The International Chamber of Commerce (ICC) has recently published its new version of Incoterms 2020. The Incoterms rules help individuals and companies that participate in the daily import and export of global trade. These essential terms of trade can be found in the newly published guide, now available for purchase from the ICC.
Incoterms are a globally-accepted set of guidelines that are usable regardless of language or culture. They were established in 1936 as a trade contractual standard and are updated decennially to encompass the ever-changing technology and practices in international trade.
Buyers and sellers can utilize any published version of Incoterms; however, they must state the version used to ensure that all parties are aware of the ramifications of that version. Incoterms are best used as a reference in contracts. However, Incoterms do not have any legal weight to them independently, so contractual parties must refer explicitly to which set of Incoterms they wish to use in a contract.
Effective immediately, if a contract uses Incoterms 2020 as a guideline, the newest version should be noted. All commercial invoices should state the agreed-upon Incoterms, including the name, place and Incoterms version.
An example of such would be: ExWorks ABC Company, OceanTown, NY, Incoterms 2020
Past versions of Incoterms will continue to apply even if the contract will take place in 2020 unless the contract says otherwise. For contracts entered into before January 1, 2020, it is essential for the parties involved to indicate which set of Incoterms is applicable.
After January 1, 2020, courts and arbitrators can expect that any reference to Incoterms in new contracts is intended to be a reference to Incoterms 2020.
Our team of global logistics experts is here to help. If you have any questions about how Incoterms 2020 will impact your business, please contact us today.