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 incoterms |
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The INCOTERMS (International
Commercial Terms) is a universally recognized set of definitions
of international trade terms, such as FOB, CFR and CIF,
developed by the International Chamber of Commerce (ICC)
in Paris, France. It defines the trade contract responsibilities
and liabilities between buyer and seller. It is invaluable
and a cost-saving tool. The exporter and the importer
need not undergo a lengthy negotiation about the conditions
of each transaction. Once they have agreed on a commercial
term like FOB, they can sell and buy at FOB without discussing
who will be responsible for the freight, cargo insurance,
and other costs and risks.
The INCOTERMS was first published in 1936---INCOTERMS
1936---and it is revised periodically to keep up with
changes in the international trade needs. The complete
definition of each term is available from the current
publication---INCOTERMS 2000. The publication is available
at your local Chamber of Commerce affiliated with the
International Chamber of Commerce (ICC).
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EXW
(Ex Works )
EXW applies to goods available only at the seller's
premises. Buyer is responsible for loading the goods
on truck or container at the seller's premises,
and for the subsequent costs and risks..
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FCA
(Free Carrier)
The delivery of goods on truck, rail car or container
at the specified point (depot) of departure, which
is usually the seller's premises, or a named railroad
station or a named cargo terminal or into the custody
of the carrier, at seller's expense. The point (depot)
at origin may or may not be a customs clearance
center. Buyer is responsible for the main carriage/freight,
cargo insurance and other costs and risks. |
FAS
(Free alongside Ship)
Goods are placed in the dock shed or at the side
of the ship, on the dock or lighter, within reach
of its loading equipment so that they can be loaded
aboard the ship, at seller's expense. Buyer is responsible
for the loading fee, main carriage/freight, cargo
insurance, and other costs and risks. |
FOB
(Free on Board )
The delivery of goods on board the vessel at the
named port of origin (loading), at seller's expense.
Buyer is responsible for the main carriage/freight,
cargo insurance and other costs and risks. |
CFR
(Cost and Freight)
The delivery of goods to the named port of destination
(discharge) at the seller's expense. Buyer is responsible
for the cargo insurance and other costs and risks.
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CIF
(Cost, insurance and freight ))
The cargo insurance and delivery of goods to the
named port of destination (discharge) at the seller's
expense. Buyer is responsible for the import customs
clearance and other costs and risks. |
CPT
(Carriage paid to)
The delivery of goods to the named place of destination
(discharge) at seller's expense. Buyer assumes the
cargo insurance, import customs clearance, payment
of customs duties and taxes, and other costs and
risks. |
CIP
(Carriage and insurance paid to)
The delivery of goods and the cargo insurance to
the named place of destination (discharge) at seller's
expense. Buyer assumes the import customs clearance,
payment of customs duties and taxes, and other costs
and risks |
DAF
(Delivered at frontier))
The delivery of goods to the specified point at
the frontier at seller's expense. Buyer is responsible
for the import customs clearance, payment of customs
duties and taxes, and other costs and risks. |
DES
(Delivered ex ship)
The delivery of goods on board the vessel at the
named port of destination (discharge), at seller's
expense. Buyer assumes the unloading fee, import
customs clearance, payment of customs duties and
taxes, cargo insurance, and other costs and risks. |
DEQ
(Delivered Ex Quay)
The delivery of goods to the quay (the port) at
destination at seller's expense. Seller is responsible
for the import customs clearance and payment of
customs duties and taxes at the buyer's end. Buyer
assumes the cargo insurance and other costs and
risks. |
DDU
(Delivered Duty Unpaid)
The delivery of goods and the cargo insurance to
the final point at destination, which is often the
project site or buyer's premises, at seller's expense.
Buyer assumes the import customs clearance and payment
of customs duties and taxes. The seller may opt
not to insure the goods at his/her own risks. |
DDP
(Delivered Duty Paid)
The seller is responsible for most of the expenses,
which include the cargo insurance, import customs
clearance, and payment of customs duties and taxes
at the buyer's end, and the delivery of goods to
the final point at destination, which is often the
project site or buyer's premises. The seller may
opt not to insure the goods at his/her own risks..
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