Why Incoterms® Matter

​Incoterms® are globally recognized, standardized rules on the allocation of obligations, costs, and risks in the international trade of goods. They were first codified by the International Chamber of Commerce (ICC) in 1936 and have been periodically updated to reflect the evolution of international trade practices. The current version, Incoterms® 2020, has been in force since January 1, 2020, and brings several innovations that simplify their use and enhance clarity.

Drafting international contracts is inherently complex. Differences in language, national legal systems, and local trade customs can lead to misinterpretation and costly disputes. Incoterms® simplify this process through internationally agreed definitions and rules outlining the responsibilities of buyers and sellers regarding transport organization, loading and unloading, transfer of risk, insurance, and customs clearance. 

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Although not binding legal instruments, Incoterms® function as widely accepted contractual standards — often referred to as soft law — that bring legal certainty and predictability to global trade transactions. Importantly, Incoterms® define the critical point at which risk transfers from seller to buyer, along with the division of responsibilities for transport, insurance, and documentation. These rules clarify how obligations, costs, and risks transfer at different stages — and why these transitions don’t always occur at the same moment.

This training will help you develop the ability to choose the most suitable Incoterms® rule for your specific trade situation, and apply them with confidence to support smooth, transparent, and dispute-free international transactions.