International trade practices are long-established international trade norms that are often consciously followed in international trade activities. They are a series of customary practices and their interpretations with universal significance. International trade practices can avoid or eliminate different understandings or interpretations of the same issue by trade parties in different countries or regions. Therefore, they play an important role in handling international trade disputes.
International trade practices related to trade terms
1. Warsaw-Oxford Rules, 1932
Based on British trade practices and precedents, these rules clearly define and explain the nature of CIF sales contracts, the costs, responsibilities and risks borne by both parties, and the way of transferring ownership.
2. Revised American Foreign Trade Definitions, 1990
Revised American Foreign Trade Definitions 1990 The revised rules explain the six terms EXW (Ex Works), FOB (Free on Board), FAS (Free along Side), CFR (Cost and Freight), CIF (Cost Insurance and Freight), and DEQ (Delivered Ex Quay). Among them, under the FOB term, the division of responsibilities and obligations between the buyer and seller under different modes of transportation is further divided into six variations.
The special interpretation of the FOB term in the “Revised 1990 U.S. Foreign Trade Definitions” is mainly in the following aspects. (1) In terms of scope of application, FOB applies to all modes of transportation. If it is water transportation, the word “Vessel” must be added after FOB and the name of the port of shipment must be listed to indicate that the seller delivers the goods on board the ship at the port of shipment.
(2) In terms of risk division, the risk division of FOB Vessel is based on the ship’s hold, that is, the seller bears all liability for loss and damage of the goods until they reach the ship’s hold.
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(3) In terms of export procedures, the seller of FOBVessel is obliged to assist the buyer in obtaining various certificates issued by the exporting country for the export of goods or the import and export of goods at the destination only if the buyer makes a request and the buyer bears the expenses, and the export tax and other taxes and fees must also be borne by the buyer.
3. International Rules for the Interpretation of Trade Terms 2010
International Rules for the Interpretation of Trade Terms 2010 is referred to as INCOTERMS 2010. INCOTERMS 2010 has guiding significance for the current operation of international trade, especially its revision has changed some rules or concepts, effectively promoting the process of world trade facilitation.