Guide

International Commercial Contracts - Incoterms

What are Incoterms?

Incoterms are maintained and developed by the International Chambers of Commerce (ICC).

What are Incoterms?

International Commerce Terms (Incoterms) are an internationally recognised standard trade terms that set out buyer and seller responsibilities.

Each Incoterm establishes who is responsible for costs and risks such as:

  • transport costs
  • insurance
  • duties payable
  • customs clearance

Incoterms are accepted by governments, legal authorities and businesses worldwide for the interpretation of most commonly used terms in international trade. This reduces or removes uncertainties and often costly misunderstandings arising from different interpretation of such terms in different countries. Incoterms apply to both domestic and international sale contracts. Read more about Incoterms and contracts.

When should Incoterms be used?

Before you use Incoterms, consider the country of the buyer. Some countries stipulate that set Incoterms are used, while others set chosen Incoterms as standard practice. Transport may also affect your choice as some Incoterms can only be used for transport by sea and inland waterways.

The latest set of Incoterms, known as Incoterms 2020, came into force on 1 January 2020.