INCOTERMS® 2020 - AN EFFECTIVE TOOL TO REDUCE INCONSISTENCIES IN GLOBAL TRADE

INCOTERMS® is an acronym derived from international commercial terms. These standard trade terms listed under INCOTERMS® provide a universal meaning to buyers and sellers around the world.

- R Narayanan

They're used in sale contracts to make sure that the buyer and seller know and understand their individual responsibilities as to:

• 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?

Presently, INCOTERMS® is being revised and published at the beginning of the decade by the International Chamber of Commerce (ICC). The latest version of INCOTERMS® came into effect from 1st January 2020 in the name of INCOTERMS® 2020. Incoterms® 2020 is a registered trademark of ICC.

History of INCOTERMS®: One of the main agenda of the International Chamber of Commerce (ICC) after its creation in 1919 was to facilitate International Trade. In the early 1920's ICC conducted a study on the commercial trade terms used by merchants across 13 countries and it was limited to six commonly used terms in these countries. In 1923 the results of the study were published and it highlighted the disparities in interpretation of the six commercial trade terms.