First introduced in 1936 by the International Chamber of Commerce (ICC), Incoterms are a set of rules which define the responsibilities of sellers and buyers for the delivery of goods under sales contracts and are widely used in commercial transactions. The latest iteration Incoterms 2020 have been released by the ICC.
The Incoterms rules were introduced by ICC in 1936 to establish commonly accepted definitions and rules related to the delivery of goods between trading partners worldwide and are periodically revised to reflect changes in the international trade system. The 2020 edition launches during the organisation’s Centenary year.
Available in digital and print editions, Incoterms 2020 includes more detailed explanatory notes, with enhanced graphics to illustrate the responsibilities of importers and exporters and more detailed explanations on how to choose the most appropriate Incoterms rule for a given transaction.
Incoterms 2020 changes include:
1. Provision for demonstrated market need in relation to bills of lading (BL) with an on-board notation and the Free Carrier (FCA) Incoterms rule.
2. Aligns different levels of insurance coverage in Cost Insurance and Freight (CIF) and Carriage and Insurance Paid To (CIP).
3. Arrangements for carriage with own means of transport in FCA, Delivery at Place (DAP), Delivery at Place Unloaded (DPU), and Delivered Duty Paid (DDP).
4. Change in the three-letter name for Delivered at Terminal (DAT) to DPU.
5. Incoterms 2020 includes security-related requirements within carriage obligations and costs.
ICC Secretary General John W.H. Denton: “Incoterms 2020 rules make business work for everyone by facilitating trillions of dollars in global trade annually. Because they help importers and exporters around the world to understand their responsibilities and avoid costly misunderstandings, the rules form the language of international sales transactions, and help build confidence in our valuable global trading system.”
Incoterms 2020 is available for purchase through ICC’s e-commerce platform: https://2go.iccwbo.org/.