• Incoterms
  • July 6, 2011 | Author: Cristina de Andrade Salvador
  • Law Firm: Miguel Neto Advogados - São Paulo Office
  • The International Commercial Terms, or Incoterms, were introduced in 1936 and have been modified over the years, usually once every decade.

    Incoterms are international commerce terms published by the International Chamber of Commerce. In an international purchase and sale contract, they assign transportation costs and liabilities between buyer and seller. Until 2010, the 13 existing terms were divided into four distinct groups. From 2011, however, further changes were incorporated into the Incoterms system.

    Effective from January 1st, 2011, Incoterms 2010 becomes more simplified. There are now only 11 terms. Four of the five terms in group "D" were eliminated, while two new ones were introduced. This review is intended to make an adjustment of Incoterms 2000 to current trade practices.

    Group D assigns responsibility to the exporter until delivery of the goods at the place of destination stipulated by the importer. In this group, the terms DAF, DES, DEQ and DDU have ceased to exist. Two new terms, more clear and objective, took their places: DAT (Delivered at Terminal), in which the goods shall be delivered to a terminal, and DAP (Delivered at Place), in which the goods are delivered to a place other than a terminal.

    Another change occurred in terms exclusively used in maritime modes, which set the seller's obligation to deliver the goods "on board"- terms FOB, CFR and CIF. This puts an end to the dispute over liability that existed prior or after the imaginary perpendicular line (ship's rail) on the FOB term.

    In addition, other changes are worth highlighting: Incoterms 2010 can also be used for domestic and intra-regional blocs’ transactions; and each term has expanded its preamble, including explanatory notes to inform users more completely about the term in question.

    In spite of all the changes, the process of choosing the appropriate incoterm remains with the same precautions. It is necessary to observe the commercial purchase and sale negotiation, the transportation modes or other logistics services, obligations and responsibilities intended to be assumed by each party, among others.

    Last but not least, it should be emphasized that our office has, in addition to a specific area to deal with matters of this nature, highly skilled partners to provide clarifications in greater detail.