The International Chamber of Commerce is what we'll be discussing in this article. You'll learn what this organization is and what its function is. So, I invite you to keep reading to find out more.
Chamber of international trade
To discuss the International Chamber of Commerce, we must address Incoterms 2020, a set of terms or rules that govern the responsibilities of companies in contracts for the purchase and sale of goods, accepted by governments and businesses. Therefore, the role of the International Chamber of Commerce would not exist without Incoterms 2020, as it regulates all such transactions.
The International Chamber of Commerce helps companies identify potential business opportunities. This makes it important to optimize all international transactions using these terms.
What is the International Chamber of Commerce?
The International Chamber of Commerce ( ICC) is a global business organization that provides protection to companies worldwide. This protection is offered in terms of commercial transactions, facilitating investment within an international trade system characterized by transparency in its operations.
The CCI also helps companies to meet all the challenges and take advantage of the opportunities of globalization. This body was created in 1919 and there are currently thousands of companies and trade associations in more than 130 countries that are part of the ICC.
Function
Among the functions of the International Chamber of Commerce is the creation of guidelines that regulate commercial transactions. Of these rules created by the ICC, Incontems 2020 stands out; these rules facilitate international trade operations through the use of international trade terms.
But this is not the only rule because there are also other rules, among which we will name below:
- The UCP rules, which are the rules that regulate the use of documentary credits.
- The URDG uniform rules, which regulate first demand guarantees.
- And the ISP 90 rules, which regulate contingent credits or called standby credits.
Additionally, the ICC is in charge of publishing different contract models, as well as the guides and resources that are destined to resolve legal disputes and arbitration. In addition, the ICC also provides the service of the International Court of Arbitration and the World Federation of Chambers.
This body is currently the most consulted with the highest level of the UN. Through business experts who determine business prospects in terms of investment policies.
Importance of Incoterms 2020
Incoterms 2020 are rules that are applied by all merchants in the world and their use is accepted and respected in any international sales contract. That is why these rules are important because the wrong interpretation can generate legal conflicts as well as economic losses for both the seller and the buyer that can cause higher expenses.
The main objective of Incoterms 2020 is to help in international commercial operations, for this a series of rules and terms were established where the rights and obligations for the seller and the buyer are agreed. With the proper application of Incoterms, they ensure that all parties correctly interpret the negotiated terms.
Within these rules, the means of transport used to move the merchandise are discussed, as well as the place where the merchandise must be delivered and all the procedures that are required, called payments and expenses that must be assumed by sellers and buyers. This is why the correct application of Incoterms 2020 achieves limits in sales contracts and related contracts.
Advantages and disadvantages
Among the advantages and disadvantages of the International Chamber of Commerce, we will mention the following:
Advantages
- Improves competitiveness between suppliers and supplies.
- It is a generator of employment.
- It is attractive because it attracts new investors.
- By achieving the established objectives we will have greater efficiency and of course greater benefits.
Disadvantages
- One of the disadvantages are the costs caused by licenses and other regulations, since local legislation and the extra cost that it may cause must be taken into account.
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To continue expanding the information about the International Chamber of Commerce we will leave you the following video. So you can have more information about this organism and its functions.