According to ICC, Incoterms® 2020 / Incoterms 2020 contains the ICC rules for use of the 11 Incoterms® trade terms. It takes into account the latest developments in commercial practices and updates the rules to make them more accessible and easier to use.
The new rules will enter into action on 1 January 2020. As of this date, all sales contracts should make reference to the Incoterms® 2020 rules as the latest version of the Incoterms rules.
ICC has been issuing and maintaining Incoterms rules since 1936, providing trade rules and guidance mirroring the latest developments in the trading environment from time to time. according to ICC that this Incoterms 2020 edition will be translated into 27 languages.
And as per ICC: “This newest edition of the Incoterms® rules will help prepare the business for the next century of global trade”.
What is the meaning of Incoterms?
Incoterms are the International Commercial Terms or Universal Commercial Terms that actually aimed at reducing confusion between buyers and sellers or importer and exporter and this term represents a very useful way of communication in between.
What is new in incoterms 2020?
As per the ICC website, below are the major updates in Incoterms 2020
- Incoterms® 2020 provides for demonstrated market need in relation to bills of lading (BL) with an on-board notation and the Free Carrier (FCA) Incoterms® rule.
- Incoterms® 2020 aligns different levels of insurance coverage in Cost Insurance and Freight (CIF) and Carriage and Insurance Paid To (CIP).
- Incoterms® 2020 includes arrangements for carriage with own means of transport in FCA, Delivery at Place (DAP), Delivery at Place Unloaded (DPU), and Delivered Duty Paid (DDP).
- There is a change in the three-letter name for Delivered at Terminal (DAT) to DPU.
- Incoterms® 2020 includes security-related requirements within carriage obligations and costs.
The main responsibilities/obligations to be resolved through incoterms
- Point of delivery/destination: here, the incoterms to define where to deliver between a buyer and a seller.
- Transportation costs: Which party pays for transportation.
- Export and import formalities: Who is responsible for export and importer arrangements.
- Insurance cost: Incoterms to define who to be in charge of the insurance cost.
Who publishes Incoterms?
International Chamber of Commerce ICC founded in 1919, and since then ICC is responsible for the facilitation of international trade. Having different practices and rules between those who sell or buy goods around the globe urged the necessity to have a common set of standard rules. in which, International Chamber of Commerce ICC published first Incoterms rules back in 1936. which been maintained and developed over the years of different incoterms versions: 1953, 1967, 1976, 1980, 1990, 2000, 2010 and the ninth version— Incoterms 2020. as a celebration for ICC Centenary in September 2019.