Incoterms

♦ What are Incoterms ?

Incoterms stands for International Commercial Terms. They are a set of globally recognized rules that define the responsibilities of sellers and buyers in international trade transactions.

Created and maintained by the International Chamber of Commerce (ICC), Incoterms clarify who is responsible for transportation, insurance, customs clearance, import duties, and the transfer of risks at each stage of delivery.

The latest version, Incoterms 2020, came into effect on January 1, 2020.

Why Are Incoterms Important ?

Incoterms help answer key logistics and legal questions such as:

Who pays for shipping and insurance?
Who handles customs clearance?
Where does the risk transfer from seller to buyer?
Who is responsible for delivery delays or damages?

By clearly defining these responsibilities, Incoterms reduce misunderstandings and disputes between trade partners.

♦ Contents of Incoterms 2020

Ex Works

The term “ex works” means that the seller fulfils his obligation to deliver when he places the goods at the disposal of the buyer at his premises or another indicated place (for example: plant, factory, warehouse, etc.). The seller is not responsible for the loading the goods on the vehicle or for the customs clearance of the exported goods.

Seller must provide goods of proper quality, with the provision of packaging that guarantees safety during transportation, with the appropriate requirements for labelling and packaging on the part of the Buyer, and must provide access to the cargo on its territory and the transfer of all documents for export.

♦ What are Incoterms ?

Why Are Incoterms Important ?

♦ Contents of Incoterms 2020

♦ Responsibilities of the Parties according to Incoterms-2020

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