Who Created Incoterms and Where Is the Organization Located?
Many exporters and importers use Incoterms such as FOB, CIF, FCA, and DDP, but very few know who actually created these rules.
Understanding the origin of Incoterms helps businesses appreciate why these rules are trusted worldwide.
The Organization Behind Incoterms
Incoterms were created by the International Chamber of Commerce (ICC).
The ICC is a global business organization that works to promote international trade, responsible business practices, and standard commercial rules used around the world.
Where Is the ICC Headquarters?
The headquarters of the International Chamber of Commerce is located in:
Paris, France
The organization was established in 1919, after World War I, with the goal of encouraging peaceful global trade and cooperation between countries.
Today the ICC represents businesses from more than 170 countries.
Because of its global membership, the rules created by ICC are widely accepted in international trade contracts.
Why ICC Created Incoterms
Before Incoterms existed, international trade often faced confusion and disputes.
For example:
- A seller might believe his responsibility ended when goods left the factory.
- A buyer might believe the seller was responsible until goods arrived at the destination port.
These misunderstandings caused:
- Contract disputes
- Shipping delays
- Insurance conflicts
- Legal cases between buyers and sellers
To solve these problems, the ICC introduced standardized international trade terms called Incoterms (International Commercial Terms).
First Introduction of Incoterms
The ICC first published Incoterms in 1936.
Since then, the rules have been updated regularly to reflect changes in global trade and transportation.
Major revisions include:
- 1936 – First edition
- 1953 – Expansion of trade terms
- 1990 – Adaptation to container shipping
- 2000 – Modernization of transport rules
- 2010 – Updated logistics practices
- 2020 – Current global standard
Why Incoterms Are Trusted Worldwide
Incoterms are trusted because they:
- Provide clear allocation of responsibilities
- Reduce disputes in international trade
- Standardize global commercial practices
- Help banks, insurers, and shipping companies understand contract terms
When a contract states:
“FOB Mumbai – Incoterms 2020”
both the buyer and seller immediately understand their obligations.
Important Note
Incoterms are not laws of any country.
However, when they are included in a sales contract, they become contractually binding between the buyer and the seller.
Courts and arbitration tribunals often rely on Incoterms to resolve international trade disputes.
Conclusion
Incoterms were created by the International Chamber of Commerce, headquartered in Paris, France, to bring clarity and uniformity to international trade.
Today they serve as a common language for global commerce, helping exporters and importers conduct business with greater confidence and fewer disputes.
Disclaimer
This article is provided for general informational and educational purposes only. Trade transactions may involve additional legal or contractual considerations. Readers should consult professional customs brokers, legal advisors, or relevant authorities such as the Canada Border Services Agency before making international trade decisions.
Incoterms are developed and published by the International Chamber of Commerce, headquartered in Paris, France.
The official information about Incoterms can be accessed through the ICC website.