Brexit update: the importance of a customs power of attorney

Incoterms 2020

The International Chamber of Commerce (ICC) will soon release the new Incoterms 2020, providing certainty and clarity to businesses trading across borders. The new Incoterms will be effective as of January 1st, 2020.

Every 10 years, the International Chamber of Commerce evaluates and revises the International Commercial Terms, better known as Incoterms, as a means of creating greater uniformity and effectiveness across the shipping industry. The latest version, Incoterms 2010, will stay in effect until January 2020.

What does "Incoterms" stand for?

It is an acronym standing for international commercial terms. Incoterms is a trademark of the International Chamber of Commerce, registered in several countries.

The Incoterms rules feature abbreviations for terms, like FOB (“Free on Board”), DAP (“Delivered at Place”), EXW (“Ex Works”), CIP (“Carriage and Insurance Paid To”), which all have very precise meanings for the sale of goods around the world. These terms hold universal meaning for buyers and sellers around the world.

The main Incoterms changes that are being considered are: 

• The removal of FAS (Free Alongside Ship) as it is being used infrequently;
• Separating FCA (Free Carrier) into two separate Incoterms: one for road delivery and one for maritime delivery;  
• The committee is also considering bringing back the terms FOB (Free on Board) and CIF (Cost, Insurance, Freight), instead of the FCA and CIP (Cost and Insurance Paid to) used for non-container shipments.
• There is also a debate about the creation of a new Incoterms called CNI (Cost and Insurance) to bridge the gap between FCA and CFR/CIF (Cost and Freight/Cost, Insurance, Freight). Currently, FCA includes the cost of international insurance on account of the seller-exporter, while CFR/CIF does not include the cost of freight.
• Lastly, to alleviate questions surrounding the party responsible for paying Customs fees, the ICC will evaluate the creation of 2 Incoterms to replace DDP (Delivered Duty Paid).

Other issues and updates being evaluated during this round include:

• Transportation security
• Regulations on transportation insurance
• Relationship between the Incoterms and the International Sale Contract

We will provide another update once the official Incoterms 2020 rules have been announced by the ICC. Please contact us if you have any questions.

To mark the occasion: update of our Brexit checklist

The EU withdrawal of the United Kingdom was completed on 31.01.2020. Currently we are in a transition phase which ends on 31.12.2020. A further extension of this transitional phase should have been agreed until 01.07.2020 and is therefore no longer possible. Thus, the United Kingdom will no longer be part of the internal market and the customs union as of 01.01.2021. If no agreement is reached between the UK and the EU in the remaining time of the transition phase, trade would in future fall under the rules of the World Trade Organization.

We at DACHSER cannot influence the political situation in the UK, but we can prepare you in the best possible way for regulated customs procedures. We have therefore adapted and updated our Brexit checklist to the current circumstances. You can download it here free of charge.

If you have any questions, please get in touch with your responsible contact person at the respective DACHSER branch.

Consequences of adverse weather conditions in Spain

Storm Filomena has affected Spain in recent days and especially the Community of Madrid, we would like to give you some information about the restrictions on logistics.

Road Transport:

• Difficulties in distribution activities throughout the week, mainly throughout Madrid
• Restrictions on access to industrial estates due to accumulation of snow and vehicles
• Difficulties in collections, deliveries and shipments to other delegations. Journeys to and from Madrid may suffer significant delays
• Traffic restrictions for heavy vehicles (partially open on some roads)
• Temporary reduction of long-distance routes between delegations

Air Transport:

• MAD airport starts operating slowly but suffers long delays due to canceled flights
• Handling personnel are severely restricted and therefore air cargo operations start to run very slowly
• Customs operations are giving priority to express shipments
• Road access to and from Madrid suffer significant restrictions

During this week, the alert is still active due to very low temperatures (in some places below -10ºC), so please expect strong restrictions and incidents in all transport and distribution services.

If you have questions, please feel free to speak to your DACHSER representative. We hope that the situation will normalize as soon as possible, and we will keep you informed.

Brexit deal agreed - customs administration from January 1, 2021

On December 24, 2020, an agreement on future cooperation and trade was reached between the EU and the UK.

An essential point is that between EU and UK for goods deliveries from both areas no customs duties are to be levied. However, this does not mean that the administrative "customs clearance" will be eliminated. This means that all documents and customs relevant information must be submitted by the customer in advance and only after the shipment has been released by the customs team of DACHSER, the shipment can be accepted for dispatch.

Please note that from January 1,2021 this applies to all shipments between the EU and UK, only shipments from the EU to Northern Ireland are excluded. In particular, proof of preferential origin of goods should be provided. The most important necessary information for exporters and importers can be found in the document below.