Incotermsen
Incoterms 2020
Current version of ICC international commercial rules, defining 11 terms in four groups (E, F, C, D) to frame obligations in international sales.
Definition and principle
Incoterms 2020 are the ninth revision of international commercial rules published by the International Chamber of Commerce (ICC), in force since 1 January 2020. They define 11 standardised commercial terms that determine the respective obligations of seller and buyer regarding delivery, risk transfer, cost allocation, customs formalities, and insurance.
The 11 Incoterms 2020
Any mode of transport:
- EXW (Ex Works): ex works
- FCA (Free Carrier): free carrier
- CPT (Carriage Paid To): carriage paid to
- CIP (Carriage and Insurance Paid To): carriage and insurance paid to
- DAP (Delivered at Place): delivered at place
- DPU (Delivered at Place Unloaded): delivered at place unloaded
- DDP (Delivered Duty Paid): delivered duty paid
Sea and inland waterway transport only:
- FAS (Free Alongside Ship): free alongside ship
- FOB (Free on Board): free on board
- CFR (Cost and Freight): cost and freight
- CIF (Cost, Insurance and Freight): cost, insurance, and freight
Key changes in Incoterms 2020
- DPU replaces DAT (Delivered at Terminal) with more flexibility on the unloading location
- CIP: insurance level raised to ICC (A) — all risks (from ICC (C) in 2010)
- FCA: new option to obtain an "on board" bill of lading (B/L on board)
- Consideration of transport by own means of the seller or buyer
- Security: safety-security obligations mentioned in each term
Correct usage
- Always specify the Incoterm + precise location + version: "CIF Le Havre (Incoterms 2020 ICC)"
- Incoterms do not deal with transfer of ownership, price, payment method, applicable law, or dispute resolution
- Incoterms 2010 and 2020 coexist — the applicable version is the one mentioned in the contract