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Questions and Answers
What is the main purpose of Incoterms?
What is the main purpose of Incoterms?
The term DPU (Delivered at Place Unloaded) was introduced in the Incoterms 2010.
The term DPU (Delivered at Place Unloaded) was introduced in the Incoterms 2010.
False
Name one of the two working groups responsible for the WTO Valuation Agreement.
Name one of the two working groups responsible for the WTO Valuation Agreement.
Committee on Customs Valuation
The _____ for Valuation Procedure lays the legal foundation for the method of valuation under the WTO Valuation Agreement.
The _____ for Valuation Procedure lays the legal foundation for the method of valuation under the WTO Valuation Agreement.
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Match the Incoterms with their descriptions:
Match the Incoterms with their descriptions:
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Under the CIF term, who is responsible for the insurance during transport?
Under the CIF term, who is responsible for the insurance during transport?
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Under EXW terms, the seller is responsible for the transportation of goods to the country of importation.
Under EXW terms, the seller is responsible for the transportation of goods to the country of importation.
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What does the term DAP stand for in shipping terms?
What does the term DAP stand for in shipping terms?
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Under CIP terms, the seller purchases ______ which covers the goods to the point of delivery.
Under CIP terms, the seller purchases ______ which covers the goods to the point of delivery.
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Match each term with their corresponding responsibilities:
Match each term with their corresponding responsibilities:
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Study Notes
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.
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Description
Explore the fundamentals of Incoterms and the WTO Valuation Agreement as stipulated in GATT 1994. This quiz provides insights into international trade responsibilities, customs valuation, and applicable regulations. Ideal for those studying international trade and customs procedures.
