group has met at length to analyze, discuss and consider more than 3,000 substantial comments provided by ICC national committees. Successive consultations took place with participation from ICC national committees in April 2017, October 2017 and May 2018. This process also included two “user” global consultations, which took place in Beijing (2017) and London (2018). During the drafting process, the international editorial board met 12 times between July 2016 and September 2018 to discuss proposed changes, as well as recommendations from ICC national committees.