Incoterms

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A Guide to Incoterms® 2020

The introduction of the new CDS platform has resulted in the legal obligation to submit the Incoterms® relating to all imports to HMRC from 30 September 2022.

Gauran LTD provide guidance in understanding the eleven international terms established by the International Chamber of Commerce that govern a contract of sale in international trade.

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The use of Incoterms® establishes a consensus rule applied on a global basis, and answers to the following questions:

  • 1. Who pays for the main transport?
  • 2. Where does the delivery take place?
  • 3. Where and when the risk is transferred from the Seller to the Buyer?
  • 4. Which party bears the fees arising from transport – the issue of documents, unloading of goods at destination, cost of freight, customs clearance at export and import, and the insurance of goods etc?

    • When you display the Incoterms rule you are using, it should be followed by a location and which version of Incoterms— Incoterms® 2020, Incoterms® 2010, or Incoterms® from some other year—that you are using.

    The location depends on which Incoterm you are using. This will identify whether Incoterm rules with from the seller’s premises or the buyer’s, or the Incoterm rule with the ocean port of shipment and or the ocean port of destination.

    For example:

    1. CIF Shanghai Incoterms® 2020, or

    2. DAP No 123, ABC Street, Nation of Destination, Incoterms® 2020.