INCOTERMS 2020

The INCOTERMS (International Commercial Terms) determine the responsibility of the different parties regarding the delivery conditions, assumption of risks of each party, distribution of expenses, customs procedures, transport and insurance, so that it can be guaranteed between customer and supplier the most optimal conditions for both in which these exchanges of goods take place. They deal with rights and obligations in the contract of sale, delivery of goods and international and national contracts, but not the consequences of possible breaches or property rights.

The terms can be grouped into groups, so that group C, group D and group F are formed, as follows: Group C (indirect delivery, transport payment), which is divided into CFR (cost and freight), CPT (carriage paid to) and CIP (carriage and insurance paid) and CIF (cost, insurance and freight); Group D (direct delivery on arrival), developed in DAT (delivered at terminal, more information below), DAP (delivered at terminal) and DDP (delivered duty paid); and finally, Group F (direct delivery, the buyer does not pay for transport), being FCA (free carrier), FAS (free alongside ship) and FOB (free on board), and one more, the EXW (ex Works)

They are prepared by a drafting group, mostly of European representation, although this time has also members from China and Australia, to make a total of 150 members, who form the International Chamber of Commerce, which is the organization that publishes them since 1930.

Since 1980, at the beginning of each decade, changes and improvements to INCOTERMS have been compiled, so that commercial terms, both international and national, are interpreted.

The new changes of INCOTERMS 2020, will be changed possible in 2029.

Among them is the creation of DPU (delivered at place unloaded), which replaces the already mentioned DAT. The obligations and functions do not change, only the name, to clarify that it can be downloaded at any point in the country of destination, not only in a terminal or transport stores.

Differences in transport insurance are also differentiated, between CIP and CIF, in which in CIP the seller is obliged to contract transport insurance in favor of the buyer with wide coverage and in CIF the seller is obliged to contract insurance with coverage minimum

INCOTERMS 2020 also includes requirements related to transport safety, obligations and costs, dealing more precisely with responsibility in the transport security from the country of origin to the destination and customs clearance procedures (export / transit / import).

Similarly, they include agreements for transport with their own means, explaining more precisely which of the two parties is responsible for making customs clearance, assuming risks and costs.

Among the changes, there is the structure of the obligations, which are broken down between the seller (A1 General Obligations, A2 Delivery, A3 Transfer of risks, A4 Transport, A5 Insurance, A6 Delivery or transport document, A7 Import / export clearance, A8 Packaging , packaging and marking, A9 Cost distribution and A10 Notices) and buyer (B1 General obligations, B2 Receipt, B3 Transfer of risks, B4 Transport, B5 Insurance, B6 Proof of delivery or transport, B7 Import / export clearance, B8 Packaging, packaging and marking, B9 Cost distribution and B10 Notices).

Finally, new figures are introduced to facilitate the understanding and use of the rules, with a simple language, more explanatory content, greater breakdown in the distribution of costs, relationship between incoterms and international trade contracts, as well as comparative obligations between the 11 incoterms.