ICC releases new int’l business terminologies

Published November 3, 2019, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

As doing business has become globalized, the International Chamber of Commerce (ICC) has updated the Incoterms 2020 International Rules, which defines commercial terminologies, to facilitate business transaction, avoid disputes among parties in a business transaction, and to reduce cost.

Francis Chua
Francis Chua

ICC Philippines (ICCP) Founder and Chairman Francis Chua said at the recent workshop on Incoterms 2020, participated in by customs brokers and corporate officers, that the book is the latest version of commercial terminologies that all businesses engaged in international trading must understand. The updated international commercial terminologies will take effect January 1, 2020.

Incoterms, which is updated very ten years, has provided critical guidance to importers, exporters, lawyers and transport operators to keep up with changes in international trade.

For the first time, the drafting team of Incoterms 2020 included representatives from Asia-Pacific, namely China and Australia. The Incoterms 2020 is the 9th version published by ICC, the globally recognized trade terms on the sale of goods, providing certainty and clarity to business and traders operating in the international trade system.

Chua explained that ICCP has been undertaking activities such as the Incoterms 2020.

“The commercial international terminology is crucial because if we businessmen, especially those doing international transactions, do not speak the same language we will not understand each other and we end up suing each other in court,” he said.

He stressed that delays and court cases can be costly and make business less competitive.

Thus, there are terminologies that businessmen must understand to avoid misinterpretation and miscommunication that could result in trade dispute.

For instance, Chua cited terminologies for different modes of deliveries such as ex-warehouse, ship alongside, ship onboard, CNF (cost, insurance, freight), FOB (freight on board), among others.

“These are just a few terms that businessmen must understand in a globalized trading system,” he said noting that ICC has to upgrade the Incoterms every ten years because of the improvement and developments in trade and terminologies.

He said that ICCP has only three copies from ICC Paris, the headquarters of ICC. Incoterms version 2020 can also be accessed online based on subscription.

“No matter how big or small you are, you should follow ICC as it was established to give order to all business conduct all over the world,” he added.

Aside from coming up with the international commercial business terminologies, the ICC also handles arbitration proceedings in Singapore and Paris.

To recall, the Philippine government won its arbitration case in 2012 against Philippine International Air Terminals Co. (Piatco), ending a nine-year legal battle over rights to operate Ninoy Aquino International Airport Terminal 3 (NAIA-3).
Piatco and its German partner Fraport AG filed a case against the Philippine government in the ICC Singapore after the latter rescinded its contract in 2002. Piatco and Fraport were ordered by the Court of Appeals (CA) to pay the Philippine government a total of $6 million or almost P300 million for the costs of arbitration proceedings before the ICC in Singapore.

“ICC is like the Department of Education, which oversees all educational system and regulations in the country. DepEd is for schools, ICC is for international commercial business,” said Chua, who revived ICCP after his presidency at the Philippine Chamber of Commerce and Industry (PCCI).

According to Chua, the PCCI used to represent the ICC in the Philippines but could not sustain the P1 million annual franchise fee. It was later given to another business group associated with the Makati Business Club, which also failed to pay the same fee. This resulted in the blacklisting of the Philippines by ICC.

After the Incoterm Version 2020 project, Chua said they would be conducting a seminar on ATA CARNE, which is the passport for goods to be used for international fairs in another country.

 
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