Incoterms 2020 Explained — A South African Importer's Guide
Understand the 11 Incoterms that govern international trade. Learn what each term means for your SARS customs declaration, who pays for what, and which term is right for your import.
This guide to Incoterms 2020 is provided by JLog, a registered SARS customs clearing agent and third-party logistics company based in Woodstock, Cape Town. JLog uses Incoterms daily when quoting and clearing international shipments for art, furniture, wine, and e-commerce goods across 100+ countries.
What are Incoterms?
Incoterms are international commercial terms published by the International Chamber of Commerce (ICC) that define the responsibilities of sellers and buyers in international trade transactions. The Incoterms 2020 edition includes 11 rules split into two categories: 7 terms for any mode of transport (road, rail, air, sea) and 4 terms for sea and inland waterway only.
For South African importers, Incoterms matter because they determine three critical things: the SARS customs value of your goods (SARS uses CIF at port of entry), risk allocation (when responsibility shifts from seller to buyer), and cost planning (who pays for freight, insurance, duties, and VAT). Choosing the right Incoterm can save you money and reduce your compliance risk.
Any Mode of Transport 7 terms
Sea & Inland Waterway Only 4 terms
⚖ Responsibility Comparison
Term
Export Clearance
Freight
Insurance
Import Clearance
Duty & VAT
❔ Frequently Asked Questions
What are Incoterms 2020?
Incoterms are international commercial terms published by the ICC that define seller and buyer responsibilities in international trade. The 2020 edition includes 11 terms that specify who pays for freight, insurance, customs clearance, and at what point risk transfers from seller to buyer. They are used in contracts and invoices worldwide to avoid misunderstandings about delivery obligations.
Which Incoterm is best for importing to South Africa?
DAP and CIF are the most popular for SA imports. DAP gives you delivery to your door with customs control. CIF gives the exact value SARS needs for duty calculation. Both give the buyer control over import clearance, which is important for managing SARS compliance. Avoid DDP unless your foreign supplier is registered with SARS and experienced with South African customs procedures.
What is the difference between FOB and CIF?
FOB means you pay for goods loaded on the ship and arrange freight yourself. CIF includes freight and insurance to the destination port. With FOB, you control shipping costs but must arrange logistics. With CIF, the seller handles freight and insurance, and the invoice value is what SARS uses directly for customs valuation. For most SA importers, CIF simplifies the customs declaration process.
How does SARS calculate customs value from Incoterms?
SARS uses the CIF value at port of entry. If your invoice is EXW or FOB, add freight and insurance to get CIF. If your invoice is already CIF or CIP, that value is used directly. For DAP or DDP, SARS may deduct inland transport costs to arrive at the CIF equivalent. Always keep freight invoices and insurance certificates as SARS may request them to verify your declared customs value.
What is the difference between DAP and DDP?
DAP delivers to your location but you handle customs and pay duties/VAT. DDP means the seller handles everything including duties and VAT. DAP is more common for SA imports because the buyer maintains control over customs clearance. DDP can cause complications if the foreign seller is not registered with SARS or unfamiliar with South African import regulations and duty structures.
Need help choosing the right Incoterm?
JLog handles customs clearance for all Incoterms. Whether your supplier quotes EXW, FOB, or DDP — we'll manage the import process and make sure SARS gets the right customs value.