Incoterm Presentation 2024 PDF

Incoterm Presenter: Ms. Emelda Cocom – Deputy Comptroller Compliance  OBJECTIVES  At the end of the session participant should be able to: 1. Explain the different types of terms of delivery. 2. Identify the cost that are associated with delivery term 3. Distinguish between the responsibility of...

Incoterm Presenter: Ms. Emelda Cocom – Deputy Comptroller Compliance  OBJECTIVES  At the end of the session participant should be able to: 1. Explain the different types of terms of delivery. 2. Identify the cost that are associated with delivery term 3. Distinguish between the responsibility of the buyer and the seller. WTO VALUATION AGREEMENT (GATT 1994) Article VII  Provides the basis under which the value for customs purpose will be established.  There are two working group that are responsible for the working document associated with the Valuation Agreement  Committee on Customs valuation – provides decisions that must be legislated by all WTO members.  Technical Committee on Customs Valuation – provide technical guidance for the application of the method and text of the valuation agreement. REGULATION FOR VALUATION PROCEDURE  Chapter 48 Customs and Excise Duties Act, Schedule III, Section 5, of the Substantive Laws of Belize, Revised Edition 2020.  Value of Imported Goods  Lays the legal foundation for the method of valuation under the WTO Valuation Agreement (GATT 1994)  Valuation method was adopted in the Customs and Excise Duties Act, Revised Edition 2011. INCOTERM 2020  Incoterms are a set of international trade terms that defines the responsibilities and obligation of the buyers and the sellers when shipping goods.  This allows for standardize rules for the delivery of goods, payment, risk transfer and any other key aspect of international transaction.  Established in 1936 and updated every ten years by the International Chamber of Commerce (ICC).  Incoterms 2010  Incoterm 2020  Incoterms are used for mode of transportation such as sea, air, land or railway. Incoterms  Even though the incoterms are updated every 10 years, it is not wrong for a seller to use an earlier version as long as the year is stated on the invoice.  2020 vs 2010  Introduction of DPU (delivered at place unloaded) to replace DAT (delivery at terminal)  Insurance in CIF and CIP the seller can buy minimum coverage insurance  The term FCA is used in conjunction with a bill of lading and multimodal transportation like the 2010 version when it comes to payment to bank. VALUE FOR CUSTOMS  WTO Valuation Agreement  The customs values shall incorporate in whole or in parts the following: a. The cost of transport of the imported goods to the port or place of importation. b. Loading, unloading and handling charges associated with the transport of the imported goods to the place or ort of importation. c. The cost of insurance  Adoption by Belize  Text in full except for the word “unloading”. * All charges must take place pre importation. CIF – Cost, Insurance and Freight (Port)  The seller is responsible for the cost of getting the goods to the country of importation along with the cost of insurance for the entire journey.  This term is used only if goods are transported by sea or inland waterway. EXW-EXWORKS  The seller is responsible for having the goods available for pickup at the seller’s warehouse or factory.  Once good are retrieved the buyer is now responsible for the cost and risk associated with transporting the goods to the country of importation.  The seller can either use a freight forwarder or the shipping company to take the goods from the warehouse/factory to the port of exportation.  Goods can be sold whether or not it will be shipped by sea, land, rail or air. FCA – FREE CARRIER  The seller is responsible to deliver the goods to a named place.  This can be a warehouse or terminal  The seller bears the risk of the goods until delivered at place.  Thereof, the buyer is responsible for all other cost of getting the goods to the country of importation.  Good can be sold FCA whether shipped by sea, land, railway or air. CPT – CARRIAGE PAID TO  The seller is responsible for the cost of transportation to a named destination.  Once the goods is delivered to the named place the buyer take up the responsibility of the cost of transporting the goods to the country of importation.  Goods can be sold CPT regardless of whether it will be exported by sea, land, rail or air. CIP – CARRIAGE AND INSURANCE PAID TO  The seller is also responsible for the cost of transporting the goods to a named destination.  In this case the seller also purchases insurance which covers the goods only to the point of delivery (named destination).  Once goods are delivery, the buyer assume responsibility of transporting the goods to the country of importation.  Goods can be sold CIP whether or not they will be transported by air, land, rail or sea. DAP – DELIVERED AT PLACE  The seller is responsible for the cost of delivering the goods to a named place.  Once delivered the buyers assumes responsibility of transport cost to the country of importation.  When goods are delivered DAP the sellers also clears the goods for exportation to country of importation.  Terms of delivery can be use for both ocean or air shipping. DPU – Delivered at Placed Unloaded  The seller is responsible for arranging and delivering the goods to a named place.  This also includes the unloading of the goods.  Thereof, the buyer assumes all other cost associated with the goods after the unloading.  The goods can be sold DPU whether transported by land, ocean or air. DDP – Delivered Duty Paid  Goods sold DDP gives the seller the responsibility of all cost associated with getting the goods to the country of importation, inclusive of duties and taxes.  All risk and cost are the sole responsibility of the seller.  Good can be delivered by ocean or air. FAS – Free Alongside Ship (Port)  The seller is responsible for  Picking up the goods at the factory  Clearing them for exports  And delivering to a departure location – usually the loading dock  The buyer then assumes responsibility of all other cost at this point.  This term of delivery is only negotiated if the goods will be transported by sea and inland waterway. FOB – Free on Board (Port)  The seller assumes responsibility for the following:  Picking up the goods from the warehouse/factory  Delivery of goods to the vessel and onto the vessel  The buyer assumes the cost once the goods are placed on board the ship.  This term of delivery is negotiated only if goods will be transported by sea or inland waterway. CFR – Cost and Freight (Port)  The seller is responsible for the following:  Picking up the goods from the warehouse/factory  Transport to the port of origin  Loading the goods on the vessel  Transport to the destination port  The buyer is responsible for insurance only  This term is used only if goods are transported by sea and inland waterway.