Valle García De Novales „If we want to improve user awareness of the Rules, we should act differently.“

Which role do the Incoterms® play in your daily work? What experiences have you had over the past five years with the application of the rules regarding clarity, practicality, and effectiveness? What challenges, if any, have you encountered?

„I am a commercial lawyer dealing with international commercial law and therefore, I deal with Incoterms rules in my daily work when drafting or negotiating international commercial contracts. The main disappointment I have encountered over the past five years is that, despite all the training provided, users continue to use the Rules without ever reading the official publication, so they cannot appreciate the tremendous effort that has been made with Incoterms 2020 in terms of clear language, let alone be aware of the main changes introduced in the current version.

In my experience, users continue to make the same mistakes as with the previous versions of the Rules: they use Ex-Works for selling and buying, sellers use FCA/FOB when collecting payment by a letter of credit, no one knows where the place of delivery is when using CIP/CPT and everyone thinks that C-Rules imply delivery at destination.

I think that if we want to improve user awareness of the Rules, we (ICC) should act differently. There is no point in improving the language and clarity of the official publication if no one reads it. People look for answers on the Internet, so I think that it is about time that we offer a tool similar to “ChatGPT” to help users choose the right Rule.“

The Incoterms® 2020 came into effect at a time when international trade was already under pressure due to the. pandemic and disrupted supply chains. In addition, rising costs/inflation and increasing international conflicts have occurred. Has the standardization of delivery terms with the help of the Incoterms® proven effective during this time?

„I think that the pressure on the supply chains caused by the pandemic has had an impact on the Rules chosen: most of my seller clients avoid using FOB/CIF, or any other Rule that require them to deliver on board a vessel (rollover and blank sailing situations, port strikes, etc.). In my experience, this is the first time have they shown interest in CIP/CPT Rules, which allow sellers to offer a door-to-door service without bearing the risk of loss or damage to the goods in transit.“

A look ahead to the Incoterms® 2030: Can new trends, trade practices, or even challenges already be identified from practical application? If so, which ones? Where might adjustments be necessary?

• The default insurance cover in CIP/CIF Rules should be the same (A insurance).
• FCA/FOB are not suitable options for sellers who want to be paid by a letter of credit. Only C-Rules are suitable for use with a L/C.
• It is quite impractical to have DAP/DPU Rules, users don’t understand them. It would be much more practical to have a single Rule “Delivered at Place, Unloaded/Not Unloaded”.“