INCOTERMS^® 2020

On January 1, 2020 Incoterms^® 2020 become the newest edition of the Incoterms^® rules to help prepare business for the next century of global trade.

With Incoterms^® the International Chamber of Commerce (ICC) presents a specific guidance to individuals participating in the import and export of global trade daily.

Incoterms^® 2020 address todays increasing demands on security requirements, insurance coverage, financing and changes to trading practice and were restructured, updated and supplemented with practical operational advice.

With a simpler and clearer presentation, expanded introductions and explanatory notes, articles reordered to better reflect the logic of a sales transaction the application is facilitated.

Incoterms^® rules are not in themselves – and therefore no substitute for – a contract of sale! They can be included in the purchase agreement/sales contract as follows:

[selected Incoterms^® clause]
[named port, place or location]
[Incoterms^® YYYY]

It is imperative to be precise with the exact version of chosen Incoterms^® rules to avoid complications. With the reference to Incoterms^® rules in a contract of sales of goods the parties’ respective obligations get clearly defined regarding risk, costs, arrangement of transport and customs clearance.

Changes at a Glance:

• Incoterms^® 2010 DAT changes to Incoterms^® 2020 DPU. Any (agreed) location can be the destination in the future.
• Incoterms^® 2020 consider the Bill of Lading with on-board notation for FCA. Selling & Buying party can obtain to provide the shipper a B/L with On-Board-Remark.    
• Different coverage heights in CIF & CIP.
  In contrast to Incoterms^® 2010, CIF includes the lowest possible insurance covering; CIP includes an ‘all risk’-coverage, as per Institute Cargo Clauses (‘A-Clause’).
• Incoterms^® 2020 [FCA, DAP, DPU, DDP] consider the arrangement of carriage with selling or buying parties own means.
• Inclusion of safety-related requirements for the transport of goods as well as clarification within distribution of security obligations and associated costs for all Incoterms^® 2020.