The Incoterms, those rules that define the responsibilities of the buyer and seller in transportation of goods, will be updated in 2020, so some possible changes are expected.

1. INCOTERMS
2020
6 POSSIBLE CHANGES
EXPECTED

2. A BRIEF REVIEW...
What is an Incoterm?
Incoterms are a set of rules which define
the responsibilities of sellers and buyers for
the delivery of goods under sales
contracts. Shippers worldwide use
standard trade definitions (called
Incoterms) to spell out who’s responsible
for the shipping, insurance, and tariffs on
an item; they’re commonly used in
international contracts and are protected
by International Chamber of Commerce
copyright
- International Trade Administration
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3. Who writes them?
The body responsible for
publishing them (since 1930) is
the International Chamber of
Commerce (ICC), where they are
drafted by a committee of
experts. They are always updated
every 10 years.
Therefore, the Incoterms
established in 2010 are currently
in force. And the next Incoterms
will come into effect in 2020.
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4. 6 POSSIBLE CHANGES
EXPECTED
INCOTERMS 2020
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5. REMOVE FAS
Why?
With this Incoterm, the exporter assumes the formalities of
customs clearance and export, ceasing to be responsible
for the merchandise once it is deposited to be shipped.
From then on, the buyer assumes all risks from the moment
the container is loaded onto the ship.
It is usually used especially to transport bulk cargo (some
commodities), so it is possible that a specific Incoterm for
these products may end up being created.
CHANGE 1
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(Free Alongside Ship)

6. FOB
Is exclusive for shipping.
The seller must load the
goods onto the ship
chosen by the buyer.
The seller is also
responsible for all costs
and risks up until all
goods are loaded
onboard the vessel, at
which point the risks are
transferred to the buyer.
CIF
Is exclusive for
shipping and indicates
that the seller is
responsible for the cost
and freight of bringing
the goods to the port of
destination specified by
the buyer. The seller
must also provide
insurance for the
transport of the goods.
CHANGE 2
CHANGES IN FOB AND
CIF
FOB and CIF were planned from 2010 to be used for goods
not travelling in containers. FCA and CIP should therefore
be used for containerised goods.
However, FOB and CIF have continued to be used. It is
therefore possible that these two Incoterms will again be
used for container transport.
FOB CIF
(Free On Board)
(Cost, Insurance and Freight)

7. The FCA Incoterm can be used for multiple
types of transactions. That is why it is the
most used Incoterm.
So it is possible that in the next update it
will expand, so that it can be applied to
other types of transactions. Or it may be
divided into two Incoterms: one for sea
transport and one for land transport.
CHANGE 3
FCA EXPANSION
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(Free Carrier)

8. CNI, A NEW INCOTERM
The new Incoterm is the CNI(CostandInsurance), which
aims to fill the gap that exists between CIF and FCA. In this
way, this Incoterm would include the cost of international
insurance for the exporter, but would not include freight.
CHANGE 4

9. DIVIDE DDP INTO 2
Why?
Currently, with DDP, it is the exporter
who pays the importer's customs duties
and expenses, regardless of where the
goods are delivered. Therefore, it is
possible to create two new Incoterms
based on DDP:
CHANGE 5
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DTP
DPP
DeliveredAtTerminalPaid
DeliveredAtPlacePaid
The goods are delivered to a terminal in the
importing country and it is the seller who pays
the customs costs.
The goods are delivered anywhere in the
importing country (other than a terminal) and
customs costs are paid by the seller.
NEW!
NEW!
(Delivered Duty Paid)

10. The Importer must load
at the exporter's
premises. But the reality
is that it is usually the
exporter who does it.
REMOVE EXW
Several deficiencies have been found in the Incoterm EXW, so it may
disappear. These are some of them:
If the truck is loaded by
the importer, he is
handling merchandise
from an outside
company, which can be
a problem of
occupational risk
prevention in some
countries.
It is also the importer
who makes the
customs export
formalities.
CHANGE 6
(Ex-Works)

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