According to a new 2025 report from the International Chamber of Commerce (ICC), international trade is becoming increasingly complex as countries erect barriers to widely used shipping terms.

The findings highlight mounting challenges to adopting the International Commercial Terms rules in 2025 (Incoterms®) – the globally recognised set of rules that define responsibilities between buyers and sellers in international trade. First established in 1936, the most recent and widely used set of Incoterms are the Incoterms® 2020 Rules, set out by the ICC.

These three-letter codes such as CIF (Cost, Insurance and Freight) and DDP (Delivered Duty Paid) serve as a universal language for global commerce, helping companies avoid costly misunderstandings about who bears the risks and costs at each stage of a transaction.

However, the January 2025 study reveals that dozens of nations have erected barriers to these widely used terms, particularly around insurance and customs clearance requirements. The restrictions are forcing companies to rethink how they structure international sales contracts and potentially increase costs and complexity.

What was designed as a standardised system is increasingly running into a patchwork of national regulations.

The complications are particularly acute for terms involving insurance obligations. Major economies including Brazil, Mexico and Kenya have banned foreign insurers from providing coverage under CIF and CIP (Carriage and Insurance Paid) terms once goods enter their territories. Meanwhile, several countries require all import clearance to be handled by local entities, effectively preventing foreign sellers from using DDP terms that would make them responsible for customs duties.

The European Union faces its own challenges. EU regulations require exporters to be established within the customs territory, creating complications for buyers using EXW (Ex Works) terms who later wish to export goods. This has led to situations where sellers unknowingly take on additional responsibilities.

Customs clearance poses another significant hurdle. Brazil and Colombia explicitly prohibit foreign sellers from handling import clearance, making the popular DDP terms particularly problematic. Even in countries where such arrangements are technically permitted, like Japan and Denmark, complex VAT requirements create practical difficulties.

Morocco stands out for having particularly comprehensive restrictions. The North African nation requires all companies conducting import or export activities to register with its Trade Register, effectively limiting the use of both EXW for exports and DDP for imports.

The complexity extends beyond insurance and customs. Spain’s 2022 update to its Land Transport Management Law prohibits truck drivers from loading and unloading goods, creating complications for commonly used shipping terms like EXW and DPU (Delivered at Place Unloaded).

In Thailand, exporters must declare cargo values as FOB (Free on Board) while importers must use CIF values for customs declarations, regardless of the actual terms used in their contracts. This disparity often leads to challenging price conversions, particularly when sellers are reluctant to provide detailed cost breakdowns.

According to the report, The US presents unique challenges, with export licensing requirements making EXW “extremely difficult” for US export customers. The situation is further complicated by potential confusion between US government terminology and international shipping terms, as domestic regulations sometimes use identical three-letter abbreviations with different meanings.

Ukraine’s tax code creates barriers for both importers and exporters using DDP terms. Only companies registered within Ukraine can pay VAT and other taxes into the Ukrainian budget. This effectively prevents both foreign companies from using DDP when exporting to Ukraine and Ukrainian companies from using it for exports.

The findings suggest that international trade practices will grow increasingly fragmented as the year unfolds, particularly alongside additional regulatory obstacles proposed by many of the world’s largest economies, including the US.

The ICC report recommends that traders carefully review national regulations before agreeing to shipping terms and consider alternative Incoterms rules where necessary. It particularly suggests avoiding DDP terms in favour of DAP (Delivered at Place) or DPU in markets with strict customs regulations.