The
Incoterms rules have become an essential part of the daily language of trade.
They have been incorporated in contracts for the sale of goods worldwide and
provide rules and guidance to importers, exporters, lawyers, transporters,
insurers and students of international trade.
Below are
short descriptions of the 11 rules from the Incoterms® 2010 edition. These
should be read in the context of the full official text of the rules which can
be obtained from the ICC
Store.
These
extracts can be reproduced provided that the source is cited and a link to the
ICC Store is mentioned. More information available on the dedicated page.
RULES FOR ANY MODE OR MODES OF TRANSPORT
RULES FOR ANY MODE OR MODES OF TRANSPORT
EXW Ex Works
“Ex
Works” means that the seller delivers when it places the goods at the disposal
of the buyer at the seller’s premises or at another named place (i.e.works,
factory, warehouse, etc.). The seller does not need to load the goods on any
collecting vehicle, nor does it need to clear the goods for export, where such
clearance is applicable.
FCA Free Carrier
“Free
Carrier” means that the seller delivers the goods to the carrier or another
person nominated by the buyer at the seller’s premises or another named place.
The parties are well advised to specify as clearly as possible the point within
the named place of delivery, as the risk passes to the buyer at that point.
CPT Carriage Paid To
“Carriage
Paid To” means that the seller delivers the goods to the carrier or another
person nominated by the seller at an agreed place (if any such place is agreed
between parties) and that the seller must contract for and pay the costs of
carriage necessary to bring the goods to the named place of destination.
CIP Carriage And Insurance Paid To
“Carriage
and Insurance Paid to” means that the seller delivers the goods to the carrier
or another person nominated by the seller at an agreed place (if any such place
is agreed between parties) and that the seller must contract for and pay the
costs of carriage necessary to bring the goods to the named place of
destination.
‘The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.”
‘The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.”
DAT Delivered At Terminal
“Delivered
at Terminal” means that the seller delivers when the goods, once unloaded from
the arriving means of transport, are placed at the disposal of the buyer at a
named terminal at the named port or place of destination. “Terminal” includes a
place, whether covered or not, such as a quay, warehouse, container yard or
road, rail or air cargo terminal. The seller bears all risks involved in
bringing the goods to and unloading them at the terminal at the named port or
place of destination.
DAP Delivered At Place
“Delivered
at Place” means that the seller delivers when the goods are placed at the
disposal of the buyer on the arriving means of transport ready for unloading at
the named place of destination. The seller bears all risks involved in bringing
the goods to the named place.
DDP Delivered Duty Paid
“Delivered
Duty Paid” means that the seller delivers the goods when the goods are placed
at the disposal of the buyer, cleared for import on the arriving means of
transport ready for unloading at the named place of destination. The seller
bears all the costs and risks involved in bringing the goods to the place of
destination and has an obligation to clear the goods not only for export but
also for import, to pay any duty for both export and import and to carry out
all customs formalities.
RULES FOR SEA AND INLAND WATERWAY TRANSPORT
RULES FOR SEA AND INLAND WATERWAY TRANSPORT
FAS Free Alongside Ship
“Free
Alongside Ship” means that the seller delivers when the goods are placed
alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the
named port of shipment. The risk of loss of or damage to the goods passes when
the goods are alongside the ship, and the buyer bears all costs from that moment
onwards.
FOB Free On Board
FOB Free On Board
“Free On
Board” means that the seller delivers the goods on board the vessel nominated
by the buyer at the named port of shipment or procures the goods already so
delivered. The risk of loss of or damage to the goods passes when the goods are
on board the vessel, and the buyer bears all costs from that moment onwards.
CFR Cost and Freight
“Cost and
Freight” means that the seller delivers the goods on board the vessel or
procures the goods already so delivered. The risk of loss of or damage to the
goods passes when the goods are on board the vessel. the seller must contract
for and pay the costs and freight necessary to bring the goods to the named
port of destination.
CIF Cost, Insurance and Freight
“Cost,
Insurance and Freight” means that the seller delivers the goods on board the
vessel or procures the goods already so delivered. The risk of loss of or
damage to the goods passes when the goods are on board the vessel. The seller
must contract for and pay the costs and freight necessary to bring the goods to
the named port of destination.
‘The
seller also contracts for insurance cover against the buyer’s risk of loss of
or damage to the goods during the carriage. The buyer should note that under
CIF the seller is required to obtain insurance only on minimum cover. Should
the buyer wish to have more insurance protection, it will need either to agree
as much expressly with the seller or to make its own extra insurance
arrangements.”
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