Incoterms 2010 more precise, says BB Governor
Wednesday, 8 December 2010
FE Report
Understanding of the new Incoterms 2010 is crucial for accurate negotiation of sales contracts to avoid complicacy that may arise of submitting letter of credit (L/C) to banks for reimbursement.
"The eighth version of latest Incoterms 2010 to be effective from January 1 is more precise than its older versions reflecting current trade practices," Atiur Rahman, governor of Bangladesh Bank (BB) said.
The new version has brought about major changes taking into account the spread of customs free zones, increase in the use of electronic communications, concerns about security following 9/11, latest developments in commercial practices and updates of the former rules, he said.
The BB governor was speaking as chief guest while giving certificate among the participants of the workshop on New Incoterms 2010 and Certified Documentary Credit Specialist in the city on Tuesday.
The workshop will enhance capacity building of exporters and importers of RMG, pharmaceuticals, leather, jute and jute goods, transport companies, freight forwarders and other third party service providers.
International Chamber of Commerce (ICC)- Bangladesh organised the workshop where 49 bankers, 126 senior and mid-level executives from banks and financial institutions and 49 officials of RMG attended in the three day series of workshop.
"In Incoterms 2010 publication, there is a guidance note that explains the fundamentals of each term and it is provided for easy understanding of the rules," Mahbubur Rahman, president of ICCB said.
"Revisions have been made to ensure that the wordings of the Incoterms rules clearly and accurately reflects present-day trade practices," he said.
The ICCB President emphasized the importance of understanding the new rules of Incoterms 2010 by all especially the bankers and the country's export oriented industries. Any deviation from the new rules will result in disputes.
'International commercial terms', the Incoterms rules - were first created by ICC in 1936 to help traders avoid misunderstandings by clarifying the costs, risks, and responsibilities of both buyers and sellers in the delivery of goods.
ICCB President added that the Incoterms 2010 rules take into account developments in global trade since they were last revised in 2000. These include changes in cargo security, which has been at the forefront of the transportation agenda for many countries since 9/11, and the increased use of electronic communications in business transactions.
Internationally reputed and highly experienced practitioner of International Trade Finance and a long standing member of the ICC Banking Commission Mr Vincent O' Brien conducted the workshop and spoke on the occasion. Citibank N.A. Country Officer & Chairman of ICCB Standing Committee on Banking Mamun Rashid also spoke on the occasion.
Mr Mamun Rashid said in Bangladesh, not all the Incoterms are allowed by the central bank and thus, it is relevant for us.
He expressed his hope that this workshop will disseminate the required knowledge and skills in understanding the advantages and disadvantages of the various options that all concerned need to conceive.
Abdus Salam Murshedy, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) requested to take harsh step to control wrong use of Incoterms saying many buyers are still giving L/C following the wrong Incoterms.
Understanding of the new Incoterms 2010 is crucial for accurate negotiation of sales contracts to avoid complicacy that may arise of submitting letter of credit (L/C) to banks for reimbursement.
"The eighth version of latest Incoterms 2010 to be effective from January 1 is more precise than its older versions reflecting current trade practices," Atiur Rahman, governor of Bangladesh Bank (BB) said.
The new version has brought about major changes taking into account the spread of customs free zones, increase in the use of electronic communications, concerns about security following 9/11, latest developments in commercial practices and updates of the former rules, he said.
The BB governor was speaking as chief guest while giving certificate among the participants of the workshop on New Incoterms 2010 and Certified Documentary Credit Specialist in the city on Tuesday.
The workshop will enhance capacity building of exporters and importers of RMG, pharmaceuticals, leather, jute and jute goods, transport companies, freight forwarders and other third party service providers.
International Chamber of Commerce (ICC)- Bangladesh organised the workshop where 49 bankers, 126 senior and mid-level executives from banks and financial institutions and 49 officials of RMG attended in the three day series of workshop.
"In Incoterms 2010 publication, there is a guidance note that explains the fundamentals of each term and it is provided for easy understanding of the rules," Mahbubur Rahman, president of ICCB said.
"Revisions have been made to ensure that the wordings of the Incoterms rules clearly and accurately reflects present-day trade practices," he said.
The ICCB President emphasized the importance of understanding the new rules of Incoterms 2010 by all especially the bankers and the country's export oriented industries. Any deviation from the new rules will result in disputes.
'International commercial terms', the Incoterms rules - were first created by ICC in 1936 to help traders avoid misunderstandings by clarifying the costs, risks, and responsibilities of both buyers and sellers in the delivery of goods.
ICCB President added that the Incoterms 2010 rules take into account developments in global trade since they were last revised in 2000. These include changes in cargo security, which has been at the forefront of the transportation agenda for many countries since 9/11, and the increased use of electronic communications in business transactions.
Internationally reputed and highly experienced practitioner of International Trade Finance and a long standing member of the ICC Banking Commission Mr Vincent O' Brien conducted the workshop and spoke on the occasion. Citibank N.A. Country Officer & Chairman of ICCB Standing Committee on Banking Mamun Rashid also spoke on the occasion.
Mr Mamun Rashid said in Bangladesh, not all the Incoterms are allowed by the central bank and thus, it is relevant for us.
He expressed his hope that this workshop will disseminate the required knowledge and skills in understanding the advantages and disadvantages of the various options that all concerned need to conceive.
Abdus Salam Murshedy, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) requested to take harsh step to control wrong use of Incoterms saying many buyers are still giving L/C following the wrong Incoterms.