INCOTERMS

What are Incoterms? Incoterms are a standard set of terminology, created by the International Chamber of Commerce (ICC), used universally, defining the key parts of freight forwarding. In 1936 the ICC first defined the International Commerce Terminology (INCO Terms), and we have summarized the 11 Incoterms which have recently been revised by the ICC Incoterms Drafting Committee for 2020.

Incoterms 2020 Rules are used today by practitioners and traders, anyone involved in the supply chain of delivering goods overseas will probably come across incoterms, including:

• Traders

• Producers

• Buyers

• Sellers

• Governments

• Banks

  The main purpose of Incoterms is to provide a uniform, constant and authentic interpretation of the commercial terms of delivery of goods, most frequently used in International transactions, and, by means of their application, removing any uncertainty due to divergent interpretations.

  Operators from different countries, with different legislations, can, at last, rely on the uniform, unambiguous and authentic interpretive sources for properly and fairly sharing the costs and the risks arising from the delivery of the goods.

  The use of such clauses is discretionary and, for the sake of their validity, both parties of a sales contract have to agree upon in advance through a specific mention on suche contract.

  The field of action and the function of Incoterms is identified through the acknowledgement of four “moments”:

  • Who pays for the main transport?

  • Where does the delivery take place?

  • Where and when the risk is transferred from the Seller to the Buyer?

  • Who bears all the fees arising from transporti.e. issue of documents, unloading of goods at destination, customs clearance when neccessary, insurance of goods etc.