The International Chamber of Commerce published new Incoterms® 2020 that came into effect from the 1st of January 2020. The ICC originally published Incoterms® in 1936 and have continually made updates to reflect the changes to the Global Trade environment. It’s important that all parties involved in trade clearly understand the changes and how they apply to their part in the global supply chain.
Incoterms® play such a vital role in the world of global trade. Incoterms® 2010 or Incoterms® 2020 may seem complicated, but it’s imperative that buyers and sellers clearly understand how they work and their own obligations along the supply chain. This blog is to be used in conjunction with Incoterms® 2020 chart found on our accreditations page (@Jed Marshall – can you put a link to it here?)
Please note the content of this blog and the chart are only for general information purposes and should not in any circumstances be considered bespoke legal advice or professional advice.
What are Incoterms®?
Put simply, Incoterms® are the selling terms that the buyer and seller of goods both agree to during international transaction process. These rules are accepted by governments and legal authorities around the world. Understanding Incoterms® is a vital part of International Trade because they clearly state which tasks, costs and risks are associated with the buyer and the seller.
The Incoterm® outlines when the seller’s costs and risks are transferred onto the buyer. It’s also important to understand that not all rules apply in all cases. Some encompass any mode or modes of transport. Transport by all modes of transport (road, rail, air and sea) covers FCA, CPT, CIP, DAP, DPU (replaces DAT) and DDP. Sea/Inland waterway transport (Sea) covers FAS, FOB, CFR and CIF.
Why are Incoterms® vital in International Trade?
Incoterms® are referred to as International Commercial Terms. They are a set of rules published by the International Chamber of Commerce (ICC), which relate to International Commercial Law. According to the ICC, Incoterms® rules provide internationally accepted definitions and rules of interpretation for most common commercial terms used in contracts for the sale of goods’.
All International purchases will be processed on an agreed Incoterm to define which party legally incurs costs and risks. Incoterms® should be clearly stated on relevant shipping documents and commercial paperwork.
Please feel free to read the Incoterms® 2020 pdf and should you have any questions or wish to seek guidance call one of our team on +44 (0) 121 783 6564 or email firstname.lastname@example.org
One of our experienced team will be on hand to help however we possibly can.