What is the purpose of Incoterms?

Terms of trade show precisely where the exporter's responsibilities end and where the importer's responsibilities begin. The terms of trade establishes the mode and route for movement, transfer of ownership and title and lays out who pays for which delivery related cost.

Establishing terms of trade can be a complicated and cumbersome process. Some of that burden had been reduced by the standards established by the International Chamber of Commerce (ICC). Widely known as Incoterms, these International Commercial Terms make international trade easier and facilitate the flow of goods between different countries. Incoterms are international rules that governments, legal authorities and practitioners accept as standard terms in international trade.