Study Guide

Incoterms® 2020

Incoterms® 2020 replaced Incoterms® 2010. The principal changes were:

• Clarification of scope: Explicit confirmation that Incoterms® do not deal with transfer of property, title, or ownership; are not in themselves a contract of sale; and do not determine the law applicable to the contract.
• Different insurance levels for CIF and CIP: Under CIF, the default cover is Institute of Cargo Clauses (C), which covers specified risks. Under CIP, the seller must now obtain cover compliant with Institute of Cargo Clauses (A), which covers all risks subject to listed exclusions. Both parties retain the option to agree to a higher or lower level of cover.
• Own transport: Clarification that a seller under a D-rule, or a buyer under an FCA-rule, may use their own transport.
• DAT renamed DPU: The term DAT was renamed DPU to reflect that the place of destination may be any place, not only a terminal.
• Reordering: DAP was placed before DPU in the sequence of terms.
• Security requirements: Security-related requirements were incorporated within carriage obligations and costs.

Incoterms® 2020 – Consolidated Responsibility Reference

The table below summarises how charges (C) and risk (R) are allocated between Seller and Buyer across all 11 Incoterms® 2020 rules. EXW represents the minimum obligation for the seller; DDP represents the maximum. As you move left to right, responsibility progressively transfers from buyer to seller. Note that for CPT and CIF, charges and risk pass at different points — the seller pays for main transport but risk transfers to the buyer once goods are handed to the first carrier.

Source: ICC, 2019