GlossaryEN1 min readUpdated: Jun 24, 2026

ICC Incoterms®

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Last updated: 24 June 2026Published: 19 June 2025

Source: https://iccwbo.org/business-solutions/incoterms-rules/

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Incoterms 2020 Simulator: Who bears costs & risk?

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Definition & Explanation

Incoterms® (International Commercial Terms), published by the International Chamber of Commerce and currently in their 2020 edition, are eleven standardized trade clauses that define the precise point at which costs, risks, and delivery responsibilities transfer from seller to buyer in international goods transactions. The range runs from EXW (Ex Works), where the buyer assumes responsibility from the seller's premises, through FOB (Free on Board) and CIF (Cost, Insurance and Freight) for sea freight, to DDP (Delivered Duty Paid), where the seller covers all costs including import duties to the named destination. DAP (Delivered at Place) and CPT (Carriage Paid To) are widely used in multimodal transport. Freight forwarders and customs brokers rely on the agreed Incoterm to determine who files export and import declarations, who arranges cargo insurance, and who bears liability for loss or damage in transit. Incoterms govern only the buyer–seller relationship; they do not replace contracts of carriage, insurance policies, or letter-of-credit conditions.

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Incoterms duties and charges

When goods cross borders under an Incoterm, duties, taxes, and levies arise – the allocation of these charges between buyer and se…

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CFR (Cost and Freight)

CFR (Cost and Freight) is a maritime Incoterm: the seller pays freight to the named port of destination, but risk of loss or damag…

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Delivered at Place (DAP)

A buyer contracting on DAP terms receives goods transported and ready for unloading at the agreed destination but remains responsi…

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Delivered Duty Paid (DDP)

By the time goods arrive under DDP terms, the seller has already handled everything: transport, import formalities, customs duties…

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Export handling process

A typical international shipment confronts the exporter with a chain of documents, customs formalities, and transport handovers – …

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Ex Works

Unlike every other Incoterm, where the seller organises at least part of the transport chain, Ex Works (EXW) represents the seller…

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ICC Incoterms®

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Related Terms

Incoterms duties and charges

CFR (Cost and Freight)

Delivered at Place (DAP)

Delivered Duty Paid (DDP)

Export handling process

Ex Works

Incoterms 2020 Simulator: Who bears costs & risk?

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