The International Chamber of Commerce (ICC) launched Incoterms® 2020, the newest addition of the renowned trade terms concerning delivery goods, providing certainty and clarity to business and traders everywhere.
The Incoterms® 2020 takes into account the latest developments in commercial practice, and updates the rules, making them easier to access to and easier to use, due to today’s rapid developments in the shipping industry. The new rules will enter into force on 1 January 2020. From this date, all sales contracts should make reference to the Incoterms® 2020 rules as the latest version of the Incoterms rules.
The newly-launched Incoterms® 2020 is based on a more explanatory framework, including graphics to showcase the responsibilities of importers and exporters. Moreover, this addition provides an explanation and guidance on choosing the ideal Incoterms® rule for a given transaction, or how a sales contract interacts with ancillary contracts.
- provides for demonstrated market need in relation to bills of lading (BL) with an on-board notation and the Free Carrier (FCA) Incoterms® rule.
- aligns different levels of insurance coverage in Cost Insurance and Freight (CIF) and Carriage and Insurance Paid To (CIP).
- includes arrangements for carriage with own means of transport in FCA, Delivered at Place (DAP), Delivered 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.
- includes security-related requirements within carriage obligations and costs.
In light of the launch, ICC Secretary General John W.H. Denton AO stated
… They help importers and exporters around the world to understand their responsibilities and avoid costly misunderstandings, the rules form the language of international sales transactions, and help build confidence in our valuable global trading system.