Incoterms® 2020, apply from 1st January 2020.
ICC’s world-renowned Incoterms® rules facilitate trillions of dollars in global trade each year.
Incoterms® 2020 came into effect on 1 January 2020 superseding Incoterms® 2010
What's new with Incoterms® 2020
- Updates to the FCA (Free Carrier) rule regarding bills of lading
- Changes to the levels of insurance coverage required in CIF (Cost, Insurance and Freight) and CIP (Carriage and Insurance Paid to)
- A rename of the rule DAT (Delivered at Terminal) to DPU (Delivered at Place Unloaded)
- Improvements to security-related obligations
Comment on changes sourced directly from ICC's experts
Five basic issues that are vital to the correct application of the Incoterms® 2020
Incoterms® 2020 available now
Incoterms® 2020 Guides, with comprehensive explanatory notes, print version, are available from Auckland Business Chamber: $85 + GST (members discount 20%) includes postage and packaging (from 1 Feb 2020).
Incoterms® 2020 Wallcharts: $25 + GST (members discount 20%) includes postage and packaging.
EMAIL us to order your copy or for further support: internationaltrade@chamber.co.nz
An electronic version of Incoterms® 2020 is available from ICC order.
Important
To be sure Incoterms® 2020 apply to your contract, the safest way is to make that intention clear in your contract by using this format:
“[the chosen Incoterms® rule] [named port, place or point] Incoterms® 2020”
Examples:
CIF Shanghai Incoterms® 2020, or DAP No 123, ABC Street, Importland Incoterms® 2020
WHAT ARE INCOTERMS® RULES?
The Incoterms® rules were developed by the International Chamber of Commerce to facilitate international trade and for the interpretation of the trade terms that the parties to a contract of sale could agree to apply.
They are the world’s essential terms of trade for the sale of goods. Whether you are filing a purchase order, packaging and labelling a shipment for freight transport, or preparing a certificate of origin at a port, the Incoterms® rules are there to guide you.
The Incoterms® rules provide specific guidance to individuals participating in the import and export of global trade on a daily basis.
WHO PUBLISHES THE INCOTERMS® RULES?
Since its founding in 1919, ICC has been committed to the facilitation of international trade.
Different practices and legal interpretations between traders around the world necessitated a common set of rules and guidelines. As a response, ICC published the first Incoterms® rules in 1936.
ICC has been maintaining and developing them ever since in response to technological changes in logistics and communications.
WHY USE INCOTERMS® RULES IN INTERNATIONAL TRADE?
Although other clauses for global trade exist around the world, such as the Harmonised Tariff Schedule of the United States, Incoterms® rules are global in their reach.
Similarly, Incoterms® rules do not include trade terms codified for national purposes, such as the “less than truckload shipping” (LTL) rule of the United States.
Unlike national trade policies, Incoterms® rules are universal, providing clarity and predictability to business in all countries.
WHAT DOES “INCOTERMS®” STAND FOR?
“Incoterms®” is an acronym standing for ‘international commercial terms’. “Incoterms®” is a trademark of International Chamber of Commerce, registered in several countries.
The Incoterms® rules feature abbreviations for terms, like FOB (“Free on Board”), DAP (“Delivered at Place”) EXW (“Ex Works”), CIP (“Carriage and Insurance Paid To”), which all have very precise meanings for the sale of goods around the world.
These terms hold universal meaning for buyers and sellers around the world. If you are a financial analyst in the City of London, then you might associate the acronym “FCA” with the UK’s Financial Conduct Authority.
However, for importers and exporters around the world, FCA are the initials used for “Free Carrier,” or the seller’s obligation to deliver the goods to the carrier nominated by the buyer at the seller’s premises or another named place.
WHEN WERE ICC’S INCOTERMS® RULES LAST UPDATED?
ICC previously updated the Incoterms® rules in 2010.
Incoterms® 2010 applied for all contracts until 31 December 2019.
INCOTERMS® 2020 MOBILE APP
Looking for a handy ‘on the go’ reference? The Incoterms® 2020 app brings together essential news, information and insights regarding Incoterms® 2020 Rules.
Available free of charge via the Apple App Store and Google Play.
The Incoterms® 2020 mobile app complements the comprehensive details for each Incoterm only set out in the Incoterms® 2020 guide book.
