News
Japan International Freight Forwarders Association Inc. (JIFFA) held a lecture presentation on Incoterms 2020 on Dec. 4. Incoterms, which are a set of rules for sales contracts for foreign trade transactions, are updated every 10 years by the International Chamber of Commerce (ICC) to make them keep pace with the times. On Sept. 10, a final draft was unveiled for a 2020 edition. At the workshop, Professor Emeritus Koji Tsubaki from Wasesa University, a member of the ICC Japan who had been engaged in formulating the draft, gave a presentation to explain the point of compiling it, changes to be made for a 2020 edition and other subjects.
With respect to Incoterms 2020, Mr. Tsubaki said that no so major revisions will be made from Incoterms 2010 as to impact actual trade transactions. He added, however, that changes to be made will include an improved introduction and the addition of explanatory notes for readers. Also, the 11 terms and conditions will be rearranged in accordance with their importance, while differences will be discussed on cargo insurance coverage under CIF (cost, insurance and freight) and CIP (carriage and insurance paid to) contracts. In Incoterms 2010, insurance is required under Institute Cargo ICC (C), but in Incoterms 2020, CIP requires insurance complying with ICC (A) whereas CIF requires insurance under ICC (C), because Clause A covers a more comprehensive higher level of insurance such as manufactured goods, whereas a lower level of cover from Clause C would probably apply to the commodities world.
In addition, the term DAT (delivered at terminal) will be replaced with a new term, DPU (delivered at place unloaded) to apply for shipments that are not delivered at terminals as well.
Incoterms 2020 is scheduled to take effect on Jan.1, 2020 as a set of rules for reference.
