New rules for interpreting trade terms used by importers, exporters, lawyers, transporters and insurers across the world will be released in Australia via national workshops taking place this month.
The Incoterms® 2020 rules, published by the global rule-setting organisation the International Chamber of Commerce (ICC), are crucial for understanding how and what each party agrees to in a transaction.
International Chamber of Commerce Australia director Bryan Clark said before ICC developed the Incoterms® rules, terms were subject to varying interpretations in different countries, often giving rise to disputes and litigation.
"Used in both international and domestic contracts for the sale of goods, the Incoterms® rules simplify the drafting of contracts for the sale of goods and help avoid misunderstandings by clearly setting out certain obligations of buyers and sellers," Mr Clark said.
"The eleven rules give the definition of three-letter abbreviations commonly used in export and import contracts, but firms who don't make themselves familiar with the 2020 versions are at serious risk of having a misunderstanding about their goods trade, which could cause serious loss.
"Problems arise when traders and their advisers rely on inappropriate or outdated terms. A potentially very costly mistake for example is for parties to choose an Incoterms® rule without understanding where goods are 'delivered' under the chosen rule, introducing a risk of loss or damage to goods moving from seller to buyer.
"If something goes wrong, if containers are lost overboard or goods arrive damaged, these new rules prevent disputes over who is liable."
"For this reason, across September the Australian Chamber of Commerce and Industry together with partner BDO is launching a national series of 3.5 hour workshops covering the important new ICC Incoterms® 2020 rules."
Mr Clark said the workshops will be led by international Incoterms® expert Mr Bob Ronai, who was on ICC's global Incoterms® 2020 Drafting Group, and BDO partner, Mr Bill Cole.
Mr Ronai has the honour of being the first Australian to be invited by the ICC to be a member of their Incoterms® Drafting Group to draft the new Incoterms® 2020.
"The importance of the Incoterms® rules has not been realised by the vast majority of traders out there. We have a huge responsibility to get the knowledge out," Mr Ronai said.
Tickets to the official workshops are available now.
