Understanding the complexities of importing and exporting Whilst trading internationally means that, as a small business, you have the opportunity to find suppliers and customers globally, the process can be costly and complex. You’ll need to take into consideration not only the price of goods, but transportation costs, fees charged by outsourced service providers, and charges levied by government agencies for export/import duty and VAT. Contracts and Incoterms Contracts are the foundation of all trade, whether international trade and business, the most recent they are verbal agreements or more formal written being the Incoterms 2020. The ICC Incoterms documents. The International Commercial Terms are the most widely used and accepted for (Incoterms) are a set of rules that define the international trade, shipping and insurance. responsibilities of sellers and buyers for the delivery The use of Incoterms significantly reduces of goods under sales contracts. Incoterms help misunderstandings among everyone involved in avoid confusion within any contract by clearly trade (vendor, shipper, customs broker, customer, defining who is responsible for each leg of a journey, etc.) and can minimise trade disputes and litigation. who owns the goods (i.e. responsible for insurance or absorbing damage costs), who is legally responsible Familiarise yourself with Incoterms so you can for completing customs formalities (including choose terms that will enable you to provide licenses, certificates and other paperwork) and who excellent customer service and clearly define pays any customs tariffs, excise costs, import VAT who is responsible for which charges during and other costs. the import or export process. The first Incoterms were created by the International Chamber of Commerce (ICC), who have regularly issued updated versions to reflect changes in The ICC Incoterms are the most widely used and accepted for international trade, shipping and insurance. The small business guide to import and export 4