Incoterms and WTO Valuation Agreements

Incoterms

• Incoterms are international trade terms defining responsibilities for buyers and sellers during goods shipment.
• They standardize rules for delivery, payment, risk transfer, and other international transaction aspects.
• Incoterms are established in 1936 and updated every ten years by the International Chamber of Commerce (ICC).
• Incoterms 2010 and 2020 versions exist.
• Incoterms are used for various transportation modes (sea, air, land, rail).

WTO Valuation Agreement (GATT 1994) Article VII

• Provides the basis for customs valuation.
• Two working groups manage the valuation agreement's documentation.
• Committee on Customs Valuation makes decisions that all WTO members must legislate.
• Technical Committee on Customs Valuation offers guidance on the agreement's use.

Regulation for Valuation Procedure

• Chapter 48 (Customs and Excise Duties Act) of Belize's substantive laws from the 2020 revised edition.
• The laws lay the legal foundation for valuation methods under the WTO Valuation Agreement (GATT 1994).
• The valuation method was adopted in the corresponding 2011 revision of the Customs and Excise Duties Act.

Specific Incoterm Details:

• CIF (Cost, Insurance, and Freight): Seller pays for transport, insurance, and delivery to the import country's port. Used only for sea or inland water transport.
• EXW (Ex Works): Seller prepares goods at their warehouse/factory; buyer handles transport to the destination country.
• FCA (Free Carrier): Seller delivers goods to a named place; buyer handles transport to the destination. Used for all transport modes.
• CPT (Carriage Paid To): Seller pays transport to a named destination; buyer takes over transport costs within the destination country. Used for all transport modes.
• CIP (Carriage and Insurance Paid To): Seller pays for transport and insurance to a named destination. Used for all transport modes.
• DAP (Delivered At Place): Seller delivers goods to a named place; buyer takes responsibility for transport costs to the import country. Used for all transport modes.
• DPU (Delivered at Placed Unload): Seller delivers goods to a named place and unloads them; buyer handles cost after unloading. Used for all transport modes.
• DDP (Delivered Duty Paid): Seller handles all export costs including import duties and taxes.
• FAS (Free Alongside Ship): Seller delivers goods alongside a ship; buyer handles transport and costs from that point. Used only when goods are transported by sea or inland waterways.
• FOB (Free On Board): Seller delivers goods to a ship; buyer handles all transport and costs from that point on. Used only when goods are transported by sea or inland waterways.
• CFR (Cost and Freight): Seller pays for transport and delivery to a destination port; buyer handles the insurance and costs from that point on. Used only for sea or inland water transport.

Incoterm Updates

• Incoterms get updated every ten years.
• Sellers can use earlier versions, though, as long as the year is noted.
• Changes like DPU (Delivered at Place Unloaded) replacing DAT (Delivery at Terminal) have occurred.
• Insurance in CIF and CIP can be minimum coverage as needed.

WTO Valuation (Customs)

• Customs values must include:
  • Import goods transport costs.
  • Loading, unloading, and handling fees.
  • Insurance costs.
• "Unloading" is excluded from the full text in Belize.
• All charges must occur before the import.