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The ICC "international commercial terms", known worldwide as the ICC Incoterms® rules, have been an internationally generally accepted set of definitions and terms of delivery for use in international and national purchase and sale agreements for goods with a global reach since 1936.
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The ICC Incoterms ® 2020 version is the most recent international standard on international trade and is therefore the modern alternative to the ICC Incoterms ® 2010 rules. Over the past 10 years, these have been crucial tools for importers, exporters, lawyers, carriers and insurers all over the world. ICC periodically reviews the rules. In addition to the experiences of users, changes in policies, environmental guidelines and new technology have been included in the adjustments. The ICC Incoterms ® 2020 provides buyers and sellers with an up-to-date framework. They are also easier to use.
The Incoterms® rules consist of a set of three-letter delivery terms that reflect the customs between buyers and sellers of goods. These three-letter delivery terms describe the allocation of tasks, costs, and risks between buyers and sellers, saving time and protecting entrepreneurs from pitfalls and financial damage. Developed after extensive consultation with users including economists, lawyers, traders, freight forwarders, and banking and insurance experts from ICC's global network, the ICC Incoterms® 2020 rules reflect changes in international trade. The Drafting Group, established by ICC in 2016, included a mix of traders, business representatives, and trade law specialists who analysed over 3,000 substantial comments and conducted four consultation rounds with national offices and expert groups, including two physical expert consultations in Beijing and London. This thorough process ensures that the rules remain relevant and effective in the evolving landscape of global trade.
What are the key changes in Incoterms® 2020?
The Incoterms® 2020 address a demonstrated need in the market for on-board bills of lading under the Free Carrier (FCA) Incoterms® rule.
Free Carrier (FCA) has been revised for Incoterms® 2020 to cater to a situation where goods are sold FCA for carriage by sea and buyer or seller (or either party’s bank) requests a bill of lading with an on-board notation. FCA in article A6/B6 now provides for the parties to agree that the buyer will instruct the carrier to issue an on-board bill of lading to the seller once the goods have been loaded on board, and for the seller then to tender the document to the buyer (often through the banks).
The Incoterms® 2020 provide the list of expected costs.
All costs associated with a given Incoterms rule now appear at article A9/B9 of that rule, allowing users to see the full list of expected costs at a glance. In addition to the aggregated presentation, the costs associated with each item still appear in the respective articles to accommodate a user who wants to focus on a specific aspect of the sale transaction.
The Incoterms® 2020 provide for different levels of insurance coverage under the Cost Insurance and Freight (CIF) and Carriage and Insurance Paid To (CIP) rules.
The Incoterms® 2020 rules provide for different levels of insurance coverage in the Cost Insurance and Freight (CIF) rule and Carriage and Insurance Paid To (CIP) rule.
CIF Incoterms® rule, which is reserved for use in maritime trade and often used in commodity trading, the Institute Cargo Clauses (C) remains the default level of coverage, giving parties the option to agree to a higher level of insurance cover. The CIP Incoterms® rule now requires a higher level of cover, compliant with the Institute Cargo Clauses (A) or similar clauses.
The Incoterms® 2020 allow for arranging the transport of goods with own means of transportation under FCA, DAP, DPU, and DDP.
It recognises that not all commercial trade transactions from the seller to the buyer are conducted by a third-party carrier.
The Incoterms® 2020 include security-related requirements in the obligations regarding transport and costs.
The latest edition includes clearer and more detailed security-related obligations in articles A4 on carriage and A7 on export/import clearance of each Incoterms® rule. Costs relating to these requirements also appear in the consolidated costs article, A9/B9.
The three-letter abbreviation for Delivered at Terminal (DAT) has been changed to DPU.
No, simply renamed and moved to more accurately reflect the content of the rule. The former Delivered at Terminal (DAT) has been changed to Delivered at Place Unloaded (DPU) to emphasise that the place of destination can be any place and not just a “terminal,” and to underscore the sole difference from Delivered at Place Unloaded (DPU) – under DAP the seller does not unload the goods, under DPU, the seller does unload the goods.
And since delivery under DAP happens before unloading, Incoterms® 2020 presents the newly named DPU after DAP.
Educational Materials
In Company Training Incoterms ®
The Incoterms ® 2020 rules provide clarity and certainty to your company. In practice, however, there appear to be questions about the way in which the Incoterms® rules relate to transport, customs, insurance, payment arrangements and also the internal procedures and agreements within the company. How does your company make optimal use of the most recent version of the Incoterms ® rules? What is the right application for your business? Legitimate questions to which the In Company training provides answers.
Seminars I Webinars Incoterms® 2020
To ensure that you are informed, stay informed and are also well informed about the Incoterms® 2020 rules, ICC offers Incoterms® 2020 seminars/webinars. In the seminars and webinars, experts will speak and emphasize the correct application of the ICC Incoterms® 2020 rules in daily use. The seminars and webinars are for everyone involved in trade in goods and delivery conditions, such as buyers, sellers, importers, exporters, carriers, insurers, lawyers and legal experts.
Professional Certificates
Looking to deepen your understanding of Incoterms® 2020 at your own pace? Our comprehensive e-learning courses at ICC Academy offer the flexibility to learn anytime, anywhere. Designed for professionals seeking to enhance their expertise in international trade, these interactive modules cover all aspects of Incoterms® rules, ensuring you have the knowledge to navigate global trade complexities with confidence.​
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Take advantage of this convenient learning option and empower yourself with the tools and insights needed for successful international transactions.​​
Why are the Incoterms 2020 important for you?
Get Your Copy Now
Unlock the potential of Incoterms® 2020 with ICC Netherlands. Our comprehensive guide simplifies international trade by clearly defining the responsibilities of buyers and sellers. Stay ahead in the global market with the latest insights and strategies from our team of experts. Get your copy today and ensure your business operates smoothly and efficiently.
Incoterms® 2020 APP
Download the ICC’s official Incoterms® 2020 mobile app for comprehensive, easy-to-access summaries of the rules. Navigate international trade complexities with ease and make informed decisions with confidence.
