Incoterms 2020

What do the Changes Mean?

Harsha Sirimanne-ISMM Sri Lanka

 International Commercial Terms History

• Initially created in 1936 by the International Chamber of

Commerce (ICC) and have been periodically revised
(Incoterms® 2020 is the 9th revision)

• Incoterms® are generally good for approximately 10 years ~

not a magic number, but historically about accurate

• Incoterms® reflect world-wide trade practices, as practices

change, Incoterms® are revised

• Incoterms® 2020 were written by the ICC, represented by 8

individuals from various countries/areas of the world
– Met 11 times in person
– Received over 2000 suggestions in first request
– Refined suggestions over 4 proposals
– Controlling source document is written in British English and will be
translated into 35+ languages over the next year.
 What are Incoterms ® 2020?

• Eleven (11) Incoterms® 2020 (used to be 13 terms)

– Four (4) terms were deleted and two (2) new terms were created

• Incoterms® 2020 will begin January 1, 2020, but you don’t

have to use them on that date

• Available worldwide through 100 International Chamber of

Commerce National Committees
– The terms aren’t law; no laws that require their use and are not all
inclusive
– Country neutral – they don’t favor one country over another
– Self-contained – all information that determines responsibility and risk are
in one place
 Definitions…..

Just what do we mean?

 Key Definitions

• What is Delivery?

As defined in Incoterms® 2020, “it is used to indicate

where the risk of loss of or damage to the goods passes
from the seller to the buyer.”

• It is not always:
– When the goods arrive in your customer’s hands or
– When the goods leave your dock
– Defined the same in all countries

• You must know your contract and your Incoterm®

– Note: A Purchase Order and a matching Acknowledgement will constitute
a “contract” if there isn’t a separate stand-alone contract related to the
transaction.
 Transportation Definitions

• Pre-carriage: inland transportation on the seller’s side

– Domestic: from the place where the shipment starts to any subsequent
transportation carriage
– International: from the place where the shipment starts to the departure
point on the seller’s side

• Main Carriage:
– Domestic: subsequent transportation beyond pre-carriage
– International: transportation from the point of departure on the seller’s
side to the arrival pint on the buyer’s side

• On-carriage:
– Domestic: subsequent transportation beyond main carriage
– International: transportation from the arrival pint on the buyer’s side
 Transportation Definitions

• Door – to – Door
– Contract of carriage that includes pre-carriage, main-carriage and on-
carriage by the same carrier

• Door – to – (Air) Port:

– Contract of carriage including pre-carriage and main-carriage to airport or
ocean port or truck terminal port or rail port

• (Air) Port – to – (Air) Port:

– Contract of carriage for main carriage only

• (Air) Port – to – Door:

– Contract of carriage including main carriage and on-carriage
 Type of Transportation?

• Company A

• Company B

Door to Door – one contract for all

carriage (pre-, main, and on-carriage)
 Type of Transportation?

• Company A

Door to Port – contract for pre-carriage

and main-carriage

Company B responsible for arranging

pick up at Arrival Airport
 A Few More Definitions…..

• Omni-modal: Used with terms that use all modes of

transportation (truck, airplane, vessel, train…)

• Marine-restricted: Terms that only apply to carriage by vessel

• Shipment Contract: sales/purchase contract where the

seller’s responsibility ends when goods are handed over to
the first carrier

• Arrival Contract: sales/purchase contract where seller’s

responsibility ends when goods have arrived at agreed place
 Packaging Definitions

1. The packaging of the goods to comply with any requirements

under the contract of sale.

2. The packaging of goods so that they are fit for

transportation.

3. The stowage of the packaged goods within a container or

other means of transport.

Only Definition 1 & 2 are addressed in Incoterms® 2010.

Definition 3 must be addressed within the contract
between the parties.
 What Questions to Ask?

• Who furnishes the goods?

• Who packages the goods in a manner suitable for shipment
(export)?
• Who moves the goods from the seller’s factory to a port, airport, or
border crossing in the seller’s country?
• Who arranges for export clearance in the seller’s country (if
applicable)?
• Who arranges for main carriage (international transportation) from
the departure port to the arrival port?
• Who pays for main carriage?
• Who insures the shipment?
• Who arranges for import clearance?
• Who pays import duties?
• Who pays for on-carriage from the arrival port to the delivery
destination?
• Who arranges and pays for country-specific documentation (e.g.,
consular invoices, inspection reports, licenses)?
Now that we have some basic definitions…
 What do Incoterms® 2020 Do?

• Divides up tasks, responsibilities, costs and risks to deliver goods from

seller to buyer
– If used correctly, no duplication of effort between seller & buyer
– Acts as signposts for who needs to have additional contracts (i.e., with vessel
steamship line, inland trucking company, etc.) to complete transaction
– If something goes wrong, clearly defines responsibilities based on where the goods
were in the transportation chain of delivery
• Address “String sales”
– Shipments where ownership changes in transit
• Address Cargo Security concerns
– Authorized Economic Operator (AEO), Customs-Trade Partnership Against Terrorism
(C-TPAT), Importer Security Filing (ISF 10+2)
• Defines mode of transportation by their use
– 4 Terms are for Marine-Restricted for sea & inland waterway transport only
– 7 Terms are Omni-modal for use with all modes of transportation
• Increasingly considered replacement for Uniform Commercial Code
(UCC) shipment/delivery terms.
 What Incoterms® 2020 DO NOT Do…

• Automatically Apply
• Determine When Ownership Changes
– When delivery occurs or when payment happens can impact when ownership
changes
– Must be addressed specifically in contract
• Under US Law, it is when the product is delivered
• If jurisdiction is under another sovereign nation law, you need to address per
that country regulation
• If contract is subject to the United Nations Convention on Contracts for the
International Sale of Goods (CSIG) the law does not specify if it is not
addressed specifically within the contract

• Identify when Revenue is Recognized

– Under GAAP and Securities & Exchange Commission (SEC) Rules 1) ownership must
pass prior to recognizing revenue and 2) delivery must occur
• If not specifically addressed in contract, look to applicable contract law
 What Incoterms® 2020 DO NOT Do…

• Identify if a Breach of Contract occurs, when it happened

– Does not determine remedies for breach of contract

• Provide relief from obligations/exemptions from liability in

unexpected or unforeseeable situations

• Address Payment issues

– Tells you that the buyer must pay, but not when or where

• Address more than one contract

– Drop Shipments are TWO Contracts
1) between the seller and their supplier and
2) between the seller and the buyer
– Incoterms® 2020 could be the same or different in each contract

• Specifically task a party with container stowage obligations

 Incoterms

Incoterms – Concept
EXW FOB CFR DDP
Ex Works Free On Board Cost & Freight Delivered Duty
Paid

Cargo Insurance

Exporter Importer
Title to Cargo & Responsibility for freight cost and/or insurance
 Incoterms® 2000 vs. 2010 vs.2020

• EXW – Ex Works
• EXW – Ex Works

• FCA – Free Carrier

• FCA – Free Carrier>>on board notation
• FAS – Free Alongside Ship
• FAS – Free Alongside Ship
• FOB – Free On Board
• FOB – Free On Board

• CFR – Cost and Freight

• CFR – Cost and Freight
• CIF – Cost, Insurance & Freight
• CIF – Cost, Insurance & Freight
• CPT – Carriage Paid To
• CPT – Carriage Paid To
• CIP – Carriage & Insurance Paid
To • CIP – Carriage & Insurance Paid To>>A
Insurance
• DEQ – Delivered Ex Quay
• DES – Delivered Ex Ship
• DAT – Delivered At Terminal>>DPU
• DAF – Delivered at Frontier
• DAP – Delivered At Place
• DDU – Delivered Duty Unpaid
• DDP – Delivered Duty Paid
• DDP – Delivered Duty Paid

Marine Restricted Omni-Modal

 Group Term Definitions

F – Terms
C – Terms
D – Terms
 F-Group Terms

• Are considered to be “Shipment Contracts”

• Are considered Buyer Friendly

Seller Buyer
• Handles Export Clearance • Contracts for Main Carriage
• Handles Pre-carriage • In charge of Carrier (and
• Named Place on Seller’s Side usually forwarder) selection
• Control over Freight Costs
• Control of Documentation
 C-Group Terms

• Are considered to be “Shipment Contracts”

• Are considered Seller Friendly

Seller Buyer
• Contracts for Main Carriage • Named Place is on Buyer’s side
• In charge of carrier (and • Has risk of loss while goods are
usually forwarder) selection in transit with carrier selected
• Handles pre-carriage and paid for by seller
• Has control over freight costs • Must rely heavily on Seller for
• In control of documentation data elements required for
ocean shipments such as
• Passes risk of loss (delivers) to Importer Security Filing
Buyer prior main carriage (known as ISF or 10+2)
• Handles export clearance
If informed, should not
consider “C” terms due to
downside described
 D-Group Terms

• Are considered to be “Arrival Contracts”

Seller Buyer
• Contracts for Main Carriage • Named Place on Buyer’s side
• In charge of carrier (and usually • Must rely heavily on Seller for
forwarder) selection data elements required for
• Handles pre-carriage ocean shipments such as
• Has control over freight costs Importer Security Filing
• In control of documentation (known as ISF or 10+2)
• Passes risk of loss (delivers) to • Undertakes less risk than in “C”
Buyer at freight arrival point terms
• Handles export clearance • If inexperienced, or does not
have good relationship with
• Seller may have revenue carriers, is served will by “D”
recognition issues since terms
“delivery” occurs on arrival side,
meaning revenue is recognized
only upon arrival
Omni-Modal Incoterms® 2020
 Ex Works (EXW) + (Named Place)

Named Place is generally Seller’s Location (or where product initially

ships from)

• Delivery – Seller delivers goods when placed at buyer’s disposal at

the name place of delivery
– Goods are packaged
– Goods are NOT LOADED on the collecting vehicle
• Seller Risks – Minimum obligation for seller; once packaged there is
a loss of control over transportation movement, where package is
finally received, how export or import documentation is presented to
relevant governments
• Buyer Risks – Buyer bears all costs and risks involved in taking the
goods from the named place
• Carriage: Buyer responsibility to arrange for pre-carriage, main
carriage, on-carriage
• Insurance: Neither party required to insure goods
• Export/Import Clearance: Buyer must handle all requirements, pay
all associated duties and fees

Note: Should NOT be used when the buyer cannot carry out export
requirements directly or indirectly
 Incoterms

Incoterm – EXW
OK OK OK OK
The seller fulfills his obligation to deliver when he has made the goods
available at his premises or another named place, such as the factory or
warehouse, to the buyer.
 EXW - Ex Works … named place
 Carriage - To be arranged by the Buyer
 Cost transfer - From the seller to the buyer when the goods are at the
disposal of the buyer.
 Example - EXW CARLSBAD
 Free Carrier (FCA) + (Named Place)

• Named Place is generally:

– Seller’s Place of Business
• Seller responsible for having goods available when promised,
packaged to the extent known or agree, loaded onto collecting
vehicle
• Buyer responsible for pre-carriage, main carriage, on-carriage
– Another Location on Seller’s side (i.e., International Airport, Freight
Forwarder Warehouse for consolidation, another location agreed by Seller
and Buyer)
• Seller responsible for having goods available when promised,
packaged to the extent known or agree, loaded onto collecting
vehicle, pre-carriage
• Buyer responsible for unloading pre-carriage delivering vehicle, main
carriage, on-carriage
 FCA + (Named Place)

• Contract of Carriage: Buyer is responsible to make a contract of

Carriage, however if requested or the buyer does not give
instruction in due time, the seller may contract for carriage on usual
terms at the buyer’s risk and expense.

• Risks: passes to buyer at point of delivery

• Insurance: Neither party required to insure goods

• Export Clearance: Handled by Seller

– Associated Licenses can be obtained and maintained under US Law
– Automated Export System filings can be completed by Seller

• Import Clearance: Handled by Buyer – responsible for the customs

formalities and any duties, fees, other charges due upon
importation.
• On board notation facility for BL

This is the most versatile of the “F” terms.

 Incoterms

Incoterm – FCA
OK OK OK OK
The seller fulfills his obligation when he delivers the goods into the
custody of the carrier at the named point. Used for multimodal transport
such as container or roll on – roll off.
 FCA – Free Carrier … named place
 Carriage - To be arranged by the buyer or by the seller on the buyer’s
behalf.
 Cost transfer - From the seller to the Buyer when the goods have been
Delivered to the carrier at the named place..
 Example - FCA CARLSBAD
 Carriage Paid To (CPT) + Named Place (on Buyer’s Side)

• Delivery: Seller delivers goods to a carrier or another person

nominated by the seller, at an agreed place, for
transportation to the named destination on the Buyer's side,
appropriately packaged
• Carriage: Seller chooses and pays cost of carriage to bring
the goods to the named destination (the final location, not
the destination port)
• Risks: Seller bears all risks and costs incurred until the goods
are delivered to the first carrier on the Seller’s side
• Export Clearance: handled by Seller
• Import clearance: Buyer responsibility for paperwork and all
costs
• Insurance: Neither party required

Note: Risk of Loss passes on Seller’s side to Buyer BUT Cost is Seller’s
responsibility to named location on Buyer’s side
 Incoterms

Incoterm – CPT
OK OK OK OK
The seller delivers the goods to the carrier nominated by him, but the seller
must also pay the cost of carriage to bring the goods to the named
destination. The buyer bears all risks and any other costs occurring after
the goods have been so delivered.
 CPT – Carriage Paid To … named place of destination.
 Carriage - To be arranged by the seller.
 Cost transfer – At the port of destination, buyer paying such costs as
are not for the seller’s account under the contract of carriage.
 Example – CPT SINGAPORE.
 Carriage and Insurance Paid To (CIP) +
Named Place (on Buyer’s Side)

• Delivery: Seller delivers goods to a carrier or another person

nominated by the seller, at an agreed place, for
transportation to the named destination on the Buyer's side,
appropriately packaged
• Carriage: Seller pays cost of carriage to bring the goods to
the named destination (the final location, not the destination
port)
• Risks: Seller bears all risks and costs incurred until the goods
are delivered to the first carrier on the Seller’s side
• Export Clearance: handled by Seller
• Import clearance: Buyer responsibility for paperwork and all
costs
• Insurance: Seller required to obtain maximum coverage
unless otherwise agreed
Note: Risk of Loss passes on Seller’s side to Buyer BUT Cost is Seller’s
responsibility to named location on Buyer’s side
 Incoterms

Incoterm – CIP
OK OK OK OK
The seller delivers the goods to the carrier and also procures insurance
against the risk of loss or damage during carriage. This term allows the
exporter the greatest control over all aspects of shipment.
 CIP- Carriage and Insurance Paid To … named place of destination.
 Carriage - And insurance arranged by the seller. Class A
 Cost transfer – At place of destination, the Buyer paying such costs as
are not for the seller’s account under the contract of carriage.
 Example – CIP SINGAPORE.
 Delivered at Place Unloaded– DPU +
Named Place (Buyer’s side)

• Replaces DEQ Term of 2000 and DAT of 2010

• Delivery: Seller delivers goods to named destination on
Buyer’s side, packaged appropriately and unloaded
• Carriage:
– Seller responsible for pre-carriage and main carriage
– Buyer responsible for on-carriage
• Risks: Transfer from Seller to Buyer once goods are unloaded
on buyer’s side at terminal
• Export Clearance: Seller Responsibility
• Import Clearance: Buyer Responsibility – documentation and
fees associated
• Insurance: Neither party required to insure
 Incoterms

Incoterm – DPU
OK OK OK OK
The seller delivers when the goods are placed at the disposal of the buyer
at the terminal cleared for export, unloaded from arrival mode of transport
 DPU – Delivered at Place Unloaded… named at destination , could be
stockyard, warehouse,quay etc..
 Carriage - To be arranged by the seller.
 Cost transfer - From the seller to the buyer when the goods are placed at
the disposal of the buyer at the Terminal unloaded
 Example – DPU SINGAPORE Quay
 Delivered at Place (DAP) +
Named Place (Buyer’s Side)

• Previously contained elements of DDU, DAF, DES terms

• Delivery: Seller delivers the goods to the buyer at the named
place on the Buyer’s side, appropriately packaged, but not
unloaded
• Carriage: Seller handles all carriage to named place on
buyer’s side
• Risks: Transfer from Seller to Buyer once goods are delivered
to the named place on buyer’s side
• Export Clearance: Seller handles
• Import Clearance: Buyer handles and pays associated costs
• Insurance: neither party required to insure
 Incoterms

Incoterm – DAP
OK OK OK OK
The seller delivers the goods to the buyer cleared for export placed at
disposal of buyer ready for unloading at named place in the destination
 DAP – Delivered At Place… named place of destination.
 Carriage - To be arranged by the seller.
 Cost transfer - From the seller to the buyer when the goods are
placed at the disposal of the buyer..
 Example – DAP ROTTERDAM.
 Delivered Duty Paid (DDP) +
Named Place (Buyer’s Side)

• Delivery: Seller delivers goods to the Buyer, cleared for import

on the arrival transportation, but not unloaded at the final
destination
• Carriage: Seller handles all carriage to named place on Buyer’s
side
• Risks: Transfer from Seller to Buyer once goods are delivered to
the named place on the Buyer’s side
• Export Clearance: Seller Handles
• Import Clearance: Seller Handles & pays for any charges
associated
• Insurance: Neither party required to provide
 Incoterms

Incoterm – DDP
OK OK OK OK
The seller delivers the goods when cleared for import, and not unloaded
from any arriving means of transport at the named place of destination.
The seller must bear all costs and risks involved in bringing the goods
thereto including any duties.
 DDP – Delivered Duty Paid …named place of destination.
 Carriage - To be arranged by the seller.
 Cost transfer - From the seller to the buyer when the goods are placed
at the disposal of the buyer.
 Example – DDP ROTTERDAM.
 DDP Caveats

• Should not be used if SELLER CANNOT clear goods in

importing country

• NOT recommended if Buyer wants control of import

documents and declarations to Customs

• DDP DOES NOT MEAN Buyer is absolved of all Customs

Regulations & Responsibilities
Water Transport Only Incoterms® 2020
 Free Alongside Ship (FAS) +
Named Place (alongside vessel at port on Seller’s side)

• Delivery: Seller delivers goods to Buyer alongside the vessel

chosen by Buyer at the named port of shipment, packed
appropriately
• Carriage:
– Seller handles pre-carriage
– Buyer handles main carriage and on-carriage
• Risks: Pass from Seller to Buyer once goods place alongside
the vessel on Seller’s side
• Insurance: Neither party required to insure goods
• Export Clearance: Seller Handles
• Import Clearance: Buyer is responsible for requirement and
fees associated
 Incoterms

Incoterm – FAS
OK
X X X
The seller fulfills his obligation to deliver when the goods have been placed
alongside the vessel at the named port of shipment. The buyer has to bear
all costs and risks of loss or damage to the goods. The FAS term requires
the seller to clear the goods for receipt.
 FAS – Free Alongside Ship … named port of shipment (Ship only).
 Carriage - To be arranged by the buyer.
 Cost transfer - From the seller to the buyer when the goods have been
placed alongside the ship.
 Example – FAS LONG BEACH.
 Free On Board (FOB) +
Named Place (loaded on vessel at a port on the Seller’s side)

• Delivery: Seller delivers goods to Buyer on board the vessel

chosen by the Buyer at the named port of shipment, packaged
for shipment
• Carriage:
– Seller handles pre-carriage
– Buyer handles main carriage and on-carriage
• Risks: Pass from Seller to Buyer once goods are placed on
board the vessel on the Seller’s side
• Insurance: Neither party is required to insure goods
• Export Clearance: Handled by Seller
• Import Clearance: Handled by Buyer
NOTE:
“Ships Rail” is no longer part of Incoterms® 2010. If using Marine
Terms, Contract or PO must exactly state what “on board the
vessel” means for the transaction – where on the vessel is the
container, item to be placed
 Incoterms

Incoterm – FOB
OK
X X X
The seller fulfills his obligation to deliver when the goods are placed on
board a ship at the named port of shipment. All costs from that point
forward, including freight and insurance, are for the buyer’s account.
 FOB – Free On Board … named port of shipment (Ship only).
 Carriage - To be arranged by the seller.
 Cost transfer - From the seller to the buyer when the goods pass the
ship rail.
 Example – FOB LONG BEACH
 Cost and Freight (CFR) +
Named Place (port on Buyer’s side)

• Delivery: Seller delivers goods packaged for shipment on

board the Seller-designated vessel at the port on Seller’s side
• Carriage:
– Seller handles pre-carriage and main carriage
– Buyer handles on-carriage following delivery to port on Buyer’s side
• Risks: Passes from Seller to Buyer once goods are on board
the vessel
• Insurance: Neither party required to insure goods
• Export Clearance: Handled by Seller
• Import clearance: Buyer is responsible for the customs
requirements and associated costs (fees, duties, etc.)
NOTE:
Even though risk passes from Seller to Buyer on Seller’s side (once
loaded per contract), Seller contracts for and pays freight
necessary to bring goods to the named port on the Buyer’s side
 Incoterms

Incoterm – CFR
OK
X X X
The seller must pay the costs and freight to bring the goods to the named
destination, but the risk of loss or damage are transferred from the seller to
the buyer when the goods pass the ship’s rail in the port of shipment.
 CFR – Cost & Freight … named point of destination (Ship only).
 Carriage - To be arranged by the seller.
 Cost transfer – At port of destination, buyer paying such costs as are
not for the seller’s account under the contract of carriage.
 Example – CFR SINGAPORE
 Cost Insurance Freight (CIF) +
Named Place (port on Buyer’s side)

• Delivery: Seller delivers goods packaged for shipment on board the

Seller-designated vessel at the port on Seller’s side
• Carriage:
– Seller handles pre-carriage and main carriage
– Buyer handles on-carriage following delivery to port on Buyer’s side
• Risks: Passes from Seller to Buyer once goods are on board the
vessel
• Insurance: Seller required to procure minimum coverage against
Buyer’s risk of loss or damage to the goods during carriage
• Export Clearance: Handled by Seller
• Import clearance: Buyer is responsible for the customs
requirements and associated costs (fees, duties, etc.)

NOTE: Even though risk passes from Seller to Buyer on Seller’s side
(once loaded per contract), Seller contracts for and pays freight
necessary to bring goods to the named port on the Buyer’s side
Same as CPT + Insurance coverage
 Incoterms

Incoterm – CIF
OK
X X X
The seller delivers when the goods pass the ship’s rail in the port of
shipment. The seller must pay the costs and freight necessary to bring the
goods to the named port of destination, but the risk of loss or damage are
transferred to the buyer.
 CIF – Cost, Insurance & Freight … named port of destination (Ship only).
 Carriage - Carriage and insurance to be arranged by the seller.
 Cost transfer – At port of destination, buyer paying such cost as are not
for the seller’s account under the contract of carriage.
 Example – CIF SINGAPORE.
 Price Considerations with Incoterms® 2020

When negotiating a contract, keep in mind the following:

• Basic Rule of Thumb: The more responsibility the Seller takes

on, the more they must charge the Buyer.
• Example: What is the price the Seller should quote for 10
units to be shipped from Hilltown to Seattle?

•$10,000 EXW, Johnsburg Factory

•$10,200 FCA, Carrier in Hilltown
•$10,600 CIP, Newark Airport
•$10,800 DPU, O’Hare Airport
•$12,000 DDP Seattle
 Importing and Incoterms® 2020

• Some charges if included and detailed in commercial invoice

need to be deducted from the dutiable value of the shipment
– Main carriage
– Any foreign inland freight
– Insurance
– Supply chain security fees
– Terminal handling fees
– Etc.

– See U.S. Cross Rulings HRL H092560 (April 7, 2010) and HRL H119857
(Sept 9, 2010) for additional information.
 Cargo Security

With the US programs C-TPAT and ISF (10+2 for ocean

shipments) and other countries’ similar programs in use
proper use of Incoterms® 2020 is critical to both the Seller
and the Buyer

• Control over who is arranging/paying for transportation when

is critical to maintaining control over data elements required
by governmental entities.
– Control over carriers (C-TPAT, AEO, PIP etc.)
– Control over documentation (waybills, AES data reporting, ITAR licensing
requirements)
– Control over Importer Security Filing (ISF aka 10+2 in US), the EU is also
implementing a similar ocean shipment filing requirement shortly
 What Questions to Ask?

• Who furnishes the goods?

• Who packages the goods in a manner suitable for shipment
(export)?
• Who moves the goods from the seller’s factory to a port, airport, or
border crossing in the seller’s country?
• Who arranges for export clearance in the seller’s country (if
applicable)?
• Who arranges for main carriage (international transportation) from
the departure port to the arrival port?
• Who pays for main carriage?
• Who insures the shipment?
• Who arranges for import clearance?
• Who pays import duties?
• Who pays for on-carriage from the arrival port to the delivery
destination?
• Who arranges and pays for country-specific documentation (e.g.,
consular invoices, inspection reports, licenses)?
 Final Thoughts

All Incoterms® 2020 can be used for domestic transactions.

• Incoterms® 2020 titles have removed all references to duty
• Principles apply, just not the last items on who is responsible for
export/import formalities

• Determining proper Incoterms® to use

– Revenue Recognition is NOT part of Incoterms® 2020
• Delivery + Title Passage = Revenue Recognition
• Delivery is addressed
• Title is not and must be addressed elsewhere
– Where do you want risk and responsibility?
• AES, Licensing concerns, C-TPAT, ISF should play a part in determining
appropriate Incoterms® 2020 use
– Look at the entire transaction, answer questions early in process for who does
what, when

• Some transportation charges are deducted upon import from

dutiable value (reducing duties and fees) if specifically identified by
Shipper
Questions?