Trade & Incoterms
Incoterms
International Commercial Terms published by the ICC. Incoterms define who pays for transport, insurance, and customs, and when risk transfers from seller to buyer in international trade. The current rules are Incoterms 2020.
In depth
Incoterms are the ICC's International Commercial Terms, and the current edition is Incoterms 2020. There are 11 rules in two families: seven that work for any transport mode (EXW, FCA, CPT, CIP, DAP, DPU, DDP) and four reserved for sea and inland waterway transport (FAS, FOB, CFR, CIF). Each rule allocates three things between seller and buyer — who arranges and pays for carriage, who carries the risk of loss or damage at each stage, and who handles export and import formalities. Incoterms do not transfer ownership, set payment terms, or govern what happens if the contract is breached; those belong in the sales contract.
Key points
- 11 rules in Incoterms 2020, unchanged since publication
- Seven any-mode rules; four sea-and-inland-waterway rules only
- Allocate cost, risk, and customs duties — not ownership or payment terms
- Always write the rule, the named place, and the edition: "CIF Rotterdam, Incoterms 2020"