Incoterms 2020
Incoterms 2020 is the current edition of the International Chamber of Commerce rules defining 11 trade terms that allocate delivery, risk, costs, and export and import clearance between seller and buyer.
What it requires
In effect since January 1, 2020, the rules keep 11 terms: EXW, FCA, CPT, CIP, DAP, DPU and DDP for any mode, and FAS, FOB, CFR and CIF for sea and inland waterway. DAT became DPU, so delivery can be at any place where goods are unloaded. CIP now requires Institute Cargo Clauses (A) insurance, while CIF keeps minimum (C) cover. FCA lets parties agree that the buyer's carrier issue an on-board bill of lading to the seller. They do not govern title or payment.
Why it matters
Incoterms 2020 decides who pays freight, duties and insurance on every imported order, so it directly affects landed cost and who acts as importer of record. Choosing DDP makes the seller responsible for US import clearance and duties, which became much riskier after the 2025 tariff increases and the suspension of de minimis. For example, a foreign supplier shipping DDP to a US 3PL must act as or appoint the importer of record and pay tariffs, while under FOB the US brand books ocean freight and pays duties itself. Choosing the term deliberately avoids surprise charges at the dock.
Related laws
Sources
- Incoterms 2020, ICC iccwbo.org
- ICC Incoterms 2020 commentary, HFW hfw.com
Not legal advice.