ICC publishes Incoterms 2020
28 November 2019
The International Chamber of Commerce (“ICC”) has published the latest version of its international commercial terms, the Incoterms 2020. The Incoterms rules are a set of standards used worldwide in international and domestic contracts for the delivery of goods. They explain a set of 11 of the most commonly-used three-letter trade terms (e.g. CIF and FOB), and describe how obligations, risk and costs are allocated between parties to a contract for the sale of goods.
Compared to Incoterms 2010, the previous version of the rules, Incoterms 2020 features:
- greater emphasis on how to choose the most appropriate Incoterms rule for a given transaction;
- a clearer explanation of the demarcation and connection between the sale contract and its ancillary contracts;
- upgraded Guidance Notes now presented as Explanatory Notes to each Incoterms rule; and
- a re-ordering within the Incoterms rules giving delivery and risk more prominence.
Apart from the above general changes, substantive changes to the following areas have also been made:
- bills of lading with an on-board notation and the FCA Incoterms rule;
- costs, where they are listed;
- different levels of insurance cover in CIF and CIP;
- arranging for carriage with seller’s or buyer’s own means of transport in FCA, DAP, DPU and DDP;
- change in the three-letter initials for DAT to DPU; and
- inclusion of security-related requirements within carriage obligations and costs.
Incoterms 2020 was published in September 2019 and will come into effect on 1 January 2020. It should be noted that parties to a contract for the sale of goods can agree to choose any version of the Incoterms rules. Nonetheless, the ICC recommends using the most current version of the rules.
The ICC’s press release on the publication of Incoterms 2020 is available from the ICC website iccwbo.org or by clicking here.