Incoterms - icc

What are Incoterms® rules?

The Incoterms® rules are the International Chamber of Commerce (ICC) rules for the use of domestic and international trade terms.

Incoterms® rules are key commercial tools developed and maintained by ICC and used in certain contracts for the sale of goods all over the world. They define the responsibilities of buyers and sellers for the delivery of goodsunder sales contracts and determine how costs and risks are allocated.

Click here to learn more about the 11 Incoterms® 2010 rules.

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What do they cover?

Incoterms® rules describe mainly the tasks, costs and risks involved in the delivery of goods – excluding intangibles -- fromsellers to buyers.

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Why Incoterms® rules? Why are Incoterms® rules successful worldwide?

Incoterms® rules are international rules that are accepted by governments, legal authorities and practitioners worldwide for the interpretation of the most commonly used terms in domestic andinternational trade. They facilitate business transactions globally by helping traders avoid uncertainties arising from differing interpretations of such terms in different countries.

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Do Incoterms® rules apply to international or domestic contracts of sales?

Incoterms® rules apply to both domesticand international sale contracts.

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What are the Incoterms® rules?

RULES FOR ANY MODE OR MODES OF TRANSPORT

EXW Ex Works

FCA Free Carrier

CPT Carriage Paid To

CIP Carriage And Insurance Paid To

DAT Delivered At Terminal

DAPDelivered At Place

DDP Delivered Duty Paid

RULES FOR SEA AND INLAND WATERWAY TRANSPORT

FAS Free Alongside Ship

FOB Free On Board

CFR Cost And Freight

CIF Cost, Insurance and Freight

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How are Incoterms® rules correctly used?

ICCrecommends that Incoterms® 2010 be referred to specifically whenever the terms are used, together with a location. For example, the term "Free Carrier (FCA)" should always be accompanied by a reference to an exact place to which delivery is to be made. To prevent misunderstandings, parties need to make the intended effect of any variants of the three-letter Incoterms® rules extremely clear in theircontract. Incorrect use of Incoterms® 2010 rules has the potential to lead to legal consequences.
Below is an example of the correct use of Incoterms® rules:

“FCA 123 Example Street, Paris, France Incoterms® 2010”

Only the version of Incoterms® rules published by ICC is official. Misuses can lead to expensive court cases.
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Why do Incoterms® rules need revising periodically?

Incoterms® rules are revised periodically to adapt them to contemporary commercial practice. For instance in the 2000 version, increased use of FCA (Free Carrier) prompted ICC to simplify delivery obligations under this rule. Technological changes and developments in electronic communication have influencedcontemporary trade and shaped the revision of Incoterms® rules.
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Are Incoterms 2010 compulsory after Jan 1st 2011?

It is to be noted that all contracts made under INCOTERMS® 2000 remain valid even after 2011. Moreover, although we recommend using Incoterms® 2010 after 2011,...