Changes in the Incoterms 2020

DPU: renaming of DAT

In the Incoterms 2020 a new Incoterm DPU (Delivered at Place Unloaded) is created replacing the DAT (Delivered at Terminal). This change of acronyms is a simple renaming given that the obligations and functions of both terms are exactly the same.

FCA: option of Bill of Lading (BL) with on-board notation

In the Incoterms 2020 version, this option is specified, for maritime transport, so that the buyer may instruct the carrier (shipping company or its agent) which has been contracted in order to issue a Bill of Lading (B/L – Bill of Lading) on behalf of theseller with the annotation of “aboard” (on-board), which specifies that the goods have been loaded aboard the ship.

CIP and CIF: different coverage of transport insurance

In Incoterms CIP the seller is under the obligation to take out under contract transport insurance in favour of the buyer with extensive coverage, which corresponds to Clause A of the Institute Cargo Clauses (IUA/LMA). Nevertheless, the parties may agree to take out insurance which offers reduced coverage (Clause C of the Institute Cargo Clauses).

Customs clearance: export, transit and import

In Incoterms 2020 is more precisely explained which party, seller or buyer, is responsible for carrying out customs formalities and clearance, assuming the costs and risks thereof. And the release of goods in transit is included for the first time. For the latter, the rule which is used is that the liability is assigned to whoever assumes the risk of transport to the place of delivery.

Inland transport with seller´s or buyer´s own means

In Incoterms 2020 for the first time this option is contemplated for some Incoterms the inland transport in the country of origin (FCA) or in the destination (DAP, DPU and DDP), may be undertaken by the seller or the buyer using their own means of transport.

Transport security requirements

In the Incoterms 2020, liability as regards security is addressed more precisely under two circumstances: transport from the country of origin to that of the destination and customs clearance formalities and procedures (export/transit/import).

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