Incoterms for trade finance lawyers
Produced in partnership with Sullivan
Incoterms for trade finance lawyers

The following Banking & Finance guidance note Produced in partnership with Sullivan provides comprehensive and up to date legal information covering:

  • Incoterms for trade finance lawyers
  • What are Incoterms and what is their origin?
  • How are Incoterms used?
  • What Incoterms cover
  • What Incoterms do not cover
  • Overview of the various terms
  • Other key changes in Incoterms 2020
  • Why are Incoterms relevant for financing transactions?

What are Incoterms and what is their origin?

Incoterms—an abbreviation of 'International Commercial Terms'—are a set of globally recognised terms and conditions used in international, and sometimes domestic, contracts for the sale and purchase of goods. They comprise a set of 11 three letter acronyms/abbreviations each representing a different set of provisions dealing with the allocation of duties, costs and risks in a sale and purchase contract.

The International Chamber of Commerce (ICC) publishes a set of rules for the interpretation of Incoterms explaining the meaning of each of the terms. These rules were first published in 1936 and are updated periodically to reflect changes in trade practices. In September 2019, the ICC published the latest version, Incoterms 2020, which came into effect on 1 January 2020 (although the 2020 rules could have been incorporated into contracts before that date, if the parties so wished).

For the full text of the 2020 version of these rules, see Practice Notes:

  1. Incoterms® 2020—introduction

  2. Incoterms® 2020 Rules—EXW Ex works

  3. Incoterms® 2020 Rules—FCA Free Carrier

  4. Incoterms® 2020 Rules—CPT Carriage paid to

  5. Incoterms® 2020 Rules—CIP Carriage and insurance paid to

  6. Incoterms® 2020 Rules—DAP Delivered at place

  7. Incoterms® 2020 Rules—DPU Delivered at Place Unloaded

  8. Incoterms® 2020 Rules—DDP Delivered duty paid

  9. Incoterms® 2020 Rules—FAS Free alongside ship

  10. Incoterms® 2020 Rules—FOB Free on board

  11. Incoterms® 2020 Rules—CFR Cost