Short answer: Incoterms are standard international trade terms published by the International Chamber of Commerce. They set out who does what, who pays for what and who bears which risk when goods move from seller to buyer. The 2020 edition has eleven rules.
Not legal, customs or tax advice. General information only; check duties, documents and contract terms with your customs broker or adviser.
What two sources say about Incoterms
| Source page | Publisher | What the page says |
|---|---|---|
| Incoterms rules | ICC - International Chamber of Commerce | Says Incoterms are standardised three-letter trade terms used in sales contracts to clarify who handles tasks, costs and risks. Says the 2020 edition took effect on 1 January 2020. |
| Know Your Incoterms | International Trade Administration (trade.gov) | Says Incoterms 2020 are 11 ICC rules, seven for any transport mode and four for sea and inland waterway only. Notes parties may use an older version if the contract names it. |
| Incoterms | Wikipedia | Says Incoterms do not form the contract, set prices or payment terms, or decide when title passes. Describes the 2020 edition as the ninth, with DPU replacing DAT. |
Key points
- Incoterms are standardised trade terms, each three letters long, used in contracts for selling goods. [1, 3]
- They clarify which party handles each task, bears each cost and takes each risk in delivery. [1, 3]
- ICC first published them in 1936. [1]
- Incoterms 2020 took effect on 1 January 2020 and has 11 rules. [1, 2, 3]
- Seven rules suit any transport mode and four suit sea and inland waterway transport only. [2, 3]
- Incoterms do not set the price, payment terms or when legal title passes, and an older version may be used if the contract names it. [2, 3]
Incoterms compared with Incoterms 2010
| Aspect | Incoterms | Incoterms 2010 | Source |
|---|---|---|---|
| What changed | DPU replaced DAT. | DAT was included. | [3] |
| Whether it can still be used | The current edition. | Can still be used if the parties agree and name the version in the contract. | [2] |
Where sources differ
Sources agree on the basics. Some trade usage of terms like FOB differs from the ICC meaning, so contracts should name the Incoterms edition.
Questions to ask a supplier about Incoterms
- [ ] Which Incoterm and which edition is this quote based on?
- [ ] What named place or port goes with the term?
- [ ] Which costs and risks fall on us after the handover point?
- [ ] Who handles export and import clearance under this term?
- [ ] Does the price quoted include freight and insurance?
Read next on this site
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Sources: [1] ICC - International Chamber of Commerce, fetched 2026-11-12; [2] International Trade Administration (trade.gov), fetched 2026-11-12; [3] Wikipedia, fetched 2026-11-12. As of 2026-11-12. General information, not legal, customs or tax advice. Wording is paraphrased from the pages linked; your written quote and contract govern.