On 28 June, the International Chamber of Commerce (ICC) announced that, as it celebrates its 100th year, its Incoterms® 2020 would be released in early September and come into effect on 01 January 2020.
The ICC considers its Incoterms® rules, first introduced in 1936, as the language of international trade. At the time of their introduction, and to this day, the Incoterms® rules adhere to commercial and judicial standards.
Now, more than 80 years later, the Incoterms® rules are used every single day by millions of enterprises of all sizes from around the world, including multinational enterprises (MNEs), small, micro and medium-sized enterprises (SSMEs), and individual practitioners.
Following its latest revision, Incoterms® 2020 will reflect the ever-changing nature of the current international trade system. The ICC indicated that over the course of the drafting process of Incoterms® 2020, several revisions had been made to make sure that the Incoterms® rules clearly and accurately reflect the current day-to-day trade practices.
In advance of the launch of the Incoterms® 2020 rules, you may want to use the time from their release in September 2019 to adapt, prepare and train your business for 01 January 2020.
To assist you in this endeavour the ICC has taken steps to ensure that Incoterms® 2020 is convenient and accessible in digital and hard copy formats. The Incoterms® 2020 rules are in the process of being translated into 27 languages.
Coinciding with the news of the Incoterms® 2020 rules, the ICC announced the development of “smartINCOs” - the next generation of the Incoterms® rules.
As part of the ICC’s global efforts to embrace the use of technology as a key driver of transformation for international trade, the ICC, with support from Perlin, a Singapore-based distributed ledger technology company, will be developing customisable, self-executing digital sales agreements, incorporating the Incoterms® 2020 rules.
The ICC expects that the incorporation of smartIncoterms® rules, or smartINCOs, will help facilitate trade by reducing costs and barriers faced by importers and exporters worldwide, notably SMMEs.
The ICC foresees that the platform will utilise sensor data and application programme interfaces (APIs) to prompt triggers for self-execution, sustainability, and other environmental, social and governmental (ESGs) performance indicators to improve trade facilitation.
Story by: Riaan de Lange