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Incoterms 2020
In 1936, the International Chamber of Commerce developed the commonly used terms for international trade (INCOTERMS – International Commercial Terms) to prevent misunderstandings regarding costs, risks, and responsibilities when trading between countries. These terms were later revised in 1953, 1967, 1976, 1980, 2000, 2010, and most recently in 2020.
divided into two parts
The 2020 Incoterms regulate 11 terms, which are divided into two parts depending on the mode of transport.
All modes of transport
Sea and inland waterway transport
Significance
By using these standardized terms, exporters and importers can clearly understand who bears which responsibilities, costs, and risks.
Because these issues are standardized in a clear manner, the risk of legal disputes is reduced.
1. TERMS APPLICABLE TO ALL MODES OF TRANSPORT
Ex Works (EXW) / Specify the named place of delivery
- The seller (exporter) delivers the goods by placing them at the disposal of the buyer (importer) at the named place of delivery, which can be the seller’s premises or another location.
- The named place of delivery may be the seller’s own premises or another place.
- The seller is not responsible for loading the goods onto any collecting vehicle, nor for carrying out any export formalities, if required.
(Free Carrier) / Insert the name of the named place of delivery
The seller (exporter) delivers the goods to the buyer (importer) in two possible ways:
First,
If the named place of delivery is the seller’s factory, warehouse, or other premises owned by the seller, the goods are delivered
- after being loaded onto the carrier arranged by the buyer.
Second,
If the named place of delivery is elsewhere, the goods are delivered
- after being loaded on the seller’s carrier,
- when they reach the named place,
- when ready to be unloaded from the seller’s carrier,
- by handing them over to the carrier or a third party designated by the buyer.
(Carriage Paid To – CPT) / Insert the name of the place of destination
The seller (exporter) delivers the goods to the buyer (importer) by:
- handing them over to the carrier,
- arranging the transport contract,
- or ensuring the goods are received by the carrier at a suitable place and in a suitable manner, ready for loading onto the means of transport,
- thereby transferring the risk to the buyer.
(Carriage and Insurance Paid To) / Insert the name of the named place of destination
The seller (exporter) delivers the goods to the buyer (importer) by:
- Handing them over to the carrier,
- Concluding the contract of carriage, or
- Procuring the goods already delivered,
at a place and in a manner suitable for loading onto the transport, thereby transferring the risk to the buyer.