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Incoterms 2020

Features an in-depth introduction to help users select the appropriate Incoterms® rule for their sale transaction and incorporates expanded explanatory notes for users at the start of each Incoterms® rule.

The ICC Incoterms® 2020

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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.

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.

Why are the Incoterms 2020 important for you?

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Important changes 

The Incoterms® 2020 are more accessible and user-friendly than previous versions, providing more detailed explanations with illustrations that outline the responsibilities of importers and exporters for each Incoterms® rule. The introduction to the Incoterms® 2020 also provides a more detailed explanation of how to choose the most suitable Incoterms® rule for a specific transaction and the relationship of an Incoterms® rule with other agreements. The main changes include:

- The Incoterms® 2020 address a demonstrated need in the market for on-board bills of lading under the Free Carrier (FCA) Incoterms® rule.
- 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 allow for arranging the transport of goods with own means of transportation under FCA, Delivery at Place (DAP), Delivery at - Place Unloaded (DPU), and Delivered Duty Paid (DDP).
- The three-letter abbreviation for Delivered at Terminal (DAT) has been changed to DPU.
- The Incoterms® 2020 include security-related requirements in the obligations regarding
transport and costs.

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ICC Incoterms® rules - standard delivery terms 

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The ICC Incoterms® rules are standard delivery terms that entrepreneurs include in purchase agreements regarding goods. These terms establish direct, globally recognized and acknowledged agreements on (the organization of) transport, insurance, and place of delivery. The Incoterms® rules consist of a set of three-letter delivery terms that reflect the customs between buyers and sellers of goods. They mainly describe how the tasks, costs, and risks associated with the delivery of goods between sellers and buyers are allocated. The use of ICC Incoterms® rules saves time and protects entrepreneurs from pitfalls and financial damage. The first ICC Incoterms® rules were published by the ICC in 1936. Since then, the rules have been used worldwide by entrepreneurs and businesses of all sizes. The ICC Incoterms® rules are revised approximately every 10 years to adapt them to the latest developments in trade practice. The most recent version, from 2020, has been in effect since January 1, 2020.

Incoterms® 2020

The ICC Incoterms® 2020 provide buyers and sellers with an updated general framework that reflects changes in international trade. The Incoterms® 2020 were published in the fall of 2019 and became effective on January 1, 2020. The ICC Incoterms® 2020 were developed after consultation with users including economists, lawyers, traders, freight forwarders, and banking and insurance experts from the network of over 80 ICC national offices and specific industry expert groups.

The Incoterms® 2020 Drafting Group, established by ICC in 2016, consists of experts from America, Europe, Turkey, China, Australia, and ICC's Director of Trade and Investment. In terms of expertise, the Drafting Group includes a mix of traders, business representatives, and lawyers specialized in trade law. Since 2016, the Drafting Group has analyzed and discussed the more than 3,000 substantial comments gathered through the national ICC offices and expert groups. Four consultation rounds with national offices and expert groups have taken place. This consultation process also included two physical expert consultation rounds held in Beijing (2017) and London (2018).

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What are the key changes in Incoterms® 2020? 

Why has the FCA Incoterms® rule been revised? 

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). 

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