History of Incoterms

• Incoterms (an acronym for International Commercial Terms) established in 1936 by the International Chamber of Commerce (ICC).

• Incoterms is a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC).

• The use of Incoterms in International Trade is widespread today.

• One of the first initiatives of the International Chamber of Commerce (ICC) to facilitate international trade was to explore the understanding of trade terms.

• The latest revision, Incoterms 2020 came into force on 1 January 2020, replacing the previous version Incoterms 2010.

• Incoterms identify the obligations placed on the parties to the contracts in terms of:
– Responsibilities relating the costs and their division when shipping the goods
– Distribution of risks associated with the movement of the goods
– Where these risks transfer to another party

• The aim is to assist Incoterm users to identify the correct terms for their particular requirements. These two categories:
– Terms for any Mode or Modes of Transport: include CIP, CPT, DAP, DAT, DDP, EXW, FCA – All of these terms need to specify the port or destination
– Terms for Sea and Inland Waterway Transport: include CIF, CFR, FAS, FOB – All are to the named port of destination