Often misunderstood, Incoterms exist to remove or reduce uncertainty between the seller and buyer conducting international commercial transactions. The rules exist as a framework between the parties and define who is responsible for each task in the transaction, the associated costs and the risk involved in the transportation and delivery of the goods.

The Incoterms are published by the International Chamber of Commerce (ICC). They are periodically updated and the latest version (version eight – Incoterms 2010) was published 1 January, 2011.

Incoterms 2010 includes eleven rules identified by way of a three letter term. They are grouped in to two groups covering transport by 1) any mode of transport or 2) by sea or inland waterway. Parties to a contract for the sale of goods should clearly identify in the documents which rule is to be used and the version that applies eg. INCOTERMS 2010. Where an earlier version of the Incoterms is used, the version must be clearly stated.

For further information, refer to the ICC website www.iccwbo.org or contact us to discuss which rule applies to your next business transaction.