INCOTERMS (INTERNATIONAL COmmercial TERMS)
Coded Delivery Conditions – INCOTERMS – is an especially useful guide for all economic agents engaged in international trade transactions. They allow the exact definition of the extent of the obligations of the parties in relation to one of the essential components of the contract performance: DELIVERY.
Incoterms 2000 are the internationally accepted terms of trade that define and state the framework within which the buyer and seller perform their role in the carriage of goods, the ownership of the goods, the insurance of the goods.
Incoterms2000 uses the following terms:
- Group E – The seller puts the merchandise in his own warehouse at the buyer’s disposal:
EXW – Ex Works – Franco Factory (Imposes minimum obligations on the seller who has to make the goods available to the buyer at his premises without being responsible for loading the goods in the buyer’s means of transport The buyer bears all the risks involved in taking over the goods and transporting them at the destination)
- Group F – Main transport is not paid by the seller, who handles the cargo to a designated carrier:
FCA – Free Carrier – Franco Carrier – the merchandise after it was sold is handed over by the exporter to the first carriage, named by the buyer, at the agreed place. It is indicated to stipulate in the contract the seller’s obligation to load and stack the goods in containers in the middle of transport at his own expense, leaving the buyer the burden of transportation and unloading.
FAS – Free Along Ship – Franco along the ship – can only be used for shipping and river transport, the buyer hires the ship, and the seller brings the goods to the port and places it on the keys along the ship.
FOB – Free on Board – Franco on board – Transfer from seller to buyer of goods, expenses, formalities and risk is done when the merchandise has passed the railing of the vessel. (The seller must deliver the goods to a particular carrier with which the buyer has a transport contract. From the moment the goods are delivered, the buyer bears all the risks).
- Group C – Main transport is paid by the seller, who will bear the expenses but not the risks during transport:
CFR – Cost and Freight – Cost and Freight – the seller hires the ship, loads it and takes it to the destination port agreed.
CIF – Cost, Insurance, and Freight – Cost, insurance and freight – In addition to CFR, the seller has the obligation to buy the buyer on behalf of the latter, an insurance contract against shipping risks or loss of cargo during transport.
CPT – Carriage paid to – Carriage paid until – the seller pays the shipment to the destination. The condition can be used for all types of transport.
CIP – Carriage and Insurance paid to – The transport and insurance paid to – besides the CPT, the seller assures the merchandise, on behalf and on behalf of the buyer, against the minimum risk of damage and loss.
- Group D – The seller bears all expenses and risks for the delivery of the goods at the agreed destination:
DAF – Delivered at Frontier – Franco Border – the seller puts the goods at the agreed frontier buyer’s point of view and fulfills the import customs formalities.
DES – Delivered ex Ship – Franco unladen ship (only on waterways) – the seller bears the costs and the risks of bringing the cargo to the port of destination, making it available to the buyer aboard the ship, unladen for import.
DEQ – Delivered ex Quay – Franco Chei (only in non-negotiable ways) – Besides DES, the seller pays customs in the country of the buyer.
DDU – Delivered Duty Unpaid – Franco unclear destination – the seller does not pay customs and other taxes in the country of the buyer.
DDP – Delivered Duty Paid – Franco Customs Clearance – the seller pays all the taxes and risks involved, delivering the goods to the destination (maximum of obligations to the seller).
