| INCOTERMS
(INTERNATIONAL COMMERCIAL TERMS) |
Click
on the Incoterms Abbreviation for a detailed description
and explanation of the term: |
| GROUP
E - DEPARTURE |
|
EXW
|
Ex Works (named place)
|
| GROUP
F – MAIN CARRIAGE UNPAID |
|
FCA
|
Free Carrier (named place)
|
|
FAS
|
Free Alongside Ship (named loading port)
|
|
FOB
|
Free On Board (named loading port)
|
| GROUP
C – MAIN CARRIAGE PAID |
|
CFR
|
Cost and Freight (named destn. port)
|
|
CIF
|
Cost, Insurance and Freight (named destn. port)
|
|
CPT
|
Carriage Paid To (named destn. port)
|
|
CIP
|
Carriage and Insurance Paid to (named destn. port)
|
| GROUP D – ARRIVAL |
|
DAF
|
Delivered At Frontier (named place)
|
|
DES
|
Delivered Ex Ship (named port)
|
|
DEQ
|
Delivered Ex Quay (named port)
|
|
DDU
|
Delivered Duty Unpaid (named destn. place)
|
|
DDP
|
Delivered Duty Paid (named destn. place)
|
| EXW
[ Ex Works ] |
Under this Incoterm,
the seller must pack and place the goods at the disposal
of the buyer at the time provided for in the contract
at a named delivery point within his works or factory.
The seller is not, however, responsible for loading the
goods and if he does so will do so as agent of the buyer.
The buyer is responsible for the entire cost of transporting
the goods which are at his risk from the moment they are
made available by the seller, and is also responsible
for all export formalities. Provision is now made for
an invoice provided by the seller by EDI methods in this
and other Incoterms.
|
| FCA
[ Free CArrier ] |
This Incoterm should
be selected in place of FOB when through road transport
is employed (including ro/ro) or where multimodal container
operations are used on a door-to-door basis rather than
port-to-port. It is also now recommended usage for rail
replacing FOR/FOT and for air replacing FOA. In fact,
FCA can be used for any mode of transport. Under the "free
carrier" Incoterm, the seller must hand the goods
over to the carrier named by the buyer cleared for export
at the time and at the place stipulated by the buyer.
This might well be a carrier's inland consolidation depot
or terminal and the term "carrier" will include
a freight forwarder if such person has been nominated
by the buyer for the receipt of the goods. It is the seller's
duty to give the buyer sufficient notice when he has handed
the goods over to the carrier, normally by telephone,
fax or telex. He must also obtain any necessary export
license. The seller retains the risk in the goods until
they have been handed over to the named carrier in accordance
with the buyer's instructions. In the case of road transport,
the seller will remain on risk where goods are collected
from its premises until they have been loaded safely onto
the road vehicle.
|
| FAS
[ Free Alongside Ship ] |
The buyer must clear
the goods for export and be responsible
for arranging for them to be loaded on board the vessel.
|
| FOB
[ Free On Board ] |
Under this Incoterm,
the seller must pack and deliver the goods on board a
vessel named by the buyer cleared for export at the port
named in the contract of sale at the stipulated time.
The seller must also give the buyer sufficient notice
that the goods are safely on board. The seller retains
the risk in the goods until they pass the ship's rail,
whereupon the risk passes to the buyer. The seller must
obtain any necessary export license. This term is only
appropriate for conventional maritime transport, not ro/ro
or intermodal container movements.
|
|
CFR [ Cost and
Freight ]
|
Under this Incoterm,
the seller must pack the goods (where necessary) and arrange
and pay for the goods to be export cleared and carried
by ship to a named port of destination and unloaded at
that destination. He must also obtain any necessary export
license. The goods must be loaded within the period stipulated
by the buyer and the seller must give the buyer sufficient
notice that the goods are safely on board. The seller
retains the risk in the goods until they pass the ship's
rail, whereupon the risk passes to the buyer. It is the
seller's duty to obtain for the buyer the usual transport
document for the agreed port of destination. This may
be a clean negotiable bill of lading or a non-negotiable
sea waybill and here, as now elsewhere in Incoterms, such
transport document can be communicated to the buyer by
EDI. This term is only appropriate for conventional maritime
transport, not ro/ro or intermodal container movements.
|
| CIF
[ Cost, Insurance and Freight ] |
This Incoterm is
identical in most particulars with CFR and the same comments
apply, including its applicability only to conventional
maritime transport. In addition to his CFR responsibilities,
the seller under CIF must obtain in transferable form
a marine insurance policy to cover the risks of transit
with insurers of repute. The policy must cover the CIF
price plus 1 0 per cent and where possible be in the currency
of the contract. Note that only very basic cover is required
equivalent to the Institute "C" clauses and
buyers should normally insist on an "all-risk"
type of policy such as that under the Institute "A"
clauses. This term is only appropriate for conventional
maritime transport, not ro/ro or international container
movements.
|
| CPT
[ Carriage Paid To ] |
This Incoterm should
be selected in place of CFR when through road transport
is employed (including ro/ro) or in the case of multimodal
transport. It can be used optionally for any mode of transport.
Under this Incoterm, the seller must arrange and pay for
the transport of the goods cleared for export to the point
agreed as the destination. The seller must give the buyer
sufficient notice, normally by telephone, fax or telex,
when the goods have been handed over to the first carrier
in the chain. He must also obtain any necessary export
license. -NE seller retains the risk in the goods until
they have been handed over to the first carrier, whereupon
the risk passes to the buyer. The buyer is responsible
for customs duties at the destination.
|
|
CIP [ Carriage
and Insurance Paid ] |
This Incoterm should
be selected in place of CIF when through road transport
is employed (including ro/ro) or in the case of multimodal
transport. It can be used optionally for any mode of transport.
It is identical in most particulars with "Carriage
paid to….". In addition to his CPT (formally DCP)
obligations, the seller must obtain transport insurance
upon which the buyer must be entitled to claim with insurers
of repute. The cover used to have to be adequate taking
account of custom of the trade, the type of goods and
other circumstances. However, the insurance requirements
have now been aligned on the more restrictive conditions
of CIF where only minimum cover need be provided. Shippers
of non-bulk commodities should be aware that this minimum
cover is not adequate for manufactured goods and that
consideration should be given to requesting the seller
to provide "A" clauses cover or equivalent.
|
| DAF
[ Delivered At Frontier ] |
This is a multimodal
term under which the seller has responsibility until the
goods reach the frontier cleared for export. It is important
always to name the frontier of destination where transit
will take the goods through several countries.
|
|
DES [ Delivered
Ex Ship ]
|
The seller has responsibility
until the goods are ready
for unloading at the port of destination.
|
| DEQ
[ Delivered Ex Quay ] |
The seller has responsibility
until the goods are unloaded on
to the quay and (usually) for customs clearance.
|
| DDU
[ Delivered Duty Unpaid ] |
This new Incoterm
can be used irrespective of the mode of transport. The
seller bears the risk and expense of getting the goods
to a named destination, but excluding duties, taxes and
other official charges payable on import. Some variations
on DDU are possible if the seller is to pay some of the
import charges, for example "delivered duty unpaid
VAT paid….". The seller must give the buyer sufficient
notice of the dispatch of the goods so that the latter
can arrange to clear them on importation.
|
| DDP
[ Delivered Duty Paid ] |
This Incoterm can
be used irrespective of the mode, or principal mode of
transport employed. It stands at the other end of the
spectrum from ex works. In this case, the seller bears
all the expense of getting the goods to a named point
of destination and also bears all the risk until the goods
are placed at the disposal of the buyer. In particular,
the seller must arrange and pay for transport of the goods
so that they will be available at the destination on the
date agreed with the buyer. He must see that the buyer
receives documents which will enable him to take delivery
of the goods. He must obtain both export and import licenses
where necessary and pay all import duties and charges
at the named place of destination. He must notify the
buyer when the goods are placed in the hands of the first
carrier in the chain, in sufficient time so that the buyer
can be ready to take delivery.
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