Here's some real news to start the year. After more than two years of debate, the International Chamber of Commerce has decided to revise Incoterms 2000. Work has begun, but there is no target date as the revision process has changed. The changes themselves are interesting as they are designed to invite more comment from the trade. All the previous revisions with which I am familiar involved two groups. A Working Group, consisting of representatives from some of the ICC National Committees, would meet four or five times to consider proposed changes. The changes were debated and referred to a Drafting Group consisting of five Working Group delegates. The Drafting Group prepared the recommendations in “what if” language, and recirculated them to the National Committees for further comment. Finally, after three or four go-rounds, the finished draft was presented to the entire ICC Commercial Law and Practice Commission (CLP) for approval.
Under the new procedure, National Committees will be invited to send their recommendations directly to a seven-member Drafting Group for consideration, “what if” drafting and recirculation. The process will be repeated as needed to form a consensus. Once a final draft is achieved, it will be sent to the ICC's standing Committee of Experts for review, and then as before to the CLP for approval. No one knows how long the process will take. There will be plenty of suggestions (the ICC has some manner of representation in over 130 countries). On the other hand, bypassing an entire discussion level may speed things up. It definitely will be more representative and closer to the trading community at large than previous efforts. Since Working Group meetings were held at ICC headquarters in Paris, travel costs and time made attendance easier for some National Committees than for others. Although all National Committees were invited to participate by mail or e-mail, the actual debating was done at the Working Group meetings.
An obvious result from this change is that the Drafting Group will be exposed to a huge number of proposals without a Working Group to “filter” them. Three new rules were established to make this deluge manageable:
-- Every criticism must be accompanied by a proposed remedy.
-- All proposals must come through ICC National Committees.
-- All proposals must be received in Paris by March 31.
Here's your chance to participate in a major international trade development! As with the 2000 revision, I’ll be representing the United States on the Drafting Group through our National Committee, the United States Council for International Business (USCIB). To provide enough turnaround time, please get your suggestions to me by March 24 at the latest. As this is the day after Easter, sooner is much better. My email address is fjr424@aol.com. Please copy Chris Martin at USCIB cgmartin@uscib.org. To ensure that nothing gets lost in the ether, please also mail a hard copy to me at International Projects, Inc., P.O. Box 352650, Toledo, Ohio, 43635-2650. This really is important enough for a belt and suspenders approach!
There will be another change. The title of the next version will not include a year. Including a year raised expectations that Incoterms would be revised every 10 years whether revision was needed or not. The converse was also present, that there would be no revision in less than 10 years regardless of the need. Neither assumption is true, and giving future revisions date-neutral titles will help clarify this.
Frank Reynolds is president of International Projects, Inc., an export management company. His column appears exclusively in The Journal of Commerce Online.
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