Incoterms

Incoterms

Incoterms or International Commercial Terms are a series of international sales terms, published by the International Chamber of Commerce (ICC) and widely used in international commercial transactions. These are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade. This reduces or removes altogether uncertainties arising from different interpretations of such terms in different countries. Scope of this is limited to matters relating to rights and obligations of the parties to the contract of sale with respect to the delivery of goods sold. They are used to divide transaction costs and responsibilities between buyer and seller and reflect state-of-the-art transportation practices. They closely correspond to the U.N. Convention of Contracts for the International Sale of Goods. The first version was introduced in 1936 and the present version dates from 2000. As of January 1, 2011, the eighth edition, Incoterms 2010, are in effect.

CFR (Cost and Freight)

Destination port-paid to arrival at destination port: Title, risk and insurance cost pass to buyer when delivered on board the ship by seller who pays the transportation cost to the destination port. Used for sea or inland waterway transportation.

CIF (Cost, Insurance and Freight)

(destination port-same as CFR but includes insurance) Title and risk pass to buyer when delivered on board the ship by seller who pays transportation and insurance cost to destination port. Used for sea or inland waterway transportation.

CPT (Carriage Paid To)

(place at destination-includes all destination port charges) Title, risk and insurance cost passed to buyer when delivered to carrier or seller who pays transportation and insurance cost to destination. Used for any mode of transportation.

CIP (Carriage and Insurance Paid To)

(place at destination-same as CPT, but includes insurance) Title and risk pass to buyer when delivered to carrier by seller who pays transportation and insurance cost to destination. Used for any mode of transportation.

DAF (Delivered to Frontier)

(border of country-same as paid by seller to border-all other charges to buyer) Title, risk and responsibility for home furnishing import clearance pass to buyer when delivered to named border point by seller. Used for any mode of transportation.

DES (Delivered Ex Ship)

(on board ship to destination port) Title, risk, responsibility for vessel discharge and home furnishing import clearance pass to buyer when seller delivers goods on board the ship to destination port. Used for sea or inland waterway transportation.

DEQ (Delivered Ex Quay ie. Duty Paid)

(destination port-includes duties and taxes, but not destination charges or delivery) Title and risk pass to buyer when delivered on board the ship at the destination point by the seller who delivers goods on dock at destination point cleared for home furnishing import. Used for sea and inland waterway transportation.

DDU (Delivered Duty Unpaid)

(consignee door-excluding duties and taxes) Title, risk, and responsibility for vessel discharge and home furnishing import clearance pass to buyer when seller delivers goods on board the ship to destination port. Used for sea and inland waterway transportation.

DDP (Delivered Duty Paid)

(consignee door-includes all charges origin to destination) Title and risk pass to buyer when seller delivers goods to named destination point cleared for home furnishing import. Used for any mode of transportation.

EXW (Ex Works)

(factory, mill, warehouse: your door) Title and risk pass to buyer including payment of all transportation and insurance cost from the seller’s door. Used for any mode of transportation.

FCA (Free Carrier)

(pick a place after your origin to start) Title and risk pass to buyer including transportation cost when the seller delivers goods cleared for export to the carrier. Seller is obligated to load the goods on the Buyer’s collecting vehicle; it is the buyer’s obligation to receive the seller’s arriving vehicle unloaded.

FAS (Free Alongside Ship)

(port, after all origin port charges) Title and risk pass to buyer including payment of all transportation and insurance cost once delivered alongside ship by the seller. Used for sea or inland waterway transportation. The export clearance obligation rests with the seller.

FOB (Free On Board)

(port-same as FAS) Risk passes to buyer including payment of all transportation and insurance cost once delivered on board the ship by the seller. Used for sea or inland waterway transportation.