New Incoterms 2020, which were published on 10 September 2019, entered into force on 1 January 2020.

Incoterms 2020 were developed by the ICC Committee of Experts (drafting group). The Committee included lawyers from the USA, United Kingdom, France, Turkey and Germany. For the first time there were also representatives of China and Australia. The aim of the Committee was to simplify rules, eliminate excessive Incoterms, which can cause confusion when using trade terms, and provide more accurate explanation of all supply conditions for exporters and importers all over the world.

The following changes to the Incoterms were introduced:

  • To remove EXW (ex works) from Incoterms;
  • To remove FAS (Free Alongside Ship);
  • To split FCA (Free Carrier) into two Incoterms — one for land delivery and another for maritime delivery;
  • To change FOB and CIF for container shipping;
  • New Incoterm is called CNI (Cost and Insurance), it means that the seller is considered to perform delivery, when the insured goods are located in the mentioned port of departure;
  • Two new Incoterms are based on DDP — DTP and DPP:
  1. A) DTP (Delivered at Terminal Paid) means that the seller is responsible for shipment expenditures with payment of customs duties and delivery of merchandise to the terminal (port, airport, transport hub, etc.) in the country of the buyer
  2. A) DPP (Delivered at Place Paid) means that the seller is responsible for shipment expenditures with payment of customs duties and delivery of merchandise anywhere that is not a transport terminal (e.g. the buyer’s address).

Incoterms 2020 can be used from 1 January 2020, but you can continue using Incoterms 2010 or Incoterms 2000, or even the earlier editions. That is why international sale purchase agreements must include exact edition of Incoterms when indicating delivery conditions.

Source: Department for Increase in Competitiveness of the Region under Kharkiv Oblast State Administration