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Writer's pictureKris Somers

Incoterms 2020: what changed?

Since the early 20th century, Incoterms have been a staple among trading conditions worldwide, especially in international sales agreements. The conditions determine certain rights and obligations of the parties and regulate, for example, the place of delivery, the customs obligations, the costs and the risk of transport. Contracting parties may choose from a menu of eleven different Incoterms, each with their own specific set of rules.

The Incoterms 2020 of the ICC (International Chamber of Commerce) came into effect on 1 January 2020. The previous Incoterms dated from 2010. The 2020 version served to remove certain pain points.

Parties wondering whether they should update their “Incoterms 2010” references in their agreements to “Incoterms 2020” will perhaps be reassured to learn that both the seller-friendly “EXW” (Ex Works) and buyer-friendly “DDP” (Delivery Duty Paid), favorite terms in many agreements, remain “as is”.

Some of the more noteworthy changes and updates in this 2020 edition include:

· The Incoterm “DAT” (Delivered at Terminal) changes its name to “DPU” (Delivery at Place Unloaded) to emphasize that goods can also be delivered to a place other than a terminal;

· The transport insurance for “CIP” (Carriage and Insurance Paid To) is extended to a higher coverage level;

· More information is included about cost allocation and transport safety.

So, should you start referring to Incoterms 2020 now? That depends.

If your contract presently refers to Incoterms 2010, please note that it is indeed the set of 2010 that continues to apply, unless you amend your contract to reference the 2020 rules. Conversely, if you for whatever reason prefer the 2010 (or an older) version over the 2020 set, it suffices to reference the desired year.


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