Incoterms (International Commercial Terms) Text N°4
International Commercial Terms (‘Incoterms’) are internationally recognised
standard trade terms used in sales contracts. They’re used to make sure buyer
and seller know:
who is responsible for the cost of transporting the goods, including insurance,
taxes and duties
where the goods should be picked up from and transported to
who is responsible for the goods at each step during transportation
The Incoterms® rules are an internationally recognized standard and are used
worldwide in international and domestic contracts for the sale of goods. First
published in 1936, Incoterms® rules provide internationally accepted
definitions and rules of interpretation for most common commercial terms.
The rules have been developed and maintained by experts and practitioners
brought together by ICC and have become the standard in international
business rules setting. Launched in mid-September 2010,0Incoterms®
20100came into effect on 1 January 2011.0They help traders avoid costly
misunderstandings by clarifying the tasks, costs and risks involved in the
delivery of goods from sellers to buyers. Incoterms® rules are recognized by
UNCITRAL as the global standard for the interpretation of the most common
terms in foreign trade.
Please note that all contracts made under INCOTERMS® 2000 remain valid
even after 2011. Moreover, although we recommend using Incoterms® 2010
after 2011, parties to a contract for the sale of goods can agree to choose any
version of the Incoterms rules after 2011. It is important however to clearly
specify the chosen version INCOTERMS® 2010, INCOTERMS® 2000 or any
earlier version.
From 1936 to today: the Incoterms® rules
The Incoterms® were created in 1936 with the purpose of providing a set of
international rules for the interpretation of the most commonly used trade
terms in foreign trade. Since then, ICC expert lawyers and trade practitioners
have updated them six times to keep pace with the development of
international trade.
Pre-Incoterms rules
The Incoterms® was first conceived by the International Chamber of
Commerce (ICC) in 1921, and brought to fruition with the first Incoterms® rules
in 1936. This set in motion a long and vibrant history of Incoterms®
publications that continues today with Incoterms® 2010, which will go into
effect 1 January 2011.A Trade Terms Committee with the assistance of the ICC
National Committees developed the first six rules in 1923: FOB, FAS, FOT, FOR,
Free Delivered CIF and C&F, which were the precursor of what would later be
known as the Incoterms® rules.
