Incoterms®2020

Incoterms®2020 Rules

 

 

The Incoterms® rules define the responsibilities of buyers and sellers for the delivery of goods under worldwide sales contracts. The International Chamber of Commerce (ICC) has announced the Incoterms® 2020 update of their international trade terms for the sale of goods. The new edition of Incoterms® 2020 takes effect as of January 1, 2020. In response to this latest update, King Star has summarized the key points of each term in Incoterms® 2020 to provide a clear overview and guidance for our valued customers.

Key Changes in Incoterms® 2020 

 

1. Free Carrier (FCA) is now separated to FCA (a) and FCA (b), where FCA (a) applies when the agreed delivery location is within the seller's premises and FCA (b) applies when the agreed delivery location is outside the seller's premises. The additional provision of FCA currently states that if the parties have agreed, the buyer must instruct the carrier to issue a transportation document stating the goods have been loaded (such as a Bill of Lading with an on board remark) to the seller, at the buyers cost and risk. 


2. Carriage and Insurance Paid To (CIP) requires insurance coverage/policy to comply with the minimum coverage of the Institute Cargo Clause (A) or equivalent. 


3. Delivered at Terminal (DAT) has been revised to Delivered at Place Unloaded (DPU) to clarify that the place of destination could be any place, whether it is a “terminal" or not. 


4. Free Carrier (FCA), Delivered at Place (DAP), Delivered at Place Unloaded (DPU) and Delivered Duty Paid (DDP) now recognizes that the goods may be arranged by buyer/seller using its own means of transportation without involving any third-party carrier. 


5. Cost Insurance and Freight (CIF) requires insurance coverage/policy to comply with the minimum coverage of the Institute Cargo Clause (C) or equivalent. 


6. Allocation of costs now appears in the A9/B9 section of each Incoterms® rule to enable a comparative understanding of the parties' cost obligations. 


7. The responsibility of security-related requirements and ancillary costs to the sellers is now clearly specified in the Incoterms® 2020 with explanatory notes.

Remarks: All information provided on this page is for informational purposes only. For detailed descriptions of Incoterms®, please refer to the official website of the ICC (https://iccwbo.org/)

Resources Centre