What are Incoterms?
Definition: What are Incoterms?
The term “Incoterms” is short for “International Commercial Terms”. The Incoterms are a globally valid standard that regulate the obligations of sellers and buyers. Incoterms refer to contract elements such as the transfer of risk, place of delivery, and costs and risk for transportation. They provide answers to questions such as these:
- When will goods pass from the seller to the buyer?
- Which partner will bear which transport costs?
- Who will be liable for loss and damage from what point?
- Who will bear the insurance costs in the event of damage?
Incoterms are no legal requirements, but agreements on a voluntary basis. The advantage: No detailed descriptions are necessary when using Incoterms, meaning it is sufficient to use certain clause abbreviations such as DAP, DDP or DDU.
Using the current Incoterms 2020 chart codes is not only advisable in international trade of goods. Their use can also help to make national business easier.
Which Incoterms are currently valid?
Currently, the Incoterms 2020 apply. The publisher, the International Chamber of Commerce (ICC), identifies the current status of the Incoterms by indicating the year. For the current version, the ICC deleted the DAT clause of the version previously effective and integrated a newly created clause.
Are there Incoterms 2021?
There are no dedicated Incoterms 2021. The Incoterms 2020 remain valid until a new version is issued, just like Incoterms 2010 were the valid predecessor of the current version until 2020. Since their first definition in 1936, the Incoterms have been adapted several times. In Incoterms 2010, for example, the number of clauses was reduced from 13 to 11 clauses. The total number of clauses has remained the same even after the latest revision of the standard in 2020.