Incoterms 2000

The word “Incoterms” is the abbreviation for “International commercial terms” and individual Incoterms are delivery clause of a bill of sale (not transport contract). The commercial terms are principal elements of international bills of sales because they determine duties of third sides forasmuch as: transport of goods from a seller to a buyer, import and export customs pursuance.

Incoterms also explicates division of costs and risks among contractors. Traders like to use abbreviations – e. g. FOB or CIF – to explain allotment of duties, costs or risks relating to the transport of goods from the seller to the buyer. There are often misunderstandings because of correct interpretation of these terms. It was necessary to formulate principles of the commercial terms interpretation on which the contractors can agree. Incoterms are foundation of these principles of the interpretation. They were issued for the first time by the International Chamber of Commerce in 1936. Their official name is the International Principles for Interpretation of Commercial Terms.

Incoterms – EXW

The seller delivers when he places the goods at the disposal of the buyer at the seller’s premises or another named place (i. e. works, enterprise, factory, warehouse, etc.). He is neither responsible for loading on any collecting vehicle nor for clearing for export.

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer

Incoterms – FCA

The seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. The chosen place of delivery is crucial for determining of the obligations of loading and unloading the goods at the named place. If delivery occurs at the seller’s premises, the seller is responsible for loading. If delivery occurs at any other place, the seller is not responsible for unloading.

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer

Incoterms – FAS

The seller delivers when the goods are placed alongside the vessel at the named port of shipment. The buyer has to bear all costs and risks of loss of or damage to the goods from that moment. The FAS term requires the seller to clear the goods for export.

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer

Incoterms – FOB

The seller delivers when the goods pass the ship’s rail at the named port of shipment. The buyer has to bear all costs and risks of loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export.

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer

Incoterms – CFR

The seller delivers when the goods pass the ship’s rail in the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the buyer.

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer

Incoterms – CIF

The seller delivers when the goods pass the ship’s rail in the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the buyer. The seller also has to procure marine insurance against the buyer’s risk of loss of or damage to the goods during the carriage, contract for insurance and pay the insurance premium.

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer

Incoterms – CPT

The seller delivers the goods to the carrier nominated by him. The seller must pay the costs of carriage necessary to bring the goods to the named destination but risks of loss of or damage to the goods, as well as additional costs occurring after the goods have been so delivered, are transferred from the seller to the buyer.

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer

Incoterms – CIP

The seller delivers the goods to the carrier nominated by him. The seller must pay the cost of carriage necessary to bring the goods to the named destination but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the buyer. The seller also has to procure insurance against the buyer’s risk of loss of or damage to the goods during the carriage, contract for insurance and pay the insurance premium

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer

Incoterms – DAF

The seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport not unloaded, cleared for export, but not cleared for import at the named point and place at the frontier, but before the customs border of the adjoining country.

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer

Incoterms – DES

Seller delivers when the goods are placed at the disposal of the buyer on board the ship not cleared for import at the named port of destination. The seller has to bear all costs and risks involved in bringing the goods to the named port of destination before discharging.

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer

Incoterms – DEQ

The seller delivers when goods are placed at the disposal of the buyer not cleared for import on the quay at the named port destination. The seller has to bear all costs and risks involved in bringing the goods to the named port of destination and discharging the goods on the quay. The DEQ term requires the buyer to clear the goods for import and to pay for all formalities, duties, taxes and other charges upon import.

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer

Incoterms – DDU

The seller delivers the goods to the buyer, not cleared for import, and not unloaded from any arriving means of transport at the named place of destination. The seller has to bear the costs and risks involved in bringing the goods, other than any duty for import in the country of destination. Such duty has to be borne by the buyer as well as any costs and risks caused by his failure to clear the goods for import in time.

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer

Incoterms – DDP

The seller delivers the goods to the buyer, cleared for import, and not unloaded from any arriving means of transport at the named place of destination. The seller has to bear all the costs and risks involved in bringing the goods to this place including any duty for import in the country of destination.

1 – The agreed place
2 – The agreed destination
3 – The agreed port of loading
4 – The agreed port of discharge
– – – – – – – – Cost of the seller
––––––– Risk of the seller
– – – – – – – – Cost of the buyer
––––––– Risk of the buyer