What are Incoterms and how are they used in Dutch trade?

Dutch term: Incoterms | Legal basis: ICC Incoterms 2020

Incoterms are the ICC (International Chamber of Commerce) rules that allocate delivery, risk, cost and customs responsibility between seller and buyer in international trade contracts. The current edition is Incoterms 2020, with eleven terms ranging from EXW (Ex Works, minimal seller responsibility) to DDP (Delivered Duty Paid, maximum seller responsibility).

Incoterms do not cover payment terms, transfer of ownership, or remedies for breach. They must be incorporated into the contract by reference to a specific Incoterm and a named place (e.g. 'FCA Amsterdam Incoterms 2020'). Contracts that rely on an Incoterm alone, without aligning the rest of the contract, almost always produce disputes because the Incoterm does not address all the commercial questions between the parties.

Why it matters for international businesses

For trade through the Netherlands (Port of Rotterdam, Schiphol Airport), the choice of Incoterm directly affects which party bears customs and VAT obligations and where risk passes. Getting the Incoterm right is a core part of international contract drafting.