From 1936 to today: the Incoterms® rules

The Incoterms® were created in 1936 with the purpose of providing provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. Since then, ICC expert lawyers and trade practitioners have updated them six times to keep pace with the development of international trade.

Pre-Incoterms rules

The Incoterms® was first conceived by the International Chamber of Commerce (ICC) in 1921, and brought to fruition with the first Incoterms® rules in 1936. This set in motion a long and vibrant history of Incoterms® publications that continues today with Incoterms® 2010, which will go into effect 1 January 2011.A Trade Terms Committee with the assistance of the ICC National Committees developed the first six rules in 1923: FOB, FAS, FOT, FOR, Free Delivered CIF and C&F, which were the precursor of what would later be known as the Incoterms® rules.

Why revise the Incoterms®?

As commercial practices, types of goods and transports, and international laws evolve, the Incoterms ® rules need to be regularly updated by experienced international experts.

Some significant revisions include:

1980 –FCA was introduced in order to provide a rule that dealt with the frequent case where the reception point in maritime trade was no longer the ship’s rail (the traditional FOB-point) but rather a point on land, prior to loading on board a vessel, where goods were stored in a container for subsequent transport by sea or by different means of transport in combination.

1990 – the clauses dealing with the seller’s obligation to provide proof of delivery permitted a replacement of paper documentation by EDI-messages provided the parties had agreed to communicate electronically.

2000 - (1) the placing of the export clearance under FAS on the seller (previously on the buyer); (2) the specification of the seller’s obligation to load the goods on the buyer’s collecting vehicle and the buyer’s obligation to receive the seller’s arriving vehicle unloaded under FCA.

How are the Incoterms® revised?

Revision of the Incoterms® rules is initially entrusted to a small global Drafting Group. The group is formed by experts from various nationalities chosen for their extraordinary contribution to international commercial law and to the International Chamber of Commerce along the years.

  • Revised drafts are then circulated broadly and internationally through ICC National Committees, with the resulting comments and suggestions channeled back to the Drafting Group.
  • The final draft, once approved by the ICC Commission on Commercial Law and Practice, is submitted for adoption by the ICC Executive Board.
  • The broad international consultation aims to ensure that official ICC products possess an authority as representing the true consensus viewpoint of the world business community.

Incoterms® books - Special Offers

  • Incoterms® 2010 Incoterms Q and A

Incoterms® 2010 Christoph M Radtke

Introduction to Incoterms® 2010